Citation: Environment Protection Authority v Grafil Pty Limited; Environment Protection Authority v Mackenzie [2022] NSWCCA 268
Court: NSW Court of Criminal Appeal
Date: 9 December 2022
Judges: Gleeson JA, Bellew J, Hamill J
Background
The first respondent, a company engaged in sand excavation, held approval to construct an access road on its land. Between late October 2012 and mid-May 2013, it allowed between 24,000 and 44,000 tonnes of waste to be stockpiled on that land for use as road base. This constituted the scheduled activities of waste disposal and waste storage under the Protection of the Environment Operations Act 1997 (NSW) ("the Act"), and the company held no licence to carry out those activities. Exemptions from licensing were available but required the company to maintain records of the quantity and source of material received. No such records were kept. The company was convicted under s 144(1) of the Act, and its director was convicted of the same offence under the executive liability provisions in s 169.
At first instance, the sentencing judge imposed no fine on the company, instead ordering it to pay a portion of the EPA's legal and investigation costs. The director's charge was dismissed without conviction under s 10 of the Crimes (Sentencing Procedure) Act 1999. The EPA, as the relevant regulatory authority, appealed both outcomes.
Legal Issues
- Whether the sentencing judge erred in finding that neither respondent demonstrated a failure of moral culpability
- Whether the sentencing judge erred in finding that general deterrence had no role to play in sentencing either respondent
- Whether the sentences imposed were manifestly inadequate
- Whether the sentencing judge's criticisms of the EPA's conduct of its investigation were justified
Decision
Moral culpability (Ground 1): The Court of Criminal Appeal found that the sentencing judge's conclusion that there had been no failure in moral culpability was unsupported by the factors on which she relied. Moral culpability in the sentencing context refers to an offender's general blameworthiness. The offending involved the unlicensed use of land as a waste facility for almost seven months, during which a very large quantity of waste was deposited without any environmental or regulatory control. The sentencing judge's characterisation of the offending as not substantial was an error.
General deterrence (Ground 2): The Court confirmed that general deterrence is a fundamental sentencing principle, both at common law and under statute, and that it carries particular weight in environmental offending cases. The sentencing judge's finding that general deterrence played no role at all was directly contrary to an express statutory purpose of sentencing and to established authority. This error was made out in relation to the company.
Re-sentencing the company: On re-sentence, the Court imposed a fine of $100,000 on the company. It held that the payment of prosecutors' costs, while constituting a form of punishment, could not substitute for an actual financial penalty. The offending undermined both the regulatory scheme and the legislative objectives of the offence provision itself, and a substantial fine was required to reflect adequate punishment, accountability, and denunciation.
The director's appeal: Despite Ground 1 and Ground 2 being established, the appeal against the director was dismissed. The director had been diagnosed with a major depressive disorder, which made him an inappropriate vehicle for general deterrence. The Court confirmed that a finding of trivial offending is not a prerequisite to a s 10 dismissal, and that, taking all circumstances into account, the dismissal of the charge without conviction remained appropriate. The Court did, however, note the need for reasonable proportionality between sentence and objective gravity of offending, even where a powerful subjective case is presented.
EPA's investigation conduct: Bellew J made additional observations rejecting the sentencing judge's criticisms of the EPA's investigative methods. The Court drew an important distinction between an authority detecting an offence and gathering evidence to support it on the one hand, and actively encouraging or facilitating offending on the other. The EPA's conduct fell squarely into the former category, and the suggestions that it had acted improperly or beyond its proper role were not supported.
Orders Made
- The conviction of Grafil Pty Limited is confirmed.
- Grafil Pty Limited is fined $100,000.
- The order requiring Grafil Pty Limited to pay 25% of the EPA's legal costs (as agreed or assessed) is confirmed.
- The order requiring Grafil Pty Limited to pay 25% of the EPA's investigation costs, being $46,772.00, is confirmed.
- The appeal against Robert Bruce Mackenzie is dismissed.
Key Takeaways
- A sentencing court's characterisation of serious and extended environmental offending as lacking moral culpability will not survive appellate scrutiny where it is unsupported by the factors relied upon, particularly where large quantities of uncontrolled waste were deposited over many months without any licence or regulatory oversight.
- General deterrence is an express statutory sentencing purpose and a well-established common law principle; a finding that it plays no role at all in an environmental offending case constitutes legal error.
- The payment of a prosecutor's costs, while forming part of punishment, does not substitute for an actual financial penalty in cases of serious environmental offending; denunciation and accountability require an independent monetary sanction.
- Under s 10(1)(a) of the Crimes (Sentencing Procedure) Act 1999, a dismissal without conviction does not require the offending to be trivial; serious subjective circumstances, such as a diagnosed major depressive disorder, may still render an individual an inappropriate vehicle for general deterrence even where the offending itself is not trivial.
- Regulatory authorities that detect offences and gather evidence in support of a prosecution are not acting improperly merely because their monitoring activities ultimately reveal the extent of ongoing offending; the relevant line is between detection and actively facilitating or encouraging the offence.
Legislation and Cases Referenced
Legislation:
- Protection of the Environment Operations Act 1997 (NSW), ss 48, 144(1), 169
- Protection of the Environment Operations (Waste) Regulation 2005 (NSW)
- Protection of the Environment Operations (Waste) Regulation 2014 (NSW)
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 10
- Criminal Appeal Act 1912 (NSW)
- Waste Avoidance and Resource Recovery Act 2001 (NSW)
- Environmental Planning and Assessment Act 1979 (NSW)
Cases:
- Paterson v R [2021] NSWCCA 273
- Bentley v BGP Properties Pty Limited (2006) 145 LGERA 234; [2006] NSWLEC 34
- Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14
- Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1; [2010] NSWCCA 194
- Edwards v R [2021] NSWCCA 57
- R v Lau [2022] NSWCCA 131
- Chin v Ryde City Council [2004] NSWCCA 167; (2004) 133 LGERA 312
- EPA v Barnes [2006] NSWCCA 246
- Environment Protection Authority v Custom Chemicals Pty Ltd [2016] NSWLEC 146
- Environment Protection Authority v Edward Gilder [2018] NSWLEC 119
- Environment Protection Authority v Geoff Robinson Pty Limited; Environment Protection Authority v Robinson [2011] NSWLEC 14
- Environment Protection Authority v Hanna [2010] NSWLEC 98
- Walden v Hensler (1987) 163 CLR 561; [1987] HCA 54
- Axer Pty Ltd v Environmental Planning Authority (1993) 113 LGERA 357
- Mulato v R [2006] NSWCCA 282
- R v Birtles [1969] 1 WLR 1047
- Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189