Wills v Ianelli & Others [2008] NSWLEC 300 | Case summary

1 His Honour: Section 22B(1) in Part 3A of the Rivers and Foreshores Improvement Act 1948 ("RFI Act") provides that: " a person must not: (a) make an excavation on, in or under protected land, or (b) remove material from protected land, or (c) do anything which obstructs, or detrimentally affects, the flow of protected waters, or which is likely to do so, unless the person is either authorised to do so by a permit under this Part and does so in accordance with any conditions to which the permit is subject, or is authorised to do so by the regulations". 2 Nine related prosecutions were commenced on 9 January 2008 concerning excavations at three locations on protected land between 10 and 25 January 2007, without an authorising permit under Part 3A. 3 Antonio Ianelli is the controlling mind of both the landowning company (Cantrala Pty Ltd) and the farm operating company (Redbank Fresh Produce Pty Ltd) at Dromore Station off the Monaro Highway near Cooma or Bredbo, where Mr Ianelli and interests associated with him grow oats and vegetables. The offences occurred on Dromore Station. Mr Ianelli and each company faced three charges each. He and Cantrala have pleaded guilty to amended (rolled-up) summonses in matters 50001 and 50007. The other seven prosecutions are listed for mention today (50002 and 50003 against Ianelli; 50004, 50005, 50006 against Redbank; and 50008 and 50009 against Cantrala) with a view to their being withdrawn when sentence is imposed in the two matters currently before me. 4 Cantrala held at relevant times four pumping licences under the Water Act 1989 in respect of the Murrumbidgee and Numeralla Rivers, two of which included "cease to pump" conditions requiring Cantrala to cease pumping from the Murrumbidgee River when it falls to a certain level, as measured by reference to discharges from the Murrumbidgee at Mount McDonald and Billilingra gauges. Relevantly, those two licences cover the three sites specified in the charges. Precise title particulars, locational details, etc. are set out in the Agreed Statement of Facts (Exhibit P1). I will not include the whole of the Agreed Statement of Facts in this judgment, but it will remain in the Court file if reference need be had to it. 5 The offending excavations were carried out by Vincenzo Stefanetto, an excavator operator with Inca Plant Hire Pty Ltd, on the bed and bank of the Murrumbidgee River. Redbank paid Inca $5,206.85 for at least some of the work, namely that done on 12 and 14 January 2007 at sites 4 and 5. The work at Site 3 was carried out on 25 January 2007. 6 The river is "protected waters" and the sites meet the criteria for "protected land" under the RFI Act. No person or company has ever held a Part 3A permit for excavation works at any of the three sites. Such permits usually impose very strict conditions because of the potential for serious environmental harm (including to the River itself) from excavations on bed or bank. The material before the Court indicates that a permit would not have been issued for these works at that time. 7 Particulars of the excavations are set out in the Agreed Statement of Facts (pars 19-21); there are photographs in Exhibit P2 (mainly taken 18 January 2007 or 10-11 December 2007); and I have watched the DVD of the sites (Exhibit P3) taken 18 January 2007. 8 Clearly the interference with the landform, vegetation and the river itself is substantial - dug out areas and holes, mounds or stockpiles of materials, clearing on the bank - and the Agreed Statement of Facts notes a direct impact on the sub-surface water by creation of a drain at each site, and a likely local and short term impact on water flow and quality, to the detriment especially of downstream licensees and other landholders fronting the river. Details appear in pars 23-27 of the Agreed Statement of Facts. 9 Gauge records confirm the little or no "flow of water" in the river at the relevant time, and the river flows are detailed in par 22(a)-(c) of the Agreed Statement of Facts. 10 The excavations were made to facilitate licensed pumping from a lower level than previously to irrigate crops on Dromore at a time when pumping was not authorised. 11 The relevant NSW government department sent letters out on 1 December 2006 to all licensees advising that Tantangara dam discharges into the river "would be reduced significantly" and reminding licensees of their responsibility to cease irrigation in accordance with their licence conditions. The Defendants deny receipt of any such letter and the Prosecutor can not establish that it was delivered to them. However, Mr Nairn's letter of 22 October 2008 makes clear that Mr Ianelli knew at sometime "in early 2007" that Tantangara flows had ceased and he would not be able to access his water allocation. At the time of Mr Nairn's inspection of the property there had been rain and he says Mr Ianelli pumps naturally pooled water back into the Numeralla River. 12 Mr Ianelli had sown his crops in anticipation that the usual pumping arrangements would be in place - he was operating on advice he received on 15 December that no reduction was expected, and planted his summer crops. Two weeks before 9 January 2007 he was told he should have received a registered letter advising of new restrictions. He was then faxed a copy of the letter. Urgent political representations were unsuccessful, and he acted out of sheer desperation. 13 The obligations breached here rest squarely on the company Cantrala. It owns the land and holds the licences. Mr Ianelli is its sole director and secretary, but he is not a shareholder. On the other hand, he is the only director and the only shareholder in Redbank. He cannot escape some of the culpability for these offences. 14 However, the Prosecutor acknowledges the traditional compliance of the Defendants with the terms of their licences over almost 20 years on Dromore Station. 15 Mr Nairn's letter records the company's efforts, under Mr Ianelli's direction, to protect the riverbank environment and run off, and direct ponded rainwater to the streams, and refers to some information he received indicating that, contrary to NSW government advice to the public, Snowy Hydro had continued to release water during the relevant period. 16 Nonetheless, works were done without a permit, when a permit would not have been granted, and with harmful results. The penalties imposed must reflect the objective gravity of what was done, and the breach of public trust it represents, and send a message to the wider community that drought, desperation, financial imperative, and difficulty of detection and enforcement cannot excuse disobedience of the law. 17 While there is no real evidence of remorse, it is to the credit of the Defendants: (i) that they responded helpfully to a notice to produce information, against their interests, (ii) that they have agreed to pay the Prosecutor's costs, totalling $50,000. (iii) that they have undertaken, through their counsel, to comply with an expected remediation notice, at their own considerable expense, and (iv) that they pleaded guilty at what was, in practical terms, the earliest opportunity to do so. 18 I have many cases upon which to draw in setting penalties, but have been referred to only one under the RFI Act - Minister administering the Ports Corporatisation and Waterways Management Act 1995 v Hakim (No.4) [2005] NSWLEC 344, a decision of my former brother, Cowdroy J. 19 In that case the defendant pleaded Not Guilty, but His Honour was satisfied a permit would have been issued. It is not a case of much help to me in this matter. 20 The maximum penalty for these offences is $137,500 for a corporation and $66,000 for an individual. 21 I consider this offence sits at the upper end of the lower range of culpability. I believe the company should be fined $40,000 and Mr Ianelli $15,000. Both fines should be discounted by 20% for the utilitarian value of the pleas of guilty, resulting in fines of $32,000 and $12,000 respectively. 22 The formal orders of the Court will be:

Wills v Ianelli & Others

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