Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66

Land and Environment Court of New South Wales

CITATION : Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66 PROSECUTOR: Newcastle City Council PARTIES : DEFENDANT: Pace Farm Egg Products Pty Limited ACN 003 607 841 FILE NUMBER(S) : 50065 of 2001 CORAM: Lloyd J Environmental Offences :- section 10 of the Crimes (Sentencing Procedure) Act 1999 - penalty KEY ISSUES: Costs:- summary prosecution - failure to agree to statement of facts Words and Phrases: - "likely" LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 s 10 Protection of the Environment Operations Act 1997 s 120(1), s 123, s 241(1) Australian Communications Authority v Viper Communications Pty Ltd [2001] FCA 355; Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357; Cameron v The Queen [2002] HCA 6; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1992) 32 NSWLR 683; Cobiac v Liddy (1969) 119 CLR 257; Gammon (Hong Kong) Ltd v Attorney-General of Hong Kong [1985] AC 1; CASES CITED: Lim Chin Aik v The Queen [1963] AC 160; Mathews v Goulburn Wool Processors, NSWSC, Smart J, 6 November 1986, unreported; New South Wales Sugar Milling Co-operative Ltd v State Pollution Control Commission (1992) 75 LGRA 320; R v Visconti [1982] 2 NSWLR 104; State Pollution Control Commission v Blayney Abattoirs Pty Ltd (1991) 72 LGRA 221; State Pollution Control Commission v New South Wales Sugar Milling Co-operative Ltd (1991) 73 LGRA 86; Thorneloe v Filipowski (2001) 52 NSWLR 60 DATES OF HEARING: 08/04/2002, 09/04/2002, 10/04/2002 and 11/04/2002 DATE OF JUDGMENT: 05/02/2002

PROSECUTOR: Mr T G Howard (barrister) SOLICITORS: Harris Wheeler LEGAL REPRESENTATIVES: DEFENDANT: Mr T S Hale SC and Ms N Sharp (barrister) SOLICITORS: Hunt Partners

JUDGMENT:

7 IN THE LAND AND Matter No.: 50065 of 2001 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 2 May 2002

Newcastle City Council Prosecutor v Pace Farm Egg Products Pty Limited ACN 003 607 841 Defendant REASONS FOR JUDGMENT 1. The defendant has pleaded guilty to an offence that on or about 10 July 2000 at Warabrook (a suburb of Newcastle) it polluted waters contrary to s 120(1) of the Protection of the Environment Operations Act 1997. The matter is before the Court on the questions of penalty and costs. 2. Although the plea of guilty is an admission of the essential elements of the offence, that is to the extent of any admission made in this case, the parties have not been able to agree on a common statement of facts which is to be presented to the Court. The parties have not been able to agree, for example, on what caused the offence. Accordingly, it has been necessary to adduce full evidence relating to the fact of the occurrence, the cause, the harm and potential harm caused or likely to be caused by the commission of the offence and other matters. 3. I turn, firstly, to the evidence which is not disputed. 4. The defendant is the occupier of the premises known as 23 Warabrook Boulevard, Warabrook, in which it processes egg products. On 10 July 2000 waste water from the defendant's premises entered the stormwater system at those premises, flowed into the underground stormwater pipe outside the premises to a point at the end of Rosegum Drive, discharged into a concrete stormwater pit at the end of Rosegum Drive from which it flowed into a creek known as Rosegum Creek, and then flowed downstream for a distance of between 50 meters and 80 metres to the first of a series of interconnected ponds which in turn led to Warabrook Lagoon another 500 to 600 metres further downstream. There is no suggestion, however, that the waste water from the defendant's premises extended beyond the first of the interconnected ponds. 5. The waste water had a strong unpleasant odour, which was noticeable at Rosegum Drive. The odour was described in the evidence of the prosecutor's Environment Protection Officer, Mr A Gilligan, as being similar to domestic grease trap waste. Mr G J King, the defendant's maintenance supervisor, described the odour as "a slight ammonia smell". Mr J Walters, of Valley Disposal Services, who attended the defendant's premises at the request of the defendant to pump out the waste water from under the defendant's premises and from the creek, said in his evidence that the smell was quite different to that of grease trap waste. Dr N Ashbolt, a water quality microbiologist, expressed the opinion that the smell described by Mr Gilligan was a "fatty acid" smell consistent with the presence of microbial fermentation products and egg matter. 6. The waste water had a grey/white milky appearance. There was a scum on top of the water in the creek and a smaller quantity of scum on top of the water in the pond. The scum on top of the water in the pond was retained by a floating boom which the defendant had arranged to be placed across the pond. Clumps of the white liquid became solidified and collected on the reeds along the creek. The cause of the spillage 7. At about 9.45 am on 10 July 2000, the defendant's maintenance manager, Mr G J King, noticed some "stagnant looking water" in an open stormwater drain which runs under the floor area of the building and then between the main building and the plant room at the defendant's premises. He found that the drain was blocked by industrial polystyrene insulation from lagging off-cuts which had apparently been blown into the drain following the installation of polystyrene lagging on the new refrigeration pipes a few days earlier. Mr King cleared the blockage in the stormwater drain and went to a nearby lunchroom for a cup of tea for approximately 15 minutes. He then went back to the drain and smelt an odour. He also noticed that the colour of the water in the drain had changed to "yellowy orange" colour. He looked under the building and saw a build-up of liquid waste, which was now flowing along the open stormwater drain. He immediately blocked the outlet of the stormwater drain using a piece of marine plywood and rags. He then telephoned Mr Walters of Valley Disposal Services and asked him to send a tanker as soon as possible. Accordingly to the records produced on subpoena by Telstra Corporation Ltd, this telephone call was made at about 10.10 am. I am satisfied that the flow of waste water into the stormwater system probably continued for about 15 minutes before Mr King was able to stop it. 8. Mr Walters arrived with a tanker at about 11.40 am or 11.45 am. He obtained access to the underfloor area of the defendant's building through a small door near some stairs in the vicinity of the open stormwater drain. He observed a large amount of white liquid under the building. He pumped out the underfloor area of the building. According to the invoice issued by Valley Disposal Services, about 6,000 litres of the waste water was pumped out from under the building. 9. Mr Walters states that he also contacted a person at Newcastle Port Authority and asked for a floating boom to be delivered, and upon delivery he then put it in place across the first of the ponds to retain the scum on the surface on that pond. It is not clear from the evidence whether the boom was put in place on 10 July 2000 or on the following day. 10. Mr Walters also pumped out the first section of the creek into which the waste had discharged. The creek was not flowing at the time and he used a fine spray of water to hose the waste water into deeper channels for the purpose of pumping it out. He also flushed out the stormwater drain from the defendant's premises to the concrete stormwater pit at the end of Rosegum Drive. This pit apparently also operates as silt trap. I am satisfied by the evidence that the flushing of the stormwater drain and of the creek took place on the following day, 11 July 2000. This is confirmed by the fact that the grate on the stormwater silt trap in Rosegum Drive was padlocked. The padlock is clearly shown in a video taken by Mr Gilligan on 10 July 2000. The padlock was unlocked by Mr M Rayner, an Environment Protection Officer employed by the prosecutor, at about 10.00 am on 11 July 2000. Moreover, an invoice was issued by Valley Disposal Services for pumping out the waste water from the creek. The invoice shows that some 20,000 litres of waste water was pumped from the creek on 11 July 2000. 11. Mr Gilligan conducted a dye test which established conclusively that water flowed from the defendant's stormwater drain to the stormwater silt trap at the end of Rosegum Drive. Mr Walters collected the dyed-coloured liquid from the silt trap. Photographs show this as also taking place on 11 July 2000. 12. Mr King investigated under the floor of the building and saw an inspection plate missing from one of the wastepipes under the floor of the building. He initially thought that this could have been the source of the waste water under the building and he immediately replaced the missing inspection plate. He also said in his evidence that "there was an awful lot of water there". It is unlikely, therefore, that the missing inspection plate could have been the cause of the waste water accumulating under the building. Waste water would only have escaped through the missing inspection plate, apart perhaps from a few drops that may have splashed out, if the wastepipe had been under a head of pressure such as that which occurs if the pipe is blocked downstream from the inspection plate. There is nothing to suggest that anything like this happened. 13. Mr N P Ayscough, a plumber engaged by the defendant, investigated the underfloor drainage system at the defendant's premises on 12 July 2000. He said that it was wet everywhere under the floor of the defendant's building and that the water remaining under the building was "dirty gunky sort of sewerly looking water". He initially thought that the floor waste from the mix tank room of the premises went to an underfloor grease trap, rather than to the main grease trap outside the building and then to the sewer. The mix tank room is washed down on a daily basis and generates a significant amount of liquid waste. He subsequently went back and had another look under the floor. He found that the floor waste from the mix tank room in fact went to the main waste water system and to the main grease trap outside the building. He found some hairline cracks in the floor waste in the mix tank room and when this area was hosed, water dripped down into the underfloor area. As to these cracks Mr Ayscough said "you could hardly see them from the top…". According to Mr Ayscough, whose evidence I have no reason to doubt, only the chiller room and the freezer room drain to the underfloor grease trap, and neither of those areas generates waste water. 14. Mr Ayscough stated that ever since the incident, he has been engaged by the defendant to carry out six-monthly periodic checks of the underfloor waste system and there are now no leaks or other defects in the system. 15. Mr T W Macoun, an environmental engineering consultant who gave evidence for the defendant, inspected the premises. His description of the underfloor waste water system concurs with that of Mr Ayscough and which was confirmed by a flow test which he carried out with tracer dye. In his report which is in evidence Mr Macoun states: The design of the floor waste connection is shown in a sketch plan, included as Attachment 4. The washout of the two mix tanks in this room results a waste volume of between 400 and 600 litres daily being discharged via the floor waste. This is both wash water but can comprise concentrated egg mix when the washout of the 50 millimetre pump line from these tanks to the upper level of the plant causes the backflow and discharge of the material contained in that line. It is my opinion on the evidence available, that wash water and egg product has escaped from around this floor waste because of a crack in the copper seal between the PVC pipe and the base of the floor waste. This has resulted in a build up of concentrated organic solution in the under floor area. … Any leak to the underfloor area would have built-up but been effectively sealed by the condensation water, effectively suppressing the generation of odour that would have provided an early indication of this leak. It would also appear that the earthenware drainage pipe that was intended to drain this area had become blocked by debris etc, causing a large buildup of water (and waste) in the area. The blockage of the stormwater channel by the polystyrene lagging on the morning of 10 July 2000 resulted in a buildup of roof water drainage to almost the top of that stormwater channel. This would have resulted in a backflow from the channel to this under floor area of the Liquid Plant, and an unblocking of that drainage outlet. When the polystyrene was partly removed, allowing the discharge of the stormwater to occur and the level in the stormwater channel to drop, the hydraulic head difference between the water in the under floor area and the level in the stormwater channel then provided the opportunity for discharge to the stormwater channel to occur. 16. I accept the opinions of Mr Macoun which I have set out above. The prosecutor submits, however, that the leak from the floor waste drain of the mix tank room was not sufficient alone to explain the volume of sewerage waste under the building. According to Mr Macoun "it was like a giant swimming pool underneath". As I have noted previously, Mr Walters pumped out 6,000 litres of waste water from under the building. 17. There is no evidence, however, of any other leak in the system which could have been the source of the waste water under the building. It is conceded by the defendant that the waste water from the leak around the floor waste drain of the mix tank room must have accumulated under the building in the manner described by Mr Macoun for some months to have generated the amount of water that was there. 18. In the absence of any other evidence I accept the defendant's submission that waste water from the mix tank room at its premises leaked under the building over a lengthy period of time, allowing the volume of waste water to accumulate to a volume of several thousands litres. It was this water which escaped into the defendant's stormwater system when the blockage to that system was cleared by Mr King on the morning of 10 July 2000. This water discharged into the stormwater system for about 15 minutes until the flow was blocked by Mr King. The harm caused by the spillage 19. The spillage of the waste water resulted in a strong and unpleasant odour as noted by Mr Gilligan and Mr Rayner when they went to Rosegum Drive on the morning of 10 July 2000. The waste water itself had a milky appearance which is consistent with the suspension of fats in waste water, particularly as it appeared as scum on the surface. The volume of waste water which entered Rosegum Creek and the pond is not known, but based on a discharge for a period of 15 minutes from the defendant's premises, the volume of waste water discharged has been estimated at approximately 2,000 litres. 20. Analysis results show that the waste water contained levels of presumptive faecal coliform which were well above the ANZECC Water Quality Guidelines. I note that this does not necessarily establish whether the coliform levels are attributable to faecal coliforms. I accept, therefore, the opinion of Dr Ashbolt that the high levels of presumptive faecal coliform is explained by the fact that the waste water represented a rich organic environment (from egg product) in which bacteria including a variety of coliform flourished; and if this was the explanation for a very high level of presumptive faecal coliforms then the growth of native bacteria in the waste water would not represent a pathogen health risk. 21. The analysis results also showed high level of biochemical oxygen demand (BOD) and chemical oxygen demand (COD). These levels were, in the case of BOD, 4,300 ml/L at Rosegum Creek and 4,900 ml/L at the defendant's premises. The levels of COD were 19,600 ml/L at Rosegum Creek and 23,600 ml/L at the defendant's premises. The high level of BOD is over 200 times the concentration of normal domestic sewerage. These levels of BOD and COD are highly detrimental to biota which require oxygen for survival such as fish, insect larvae, other macroinvertebrates and microinvertebrates because of the loss of dissolved oxygen in the water. If there had been continued degradation of BOD level in the receiving waters then this would have resulted in highly anaerobic conditions and the potential for the production of sulphides and other toxic anaerobic by-products. The waste water also introduced a high level of turbidity, thus reducing the penetration of natural light into the stream and pond and which would impact in a harmful way on biota. 22. The discharge went as far as the first pond downstream. I accept the opinion of Dr Ashbolt that he would expect that pond to have at least macroinvertebrates and microinvertebrates. 23. Mr G Winning, a wetland ecological consultant inspected Rosegum Creek and Warabrook Lagoon on 8 January 2002. This area was historically part of Hexham swamp and is part of the ecologically valuable remnant wetlands in the Waratah/Shortland area. He observed several bird species on the smaller ponds and on Warabrook Lagoon. He noted these waters also supported a community of small fish and aquatic invertebrates. By "these waters" I assume that Mr Winning includes the first of the ponds into which the waste water was discharged. According to Mr Winning, whose evidence I have no reason to doubt, it is likely that a biological effect of the discharge of the waste water would have been confined to the section of Rosegum Creek from the point of discharge into that creek and the first of the downstream ponds. In his opinion, it is unlikely that a biological effect would have been detectable in Warabrook Lagoon. Section 10, Crimes (Sentencing Procedure) Act 1999 24. Section 10 of the Crimes (Sentencing Procedure) Act 1999 relevantly states as follows: 10 Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make either of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person on condition that the person enter into a good behaviour bond. (2) An order referred to in subsection (1)(b) may be made if the court is satisfied: (a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or (b) that it is expedient to release the person on a good behaviour bond. (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. … 25. Mr T S Hale SC, who (with Ms N Sharp) appears for the defendant, submits that the Court should make an order directing the charge to be dismissed. In this respect Mr Hale relies upon following matters referred to in s 10(3) of the Crimes (Sentencing Procedure) Act 1999: (a) the defendant has no prior convictions; (b) the trivial nature of the offence; (c) the extenuating circumstances, namely, it is difficult to identify any effective step that the defendant could have taken in order to prevent the offence and which does not require virtual perfection (referring to Thorneloe v Filipowski (2001) 52 NSWLR 60 at 77 (par [186]) and to Australian Communications Authority v Viper Communication Pty Ltd [2001] FCA 355 at pars [50] to [53]; (d) a matter which is proper to consider, namely, the prosecution was brought by a council and not by the Environment Protection Authority ("the EPA") and the prosecution would not have been brought under the latter's Prosecution Guidelines. 26. As to (b) Mr Hale submits that the discharge of waste water was small; it was into a creek and pond which were part of a natural stormwater detention basin receiving water from an industrial area of about 40 hectares; the area downstream was dammed to contain sediment run-off; although there was evidence of theoretical harm to the environment there was no evidence of actual harm; the clean-up commenced immediately at the instigation of the defendant; the creek was dry at the time so that much of the waste stayed within the bed and banks of the creek and was successfully removed; very little waste appears to have reached the pond; and the discharge into the pond was very small having regard to the size of the water body into which it went. 27. As to (c) Mr Hale submits that the hairline cracks at the floor waste in the mix tank room were not readily observable and the cause of the event was "a fluke". In his submission, the purpose of imposing strict liability upon the defendant is to promote the objects of the statute of encouraging greater vigilance, but there is nothing that the defendant could have done to guard against the kind of event which occurred in the present case. As in Thorneloe this was a comparatively minor pollution by a first offender and there was an inability to identify any conduct on the part of the defendant which would have averted the event. 28. As to (d) Mr Hale relies upon an absence of harm or potential harm to the environment; the absence of culpability on part of the defendant due to the circumstances which led to the offence; the absence of prior convictions; the fact that the offence was not a continuing one; that there is no need for a deterrence in this instance; the significant lapse of time between the offence and the prosecution (almost 12 months); the absence of any concern about a precedent; and the defendant's full co-operation with the prosecutor. Mr Hale submits that the offence was one in which it would have been more appropriate to issue a penalty notice under the EPA's Prosecution Guidelines. Mr Hale also submits that the council should not be encouraged to prosecute offences such as this in the Land and Environment Court having regard to the financial advantage and financial incentive under s 694 of the Local Government Act 1993, which provides that any penalty or fine be paid to the council. The Court's findings 29. It is accepted that the defendant has no prior convictions recorded against it and otherwise has a good environmental record. Although the defendant is a corporation I am prepared to find that sub-s (3)(a) operates in the defendant's favour. With regard to sub-s (3)(b), the offence cannot be regarded as trivial. I have described the effect of the discharge and both the harm and the potential harm caused or likely to be caused thereby to the environment. There was actual harm to the environment, such as the offensive odours at Rosegum Drive and along the creek. I have described the high levels of BOD and COD in the waste water, the former being some 200 times greater than that of sewage. I have referred to the actual harmful effects of the waste water described by Dr Ashbolt and by Mr Winning. The offence must be described as serious and potentially very serious. In Thorneloe the Court of Criminal Appeal held that the potential for greater harm may be taken into account in considering whether to exercise its discretion under sub-s (3)(c) of s 10 (at pars [136] to [138], [158], [197] to [200], [219]). On this ground alone I would not be prepared to exercise the Court's discretion under s 10 of the Act in favour of the defendant. 30. As to sub-s (3)(c), I accept the submission of Mr Hale that the purpose of imposing strict liability is to promote the objects of the statute of encouraging greater vigilance to prevent the commission of the prohibited act (Gammon (Hong Kong) Ltd v Attorney-General of Hong Kong [1985] AC 1 at 14, quoted with approval in Thorneloe at 75). 31. I also accept the following statement of principle, relied upon by Mr Hale, made by Lord Evershed in Lim Chin Aik v The Queen [1963] AC 160 at 174 (and also quoted with approval in Thorneloe at 75): It is pertinent also to inquire whether putting the defendant under strict liability will assist in the enforcement of the regulations. That means there must be something he can do, directly or indirectly, by supervision or inspection, by improvement of his business methods or by exhorting those whom he may be expected to influence or control which will promote the observance of the regulations. Unless this is so, there is no reason in penalising him, and it cannot be inferred that the legislature imposed strict liability merely in order to find a luckless victim. 32. In Australian Communications Authority v Viper Communications Pty Ltd [2002] FCA 355, Mathews J of the Federal Court, in discussing the question of penalty for a breach of the Commonwealth communications legislation, said (at par [50]): In my view it is not appropriate to impose pecuniary penalties upon either of the respondents. I accept, as the respondents' counsel have suggested, that something more than a mere contravention of the legislative provisions must be shown. A consideration of the matters referred to in s 570(2) [of the Communications Act 1997] must show a contravention which is in some degree culpable. Alternatively, and probably more importantly, there must be material to suggest that the imposition of pecuniary penalties will have a real deterrent effect upon others who are or might be in contravention of the Act. Neither of these features have been demonstrated here . 33. Thorneloe is thus authority for the proposition that: Even in the case of an offence of strict liability, no public purpose is served by recording a conviction or imposing a penalty in circumstances where the relevant accused could not, as a matter of practical reality, have done anything to ensure that the offence or, in the case of a result offence, the adverse consequences of the conduct, did not occur (per Spigelman CJ at 74-75, par [171]). 34. It is therefore appropriate to consider what the defendant could have done to avert the event which led to the offence. I accept the submission of Mr Hale that the cause of the presence of the large amount of waste water under the defendant's building was wash-down water from the mix tank room leaking through the hairline cracks at the floor waste in that room, which cracks were not readily apparent. It is self-evident that the large volume of waste water which was under the building on 10 July 2000 must have accumulated in this manner over many months. This is conceded by Mr Hale. 35. The waste water generated by the defendant's business is and was potentially harmful to the environment if not contained and disposed of properly to the sewerage system. It was thus essential that the system of piping under the floor of the defendant's premises be maintained in proper condition. The leakage of waste water into the underfloor space of the building would and should have been readily observed by the simple step of someone looking under the building. As one witness said, "[i]t was like a giant swimming pool underneath". There was a small door which provided access to the under-floor space. It is self-evident that if anyone had opened the door and looked under the building, such a large volume of waste water would have been readily apparent; and the source of the leak could have been investigated (as occurred after the event). All that was required was a system of regular inspection as occurs now. This factor is one that is recognised in Gammon (Hong Kong) Ltd ("by encouraging greater vigilance…"), in Lim Chin Aik ("there must be something he can do directly or indirectly, by supervision or inspection,…") and in Thorneloe (whether the defendant could "as a matter of practical reality, have done anything to ensure that the offence, or in the case of a result offence, the adverse consequences of the conduct, did not occur."). 36. It is also relevant that the offence is one of strict liability: "A person must not pollute waters". As Mahoney JA explained in Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359: The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur. 37. In the present case the simple precaution of looking under the building on a reasonably regular basis, as occurs now, could and should have been taken. If that had been done then the large volume of waste water – the "giant swimming pool underneath" – which must have been there for a considerable time, would have been readily apparent even on a mere cursory look. 38. I turn now to sub-s (3)(d). I have referred to the harm and potential harm to the environment. As noted in par [29] above, the potential for greater harm is recognised in Thorneloe as a matter to be taken into account under sub-s (3)(d). I do not accept the submission that the circumstances surrounding the offence operate in the defendant's favour, particularly in the absence of regular, or any, inspections of the under-floor area of the building. I accept the submission that there may be no need for a specific deterrent in this instance. In my opinion, however, there is a need for a general deterrent so that business will be encouraged to make arrangements and take precautions so as to ensure that pollution will not occur (cf Mahoney JA in Axer Pty Ltd v Environment Protection Authority at 359, noted at par [37] above). 39. The Prosecution Guidelines of the EPA, upon which Mr Hale relies, were admitted in evidence. The Guidelines set out (inter alia) the factors which arise for consideration in determining whether the public interest requires a prosecution (see section 3.7). These include the seriousness or, conversely, the triviality of offence; the harm or potential harm to the environment; any mitigating or aggravating circumstances; the degree of culpability of the offender; the length of the time since the offence; the length and expense of a court hearing; and the likely outcome in the event of a conviction having regard to the sentencing options available to the Court. In my opinion, a consideration of these factors does not necessarily lead to the conclusion that a prosecution would not or should not have been commenced in this case. It would be quite open, on balancing these considerations, for the prosecuting body to have brought a prosecution for this offence. 40. I do not accept as valid Mr Hale's submission that the council should not be encouraged to prosecute offences such as this because of the financial advantage it would receive from the payment of a penalty or fine. If this submission were to be accepted it would mean that no prosecuting authority should prosecute for an offence which attracts a monetary penalty or fine. It cannot be suggested that by fixing a fine for particular offences the legislature implied that prosecutions should not be brought and that fines appropriate to the particular offence should not be imposed simply because the fine is to be paid to the prosecuting authority. 41. For the various reasons canvassed above I am of the firm view that this is not an appropriate case for the Court to exercise its discretion under s 10 of the Crimes (Sentencing Procedure) Act 1999. Penalty 42. I now consider the question of penalty by reference to the considerations set out in pars (a) to (e) of s 241(1) of the Protection of the Environment Operations Act. (a) The extent of the harm caused or likely to be caused to the environment by the commission of the offence. 43. The offence caused actual harm to the environment. Apart from the odours at Rosegum Drive and along the creek, the discharge of the waste water into the creek and to the first of the downstream ponds resulted in a deleterious change to the physical, chemical and biological conditions of those waters. The actual harm from the waste water included the introduction of turbidity, which reduced the penetration of natural light into the waters; the very high levels of BOD (over 200 times the concentration of normal domestic sewage), which would have had a harmful effect on the biological community of the creek and of the pond; and the creation of highly anaerobic conditions in those waters. 44. In considering the harm likely to be caused to the environment, it is to be noted that the word "likely" in this context has been held to mean "a real or not remote chance or possibility regardless of whether it is less or more than a fifty per cent chance" (Mathews v Goulburn Wool Processors, NSWSC, Smart J, 6 November 1986, unreported); "only a real chance or possibility, and not more probably than not" (State Pollution Control Commission v Blayney Abattoirs Pty Ltd (1991) 72 LGERA 221 at 224); and "does not mean 'probable'. It means 'a real possibility'" (New South Wales Sugar Milling Co-operative Ltd v State Pollution Control Commission (1991) 73 LGRA 86 at 100, affirmed by the Court of Criminal Appeal on other grounds, (1992) 75 LGRA 320). 45. The evidence of Dr Ashbolt and Mr Winning, neither of whom were cross-examined and whose evidence I thus accept, shows that there was a likely harm in the sense I have described to aquatic biota which require oxygen for survival, such as fish, insect larvae and other macroinvertebrates and microinvertebrates because of the loss of dissolved oxygen. Their evidence also shows that there was a likelihood of the production of sulphides and other toxic anaerobic by-products (such as ammonia and fatty acids) as a result of the highly anaerobic conditions created by the extremely high levels by BOD in the waste water. 46. I accept the opinion of Mr Macoun, however, that the nature of the thick vegetation along the creek would have inhibited the extent of the dispersion of the waste. I accept the submission on behalf of the defendant that the waste water was not likely to have had any detectable effect on Warabrook Lagoon. It is also apparent that the harm was abated and the potential harm was lessened by the reasonably prompt flushing and pumping out of the waste from the creek by the defendant's contractor. (b) The practical measures that may be taken to prevent, control, abate or mitigate that harm. 47. I have already discussed this in considering the submission that the Court should exercise its discretion under s 10 of the Crimes (Sentencing Procedure) Act 1999. Shortly stated, there were some hairline cracks around the floor waste in the mix tank room at the defendant's premises, which allowed waste water to leak into the underfloor space over a considerable period of time. The most simple and expedient practical measure that could have been taken to prevent the harm would have been to occasionally look through the door to the under-floor area of the defendant's building. If that had been done then it is self-evident that the very large volume of waste water – the "giant swimming pool underneath"- would have been noticed on even a cursory inspection. In that event the source of the waste water could have been located, as subsequently happened, and the escape of the waste water and the subsequent harm could have been avoided. 48. The defendant did not have, but should have had, plans or drawings showing the layout of the under-floor waste water drainage system. The defendant did not take any steps to prepare such plans or drawings until after it received the prosecutor's notice pursuant to s 193 of the Protection of the Environment Operations Act, in March 2001. Even then it did not initially produce drawings showing the correct layout. 49. The evidence also shows that whilst the defendant was meticulous in its attention to cleanliness and hygiene within its plant, it paid insufficient regard to the waste water system under the floor. 50. Since the occurrence of the offence the defendant has instituted a practice of periodic inspections of the underfloor area of its building and of the waste water piping. The defendant has also since the offence installed sumps under the building containing pumps trigged by float valves which automatically pump any accumulated water to the sewer line. The defendant has also installed back-to-base alarms in the event of any malfunction of the pumps. The defendant has removed some of the brickwork which restricted access to the underfloor space so as to facilitate visual inspection of the area. The defendant has re-routed the piping of the floor waste in the chiller room corridor so it does not connect to the underfloor grease trap but connects instead to the main waste drainage line leading to the main grease trap and thence to the sewer. Some of these measures, however, could have been taken prior to the offence. 51. As to the abatement or mitigation of the harm, I am prepared to accept that the evidence shows that the defendant promptly arranged for the clean-up undertaken by its contractor, Valley Disposal Services. (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. 52. I accept the submissions on behalf of the prosecutor, consistent with the evidence, that the defendant operated a major egg product processing facility which processed between 130,000 and 140,000 litres of liquid egg product per week; the defendant was well aware that the product was an effective medium for the growth of bacteria; the entire factory was washed down daily with waste water draining to floor wastes; and there was a ready capacity in the event of any leakage in the floor waste system for waste water to escape into the underfloor space and to pass from there into the stormwater system. It follows that any harm caused to the environment by the escape of the such waste into the stormwater system and areas downstream of the stormwater system was readily foreseeable. (d) The extent to which the person who committed the offence had control over the causes that gave rise to the offence. 53. The defendant had complete control over its premises and the maintenance of its premises. It also had complete control over the way in which its activities within those premises were managed. There is no suggestion in this case that the offence was caused by extraneous factors, such as extraordinary weather conditions or by the actions of third parties. (e) Whether, in committing the offence, the person was complying with orders from an employer or supervising employee. 54. This consideration is not relevant in this case. Other considerations. 55. I accept the submission on behalf of the defendant that there is no need in this case for a specific deterrent. I also accept the submission on behalf of the defendant that it readily co-operated with the prosecutor and furnished all the information which it was asked to provide. It is also clear that the defendant immediately engaged Valley Disposal Services to effect a clean up. The costs to the defendant of the clean up, the installation of the underfloor sumps and plumbing work amounted to $14,301. 56. It is submitted on behalf of the defendant that the Court should take into account the embarrassment to its reputation in an industry in which a penalty and fine for an offence of this nature would be particularly damaging. In considering the question of penalty it must be remembered, however, that the sentencing must embrace powerful consideration of general deterrence (Axer Pty Ltd v Environment Protection Authority per Badgery-Parker J at 367). It is also relevant that the offence of one of strict liability: "A person must not pollute waters". As Windeyer J said in Cobiac v Liddy (1969) 119 CLR 257 at 269: "The more strict a rule is made, the more serious become the consequences of breaking it, the less likely it may be that Parliament would intend to close all avenues of exception". Moreover, as Spigelman CJ said in Thorneloe, at 73, par [155]: The risk to which society was subject is, in my opinion, a relevant and, accordingly, a "proper consideration" to be taken into account…. This is so even in the context of a strict liability result offence… 57. Earlier, Spigelman CJ had said, at 69, par [129]: With respect to most criminal offences, the protection of society is served by taking into account the threat to society even if, in the particular circumstances, the threat has not eventuated. 58. The maximum penalty for the offence is $250,000 in the case of a corporation (s 123 of the Protection of the Environment Operations Act). I accept the defendant's plea of guilty as an expression of regret, (which was personally expressed by the processing manager of the defendant, Mr P A Pace) and of an acceptance of responsibility. I also accept the plea of guilty as a willingness to facilitate the course of justice and not on the irrelevant basis that the plea has saved the community expenses of a contested hearing (see Cameron v The Queen [2002] HCA 6 at par [14]). In the present case, since the parties were unable to agree on a common statement of facts and it has thus been necessary to adduce full evidence in any event, there has probably been little or no saving of the expense of a contested hearing. 59. I also have regard to the principle of even-handedness. This principle is explained by Street CJ in R v Visconti [1982] 2 NSWLR 104 at 107 (and which is quoted with approval in Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1992) 32 NSWLR 683 at 702): The task of the sentencing judge, no less than the task of an appellate court, is to pursue the ideal of evenhandedness in the matter of sentencing. Full weight is to be given to the collective wisdom of other sentencing judges in interpreting and carrying into effect the policy of the legislature. This collective wisdom is manifested in the general pattern of sentences currently being passed in cases which can be recognised judicially as relevant to the case in hand. 60. The range of penalties imposed by the Court in offences with a similar degree of seriousness have generally been between ten per cent and thirty per cent of the maximum penalty. Having regard to all of the matters to which I have referred above, I am of the view that a penalty towards the lower end of the range, namely twelve and a half per cent of the maximum, is appropriate. This should be discounted by a further twenty five per cent for the early plea of guilty. The penalty thus reduced and to be imposed will be $22,500. Costs 61. It is submitted that there should not be an order that the defendant pay the full amount of the prosecutor's costs. The submission is based upon the prosecutor's refusal to accept the draft statement of facts proffered by the defendant, which version was in the end accepted by the Court. 62. Except in cases of formal notices to admit facts, I am unaware of any principle or practice under which a party is penalised in costs for not accepting or agreeing to a statement of facts proffered by another party. The practice of agreeing upon and tendering a common statement of facts on pleas of guilty is obviously beneficial not only to the parties but also tho the Court. There is, however, no obligation on any party to so agree. As I have said, I am unaware of any practice under which any party not so agreeing should be penalised in costs. The prosecutor is entitled to its costs and an order for costs will be made accordingly. Orders 63. I make the following orders: (1) The defendant is convicted of the offence as charged. (2) The defendant must pay a penalty in the sum of $22,500. (3) The defendant must pay the prosecutor's costs. (4) The exhibits may be returned. I hereby certify that the preceding 63 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd.

Associate

Dated: 2 May 2002

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.