Natural Resources Access Regulator v Maules Creek Coal Pty Ltd

Catchwords

[2014] NSWLEC 179 Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299[2006] NSWLEC 419 Garrett v Freeman (No 5) (2009) 164 LGERA 287[2009] NSWLEC 1 Garrett v Williams (2006) 160 LGERA 115[2014] NSWCCA 84 Hili v The QueenJones v The Queen (2010) 242 CLR 520[2010] HCA 45 Hoare v The Queen (1989) 167 CLR 348[1989] HCA 33 Latoudis v Casey (1990) 170 CLR 534[1990] HCA 59 Markarian v The Queen (2005) 228 CLR 357[2005] HCA 25 Morrison v Defence Maritime Services (2007) 156 LGERA 365[2007] NSWLEC 552 Muldrock v The Queen (2011) 244 CLR 120[2011] HCA 39 Nash v Silver City Drilling (NSW) Pty LtdAttorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd (2017) 93 NSWLR 338[2009] NSWLEC 178 R v Olbrich (1999) 199 CLR 270[1999] HCA 54 R v Peel [1971] 1 NSWLR 247 R v ThomsonR v Houlton (2000) 49 NSWLR 383[2000] NSWCCA 309 R v Visconti [1982] 2 NSWLR 104 Ryan v The Queen (2001) 206 CLR 267

Judgment (102 paragraphs)

[1]

v Defence Maritime Services (2007) 156 LGERA 365; [2007] NSWLEC 552 Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd (2017) 93 NSWLR 338; [2017] NSWCCA 96 New Galaxy Investments Pty Ltd v Thomson (No 2) [2017] NSWCA 235 Newcastle City Council v Pace Farm Egg Products Pty Ltd (No 3) [2005] NSWLEC 423 Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178 R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 R v Peel [1971] 1 NSWLR 247 R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 R v Visconti [1982] 2 NSWLR 104 Ryan v The Queen (2001) 206 CLR 267; [2001] HCA 21 Stephen James Orr v Narrabri Coal Operations Pty Ltd; Stephen James Orr v Narrabri Coal Pty Ltd [2021] NSWLEC 85 Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7 Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14 Texts Cited: Chessman, "What's wrong with the Australian River Assessment System (AUSRIVAS)?", (2021) 72 Marine and Freshwater Research 1110 NSW Office of Director of Public Prosecutions, Prosecution Guidelines (March 2021) Category: Sentence Parties: Natural Resources Access Regulator (Prosecutor) Maules Creek Coal Pty Ltd (Defendant) Representation: Counsel: R White and Z Shahnawaz (Prosecutor) D Hume (Defendant)

[2]

Solicitors: Crown Solicitor's Office (Prosecutor) Ashurst (Defendant) File Number(s): 2020/192787

[3]

Judgment

The Defendant, Maules Creek Coal Pty Ltd (ACN 140 533 875), has pleaded guilty to an offence of taking water from a water source without an access licence contrary to s 60A(2) of the Water Management Act 2000 (NSW) (WM Act). Between 1 July 2016 and 30 June 2019 1,000ML of clean surface water was captured in water storages at the Maules Creek Coal Mine (the mine) without an access licence for the Water Sharing Plan for the Namoi and Peel Unregulated Rivers Water Sources 2012 (WSP) being held by the Defendant. The Maules Creek Coal mine is an open cut mine near Boggabri.
It is necessary to sentence the Defendant for this offence. A plea of guilty can be considered as an admission of the essential elements of an offence. The offence is one of strict liability so that mens rea is not an essential element of the offence. When sentencing, any matter adverse to a defendant must be proved by a prosecutor beyond reasonable doubt: R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 (Olbrich) at 281. Any contested matter relied on by a defendant must be established on the balance of probabilities: Olbrich at 281.

[4]

Water Management Act 2000

Relevant sections of the WM Act provide: Chapter 1 Preliminary … 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 - … (e) to provide for the orderly, efficient and equitable sharing of water from water sources, … 4A Meaning of "overland flow water" (1) In this Act, overland flow water means water (including floodwater, rainfall run-off and urban stormwater) that is flowing over or lying on the ground as a result of - (a) rain or any other kinds of precipitation, or (b) rising to the surface from underground, or (c) any other process or action of a kind prescribed by the regulations. (2) Water is flowing over the ground for the purposes of subsection (1) even if it flows over the ground by means of artificial structures such as roads, canals or road gutters. (3) However, subsection (1) does not include - (a) water that is collected from a roof (including water collected from a roof using a rainwater tank), or (b) water that is flowing over or lying on the bed of a river, lake or estuary, or (c) water flowing over or lying on the ground in such circumstances as may be prescribed by the regulations. … Chapter 2 Water management planning Part 1 General Division 1 Water management principles 5 Water management principles … (2) Generally - (a) water sources, floodplains and dependent ecosystems (including groundwater and wetlands) should be protected and restored and, where possible, land should not be degraded, and (b) habitats, animals and plants that benefit from water or are potentially affected by managed activities should be protected and (in the case of habitats) restored, and (c) the water quality of all water sources should be protected and, wherever possible, enhanced, and (d) the cumulative impacts of water management licences and approvals and other activities on water sources and their dependent ecosystems, should be considered and minimised, and (e) geographical and other features of Aboriginal significance should be protected, and (f) geographical and other features of major cultural, heritage or spiritual significance should be protected, and (g) the social and economic benefits to the community should be maximised, and (h) the principles of adaptive management should be applied, which should be responsive to monitoring and improvements in understanding of ecological water requirements. … Chapter 3 Water management implementation … Part 2 Access licences Division 1 Preliminary … 56 Access licences (1) An access licence entitles its holder - (a) to specified shares in the available water within a specified water management area or from a specified water source (the share component), and (b) to take water - (i) at specified times, at specified rates or in specified circumstances, or in any combination of these, and (ii) in specified areas or from specified locations, (the extraction component). … Division 1A Offences 60A Taking water without, or otherwise than authorised by, an access licence (1) A person - (a) who takes water from a water source to which this Part applies, and (b) who does not hold an access licence for that water source, and (c) who intentionally or negligently takes that water without obtaining an access licence for that water source, is guilty of an offence. Tier 1 penalty. (2) A person - (a) who takes water from a water source to which this Part applies, and (b) who does not hold an access licence for that water source, is guilty of an offence. Tier 2 penalty. … 60I Access licence required for water used in mining activities (1) A person who takes water in the course of carrying out a mining activity is, for the purposes of this Act, taking water from a water source. (2) Without limiting the generality of subsection (1), a person takes water in the course of carrying out a mining activity if, as a result of or in connection with, the activity or a past mining activity carried out by the person, water is removed or diverted from a water source (whether or not water is returned to that water source) or water is re-located from one part of an aquifer to another part of an aquifer. (3) To avoid doubt, a person who takes water in the course of carrying out a mining activity as referred to in subsection (2) is required to hold an access licence authorising the taking of that water. (4) In this section - mineral has the same meaning as it has in the Mining Act 1992. mineral exploration means prospecting pursuant to an assessment lease, exploration licence, mineral claim, mining lease or opal prospecting licence under the Mining Act 1992. mining means the winning or removal of materials by methods such as excavating, dredging, drilling or tunnelling for the purpose of obtaining minerals or petroleum, and includes - (a) the construction, commissioning, operation and decommissioning of associated works, and (b) the stockpiling, processing, treatment and transportation of materials extracted, and (c) the rehabilitation of land affected by mining. mining activity means any of the following - (a) mining, (b) mineral exploration, (c) petroleum exploration. petroleum has the same meaning as it has in the Petroleum (Onshore) Act 1991. petroleum exploration means prospecting pursuant to a petroleum title under the Petroleum (Onshore) Act 1991. (5) This section does not limit any other provision of this Act. … Chapter 7 Enforcement Part 1 Directions to landholder and other persons ... Division 8 Enforceable undertakings 336E Enforcement of undertakings (1) The Minister may accept a written undertaking given by a person for the purposes of this section in connection with a matter in relation to which the Minister, the Ministerial Corporation, the Natural Resources Access Regulator or any other public authority has a function under this Act. (2) The person may withdraw or vary the undertaking at any time, but only with the consent in writing of the Minister. The consent of the Minister is required even if the undertaking purports to authorise withdrawal or variation of the undertaking without that consent. (3) The Minister may apply to the Land and Environment Court for an order under subsection (4) if the Minister considers that the person who gave the undertaking has breached any of its terms. (4) The Land and Environment Court may make all or any of the following orders if it is satisfied that the person has breached a term of the undertaking - (a) an order directing the person to comply with that term of the undertaking, (b) an order directing the person to pay to the State an amount not exceeding the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach, (c) any order that the Court thinks appropriate directing the person to compensate any other person who has suffered loss or damage as a result of the breach, (d) an order requiring the person to prevent, control, abate or mitigate any actual or likely damage to the built or natural environment caused by the breach, (e) an order requiring the person to make good any actual or likely damage to the built or natural environment caused by the breach, (f) any other order the Court considers appropriate. (5) The Ministerial Corporation, the Natural Resources Access Regulator or another public authority may recommend that the Minister accept an undertaking under this section that the Ministerial Corporation, the Natural Resources Access Regulator or public authority has negotiated with a person proposing to give the undertaking in connection with a function of the public authority under this Act. (6) Nothing in this section prevents proceedings being brought for the contravention or alleged contravention of this Act to which the undertaking relates. … Part 5 Legal proceedings and appeals Division 1 Legal proceedings … 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, 49B 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. … Dictionary … available water, in relation to a water management area or water source, means the water that is available in that area or water source in accordance with an available water determination that is in force in respect of that area or water source. available water determination means a determination referred to in section 59 … environment includes all aspects of the surroundings of human beings, whether affecting them as individuals or in their social groupings. … water management area means an area of land that is constituted as a water management area by an order in force under section 11. … water source means the whole or any part of - (a) one or more rivers, lakes or estuaries, or (b) one or more places where water occurs on or below the surface of the ground (including overland flow water flowing over or lying there for the time being), and includes the coastal waters of the State. … waterfront land means - (a) the bed of any river, together with any land lying between the bed of the river and a line drawn parallel to, and the prescribed distance inland of, the highest bank of the river, or (a1) the bed of any lake, together with any land lying between the bed of the lake and a line drawn parallel to, and the prescribed distance inland of, the shore of the lake, or (a2) the bed of any estuary, together with any land lying between the bed of the estuary and a line drawn parallel to, and the prescribed distance inland of, the mean high water mark of the estuary, or (b) if the regulations so provide, the bed of the coastal waters of the State, and any land lying between the shoreline of the coastal waters and a line drawn parallel to, and the prescribed distance inland of, the mean high water mark of the coastal waters, where the prescribed distance is 40 metres or (if the regulations prescribe a lesser distance, either generally or in relation to a particular location or class of locations) that lesser distance. Land that falls into 2 or more of the categories referred to in paragraphs (a), (a1) and (a2) may be waterfront land by virtue of any of the paragraphs relevant to that land.

[5]

Water Management (General) Regulation 2018

Clause 21 of the Water Management (General) Regulation 2018 (NSW) (WM Regulation 2018), commencing on 24 August 2018 and in force until the end of the charge period on 30 June 2019 provides: Part 2 Access licences … Division 2 Exemptions 21 Exemption from requirement for access licence (1) A person is exempt from section 60A(1) and (2) of the Act in relation to the taking of water from a water source if the person - (a) is specified in any provision of Part 1 of Schedule 4, and (b) takes water for any of the purposes, and in the circumstances, specified in that provision. (2) A person exempted under this clause is also exempted from any mandatory conditions relating to access licences that are imposed on a water supply work approval. …
Words and expressions used in an instrument have the same meaning as in the Act under which the instrument is made (s 11 of the Interpretation Act 1987 (NSW)). For the definition of water source, see above in [3].

[6]

Water Management (General) Regulation 2011 (repealed)

Clause 18 of the now repealed Water Management (General) Regulation 2011 (NSW) (WM Regulation 2011) provided during the charge period from 1 July 2016 until 24 August 2018: Part 2 Access licences … Division 2 Exemptions 18 Exemption from requirement for access licence (1) A person is exempt from section 60A (1) and (2) of the Act in relation to the taking of water from a water source if the person: (a) is specified in any provision of Part 1 of Schedule 5, and (b) takes water for any of the purposes, and in the circumstances, specified in that provision. (2) A person exempted under this clause is also exempted from any mandatory conditions relating to access licences that are imposed on a water supply work approval. (3) An exemption conferred by this clause that requires a watering program to be approved by the Minister is subject to the condition that any person claiming the exemption must, if required to do so by an authorised officer, produce the approved watering program immediately or within the period, and at the place, specified by the officer. (4) An exemption conferred by subclause (1) with respect to approved watering for basic human water needs (within the meaning of clause 14 of Schedule 5) ceases to apply 4 months after the date on which the relevant approval was granted by the Minister or such later date as the Minister may approve of in writing. (5) An exemption conferred by this clause with respect to the taking of water for the purposes and in the circumstances specified in clause 15B of Schedule 5 (Emergency safety measures) is subject to the condition that the person claiming the exemption must comply with all applicable requirements (if any) of the Minister: (a) that are published in the Gazette, or notified in writing to the person, for the purposes of this subclause, and (b) that are for the purposes of implementing the water management principles in relation to the taking of water the subject of the exemption. …

[7]

Water Sharing Plan for Namoi and Peel Unregulated and Alluvial Water Sources 2012

Relevant provisions of the WSP provide: Part 1 Introduction … 4 Application of this Plan … (3) Subject to subclause (5), these water sources include all water - (a) occurring naturally on the surface of the ground within the boundaries of these water sources as shown on the Plan Map, and (b) in rivers, lakes and wetlands within the boundaries of these water sources as shown on the Plan Map. … Part 2 Vision, objectives, strategies and performance indicators … 9 Vision statement The vision for this Plan is to provide for the following - (a) the health and enhancement of these water sources and their water-dependent ecosystems, (b) the continuing productive extraction of surface water for economic benefit, (c) the spiritual, social, customary and economic benefits of surface water to Aboriginal communities, (d) the social and cultural benefits to urban and rural communities that result from surface water. … 10 Environmental objectives (1) The broad environmental objective of this Plan is to protect, and contribute to the enhancement of, the ecological condition of these water sources and their water-dependent ecosystems over the term of this Plan. (2) The targeted environmental objective of this Plan is to protect, and contribute to the enhancement of, the following over the term of this Plan - (a) the recorded distribution or extent, and population structure, of target ecological populations, (b) the longitudinal and lateral connectivity within and between water sources to support target ecological processes, (c) water quality within target ranges for these water sources to support water-dependent ecosystems and ecosystem functions. (3) The strategies for reaching the targeted environmental objective of this Plan are as follows - (a) establish and maintain compliance with a long-term average annual extraction limit and a long-term average sustainable diversion limit, (b) reserve a portion of flows to partially mitigate alterations to natural flow regimes in these water sources, (c) restrict the take of water from in-river and off-river pools when the volume of that water is less than full capacity, (d) restrict or prevent water supply work approvals in specified circumstances. (e) reserve a portion of flows to maintain longitudinal connectivity within and between these water sources and other connected water sources including the Upper Namoi Regulated River Water Source, the Lower Namoi Regulated River Water Source and the Peel Regulated River Water Source. (4) The performance indicator used to measure the success of the strategies for reaching the broad environmental objective in subclause (1) is an evaluation of the extent to which the combined outcomes of the targeted objectives in subclause (2) have contributed to achieving the broad objective. (5) The performance indicators used to measure the success of the strategies for reaching the targeted environmental objective in subclause (2) are the changes or trends in ecological condition during the term of this plan, as assessed using one or more of the following - (a) the recorded range, extent or condition of target ecological populations, (b) measurements of fish movements through priority fish passage areas, (c) the recorded values of water quality measurements including salinity, turbidity, total nitrogen, total phosphorous, pH, water temperature and dissolved oxygen. (6) In evaluating the effectiveness of the strategies in meeting the objectives in this clause, the following will be relevant - (a) the extent to which the strategies in subclause (3) and provisions in this Plan have been implemented and complied with, (b) the extent to which changes in the performance indicators can be attributed to the strategies in subclause (3) and provisions in this Plan, (c) the extent to which the strategies in subclause (3) support achievement of the environmental objectives, (d) the extent to which external influences on these water sources during the term of this Plan have affected progress toward achieving the environmental objectives.

[8]

Terms of Amended Summons

The Amended Summons of 9 April 2021 seeks an order that the Defendant answer the charge that (footnote omitted): 1 … between about 1 July 2016 and 30 June 2019, the Defendant committed an offence contrary to s. 60A(2) of the Water Management Act 2000 (NSW) (the Act), in that it took water from the Maules Creek Water Source, being a water source to which Part 2 of Chapter 3 of the Act applied, when it did not hold an access licence for that water source. Particulars (a) A person The Defendant was the manager and operator of the Maules Creek Coal Project (the Mine) located on Therribri Rd, Boggabri NSW 2382, comprising some 48 parcels of land, a reserve and other features as described in Appendix 1 to the Mine's Consolidated Consent dated 23 October 2012, in the Parishes of Leard and Therribri, County of Nandewar, in the Narrabri Local Government Area (the Project Site), between 1 July 2016 and 30 June 2019. (b) who takes water ln the course of carrying out its mining activities within the Project Site, the Defendant captured rainfall and surface water runoff between 1 July 2016 and 30 June 2019 by means of dams and other water storages listed in Table 1 below, which were constructed on the Project Site. The quantum of the alleged unlawful take was 1.000ML. The take occurred by the capture of rainfall and surface water runoff by the following storages: [see "Table 1" in Statement of Agreed Facts par 50 below]. The alleged take occurred when water was captured by each relevant storage and, in aggregate, comprised the total figure in the unlawful take column of Table 1. The unlawful take is further particularised in the Statement of Agreed Facts dated 9 April 2021. (c) from a water source to which Part 2 of chapter 3 of the Act applies The Mine is partly located on the Maules Creek Water Source. Rainfall captured within the Project Site forms part of the Maules Creek Water Source which is a water source to which Part 2 of Chapter 3 of the Act applies. (d) who does not hold an access licence for that water source Between 1 July 2016 and 30 June 2019 the Defendant did not hold an access licence authorising it to take water from the Maules Creek Water Source. … 3 An order that the Defendant pay the Prosecutor's costs. …

[9]

Statement of agreed facts

The Prosecutor and the Defendant agreed the following Statement of Agreed Facts (SOAF) (tabs omitted and footnotes moved into brackets): The Defendant and the approved mine 1 The Defendant, Maules Creek Coal Pty Ltd (ACN 140 533 875) (MCCPL), is a wholly owned subsidiary of Whitehaven Coal Limited (WHC). 2 MCCPL was the manager and operator of the Maules Creek Coal Mine (Mine) during the period 1 July 2016 to 30 June 2019 (the Relevant Period). 3 The Mine is an open cut coal mining operation located within the Narrabri Shire Local Government Area, approximately 17 kilometres north east of the township of Boggabri. The Mine is located in the Gunnedah Basin. During the Relevant Period, the project site for the Mine comprised 3,550 ha (the Project Site). MCCPL is still the manager and operator of the Mine. 4 The Mine is a joint venture between Aston Coal 2 Pty Ltd (ACN 139 472 567) (Aston Coal 2), IRCA MC Pty Ltd (ACN 147 657 074) (ICRA) and J-Power Australia Pty Ltd (ACN 002 307 682) (J-Power). Aston Coal 2 is a wholly owned subsidiary of WHC. 5 MCCPL was the lawful occupier of the Mine during the Relevant Period and is still the lawful occupier. 6 A figure depicting the regional location of the Mine is behind Tab 1 of the attached bundle. 7 The Mine was approved by the Planning Assessment Commission, as delegate of the Minister for Planning and Infrastructure, pursuant to the now repealed Part 3A of the Environmental Planning and Assessment Act 1979 (EP&A Act) on 23 October 2012. This approval has been subsequently modified on five occasions and is now taken to be a development consent under Part 4 of the EP&A Act (Development Consent) (Government Gazette (No. 78, 17 August 2018) pp 5235-5236; Environmental Planning and Assessment (Savings, Transitional and Other Provisions) Regulation 2017, clause 6(3) of Schedule 2). 8 The Development Consent for the Mine confirms the location of the Project Site, including the relevant Lots/DPs. A copy of the Development Consent, as at 6 December 2019, is behind Tab 2 of the attached bundle. 9 The approved general arrangement of the Mine and its boundaries is depicted behind Tab 3 of the attached bundle. 10 MCCPL is the holder of Environment Protection Licence No. 20221, which authorises multiple scheduled activities at the Mine under the Protection of the Environment Operations Act 1997 (EPL). 11 A copy of the EPL is behind Tab 4 of the attached bundle. 12 For the purpose of the Water Management Act 2000 (WM Act), MCCPL is the "landholder" (WM Act, Dictionary) of the relevant land within the Project Site. The offence 13 MCCPL is charged with committing an offence contrary to section 60A(2) of the WM Act in that, during the Relevant Period, it took water from the Maules Creek Water Source, being a water source to which Part 2 of Chapter 3 of the WM Act applied, when it did not hold an access licence for that water source. 14 MCCPL captured rainfall and clean surface water runoff ("Water source" is defined in the Dictionary to the WM Act as including a place where 'overland flow water' flows over the surface of the land. Section 4A of the WM Act defines "overland flow water" to include rainfall and surface water runoff) in dams and other water storages within the Project Site specified in Tables 1 and 2 below. This constituted the offending conduct. The relevant water source 15 The Mine is partly located within the Maules Creek Water Source (Maules Creek Tributaries Management Zone). This water source is one of the Namoi Unregulated Rivers Water Sources within the Namoi Water Management Area. 16 Throughout the Relevant Period, the Maules Creek Water Source was regulated by the Water Sharing Plan for the Namoi Unregulated and Alluvial Water Sources 2012 (the WSP) made under the WM Act. The WSP has since been amended and renamed as the Water Sharing Plan for the Namoi and Peel Unregulated Rivers Water Sources 2012. The Maules Creek Water Source relevantly included all of the water occurring naturally on the surface of the ground and in unregulated rivers within the boundaries of this water source as shown on the WSP Map (WSP, clause 4). 17 A copy of the WSP Map that was in force throughout the Relevant Period is behind Tab 5 of the attached bundle. 18 Part 2 of Chapter 3 of the WM Act, which provides for access licences, applied to the Maules Creek Water Source throughout the Relevant Period. Surrounding watercourses and catchment area 19 The northern Development Consent boundary of the Mine is located generally along the southern bank of Back Creek. Back Creek has an incised main channel approximately 1-1.5 metres deep. Back Creek is an ephemeral watercourse. 20 Back Creek is a tributary of Maules Creek and flows through a wide, flat floodplain that has mostly been cleared for agricultural activities. 21 Maules Creek flows westwards into the Namoi River about 30 kilometres south-east of Narrabri. The Namoi River has a catchment area to Boggabri of about 22,600 km2 and an incised main channel that meanders across a wide alluvial floodplain. 22 A figure depicting the network of surrounding watercourses is behind Tab 6 of the attached bundle. 23 Prior to the construction of the approved Mine, the relevant land was drained by various ephemeral tributaries of Back Creek and some gully catchments. 24 Although the watercourses which existed before the Mine have been significantly altered by the Mine and its constructed water management system, there are still some remnant ephemeral streams within the Development Consent boundary. Context of the planning approval 25 The Development Consent permits MCCPL to carry out mining operations at the Mine until the end of 2034. 26 The conditions of the Development Consent require MCCPL to ensure that: (a) any surface water discharges of mine water ("Mine water" is defined in the Definitions section of the Development Consent to mean "Water that accumulates within, or drains from, active mining areas, coal reject emplacement areas, tailings dams and infrastructure areas, synonymous with dirty water") from the site are of equal or better quality than the receiving waters and comply with the discharge limits in the EPL (condition 38 in Schedule 3); and (b) it has sufficient water for all stages of the Mine and if necessary, adjust the scale of mining operations on site, to match its available water supply to the satisfaction of the Secretary of the Department of Planning, Industry and Environment (condition 36 in Schedule 3). 27 The note above condition 36 in Schedule 3 of the Development Consent records that MCCPL was required to obtain the necessary water licences for the Mine under the WM Act. 28 The note to condition 38 in Schedule 3 of the Development Consent states: The project is based on a zero discharge basis for mine water in all modelled meteorological events, however the Department acknowledges that discharge of treated water may be required to be undertaken following very extraordinary events outside modelled data, if approved under an EPL. 29 Under condition 40 in Schedule 3 of the Development Consent, MCCPL is required to prepare and implement a Water Management Plan (WMP) for the Mine to the satisfaction of the Secretary of the Department of Planning, Industry and Environment. The Mine's surface water management system 30 The water management strategy for the Mine was set out in section 4.2 of the WMP approved by the Secretary of the Department of Planning, Industry and Environment. The WMP states on pages 50-51: The Project's Water Management System aims to ensure leading-practice management of all water on site. The objectives of the water management system are to ensure: • Clean water runoff from undisturbed catchment areas is diverted away from the mining area, where possible; • Sediment laden runoff from disturbed areas is treated prior to re-use in the water management system or released into the receiving environment if water quality meets EPL requirements; • Mine water (including water that accumulates within, or drains from, active mining areas, coal reject emplacement areas and CHPP infrastructure areas) and groundwater collected within open cut pits is contained and reused on-site; • No discharge of mine water off-site; and • On-site water demands are satisfied whilst minimising offsite water requirements. 31 The Mine's WMP dated 2014 is included behind Tab 7 of the bundle of documents. The Mine's more recent WMP dated 2019 is included behind Tab 8 of the bundle of documents. 32 The Mine's WMP distinguishes between three types of water: a. "mine water", which has come into contact with coal; b. "dirty water" which is surface runoff water from areas that are disturbed by mining operations, also referred to as sediment-laden runoff; and c. "clean water", which is surface runoff water where water quality is not affected by mining operations. 33 The primary operational demands for water at the Mine are dust suppression activities and the operation of the Coal Handling and Preparation Plant. 34 Under the WMP, the main water supply sources for the Mine were identified as: a. mine/dirty water runoff captured within the Mine; b. river water pumped to the Mine from the Namoi River (Lower Namoi Regulated River Water Source) via pipeline; and c. groundwater inflow to the open cut pit. 35 The Mine's WMP described the Mine's water management system in section 4.3 (pages 51-65), including the erosion and sediment controls, clean water management system and mine water management system. 36 The performance criteria for the Mine's water management system were set out in Table 4.6 of the Mine's WMP (pages 66-68). The surface water quality and quantity monitoring plan was set out at section 4.5.1 (pages 71-72). The "take" of water under the WM Act 37 Throughout the Relevant Period, the WM Act relevantly authorised a person to take water from a water source: a. pursuant to an access licence, in compliance with the conditions of that access licence; b. in accordance with an applicable statutory exemption from the requirement for an access licence; or c. in accordance with harvestable rights under a relevant harvestable rights order. Access licences 38 Under sections 60A and 60I of the WM Act, a person who "takes water in the course of carrying out a mining activity" is required to hold an access licence authorising the take of that water. 39 Corporations associated with the Mine hold several access licences which were relied upon to account for water taken for the Mine's operations. For example, Aston Coal 2, ICRA and J-Power held one such licence: Water Access Licence No. 13050, a high security access licence which confers an annual share component entitlement of 3000 mega litres (ML) in the Lower Namoi Regulated River Water Source. This licence did not authorise the take of any of the water identified in Table 2 below. 40 MCCPL did not hold an access licence entitling it to take water from the Maules Creek Water Source at any time during the Relevant Period. Statutory exemption 41 Clause 21 of the Water Management (General) Regulation 2018 (2018 Regulation) and clause 18 of the now repealed Water Management (General) Regulation 2011 (2011 Regulation) provided statutory exemptions from the requirement for an access licence to take water from a water source under the WM Act. 42 Relevantly, the 2018 Regulation and 2011 Regulation provided an exemption for water taken from a water source by way of the following category of "excluded work" (2018 Regulation: cl21(1); item 12 in Schedule 4 and item 3 in Schedule 1 112011 Regulation: cl 18(1); item 12 in Schedule 5 and item 3 Schedule 1): Dams solely for the capture, containment and recirculation of drainage and/or effluent, consistent with best management practice or required by a public authority (other than Landcom or the Superannuation Administration Corporation or any of their subsidiaries) to prevent the contamination of a water source, that are located on a minor stream. (Excluded Works Exemption) 43 MCCPL was not required to hold an access licence to lawfully take runoff from the Maules Creek Water Source by a dam within the Mine when that water was taken in accordance with the Excluded Works Exemption. MCCPL does not rely on the Excluded Works Exemption to authorise the take of any of the clean water runoff identified in Table 2 below. Harvestable rights ("Harvestable rights" is defined under the WM Act to mean the rights conferred on a landholder by a harvestable rights order in force under section 54 of the WM Act). 44 Division 2 of Part 1 of Chapter 3 of the WM Act and the applicable harvestable rights order (HRO) made pursuant to section 54 of the WM Act (Harvestable Rights - Eastern and Central Division, Government Gazette (No. 40, 31 March 2006) pp 1 628-1630) provided for a landholder to capture runoff by means of harvestable right dams "located on a minor stream" without an access licence under the WM Act. MCCPL was not required to hold an access licence to lawfully take runoff from the Maules Creek Water Source by a dam within the Mine when that water was taken in accordance with MCCPL's harvestable rights entitlement and the HRO. 45 MCCPL does not rely on harvestable rights to authorise the take of any of the clean water runoff identified in Table 2 below. The unlawful take from the Maules Creek Water Source during the Relevant Period The relevant water storages 46 During the Relevant Period, there were more than 30 water storages present at the Mine. 47 The relevant water storages within the Mine which are the subject of this prosecution are identified in Table 1 below: TABLE 1 Storage Purpose Highwall Dam 2 (HWD2) Clean water runoff diversion Highwall Dams 3/4 (HWD3/4) Clean water runoff diversion Mine Pit Mine water runoff management Sediment Dam 3 (5D3) Dirty water runoff management Sediment Dam 7/MC10 (SD7/MC10) Dirty water runoff management Rio Development Dam/Sediment Dam 2 (RDD/5D2) Clean water runoff management/Dirty water runoff management

[10]

48 A figure depicting the location of each of these storages within the Mine is behind Tab 9 of the attached bundle. The volume of runoff unlawfully taken 49 The volume of runoff taken by the storages identified in Table 1 in contravention of section 60A(2) of the WM Act was 1,000 ML of clean water runoff during the Relevant Period. 50 The proportion of the 1,000 ML taken by each of the relevant storages during the Relevant Period is identified in Table 2 below: TABLE 2 Storage Unlawful take (ML) HWD2 30 HWD3/4 187 Mine Pit 139 SD3 145 SD7/MC10 340 RDD/SD2 159 Total 1,000

[11]

51 The water identified in Table 2 was taken in connection with MCCPL's mining activities. 52 During the Relevant Period, MCCPL removed a proportion of the captured water identified in Table 2 from the water storages identified in Table 2 and used this water within the Project Site. The offending conduct Take of water by clean water diversions 53 HWD2, HWD3 and HWD4 were highwall clean water diversion dams located south of the Mine's open cut pit at a higher elevation in the landscape than the pit. They are assessed as having captured a combined 217 ML of clean water runoff during the Relevant Period. 54 The purpose of these dams was to prevent clean water runoff flowing from ephemeral streams into the open cut pit by temporarily intercepting this runoff and effectively diverting it to downstream watercourses, including Back Creek. 55 The clean water runoff captured by these dams was not diverted to downstream watercourses. 56 The 30 ML of clean water runoff assessed as having been captured by HWD2 was not authorised by the Excluded Works Exemption because this runoff was not captured and managed in accordance with best management practice for mines or to prevent the contamination of a water source. The clean water runoff captured by this clean water diversion dam was not managed in accordance with best management practice because it was not diverted to downstream watercourses. 57 MCCPL does not rely on harvestable rights to account for the runoff captured by HWD2. 58 The 187 ML of clean water runoff assessed as having been captured by HWD3/4 could not be authorised by the Excluded Works Exemption or harvestable rights because these storages, although located on ephemeral streams, were not "located on a minor stream". 59 HWD2, HWD3 and HWD4 no longer exist. Take of some clean water by the Mine Pit 60 The Mine Pit was assessed as having captured 139 ML of clean water runoff from ephemeral streams located above the highwall of the Mine's open cut pit during the Relevant Period. 61 The purpose of the water storages within the Mine Pit was to capture and contain mine water runoff and thereby prevent the contamination of downstream watercourses. 62 The Mine's highwall clean water diversion system was not properly constructed and operated. As a result, the Mine Pit captured clean water runoff which should have been diverted to downstream watercourses but instead drained directly into the Mine Pit, where it mixed with dirty water and mine water. 63 The 139 ML of clean water runoff assessed as having been captured by the Mine Pit was not authorised by the Excluded Works Exemption because this runoff was not captured in accordance with best management practice for mines or to prevent the contamination of a water source. This clean water runoff was not captured in accordance with best management practice because the Mine Pit captured clean water runoff which should have been diverted to downstream watercourses. 64 MCCPL did not rely on harvestable rights to account for runoff captured by the Mine Pit. Take of some clean water by the dirty water management system 65 SD3 was a sediment dam located in the north-west corner of the Mine. It was assessed as having captured 145 ML of clean water runoff during the Relevant Period. 66 The purpose of SD3 was to prevent dirty water runoff from contaminating downstream watercourses by securely capturing and managing such runoff. 67 MCCPL operated its water management system such that this sediment dam captured a volume of clean water runoff that was inconsistent with its purpose and function. 68 The 145 ML of clean water runoff assessed as having been captured by SD3 was not authorised by the Excluded Works Exemption because this runoff was not captured in accordance with best management practice for mines or to prevent the contamination of a water source. This clean water runoff was not captured in accordance with best management practice because SD3 captured a volume of clean water runoff that was inconsistent with its purpose and function. 69 MCCPL did not rely on harvestable rights to account for runoff captured by SD3. 70 SD7 was located adjacent to the Mine's access road and was an historic pre-Mine farm dam. MC10 was constructed by Leighton Contractors (on behalf of MCCPL) as a sediment dam during its construction of the Mine's rail corridor. SD7 and MC10 were connected "cascading" dams located on the same ephemeral stream. They are assessed as having captured a combined 340 ML of clean water runoff during the Relevant Period. 71 The purpose of SD7/MC10 was to prevent dirty water runoff associated with the construction of the Mine's rail corridor from contaminating downstream watercourses by securely capturing and managing such runoff. 72 Despite predominantly capturing clean water runoff from an ephemeral stream, SD7 was not decommissioned by MCCPL. 73 MC10 was used during the Relevant Period as a sediment settling dam. After settling, water either passively spilled over and/or was actively transferred over the storage wall into the spillway which reports to SD7. 74 The 340 ML of clean water runoff assessed as having been captured by SD7/MC10 could not be authorised by the Excluded Works Exemption or harvestable rights because these storages, although constructed on an ephemeral stream, were not "located on a minor stream". 75 RDD was located on a low-lying area that is now underneath the Mine's northern emplacement stockpile and was a pre-Mine dam that originally functioned in the Mine's water management system as an overflow dam within a clean water drainage line. SD2 was constructed directly adjacent to RDD and operated as a sediment dam. These related storages are assessed as having captured a combined 159 ML of clean water runoff from an ephemeral stream during the Relevant Period. 76 The 159 ML of clean water runoff assessed as having been captured by RDD/SD2 was not authorised by the Excluded Works Exemption because this runoff was not captured in accordance with best management practice for mines or to prevent the contamination of a water source. This clean water runoff was not captured in accordance with best management practice because this water should have instead been diverted around RDD/SD2 and into a downstream watercourse. 77 MCCPL did not rely on harvestable rights to account for runoff captured by RDD/SD2. Cooperation with investigation 78 The Natural Resources Access Regulator (NRAR) commenced an investigation into alleged unlawful take of water at the Mine in June 2018. 79 MCCPL cooperated with NRAR's investigation and in the preparation of this Statement of Agreed Facts. No prior convictions 80 MCCPL has no prior convictions for offences under the WM Act. Enforceable undertaking 81 The parties have agreed an enforceable undertaking given by the Defendant to the Prosecutor under the WM Act.

[12]

Locations of structures, instruments and monitoring sites for ease of reference

The map below was tendered by the Defendant (Ex 6). It shows the mine's project boundaries, the mine's rail line, the watercourses in the area including Back Creek, Maules Creek, the unnamed ephemeral creek known as the Southwest Tributary and the Namoi River, the irrigation diversion channels on Back Creek, the water storages the subject of the offence, stream gauges and surface water monitoring locations.
The next map, below, was extracted from the Maules Creek Coal Mine Annual Review 2017 exhibited to the affidavit of Mr Alexander Bowlay of the Natural Resources Access Regulator (NRAR), affirmed 25 June 2020, showing the surface water and geomorphological monitoring locations at the mine.
In this judgment, the "Active Mine Area" means the active operational area of the mine which is located within the catchment of Back Creek.
It is agreed by the parties' experts that if runoff was not caught by SD7 and MC10, the dams identified in the SOAF par 70 and shown on the map above in [10], it would drain to the Southwest Tributary which drains to the Namoi River.
There are two irrigation diversion channels, a dam and other surface water structures present downstream on Back Creek before it meets Maules Creek, shown as black dashes on Back Creek in the map above in [10]. It was agreed by the parties' experts that these could have prevented water in Back Creek from flowing into Maules Creek and made it unlikely that Maules Creek was affected by the offence.
Dr Peter Hancock's site inspection (see below in [118]) identified an earth embankment along the drainage line of the Southwest Tributary, just past SD7. It was unchallenged expert evidence that this would have prevented a large proportion of water flowing along the Southwest Tributary from reaching the Namoi River, potentially more than 50%.

[13]

Expert evidence

The Prosecutor did not ultimately press in closing submissions that environmental harm to Maules Creek, the Southwest Tributary or the Namoi River was caused by the offence. Accordingly all of the extensive evidence heard in relation to those areas will not be set out below. Evidence that follows focussed on whether there was environmental harm as a result of impacts to surface water in Back Creek and to adjacent groundwater, and therefore vegetation and aquatic ecology in Back Creek.
The Prosecutor tendered a tender bundle of documents containing all of the Prosecutor's evidence as filed (Ex A). Not all of this evidence was ultimately read, as discussed in [164].

[14]

Mr Anderson

The Prosecutor tendered Mr Doug Anderson's lengthy hydrology and hydrogeology report dated 18 June 2021 and supplementary report dated 30 July 2021. Mr Anderson holds undergraduate and postgraduate qualifications in environmental engineering and groundwater studies from the University of New South Wales (UNSW) and is a Principal Environmental Engineering Hydrogeologist at Pells Sullivan Meynink with 20 years' experience in groundwater and surface water assessment. Hydrogeologists have expertise in understanding and predicting how water moves through the ground.
Mr Anderson considered the hydrological/hydrogeological impact or likely impact of the offence on surface water in Back Creek and groundwater. He was also instructed to determine how Back Creek is replenished and to explain what an ephemeral watercourse is. Mr Anderson did not consider that he had enough data to develop and calibrate a coupled hydrological-hydrogeological model to predict Back Creek stream flow and shallow groundwater behaviours. Mr Anderson's reports were not based on complex modelling prepared by him. He considered modelling conducted by others. For example, Mr Anderson relied on the modelling conducted by Dr Francois Flocard as well as the Maules Creek Mine Environmental Impact Statement, Surface Water Impact Assessment (WRM, 2011). Mr Anderson's answers to the questions posed were based on a conceptual (or theoretical) hydrological and hydrogeological model. He developed a simplified water balance assessment model commensurate with the information available.
Mr Anderson assumed that all 1,000ML captured by the mine would have made its way to Back Creek, including 340ML captured by SD7/MC10. Mr Anderson's reading of the mine's water management plan (WMP) was the basis for his assumption. He assumed that SD7/MC10 were in areas not affected by mining operations because they were located near a rail line and rail operations were not mining operations. The WMP 2014 at p 63, reads: "runoff from the undisturbed catchments will also be diverted to the clean water drainage system and discharged to Back Creek" (see below in [161]). As he considered SD7/MC10 to be in undisturbed catchments, Mr Anderson considered water in SD7/MC10 was clean water that would have to be discharged to Back Creek.
In relation to groundwater recharge rates in general, Mr Anderson initially estimated, in the absence of any monitoring data, that 1-30% of surface water usually enters the ground during rainfall depending on the geology. He assumed this was applicable to Back Creek. Using the stream level data for Back Creek provided by Dr David Newton (see below in [62]), Mr Anderson later revised this recharge rate to 9-43% in his supplementary report.

[15]

Impacts on Back Creek

The offence had a number of adverse impacts on Back Creek. It reduced the total volume of overland flow water moving downstream within Back Creek during and following rainfall runoff; water on the ground within Back Creek following rainfall runoff; water below the ground within Back Creek following rainfall runoff (overland flow water infiltrating into the ground into stream bed and stream bank storage); and water infiltrating into the ground through the bed and banks of Back Creek of which some percentage then drains deep into the underlying aquifers.
Had the taken water been released into the environment in accordance with the approved WMP as interpreted by Mr Anderson the water would have been naturally distributed throughout the hydrological cycle. In particular, the hydrogeological course of the water would be runoff to and within Back Creek and other tributaries/water courses downstream of the water storage and capture locations; infiltration into the stream bed and stream bank soil moisture store; evaporation from any ponded water within the creek bed; evapotranspiration by riparian vegetation; groundwater recharge to the deeper aquifers underlying the stream; and groundwater flow to other parts of the aquifer. The offence has caused a loss of water to all these hydrological zones, environments and water sources. The offence reduced the water available to downstream surface and groundwater environments by an amount approaching 1,000ML.
The reduction of the volume of Back Creek surface water occurred during rainfall events and a few hours to days thereafter. The impact can be characterised as "minor" and unlikely to extend more than 10km downstream of the mine. This characterisation was later revised (see [32] below). The offence caused environmental harm by causing reduced flow in a downstream direction. It reduced flow into irrigation diversion channels present downstream on Back Creek (see [14] above) and posed a risk of reduced evapotranspiration rates for vegetation with roots above ground.
The impact on Back Creek soils (stream bed and bank sediments) reduced replenishment of riparian soils moisture and groundwater on approximately 13 occasions during the charge period. The immediate impacts lasted up to 1-2 months after each runoff event impacted by the offence. The cumulative impacts potentially lasted for the duration of the charge period (especially during drought periods). The spatial extent of impact, and consequently environmental harm, was likely limited to the natural environment of Back Creek and its tributaries closer to and/or on the mine site (to a distance of 9.8km downstream of the mine's eastern discharge point); namely the soils, sediments, rocks and ecology within 6m of ground surface located within 20 to 40m horizontally of the water courses (i.e. the riparian zone of Back Creek and its tributaries). The offence caused environmental harm in relation to soils and the stream bed by lowering soil moisture, increasing the risk of reduced evapotranspiration rates for riparian vegetation and reducing water for aquatic ecology.

[16]

Deeper groundwater

The volume and rate of groundwater recharge into the aquifers at depth below the Back Creek watercourse must have been decreased by the offence. The Gunnedah-Oxley Basin Murray Darling Basin Groundwater Source would have been affected directly below Back Creek. Effects would be unlikely to extend more than 9.8km from the mine. Environmental harm would be caused by reduced groundwater flow and levels to more distant parts of the aquifer or adjacent aquifers. The effects would be potentially measurable if piezometers had been installed at shallower depths and monitored more frequently. The Maules Creek Groundwater Source Upper Namoi Zone 11 would be similarly affected. There must also have been reduced horizontal groundwater flow into other parts of the aquifer at distance. The effects would be likely indiscernible at distance to Back Creek due to increasing aquifer volume and the regional water table fluctuations caused by climate, regional irrigation, and nearby mine groundwater use. While the amount of water not reaching the aquifers at depth is much less than the take of water the subject of the offence, in cases where the aquifer is under pressure from cumulative impacts of historical and current aquifer interference, even small amounts of recharge provide a benefit, especially during a drought.
Mr Anderson assumed that the duration of effects on aquifers would also be the same as that described in relation to stream bed and bank sediments. The water withheld from aquifers might be in the range of 1-30% (the recharge rate subsequently revised to 9-43%) of the total take of water the subject of the offence. Mr Anderson's overall assessment on deep aquifers was nevertheless that due to the very dry conditions during the charge period, very little groundwater would have been draining into the aquifers at depth. Any impact to immediate or regional scale aquifers would be too small to measure or infer conceptually and required complex numerical modelling to predict with more data than was available.

[17]

Mr Anderson's methodology and commentary on Dr Newton's methodology

Mr Anderson did not do "quantitative numerical modelling of hydrological and hydraulic processes of coupled surface water - groundwater systems" because he "did not have sufficient data (stream flows and shallow groundwater levels within five metres of ground surface and fifteen metres of Back Creek) … to undertake that modelling task". Field work exercises to collect sufficient data and undertake computational modelling work would require years to complete.
While Dr Newton's Australian Water Balance Model (AWBM) predictions did cause Mr Anderson to question his opinions, on further consideration he did not change them; he clarified them. The AWBM is a rainfall-runoff model. Dr Newton used the AWBM model to inform his report (see below in [58]). The parameters he entered into the model were determined by the Maules Creek Mine Environmental Impact Statement, Surface Water Impact Assessment and are identical to those used by Dr Flocard to estimate the unlawful take volumes in Table 2 of the SOAF par 50. Dr Flocard's evidence is briefly examined below from [80]. Mr Anderson considered that the AWBM modelling used in Dr Newton's expert report is of limited usefulness. This view was based on consideration of the AWBM software limitations, the irrigation diversion channels in Back Creek, and comparisons of the AWBM predictions to the monitoring data provided. For example, the model grossly overestimates the volume of surface water flows in Back Creek during drought periods.
The AWBM is not a useful tool for predicting how and where water flows between two points within a catchment, nor effects of riparian groundwater or evapotranspiration rates. Specifically, it does not simulate hydraulic flow processes that occur within or along ephemeral creeks, including water movement into overbank areas, irrigation diversion channels, side storage channels, and dams. It does not simulate the hydraulic interaction between the surface water and shallow groundwater along a water course. Dr Newton's AWBM modelling therefore does not show where water from the mine site moves through Back Creek or how much goes into the ground beneath Back Creek. The AWBM could be calibrated to reasonably predict either high flows or low flows at single points within a catchment, although probably not within the same scenario.

[18]

Drought and other conditions affecting impact of the offence

The magnitude of the impacts increased in the charge period because groundwater levels were likely to be at their lowest levels in the last 70 years. The timing of the offence coincided with "the worst drought in living memory" - meaning the water that would have been released into the environment had significantly more relative value to the environment. Furthermore, the legal taking of water by the mine in previous years would have led to drier conditions.
During a period of above average rainfall the offence would have caused minimal harm to the riparian ecology of Back Creek relative to the impact of the mine's lawful operations. If the take had occurred during a large rainfall event the impacts would have been relatively less significant.
Mr Anderson clarified that he should have written "prolonged period of long-term below average rainfall" rather than a "prolonged period of below average rainfall". The 2016-17 period included a "short lived break" of the drought during the 2017 calendar year due to above average rainfall conditions. His view was that this was considered in his first report.
While the effects on riparian vegetation in the 2016-17 "short lived break" in the drought were likely minimal, the taking of water by the offence still represents a significant loss of water to the system that diminishes the availability of riparian groundwater during the remaining parts of the drought. Between 20 January 2017 and 29 March 2019 there was a drought based on only a few, minor flows at the downstream edge of the mine. The CSIRO soil moisture model predictions in Mr Anderson's first report (extracted from the CSIRO Australian Landscape Water Balance Model published by the Australian Bureau of Meteorology) predicted depleted soil moisture conditions in 2018 and 2019, during which period the environment could have significantly benefitted from the Defendant not harvesting the water.

[19]

The offence benefitted groundwater levels

Mr Anderson opined at par 124 of his supplementary report that groundwater users likely benefited and continue to benefit from the offence because had the Defendant not taken surface water, it would have likely needed to pump groundwater, increasing the approved drawdown of the groundwater sources.

[20]

Groundwater does replenish Back Creek

Local shallow groundwater flow systems near Back Creek will contribute seepage into Back Creek following large rainfall events. If flow in Back Creek was observed for several weeks following rainfall, or stream pools were observed and sustained for several weeks without depletion, this would indicate a groundwater flow system. Considering the additional stream flow data identified by Dr Newton (described below in [62]), if there is baseflow from local groundwater systems, it lasts for 3-4 days.

[21]

Timing of take

Mr Anderson did not identify the precise times the take occurred in terms of days or months. Relying on data sourced from Dr Flocard's report (see below from ([80]), the unlawful take of 1,000ML occurred in the following volumes at the following times: 1. 2016-2017: 640.6ML 2. 2017-2018: 171.4ML 3. 2018-2019: 188ML
Again relying on data sourced from Dr Flocard's report, the percentage of allocated water in the Maules Creek Water Source (described in the SOAF pars 15-16) that was taken by the offence in the relevant years was 23.7% of the total allocated water over the entire period, broken down as follows: 1. 2016-2017: 45.5% 2. 2017-2018: 12.2% 3. 2018-2019: 13.4%.

[22]

Mr Anderson's oral evidence

Mr Anderson was cross-examined by the Defendant. Mr Anderson accepted in cross-examination that his preference would have been to carry out quantitative (computational) modelling but he was not able to do so. He had not done quantitative modelling of either surface water systems or groundwater systems. Nor did he have the kind of observational data necessary to validate predictions in a model. He nevertheless opined that he could still express views about hydrological consequences without such a model. In re-examination, Mr Anderson expressed the view that it was not a limitation that he did not have a computational model. In the process of understanding something, a conceptualisation of the impacts is first needed.
Mr Anderson accepted that there was no evidence of how the water moved down Back Creek due to a lack of instrumentation deployed by the Defendant. He was relying on his experience from other sites and observational data that becomes available in respect of those sites.
Mr Anderson estimated that the "simple toolkit" he used to draft his reports could make estimates within 30-50% accuracy, whereas a complex computational model could probably make predictions to within 10-30% accuracy of the actual figures.
Mr Anderson was aware that he based his reports (see above in [19]) on reports based on AWBM modelling, namely the Maules Creek Mine Environmental Impact Statement, Surface Water Impact Assessment, and Dr Flocard's report, which he relied on to ascertain the total volume of water taken. Mr Anderson understood why Dr Newton had used the AWBM modelling and that there were advantages to it. He also accepted that the AWBM model is a good tool for predicting flows past a point.
Mr Anderson accepted that water takes would generally be less significant in a high rainfall period during a high rainfall event. Nevertheless, if water is withheld during a period preceded by years of drought but with a blip of above average rainfall in the middle, the impact of the take could in fact be amplified.
Dr Newton is correct that if the sediment dams SD7/MC10 were not there, and had the take not occurred, water would have flowed down the Southwest Tributary and into the Namoi River rather than Back Creek (see below in [61]). Mr Anderson assumed that SD7/MC10 would capture water which would have been dealt with in accordance with the WMP by being pumped into Back Creek.

[23]

Dr Newton

The Defendant tendered Dr Newton's surface water hydrology report dated 15 July 2021 (Ex 1) and supplementary report dated 21 July 2021 (Ex 2). Dr Newton is a Director and Senior Principal Engineer at WRM Water and Environment Pty Ltd. He has 30 years' experience as an engineer providing specialist advice in surface water engineering with a focus on hydrologic and hydraulic modelling.
Dr Newton assessed the impact of the offence on downstream surface water flow by comparing runoff in Back Creek in two scenarios, firstly if no clean water was discharged from the mine, secondly if it were discharged to Back Creek. The Back Creek flow volume for the no discharge scenario was estimated by rainfall runoff modelling of the residual Back Creek catchment excluding the Active Mine Area. The AWBM was used, discussed above in [38]. Volumes of water in Back Creek under the clean water discharge scenario were estimated by adding the take the subject of the offence to the Back Creek flow volume from the residual catchment.
The adopted methodology is likely to provide an upper-limit estimate of the impact of unlicensed clean water capture because: 1. any overflows of treated water from sediment dams that may have occurred during the relevant period have been ignored; and 2. it is unlikely that 100% of the unlicensed clean water capture volume could have been discharged to Back Creek due to operational limitations such as, for example, the inability of pumping infrastructure to fully dewater highwall dams.
Mr Anderson was wrong that water captured in SD7/MC10 would have been released into Back Creek. The mine's WMP does not provide for clean water runoff to be captured from the Southwest Tributary by SD7/MC10 and transferred to any tributary of Back Creek.
SD7/MC10's capture of 340ML did not have any impact on Back Creek or Maules Creek because runoff draining to SD7/MC10 flows to the Namoi River via the Southwest Tributary. The impact of the unlicenced clean water capture on downstream surface water was therefore assessed assuming that only 660ML of the 1,000ML would have been discharged to Back Creek.
SW09 is a stream level gauge downstream of the mine, towards the confluence of Maules Creek and Back Creek. SW10 is a stream level gauge upstream of the mine. The locations of these gauges are shown at the centre of the map above in [10]. Dr Newton used the stream level monitoring data captured by the gauges in his report. The data is provided in centimetres for water level and litres per minute for flow data. It is of poor quality. The recorded water level and flow data is extremely low (below 1.1cm over the charge period) and is unlikely to be correct. The data also records negative values which are unlikely to be correct and were filtered in Dr Newton's analysis. In Dr Newton's view, the only value of the data is to indicate the frequency with which some flow may have occurred in Back Creek (although even for this limited purpose its usefulness is questionable). SW09 data looks more realistic than SW10.

[24]

Impacts of Active Mine Area Capture on Back Creek

Adverse impacts on surface water flow caused by the mine's unlicensed clean water capture in Back Creek were of low significance. The impact of the Active Mine Area capture on Back Creek over the charge period varied between about 14% immediately downstream of the mine, to 10% at the Maules Creek confluence.
The catchment is small in the context of the Namoi River system. The estimated 8% to 15% change in flow volume due to the mine's unlicensed clean water capture is much less than the range of annual variability due to climatic variation in this ephemeral watercourse. The Active Mine Area capture would not have changed the frequency of flow in Back Creek because the portion of the catchment not affected by mining would generate runoff at the same frequency as areas captured by the mine. The number of days in which Back Creek was flowing downstream of the mine would have been unaffected.

[25]

Issues with Mr Anderson's evidence

Mr Anderson's lengthy report in respect of the effect of the offence on Maules Creek, Back Creek, groundwater and any other water source in the surrounding area was "unwieldy" and Mr Newton had difficulty understanding it. Mr Anderson's summary answers do not appear to quantify the magnitude of impact of the offence beyond general and obvious statements, such as that the offence would result in reduced flow in the downstream direction. Mr Anderson failed to consider that the mine capture only affected part of the Back Creek catchment, the rest of which experienced runoff in the same way as pre-mine conditions. Mr Anderson failed to consider that only 660ML was diverted from Back Creek rather than 1,000ML.
Mr Anderson misunderstood the AWBM model used in the mine's Environmental Impact Statement Surface Water Impact Assessment. This had consequences for Mr Anderson's estimate of the depth of the riparian groundwater zone after each runoff event, and therefore of his assessment of the extent of the impact of the offence. He attaches some significance to the depth of the conceptual "buckets" used in the AWBM modelling, which he says is 2.83m in total. Mr Anderson noted that this figure is close to his estimate of 2m for the depth that 1,000ML would infiltrate into the riparian zone of Back Creek (above in [27]). However, the accurate figure for the AWBM "buckets" is 120mm, not 2.83m. Mr Anderson's estimate of the depth to which water infiltrates the riparian groundwater zone "does not represent the hydrologic behaviour of the system with or without the Offence in any physically realistic way".

[26]

Drought

Drought conditions did not prevail in the entire charge period. Mr Anderson's comments that drought magnified the significance of the offence cannot apply to the entire charge period. Given WY2016-2017 was not a drought period, and 442ML of the 660ML withheld from Back Creek occurred in WY2016-2017, Mr Anderson should have only assessed the impact of a 218ML take during drought periods. The finding that release of additional water would have benefitted riparian vegetation is not useful without a comparison of conditions with and without the offence.

[27]

Groundwater does not replenish Back Creek

Groundwater does not replenish Back Creek in any significant way. Replenishment of Back Creek by groundwater would be evidenced by streamflow continuing for weeks following rainfall and/or persistent stream pools. Photographs from the Annual Stream and Riparian Vegetation Health Assessment reports prepared by Cumberland Ecology (see below in [91] and in Dr Hancock's evidence from [116]) of the Back Creek bed at 8 locations upstream of the mine to just upstream of the confluence with Maules Creek from 2015-2020 largely show the creek bed as dry and consistently so.

[28]

Timing of take

Dr Newton did not identify the precise times the take occurred in terms of days or months. The unlawful takes occurred in the following volumes at the following times in his opinion: 1. 2016-2017: 665ML. 2. 2017-2018: 176ML. 3. 2018-2019: 159ML.

[29]

Dr Newton's oral evidence

In cross-examination, Dr Newton agreed with Mr Anderson's summary of the percentage of allocated water in the Maules Creek Water Source (described in the SOAF pars 15-16) taken per year and overall (above in [49]). Dr Newton also agreed that in 2018-2019, recorded rainfall in the vicinity of the mine was below average. From 2016-2018, Dr Newton observed that the cumulative rainfall deficit "probably had a horizontal trend".
Dr Newton accepted that his modelling does not account specifically for groundwater other than as a loss of surface flow. AWBM is a surface flow model. Dr Newton did not put the physical geometry of Back Creek in the AWBM modelling and the model does not take into account the potential infiltration of water into the stream bed below Back Creek. The AWBM modelling had not been calibrated since 1983 apart from by annual reviews of the site water balance and seeing if they were consistent with available site data. The modelling may be less accurate if conditions varied from when it was calibrated. However, the AWBM was not less reliable for predicting flows in low flow conditions during drought. This same model was used by Dr Flocard (below from [80]) to estimate the agreed 1,000ML total take figure, meaning that proportionally the impacts of the offence are best determined using the same modelling.
Dr Newton emphasised that the data from SW09 and SW10 (discussed above in [62] and used by Mr Anderson, see [31]-[33]) was unreliable. The data should possibly be read as metres instead of centimetres as Mr Anderson had assumed. Given the unreliability, he could not agree with Mr Anderson's estimate that 38ML per runoff event can infiltrate the ground within Back Creek between SW10 and the confluence of Back Creek and Maules Creek. It was unclear how Mr Anderson came to his estimate of 9-43% of flow infiltrating as groundwater. He was probably relying on the inaccurate SW09/SW10 data. The proposition that the data shows the water was "going somewhere between SW09 and SW10" was not necessarily correct because the data from the gauges is showing level, not flow. Flow cannot be deduced from the height of water level as shown by comparing two different gauges. It is not necessarily true that there would be a diminution in flow as opposed to level between SW09 and SW10.

[30]

Mr Tomlin

The Defendant tendered Mr Tomlin's report dated 15 July 2021 (Ex 3). Mr Tomlin, hydrogeologist, is a Principal Consultant and Technical Director of Australasian Groundwater and Environmental Consultants Pty Ltd. He has qualifications in Australian environmental studies and hydrogeology and groundwater management with 25 years' experience in the consulting industry. He has handled all groundwater investigations for the Maules Creek Coal Mine since 2010. He provided opinions on the likely impact of the offence on groundwater sources based on information from Mr Anderson, Dr Flocard, data provided by the Defendant and Water NSW's groundwater database and Water Register. Mr Tomlin did not provide an opinion on water stored in the stream bed and bank, only water that reaches or would reach a fully saturated aquifer.

[31]

Impacts of Active Mine Area take on Back Creek groundwater

In relation to the effect of withholding 660ML from Back Creek during the charge period, a portion of that water would have become groundwater recharge for the less productive Gunnedah-Oxley Basin Murray Darling Basin groundwater source and also potentially the highly productive Upper Namoi Zone 11, Maules Creek Groundwater Source when flows are sufficient. There is insufficient information to determine the proportion of the water that would have become recharge. Recharge rates could be relatively high along the alignment of Back Creek, noting Mr Anderson's estimate of 1-30% (which was revised to 9-43%,see above in [21]). Assuming a recharge rate of 15% of 660ML, that is a total loss of 99ML over the charge period. If doubled to a 30% recharge rate, this is a loss of groundwater of 198ML.
Mr Anderson's estimates of the impact of withholding of groundwater from Back Creek may have been overestimates because he assumed that 1,000ML was not discharged into Back Creek. Only 660ML was withheld. Mr Anderson is correct that the groundwater effects were likely too small to measure. The only significant effects would be along the alignment of Back Creek. The effects on groundwater at distance to Back Creek were likely too small to measure.
In relation to whether Back Creek surface water is replenished by groundwater, Mr Anderson's view that groundwater may contribute seepage after large rainfall events is wrong. The water table is well below the level of Back Creek and does not provide baseflow to Back Creek.

[32]

Could the amount lost to groundwater be accounted for out of allocated take?

As agreed in the SOAF, the Defendant did not hold Water Access Licences (WALs) entitling it to take water from the Maules Creek Water Source during the charge period. The Defendant did hold groundwater WALs during the charge period entitling it to access groundwater from the Gunnedah-Oxley Basin MDB Groundwater Source, Upper Namoi Zone 4, Namoi Valley (Keepit Dam to Gin's Leap) Groundwater Source, Upper Namoi Zone 5, Namoi Valley (Gin's Leap to Narrabri) Groundwater Source, and Upper Namoi Zone 11, Maules Creek Groundwater Source.
In Mr Tomlin's opinion, the Annual Reviews for Maules Creek Coal Mine (see below in [157]) establish that the amount lost to groundwater from both the SC7/MC10 and the Active Mine Area takes was less than the residual, unused allocation of Maules Creek Coal Mine under the relevant WALs during the charge period.

[33]

Dr Flocard

The Prosecutor tendered Dr Flocard's water engineering report dated 21 August 2020. Dr Flocard's report was commissioned by the Prosecutor at an early stage in proceedings before the Defendant's plea of guilty and much of his evidence was not pressed. Sections 1.3, 2.6 and 2.7 were read (Ex B). Dr Flocard is a Principal Engineer at the Water Research Laboratory at UNSW. Dr Flocard was engaged by the Prosecutor to inspect the mine site on 11 April 2019 to review the type and number of flow metres and other instrumentation in use at the site.
Dr Flocard's report provided the basis for much of the SOAF and described how, in his opinion, the mine's failure to operate its water management system effectively allowed the offence to occur. Dr Flocard based his assessment of the total take of water the subject of the offence on AWBM modelling (see above in [19]).

[34]

Dr Pfautsch

The Prosecutor tendered Dr Sebastian Pfautsch's expert plant hydraulics and ecohydrology report dated 11 June 2021 and supplementary report dated 27 July 2021. Dr Pfautsch is an Associate Professor in urban studies at Western Sydney University. He has more than 15 years of scientific experience researching plant-water relations, including four years of field research that focused on the impact of groundwater drawdown on adjacent woodlands. He was instructed to provide his opinion on the impact or likely impact on, and harm or likely harm of the offence to the vegetation in the surrounding environment.
Dr Pfautsch was provided with sets of photographs of the vegetation in the vicinity of the mine. The first set was taken around dams during the early stages of mining operations (2014-2016). The second set was taken by Ms Roslyn Druce and Ms Elizabeth Laird and exhibited to their affidavits in these proceedings (see below in [145]-[146]). These included photographs taken from 2005 to 2019 (in Ms Druce's case) and 2016 to 2020 (in Ms Laird's case), depicting riparian vegetation and creek flows around Back Creek, as well as Maules Creek, Horsearm Creek and Elfin Crossing (a concreted causeway over Maules Creek). The third set was a series of images and videos taken and provided by Mr Bowlay documenting the status of the vegetation along points at the northern boundary of the mine in May 2021 on a site inspection which Dr Pfautsch was unable to join. Dr Pfautsch had suggested the sites at which to take photographs using vegetation maps provided by Cumberland Ecology Maules Creek Coal Project - Ecological Assessment (2011) (Cumberland EIS). The sites were chosen because they were either likely to show an impact from changes in hydrology or were sites at which no change was expected from the offence, being control sites. Dr Pfautsch examined the photographs from 10 sites (Sites 1-9 and 14) for signs of stress on vegetation. Their location is shown on the map below. As recorded in the extracted table below, Site 9 was a control site. Site 7 was recorded as an upstream site.

[35]

Harm to vegetation

Dr Pfautsch did not find impacts at Sites 1-6, 8 and 14. He found signs of previous stress on plants at Sites 7 and 9 (a control site). The harms visible in vegetation at Sites 7 and 9 were likely due to a cumulative stress response to drought and reduced water surface flows. Some of the photographs in evidence showed vegetation loss. Others did not, indicating that there was no systemic widespread dieback event happening at a broader landscape scale. Nevertheless, the photographs show severe damage to vegetation. Site 7 featured established trees which display a high capacity to recover from stress and the stress appeared temporary only at that site.
It is highly likely that the take of water has contributed to water stress, reduced ecosystem functioning, and plant mortality in vegetation communities proximate to the mine. In particular, there is evidence of severe drought stress in well-established, long-lived tree vegetation at Sites 7 and 9. Any shallower rooted species (shrubs, grasses and young trees) would have experienced mortality at least in some areas. However, grasses with shorter life cycles compared to shrubs and trees, would have completely recovered following significant rainfall from February 2020 onwards.
The likelihood is very high for occurrence of increased water stress in plants, reduced availability of sugars for growth, storage and exchange with symbiotic partners (through reduced capacity to assimilate carbon from the atmosphere), loss of foliage from tree canopies, reduced defence against pathogens and insects as well as reduced availability of soil nutrients. The offence would also cause lower uptake and availability of a range of nutrients. It is highly likely that the offence harmed the environment at the "worst possible time" to limit discharge of water into the environment. Although it could be argued that the system was already stressed due to drought conditions, the added stress caused by the offence could have pushed plants past threshold levels of water stress.

[36]

Uncertainty of evidence

Dr Pfautsch could not state with certainty that the taking of water caused the effects described above. There was no systematic surveying done of impacted vegetation before, during and immediately after the period of the offence. Due to a lack of contemporaneous evidence, Dr Pfautsch could not provide an opinion on the actual or direct impacts of the offence. It was difficult to quantify and measure the impact arising directly from the take given the likely impacts from other factors. He was unable to provide a definite statement of the extent of the harm. He was unable to state which species of plants may have been affected. He did state, with certainty, that the diversion of surface water caused by the offence must have contributed to the impacts noted. These impacts would have been most severe at the northern boundary of the mine and along Back Creek.

[37]

Drought and other conditions affecting impact of the offence

The fact that drought and heat not only impacted plants during one but three consecutive years reinforces the expectation of the likelihood of stress on the ecosystems. The impact of the offence was reduced by the fact that the drought broke in February 2020 and the plants in the area have high capacity to recover from drought stress if lethal thresholds are not surpassed.
The extent of the harm within the mine boundary was likely to be low because of removal of plants by the mine previously. The situation was likely to be different for the rail corridor associated with the Maules Creek Water Source (shown in the map in [10]) because the dams along the corridor (SD7/MC10) were at lower elevations in the landscape. However, as noted, Dr Pfautsch was unable to provide a definite opinion of the extent of harm.

[38]

Impact on vegetation utilising groundwater

The available data indicates that "the offence had no direct effect on the dynamics of near-surface groundwater levels recorded at bores along Back Creek or Maules Creek". Such effects cannot be excluded but the likelihood of additional harm to plants, especially deep-rooted trees from changes in groundwater was not systemic.

[39]

Methodology and the Cumberland Ecology Monitoring

In his supplementary report, Dr Pfautsch provided his opinion on the methodology behind some of Dr Hancock's report. Dr Hancock relied on information collected by the Cumberland Ecology Pty Ltd Annual Stream and Riparian Vegetation Health Assessments 2015-2020 (Cumberland Ecology Monitoring). The monitoring program included two sites on Back Creek that are upstream of Maules Creek Coal Mine (BCP1, BCP2) and five sites that are downstream (BCP3, BCP4, BCP5, BCPX, BCP6, BCP8). The location of most of the Cumberland Ecology Monitoring sites is shown in the map above in [11]. The evidence before the Court is that in relation to vegetation, this monitoring consisted of visual assessments of vegetation cover. For Dr Hancock's conclusions based on the Cumberland Ecology Monitoring, see below in [123]-[129].
In Dr Pfautsch's view, the information collected by Cumberland Ecology Monitoring cannot be used to conclude that variation of vegetation cover was the result of drought only and not the offence. Visual assessments greatly depend upon the skills of the observer and are the least reliable form of survey. There are long-known flaws in the methodology of the Australian River Assessment System, used by Cumberland Ecology, for detecting anthropogenic impacts on stream health. These limitations were recently exposed in Chessman, "What's wrong with the Australian River Assessment System (AUSRIVAS)?", (2021) 72 Marine and Freshwater Research 1110. Dr Pfautsch also opined that the variation in tree cover during the charge period was so high at Site BCP5 in Cumberland Ecology Monitoring that it cannot be explained by ecological processes alone.
Even if he assumed that the Cumberland Ecology Monitoring was correct, Dr Pfautsch would not change his views as to extent of harm caused or likely to be caused to vegetation. Comparing observations from downstream, presumably "impact" sites, to a single upstream site, presumably a "control" site, cannot yield reliable information. Dr Hancock selectively picked monitoring sites (see [117]) rather than examining all available sites.
In respect of Dr Hancock's disagreements with Dr Pfautsch, Dr Hancock's views were based solely on visual inspections more than two years after the offence (see [118], [131]). In response to Dr Hancock's critique that Site 7 from Dr Pfautsch's report was upstream and therefore could not have been affected by the offence (see [129]), Site 7 was located on a tributary to Back Creek and therefore the term upstream may have been misleading. In any case observing one image from a single site two years after the offence is a questionable basis for assessing water stress caused by the offence.

[40]

Dr Pfautsch's oral evidence

Dr Pfautsch was cross-examined by the Defendant. He agreed that it was important to know where water that was taken would have gone for the purposes of his report. He partly relied on Mr Anderson's report to form his views in that regard. He also agreed it was important to know when the water was taken, particularly when assessing short-term impacts, and he did not form a view on exactly when the takes occurred.
In cross-examination it was put to Dr Pfautsch that he started with the damaged sites (7 and 9) and then worked backwards to establish whether the water that might have reached those sites had been sequestered, only then forming the view that the damage might have been caused by the take. Dr Pfautsch accepted that this was close to what he did but preferred to characterise his methodology as identifying sites in advance that could contain vegetation that was potentially harmed by the take of water. Later in cross-examination, he appeared to wholly accept counsel for the Defendant's characterisation.
Dr Pfautsch accepted that he was assuming that the offence caused a reduction in water available at Site 7.
Dr Pfautsch was not saying that the offence caused a reduction in groundwater and thereby affected vegetation. He focused on surface water when it came to plant stress.

[41]

Dr Growns

The Prosecutor tendered Dr Ivor Growns' expert aquatic ecology report dated 27 July 2021 and supplementary report dated 27 July 2021. He holds a PhD in Environmental Science from Murdoch University and is a Research Fellow with over 25 years' experience in primarily macroinvertebrate and fish ecology, with specific expertise in the relationships between water flow and biota of rivers, streams and wetlands. Dr Growns was asked to assume 1,000ML taken from the environment would have flowed into Back Creek.
Due to a lack of contemporaneous surveying and sampling in the impacted area immediately before and after the charge period, Dr Growns did not know exactly what biota would have occurred in the creeks and rivers downstream of the mine. He was drawing the conclusion that certain species likely existed in the environment from his own experience, studies and surveys such as the Atlas of Living Australia, the Sustainable River Audit database for the Murray-Darling Basin, a desktop assessment prepared by NSW Fisheries of Back Creek and Maules Creek, and the Cumberland EIS. Dr Growns analysed the impact of the offence conceptually, using a series of flow diagram conceptual models of the effects of water extraction on ecosystems.

[42]

Assumptions and qualifications

The offence resulted in less water being available from rainfall runoff events extending to approximately 10km downstream of the mine. The less water available, the greater the impact on aquatic biota. Whether water flows depends on the duration and volume of a rainfall event. After the cessation of water flow still water pools are likely to form. Where there is less surface runoff any pools will dry more quickly and habitat will be lost.
The exact extent and duration of the impact on the habitat of biota (measured in terms of velocity, water depth and surface area) from the offence was difficult to determine. Moreover, the conceptual models used are subject to the qualification that responses will vary with natural discharge patterns and the timing, frequency, and magnitude of extraction.

[43]

Harm to biota in Back Creek

The impact of the clean water take would have been to reduce the flowing water habitat available to biota in Back Creek at the times the runoff events would otherwise have occurred. Following runoff events still water habitats (pools) would also have been affected by reducing their persistence. The impacts involved alteration of the physical (e.g. a reduction in depth of remnant pools) and chemical (e.g. a decrease in dissolved oxygen) attributes of still and flowing waters which directly impact aquatic biota. Taxa requiring water to complete their reproductive life cycle would be affected by pools drying out more quickly. Those which can fly in and out of habitats were less likely affected. Insofar as invertebrate taxa that require water decline, that will impact on predator taxa. A reduction in habitat reduces the potential for biota to breathe, feed and breed. The impact on species are summarised by the conceptual models in the report, which show a wide range of adverse impacts on biota as a result of decreased water. The range of species likely to be affected based on the databases noted in [101] were listed in Table 1 and Table 2 of Dr Growns' report.
The opinions expressed in Dr Growns' first report were not altered or qualified in his supplementary report. He agreed with Dr Hancock that the effects of the offence would be short-term because the impacts would stop following the drying of the creek bed and only be felt once water was back in the environment and being taken (see [119]). The impacts would also be limited by the fact that the invertebrates in Back Creek are adapted to the ephemeral creek. Dr Hancock was also correct (see [126]) that the volume of water taken may have been minor in comparison to the water already present in Back Creek and therefore the impacts may have been minor.
Given the conceptual models on which Dr Growns' report was based, the offence would have caused harm to invertebrates (and terrestrial vertebrates relying on such invertebrates) through a reduction in the amount of habitat available. Despite Dr Hancock's findings that there was such a minor impact on aquatic biota (such as the loss of a few individual invertebrates) in Back Creek that there was essentially no harm (see [119], [124], [128]), Dr Hancock's opinions corroborated Dr Growns' opinions that harm would be caused to invertebrates. Contrary to Dr Hancock, in Dr Growns' opinion the loss of some invertebrates does constitute harm.

[44]

Criticism of Dr Hancock's methodology and Cumberland Ecology Monitoring

Dr Hancock could not reliably assess the level of ecological impacts based on the data on the number of taxa or the percentage of tolerance taxa provided in the Cumberland Ecology Monitoring (see above in [91]). The number of taxa and the percentage of tolerant taxa are set out at pars 29-34 of Dr Hancock's report. The use of this data to indicate recovery is problematic for two reasons.
Firstly, Dr Hancock's report contains no statistical analysis to indicate whether the difference in the number of taxa or percentage of tolerant taxa at sites upstream (Sites BCP1 and BCP2) and the sites downstream (defined by Dr Hancock as Sites BCP4, BCP5, BCP6 and BCPX) changed before and after the offence. For a map depicting the locations of those sites, see above in [11]. Such an analysis would require replicate samples at each site to measure variability of the data. When conducting statistical analysis it is necessary to measure variability (the amount of spread in data) in order to calculate formulas that generate the statistics in the analysis. The statistics are used to assess whether the difference in the number of taxa or their tolerance is significantly different (i.e. was not equal to zero) in the impacted area, before and after the charge period, compared with the upstream sites. Without such a statistical analysis it is impossible to judge whether any change occurred as a result of the offence.
Secondly, the Cumberland Ecology Monitoring data is problematic because there are only two sites which have been used to assess the condition of the invertebrates that would have existed if the offence had not taken place. To properly assess the potential condition of the invertebrate taxa without the offence, a large number of sites is required to measure the natural variation in the invertebrates outside the affected area. The use of only two sites (BCP1 and BCP2) is insufficient. Natural variation occurs in invertebrates because they respond to environmental differences between and within creeks. A larger number of testing sites is required to see if the number of taxa and the percentage of tolerant taxa at Sites BCP4, BCP5, BCP6 and BCPX lay outside what would naturally occur without the offence.

[45]

Harm to endangered fish

The Prosecutor tendered the NSW Department of Primary Industries 2013 publication entitled "Policy and guidelines for fish habitat conservation and management" (the Policy) (Ex D). Mr David Ward's desktop assessment, summarised below in [135], classified Back Creek's status as a fisheries habitat based on the classifications used in the Policy. Dr Growns relied on Mr Ward's desktop assessment.
The Atlas of Living Australia does not indicate that the Southern Purple Spotted Gudgeon has been located near Back Creek. Back Creek is ephemeral and unlikely to support continuing fish populations. Mr Ward's desktop assessment attached to Dr Growns' first report identifies Back Creek as expected threatened species habitat for Southern Purple Spotted Gudgeon. While Dr Growns had not seen the data underlying the desktop assessment conducted by NSW Fisheries, he considered it reliable based on his knowledge and experience.

[46]

Dr Growns' oral evidence

Dr Growns agreed in cross-examination that he needed to understand the hydrological consequences of the take as a starting point of his assessment. He was relying on Mr Anderson's assessment of 1,000ML in his first report and dealt with the possibility that 660ML was withheld from Back Creek in his second report. He was relying on Mr Anderson's view (above in [20]) that every megalitre of water taken by the storages was deprived from Back Creek. He was instructed to assume this was the case. Dr Growns accepted that the physical characteristics of the water course would affect the ability of water flows to form pools. Dr Growns accepted that he had not done an analysis to see whether Back Creek has characteristics that would help form pools.
When pressed as to his assumptions about where the water would have gone into Back Creek and Maules Creek, Dr Growns stated that he assumed that any water in Back Creek would have provided animal habitats. Dr Growns had not done a statistical analysis to indicate whether there were differences in the number of taxa or percentage of tolerant taxa at sites upstream and sites downstream change before and after the events. This was the analysis that he claimed Dr Hancock would need in order to judge whether there was a change caused by the offence (in [108]).
Dr Growns accepted that the duration and nature of rainfall events accompanying the offence was relevant to assessing impacts on aquatic ecology, and that he did not have that data. He further accepted that the impact of the offence would be reduced in winter.
Dr Growns accepted that he relied on the views of Mr Ward (see below in [135]) in opining that Back Creek could be a habitat for Purple Spotted Gudgeon in his first report. He assumed that Purple Spotted Gudgeon could migrate from Maules Creek to Back Creek.

[47]

Dr Hancock

The Defendant tendered Dr Hancock's terrestrial and aquatic ecology report dated 15 July 2021 (Ex 4) and supplementary report dated 15 August 2021 (Ex 5). He has a PhD in Freshwater Ecology from the University of New England and is a Principal Aquatic Ecology Consultant with more than 25 years' experience, primarily in groundwater invertebrates and macroinvertebrates. Dr Hancock clarified in his supplementary report that he also has expertise in relation to riparian and terrestrial vegetation, as distinct from plant physiology, aquatic plants, and riparian plant taxonomy. He was asked to provide his opinion on the impacts and harm of the offence on aquatic and terrestrial ecology, and to agree or disagree with the findings of Dr Growns and Dr Pfautsch.
Dr Hancock relied on Cumberland Ecology Monitoring discussed by the Prosecutor's experts as reflected above in [91]-[95] and [107]-[109]. In assessing vegetation cover downstream, Dr Hancock relied on Sites BCP3 and BCP 5 from Cumberland Ecology Monitoring. In assessing vegetation cover upstream before and after the offence, Dr Hancock relied on Sites BCP1 and BCP 2.
Dr Hancock also conducted a site inspection on 29 June 2021 and was taken to seven locations: SD7 and the creek line of SD7, a 1.5km reach of Back Creek extending upstream from 300m downstream of the mine, Back Creek immediately upstream, Back Creek 1.5km upstream of the mine, Back Creek at Therribri Road (1km upstream of the confluence with the Namoi River), Maules Creek at Elfin Crossing and Maules Creek at Browns Lane. He visually assessed each site he visited, made notes, and took photographs. He also collected macroinvertebrate samples at Back Creek. He used the Policy (Ex D) to determine fish habitat classification.

[48]

Impacts of Active Mine Area take on Back Creek

The unlawful capture of water (660ML over three years) in the Active Mine Area would have had minor, short-term impacts on aquatic ecology, but has not had any long-term impacts on aquatic ecology. The unlawful capture of water in the Active Mine Area has not caused any actual or likely harm to the aquatic or terrestrial ecology.
This conclusion is partly based on Mr Anderson's assessment of the spatial extent of the impact of the offence, namely that it was contained to within 9.8km of the Back Creek catchment or to within the irrigation diversion channels downstream of the mine on Back Creek (see the dashed lines on the map in [10]). The magnitude of reduced runoff impacts downstream of the diversions was likely minor.
Back Creek has no suitable habitat for Southern Purple Spotted Gudgeon. Suitable habitat may be present in the middle reaches of Maules Creek in the form of isolated perennial pools. However, if the impacts of the offence only extended up to 9.8km along Back Creek, the offence would not have impacted these pools.
The ecology of Back Creek is ephemeral. The creek contains biota "highly adaptable to a wide range of flow". Animals living in ephemeral waterways have life-cycle strategies allowing them to survive dry periods and recolonise when water returns.
Cumberland Ecology Monitoring shows an increase in the taxonomic richness in Back Creek macroinvertebrate communities in surveys after the charge period. The data also shows an increase in the proportion of pollution-sensitive taxa. This is potentially due to longer periods with surface water present in the channel and despite most of the survey sites being dry in the intervening period between survey events.
Based on observations made during the site visit, the riparian zone along Back Creek showed no identifiable impact potentially caused by the offence. The monitoring data in the Cumberland Ecology reports does not demonstrate that the offence has had any "significant" impact on Back Creek, with sites downstream of the mine showing similar changes through time as those sites upstream of the mine.
Based on Dr Pfautsch's assessment of riparian vegetation along Back Creek, the impact of the offence would be most pronounced on shallow rooted plants such as grasses, shrubs and young trees. Any reversible effects on the impacted ecosystems in the relevant area would have occurred in 2020 and 2021 with the resumption of regular rainfall. Sites downstream of the mine along Back Creek show healthy riparian vegetation and closed grass cover with no systematic and widespread dieback visible.

[49]

Harm to endangered fish

Dr Hancock classified Back Creek as Type 2 (Moderately Sensitive) Key Fish Habitat under the Policy (Ex D) because the reach of the river did not have rocks greater than 500mm in two dimensions and logs greater than 300mm diameter and 3m length. Back Creek is not likely to be a suitable habitat for Southern Purple Spotted Gudgeon because of its lack of aquatic vegetation and long periods of no flows. The nearest recorded site for the species is several hundred kilometres away.

[50]

Dr Hancock's oral evidence

Dr Hancock accepted that the rainfall which occurred from February 2020 would have led to the replenishing of soils in the area, which may explain the lack of impacts on vegetation observed in 2021 and identified in his report (in [129]). He accepted that trees and shrubs and grasses may have died between 2016 and 2019 at least partly as a result of the offending conduct.
Dr Hancock agreed that it was possible that the withholding of water from Back Creek may have impacted on ecosystem functions and vitality. This was especially the case if the water was distributed in one event as opposed to distributed events. He nevertheless felt that the rainfall falling directly on the soil at the time of rainfall events had a more significant positive impact on the soil then water in Back Creek sinking into the channel, banks and bed of Back Creek.
In relation to the type of fish habitat prevailing in Back Creek, Dr Hancock agreed that a factor indicating inclusion within Type 1 Highly Sensitive Key Fish Habitat under the Policy (Ex D) is whether the location is known or expected threatened fish species habitat.

[51]

Fisheries officer

The Prosecutor tendered the affidavit of Mr David Ward affirmed 11 June 2021, an additional affidavit affirmed 28 July 2021 and exhibit DW-1 to his first affidavit. Mr Ward has qualifications in zoology and marine biology and is employed as a Fisheries Manager within the Freshwater Environment branch of the NSW Department of Primary Industries (Fisheries). Mr Ward conducted a desktop assessment to determine the fisheries values of Back Creek.
Back Creek is Type 1 (Highly Sensitive Key Fish Habitat) under the Policy because it is expected threatened species habitat for Southern Purple Spotted Gudgeon listed under Sch 4 of the Fisheries Management Act 1994 (NSW), based on the report entitled "Fish Communities and threatened species distributions of NSW" (NSW Department of Primary Industries, 2nd ed, July 2016) (Threatened Fish Distributions NSW). Mr Ward spoke with Dr Growns about his assessment.
Mr Ward's second affidavit of 28 July 2021 responded to the claims made by Dr Hancock. Mr Ward referred to the DPI Primefact Southern Purple Spotted Gudgeon Mogurnda Adspersa (July 2017, Primefact 1275, 2nd ed) (Primefact 1275). Mr Ward disagreed with Dr Hancock's classification of Back Creek as Type 2 (Moderately Sensitive) Key Fish Habitat on the basis that Dr Hancock was wrong to treat the presence of rocks greater than 500mm in two dimensions and logs greater than 300mm diameter and 3m length as a requirement of a Type 1 habitat; rather, this was only one of the features that would suffice to make an environment a Type 1 habitat.
Mr Ward stated in re-examination that he was relying on the habitat being "any known or expected protected or threatened species habitat under the Fisheries Management Act [sic]" for the purposes of classifying the habitat as Type 1 under the Policy (Ex D). Mr Ward observed that some of the features of pools identified by Dr Hancock in his report seemed to bolster the assertion that Back Creek may be Southern Purple Spotted Gudgeon habitat because the features were consistent with Primefact 1275.
In cross-examination, Mr Ward admitted there are benefits of a field assessment relative to a desktop assessment. He agreed that no surveys had been conducted for fish in Back Creek to his knowledge.
Mr Ward was asked about the report Threatened Fish Distributions NSW. Figure 14 is a map of the indicative distribution of the Southern Purple Spotted Gudgeon in NSW. Mr Ward agreed that this map only indicated that populations of that species may be present, with a level of confidence that may be as low as 33% and as high as 100%.

[52]

Departmental officers' evidence read by Prosecutor

The Prosecutor tendered the affidavit of Mr Timothy Baker affirmed 10 June 2021 which was relied on in part. Mr Baker is a Senior Water Regulation Officer at NRAR. He stated that water sharing plans are the primary tools to facilitate the provision of water for the environment in addition to providing water for water users. Mr Baker provided: 1. a summary of the regime for water allocation under the WM Act; 2. information about the allocation levels at unregulated water sources such as Maules Creek (which is generally 100%); 3. a letter from the NSW Office of Water to the NSW Department of Planning on 12 October 2011 providing comments on the Environmental Assessment for the Maules Creek project application lodged by Aston No 2 Coal Pty Ltd (Aston No 2); 4. a letter from the NSW Office of Water to Resource Strategies Pty Ltd on 20 November 2014 outlining the Office's comments on the revised WMP for Maules Creek Coal Mine; 5. a letter entitled "Initial Advice on preliminary draft WMP" from the NSW Office of Water to Whitehaven Coal Limited (Whitehaven) on 21 February 2013 outlining the Office's comments on the draft WMP, including a comment on the reporting and review data in relation to water that was required by the Department.
The Prosecutor tendered the affidavit of Mr Mark Burrell affirmed 6 August 2021. Mr Burrell is a water accountant at the Department of Planning, Industry and Environment. He described the system of trading for water allocation between water access licence users pursuant to s 71T (assignment of water allocation between access licences) or s 71V (interstate assignment of water allocations) of the WM Act. Using data generated by trades, the NSW Department of Primary Industries trade dashboard produces a trade report, which collates inter alia the volume of water allocation traded in megalitres for each water source and the weighted average trade price of water allocation in $AUD per megalitre (the cost of water). Mr Burrell identified, where available for relevant years, the cost of water in the: 1. Maules Creek Unregulated River Water Source (no transactions); 2. Lower Namoi Regulated River Water Source; 3. Gunnedah-Oxley Basin MDB Groundwater Source; 4. Upper Namoi Zone 4, Namoi Valley (Keepit Dam to Gin's Leap) Groundwater Source; 5. Upper Namoi Zone 5, Namoi Valley (Gin's Leap to Narrabri) Groundwater Source; and 6. Upper Namoi Zone 11, Maules Creek Groundwater Source (no data available).

[53]

Local residents' affidavits read by Prosecutor

Ms Roslyn Druce swore an affidavit dated 18 May 2021, but only paragraphs 1-3 and 36-63 and parts of exhibit RSD-1 (tabs 18-41) were read. Ms Druce lives on a property at Wongolea. She took photographs between 2005 and 2019 of flooding events at Back Creek and of Melaleuca riparian forest communities on Back Creek at various locations, exhibited to her affidavit (tabs 18-41). Dr Pfautsch relied on some her photographs (see [83]).
Ms Elizabeth Laird swore an affidavit dated 4 June 2021, but only paragraphs 100-105 and tabs 54-59 of the exhibit EAL-1 were read. Her evidence included photographs taken in 2019 showing Maules Creek and Elfin Crossing, a photo of fish in a pool of water near Elfin Crossing, a photo of the creek bed of Maules Creek near Elfin Crossing, a photo of fish that appeared dead in a pool of water in the creek bed of Maules Creek, and a photo within the creek bed of Maules Creek upstream of Elfin Crossing. Dr Pfautsch relied on some her photographs (see [83]).
Mr Derek Williams affirmed an affidavit dated 4 June 2021, but only paragraphs 1, 5, 8 and annexure 2 were read. He owns a property situated near the junction of Maules Creek and Back Creek. He and his wife owned a surface licence to take water from Maules Creek, reproduced in annexure 2 to his affidavit. That licence came with conditions, including condition 8, restricting the take from Maules Creek and Horsearm Creek when flows are in the "Very Low Flow Class" subject to certain exemptions. This evidence was not relevant to the circumstances of this offence and was read to show that there were residents in the area with water access licences attached to which were conditions regulating when they could take water from the Maules Creek Water Source.

[54]

Representatives of Maules Creek Coal Mine read by Defendant

Mr Huw Morgan, who affirmed an affidavit dated 16 July 2021, is Group Manager - Water and Property for Whitehaven. He is responsible for providing subject matter expert advice and operational support with respect to the mine. He identified the rectification works carried out by the Defendant since the offence to address the deficiencies of the mine's water management systems as identified in the SOAF, the recent history of the irrigation diversion channels and other water management structures on Back Creek, and his actions to deal with those structures. He stated that the mine had been negotiating an enforceable undertaking with the Prosecutor since 29 March 2021.
Mr Morgan provided evidence that the rectification works program in which the mine is engaged includes three components: a. a new highwall dam clean water diversion system; b. a new western clean water diversion system; and c. the decommissioning of the SD7/MC10 storages within the Mine's rail corridor and reinstatement of the historical natural watercourse at the location of these storages.
The first two components are outlined in an addendum to the mine's approved WMP. The full rectification plan is to be carried out in accordance with the enforceable undertaking. The Highwall dam system is expected to be completed in January 2022 and is expected to cost $6,000,000. The construction of the western clean water diversion system was completed in December 2020. It was not operational as of July 2021 because the existing pump system has been impacted by repeated pump failures caused by sediment from the base of the dam entering into and blocking the dam's pump intake mechanism. The Defendant needed to uninstall the existing pump system and replace it with a pontoon pump system. This work was estimated to be completed by September 2021. Mr Morgan had also, as of July 2021, commenced work to decommission the two irrigation diversion channels on Back Creek, the drainage barrier on Back Creek (so as to prevent surface water being impeded), and the pipe and valve located next to the large dam to the south of Back Creek (so as to prevent water entering the dam).
Mr Ian Humphris, who affirmed an affidavit dated 21 July 2021, is a Director of the Defendant. He attested to the Defendant's remorse, the changes in governance of the Defendant since the offence, the rectification works undertaken by the Defendant and to the Defendant's character as a "corporate citizen".

[55]

Enforceable undertaking

The enforceable undertaking under s 336E of the WM Act between the Prosecutor and the Defendant on 11 August 2021 was tendered (Ex C). The Defendant undertook to: a) construct approved Highwall Dams 8, 9, 10 and 11 and all associated works* by no later than 25 March 2022 or a later date agreed in writing by NRAR which agreement will not be unreasonably withheld in circumstances where delay is beyond the control of MCCPL (Figure 1 shows the general configuration of this clean water management system, including the location of the dams, pumps, pipeline, access road and the discharge point into an existing clean water diversion drain within the Mine's project boundary); b) operate approved Highwall Dams 8, 9, 10 and 11 and all associated works* (while operational) for the purpose of transferring captured clean water runoff from undisturbed catchments into a tributary of Back Creek in accordance with the water management plan under the SSD Consent; c) operate the already-constructed and approved Western Clean Water Diversion and all associated works* (while operational) for the purpose of transferring captured clean water runoff from undisturbed catchments into a tributary of Back Creek in accordance with the water management plan under the SSD Consent (Figure 2 shows the general configuration of this clean water management system); d) decommission Sediment Dam 7/MC10 and re-establish the historical natural drainage line at the location of these storages within the rail corridor by no later than 29 July 2022 or a later date agreed in writing by NRAR which agreement will not be unreasonably withheld in circumstances where delay is beyond the control of MCCPL; and e) submit an updated water management plan for approval under the SSD Consent by 30 November 2021 or a later date agreed in writing by NRAR which: 1. documents the procedures for operating the Highwall Dams and the Western Clean Water Diversion as an automated release system to maximise the volume of clean water diversion and the procedures for monitoring and reporting the water managed by these clean water management systems including: i. the location of the equipment used to monitor the volume of clean water discharged by the Highwall Dams and the Western Clean Water Diversion (figure and table of spatial coordinates); ii. the location of the pipes, pumps, flow meters and water level sensors for the Highwall Dams and the Western Clean Water Diversion (figure and table of spatial coordinates); iii. the stage storage curves for each Highwall Dam and the Western Clean Water Diversion Dam; iv. a figure showing the general configuration of the Highwall Dams and the Western Clean Water Diversion (including the undisturbed catchments reporting to each dam); and v. the planned operational life and decommissioning date of each Highwall Dam; 2. provides for: i. the existing Back Creek stream health monitoring to be undertaken on a biannual basis and include monitoring of tree and canopy health and density (taking into account seasonal changes) at the 9 existing monitoring sites shown in Figure 3 including the: • 2 locations on Back Creek upstream of the Mine site; • 5 locations on Back Creek downstream of the Mine site; • 2 locations on Maules Creek, one upstream and one downstream of the confluence with Maules Creek; ii. associated trigger indicators for carrying out an investigation into potential unexpected surface water impacts of the Mine on tree and canopy health and density and for carrying out additional monitoring of riparian vegetation communities; 3. provides for: i. water quality monitoring of the water discharged by the Highwall Dams and the Western Clean Water Diversion during release events. The monitoring data shall include: • at least one sample (parameters: the parameters listed in Table 4.9 of the approved March 2019 Water Management Plan) per release event (subject to access) from the clean water end of pipe release point; • at least one sample (parameters: the parameters listed in Table 4.2 of the approved March 2019 Water Management Plan) per release event (subject to access) taken from Back Creek both upstream and downstream of the clean water dam release points; ii. this water quality monitoring data to be reported quarterly on the publicly accessible website for the Mine; iii. associated trigger indicators for carrying out an investigation into unexpected surface water quality impacts in Back Creek, to determine impacts from the Mine; iv. multi-level monitoring and reporting of shallow soil and rock moisture content at three locations within the main stream bank of Back Creek (one for each geological unit traversed by the creek) for the purpose of providing records for the calibration of surface water and groundwater management models for the area and the purpose of estimating and managing the Mine's surface water and groundwater effects. Each location monitored should record daily-average soil moisture at 0.5m, 1.5m, 3m and 6m depths; v. the following: • details of current and any additional stream flow gauging, and the soil moisture monitoring of Back Creek described above; • documentation of the make and model of current and any additional instruments used to record stream water levels and the methods applied to post-process and quality control this information into stream level records; • documentation of the make and model of proposed soil moisture probes and the methodology relevant to their use; • cross-section surveys of the existing and any proposed Back Creek surface water level gauging sites; and • development and reporting of rating curves for the gauging sites to enable conversion of monitored stream levels to stream flow. f) submit an updated biodiversity management plan for approval under the SSD Consent by 30 June 2022 or a later date agreed in writing by NRAR which provides for: i. monitoring at a number of permanent sites proximate to Back Creek and its tributaries downstream of the Mine (northern and north-west boundary) to monitor vegetation health in the area likely to be affected by water management at the Mine; ii. monitoring at a number of permanent sites in forested areas proximate to Back Creek and its tributaries upstream of the Mine (mostly east, but also west of the Mine) to monitor vegetation health in the area unlikely to be affected by water management at the Mine; iii. monitoring techniques, trigger points/thresholds and associated actions relating to the monitoring set out at (i) and (ii).

[56]

Annual reviews and annual reports

Annual review documents for Maules Creek Coal Mine for 2017, 2018 and 2019 were exhibited to Mr Bowlay's affidavit affirmed 25 June 2020. These were environmental reviews prepared pursuant to the former s 122B (now s 9.39) of the Environmental Planning and Assessment Act 1979 (NSW). The Defendant also provided the 2020 Annual Report, "Half Year Results Presentation" published 17 February 2021 and the 2021 Annual Report for Whitehaven (of which the Defendant is a wholly owned subsidiary). In financial year (FY) 2020, Whitehaven recorded net profit after tax of $30,000,000. In FY 2021, it recorded a net loss after tax of $87,300,000 million. In FY 2020 Whitehaven had net assets worth $3,249,590,000 and in FY 2021 it had net assets worth $2,705,738,000. The Defendant further provided two financial tables for the Defendant in FY 2020 and FY 2021. They show that in FY 2020, Maules Creek made a net profit of $37,837, had total assets worth $8,758,833 and total liabilities worth $12,489,632. In FY 2021, the Defendant made a profit of $5,909 and had total net assets worth $9,639,186 and total liabilities worth $13,364,076. According to the Whitehaven Annual Report Whitehaven owns and operates through its subsidiaries a number of mines in New South Wales and Queensland.

[57]

Water management plan

The SOAF at pars 29-36 sets out detail about the mine's WMPs. The 2014 and 2019 WMPs were attached to the SOAF at tabs 7 and 8. Relevant aspects of the WMP 2014 are summarised as follows.
Section 2.4 and table 2.3 of the WMP 2014 outlines the requirements of the WMP in accordance with the project approval, including a Site Water Balance, a Surface Water Management Plan and a Groundwater Management Plan. The Surface Water Management Plan begins at section 4.0. Table 2.3's description of the Surface Water Management Plan requirements includes requirements for a detailed description of the water management system on site, including water storages, clean water diversion systems and mine water management systems.
Section 4.2 of the WMP 2014 is the Water Management Strategy. It broadly describes the aims of the mine's water management system.
Section 4.3.1 of the WMP 2014 is in relation to a "Proposed Water Management Infrastructure and System Configuration", which included as an element of the operational strategy that the mine water dam be used as the first priority storage for supply of all mine site demands, excluding the vehicle wash-down demand. Another element is that runoff accumulated in the high wall structures is pumped or drained to clean water drains and diverted around disturbed areas through the mine site to Back Creek. Section 4.3.3 of the WMP 2014 outlines that surface water from areas where water quality is not affected by mining operations is considered clean water. Runoff from undisturbed catchments will be diverted to the clean water drainage system and discharged to Back Creek.
Table 4.4 of the WMP 2014 presents a brief description of the water management structures, including mine water dam, the highwall dams (HWDs) and sediment dams. The mine water dam accepts water from the mine pit and the coal processing infrastructure area and supplies water management system demands at the highest priority. The purpose of SD2 and SD3 was to capture runoff from the operations area.
Section 4.5 of the WMP 2014 outlines the surface water monitoring objectives and planned actions of the mine. Table 4.7 identifies surface water monitoring objectives and monitoring actions, including in relation to water quality downstream of the mine and minimising impacts on stream and riparian health and vegetation. The monitoring proposed to deal with the latter objective was annual stream and riparian vegetation health assessment comprising macro-invertebrate monitoring and physical and chemical monitoring of Back Creek. Section 4.5.1 describes a surface water quality and quantity monitoring plan which is described as key to the surface water management system. According to section 4.51, the protocols in section 4.5.1 will ensure compliance with the mine's licences and provide valuable information on the performance of the water management system.

[58]

Evidence not read

The Prosecutor did not read the following documents served on the Defendant: 1. the affidavit of Ms Susan Pucci affirmed 20 January 2020; 2. the affidavit of Ms Jeanette Nestor sworn 9 February 2021; 3. the affidavit of Mr Bowlay affirmed 19 March 2021; 4. the expert report of Dr Ivars Reinfelds of 29 March 2021; 5. the affidavit of Mr Glen Hamblin affirmed 13 May 2021; 6. the affidavit of Mr Richard Laird sworn 3 June 2021; 7. the affidavit of Mr Ian Norrie affirmed 7 June 2021; and 8. the "bundle of documents regarding compliance history".

[59]

Purposes of sentencing

Section 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) (CSP Act) states: Part 1 Preliminary … 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.
The sentence must reflect all the relevant objective circumstances of the offence and subjective circumstances of a defendant: Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7 at 490 (Jacobs J) and Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14 (Veen (No 2)) at 472-473 (Mason CJ, Brennan, Dawson and Toohey JJ), 490-491 (Deane J). The sentence should not exceed what is justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances: Veen (No 2) at 472, 485-486, 490-491, 496 and Hoare v The Queen (1989) 167 CLR 348; [1989] HCA 33 (Hoare) at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).
The CSP Act (in particular, Pt 3 Div 1) contains provisions relevant to sentencing procedures. Section 21A of the CSP Act identifies numerous matters that a court must take into account when sentencing including those in relation to aggravating (s 21A(2)) and mitigating (s 21A(3)) factors.

[60]

Objective seriousness

The objective seriousness of an offence is determined by considering the following factors where relevant: the nature of the offence; the maximum penalty for the offence; the environmental harm caused by the offence; the defendant's state of mind; the defendant's reasons for committing the offence; the foreseeability of the risk of harm to the environment; the practical measures available to the defendant to avoid harm to the environment; and the defendant's control over the causes of the harm: Chief Executive of the Office of Environment and Heritage v Turnbull [2017] NSWLEC 141 at [16]. Some of these factors overlap with mandatory sentencing considerations under the heads of s 364A(1) of the WM Act below.

[61]

Nature of offence

A fundamental consideration for environmental offences is the extent to which the defendant's conduct offends against the legislative objectives expressed in the offence: R v Peel [1971] 1 NSWLR 247 at 262; Garrett v Williams (2006) 160 LGERA 115; [2006] NSWLEC 785 at [89]; Garrett v Freeman (No 5) (2009) 164 LGERA 287; [2009] NSWLEC 1 at [52]; and Director-General, Department of Environment and Climate Change v Rae (2009) 168 LGERA 121; [2009] NSWLEC 137 at [15]. The objects of the WM Act in s 3 are extracted above in [3].
It is agreed that the Defendant did not hold an access licence entitling it to take water from Maules Creek Water Source during the charge period. Under s 56 of the WM Act an access licence is required to take water other than for domestic and stock rights and harvestable rights. Under s 60I(3) of the WM Act a person who carries out a mining activity is required to hold an access licence authorising the taking of water. The WM Regulation 2018 and WM Regulation 2011 provide statutory exemptions from the requirement to hold a licence to take water from a water source under the WM Act, for an excluded work. Those exemptions did not apply.
As the Prosecutor submitted the important role of water sharing plans in facilitating the provision of water for both the environment and water users is identified in the affidavit of Mr Baker (in [141]). Water allocations are used to ensure long term water security based on the availability of water in a water source as prescribed by a water sharing plan. The vision statement for the WSP is to "provide for healthy and enhanced water sources and water dependent ecosystems and for equitable water sharing among users in these water sources", including the Maules Creek Water Source (WSP cl 9). Consistent with the objects of the WM Act, the objectives of the WSP, at the relevant time, included the following (cl 10): (a) protect, preserve, maintain and enhance the important river flow dependent and high priority groundwater dependent ecosystems of these water sources, … (d) manage these water sources to ensure equitable sharing between users
For each year within the charge period, the estimated share component of the Maules Creek Water Source was 1,406 units, which translates to 1,406ML.
The water management principles are identified in s 5(2) of the WM Act. Apart from basic landholder rights and some exemptions, it is fundamental to the statutory scheme that a person can only take water from a water source if the person is the holder of an access licence, or a person undertaking mining must have an access licence to authorise the take of water.

[62]

Maximum penalty

The maximum penalty in the charge period was $1.1 million and is relevant to determining the objective gravity of the offence. The maximum penalty reflects the public expression by Parliament of the seriousness of the offence: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698. It also provides a sentencing yardstick for the case before the Court. As the High Court noted in Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [31]: It follows that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick.

[63]

Reasons for offence

The Prosecutor has not provided any evidence relevant to the intention of the Defendant in taking water the subject of the charge without an access licence. It submitted that the water was used in the course of mining operations, citing pars 52, 54, 62, 68, 70 and 75 of the SOAF. These words do not appear in those paragraphs. The words that appear is that the water was used "within the Project Site". The Prosecutor submitted that it should be inferred that the water was used for mining operations. As it bears the onus of proof beyond reasonable doubt for matters adverse to the Defendant, far more than an asserted inference is needed for it to establish to the necessary standard of proof that the water was used in mining operations and/or that was intended. In any case the Prosecutor failed to prove what proportion of water was used in mining operations and to establish the significance of the mine using the taken water in its operations.
Consideration of the "reasons for the offence" may also encompass the submission that the offence was for financial gain, an aggravating factor. For consideration of that issue, see [236] below.

[64]

Water Management Act 2000 s 364A(1) considerations

Section 364A(1) of the WM Act identifies various considerations to be considered when sentencing where relevant.

[65]

Impact of the offence on other persons' rights under the WM Act, s 364A(1)(a)

While the Prosecutor's written submissions identified that reliance would be placed on subs (a) ultimately no relevant evidence was read and no reliance placed on subs (a).

[66]

Market value of any water that has been lost, misused or unlawfully taken as a consequence of the commission of the offence, s 364A(1)(b)

The Prosecutor submitted that the water taken had a market value, relying on the affidavit of Mr Burrell dated 10 August 2021, summarised above in [142], essentially confirming that there was a water market in NSW. Mr Burrell identified that the water in the Lower Namoi Regulated Water Source and a number of nearby groundwater sources had certain values during the charge period. The Defendant submitted that the evidence did not establish that the water the subject of the offence had any market value. I agree with the Defendant.
As no attempt was made to tie this evidence to the circumstances giving rise to the offence subs (b) appears to have no relevance. Evidence of the value of water in other water sources to which the mine had access does not establish a market value for water in the Maules Creek Unregulated River Water Source, in which no trades occurred during the charge period.

[67]

Extent of the harm caused or likely to be caused to the environment, s 364A(1)(c)

As summarised above the parties' expert evidence on environmental impact was extensive with evidence from hydrologists, groundwater hydrogeologists, terrestrial and aquatic ecologists and plant hydraulics experts/ecohydrologists.
The parties' experts agree that as regards the years of the take, the range of water taken was as follows: 1. 2016-2017: 640.6-665ML; 2. 2017-2018: 171.4-176ML; and 3. 2018-2019: 159ML-188ML.
It is apparent that the largest take of water was in the 2016-2017 year.

[68]

660ML vs 1,000ML withheld from Back Creek

The Prosecutor maintained in closing submissions that in accordance with Mr Anderson's interpretation of the WMP (in [20]), environmental harm should be assessed on the basis that 1,000ML of water would have gone into Back Creek if not for the offence.
The Defendant submitted that Mr Anderson asked the wrong question when assessing the environmental impact of the offence. He asked what would have happened if the water had been taken by SD7/MC10 and then dealt with in accordance with the WMP, when he should have asked what would have happened if SD7/MC10 did not take water. The Defendant was not charged with a breach of the WMP or the conditions of project approval. Mr Anderson accepted that if SD7/MC10 had not taken 340ML of clean water runoff, it would have flowed down the Southwest Tributary towards the Namoi River. In any event, the further problem for the Prosecutor is that the WMP did not require water from SD7/MC10 to be pumped to the north of the site and discharged to Back Creek. The WMP does not mention SD7/MC10, presumably because it was intended that they would be decommissioned. SD7/MC10 were not clean water dams; the proposition that water was to be discharged from SD7/MC10 to Back Creek cannot be correct.
The Defendant's submissions are correct in relation to the scope of the WMP, namely that SD7/MC10 are not referred to in the WMP unlike the highwall dams which were part of the clean water runoff diversion system. SD7/MC10 are located next to the rail line on the southwestern extremity of the mine area and were not included in the WMP. It follows that no requirement existed for any water collected in them to be pumped to Back Creek.
Accordingly Mr Anderson's approach of considering that the clean water in SD7/MC10 was withheld from Back Creek is not correct. The amount of runoff withheld from Back Creek as a result of the offence will be assumed to be 660ML as otherwise agreed by the hydrologists based on Dr Flocard's report.
As I understand the Prosecutor's final case no separate allegation of environmental harm arising from the collection of clean water in SD7/MC10 was made in relation to the Southwest Tributary and the Namoi River.

[69]

Timing of take and effect of drought

The Prosecutor submitted that the fact that the offence occurred "at the worst possible time" during a time of drought worsened the extent of harm to the environment, at least until the drought broke in 2020. The impacts of the drought are described in the expert evidence, including that it was "the worst, most prolonged, drought in the area in living memory" (Mr Anderson's evidence in [42]), and that the offence occurred at "the worst possible time" (Dr Pfautsch's evidence in [86]). The drought meant that even small aquifer recharge would provide a positive benefit to the water balance of the aquifer. The impacts on the water storages in the soil, shallow aquifers and deep aquifers were exacerbated by the drought, when water had increased value to the environment. Grasses and trees suffered severe distress, as evidenced in photos from May 2021 which show indicators of former stress. The drought lasted between 2016 and February 2020. While the observations of water stress on plants could be from the effects of drought, any harm was potentially accelerated by the combined effects of the drought and the offending conduct.
The Defendant submitted that it is not in dispute that more than 60% of the take occurred in the 2016-2017 year and the Court can make this finding, to any requisite standard. The Court can also find that the 2016-2017 year was an above average rainfall year. The cumulative rainfall deficit for 2016-2018 was fairly steady overall. Beyond these generalities, the evidence does not permit the Court to make a finding as to the specific days, or even months, that the take occurred. The precise times of the takes are important for a number of reasons. Mr Anderson explained that it is relevant to know whether the take occurred during a larger rainfall event (in [43]-[45]). Dr Pfautsch explained that the time of the take is relevant to vegetation impacts (in [96]). Each of the three conceptual models relied on by Dr Growns was subject to the qualification that "responses will vary with natural discharge patterns and the timing, frequency and magnitude of extraction" (in [103]). Dr Growns explained that impacts of a take on aquatic ecology are affected by whether the take affected flow duration and the creation of water pools (in [102]). However, Dr Growns also explained that whether water will flow along Back Creek and whether water pools form depends on the duration and nature of rainfall events (in [102]). Unless one knows when the take occurred, it is not possible to know whether the take occurred at a time when the rainfall event had any particular duration or nature.

[70]

Modelling and methodology - hydrologists

On the issue of modelling, the Prosecutor submitted in closing that Dr Newton's AWBM model is not a model which properly quantifies the impacts of the water not released by the mine in Back Creek. For the reasons Mr Anderson gave (in [38]-[41]), Dr Newton's modelling is fundamentally flawed. The Court should be satisfied that the conceptual model utilised by Mr Anderson accurately predicted that the offence caused loss of surface water flows and stream bed infiltration in Back Creek. Mr Anderson's conceptual model was demonstrated to be accurate by the stream flow data from SW09 and SW10 showing infiltration into the shallow riparian groundwater beneath Back Creek.
The Defendant submitted that the AWBM model was used by Dr Flocard and the original Maules Creek Mine Environmental Impact Statement, Surface Water Impact Assessment (WRM, 2011), which Mr Anderson relied upon. Furthermore, Mr Anderson did not do any quantitative modelling of his own. He could not quantify the effect of the offence. His evidence is at the very highest level of generality. Mr Anderson also accepted that there were some advantages to using the AWBM model (see [53]). There is only one computational model being used and it is Dr Newton's AWBM. If the model is problematic, this does not assist the Prosecutor; there will simply be no quantification at all in the proceedings. The issue is a red herring.
While the evidence is that the AWBM modelling has limitations, it is the only modelling in evidence and was used by both parties' experts to consider the impact of the offence. Even if I found, which I do not, that the modelling was so seriously flawed as to be of limited value in these proceedings, this would have the effect of undermining Mr Anderson's evidence given his reliance on AWBM modelling done by others.
I do not consider this criticism fundamentally undermines Dr Newton's evidence.

[71]

Surface water including water course, stream pools, soil, local groundwater

The Prosecutor submitted that the offence directly impacted the hydrological processes of Back Creek, including its stream flow; flow through stream pools; soils, stream beds and sediments; and shallow groundwater systems. The most significant water impacts of the offence, and the ensuing likely environmental harm, likely extended up to 9.8km (+-30%) downstream of the mine including the soils, sediments and rocks 20-40m horizontally of Back Creek and within 6m of the ground surface i.e. the riparian zone of Back Creek (Mr Anderson in [29]). The offence reduced the water infiltrating into the stream bed and bank sediments, reduced soil moisture, leading to less evapotranspiration by riparian vegetation and faster soil moisture depletion, reduced any stream pools that may otherwise have formed, and reduced evaporative cooling. Were it not for the offence, replenishment of riparian soil moisture and groundwater would have otherwise occurred on approximately 13 occasions during the relevant period, with the immediate impacts on root zone soil moisture lasting up to 1-2 months after each runoff event that was impacted, and the cumulative impacts on root zone soil moisture potentially lasting for the duration of the relevant period, especially during drought periods. Had the offence not occurred there would have been a material increase in soil moisture and riparian groundwater: see Mr Anderson in [28]. These impacts are explained in Mr Anderson's evidence in [22]-[34].
The Defendant submitted that the offence did not have a significant hydrological effect on Back Creek. Any change in volume was much less than the range of annual variability due to climatic variation. The capture would not have changed the frequency of flow. Back Creek is an ephemeral stream. The volume of water taken may have been minor in comparison to that already present in Back Creek and therefore the impacts may have been minor (Dr Growns in [105]). Mr Anderson's evidence was that any significant impacts could extend as far as 9.8km downstream but could also have extended as little as 70% of that distance (6.86km). This estimate was based on the incorrect assumption that 1,000ML was deprived from Back Creek. The Court cannot find to the requisite standard that the data from SW09 and SW10 (see [62]) was reliable. Mr Anderson relied on the stream level monitoring data in his assessment of the hydrological impacts (see [31]). Mr Anderson also admitted he has limited experience with ephemeral stream monitors.

[72]

Deeper groundwater

The Prosecutor submitted that the evidence demonstrates that the offence caused reduced deep drainage to aquifers below the watercourse, noting that while the amount that would have reached the aquifers was much less than the volume of water taken overall, in cases where the aquifer is under pressure even small amounts of recharge are important (see [35]).
The Defendant submitted that the Court cannot make a finding beyond reasonable doubt as to the proportion of the take that would have become groundwater (see Mr Tomlin in [75]). A considerable amount of groundwater allocation was available and unused in each relevant year (see Mr Tomlin in [78]-[79]). Mr Anderson conceded that the offence was beneficial to groundwater in the area overall (see Mr Anderson in [46]). Even if there was some impact, Mr Anderson maintained it was too small to measure or likely indiscernible anywhere except directly below Back Creek where no piezometers had been installed (see in [36]).
Whether or not the stream flow data provided by SW09 and SW10 is reliable, which was the subject of some debate between the experts, the Court does not have evidence to support a finding to the requisite standard as to the proportion of surface water runoff that would have become groundwater recharge. Given the Prosecutor's own expert identified the groundwater impacts of the offence as immeasurable or likely indiscernible, opined that very little water would drain to the deep aquifers, and expressed the view that the offence likely benefitted groundwater levels in the area, the Prosecutor has not made out a case of actual or likely harm to groundwater to the requisite standard. I agree with the Defendant's submissions as these are borne out by the evidence.

[73]

Vegetation

The Prosecutor submitted that the evidence from Dr Pfautsch establishes that the offence highly likely contributed to water stress, reduced ecosystem functioning and increased plant mortality in vegetation proximate to the mine. While the Prosecutor originally submitted that the offence caused actual harm to riparian vegetation, this was not ultimately pressed. The actual impact cannot be determined. Severe drought stress on vegetation is nevertheless established. The impact would be most pronounced on species that solely rely on moisture in the upper soil layers (0-30 cm), such as grasses, shrubs and young trees. There is also evidence of impacts to well-established trees. The harm to plants is evidenced by contemporaneous photographs of vegetation taken along Back Creek in 2018 and 2019. Photographs from 2021 show evidence of former stress. While the observations of water stress described above could be from the effects of drought, any harm was potentially accelerated by the combined effects of the drought and the offending conduct (see Dr Pfautsch in [86]). The harms likely to occur to plants include those described by Dr Pfautsch in [84]-[86].
In relation to the Cumberland Ecology Monitoring used by Dr Hancock as evidence of the absence of environmental harm to vegetation (see [91], [117], [125], [129]), the Prosecutor submitted that the monitoring data was of limited utility based on Dr Pfautsch's evidence in [91]-[95].
The Defendant noted that the Prosecutor alleges likely harm to vegetation, not actual. Dr Pfautsch conceded that the actual and direct impacts cannot be determined (in [87]). The Prosecutor conceded that any effects were temporary. Dr Pfautsch's evidence does not demonstrate to the requisite standard even likely harm to vegetation. Dr Pfautsch did not find any harm at sites 1-6, 8 and 14 (in [84]). He found impacts at site 9, but this was a control site; if harm is found at a control site, that suggests the cause was not the offence. Further, site 9 was not located on Back Creek. Dr Pfautsch found harm at Site 7, but the Court cannot find that Site 7 was impacted by the offence because on the available evidence it cannot find Site 7 was downstream of the water storages in issue (see [94]). In any case, Dr Pfautsch accepted that the vegetation at Site 7 had a high capacity to recover (in [88]). Dr Pfautsch emphasised that the primary cause was drought, with the take being a likely cumulative impact (see [84]). The Prosecutor also conceded in closing submissions that there was no case of harm to vegetation that relied on deeper groundwater.

[74]

Aquatic ecology

While the Prosecutor originally submitted that the offence caused actual harm to aquatic ecology, this was not ultimately pressed. Relying on the evidence of Dr Growns, the Prosecutor submitted that the take would have likely reduced the water forming flowing and still water habitats in Back Creek, reducing the ability for biota to breathe, feed and breed (in [104]). Invertebrate taxa with rapid lifecycles would likely have been affected, and these provide food for other terrestrial invertebrates. Reduced water would likely have adversely impacted the range of taxa identified by Dr Growns in his report. The likely harm caused to the riparian environment of Back Creek would have been significant. The evidence of Mr Ward shows Back Creek is classified as highly sensitive key fish habitat under the Policy (see [135]). This was because Back Creek was identified as an expected habitat for the Southern Purple Spotted Gudgeon, an endangered species.
The Defendant submitted that the Prosecutor did not run a case of actual harm to aquatic ecology in Back Creek, only likely harm. Dr Growns accepted that "without …a statistical analysis, it was impossible to judge whether any change occurred as a result of the offence". He did no such analysis (in [108], [113]). At most there were minor short term impacts. There is evidence of increased taxonomic richness since the charge period (in [123]). The riparian zone shows no identifiable impact (in [124]). The ecology is highly adaptable to a range of flows (in [122]). The take would have occurred during rainfall events meaning Back Creek was already flowing, reducing the impact of the offence (in [126]). Any impacts were likely to have been short-term and may have been minor according to the Prosecutor's witness (in [105]).
Dr Growns conceded that Back Creek was unlikely to support continuing fish populations (in [111]). The Prosecutor did not establish to the requisite standard that there is Southern Purple Spotted Gudgeon habitat in Back Creek, given the only evidence the Court has on which to base such an assessment is an indicative map with confidence levels as low as 33% (in [139]). Back Creek is not in any of the catchments in which the Southern Purple Spotted Gudgeon has been found (see [140]). No field assessment indicating the existence of the Southern Purple Spotted Gudgeon has occurred (see [138]). Dr Hancock made observations during his site visit to Back Creek which suggested to him that it was unlikely to host habitat for Southern Purple Spotted Gudgeon (in [130]).

[75]

Practical measures that may be taken to prevent, control, abate or mitigate harm, s 364A(1)(d)

The Prosecutor submitted that there were three practical measures the Defendant could have taken to prevent the risk of harm. The first was not to take surface water without a licence. The second was to operate the mine's water management system in accordance with the WMP by diverting water from the highwall dams back to the environment and not capturing clean water in sediment dams or the mine pit. The third was to comply with the mine's obligations attached to the project approval to include within a Surface Water Management Plan a range of performance criteria, monitoring and reporting procedures, and further plans to respond to exceedances of the performance criteria.
The Prosecutor was not arguing that the alleged breaches of the WMP 2014 aggravated the offence per se, but that compliance with the WMP 2014 would have enabled practical measures to prevent, control, abate or mitigate environmental harm.
The Defendant submitted that s 364A(1)(d) refers to the "harm" referenced in 364A(1)(c). That "harm" is the actual or likely harm in fact caused by the offence. The evidence does not establish that any actual harm was caused by the offence. To the extent that the evidence establishes likely harm, the Defendant accepted that there were practical measures it could have taken to prevent the harm arising from the offences.
In relation to the alleged breaches of the WMP 2014, the Defendant submitted that it was not notified that the Prosecutor would make submissions to the effect that there had been non-compliance with the WMP 2014 and therefore did not tender evidence in response. There was no particularisation of such claims. There was no evidence that the Secretary of the Department of Planning, Industry and Environment, or its predecessor the Department of Planning and Environment (the Department) considered the WMP 2014 to have been breached. Relying on Mr Anderson's evidence in submitting that the mine should have put other precautionary measures in place because the WMP 2014 was inadequate does not go to the issue of non-compliance with the WMP 2014. In any case a finding that the mine breached the WMP 2014 does not assist the Court because the offence charged was not a breach of the WMP 2014 but taking water without a licence.
For the reasons given by the Defendant, the allegation that it failed to comply with the WMP 2014 falls outside the offence, was not apparently particularised before the Prosecutor's written submissions and I accept the Defendant was unaware that the issue was to be raised. No evidence has been provided by the Prosecutor that the relevant regulator, the Secretary of the Department, considered there was an issue of non-compliance with the WMP 2014. Nevertheless given that the activities carried out at the mine site were completely in the Defendant's control including ensuring that its activities did not result in the unlawful taking of water I find that there were practical measures which the Defendant could have taken to prevent the offence regardless of whether the Prosecutor could raise breaches of the WMP.

[76]

Extent to which harm could have been reasonably foreseen, s 364A(1)(e)

The Prosecutor submitted that the Defendant could reasonably have foreseen the harm that was actually caused or was likely to be caused to the environment by the taking of clean water without an access licence. The nature, extent and location of the dams, and the failure to divert clean water from undisturbed catchments away from the mine and back into the environment, made environmental harm inevitable. The project approval was conditioned on the mine's compliance with its WMP. The Court should find that the mine ought reasonably to have known that the take of water unaccounted for under the mine's licences was a matter of great significance to the surrounding environment and should have foreseen the risk of harm from failing to ensure that the clean water diversions actually occurred. The Prosecutor originally submitted that the Defendant had actual knowledge in respect of the offence but did not press that submission in the course of the hearing. That is appropriate as no evidential basis exists for actual knowledge of harm.
The Defendant submitted that foreseeability either that the matter was of great significance to the environment or that there was a risk of harm is not relevant to s 364A(1)(e). The question posed by s 364A(1)(e) is whether the actual harm or likely harm caused by the offence (that is, the particular harm) was reasonably foreseeable. The Prosecutor makes no case on this topic, as it could not specify actual harm and the Prosecutor's submissions do not deal with harm foreseeable from the offence.
I agree with the Prosecutor's submissions that the actual harm to the limited extent any was able to be proved to surface water and the potential for harm to vegetation was foreseeable by the Defendant, whose submissions are hard to follow.

[77]

Control over causes that gave rise to the offence, s 364A(1)(f)

There is no dispute that the Defendant had control of the causes that gave rise to the offence.

[78]

Whether the offence was committed during a severe water shortage or an extreme event, s 364A(1)(g)

No specific reliance was placed on s 364A(1)(g) by the Prosecutor although submissions were made about the drought conditions during much of the charge period of three years.

[79]

Intentions in committing the offence, s 364A(1)(h)

No evidence relevant to s 364A(1)(h) was adduced by the Prosecutor.

[80]

Complying with orders, s 364A(1)(i)

Section 364A(1)(i) is not relevant.

[81]

Water released for environmental purposes, s 364A(1)(j)

Section 364A(1)(j) is not relevant.

[82]

Any civil penalty that has been imposed, s 364A(1)(k)

Section 364A(1)(k) is not relevant.

[83]

Other matters the court may consider relevant

The Prosecutor submitted that the fact that the offence occurred during a period of drought is relevant to the objective seriousness of the offence (see [192]) as another matter the Court may consider relevant. As the Defendant submitted whether the area around the mine was subject to drought in the charge period has been considered already in relation to the extent of impact of the harm and cannot be "double counted". As already noted no mention was made of s 364A(1)(g) by the Prosecutor.

[84]

Financial gain, s 21A(2)(o) not established

Financial gain is an aggravating factor under s 21A(2)(o) of the CSP Act that must be proved beyond reasonable doubt. Financial gain includes costs not incurred: Environment Protection Authority v Custom Chemicals Pty Ltd [2016] NSWLEC 146 at [86].
The Prosecutor alleged the offence was carried out for financial gain. It submitted that had the mine not taken the water the subject of the offence, it would have needed to purchase additional water entitlements from the Lower Namoi Regulated Water Source or nearby groundwater sources. According to evidence from Mr Burrell (see [142]), the cost of water from the Lower Namoi Regulated Water Source was between $141-$391/ML during the charge period. The prices for groundwater from the sources to which the mine had access ranged between $37-$214/ML during the charge period. Moreover, relying on the affidavit of Mr Keough (see [143]), Aston No 2 (one of the joint venturers of the mine) undertook two temporary water trades under s 71T of the WM Act in June 2017 and April 2018. This earned Aston No 2 a total of $285,750. Aston No 2 could engage in water trading because the mine unlawfully took water from Maules Creek Water Source.
The Defendant submitted that it cannot be contended that the offence was committed for financial gain. The Prosecutor does not assert any state of mind. The Prosecutor contended that had the mine accessed water from another water source, it would have had to pay for it. There is no basis for this inference. The logical steps supporting this inference have not been articulated. The evidence is in fact that the mine had available to it substantial water entitlements during the charge period which it did not access (see the annual reviews above in [157]). Mr Keogh's evidence of water trades by some other person, Aston No 2, does not establish financial gain by the Defendant. Nor is any connection drawn by the Prosecutor between the offence and those trades.
As the Defendant submitted no attempt was made to tie the water trades made by Aston No 2 to the offence. The Prosecutor's submission was simply made that because the Defendant captured water these trades could occur. No factual basis had been established to support that submission. No aggravating circumstance under s 21A(2)(o) has been established.

[85]

Finding on objective seriousness

The Prosecutor submitted that the offending conduct in this case was of medium-high objective seriousness, involving the take (for three consecutive years) of a substantial share of water which was available in each year to be taken from the Maules Creek Water Source without an access licence. It thereby offended against the objects of the WM Act, the water management principles, the vision of the WSP and the statutory provision creating the offence being s 60A(2) of the WM Act, undermining the regulatory scheme. This increases the objective seriousness of the offence: Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v O'Haire [2020] NSWLEC 158 at [33] (Pepper J) (O'Haire).
The Defendant disputed this, submitting that the offence was of low, and certainly no more than moderate seriousness.
The Defendant is a large company undertaking a sophisticated mining operation in the course of which it failed to comply with its obligations under the WM Act resulting in this offence. The Defendant is a wholly owned subsidiary of Whitehaven, a very large company which operates directly or through its subsidiaries a number of coal mines in Australia. The offence took place over three years, clean water was withheld from the environment of Back Creek in two years of severe drought and there is no evidence that the Defendant identified its own failures on its site. The Prosecutor had to reduce its claims of actual environmental harm in the course of the hearing including reducing the geographic area affected and the amount of water withheld to 660ML withheld from about 9.8km of Back Creek downstream of the mine. This reflected the difficulty of establishing actual harm beyond reasonable doubt in light of the nature of the environment and the offence. The Prosecutor ultimately alleged and I accepted that there was undefined actual harm to surface water flows, and likelihood of harm being caused to vegetation around Back Creek and to its aquatic ecology as a result of the offence. The Defendant's failure to comply with the statutory scheme aimed at the management of water resources undermines that scheme in a substantial way. I consider the objective seriousness of this offence is at the low end of the medium range.

[86]

Mitigating factors

Mitigating circumstances that can be taken into account in sentencing include those in s 21A(3) of the CSP Act where relevant.

[87]

Early plea of guilty, ss 21A(3)(k), 22

An early plea of guilty is a mitigating circumstance (ss 21A(3)(k), 22 of the CSP Act). In respect of this offence, the application of the full discount of 25% for the utilitarian value of an early plea of guilty as stated in R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 at [152] is warranted. The Defendant pleaded guilty on the day the Amended Summons was filed. The utilitarian value of a plea is generally intended to reward an early plea which saves a prosecutor and a court expenditure of time and money in case preparation and management.

[88]

Assistance to authorities, s 21A(3)(m)

It is an agreed fact (SOAF par 79) that the Defendant co-operated with the Prosecutor.

[89]

Remorse, s 21A(3)(i)

The Defendant submitted, relying on Mr Humphris' evidence, that the Defendant is remorseful (in [152]-[153]). The Defendant has entered voluntarily into an enforceable undertaking (in [155] above) which has been accepted by the Prosecutor as delegate for the relevant Minister. The detail and onerousness of the undertaking is part of the punishment and should operate to reduce the penalty.
The Prosecutor submitted that the Defendant had failed to take measures promptly to avoid further harm since the offence and its remorse is qualified at best. The Prosecutor referred to the first and third methods of showing contrition and remorse identified by Preston CJ in Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299; [2006] NSWLEC 419 at [203]-[214]: First, the speed and efficiency of action to rectify any harm caused or likely to continue to be caused by the commission of the offence is the clearest indication of contrition and remorse. Where it occurs it justifies a reduction in the sentence… Thirdly, the taking of action to address the causes of the offence, such as designing and installing improved pollution prevention and control systems, also indicates a genuine desire to act responsibly….
The Defendant's conduct does not meet the standards identified by Preston CJ because there are no HWD storages within the project boundary and the HWDs and infrastructure promised by the Defendant are not due to be completed until 2022 according to Mr Morgan (see [150]). The clean water diversion system to return water to Back Creek was not operational at the time of written submissions (28 July 2021). SD7 has not been decommissioned.
The Defendant submitted in reply that it should not be criticised for its failure to construct works (e.g. highwall dams) in accordance with the enforceable undertaking (in [155] above): 1. There is no basis for a contention that the Defendant has not acted "rapidly" to address the harm, contrary to the Prosecutor's closing submissions. No such contention has been notified to the Defendant, and it has not been addressed in lay evidence. In fact, the Defendant first suggested an enforceable undertaking to the Prosecutor on 5 November 2019 (I note there is no evidence of this date as Mr Morgan's evidence refers to March 2021, at [148]) and the Defendant has offered multiple draft enforceable undertakings since. The Prosecutor has not addressed these matters in evidence. 2. The Prosecutor and the Defendant have been in negotiations about an enforceable undertaking for some time (see [148]). 3. It is reasonable for the Defendant not to construct a new system unless and until there is an enforceable undertaking in place identifying what new system should be constructed. 4. It is not apparent how the Prosecutor could contend that the Defendant should have started constructing a new eastern HWD system in circumstances where the Prosecutor was negotiating with the Defendant about what that new HWD system should look like. 5. Mr Morgan has explained the difficulties in constructing a new eastern HWD system (in [150]). The Prosecutor has not impugned Mr Morgan's evidence. 6. The Defendant has already constructed its new western clean water diversion system (and did so in December 2020), see above in [150].

[90]

Good character, s 21(3)(f)

The Defendant submits that it is of good character, relying on Mr Humphris' evidence (see [154]).
The Prosecutor submitted that the evidence of good character is primarily in respect of the parent company of the Defendant, not the Defendant. This evidence cannot be used to draw conclusions about the character of the Defendant: Stephen James Orr v Narrabri Coal Operations Pty Ltd; Stephen James Orr v Narrabri Coal Pty Ltd [2021] NSWLEC 85 (Narrabri Coal) at [219] (Pepper J).
While some of Mr Humphris' evidence on good character relates to the activities of the corporate parent of the Defendant, some of it relates directly to the Defendant, for example its discretionary financial contributions to community initiatives, its employment practices in relation to Aboriginal and Torres Strait Islander peoples and local residents, its investment in local skills and lack of prior convictions. Narrabri Coal is not on all fours with this case. I accept the Defendant's evidence on good character.

[91]

Publication order

The Defendant has agreed to the making of a publication order and its contents. This will be imposed as provided for by s 353G(1)(a) of the WM Act. The parties have agreed the text of such an order.

[92]

Offence could have been prosecuted in the Local Court

The Defendant submitted that the fact that the offence could have been prosecuted in the Local Court with a lower jurisdictional maximum penalty is a matter that can be taken into account in favour of the Defendant: Harris v Harrison (2014) 86 NSWLR 422; [2014] NSWCCA 84 at [92] (Simpson J, Hall and Schmidt JJ agreeing); O'Haire at [185] (Pepper J). The Prosecutor responded that the offence was most appropriately heard in this Court given the complexity of the issues.
As observed in Chief Executive, Office of Environment and Heritage v Parrish and Son Pty Ltd [2020] NSWLEC 47 at [127]-[133] (Moore J), when all prosecutions of the statutory provisions engaged can be brought summarily before the Local Court, that fact cannot operate universally in mitigation. It is necessary to identify factors which suggest that the Prosecutor might have appropriately brought proceedings in the Local Court rather than this Court. Given the complexity of this matter it was appropriately prosecuted in the Court in my view.

[93]

Deterrence, general and specific

I considered the meaning of deterrence, general and specific in Environment Protection Authority v Sam Abbas (also known as Osama Abbas) [2021] NSWLEC 57 at [104]-[106] as follows: 104 General deterrence is an important aspect of sentencing in environmental crime. As held by Preston CJ in Bentley v BGP Properties Pty Limited (2006) 145 LGERA 234; [2006] NSWLEC 34 at [139]-[140]: The sentence must serve the purpose of general or public deterrence. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed: R v Rushby [1977] 1 NSWLR 594 at 597-598. This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines: Environment Protection Authority v Capdate Pty Limited (1993) 78 LGERA 349 at 354 and Director-General, National Parks and Wildlife v Wilkinson [2002] NSWLEC 171 (27 September 2002) at [85] and [93] per Lloyd J. 105 Specific or personal deterrence is applicable where an offender has a prior criminal record which manifests a continuing attitude of disobedience, such that more weight should be given to retribution, personal deterrence or protection of the community: Veen (No 2) at 477; R v Abboud [2005] NSWCCA 251 at [33]; R v McNaughton (2006) 66 NSWLR 566; [2006] NSWCCA 242 at [54]. 106 Specific deterrence has particular relevance where an offender continues to operate in the same area of operation in which the offence occurred: Environment Protection Authority v Ardent Leisure Ltd (ACN 104 529 106) [2018] NSWLEC 36 at [135] per Robson J citing Preston CJ in Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222 at [48].
Given the importance of the regulatory system of water under the WM Act general deterrence is an important consideration in this case. The Prosecutor did not contend that there was any need for specific deterrence in this case.

[94]

Denunciation and retribution

Section 3A(a), (e) and (f) of the CSP Act sets out retribution and denunciation as part of the purposes of sentencing and the Court needs to take them into account. This consideration applies equally to strict liability offences. As Kirby J explained in Ryan v The Queen (2001) 206 CLR 267; [2001] HCA 21 (Ryan) at [118]: A fundamental purpose of the criminal law, and of the sentencing of convicted offenders, is to denounce publicly the unlawful conduct of an offender. This objective requires that a sentence should also communicate society's condemnation of the particular offender's conduct. The sentence represents "a symbolic, collective statement that the offender's conduct should be punished for encroaching on our society's basic code of values as enshrined within our substantive criminal law".
McHugh J elucidated the purpose of achieving retribution in Ryan at [46] as follows: the existing principles require many sentences to be retributive in nature, a notion that reflects the community's expectation that the offender will suffer punishment and that particular offences will merit severe punishment. The "persistently punitive" attitude of the community towards criminals means that public confidence in the courts to do justice would be likely to be lost if courts ignored the retributive aspect of punishment.
These considerations loom large in this matter.

[95]

Even-handedness/parity

The principle of even-handedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty: R v Visconti [1982] 2 NSWLR 104 at 107 (Street CJ, Lee and Maxwell JJ agreeing). The principle of even-handedness in sentencing so that like offences receive like sentences is recognised, but each case must be determined on its own facts: Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 at [42]. A history of sentencing in other cases does not limit my sentencing discretion.
The Defendant submitted that O'Haire was comparable. The total penalty in that case for eight offences was $131,250. The circumstances in O'Haire included the following: 1. There were eight charges: [2]. (In contrast, here, there is one charge). 2. The relevant offence was that prescribed in s 60C(2) of the WM Act: [1]. 3. The total unlawful take between 12 April 2016 and 4 March 2019 was approximately 1,378ML: see [2] and [112]. (In contrast, here, the take is 1,000ML). 4. The water was river water taken via a pump from the Murray River (Murray Regulated River Water Source) and had market value: [3], [55] and [121]. (In contrast, here, the water was runoff taken from an unregulated surface water source and is not established to have had market value). 5. Mr O'Haire's conduct was deliberate: see [137]. He committed the offences intentionally: [145]. (In contrast, here, there is no contention that the conduct was intentional). 6. Mr O'Haire committed the offences to save or defer the incurring of an expense: [145]. He committed the offences for financial gain: [147]. (In contrast, here, there is no basis for a contention that the offences were committed for financial gain). 7. The Court concluded that in these circumstances the offences were in the "moderate" range of objective seriousness: [151]. 8. Mr O'Haire was assessed as being at moderate risk of re-offending: [178]. (In contrast, here, there is no contention that there is any risk of re-offending). 9. Mr O'Haire displayed "no regret or remorse whatsoever for his offending", had not "demonstrated any insight into his offending behaviour" and he continued "to implicate the NRAR in his culpability": [184]. (In contrast, here, the Defendant has displayed remorse, and has taken positive steps). 10. There was a need for specific deterrence: [191]. (In contrast, here, the Prosecutor does not rely on specific deterrence). 11. There was no enforceable undertaking (in contrast to the present case).

[96]

Legal costs

The parties agreed that the payment of the Prosecutor's costs is "viewed as an aspect of punishment and should be considered in the determination of the appropriate penalty as a factor that acts to reduce the penalty": Director-general, Department of Environment and Climate Change v Hudson (No 2) [2015] NSWLEC 110.
The Prosecutor seeks legal costs in the amount of $688,075.80 pursuant to s 257B of the Criminal Procedure Act 1986 (NSW) (CP Act) being for costs incurred up to the date of entry of the plea on 9 April 2021 including costs incurred in relation to drafting the summons, collecting evidence necessary for commencement of proceedings and provision of the s 247E notice of prosecution case, and preparation for the sentencing hearing. This figure was revised down from $739,265.38 following correspondence between the parties after the hearing. The Prosecutor stated it had removed costs related to other proceedings.
The Defendant accepts that it should pay some of the Prosecutor's costs. The order it seeks is: Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the Defendant is to pay 50% of the Prosecutor's costs of the proceedings as agreed or assessed, such costs to exclude the costs of the Summons filed on 29 June 2020 in these proceedings and the costs in proceedings 2020/192788, 2020/192789, 2020/192790 and 2020/192791.

[97]

Prosecutor's submissions

The Prosecutor submitted that ordinarily when a court convicts and sentences an accused person for an offence it is appropriate for the court to order the accused person to pay the costs of the prosecutor: Council of the City of Sydney v Trico Constructions Pty Ltd [2015] NSWLEC 56 at [143] (Preston CJ). Costs orders are compensatory: Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 at 534. The Court has the discretion not to award costs or all costs. None of the examples of grounds for not awarding all costs provided in Environment Protection Authority v Hanna (2018) 235 LGERA 114; [2018] NSWLEC 80 (Hanna) at [281] arise in this case. Those grounds include that the prosecutor did not succeed in proving certain charges, did not succeed in proving aggravating factors on sentencing, or there was disentitling conduct leading up to, bringing or prosecuting the proceedings. No disentitling conduct was alleged by the Defendant in written closing submissions.
In Morrison v Defence Maritime Services (2007) 156 LGERA 365; [2007] NSWLEC 552 (Morrison), Biscoe J reviewed the civil authorities on apportionment of costs, holding at [18] that the principles established in those cases are the same in criminal proceedings. His Honour held at [17] that where the prosecutor succeeds on only a portion of its case, "the circumstances may make it reasonable that it bears the expense of litigating that portion upon which it has failed". That is "where the prosecutor has failed on a dominant or separable and sustainable issue": Morrison at [17]. His Honour held that when considering apportionment of costs in civil litigation "a balance has to be maintained between not discouraging litigants from canvassing all material issues and not rewarding them for unreasonable conduct in the pursuit of issues. That balance is even more important in a criminal case where a prosecutor has a public duty to put all material issues before the Court": Morrison at [20]. See also Newcastle City Council v Pace Farm Egg Products Pty Ltd (No 3) [2005] NSWLEC 423 (Pace Farm Egg).
The circumstances of this case are quite different to Morrison and Pace Farm Egg. There is no disentitling conduct on the part of the Prosecutor.
The question of the extent of the harm caused or likely to be caused to the environment by the commission of the offence is one of the matters that must be taken into consideration by the Court in sentencing pursuant to s 364A of the WM Act. In circumstances where the offending conduct related to a capture of surface water of 1,000ML in dams and other water storages within the Project Site (SOAF at (14)) over three consecutive years (at least two of which coincided with drought conditions), thus preventing that water from entering the environment, it was reasonably arguable for the Prosecutor to contend that harm was likely to be caused to the environment, in particular the riparian zone of Back Creek lying just to the north of the Project Site. Indeed, the Prosecutor had a public duty to put material issues before the Court. A prosecutor, such as the State's water regulator, should not be discouraged from canvassing at the sentencing hearing reasonably arguable matters such as the likely impact and extent on the environment of the offending conduct of capturing clean rainwater pursuant to Morrison at [20].

[98]

Defendant's submissions

The way the Prosecutor conducted the sentence hearing was unnecessarily lengthy and complex and could have been more efficiently run if issues of fact in dispute could have been identified in advance of the hearing. Significant parts of the case on environmental harm beyond Back Creek and impacts on other water users were abandoned. Voluminous evidence on matters which were not relevant was prepared but not referred to or relied on by the Prosecutor.
The proposed costs order reflects what has already occurred namely the abandonment of issues and the manner in which the case was conducted. If the Court does not accept all aspects of the Prosecutor's case further deduction also may be warranted.
Section 257B is discretionary and can be applied to exclude costs, as has occurred in numerous cases such as Hanna; Nash v Silver City Drilling (NSW) Pty Ltd; Attorney General for New South Wales v Silver City Drilling (NSW) Pty Ltd (2017) 93 NSWLR 338; [2017] NSWCCA 96; Environment Protection Authority v Truegain Pty Ltd (No 4) (2014) 206 LGERA 11; [2014] NSWLEC 179; Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178. The principles applied in these cases are not unique to this Court or to the criminal context. They reflect general principles applicable to the awarding and quantification of costs. More generally, the cases establish the following principles in relation to costs.
A party may be deprived of all or part of its costs where it loses on a separate issue which has increased the time taken in Court: e.g. New Galaxy Investments Pty Ltd v Thomson (No 2) [2017] NSWCA 235 at [21]-[23] (and cases there cited). Further, where a party is partly successful and partly unsuccessful, it is open to the Court to apportion costs between issues. The question of apportionment is a matter of discretion for the trial judge; mathematical precision is illusory; and the task is largely impressionistic: e.g. Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261; [1993] FCA 346 at 272; Avopiling Pty Ltd v Bosevski (2018) 98 NSWLR 171; [2018] NSWCA 146 at [172]-[176] (Payne JA, McColl JA agreeing at [1], White JA agreeing at [182] save as to [34]).
Firstly, costs of discontinued proceedings should not be payable (the Prosecutor says these are not claimed in its amended table).

[99]

Finding on costs

Whether costs are awarded in whole or part to a prosecutor pursuant to s 257B of the CP Act requires the exercise of a court's discretion. The applicable principles are identified in the parties' submissions summarised above in [266]-[267], [277]-[278].
As a result of further correspondence after the hearing the Prosecutor reduced its claim for costs and to the extent that occurred it addressed some of the Defendant's complaints in my view.
I observe that it is unnecessary to make the order sought by the Defendant referring to other proceedings not before the Court for sentencing. No costs can be claimed in those matters if they are not the subject of any costs order by the Court. There is therefore no need to refer to their exclusion explicitly in an order. This responds to the first and second matters identified by the Defendant.
In relation to the third matter raised by the Defendant, the conduct of proceedings, I agree with the Defendant above in [281] that the sentencing hearing on environmental harm could have been run far more efficiently by the Prosecutor. The SOAF did not include any facts concerning environmental harm. The parties agreed that no alleged facts on actual or likely harm to the environment, no draft statement of facts on environmental harm and no draft list of disputed facts/issues were provided by the Prosecutor to the Defendant before the sentencing hearing.
The topic of environmental harm occupied most of the three-day sentencing hearing involving numerous experts' reports and their oral evidence as summarised above in [18]-[133].
Any attempt before the hearing to identify facts even if disagreed would have been of substantial assistance to the Defendant and the Court. Mr Anderson's report was particularly unwieldy and unnecessarily lengthy. Some consideration needs to be given to the presentation of expert material so that it can be considered efficiently by the parties and the Court.
The Prosecutor did not ultimately press in closing submissions any likelihood of environmental harm being caused to Maules Creek, the South West Tributary or the Namoi River as a result of the offence. All the experts prepared evidence to address these matters. That evidence has not been included in this judgment as it became unnecessary to consider but the Court was referred to it during the sentencing hearing and I consider that it was substantial.

[100]

Conclusion on penalty

When sentencing, the Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a "value judgment as to what is the appropriate sentence given all the factors of the case": Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [26] unanimously following Markarian v The Queen at [51] per McHugh J.
Taking into account my finding on objective seriousness and mitigating factors, I consider the appropriate penalty is $250,000 which will be reduced by 25% to $187,500 in light of the early guilty plea.

[101]

Orders

The Court orders that: 1. Maules Creek Coal Pty Ltd (ACN 140 533 875) is convicted of the offence contrary to s 60A(2) of the Water Management Act 2000 (NSW) with which it is charged, in that between about 1 July 2016 and 30 June 2019, it took water from the Maules Creek Water Source, being a water source to which Part 2 of Chapter 3 of the Water Management Act 2000 (NSW) applied, when it did not hold an access licence for that water source. 2. Maules Creek Coal Pty Ltd (ACN 140 533 875) is fined $187,500. 3. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), Maules Creek Coal Pty Ltd (ACN 140 533 875) is to pay 60% of the Prosecutor's costs as agreed or assessed. 4. Pursuant to s 353G(1)(a) of the Water Management Act 2000 (NSW), Maules Creek Coal Pty Ltd (ACN 140 533 875) must: 1. within 28 days of the date of this order, cause a notice in the form of Annexure 'A' to this judgment to be placed within the first 5 pages of the following publications, at a minimum size of 10 cm x 18 cm: 1. the print and digital versions of The Land; 2. the print and digital versions of The Northern Daily Leader; and 3. the print and digital versions of the Australian Financial Review; 1. within 28 days of the date of this order and for a minimum of 30 days, cause a notice in the form of Annexure 'A' to this judgment to be placed on the Maules Creek Coal Mine website: https://whitehavencoal.com.au/our-business/our-assets/maules-creek-mine/; 2. within 28 days of the date of this order, post the text of Annexure 'A' to this judgment on Whitehaven Coal's LinkedIn page. The text is to be posted between the hours of 8:00 am and 10:00 am or 4:30 pm and 6:30 pm on a weekday. The post must remain as a pinned post on the LinkedIn page for a minimum of seven days, and as a post on the LinkedIn page for 30 days; 3. within 40 days of the date of this order, provide to the Prosecutor a complete copy or screenshot of the entire page of the publications and websites referred to in orders 4(a) to (c) above in which the notices have appeared or been posted pursuant to these orders; 4. cause a notice in the form of Annexure 'A' to this judgment to be placed in the next annual Sustainability Report published by Whitehaven Coal after the date of this order; and 5. within 28 days of publishing the next annual Sustainability Report, provide to the Prosecutor a complete copy of the page of the Sustainability Report in which the notice has appeared pursuant to order 4(e). 1. The exhibits are returned. 2. Pursuant to s 122(2) of the Fines Act 1996 (NSW), the Registrar is directed to pay 50% of the fine to the Prosecutor.

[102]

Amendments 03 December 2021 - "$200,000" changed to "$187,500" in paragraphs [302], [303(2)], Annexure A Order for moiety added in paragraph [303(6)] 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: 03 December 2021

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