Transport for New South Wales v Estuary Constructions Pty Ltd; Transport for New South Wales v Sampson

Transport for New South Wales v Estuary Constructions Pty Ltd; Transport for New South Wales v Sampson - [2022] NSWLEC 23 - NSWLEC 2021 case summary — Zoe

[6]

Statutory provisions of the POEO Act

The Clean-up Notice Offence arises under s 91(5) which provides: (5) Offence A person who, without reasonable excuse, does not comply with a clean-up notice given to the person is guilty of an offence. Maximum penalty - (a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or (b) in the case of an individual - $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
The Prevention Notice Offence arises under s 97 which provides: 97 Offence A person who does not comply with a prevention notice given to the person is guilty of an offence. Maximum penalty - (a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or (b) in the case of an individual - $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
The Pollute Waters Offence arises under s 120 which provides: 120 Prohibition of pollution of waters (1) A person who pollutes any waters is guilty of an offence. (2) In this section - Pollute waters includes cause or permit any waters to be polluted.
The Notice to Produce Offence arises under s 211 which provides: 211 Offences (1) A person who, without lawful excuse, neglects or fails to comply with a requirement made of the person under this Chapter is guilty of an offence. (2) A person who furnishes any information or does any other thing in purported compliance with a requirement made under this Chapter, knowing that it is false or misleading in a material respect is guilty of an offence. (3) A person who wilfully delays or obstructs an authorised officer in the exercise of the authorised officer's powers under this Chapter is guilty of an offence. (4) A person who impersonates an authorised officer is guilty of an offence. Maximum penalty (subject to sections 204 and 208) - (a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or (b) in the case of an individual - $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
With respect to the charge relating to the Pollute Waters Offence, Mr Sampson has been charged under the special executive liability provisions provided for in s 169(1): 169 Liability of directors etc for offences by corporation - offences attracting special executive liability (1) If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that - (a) (Repealed) (b) the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (c) the person, if in such a position, used all due diligence to prevent the contravention by the corporation.
Insofar as the charges against Mr Sampson in the Clean-up Notice and Prevention Notice Offences he has been charged pursuant to the executive liability provisions pursuant to s 169A (which relates specifically to offences of the type in ss 91 and 97 by operation of s 169A(1)) of the POEO Act which provides: 169A Liability of directors etc for offences by corporation - offences attracting executive liability generally … (2) A person commits an offence against this section if - (a) a corporation commits an executive liability offence, and (b) the person is - (i) a director of the corporation, or (ii) an individual who is involved in the management of the corporation and who is in a position to influence the conduct of the corporation in relation to the commission of the executive liability offence, and (c) the person - (i) knows or ought reasonably to know that the executive liability offence (or an offence of the same type) would be or is being committed, and (ii) fails to take all reasonable steps to prevent or stop the commission of that offence. Maximum penalty - The maximum penalty for the executive liability offence if committed by an individual. (3) The prosecution bears the legal burden of proving the elements of the offence against this section. (4) The offence against this section can only be prosecuted by a person who can bring a prosecution for the executive liability offence. (5) This section does not affect the liability of the corporation for the executive liability offence, and applies whether or not the corporation is prosecuted for, or convicted of, the executive liability offence. (6) This section does not affect the application of any other law relating to the criminal liability of any persons (whether or not directors or other managers of the corporation) who are accessories to the commission of the executive liability offence or are otherwise concerned in, or party to, the commission of the executive liability offence. (7) In this section - director has the same meaning it has in the Corporations Act 2001 of the Commonwealth. reasonable steps, in relation to the commission of an executive liability offence, includes, but is not limited to, such action (if any) of the following kinds as is reasonable in all the circumstances - (a) action towards - (i) assessing the corporation's compliance with the provision creating the executive liability offence, and (ii) ensuring that the corporation arranged regular professional assessments of its compliance with the provision, (b) action towards ensuring that the corporation's employees, agents and contractors are provided with information, training, instruction and supervision appropriate to them to enable them to comply with the provision creating the executive liability offence so far as the provision is relevant to them, (c) action towards ensuring that - (i) the plant, equipment and other resources, and (ii) the structures, work systems and other processes, relevant to compliance with the provision creating the executive liability offence are appropriate in all the circumstances, (d) action towards creating and maintaining a corporate culture that does not direct, encourage, tolerate or lead to non-compliance with the provision creating the executive liability offence.

[10]

The salvage operation

Following the sinking of the Barge, TfNSW commissioned a commercial diving firm, Sea Service Diving & Marine Pty Ltd (SSD&M) to conduct an underwater survey on 30 January 2019.
When surveyed, pieces of timber and thick black plastic lay on the seabed around the Barge, along with a sign containing the numbers "53121".
TfNSW organised oil absorbent booms until the Barge was salvaged in March 2019.
Following the receipt of a letter from Estuary Constructions on 7 February 2019 advising that it denied it was responsible for the sinking of the Barge, and having regard to the environmental impacts of leaving the Barge in its sunken position, TfNSW proceeded to engage contractors to salvage the Barge. SSD&M was engaged to undertake the salvage operation. AWB Contractors Pty Ltd (AWB) supplied heavy lifting, transport and disposal services.
SSD&M and AWB commenced the salvage operation on 4 March 2019. The Barge was removed from the waters on 12 March 2019, with other dislodged equipment and debris removed from the waters on 13 March 2019.
On 13 March 2019, the salvage team retrieved equipment and debris that was lying on the seabed around where the Barge sank. Objects recovered included the pile-driving tower (weighing 2.32 tonnes and 11.5 metres long), part of which had been embedded in the seabed and had been cut on 7 March 2019 to free the Barge. In addition, a red portable crane (weighing 1.515 tonnes), a large timber pile, a black mat, and two mooring blocks were retrieved.
TfNSW officer Mr Aldridge attended the salvage operation and recorded images of hydrocarbons surfacing from the sunken Barge on 5 to 8 March and 11 to 12 March 2019.
The surface slicks included at least petroleum fuel (likely diesel) and hydraulic oil. Hydrocarbons leaked, spilled, or otherwise escaped from various items of plant and equipment.
On 26 February 2019, Mr Aldridge sent an email to Mr Sampson inviting Mr Sampson to participate in an electronically recorded interview in his capacity as director of Estuary Constructions.
On 27 February 2019, Mr Aldridge received an email from Mr Sampson which email attached two letters on Estuary Constructions letterhead. The first, dated 26 February 2019, declined the interview invitation. The second was a copy of the Estuary Constructions letter dated 7 February 2019 in relation to the Clean-up Notice issued on 22 January 2019.

[13]

TfNSW's evidence

In order to prove the facts relied upon by the Prosecutor with which the Defendants did not agree the Prosecutor read the six affidavits of: Rodney John McDonagh sworn 25 June 2019; Nayland Joshua Bram Aldridge sworn 19 December 2019; Edward Philip George Hodge sworn 12 August 2020; David Stuart Wise-Mann sworn 27 August 2020; David Anthony Petch sworn 26 August 2020; and Ryan Carmichael sworn 31 January 2020. This evidence was not contested and the affidavits were read without objection and the deponents were not cross-examined. These affidavits deposed additional further matters as recited below.
The Prohibition Notice was issued to Estuary Constructions on 25 October 2016 pursuant to s 111 of the Marine Safety (Domestic Commercial Vessel) National Law Act 2012 (Cth).
In 2018 TfNSW officers became concerned that the placement and keeping of the Barge in a dilapidated state on the waters of Pittwater was likely to cause a pollution incident, and reasonably suspected that an activity had been, and was being, carried on in an environmentally unsatisfactory manner by Estuary Constructions.
TfNSW gave Estuary Constructions the Prevention Notice in writing dated 13 June 2018 pursuant to s 96 of the POEO Act. Estuary Constructions acknowledged receipt of the Prevention Notice by letter dated 28 June 2018.
The Prevention Notice required that Estuary Constructions remove the Barge and not return it to the waters until it was repaired to the satisfaction of TfNSW. The Prevention Notice specifically directed Estuary Constructions, in summary, to: 1. Within 14 days from the date of the letter, remove the Barge from NSW waterways until proper repairs have been conducted and it is deemed to be in a seaworthy state. Additionally, any loose debris or equipment on the Barge was to be removed unless securely fastened, ensuring there was no risk of polluting the waterway; 2. Ensure that proper repairs were made to the Barge's hull and its watertight integrity; 3. Before returning the Barge to NSW navigable waters, provide TfNSW with expert advice by way of an accredited marine surveyor detailing that the Barge no longer presented a serious risk to the environment or to the safety of persons; and 4. If the Barge was going to be disposed of and no longer associated to Estuary Constructions' commercial mooring, provide TfNSW with substantiating documentation, photographs and receipts of the disposal.
Estuary Constructions did not comply with the Prevention Notice as it did not: 1. Remove the Barge from NSW waterways (either within 14 days of the date of the notice or at any time thereafter); 2. Remove any loose debris or equipment from the Barge or securely fasten it to ensure that there was no risk of polluting the waterway; or 3. Ensure proper repairs were made to the Barge's hull and its watertight integrity.
At the date of the sinking and for several years prior, Estuary Constructions owned and occupied the Barge (having purchased it in December 2013).
As a result of the sinking on 22 January 2019, the Barge introduced to the waters of Pittwater both solid and liquid substances, which: 1. Changed the physical, chemical and biological condition of the waters; 2. Changed the condition of the waters such as to render the waters unclean or impure and poisonous or harmful to aquatic life, animals, birds or fish in or around the waters; 3. Included matter of a prescribed nature such as wood, plastic, oil, grease and diesel, and chemical toxicants for which guidelines are prescribed; and 4. Resulted in harm to the environment by directly and indirectly altering the environment with the effect of degrading it.
The solid substances included: 1. The Barge itself; 2. Plant and equipment situation on the Barge or dislodged from it; and 3. Debris, flotsam, and other materials such as plastic, metal and wood.
The liquid substances included hydrocarbons such as fuel and oil.
The underwater survey was undertaken by SSD&M on 30 January 2019. The Barge was found to be resting on its side with the starboard (right) bow elevated around 1.5 metres from the seabed, while the aft (rear) starboard section was buried in seabed sediment. The Barge's side resting position was propped by the pile-driving tower, which entered the seabed at around 4 metres along its length. The crane arm displayed Estuary Constructions signage.
On 22 January 2019, TfNSW prepared a clean-up notice pursuant to s 91 of the POEO Act (the Clean-up Notice) to Estuary Constructions. The Clean-up Notice was served on 23 January 2019 when it was personally delivered to the sole director of Estuary Constructions, Mr Sampson.
The Clean-up Notice directed Estuary Constructions to take the following clean-up action: 1. Undertake all available measures to minimise and ensure that any release of debris, fuel, oil and other noxious substances is immediately contained; 2. Salvage the Barge, along with any associated debris whether floating or submerged, and remove it from the navigable waters of NSW within 7 days of the date of the notice; 3. Provide for appropriate methods to deal with any release, containment and subsequent disposal of any fuel, oil and other noxious substances and/or related materials; 4. Prior to returning the vessel to the navigable waters of NSW, provide to TfNSW expert advice by way of an accredited marine surveyor detailing that the vessel no longer presents a risk to the environment; and 5. If the vessel was to be disposed of, provide TfNSW with substantiating documentation, photographs and receipts of proper disposal (in accordance with legislative requirements).
Estuary Constructions did not comply with the Clean-up Notice. It did not: 1. Undertake all available measures to minimise and ensure that any release of debris, fuel, oil and other noxious substances was immediately contained; 2. Salvage the Barge, along with any associated debris whether floating or submerged, and remove it from the navigable waters of NSW (either within 7 days of the date of the notice or at any time thereafter); or 3. Provide for appropriate methods to deal with any release, containment and subsequent disposal of any fuel, oil and other noxious substances and/or related materials.
By notice in writing dated 1 March 2019 and served that day on Estuary Constructions pursuant to ss 192 and 193 of the POEO Act (Part 7.3 Notice), Mr Aldridge in his capacity as an authorised officer of TfNSW required Estuary Constructions to provide the following information and records: Information 1. Details of all works undertaken during the period 17 February 2016 - 21 January 2019 (inclusive) to maintain, repair or otherwise improve the condition of the vessel. 2. Details of all known defects on the vessel as of 21 January 2019. Records 1. All Records relation to the maintenance or repair of the vessel during the period 17 February 2016 - 21 January 2019 (inclusive), including but not limited to invoices for materials purchased, payments to external parties for work performed to maintain the vessel, work diary entries, employee scheduling and maintenance plans. 2. Any and all pre-purchase or post purchase report(s) by a marine surveyor which describes the condition of the vessel. 3. A copy of all documentation (including by not limited to the Contract for Sale) pertaining to the Purchase of Estuary Constructions Pty Ltd by the current entity Estuary Constructions Pty Ltd (ABN 11 116 987 908).
The Part 7.3 Notice included a warning that failing to comply with the notice is an offence. The Part 7.3 Notice required Estuary Constructions to provide the information and records by 4pm on 15 March 2019.
On 15 March 2019, Mr Aldridge received an email from Mr Sampson which email attached a letter on the letterhead of Estuary Constructions, dated 12 March 2019 and bearing a signature block with the words "Mr Grant Sampson Director". This letter referred to the Part 7.3 Notice and declined to provide the information and records sought by TfNSW.
Shortly after this email on 15 March 2019, Mr Aldridge received a further email from Mr Sampson which email attached another letter on the letterhead of Estuary Constructions, dated 12 March 2019 and bearing a signature block with the words "Mr Grant Sampson Director". This second letter did not provide the information.
On 20 March 2019, Mr Aldridge sent a further letter to Estuary Constructions, which strongly encouraged Estuary Constructions to comply with the Part 7.3 Notice and included the statement that "failure to comply with the Notice is an offence pursuant to s 211 of the Act and that this is an ongoing offence. Your attention is drawn to the penalties outlined in s 211".

[14]

Defendants' evidence

The Defendants relied upon the two affidavits of Grant Darcy Sampson sworn 17 September 2021 and 22 November 2021.
At [1]-[4] of the affidavit sworn 17 September 2021, Mr Sampson deposed as to his role and shareholding status with Estuary Constructions in the following terms: 1. I am the sole Director of Estuary Constructions Pty Limited ACN 166 987 908 (EC) which, together with me, is a Defendant of various proceedings as referenced. 2. I became the sole Director of EC in November 2014, replacing my son Riley Sampson. 3. Prior to that, the sole Director and shareholder was Roger Andrews, who has since become my stepfather. 4. I have never been a shareholder of EC. I hold the shares in EC non-beneficially for the Waipara Trust, which is associated with the Sampson family.
The remainder of the 17 September 2021 affidavit was either not read or rejected on the basis of relevance and traversing the plea.
The 22 November 2021 affidavit was read subject to relevance. This affidavit provided evidence regarding both his personal and Estuary Construction's financial position. Mr Sampson extracted figures from the financial statements of Estuary Constructions in the 2016-2018 fiscal years, as well as a statement of his personal assets and liabilities.
Mr Sampson was cross-examined on the financial situation of both himself and Estuary Constructions.
When questioned about the financial statements of Estuary Constructions and whether the figures were from his accountants, as well as whether the company had maintained bank accounts after 2018, Mr Sampson stated that he was unsure. He stated that his involvement in the administrative side of the company was minimal as his wife was in charge of the bookwork. He was not aware of Estuary Constructions continuing to trade after 2018 and was unsure what the reference to "netting out of intangibles (goodwill)" at [3] encompassed. He accepted that the financial statements were incomplete as to the whole financial situation of the company, being more of an end result.
Mr Sampson was also questioned on his personal statement of assets, liabilities and income/expenditure as at 29 October 2021. He was asked about the status of a newer barge which had been purchased. He clarified that this had been purchased by a separate company known as "Sampson's Secrets" trading as Estuary Waterfront Constructions; a company in which Mr Sampson admitted an interest in, stating that he "operates in it". He acknowledged that this interest was not captured in that financial statement and that he had not prepared the statement.
When asked about who prepared the affidavit and whether he was sure of whether the personal financial information provided was correct, Mr Sampson replied that Mr Mazoudier, who was informally advising him, had prepared the affidavit. Mr Sampson reiterated that he had relied upon his wife's knowledge for this financial information due to his not being involved in that side of the business.
During oral submissions after the lunchtime adjournment, Mr Sampson stated he had checked the financial documents in his possession from the accountant and confirmed the figures were complete and accurate.

[16]

Statutory matters required to be taken into account in sentencing

For the purposes of sentencing any relevant factors as provided for in s 21A of the CSP Act are relevant. In this case, the Prosecutor did not identify any specific factors as provided for in s 21A that it identified as being aggravating factors. The Prosecutor also submitted that there were no relevant mitigating factors apart from the Defendants' pleas of guilty that required consideration. The Defendants did not identify any other relevant factors that required consideration under s 21A. Having regard to the submissions and the evidence I accept that there are no aggravating factors that arise for consideration under s 21A and that the only relevant mitigating factors under that section are the early guilty pleas and the lack of prior criminality of both Defendants.
In addition, the provisions of s 241 of the POEO Act require the following relevant matters to be considered in sentencing: 241 Matters to be considered in imposing penalty (1) In imposing a penalty 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 extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. (2) The court may take into consideration other matters that it considers relevant.
Each party made submissions with respect to the factors in s 241(1)(a)-(d). I accept that based on the evidence in the case there is no relevant factor to be considered pursuant to s 241(1)(e).

[18]

Nature of offences and maximum penalty

Each of the offences are strict liability offences. The strict liability nature of the offences and the quantum of the maximum penalty are indicators of the public expression by Parliament of the seriousness of the offence and the gravity of the offences as perceived by the community: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698.
At the time of the offences the subject of these proceedings, the maximum penalties, as tier 2 offences, were as follows: 1. In the case of a corporation - $1,000,000, and, in the case of a continuing offence, a further penalty not exceeding $120,000 for each day the offence continued; and 2. In the case of an individual - $250,000, and, in the case of a continuing offence, a further penalty not exceeding $60,000 for each day the offence continued.
An offence against s 169A, in respect of a corporation's executive liability offence against ss 91(5) or 97, carried the same maximum penalty as if ss 91(5) or 97 had been breached by an individual.
The maximum penalties demonstrate the seriousness with which these environmental offences are viewed by the legislature.
Each of the offences arises under the provisions of the POEO Act and the objects of an Act can assist in identifying the purpose of an offence: Environment Protection Authority v Edward Gilder [2018] NSWLEC 119 at [100].
For the purposes of the consideration of sentence in these proceedings, the following stated objects of the POEO Act are relevant: 3 Objects of Act The objects of this Act are as follows: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, … (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, (iia) the elimination of harmful wastes, … (e) to rationalise, simplify and strengthen the regulatory framework for environment protection, (f) to improve the efficiency of administration of the environment protection legislation, …
These objects reinforce the public protective nature of the legislative regime and the essential role that the regulation plays in achieving those objects. The objects also reinforce the need for protection of the environment in a proactive sense rather than merely reactive, such action includes prevention as part of the system of protection.

[19]

The extent of the harm caused or likely to be caused to the environment by the commission of the offence: s 241(1)(a) POEO Act

The POEO Act contains in the dictionary the following relevant definitions for a consideration of this aspect of sentencing: harm to the environment includes any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution. environment means components of the earth, including: (a) land, air and water, and (b) any layer of the atmosphere, and (c) any organic or inorganic matter and any living organism, and (d) human-made or modified structures and areas, and includes interacting natural ecosystems that include components referred to in paragraphs (a)-(c).
These defined terms raise wide-ranging considerations relating to this aspect of sentencing. It is to be noted that where a prosecutor contends that a particular sentencing consideration should be treated as an aggravating feature it must establish by evidence, beyond reasonable doubt the presence of such aggravating factor. Where a defendant contends for the presence of a mitigating factor in sentencing it must establish the presence of such factor on the balance of probabilities: Environment Protection Authority v Sydney Water Corporation [2019] NSWLEC 100 at [131].
A consideration of the factors in s 241(1)(a) of the POEO Act requires a determination of both any actual harm that has arisen as a consequence of the offending conduct as well as any risk or potential for harm that arose from the offending conduct: Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299 at [145]-[149]; Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66 at [44].
In this context it is generally considered that in the exercise of the discretion in relation to penalty the more serious the lasting environmental harm involved, the more serious the offence and, ordinarily, the higher the penalty. Further, the fact that the environment harmed by an offender's conduct was already disturbed or modified is not a mitigating factor.

[20]

Consideration of harm in the Pollute Waters Offence

Having regard to the evidence I accept the Prosecutor's submissions that the commission of the Pollute Waters Offence caused both actual and likely harm to the environment, albeit not widespread nor permanent.
The solid and physical substances, such as the Barge and floating debris, were measurable and visually observable. Whilst the presence of liquid substances released from the Barge upon sinking was visually observable, the measurement of the volume of such material was unable to be undertaken.
It is uncontroversial that the sinking of the Barge introduced into the waters of Pittwater both solid and liquid substances that changed the physical, chemical, and biological condition of the waters.
Whilst the evidence does not permit a precise determination of a total volume of hydrocarbons present on the Barge before it sank or the volume that escaped between the Barge's sinking in January 2019 and its salvage in March 2019, the photographic evidence and the visual observations of the TfNSW officers indicates that hydrocarbons escaped into the waters over more than one day.
The evidence also indicates that the presence of hydrocarbons were likely to cause harm in that they were present at concentrations greater than the values for protection of marine life and it is likely that the pollutants had some effect on certain organisms including fish, although the effects were limited spatially and temporally.
The extent of the spread of the hydrocarbons and the presence of the physical pollutants (such as the Barge and the floating debris) was mitigated not by any action on the Defendants' behalf, but by the response of TfNSW.
I take into account that the actual and likely harm to the environment as a consequence of the Pollute Waters Offence was at the lower end of the scale. This level of harm, however, was due to the ameliorative action undertaken by TfNSW which had the effect of limiting the spatial spread and the length of time. I also take into account that the majority of the actions that ensured this limitation of potential harm were not undertaken by the Defendants notwithstanding the Clean-up Notice which would have had the same effect if complied with by the Defendants.
Having regard to the evidence, I find that there was actual harm to the receiving waters as a consequence of the sinking of the Barge comprising the presence of physical substance from the rate of sinking in January 2019 until salvage in March 2019. There was actual harm being the presence of hydrocarbon on the water surface from the date the Barge sank in January 2019 until salvage in March 2019. Further, I find that during the period from sinking until salvage of the Barge there was a risk of harm on certain organisms due to the presence of hydrocarbon concentrations greater than the value for the protection of marine life.

[24]

Reasons for committing the offence and state of mind of the offender

There is no evidence relating to the reasons why Estuary Constructions failed to comply with the Notice to Produce.
With respect to each of the Pollute Waters, Prevention Notice and Clean-up Notice Offences Mr Sampson gave evidence that the Defendants had insufficient funds. They had hoped that by operating a newer barge they would make sufficient funds to permit the repair of the Barge. This did not eventuate. The Defendants had insufficient funds to repair the Barge. It would have been cheaper to slip the Barge and undertake repairs, they did not have the funds for this and it would have been even more expensive for the Barge to be removed from the waters. It was the Defendants' financial position that prevented action being taken.
Whilst this evidence was given the financial position of the Defendants was challenged in cross-examination. The evidence of the financial position of the Defendants at the relevant times, being 2018 for the Prevention Notice Offence and 2019 for the other offences, was incomplete.
Mr Sampson's personal financial position was given as at 29 October 2021. This evidence is not sufficient to establish that he had insufficient funds at the relevant time.
The totality of the financial information provided for Estuary Constructions was that contained at [3]-[5] of Mr Sampson's affidavit sworn 22 November 2021 which stated: 3. The following is an extract from the published and filed Financial Statements of EC ie Balance Sheet, and Profit and Loss Account, as at June 30, for each of fiscal 2016, 2017 and 2018, after netting out of intangibles (Goodwill), and expressed in whole dollars: 2016 2017 2018 Profit/(Loss) 32,799 (72,428) (41,477) Total Assets 84,000 142,696 175,118 Total Liabilities 131,178 262,303 336,100 Net Worth/(Deficit) (47,178) (119,607) (160,982) 4. As is evident, from the intervention of TfNSW in restricting and ultimately prohibiting EC's use of Barge #53121, by virtue of Prohibition Notice dated October 25, 2016, EC became highly unprofitable for the latter two (2) of the three years profiled above. 5. As a result, EC ceased operations in late 2018, and is technically and practically insolvent, with negative net assets, ballooning liabilities and deficit net worth, and is presently awaiting liquidation.
As observed above at [58]-[61], when cross-examined Mr Sampson indicated a lack of familiarity with the financial arrangements relying upon others to assess the financial position. The paucity of detail of the summary of financial position makes it impossible to assess whether the statement of a lack of liquidity or capacity to pay was a true impediment to carrying out any necessary works. Apart from summary positions being stated, no financial records or details of accounting practices adopted, such as the 'netting out of intangibles (goodwill)', were provided.
I further observe that the assertion that the costs of repair or removal of the Barge from the waters exceeded the Defendants' capacity to pay was not substantiated by any identification of the actual cost that such work or actions would require. Absent such evidence I am unable to be satisfied even on the balance of probabilities that the Defendants were incapable of complying with the terms of the Prevention Notice or the Clean-up Notice.
On the evidence available, however, I am satisfied beyond reasonable doubt that the Defendants did not undertake the work necessary to comply with the Prevention Notice or the Clean-up Notice (with the consequence being the Pollute Waters Offence) so as to avoid the incurring of costs. That is, the offences occurred to enable the Defendants to retain a financial advantage of retaining the asset without incurring debt or liability for the payment for removal of the Barge from the waters or its repair.

[32]

Conclusions on objective seriousness

The Defendants made no material submissions addressing the assessment of the objective seriousness of the offences. The Prosecutor submitted that having regard to the totality of the evidence that the offences committed comprised objectively serious environmental offences with each of the Defendants' breaches comprising the Pollute Waters Offence, the Clean-up Notice Offence and the Prevention Notice Offence being in the mid-range of objective seriousness. As to the Defendant, Estuary Constructions' breach relating to the Notice to Produce Offence, the objective seriousness of that conduct is low range.
Having regard to the evidence I accept the characterisation of the objective seriousness of the charges. The Pollute Waters Offence had the consequences of actual and likely harm to the environment. It is the fact that such harm was managed such that the actual and likely harm was short-lived that operates to reduce the seriousness of the offence from the upper limits of seriousness. However, the causes that gave rise to the commission of the offence and the foreseeability of the harm are more than an oversight or omission but indicate an election to adopt a course of conduct that made the risks more real. That election was made with a view to preserving the Defendants' commercial considerations rather than a minimising of the risks to the environment. The cause of the circumstances giving rise to the offence was wholly within the Defendants' control and was foreseeable (particularly in circumstances where it was in receipt of the Prevention Notice issued many months prior to the sinking of the Barge). These factors identify an objective seriousness of at least the lower end of the mid-range of objective seriousness.
For the same reasons, the objective seriousness of the Prevention Notice and Clean-up Notice Offences are also at the lower end of the mid-range of objective seriousness.
The Notice to Produce Offence is at the low end of objective seriousness. There was harm caused to the facilitation under the POEO Act of the regulation, prevention and abatement of pollution events and the investigation process. However, on the evidence there was no evidence of harm to the environment.

[39]

Totality principle

The principle of totality is a relevant sentencing principle and has been concisely described by the majority of the High Court in Pearce v R (1998) 194 CLR 610 at 623 [40] as: To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.
In the present proceedings, the offences are conceptually and temporally distinct. However, as I have outlined above the failure to comply with the Prevention Notice the subject of the Prevention Notice Offence is causally connected to the Pollute Waters Offence. Further, the circumstances relating to the Clean-up Notice Offence impact upon the consequence of the environmental harm occasioned by the Pollute Waters Offence. Having considered each of those causal factors in the determination of the objective seriousness of the Pollute Waters Offence such that I consider that those factors are aggravating features of the Pollute Waters Offence it would be inappropriate to further punish the Defendants for these causal factors in the determination of the penalty in the Prevention Notice Offence and the Clean-up Notice Offence, as to do so would be to provide a disproportionate total penalty having regard to the totality of the criminality involved in the three offences. Accordingly, it is appropriate that I allow a significant discount to the otherwise appropriate penalty in each of the Prevention Notice and Clean-up Notice Offences. The penalty will reflect this discounting for totality.
Further, for the reasons outlined below, I propose to require the Defendants to pay the costs claimed by the Prosecutor for the abatement of the environmental harm. The works the subject of this order relate to work that the Defendants were required to undertake as part of the Clean-up Notice and will be ordered to be paid in connection with the Pollute Waters Offence. In that respect it is also appropriate that a small discount be made to the Clean-up Notice penalty to take account of this extra-curial penalty insofar as it represents at least part of the costs that the Defendants avoided by failing to comply with the Clean-up Notice which it will now be required to pay.

[40]

Abatement costs

Pursuant to s 246(1)(a) of the POEO Act, the Court may order an offender to pay to a public authority the costs and expenses incurred by that authority in connection with: 1. The prevention, control, abatement or mitigation of any harm to the environment caused by the commission of the offence; or 2. Making good any resulting environmental damage.
The Prosecutor seeks an order under s 246(1)(a) that the Defendants (jointly and severally) pay the Prosecutor an amount of $146,346.60. This amount (which does not include GST) reflects the following costs and expenses incurred by the Prosecutor: 1. $1,175 for the installation and replacement of an oil boom around the sunken Barge; and 2. $145,171.60 for the salvage and disposal of the Barge.
The oil boom was directly related to the prevention, control, abatement or mitigation of any harm arising from the dispersed hydrocarbons. Such works were required by the Clean-up Notice to which the Clean-up Notice Offence relates. TfNSW would not have had to carry out such works but for the failure of the Defendants to comply with the terms of the Clean-up Notice or to otherwise seek to mitigate the harm caused by the sinking of the Barge. For those reasons, it is appropriate in the circumstances of this case that the Defendants each jointly and severally be ordered to pay such sum.
The Defendants submitted that such sum, if ordered to be paid, should be paid by Estuary Constructions and not Mr Sampson.
The salvage and disposal of the Barge were works which made good the environmental damage of the physical presence of the Barge on the seabed with the consequential continuing risk of harm to the environment that the continued presence of the Barge posed. Again, TfNSW would not have had to carry out such works but for the failure of the Defendants to comply with the terms of the Clean-up Notice or to otherwise seek to mitigate the harm caused by the sinking of the Barge. Each of the Defendants were required to take appropriate action, Mr Sampson under his executive responsibility and Estuary Constructions as the recipient of the Clean-up Notice. I do not see a relevant distinction in liability nor do I consider it appropriate to limit the capacity of TfNSW to recover these funds from a single defendant in circumstances where both defendants have been convicted of the relevant offences. For those reasons, it is appropriate in the circumstances of this case that the Defendants each jointly and severally be ordered to pay such sum.
The Defendants will be ordered to pay the total sum of $146,346.60 for which they will be jointly and severally liable. In addition, as the oil boom and Barge salvage works were undertaken as a consequence of the pollution of the waters such order will be appropriately made in the Pollute Waters Offence for each of the Defendants.

[41]

Investigation costs

The Court is empowered by s 248(1) of the POEO Act to order an offender to pay a regulatory authority's costs and expenses reasonably incurred during the investigation of an offence.
Section 248(3) provides: 248 Orders regarding costs and expenses of investigation (1) The court may, if it appears to the court that a regulatory authority has reasonably incurred costs and expenses during the investigation of the offence, order the offender to pay to the regulatory authority the costs and expenses so incurred in such amount as is fixed by the order. (2) An order made by the Land and Environment Court under subsection (1) is enforceable as if it were an order made by the Court in Class 4 proceedings under the Land and Environment Court Act 1979. An order made by the Local Court under subsection (1) is enforceable as if it were an order made by the court when exercising jurisdiction under the Civil Procedure Act 2005. (3) In this section - costs and expenses, in relation to the investigation of an offence, means the costs and expenses - (a) in taking any sample or conducting any inspection, test, measurement or analysis, or (b) of transporting, storing or disposing of evidence, during the investigation of the offence.
The Prosecutor seeks an order that the Defendants to pay (jointly and severally) the reduced sum of $10,930.44 (excluding GST). This comprises the following costs and expenses relating to the investigation of the charges: 1. $4,000 for the 30 January 2019 underwater survey and report on the sunken Barge by Sea Service Diving & Marine Pty Ltd; and 2. $6,930.44 for the 15 March 2019 inspection and report on the salvaged Barge by naval architect David Wise-Mann (then of London Offshore Consultants (Australia) Pty Ltd).
The Defendants also submitted that such sum, if ordered to be paid, should be paid by Estuary Constructions and not Mr Sampson. For the same reasons as identified above, I consider that it is appropriate that each Defendant be jointly and severally liable to pay such investigation costs and that such costs be ordered to be paid in connection with the Pollute Waters Offence.

[42]

Fines Act - capacity to pay

The Court, in exercising its discretion to fix the amount of any fine, is required by s 6 of the Fines Act 1996 (NSW) to consider. 6 Consideration of accused's means to pay In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider - (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount.
If the Court is satisfied by sufficient evidence that an offender would be unable to pay the amount of a fine determined to be otherwise appropriate, the Court may reduce the amount of that fine to take account of the offender's impecuniosity: Bankstown City Council v Hanna (2014) 205 LGERA 39 at [175]-[181]; Transport for NSW v East Coast Wharf Constructions Pty Ltd; Transport for NSW v King [2020] NSWLEC 112 at [257]-[261].
For the reasons outlined above at [94]-[97], I am not satisfied that the Defendant, Estuary Constructions, has provided sufficient information as to its financial position and its means to pay any fine to enable an assessment required by s 6 that would warrant a reduction of the fine.
As to Mr Sampson, for the reasons outlined above, his financial position is unclear. Whilst the information given to the Court indicates a lack of means there remains unexplained how a company known as Sampson's Secrets in which he is involved was able to purchase and operate a new barge. It is unknown whether he receives any financial benefit from the operations of such company or whether he has any relevant interest in the assets of such company. He was unable to explain his financial position apart from relying on the work of others. I am not satisfied on the evidence available that Mr Sampson's capacity to pay any fine would warrant a reduction in the amount of the fine. His financial position, however, may have a bearing on the manner in which any fine is paid, such as if he makes an application to pay the fine by instalments.

[43]

Publication order

In addition to any penalty imposed the Court may make further orders as identified in Div 5 Pt 8.3 of the POEO Act. Section 250(1)(a) of the POEO Act provides that: 250 Additional orders (1) Orders The court may do any one or more of the following - (a) order the offender to take specified action to publicise the offence (including the circumstances of the offence) and its environmental and other consequences and any other orders made against the person,
The Prosecutor submitted that it was appropriate that, in addition to any fine or other order each Defendant be ordered to make a publication in accordance with a s 250(1) order. The draft terms of such proposed order were provided by the Prosecutor. It was submitted that the main purpose of publicising the detection, prosecution and punishment of offences is to improve the effectiveness of general deterrence. People and businesses need to be aware that pollution of waters and non-compliance with statutory notices are crimes, that offenders will be prosecuted and that the courts will impose significant penalties on offenders: Environment Protection Authority v Ditchfield Contracting Pty Limited [2018] NSWLEC 90 at [76].
A publication order is expressly provided as additional to, and not in substitution for, the appropriate punishment for the offending conduct. As well as promoting general deterrence, it contributes to specific deterrence insofar as it impacts on the reputation of an offender: Transport for NSW v East Coast Wharf Constructions Pty Ltd; Transport for NSW v King [2020] NSWLEC 112 at [276]. Since a publication order is made in addition to any penalty, it should not be considered in determining what penalty ought to be imposed: Environment Protection Authority v Incitec Limited (2003) 131 LGERA 176 at [58]-[59].
The Defendants submitted that a publication order should not be made as "TfNSW has already wrought considerable and, for all intents and purposes, terminal harm and damage to both [Estuary Construction's] business and finances, and likewise those of Messrs Andrews and Sampson…". They further submitted that if a publication order was required it should be funded by TfNSW due to the Defendants' lack of funds.
The Defendants further submitted that the terms of the publication order should be amended as the Prosecutor had failed to establish that Mr Sampson is the sole shareholder of Estuary Constructions or that the Barge sank due to any action or inaction on the part of the Defendants.
Having regard to the need for waterborne vessels to be maintained and for the actions of the appropriate regulatory authority to be observed, I consider it appropriate that the facts of these proceedings be published. Publication will not only reinforce to the Defendants the risk to the environment of failing to comply with the statutory protection and environmental consequences of a failure to do so, it will operate to remind, and act as a general deterrent, to other users of the waterways.
The terms proposed by the Prosecutor are appropriate, but for the period of publication in the Manly Daily Digital Edition that I have extended to 28 days. I note that the publication does not refer to the Notice to Produce Offence and, therefore, the total fine in the publication has excluded that sum.

[44]

Legal costs

The Prosecutor seeks an order that, pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the Defendants (jointly and severally) pay the Prosecutor's costs as agreed or assessed. If no agreement is reached between the Prosecutor and the Defendants, the quantum of costs would be determined under s 257G of the Criminal Procedure Act 1986 (NSW): Transport for NSW v East Coast Wharf Constructions Pty Ltd; Transport for NSW v King [2020] NSWLEC 112 at [15], [267]-[269].
In the exercise of its sentencing discretion in relation to the quantum of a fine, the Court may consider other monetary amounts an offender is ordered to pay, including the legal costs of the prosecution: Harris v Harrison (2014) 86 NSWLR 422 at [100]; Environment Protection Authority v Phillip Gregory Barnes [2006] NSWCCA 246 at [78]; Environment Protection Authority v Causmag Ore Company Pty Ltd [2015] NSWLEC 58 at [123].
However, a costs order does not of itself reduce the monetary penalty to an amount lower than that suggested by the general pattern of sentencing for the relevant offence. As the Court stated in Environment Protection Authority v Edward Gilder [2018] NSWLEC 119 at [189]: It is now well accepted that a fine and a costs order serve different purposes in that a fine serves the purposes of sentencing for the offence committed by the defendant including punishment whereas a costs order serves to compensate the prosecutor, and whilst it forms part of the punishment of the defendant, it is not of itself a reason to reduce the fine otherwise considered appropriate: Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170 at [50].
I am unaware of the quantum of any costs. However, I do note that a large number of affidavits prepared by the Prosecutor were required to be read, at least in part, due to the Defendants limited agreement as to essential facts to permit the sentence discretion to be appropriately exercised. In the circumstances I do not consider there is any reason why the penalty should be reduced to take account of the requirement to pay the Prosecutor's costs.

[49]

Orders

The Court orders that: 1. In proceedings 2019/404184: 1. The Defendant, Estuary Constructions Pty Ltd is convicted as charged for the offence against s 120(1) of the Protection of the Environment Operations Act 1997 (NSW); 2. The Defendant is fined the sum of $250,000; 3. The Defendant is to pay the Prosecutor's legal costs of the proceedings in the amount as may be determined under s 257B of the Criminal Procedure Act 1986 (NSW); 4. The Defendant is jointly and severally with the Defendant, Grant Darcy Sampson in proceedings 2019/404191 to pay to the Prosecutor: 1. Investigation costs in the sum of $10,930.44 pursuant to s 248(1) of the Protection of the Environment Operations Act 1997 (NSW); 2. Costs of abatement in the sum of $146,346.60 pursuant to s 246(1)(a) of the Protection of the Environment Operations Act 1997 (NSW); and 1. Publicise the terms of the offence and the conviction in accordance with order (8) herein. 1. In proceedings 2019/200707: 1. The Defendant, Estuary Constructions Pty Ltd is convicted as charged for the offence against s 97 of the Protection of the Environment Operations Act 1997 (NSW); 2. The Defendant is fined the sum of $55,000; 3. The Defendant is to pay the Prosecutor's legal costs of the proceedings in the amount as may be determined under s 257B of the Criminal Procedure Act 1986 (NSW); and 4. Publicise the terms of the offence and the conviction in accordance with order (8) herein. 1. In proceedings 2019/404186: 1. The Defendant, Estuary Constructions Pty Ltd is convicted as charged for the offence against s 91(5) of the Protection of the Environment Operations Act 1997 (NSW); 2. The Defendant is fined the sum of $50,000; 3. The Defendant is to pay the Prosecutor's legal costs of the proceedings in the amount as may be determined under s 257B of the Criminal Procedure Act 1986 (NSW); and 4. Publicise the terms of the offence and the conviction in accordance with order (8) herein. 1. In proceedings 2019/404187: 1. The Defendant, Estuary Constructions Pty Ltd is convicted as charged for the offence against s 211(1) of the Protection of the Environment Operations Act 1997 (NSW); 2. The Defendant is fined the sum of $15,000; and 3. The Defendant is to pay the Prosecutor's legal costs of the proceedings in the amount as may be determined under s 257B of the Criminal Procedure Act 1986 (NSW). 1. In proceedings 2019/404191: 1. The Defendant, Grant Darcy Sampson is convicted as charged for the offence against s 120(1) of the Protection of the Environment Operations Act 1997 (NSW) by operation of s169(1) of that Act; 2. The Defendant is fined the sum of $99,000; 3. The Defendant is jointly and severally with the Defendant, Estuary Constructions Pty Ltd in proceedings 2019/404184 to pay to the Prosecutor: 1. Investigation costs in the sum of $10,930.44 pursuant to s 248(1) of the Protection of the Environment Operations Act 1997 (NSW); 2. Costs of abatement in the sum of $146,346.60 pursuant to s 246(1)(a) of the Protection of the Environment Operations Act 1997 (NSW); 1. The Defendant is to pay the Prosecutor's legal costs of the proceedings in the amount as may be determined under s 257B of the Criminal Procedure Act 1986 (NSW); and 2. Publicise the terms of the offence and the conviction in accordance with order (8) herein. 1. In proceedings 2019/200714: 1. The Defendant, Grant Darcy Sampson is convicted as charged for the offence against s 97 and by operation of s 169A of the Protection of the Environment Operations Act 1997 (NSW); 2. The Defendant is fined the sum of $55,000; 3. The Defendant is to pay the Prosecutor's legal costs of the proceedings in the amount as may be determined under s 257B of the Criminal Procedure Act 1986 (NSW); and 4. Publicise the terms of the offence and the conviction in accordance with order (8) herein. 1. In proceedings 2019/404189: 1. The Defendant, Grant Darcy Sampson is convicted as charged for the offence against s 91(5) and by operation of s 169A of the Protection of the Environment Operations Act 1997 (NSW); 2. The Defendant is fined the sum of $50,000; 3. The Defendant is to pay the Prosecutor's legal costs of the proceedings in the amount as may be determined under s 257B of the Criminal Procedure Act 1986 (NSW); and 4. Publicise the terms of the offence and the conviction in accordance with order (8) herein. 1. In proceedings 2019/200707, 2019/404184, 2019/404186, 2019/200714, 2019/404189 and 2019/404191, the Defendants, Estuary Constructions Pty Ltd and Grant Darcy Sampson, pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 (NSW), must cause a notice in the form of Annexure A, at their expense: 1. To be placed in the next print edition of AFLOAT Magazine following the date of the Court's order, within the first 13 pages on an odd-numbered page at a minimum one-quarter page size; 2. To be placed in the Manly Daily Digital Edition (including any related online classifieds) within 28 days of the date of the Court's order; 3. Within 28 days of the date of publication of the notice referred to in (a) above, the Defendants must provide to the Prosecutor a complete copy of the page of AFLOAT Magazine in which that notice appears; and 4. Within 28 days of the date of publication of the notice referred to in (b) above, the Defendants must provide to the Prosecutor a screenshot copy of the published notice. 1. Within 7 days of the date of publication of each notice referred to in the previous order, the Defendants must provide to the Prosecutor, and file with the Court, a complete copy of the pages of the publications in which the notice appears. 2. Pursuant to the provisions of s 122 of the Fines Act the Court directs that 50 per cent of each of the fines imposed in orders (1)(b), (2)(b), (3)(b), (4)(b), (5)(b), (6)(b) and (7)(b) be paid to the Prosecutor. 3. Exhibits are returned.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (50 paragraphs)

Legislation Cited (7)

Cases Cited (23)

Cited By (1)