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4
Court of Criminal Appeal 9 February 2024

ACE Demolition & Excavation Pty Ltd v Environment Protection Authority

[2024] NSWCCA 4

Fraud & dishonesty
CRIME APPEAL AGAINST SENTENCE ENVIRONMENTAL OFFENCES OFFENDING APPEAL ALLOWED AND OFFENDER RESENTENCED

Citation: ACE Demolition & Excavation Pty Ltd v Environment Protection Authority [2024] NSWCCA 4
Court: Court of Criminal Appeal
Date: 9 February 2024
Judge(s): Leeming JA; Garling J; Cavanagh J

Background

The appellant was a demolition and excavation company that contracted with developers to remove waste materials, including asbestos, from two development sites in Zetland and Wolli Creek. Over a period of almost eight months, hundreds of weighbridge dockets and other documents recording the company's dealings with asbestos waste were falsified. Those documents were then provided to developers and site auditors as though they accurately recorded the waste removed.

The appellant pleaded guilty in the Land and Environment Court to four charges under s 144AA of the Protection of the Environment Operations Act 1997 (NSW). Three charges were the more serious offence of knowingly supplying false or misleading information about waste (s 144AA(2), maximum penalty $500,000 for a corporation). The fourth was the less serious offence of supplying such information without the knowledge element (s 144AA(1), maximum penalty $250,000). A separate employee, described as the company's contract manager and its second most senior person, was also sentenced for two of the s 144AA(2) offences.

The primary judge imposed total fines of $943,650, described as the largest ever imposed by the Land and Environment Court for offences under s 144AA. The company appealed on three grounds: error in assessing the likelihood of reoffending, error in assessing harm, and manifest excess of the sentences overall.

  • Whether the primary judge applied the correct legal test when assessing the likelihood of the appellant reoffending under s 21A(3)(g) of the Crimes (Sentencing Procedure) Act 1999 (NSW)
  • Whether "harm" for the purposes of s 241 of the Protection of the Environment Operations Act 1997 and s 21A(3)(a) of the Crimes (Sentencing Procedure) Act 1999 extends to damage to the regulatory system, or is confined to actual harm to the environment
  • Whether the total fines of $943,650 were manifestly excessive, including as a result of:
  • errors in assessing reoffending and harm
  • a flawed approach to identifying sentencing starting points
  • failure to apply the course of conduct principle to avoid double punishment
  • unjustifiable disparity between fines imposed on the company and those imposed on the responsible employee
  • whether participation in an agreed statement of facts was a separate mitigating factor

Decision

Reoffending (Ground 1): The Court found that the primary judge had applied an unduly onerous test. Rather than assessing the likelihood of reoffending, the primary judge had asked whether it could be certain that the appellant would not reoffend. Certainty is not the correct standard; the statutory question under s 21A(3)(g) calls for an assessment of likelihood.

Harm (Ground 2): The Court drew a clear distinction between actual or likely harm to the environment on the one hand, and damage to the regulatory regime on the other. Section 241(1) of the Protection of the Environment Operations Act 1997 directs attention only to the former. Damage to the regulatory regime may, however, be relevant under s 241(2) as a matter the court considers relevant. Similarly, for the purposes of the mitigating factor in s 21A(3)(a) of the Crimes (Sentencing Procedure) Act 1999, "harm to the regulatory system" does not fit within that provision's language, which tracks familiar heads of compensable private-law loss. Such considerations fall more readily under s 21A(1).

Manifest excess and related sub-grounds (Ground 3): The Court observed that pleading specific errors as sub-grounds of manifest excess is conceptually inconsistent: a finding of manifest excess asks whether a sentence is so excessive as to be plainly unfair or unjust, and does not operate as a vehicle for specific error. On the course of conduct point, the Court accepted that the criminal conduct underlying the first and third offences overlapped sufficiently to warrant a totality discount, though it rejected any requirement that overlapping conduct must result in concurrent sentences. The Court rejected the disparity argument, noting that the company was the contracting party entitled to the contract price while the employee had no direct economic interest in the offending. The Court also rejected the claim that participating in an agreed statement of facts constituted a separate mitigating factor under s 21A(3)(m) (assistance to law enforcement), absent evidence that the agreed facts had actually reduced the issues in contest.

Having found errors on grounds 1 and 2, and a further error relating to totality, the Court resentenced the appellant to a total of $774,000 in fines across the four offences.

Orders Made

  • Appeal allowed
  • Original fines quashed and replaced with the following:
  • $216,000 for each of two s 144AA(2) offences (matters 357465 and 357466)
  • $90,000 for the third s 144AA(2) offence (matter 357467)
  • $252,000 for the s 144AA(1) offence (matter 357468)
  • Total fines: $774,000
  • Annexure B (the publication notice) amended to record the appeal outcome and the revised total fine amount
  • Stay on payment of fines and publication of notice discharged, with 28 days granted to pay and publish
  • Liberty to apply regarding the form of Annexure B within 14 days
  • No order as to costs in the Court of Criminal Appeal

Key Takeaways

  • Under s 21A(3)(g) of the Crimes (Sentencing Procedure) Act 1999, the correct question when assessing reoffending as a mitigating factor is the likelihood of reoffending, not whether reoffending can be ruled out with certainty. Imposing a certainty standard is a legal error.

  • A distinction exists between actual or likely environmental harm (relevant under s 241(1) of the Protection of the Environment Operations Act 1997 and s 21A(3)(a) of the Crimes (Sentencing Procedure) Act 1999) and damage to the regulatory regime. The latter does not fall within the statutory language of those provisions, though it may be taken into account under s 241(2) or s 21A(1).

  • Pleading specific sentencing errors as sub-grounds of manifest excess is structurally inconsistent with the nature of that ground, which asks whether the overall sentence is so excessive as to be plainly unfair or unjust.

  • Where a course of criminal conduct underlies multiple offences, the principle of totality may warrant a discount on the overall sentence, but does not automatically require concurrent sentences.

  • Agreeing to a statement of facts does not, without more, attract the mitigating factor for assistance to law enforcement under s 21A(3)(m). A reduction under that provision requires an assessment that the assistance actually reduced the issues in contest.

Legislation and Cases Referenced

Legislation:
- Protection of the Environment Operations Act 1997 (NSW), ss 144AA, 169C, 241, 250
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22, 32, 43
- Criminal Appeal Act 1912 (NSW), ss 5AA, 5AB
- Criminal Procedure Act 1986 (NSW), ss 257B, 257G
- Fines Act 1996 (NSW), s 6
- Environment Legislation Amendment Act 2022 (NSW)

Key Cases:
- Achurch v The Queen (2014) 253 CLR 141; [2014] HCA 10
- Dinsdale v The Queen (2000) 202 CLR 321; [2000] HCA 54
- Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25
- Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37
- Mill v The Queen (1998) 194 CLR 610
- Budvalt Pty Ltd v Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator [2022] NSWCCA 9
- *Environment Protection Authority v ACE Demolition & Excavation