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Environment Protection Authority v Sydney Drum Machinery Pty Ltd (No 4) [2016] NSWLEC 59 (1 June 2016)
Last Updated: 6 June 2016
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Land and Environment Court
New South Wales
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Case Name:
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Environment Protection Authority v Sydney Drum Machinery Pty Ltd (No
4)
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Medium Neutral Citation:
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Hearing Date(s):
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16, 17, 18 June 201429, 30 September 20141,2,3,7,8 October 20144 December
2014
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Date of Orders:
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1 June 2016
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Decision Date:
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1 June 2016
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Jurisdiction:
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Class 5
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Before:
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Craig J
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Decision:
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(1) In proceedings 2016/158256 (13/50010) I record plea of guilty entered
by the defendant on 29 September 2014.
(2) In proceedings 2016/158257
(13/50011) I find the defendant guilty of the offence that between 24 January
2012 and 8 March 2012,
at or near St Marys in the State of New South Wales, he
committed an offence against s 91(5) of the Protection of the Environment
Operations Act 1997 (NSW) by reason of s 169(1) of that Act in that:
(a) he
was a director of Sydney Drum Machinery Pty Ltd (ACN: 102625507); and
(b)
that Company was given a clean-up notice and did not comply with that clean-up
notice without reasonable excuse.
(3) In proceedings 2016/158258
(13/50012) I find the defendant guilty as charged.
(4) In proceedings
2016/158195 (13/50007) I order that the summons be dismissed.
(5) In
proceedings 2016/158196 (13/50008) I order that the summons be dismissed.
(6)
In proceedings 2016/158197 (13/50009) I order that the summons be
dismissed.
(7) In proceedings 2016/158256 (13/50010), 2016/158257 (13/50011)
and 2016/158258 (13/50012) I order that the proceedings be stood
over to Friday
24 June 2016 for directions and to fix a date for hearing on sentence.
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Catchwords:
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OFFENCES – prosecution – liquid waste pollution incidents
– failure to comply with issued clean-up notices –
pleas of not
guilty – whether regulatory authority reasonably suspected pollution
incident – whether notice directions
sufficiently related to pollution
incident – whether notice terms sufficiently clear – whether
regulatory authority failed
to take into account certain considerations in
issuing notices – whether notice legally invalid due to unreasonableness
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whether reasonable excuse for failure to comply – whether due
diligence exercised to prevent failure to comply.
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Legislation Cited:
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Cases Cited:
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Category:
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Principal judgment
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Parties:
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2016/158195-158197 (50007-50009 of 2013)
Environment Protection
Authority (Prosecutor)
Sydney Drum Machinery Pty Ltd
(Defendant)
2016/158256-158258 ((50010-50012 of
2013)
Environment Protection Authority (Prosecutor)
Imad Osman-Kerim
(Defendant)
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Representation:
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Counsel:
J Giles with S Lees (Prosecutor)
Self-represented (16, 17,
18 June 2014) (Defendant)
G Segal (29, 30 September 2014, 1,2,3,7, 8 October
2014, 4 December 2014) (Defendant)
Solicitors:
Legal Department,
Environment Protection Authority (Prosecutor)
Segal & Associates
(Defendant)
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File Number(s):
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2016/158195-158197 and 2016/158256-158258(Formerly 13/50007-13/50012)
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TABLE OF CONTENTS
Introduction [1]
Relevant statutory provision [8]
Facts pertaining to the offences charged [19]
The Premises and their use [21]
The EPL [31]
Delivery of containers to the Premises contrary to
the suspension notice [37]
Inspections of the Premises prior to the charge
period [40]
Water samples tested [132]
Further evidence: the fire of 23 January 2012
[137]
Evidence of Mr Osman-Kerim [144]
Expert evidence [163]
The offence against s 91 of the Act: 17 January
Notice [177]
Element (iii) of the offence: the Company as
occupier of the Premises [180]
Element (iv) of the offence: reasonable suspicion
that a pollution event has occurred [186]
Reasonable suspicion of a pollution incident
[189]
Clean-up action related to the pollution event
[299]
Terms of notice vague and uncertain [234]
Failure to take account of relevant considerations
[247]
Reasonable excuse [255]
Section 169(1) of the Act [265]
Conclusion in respect of the 17 January Notice 2012
[268]
The offence against s 91 of the Act: 24 January
Notice [271]
The challenge to validity of the 24 January Notice:
defendant’s submission [276]
The prosecutor’s submissions [291]
Consideration [316]
Reasonable excuse [335}
Section 169(1)(c) [347]
Conclusion on offence by reference to 24 January
Notice [348]
Orders [355]
JUDGMENT
Introduction
- Sydney
Drum Machinery Pty Ltd (the Company) has been charged with the commission
of three offences against the provisions of the Protection of the Environment
Operations Act 1997 (NSW) (the Act). The Company’s sole
director, Imad (Eddie) Osman-Kerim has also been charged with three offences
against the Act arising out
of the same facts as those that found the charges
against the Company. These offences arise from the conduct by the Company of a
drum cleaning and repair business at 75 Christie Street, St Marys (the
Premises).
- In
proceedings 2016/158196 (13/50008) the Company is charged that between 10
October 2011 and 18 January 2012, it committed an offence
against s 64(1) of the
Act in that it contravened a condition of a notice suspending an environment
protection licence, that condition
operating to prevent the Company from
receiving containers at its Premises while its licence was suspended. In
proceedings 50010
of 2013, Mr Osman-Kerim is charged with the same offence in
his capacity as a director of the Company.
- In
proceedings 2016/158195 (13/50007), the Company is charged with an offence
against s 91(5) of the Act in that, without reasonable
excuse, it failed to
comply with a clean-up notice given to it on 17 January 2012. The period over
which the failure to comply occurred
is alleged to be “from about 5.00pm
17 January 2012 to about 30 January 2012”. Mr Osman-Kerim is charged with
the identical
offence, again in his capacity as a director of the Company
(proceedings 2016/158258 (13/50012)).
- The
Company is charged with a further offence against s 91(5) of the Act in that,
without reasonable excuse, it failed to comply with
a clean-up notice given to
it on 24 January 2012 (proceedings 2016/158197 (13/50009). The period in which
non-compliance with the
notice is alleged to have occurred is “between
about 24 January 2012 and 30 March 2012”. Again, Mr Osman-Kerim is charged
with that same offence in his capacity as a director of the Company (proceedings
2016/158257 (13/50011)).
- It
is convenient to refer to the clean-up notice given on 17 January 2012 as
“the 17 January Notice” and that given on
24 January 2012 as
“the 24 January Notice”.
- At
the time that each offence is alleged to have been committed, the Company was
registered under the Corporations Act 2001 (Cth). However, on 7 April
2013 the Company was deregistered pursuant to s 601AB of that Act. As a
consequence, the prosecutor asks that the charges against the Company be
dismissed. However, that circumstance
does not deny the right of the prosecutor
to proceed with the prosecution of offences against Mr Osman-Kerim, albeit
that the charges
against him are brought in his capacity as a director of the
Company and are founded upon the acts of the Company.
- Mr
Osman-Kerim had initially pleaded not guilty to the offences alleged in all
three charges brought against him. However, in the
course of the trial he has
pleaded guilty to the offence against s 64(1) of the Act but maintained his plea
of not guilty to the
offences against s 91(5). While the evidence adduced in
support of the charge under s 64(1) will be referred to, my focus will be
upon
the charges in respect of which the plea of not guilty is
maintained.
Relevant statutory provision
- Before
turning to the facts that give rise to the commission of the offences charged,
it is appropriate to identify the statutory
provisions against which those facts
are to be understood. The provisions to which I refer are those in force at the
time of commission
of the offences charged.
- Section
64 of the Act relevantly provides:
“64 Failure to comply with condition
(1) Offence
If any condition of a licence is contravened by any person, each holder of the
licence 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.
...
(3) Application
This section extends to conditions to which the suspension, revocation or
surrender of a licence is subject under section 81. For
that purpose, a
reference to the holder of the licence includes a reference to the former holder
of the licence.”
- Section
81(1) authorised the suspension of a licence either unconditionally or subject
to conditions. Subsection (3) of that section
provided:
“(3) The appropriate regulatory authority may, by notice
in writing given to the former holder of the licence, attach new
conditions to,
or vary or revoke any existing conditions of, the suspension, revocation or
surrender of the licence.”
- The
prosecutor was “the appropriate regulatory authority” (s 6(1)). The
term “licence” is defined in the Dictionary
to the Act to mean
“an environment protection licence”.
- The
entitlement to give a clean-up notice and the consequence of failure to comply
with such a notice is found in s 91 of the Act.
That section relevantly
provides:
“91 Clean-up by occupiers or polluters
(1) Notices
The appropriate regulatory authority may, by notice in writing, do either or
both of the following:
(a) direct an owner or occupier of premises at or from which
the authority reasonably suspects that a pollution incident has occurred
or is
occurring,
(b) direct a person who is reasonably suspected by the
authority of causing or having caused a pollution incident,
to take such clean-up action as is specified in the notice and within such
period as is specified in the notice
...
(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
Dictionary to the Act defines the term “pollution incident” as
follows:
“pollution incident means an incident or set of
circumstances during or as a consequence of which there is or is likely to be a
leak, spill or other
escape or deposit of a substance, as a result of which
pollution has occurred, is occurring or is likely to occur. It includes an
incident or set of circumstances in which a substance has been placed or
disposed of on premises, but it does not include an incident
or set of
circumstances involving the emission of any noise.”
- The
phrase “clean-up action” is also defined in the Dictionary in the
following terms:
“clean-up action, in relation to a pollution incident,
includes:
(a) action to prevent, minimise, remove, disperse, destroy or
mitigate any pollution resulting or likely to result from the incident,
and
(b) ascertaining the nature and extent of the pollution
incident and of the actual or likely resulting pollution, and
(c) preparing and carrying out a remedial plan of action.
It also includes (without limitation) action to remove or store waste that has
been disposed of on land unlawfully.”
- Section
256 of the Act identifies the onus of proof in a manner that is relevant to the
provisions of s 91(5). The former section
provides:
“256 Onus of proof of certain matters
(1) In any proceedings under this Act, the onus of proving that
a person had a reasonable excuse or lawful excuse (as referred
to in any
provision of this Act or the regulations) lies with the
defendant.”
- As
will become apparent, both the 17 January Notice 2012 and the 24 January Notice
2012 specified a time by which compliance with
some of the directions in each
notice were required. Relevant to that requirement are the provisions of s 319A
of the Act that provide:
“319A Continuing effect of notices and
conditions
(1) A notice given, or a condition of a licence imposed, under
this Act or the regulations that specifies a time by which, or period
within
which, the notice or condition must be complied with continues to have effect
until the notice or condition is complied with
even though the time has passed
or the period has expired.
(2) A notice that does not specify a time by which, or period
within which, the notice must be complied with continues to have
effect until
the notice is complied with.
(3) This section does not apply to the extent that any
requirement under a notice or a condition of a licence is revoked.
(4) Nothing in this section affects the powers of a regulatory
authority with respect to the enforcement of a notice or a condition
of a
licence.”
- I
have stated that, as a director of the Company, Mr Osman-Kerim, has been charged
with the same offences as those with which the
Company has been charged. I have
also recorded that the prosecutions against him are pressed, notwithstanding
that the prosecutor
seeks to have the charges against the Company dismissed
because it has been deregistered. The entitlement of the prosecutor to proceed
against Mr Osman-Kerim in these circumstances is founded upon the provisions of
s 169 of the Act. That section relevantly provides:
“169 Offences by corporations
(1) If a corporation contravenes, whether by act or omission,
any provision of this Act or the regulations, 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.
(2) A person may be proceeded against and convicted under a
provision pursuant to this section whether or not the corporation has
been
proceeded against or been convicted under that
provision.”
- Mr
Osman-Kerim relies upon the exculpatory provision of s 169(1)(c) as an element
of his defence to the offences against s 91(5) of
the Act.
Facts
pertaining to the offences charged
- The
relevant facts and circumstances pertaining to the offences charged are
generally founded upon a Statement of Facts (Exhibit B)
and a number of
documents tendered in evidence without objection. The Statement of Facts was the
subject of a consent order made
by Biscoe J on 12 August 2013 pursuant to s
247M(1)(a) of the Criminal Procedure Act 1986 (NSW). Further facts are
found in affidavits read in the course of proceedings and oral evidence given at
trial.
- At
all times prior to and during the period from 10 October 2011 and 30 March 2012,
being the period during which the offences charged
are alleged to have occurred,
the Company traded as Better Drums Pty Ltd (Better Drums) and held
Environment Protection Licence No 12893 (the EPL). That licence enabled
the Company to undertake container reconditioning and “waste processing
(non-thermal treatment)”
at the Premises. Mr Osman-Kerim was not only the
sole director of the Company, he was also involved in the daily management of
its
business at the Premises.
The Premises and their use
- The
Premises comprise a battle axe allotment of land with a long driveway from
Christie Street leading to an irregularly shaped area
of land upon which the
Company conducted its activities. Erected on that “head” of land is
a rectangular factory building
oriented to the north-east with hard paved areas
surrounding the building. A number of drainage structures are found both along
the
access handle and within the paved area to the north-east, north and
north-west of the factory building.
- Tendered
in evidence was the Statement of Environmental Effects prepared for the Company
when development consent was sought for the
development of the Premises in
October 2007 (the SEE) (Exhibit W). The SEE describes the nature of the
activities carried on by the Company. For the purpose of understanding the
present
charges, it is appropriate to give a brief description of those
activities, taken from the SEE, and evidence led before me that was
not
controversial.
- The
Company cleaned and as needed, reconditioned, intermediate bulk containers
(IBCs) used as chemical containers. Chemicals used to clean these IBCs
were stored within the factory building and included hazardous materials
such as
sodium hydroxide in flakes, sulphuric acid and other chemicals used as additives
in the cleaning process.
- IBCs
were reused numerous times by suppliers of liquid products. Although the
majority of IBCs washed and treated by the Company were
plastic containers
approximately 1m³ in size, other larger containers or drums were also
processed by the Company. On receipt
at the Company’s Premises, the IBCs
were emptied using a vacuum lance. The liquids so extracted were stored on site
prior to
being removed for disposal at a liquid waste facility. The containers
then passed along a washing line in which they were exposed
to a caustic
cleaning solution spray both internally and externally. That washing liquid was
then drained and returned from a sump
into a holding tank system where it was
retained for reuse. Retained washing liquids were used several times before
requiring transfer
to a waste water plant. The containers were then further
rinsed, dried and stored ready for delivery to the owner or for sale. A
waste
water treatment plant was located on site in order to treat the washing liquid,
thereby enabling its use on multiple occasions.
- The
process of cleaning and waste water treatment was undertaken in an area on the
south-eastern side of the factory building within
a bund of about 10cm in height
that extended to the south-eastern wall of the factory. Immediately to the south
of that area were
located four 45,000L and one 20,000L above-ground storage
tanks. While Exhibit W states that the latter tank had a capacity of 20,000L,
other evidence refers to the capacity of that tank as being 18,000L. Nothing
turns upon that difference. The 45,000L tanks were cylindrical
in shape and
stood vertically above the factory floor. The 20,000,000L tank was also
cylindrical but was lying horizontally on supports
close to the floor. The four
45,000 litre tanks were contained within a bund also of about 10cm in height,
while a bund of the same
height contained the 20,000,000L storage tank. Again,
the bund for each of those areas ran to the south-eastern side wall of the
factory so that the wall, in effect, completed the bunded enclosure.
- The
five storage tanks that are described were said to be interconnected by piping
with attached pumps. They were used as the holding
tanks for the washing liquid
that was pumped from the processing area. As waste liquid passed through each
tank, some of the suspended
solids in the liquid settled in the tank.
- Apart
from the 10cm bund around the wash bay and storage tank areas, internal bunds
were also in place around each of the doors giving
access to the factory
building, although the evidence indicates that the height of those bunds was
about 4cm to 5cm. Relevantly,
these bunds were inside two large roller doors
fixed to the north-eastern face of the factory. Those doors would appear to have
been
the primary means of access to the factory building by vehicles and other
mobile equipment used in the conduct of the Company’s
business.
- The
Premises are located adjacent to and to the north-east of Dunheved Golf Course
(the golf course). An unnamed watercourse appears to commence a short
distance to the north-east of the Premises and then runs through the golf course
before flowing into South Creek, a tributary of the Nepean River.
- Inside
the north-western boundary of the Premises and beneath the hard stand area
outside the factory building is an underground stormwater
retention tank (the
SRT) with a capacity of approximately 200,000 litres. This SRT is designed
to collect rain water that falls on the factory roof and outdoor
paved areas of
the Premises and then to provide a controlled release of that rainwater into the
unnamed watercourse. The SRT is approximately
two metres in depth.
- The
SEE at par 53 stated that at present there was no site isolation valve in place
“in case of an incident such as a fire or
chemical spill”. The
document further stated that the SRT “once isolated is expected to retain
contaminated water on
site”.
The EPL
- The
EPL was subject to a number of conditions. Included among those were the
following three “operating conditions”:
“O5.2 the number of metal drums on the Premises must not
exceed 100 at any one time.
O5.3 The total number of containers (including drums or
intermediate bulk containers) (‘IBCs’) at the Premises must
not
exceed 3,000 at any one time.
O5.4 All containers shall be stored wholly within the
building”.
- By
a Notice of Suspension of Licence dated 5 October 2011 (the Suspension
Notice), the prosecutor notified the Company that the EPL was suspended.
After recording inspections of the Premises by officers of the
prosecutor on 16
March, 20 April and 2 September 2011 when, on each occasion, the number of metal
drums and intermediate bulk containers
exceeded the numbers specified in the EPL
and were being stored outside the building located on the Premises, the
Suspension Notice
stated that the EPL was suspended for the reason that
conditions O5.2, O5.3 and O5.4 had been contravened. Further reasons
included:
“b. The receipt and storage of more than 3,000 containers
and the storage of containers not wholly within the building at
the Premises is
likely to cause pollution and impact on the surrounding environment; and
c. The suspension of the Licence and the works required to be
carried out under the conditions of the suspension are a practical
measure to
control and mitigate pollution from the excessive number of containers received
and stored at the Premises and the storage
of containers not wholly within the
building at the Premises and to protect the environment from harm as a result of
this pollution.”
- As
s 81(3) of the Act allowed, a number of conditions were imposed by the
Suspension Notice. The first two conditions expressed in
par 3 of the Suspension
Notice, stated:
“a. The licensee must ensure that no containers are
received at the Premises while the licence is suspended.
b. The Premises must be maintained in a condition which
minimises or prevents any pollution of waters from the Premises.”
(Original emphasis).
- Subparagraphs
c, d and e of par 3 imposed time limits within which excess drums and containers
were required to be removed from the
Premises and all containers stored outside
were either to be removed from the Premises or relocated “to within the
building
at the Premises”. Subparagraph f imposed an obligation on the
Company to provide receipts and dockets “showing”
that removal from
the Premises of excess containers had occurred and that excess number of
containers had been taken to a facility
that could lawfully receive them.
- Finally,
Condition 4 of the Suspension Notice stated:
“4. The suspension will remain in force until such time
as the licensee can demonstrate to the EPA’s satisfaction (expressed
in
writing) that Conditions O5.2, O5.3 and O5.4 of the licence have been complied
with and the EPA issues a notice indicating that
the suspension is
lifted.”
- Subject
to the operation of s 84(2) of the Act, the Suspension Notice recorded that the
suspension of the EPL operated from the date
of the Notice. As there was no
appeal to this Court against the decision to suspend the EPL, s 84(2) of the Act
was not engaged.
As a consequence, the EPL was suspended, subject to the
conditions imposed upon suspension, on 5 October 2011.
Delivery
of containers to the Premises contrary to the suspension notice
- Notwithstanding
receipt of the Suspension Notice, Mr Osman-Kerim admits that there were
“occasions in December 2011” when
trucks either belonging to or
contracted to Toll North Pty Limited (Toll) entered the Premises carrying
containers or drums while the Suspension Notice remained current. In fact, the
evidence obtained by
the prosecutor established that on 17 November 2011, 72
containers were delivered to the Premises by Mr Pace who was a subcontract
driver for Toll or one of its subsidiary companies. Evidence was also obtained
by the prosecutor that Mr Purin, also a subcontract
driver to Toll, delivered
two containers to the Premises on 24 November 2011. That evidence included
delivery dockets from Toll for
the containers delivered on those dates together
with an acknowledgement given by Mr Osman-Kerim in a record of interview
conducted
with officers of the prosecutor that the signature appearing on one of
those dockets acknowledging receipt at the Premises was his
signature.
- By
letter dated 25 November 2011, the Company informed the prosecutor that it had
complied with all conditions of the Suspension Notice.
Clearly, that statement
is incorrect, not only because of the deliveries that occurred on 17 and 24
November but also because Mr
Osman-Kerim later admitted that there had been some
deliveries to the Premises in December 2011.
- In
light of the evidence to which I have referred, the plea of guilty to the
offence charged under s 64(1) of the Act is unsurprising.
Based upon that
evidence together with the plea of guilty entered by Mr Osman-Kerim, I am
satisfied beyond reasonable doubt that
the Company, being the holder of the EPL
that was suspended by Notice dated and given on 5 October 2011, received 72
containers at
the Premises on 17 November 2011 and a further two containers on
24 November 2011 at those Premises while Condition 3a of the Notice
of Suspended
Licence remained an operative condition of that suspension. In so doing, the
Company acted in contravention of s 64(1)
of the Act.
Inspections
of the Premises prior to the charge period
- Alexander
Bourne, an officer of the prosecutor, visited the Premises on 2 September 2011.
The purpose of his visit was to conduct
“an announced compliance
inspection”. Mr Osman-Kerim was present at that time. Among other matters,
Mr Bourne observed
that one of the 45,000 litre storage tanks appeared to have
overflowed as there was liquid waste with a strong solvent smell pooled
on the
factory floor within the storage tank bunded area. When this matter was drawn to
the attention of Mr Osman-Kerim, he is recorded
by Mr Bourne as stating that the
tank “overflows from time to time when the filter blocks up”. On a
further visit to
the Premises on 28 September 2011, Mr Bourne observed
liquid waste that appeared to have spilled within the waste water treatment
area
but which was being contained by the bund surrounding that area. Waste water
within the floor of the waste water treatment plant
was also observed by Mr
Bourne when inspecting the Premises on 5 October 2011. On each occasion the
spilled waste water had a strong
solvent smell.
- Mr
Bourne again inspected the site on 14 October 2011 in company with, among
others, Maree Davidson, an inspector from WorkCover NSW.
Mr Bourne recorded
an observation then made that the sight gauges on the above ground storage tanks
associated with the waste water
treatment system were broken. The
Company’s representative on that occasion, Sandra Kemp, who was described
as the Company’s
Operations Manager, along with three other employees of
the Company stated that the tanks overflowed on a regular basis due to
blockages.
- On
18 October 2011, Mr Bourne was provided by WorkCover with a copy of a number of
notices issued to Better Drums at the Premises,
including Improvement Notice
7-236463, identifying potential exposure of risk to the health and safety of
employees “due to
the inadequate provision of spill containment for the
dangerous goods stored or handled at the place of work, particularly the wash
bay water treatment tanks, that had various substances or various classes being
treated and regularly overflowing”. The measure
required by the Notice was
the provision, so far as is reasonably practicable, “for the containment
of spills from the water
treatment tanks holding various classes of dangerous
goods” (Exhibit O(1) at Tab 3).
- Another
of the copy Notices received by Mr Bourne that day from WorkCover was
Improvement Notice 7-236469, also directed to Better
Drums. Again, the Notice
identified potential exposure of risk to the health and safety of employees at
the Premises “due to
the plant not being maintained in a safe condition
e.g. water tanks regularly overflow due to paper [sic] blockages, sight gauges
broken or not functioning”. The Notice required that the Company implement
and maintain a system “to ensure that the
water tanks are inspected,
cleaned and maintained in a safe operating/working condition according to the
Manufacturer’s requirements”.
- Mr
Bourne returned to the locality of the Premises on 24 November 2011. A report
had been received by the prosecutor that liquid waste
had leaked into a factory
building that adjoined the Premises in Christie Street, St Marys. The adjoining
premises were occupied
by Lisbon Engineering, with its factory building located
to the south of the Premises. Upon inspection of the Lisbon Engineering
site Mr
Bourne observed that approximately 200 to 300 litres of “a black odorous
liquid” was pooled across a section
of the factory floor at the northern
end of the building. A similar liquid had pooled between the northern end of
Lisbon Engineering
building and the southern (south-eastern) wall of the
Premises. A phytotoxic impact upon the grass between the two buildings was
observed.
- Following
inspection of the Lisbon Engineering building, Mr Bourne inspected the Premises
accompanied by Mr Osman-Kerim. During that
inspection, Mr Osman-Kerim is
recorded as stating that waste water had overflowed from a waste water tank due
to a pump failure three
days earlier; that the water had then flowed across the
concrete floor and under the factory wall due to a failed floor/wall seal
and
that the escaping liquid had flowed onto the Lisbon Engineering site and into
its workshop. Mr Bourne observed residual brown
waste down the side of the
north-eastern above ground storage tank, splash marks of residual brown waste
both across containers standing
at ground level and also on the walls
surrounding the north-eastern tank. He also saw residual liquid waste both
inside and outside
of the bund that surrounded the liquid waste treatment plant.
Photographs were taken by Mr Bourne, reflecting the observations that
he had
made on that day (Exhibit N, Tab 8). At the time, water samples were taken from
a number of places including spilled waste
from the above ground storage tanks.
Testing of those samples showed the liquid waste to be “environmentally
hazardous, with
high levels of pesticides present” (Exhibit O(2) at Tab
43).
- Mr
Bourne returned to the Premises the following day. He again observed residual
liquid waste both inside and outside the bund of
the liquid waste treatment
plant. A clean-up notice dated 25 November 2011 was then given to the
Company.
- The
inspection of the Premises by Mr Bourne on 25 November 2011 was conducted in
conjunction with Ms Davidson of WorkCover. As a consequence
of that inspection,
WorkCover issued further Improvement Notices to Better Drums and provided copies
of those Notices to the prosecutor.
In particular, Improvement Notice 7-238504
gave as the reason for that Notice the “inadequate provision of spill
containment
for the dangerous goods stored or handled”, in particular the
wash bay water treatment tank overflowing “into bunding
that does not
maintain containment or is adequate size [sic] for the storage requirements of
tanks contained within the bunded area”
resulting in the spill onto
neighbouring property (Exhibit O(1) at Tab 7).
- A
further Improvement Notice issued to the Company at that time by WorkCover, a
copy of which was provided to Mr Bourne, again identified
a risk to the health
and safety of employees using the plant “such as the water treatment
tanks” and stated that water
treatment tanks were “regularly
overflowing due to faulty pumps and blockages, sight gauges broken or not
functioning”.
Remedial action was required in the same terms as that
expressed in the earlier Notice that had also identified blockages and faulty
gauges.
- On
14 December 2011, Mr Bourne again inspected the premises of Lisbon Engineering
at 77 Christie Street, St Marys. He observed a “red,
brown and white
odorous liquid” between the northern end of the Lisbon Engineering
building and the southern or south-eastern
wall of the Premises. The same
phytotoxic impact on grass between the two buildings that he observed on 24
November remained.
- He
then went to the Premises where he met Mr Osman-Kerim. During that inspection he
observed “a red, brown and white odorous
liquid” originating from
the rear of the container wash bay. That wash bay was located on the opposite
side of the south-eastern
wall of the Premises to the impacted area of the
Lisbon Engineering building. Mr Osman-Kerim repeated the explanation given on 24
November for the escape of that liquid and stated that a new pump had been
installed on 13 December. Mr Bourne photographed the liquid
he had described
between the two buildings as well as the red, solvent smelling liquid located
within the wash bay area and waste
water sump area of the Premises.
- A
follow-up inspection of the Premises was carried out by Mr Bourne on 15 December
2011. The red, brown and white odorous liquid between
the factory building on
the Premises and the Lisbon Engineering building had not been cleaned up
although it appeared that efforts
were being made within the factory on the
Premises to clean up the spill within the wash bay area. At that time, Mr Bourne
observed
a damaged IBC that was leaking an oily liquid waste onto the factory
floor.
- On
16 January 2012, there was a fire at the Premises that caused substantial damage
to the office area within the factory and limited
damage to the remainder of
that building. Mr Bourne, inspected the Premises that day and noted that while
fire damage to the office
area was extensive, the fire did not appear to have
impacted upon the liquid waste storage tanks. Small quantities of water
apparently
used to extinguish the fire (“firewater”) were observed
on the floor of the factory.
- Mr
Bourne also observed liquid waste both within the area of the waste water
treatment system and the above ground storage tanks.
That liquid waste was
breaching the treatment plant bund. Liquid waste had also filled the bunded area
behind the wash bays. He also
noted that a fire door adjacent to the liquid
waste treatment plant had been damaged with a photograph then taken, revealing
that
the bottom section of that fire door had been broken open.
- Mr
Osman-Kerim was present during that inspection. When the liquid waste within the
area beneath the storage tanks, wash bays and
waste treatment plant were pointed
out to him, he stated that he was unaware of the spilled liquid waste, how it
had occurred or
the cause of the spill within the treatment and storage
areas.
- Section
93 of the Act enabled a regulatory authority or a person acting in accordance
with an authority from that authority, to give
a clean-up direction orally. On
16 January 2012 Mr Bourne was an authorised officer under the Act. Exercising
his authority and relying
upon the provisions of s 93(1) of the Act, he issued a
verbal clean-up direction to Mr Osman-Kerim in the following
terms:
“1. Engage a suitably qualified liquid waste removalist
to remove all liquid waste from the liquid waste containment bund
and wash bays
by 5.00pm on 17 January 2012;
2. Isolate the stormwater retention pit by 5.00pm on 17 January
2012;
3. Provide receipts to EPA demonstrating liquid waste removed
from the Premises was taken to a facility that can lawfully receive
that waste
by 5.00pm 18 January 2012; and
4. At a time to be determined remove all waste contained within
the 4 x 45,000L and 1 x 20,000L tanks by a waste removal company
to a facility
that can lawfully receive that waste.”
- In
response to that oral notice, Mr Osman-Kerim is recorded as stating that he
would comply with Directions 1, 2 and 3 but was not
in a financial position to
comply with Direction 4.
- At
that time, all electric power to the Premises had been cut off by the fire
officers who had attended to extinguish the office fire.
As it happened, that
power had not been restored to the Premises when, as will shortly be recorded,
there was a second fire at the
Premises. Pumps used to transfer waste to the
above ground storage tanks as well as pumps used to transfer liquid waste
between tanks
could not be operated in the absence of power to the
Premises.
- That
oral notice was followed up the following day when the prosecutor issued
clean-up Notice no 1503772 directed to the Company (being
the 17 January
Notice). The decision to issue that Notice was made by Jacqueline Ingham, whose
position was as Unit Head of Waste
Operations within the office of the
prosecutor. Ms Ingham issued the Notice based upon the advice that she had
received from Mr Bourne.
The Notice recorded the fact that a fire had occurred
at the Premises; that the fire had been contained but that liquid waste had
entered wash bays; that liquid waste had entered the bunded area provided for
the waste water treatment system and above ground waste
storage tanks; and that
the bunding was “inadequate for the volumes of waste stored in the above
ground tanks”. Among
the directions included in that Notice was Direction
No. 3 requiring that the following clean-up action be
taken:
3. Immediately engage a suitably qualified expert to
isolate the stormwater retention tank so that any liquid waste spilt at the
Premises does [sic]
not leave the Premises by 5.00pm Tuesday 17 January
2012” (Original emphasis).
- Once
the 17 January Notice had been prepared, Mr Bourne, together with Andrew Reece,
an authorised officer of the prosecutor, attended
the Premises and there served
the Notice upon Mr Osman-Kerim. At that time Sandra Kemp, the Company’s
Operations Manager was
at the Premises. Mr Bourne and Mr Reece explained to Mr
Osman-Kerim and Ms Kemp what the clean-up notice required the Company to
do.
Each direction given in the notice was explained to Mr Osman-Kerim and Ms
Kemp.
- Following
their inspection of the Premises that day, Mr Bourne and Mr Reece inspected the
Lisbon Engineering site. They there observed
liquid waste on the ground between
the Lisbon Engineering building and the factory on the Premises. They also
observed that in the
northern end of the Lisbon Engineering building the same
solvent smelling liquid waste covered approximately 6m² of the floor.
As a
result of those observations, Mr Bourne telephoned Mr Osman-Kerim, issuing a
further clean-up direction requiring that he make
immediate arrangements to
remove liquid waste from the Lisbon Engineering site.
- On
19 January 2012, the Prosecutor issued a variation of the 17 January Notice. The
purpose of that variation was to add the requirement
to clean up the liquid
waste that had spilt onto the Lisbon Engineering land and building. Condition 3
of the 17 January Notice was
not varied. Later that day Mr Bourne spoke
with Mr Osman-Kerim by telephone and had a conversation to the following
effect:
“IOK: I am on site at the moment. Next door has been
cleaned up.
AB: Okay.
IOK: Tomorrow I will get the stormwater retention tank
sealed.
AB: Have you removed any liquid waste from the Premises?
IOK: I am not able to yet. I am getting Transpacific to test
the liquid waste on the site.”
- The
Premises were again inspected by Mr Bourne on 20 January 2012. Upon inspection,
he observed that the SRT had not been isolated
so as to prevent the escape of
liquid wastes from the Premises. In his subsequent Record of Interview with
officers of the prosecutor,
Mr Osman-Kerim admitted that he had not complied
with the 17 January Notice.
- In
the early morning of 23 January 2012, there was a second fire at the Premises
that caused substantial damage to the factory building.
The fire was
extinguished by officers of Fire and Rescue NSW. However,
“firewater”, that is, water used to extinguish
the fire, together
with liquid waste already on the Premises was mobilised resulting in waste water
discharging from the Premises,
eventually entering South Creek.
- Mr
Bourne and Mr Reece visited the Premises that same day. On arrival at the
Premises Mr Reece observed what appeared to be contaminated
water flowing from
the SRT via a culvert adjacent to the Premises into the unnamed watercourse that
ran through the golf course.
The SRT had not been isolated and in an endeavour
to stem the flow of water from the SRT, a traffic cone or “witches
hat”
was inserted into the pipe through which the SRT drained. This
appeared to stop the flow of liquid from the SRT as the pressure of
water behind
the cone forced its narrow end into the outlet pipe and maintained it in that
position.
- Mr
Reece observed that prior to inserting the traffic cone into the SRT grey
coloured water was flowing from the SRT into the external
drainage channel.
After the traffic cone was installed he also observed that apparently
contaminated liquid was flowing out of the
north-eastern door of the factory
building but not all of that flow was being captured by the central stormwater
drains. As a consequence,
booms brought to the site by the HAZMAT crew of Fire
and Rescue NSW were used in an attempt to divert the escaping liquid to the
SRT.
- A
number of further steps were taken by Mr Reece during the morning of 23 January.
He discovered that contaminated water was leaving
the Premises via a stormwater
drain that also discharged directly into the watercourse running across the golf
course and into South
Creek. He arranged for the drainage line to be blocked,
ultimately using some sand bagging brought to the site so that the pooled
liquid
could then be pumped out. He also arranged for a contractor to attend the
Premises for the purpose of pumping out the liquid
then being retained in the
SRT as a result of the outlet drain blockage that he had achieved by inserting
the witches hat.
- Mr
Bourne arrived at the Premises on 23 January, after Mr Reece. Upon his arrival,
Mr Bourne observed the measures that had been taken
by Mr Reece both to divert
liquid waste into the SRT and to prevent water flowing from it. Mr Bourne
observed that the liquid waste
in the SRT was black to charcoal in colour, had a
strong solvent smell and was foaming. Upon inspection of the watercourse to the
north of the Premises he also observed liquid waste to be present with the same
characteristics. Water samples were collected by
him and taken to the
Environmental Forensic and Analytical Science Section of the Office of
Environment and Heritage (OEH) for analysis.
- As
a result of the fire that occurred on 23 January 2012, a number of State
government and local government agencies were present
on the site. Actions then
taken by those other agencies included:
- (i) (assistance
by staff of Penrith City Council in undertaking temporary works to divert and
contain contaminated firewater and liquid
waste to the SRT;
- (ii)
engagement of contractors to contain and remove liquid waste both from the SRT
and from the watercourse into which contaminated
liquid had flowed;
- (iii) collecting
liquid waste samples from both the Premises and along the unnamed watercourse;
and
- (iv) action by
staff of the Department of Primary Industries and its Office of Hawkesbury
Nepean, notifying all licensed and riparian
users that the pumping of water from
South Creek between St Marys and the Hawkesbury River was banned. That ban was
not lifted until
3 February 2012.
- On
the morning of 24 January 2012 Mr Bourne telephoned Mr Osman-Kerim and gave
verbal directions for action to be taken in relation
to the Premises, including
a requirement to isolate the SRT and to maintain the level of liquid waste in
the SRT to below 30% of
its maximum capacity. During the course of that day
clean-up notice no 1503916 directed to the Company (the 24 January Notice) was
issued by the prosecutor. The Notice recited the background events leading to
its issue, including the fire on 23 January 2012; the
leaking of liquid waste
from the Premises onto adjoining premises and into the watercourse leading to
South Creek; the temporary
measures taken to divert liquid waste draining from
the damaged building into the SRT; the fact that EPA officers “reasonably
suspected that a pollution incident had occurred, was occurring and is likely to
occur, due to the spill of liquid waste at the Premises”;
the compromised
integrity of the above ground tanks and the verbal clean-up directions given
earlier that day. The Notice then directed
that the following clean-up action be
taken:
“1. Immediately engage a suitably qualified
expert to isolate the stormwater detention tank so that any liquid waste
spilt at the Premises does not leave the Premises by 5.00pm 24 January
2012;
2. Immediately direct all runoff from the fire damaged
building at the Premises to the stormwater retention tank so that any liquid
wastes do not
leave the Premises by 5.00pm 24 January 2012;
3a Immediately monitor and maintain an appropriate level
of liquid waste in the stormwater retention tank and the adjacent stormwater pit
ensuring
the retention tank does not fill in excess of 30% of their
capacity;
3b The liquid waste contained within the stormwater retention
tank and the adjacent stormwater pit is to be appropriately classified
and
removed by a suitably qualified and experienced chemical spill clean-up
company;
3c The liquid waste is to be transported to or disposed of at a
facility that can lawfully receive that type of waste;
4. Within one week of access being granted to the fire damaged
building, all liquid waste contained within the 4 x 45,000L and
1 x 20,000L
above ground storage tanks is to be appropriately classified and is to be
transported to or disposed of at a facility
that can lawfully receive that type
of waste; and
5. The licensee must provide receipts or dockets showing the
liquid waste removed from the Premises has been transported to or
disposed of at
a facility that can lawfully receive that type of waste within one week of that
waste being transported from the Premises.”
(Original
emphasis)
- Later
that day Mr Bourne and Mr Reece attended the Premises where they gave the 24
January Notice to Sandra Kemp and explained the
directions that were required to
be implemented. At that time the SRT was inspected and the traffic cone plugging
the outlet was
observed to remain in place. As was acknowledged in Exhibit B,
the SRT had not been isolated in accordance with the requirement of
the 17
January Notice.
- At
the time of inspection on that day, Mr Bourne observed what he described as
“liquid waste/firewater” flowing from the
eastern side of the
factory building being directed to the SRT by the temporary booms that had been
placed on the hard stand area
of the Premises the previous day. An underground
stormwater pipe leading from the building to below the weir within the SRT was
observed
to have a dark charcoal liquid flowing from it into the SRT. According
to the report of Mr Bourne prepared following that inspection
(Exhibit N,Tab 18)
liquid wastes were observed at a low level within the SRT so that, at that time,
the SRT was able to hold the
liquid wastes flowing to it. However, contaminated
waste water that was not captured by the stormwater drainage system leading into
the SRT was being captured by a drainage line running north/south along the
eastern boundary of the Premises.
- The
Premises were again visited by Mr Reece on 25 January 2012. Once again, it was
observed that the SRT had not been isolated by
any measure taken by or on behalf
of the Company. The traffic cone remained in place. It was raining at the time
of his visit. Mr
Reece estimated that the SRT was approximately 40 percent full
with waste water from the factory building seen to be entering the
SRT. While Mr
Reece understood the capacity of the SRT to be 200,000L, given the catchment for
contaminated water running to it,
he formed the opinion that the SRT would
overflow if it was not pumped out and the rain continued to fall as it was.
- Samples
of water were taken from the SRT and also from a stormwater drain in the
northern corner of the Premises. These samples were
taken for analysis that
subsequently showed that water taken from the SRT had a pH of 10-11 while
stormwater in the drain in the
northern corner of the Premises had a pH of
6-7.
- On
27 January 2012 Ms Ingham, on behalf of the prosecutor, engaged Michael Sidaros
of Dr H2O Pty Ltd, a plumbing and maintenance contractor,
to undertake work at
the Premises, including the sealing of the SRT. On that same day, Ms Ingham also
made contact with Transpacific,
the liquid and hazardous waste division of
Transport Waste Services, requesting that a tanker be provided to remove liquid
waste
from the SRT at the Premises.
- The
Premises were attended by Mr Bourne on 27 January in company with Deanne Thomas,
Christine Mitchell and Michael Celona, officers
of the prosecutor, together with
Brad Lynch and Shane Barter from the Office of Hawkesbury Nepean. Mr Bourne
inspected the SRT and
observed that it had not been isolated in accordance with
the 17 January Notice. He also observed that the SRT was approximately
half full
of liquid waste. Together with Ms Mitchell, Mr Bourne collected liquid samples
from locations within the Premises while
Mr Lynch and Mr Barter left the
Premises to collect water samples from local water courses.
- Mr
Bourne also observed that liquid waste/firewater was flowing from the
north-eastern side of the building on the Premises with the
temporary booms that
had been put in place on 23 June appearing to direct that waste water into the
SRT. Stormwater drains carrying
this waste water were observed to be carrying
foam. Other waste water discharging from the building on the Premises that was
not
being captured by the stormwater drainage system leading to the SRT was also
being retained by the temporary measures put in place
on 23 January, although
the level of water damned by this measure had reached the level of the curb at
the boundary of the Premises.
A stormwater culvert adjacent to the Premises
showed signs of impact by the waste water that had flowed from the Premises, as
a boom
previously in place across the culvert had been washed out of position.
Foam was being generated at this point from an auxiliary
stormwater drain
entering the culvert causing the liquid waste to be aerated.
- After
making these observations, Mr Bourne and Ms Thomas left the Premises to traverse
the unnamed watercourse running across the
golf course. Mr Bourne noted that the
flow of water in the watercourse was higher than that observed on 23 January and
that while
no odour was detected, foam was visible on the flowing water. He then
travelled to the confluence of the watercourse with South Creek.
At that point,
water in the watercourse falls several metres over a series of small cascading
waterfalls into South Creek. A large
volume of foam was noted to be present at
this point with foam also present on surrounding tree trunks, causing Mr Bourne
to form
the opinion that the foam had been up to two metres above the creek
level. Upon walking approximately 25m downstream from this point,
Mr Bourne
observed that there was a high flow of water in South Creek with a water level
approximately 1m above the levels he had
observed on 23 January. At this point,
the water in South Creek was observed to be brown in colour with foam floating
on top. Water
samples were taken.
- Mr
Bourne and Ms Thomas then walked upstream from the confluence where the water
appeared to be brown in colour but no foam was present.
The high flow and
increased water levels at this point was such that samples could not be taken,
although on walking approximately
15m further upstream a location was identified
at which water samples were able to be taken. The water at this point was
observed
to be brown in colour, but no foam was present.
- Further
observations and water sampling were undertaken by Mr Bourne and Ms Thomas
further downstream in South Creek. They then returned
to the Premises, collected
all water samples taken that day by those in attendance and conveyed those to
the prosecutor’s Lidcombe
laboratory. Prior to leaving the premises on 27
January, Ms Mitchell observed a tanker from Transpacific remove liquid waste
from
the Premises.
- On
30 January 2012, Jacqueline Ingham spoke to Michael Sidaros of Dr H2O in
relation to the quote that he had given for works to be
undertaken at the
Premises. Mr Sidaros was authorised to proceed with that work which included
sealing of the SRT.
- Mr
Bourne again visited the Premises on 30 January 2012. He observed that liquid
waste was continuing to flow from the north-eastern
side of the building at the
Premises. He also observed liquid waste within the SRT.
- While
Mr Bourne was at the Premises during the morning of that day, two liquid waste
tankers from Transpacific arrived at the Premises.
This occurred at the request
of Ms Ingham on behalf of the prosecutor. The driver of the Transpacific truck
was instructed by Mr
Bourne to remove liquid waste from a stormwater pit located
in the north-eastern corner of the Premises as well as from the SRT.
Upon
arrival of a second truck, the driver was instructed by Mr Bourne to
complete removing liquid from the SRT and also to remove
liquid waste from the
ground surfaces, stormwater system and a small stormwater retention tank at the
eastern boundary of the adjoining
premises of Lisbon Engineering. An inspection
of those premises by Mr Bourne on that day revealed that liquid waste had flowed
from
the Premises onto the factory floor, yard and stormwater system of the
Lisbon Engineering premises. Later in the day Mr Bourne met
Michael Sidaros of
Dr H2O at the site and observed him seal the SRT.
- On
7 February 2012, Mr Bourne and Mr Reece attended the Premises. They inspected
the SRT and noted that the liquid draining into it
appeared to be a black
viscous substance. The depth of liquid waste within the SRT was also measured at
60cm from the top, above
an internal weir, and 90cm from the top below the
internal weir. Mr Bourne and Mr Reece also inspected the stormwater culvert
adjacent
to the Premises. This culvert was carrying water that was dark green in
colour. Following his inspection, Mr Bourne dialled the telephone
number of the
Company and also the mobile telephone number that he had for Mr Osman-Kerim.
Neither phone call was answered but Mr
Bourne left a voice mail message
requesting that his call be returned. Shortly after leaving that message he
received a telephone
call from Sandra Kemp. Mr Bourne informed Ms Kemp of his
observations at the Premises, stating that the Company was required to comply
with the 24 January Notice, in particular that it was to maintain the liquid
waste contained within the SRT below 30 percent of its
capacity. Mr Bourne
records Ms Kemp’s response as being, “We will comply with the
conditions of the Notice.”
- During
the morning of 14 February, Mr Bourne again dialled the telephone number for the
Company and the mobile telephone number of
Mr Osman-Kerim. Neither
telephone was answered and a voice mail message was left requesting that the
call be returned. Approximately
one hour later Mr Bourne received a telephone
call from Ms Kemp. He related the observations that he had last made of the
levels
of liquid in the SRT, the catchment area of the Premises and the rainfall
forecast he had obtained from the Bureau of Meteorology.
In the circumstances he
stated that the SRT was likely to fill and needed to be pumped out, as if an
overflow occurs it may constitute
an offence against s 116 of the Act. Ms Kemp
is recorded as responding:
“Okay I will call Eddie and advise him of what you have told me. Can you
please advise our solicitor Jamie on 9231 3433.”
- Following
that conversation, Mr Bourne spoke with James Vernon who he understood to be
“Jamie” referred to by Ms Kemp.
Mr Vernon was a solicitor in the
solicitor’s firm of Benjamin & Khoury. Mr Bourne told Mr Vernon of the
content of his
conversation with Ms Kemp, directed him to the EPA public
register in which copies of the suspension notice and the clean-up notices
could
be viewed. He also advised Mr Vernon of “the current environmental
issues” involving the Premises and of Mr Osman-Kerim’s
commitment to
comply with the Notices.
- Later
that morning Mr Bourne received a telephone call from Ms Kemp in which she
stated words to the effect:
“Eddie will arrange the pump out of liquid waste from the site by
Solveco.”
In response to a question from Mr Bourne, Ms Kemp stated that the pump out would
occur that day.
- Shortly
after that telephone conversation with Ms Kemp, Mr Bourne received a telephone
call from Mr Osman-Kerim. In that conversation
Mr Osman-Kerim stated that the
water in the SRT was “just water from the rain”. Mr Bourne
responded by stating that it
was rainwater mixed with contaminants from the
Premises to which Mr Osman-Kerim responded by saying “okay”.
- During
the morning of 15 February 2012 Mr Bourne again was unsuccessful in making
telephone contact either with the Company or with
Mr Osman-Kerim. A voice
mail message was left on each telephone requesting that his call be returned.
Shortly thereafter Mr Osman-Kerim
telephoned Mr Bourne when a conversation to
the following effect occurred:
“IOK: I went out to the site and looked at the stormwater
retention tank. I will get Remondis to come and pump it out tomorrow.
It should
be okay, the stormwater retention tank is nearly full.
AB: How much liquid waste is in the stormwater retention
rank?
IOK: Probably 20,000 to 25,000L in the tank. Remondis will
empty it completely. I will fax or email you the receipts and dockets
tomorrow.
AB: Have you got access to the Premises?
IOK: Yes, I have the keys to the front gate. I will be moving
the Chep pallets today.”
- In
the early afternoon of 15 February, Andrew Reece returned to the Premises. At
the time of his inspection he noted that the SRT
was 90 percent full, with very
little capacity to store any more waste water or site run off. In the course of
that inspection, Mr
Reece also discovered an 8,000 litre above ground water tank
on the Premises that was full of liquid. The liquid had a green fluorescent
colour. Mr Reece had added green fluorescence to the SRT during a previous
inspection so that any leakage or discharge from it could
be determined.
- Mr
Reece again went to the Premises on 16 February. During the course of the
morning he observed the arrival of a tanker truck from
Remondis.
Mr Osman-Kerim arrived at the Premises shortly thereafter and directed the
driver of the Remondis truck to commence pumping
water from the SRT. Once
pumping commenced Mr Reece had a conversation with Mr Osman-Kerim to the
following effect:
“IOK: Its clean water just block the pipes and let it go
into the creek.
AR: Eddie, it’s not clean water. All the water going into
the tank is from the factory where all the waste from the waste
tanks has
leaked. If you block the pipes and let it drain into the creek that is
intentional environmental harm and that is a Tier
1 offence that carries a
custodial sentence.
IOK: This is bullshit. It is costing me too much money to keep
pumping out the tank, its clean water.
AR: Eddie, you are responsible for the Premises and all the
waste on it. EPA has issued you a Clean-Up Notice that requires you
to keep the
tank below 30 percent so that if it rains and more waste comes out of the
factory it does not pollute the creek.”
- After
the Remondis truck left the Premises, Mr Reece observed that the SRT was still
about 80 percent of its capacity. He informed
Mr Osman-Kerim that more trucks
were required to reduce the volume of waste in the SRT to 30 percent in order to
comply with the
24 January Notice.
- Mr
Reece returned to the Premises at about 7.30am on 20 February 2012. Heavy rain
had fallen overnight and the purpose of the visit
was to check water levels in
the SRT. Upon inspection, Mr Reece observed that the SRT was “filled to
capacity” with water
apparently contaminated by chemicals that were washed
from the fire damaged factory building. He formed the opinion that any further
rain would cause the SRT to overflow into the watercourse and ultimately into
South Creek. Mr Reece reported his observations to
Mr Bourne.
- During
the morning of 20 February Mr Bourne made several unsuccessful attempts to
contact the Company and Mr Osman-Kerim by telephone.
Eventually, he spoke to
Sandra Kemp and had a conversation to the following
effect:
“SK: We organised two truckloads of liquid waste to be
transported from the Premises on Thursday (16 February).
AB: An EPA authorised officer inspected the stormwater
retention pit at the Premises this morning. The SRT is now full and an overflow
of the liquid waste into South Creek is imminent if it isn’t overflowing
already.
SK: The Remondis driver said levels would be compliant with the
clean-up notice and Eddie checked the levels last week.
AB: How can a 20,000L liquid waste tanker reduce a full
200,000L stormwater retention tank to below 30%? How did Eddie measure
the
levels of liquid waste in the tank to ensure compliance with the clean-up
notice?
SK: I don’t know.
AB: The stormwater retention tank is currently full and
potentially overflowing. Sydney Drum Machinery must get liquid waste removable
tankers to suck the liquid waste out of the stormwater retention tank as soon as
possible.
SK: I will let Eddie know.
AB: Should Sydney Drum Machinery fail to comply with the
clean-up notice EPA may have to organise the works and issue a costs compliance
notice to recover the costs.
SK: Okay.”
- Mr
Reece returned to the Premises shortly after 9.30am on 21 February 2012. The
prosecutor had been advised by Mr Osman-Kerim that
he had arranged for tankers
to attend during the course of the morning so as to remove waste water that had
filled the SRT. Upon
arrival, the gate to the Premises was locked and no one was
present. Mr Reece unlocked the gate with a key that he had and went immediately
to the SRT where he observed that water had overflowed from the SRT into the
watercourse leading to South Creek. After waiting for
about one hour Mr Reece
left the Premises as no one on behalf of the Company nor any waste tankers had
come to the Premises since
his arrival. He later returned with water sampling
equipment and took samples of water in both the SRT and the watercourse leading
to South Creek. He observed that the water in the SRT was very dark in colour
and had a very strong odour.
- The
water samples collected that day were then taken by Mr Reece to the laboratory
for analysis. He also contacted Mr Bourne with
the request that water tankers be
engaged to pump out some of the liquid from the SRT.
- After
attempting to contact the Company and Mr Osman-Kerim by telephone and leaving
voice mail messages requesting that his call be
returned, Mr Bourne
eventually spoke to Ms Kemp early in the afternoon of 21 February. They had a
conversation to the following effect:
“AB: Remondis are not pumping any liquid waste from the
stormwater retention tank at the Premises.
SK: The solicitor is writing a letter to EPA regarding the
costs of pumping out the liquid waste.
AB: There is a pollution event occurring now. Have trucks to
remove liquid from the stormwater retention tank at the Premises been
ordered?
SK: I don’t think so. The solicitor is writing a letter
to EPA regarding the costs of pumping out the liquid waste.
AB: That is not a lawful excuse or defence for failure to
comply with the Clean-Up Notice issued on 24 January.
SK: I will let Eddie know.
AB: Note that the spilling of stormwater retention tank [sic]
could be considered a Tier 1 offence under section 116 of the Protection
of the
Environment Operations Act 1997 and has a maximum penalty of $5,000,000 for
wilfully causing or contributing to the offence
plus there are the cost
compliance costs [sic] to consider.
SK: Okay.”
- A
short time later Ms Kemp called Mr Bourne, stating that four Remondis liquid
waste removal trucks would be onsite “first thing
in the morning”.
Later in the afternoon of 21 February 2012, Mr Bourne had a telephone
conversation with Mr Osman-Kerim. Mr
Osman-Kerim stated that at 8.00am the
following day Remondis would be taking water from the Premises “to stop
the tank from
overflowing”. When asked how many tankers would be used
Mr Osman-Kerim responded by stating that there would be “a few
tankers”.
- Mr
Bourne visited the Premises on 22 February 2012. He there observed that liquid
waste was continuing to flow from the eastern side
of the factory building on
the Premises. He also observed that liquid in the SRT was “black and
odorous”. It was at a
level that was only 35cm from the top of that tank,
far exceeding the 30 percent capacity that was the subject of the 24 January
Notice. That same day Mr Bourne caused a reminder letter to be sent by the
prosecutor to the Company, reminding it of the requirements
imposed by the
January 24 Notice, and stating that the failure to comply could involve
“further regulatory action” of
the kind indicated in the letter and
noting that an obligation to comply remained operative even if the stipulated
date for compliance
had passed.
- On
the morning of 28 February 2012, Mr Bourne learned from the website of the
Bureau of Meteorology that significant rain was forecast
for the ensuing three
days. He attempted to call Mr Osman-Kerim on his mobile telephone but when that
call was unanswered he left
a voice mail message stating that 65mm of rainfall
was predicted over the next three days which would cause the SRT to overflow
unless
it was pumped out. Mr Bourne requested that Mr Osman-Kerim return
his call.
- Mr
Bourne next telephoned the landline for the Company and spoke to Ms Kemp. After
stating that calls had been made to the mobile
telephone number for Mr
Osman-Kerim but messages were not being returned, Mr Bourne warned of the likely
rainfall over the ensuing
days and requested that the Company organise to have
the SRT pumped out as soon as possible. Ms Kemp indicated that she would
“let
Eddie know”. A little later Mr Bourne telephoned Mr Vernon, the
solicitor from Benjamin & Khoury, solicitors, who had written
to the
prosecutor confirming that the firm represented the Company. Mr Bourne repeated
his concern about the impact of further heavy
rain over the ensuing days with a
request that the EPA be advised of the actions proposed by the Company. The
prospect that the prosecutor
would take “further regulatory action”
should no response be received was also stated. Mr Vernon is recorded as
responding
by saying “okay”.
- As
no response was received either from Mr Osman-Kerim, Ms Kemp or Mr Vernon,
Mr Bourne again attempted to speak to Mr Osman-Kerim
on his mobile telephone.
The call was not answered but a voice mail message was left on that phone
stating that the prosecutor would
take action to pump some of the liquid waste
from the SRT to prevent a pollution incident and that it would seek recovery of
the
costs associated with that action from the Company. A further telephone call
to the landline telephone number of the Company was
unsuccessful.
- As
a consequence, Mr Bourne again telephoned Mr Vernon. After stating that a breach
of s 120 of the Act was occurring at the Premises
because of the potential for a
pollution incident to occur and that the Company was in breach of the January 24
Notice, Mr Bourne
stated that because of the potential for significant risk of
environmental harm, the prosecutor would engage two liquid waste removal
tankers
to remove some of the liquid waste from the SRT and was likely to seek recovery
of the costs incurred in so doing. Mr Bourne
indicated that he was contacting Mr
Vernon because his telephone calls and messages to the Company had not been
returned.
- Both
during the morning and afternoon of 29 February 2012, Mr Bourne telephoned Mr
Osman-Kerim on his mobile telephone as well as
the Company on its landline.
Until about 5.00pm in the afternoon those telephone calls had not been returned,
although messages had
been left requesting information from the Company as to
its intention to remove the liquid waste accumulating in the SRT. Shortly
after
5.00pm, Mr Bourne was successful in speaking with Ms Kemp by telephone. During
that conversation he asserted that the Company
had failed to comply with its
obligations in relation to the level of liquid waste in the SRT and requested to
know what the Company
was intending to do, indicating that the removal of two
tanker loads of liquid waste from the SRT had been arranged by the prosecutor
but that the SRT would require further “pumping out”. Ms Kemp
advised that she would so inform Mr Osman-Kerim.
- Mr
Bourne and Mr Reece had attended the Premises earlier in the afternoon of 29
February. They had supervised the extraction of liquid
waste from the SRT by the
liquid waste removal tankers engaged for that purpose by the prosecutor. Before
the extraction of liquid
waste commenced, Mr Bourne observed that the level of
waste within the SRT was 32cm from the top. That waste is described as having
a
strong solvent odour. An onsite measurement of a sample indicated the liquid to
have a pH of 9. That waste liquid was observed
to foam during the extraction
process. Upon completion of that process by two tankers, the surface of the
liquid waste in the SRT
was 59cm from the top. The total volume of liquid
removed by the two tankers was 41,700L.
- Upon
arrival at the Premises that day, Mr Bourne noted that the access driveway
gate was closed and locked with a sign on the gate
stating:
“For access contact Better Drums on xxxxxxxxx Eddie Osman Email
www.betterdrums.com.au”.
- The
mobile telephone number was that called by Mr Bourne in endeavouring to make
contact with Mr Osman-Kerim.
- At
about 5.30pm in the afternoon of 29 February, Mr Bourne spoke by telephone with
Mr Osman-Kerim and had a conversation to the following
effect:
“IOK: I called Ramondis but they won’t work for me
because they have not been paid for the past four loads.
AB: The stormwater retention tank is near full and rainfall is
predicted. To avoid the stormwater retention tank overflowing with
liquid waste
it will need to be pumped out before this Friday (2 March 2012).
IOK: I will get back to you tomorrow.
AB: Does Sydney Drum Machinery intend to maintain the Premises
and levels of liquid waste contained within the stormwater retention
tank?
IOK: Yes, I spoke to the plumber who has a solution.
AB: Okay. Note that black ooze is coming through underground
stormwater pipe leading from the factory into the stormwater retention
tank.
IOK: That’s impossible.
AB: It is the case. I have photographs to prove it.
IOK: My lawyer says it is the landowners and insurance
company’s responsibility.
AB: Okay, [the 24 January Notice] is issued to Sydney Drum
Machinery and based on the information provided to EPA to date, EPA
will seek to
recover the costs of the continual maintenance of the level of liquid waste
within the stormwater retention tank from
Sydney Drum Machinery.
IOK: Okay.”
- After
several unsuccessful attempts to speak with Mr Osman-Kerim by telephone on 1
March 2012, Mr Bourne did speak with Ms Kemp who
stated that Mr Osman-Kerim
would return the call. When telephone contact was finally made with Mr
Osman-Kerim later that day, Mr
Bourne records a telephone discussion to the
following effect:
“IOK: Things are okay onsite. The stormwater retention
tank is three quarters full.
AB: The weather forecast is that it will rain over the next few
days and that will make the stormwater retention tank overflow.
IOK: Ramondis won’t work for me. Dieb Khoury said to call
him. I’ll make some calls to get more liquid pumped out.
AB: [the 24 January Notice] requires liquid waste contained
within the stormwater retention tank to be maintained below 30% of
the capacity
of the tank. Now you are saying the tank is 75% full. You must get the tank
pumped tomorrow at the latest.
IOK: Talk to my lawyer.
AB: Okay.”
- Shortly
thereafter Mr Bourne had a telephone conversation with Mr Dieb Khoury.
Mr Bourne indicated that he was calling concerning
both the Suspension Notice
and 24 January Notice issued to the Company. Mr Bourne states that a
conversation to the following effect
then took place:
“DK: Eddie doesn’t have a problem with compliance
with the notices except he is unable to pay. He put in a claim for
advance from
the insurance company and was in a conference with them all day yesterday. Eddie
says there is only water in the tanks
onsite.
AB: The EPA has laboratory results that demonstrate
otherwise.
DK: My client is not disputing the EPA’s claims but
can’t pay.
AB: Can you confirm Imad (Eddie) Osman-Kerim does not dispute
the lawfulness of the EPA notices but is not in a financial position
to
comply.
DK: Yes. There has been a breakthrough with the Landlord.
Quotes are being gathered.
AB: The material in the stormwater retention tank is toxic. It
has a pH of 9. There are water users downstream of South Creek that
use the
water for irrigation. Letting the material in the stormwater retention tank go
into the creek is not an acceptable option.
DK: Okay.”
- Later
that day the prosecutor wrote to Mr Osman-Kerim and the Company what is
described as a “show cause” letter. Reference
is made in that letter
both to the conditions attaching to the notice suspending the EPL as well as the
directions contained in the
24 January Notice. Reference is also made to the
letter of 21 February 2012, reminding the Company of its obligations under the
Notices
to which reference is made and to the fact that a number of inspections
of the Premises reveal that liquid waste in the SRT was “well
above 30
percent of its capacity”. After stating that the prosecutor was
investigating further action, the letter indicated:
“Prior to taking any regulatory action in relation to the apparent
breaches of the POEO Act, the EPA invites the Licensee to
forward any submission
it may wish to make in relation to the matter including, but not limited to, any
defence or matter in mitigation
the Licensee wishes the EPA to
consider.”
- The
letter also stated that any submission the Company wished to make was required
to be submitted in writing by 5.00pm on 8 March
2012. No response to that letter
is recorded as having been received by the prosecutor by the stipulated
deadline.
- Mr
Bourne attended the Premises on 2 March, essentially for the purpose of
supervising removal of liquid waste from the SRT by six
liquid waste removal
trucks, whose attendance had been arranged by the prosecutor. This had occurred
because of the rainfall that
occurred and the rainfall predicted for the ensuing
days. Upon arrival Mr Bourne observed that the SRT was full and overflowing into
a stormwater pit that, in turn, drained to the unnamed watercourse. The liquid
waste was foaming in the stormwater pit and a strong
solvent odour was
experienced by him both at the SRT and in the north-eastern section of the
Premises. He also observed that liquid
within the unnamed watercourse was
foaming. Water samples were taken.
- Throughout
the day, the six liquid waste removal trucks came to the Premises and removed
liquid waste from the SRT. After the last
of those trucks had left, Mr Bourne
measured the level of waste water in the SRT to be 80cm from the top. That level
meant that the
remaining water exceeded 30 percent of the SRT’s maximum
capacity. Before departing the Premises, Mr Bourne observed that black
liquid
waste continued to drain into the SRT from a stormwater pipe leading from the
factory building on the Premises. The absence
of a roof on the building meant
that rain falling on the factory floor was draining directly to the SRT.
- After
leaving telephone messages to call, Mr Bourne received a telephone call from Mr
Osman-Kerim during the morning of 2 March. Mr
Bourne advised Mr Osman-Kerim
that the SRT was overflowing and enquired as to what he was going to do
“to fix the current pollution
incident”. He responded by stating
that he would “get a sucker truck to tanker liquid off site”.
- On
5 March 2012 Mr Bourne held a meeting with Mr Osman-Kerim at which John Machiani
of the firm Environmental Services Pollution Control,
and Michael Sidaros of Dr
H2O Plumbing were present. Mr Sidaros and Mr Machiani had been engaged by
the Company to assist it. In
the course of that meeting, the following exchange
took place between Mr Bourne and Mr Osman-Kerim:
“AB: Can you advise if you are capable of maintaining the
Premises and complying with the Notices?
IOK: I’ll try my best.
AB: But are you capable?
IOK: I’ll try my best.
AB: EPA is getting mixed messages. You say you will try to
comply with the Notices and yet the Premises has not been maintained
and Dieb
Khoury of Benjamin & Khoury Attorneys & Solicitors who represent you
states that you do not have the funds. Have
you tried to raise funds?
IOK: Yes, but I haven’t been able to.
AB: EPA requests some evidence of the inability to comply for
financial reasons. For example creditors statements, bank statements
or
accountant statements of assets owned.
IOK: Okay.
AB: If there is non-compliance with the Notices and no
maintenance occurs, EPA will consider an injunction in Court requiring
compliance.
Do you understand that?
IOK: Yes.”
- There
is no evidence of any financial information relating to the Company having been
provided to the prosecutor following that conversation.
- On
the morning of 6 March 2012 Mr Bourne telephoned Mr Osman-Kerim, advising that
forecast rainfall was for 25mm on 7 March and 50mm
on 8 March. He stated that by
his calculation the SRT would overflow on 7 March and a pump out of the SRT
would be required “by
no later than tomorrow morning”. Mr
Osman-Kerim responded by stating that he would organise the tank to be pumped
out. He was
requested by Mr Bourne to confirm by 12.00pm that day that
arrangements had been made for the pump out to occur. In the early afternoon,
Mr
Osman-Kerim advised by telephone that three trucks from Toxfree had been
organised “to pump liquid waste from the stormwater
retention tank between
8.00am and 9.00am”. Mr Osman-Kerim was requested to forward by facsimile a
copy of “the paperwork”
confirming that arrangement. Later in the
afternoon when Mr Bourne informed Mr Osman-Kerim that no
“paperwork” had been
received, the former stated that pump-out works
were “confirmed for tomorrow at 9.00am”.
- Mr
Bourne and Mr Reece inspected the Premises on 7 March 2012. Mr Bourne
observed that the stormwater diversion system that had been
put in place on the
premises as a temporary measure was damaged and so was not acting to divert all
water to the SRT. When the SRT
was inspected the water level was only 20cm from
the top.
- Mr
Osman-Kerim was at the Premises on 7 March as was Ms Kemp. A conversation to the
following effect then ensued between Mr Reece
and
Mr Osman-Kerim:
“AR: Eddie, you are not complying with the clean-up
notice and this contaminated water is overflowing from the pit and into
the
creek.
IOK: It’s clean water, nothing wrong with it.
AR: You and I both know it is not clean water so stop saying it
is clean.
IOK: What do you want me to do?
AR: We have been through this Eddie. It is not clean, it is
contaminated with chemicals and crap that came from all of the drums
you washed
out inside. If you had of [sic] emptied all of the storage tanks inside the
factory like you were supposed to you would
not need to keep pumping the
contaminated water from the pit. All of the crap from in there is now washing
into the pit.
IOK: I am trying to get more tankers here but they will not
work for me.
AR: You need to pay them Eddie, the reason they are not coming
back is that you have not paid any of the companies that have done
work for
you.
IOK: I am not going to pay them until they do the work, this is
bullshit, you don’t pay people before they do the work.
AR: The companies would talk to each other Eddie. As you have
not paid for the loads that have been removed people will not do
any work for
you.
IOK: I will organise some tankers.”
- Mr
Bourne and Mr Reece returned to the Premises on 8 March 2012. Present at the
time of their arrival was Mr Sidaros of Dr H2O, who
had been engaged by the
Company to undertake remedial work. Mr Sidaros indicated that at the request of
Mr Osman-Kerim he had entered
the fire damaged factory building, discovered that
the north-western above ground storage tank was leaking due to a melted ball
valve
and that he had capped that valve. He also stated that he was proposing to
fill a 10,000 litre above ground storage tank with liquid
waste from the SRT,
that storage tank having been fixed to a truck operated by Better Drums.
- Mr
Bourne observed at the time that liquid waste was flowing from the north-eastern
roller door of the factory building into the stormwater
drain running to the
SRT. The stormwater access point adjacent to that roller door was observed to
have a black odorous liquid flowing
through it. At that time the SRT was full of
liquid waste and was overflowing. The stormwater culvert leading from the
Premises to
the unnamed watercourse north-east of the Premises was foaming.
- Mr
Bourne also observed on that occasion that some work appeared to have been
undertaken inside the factory building in addition to
the repair that
Mr Sidaros had urgently made to the leaking valve on the above ground
storage tank. In particular, he observed that
a channel had been cut into the
concrete within the kitchen area of the building having the effect of diverting
liquid waste from
within the building to the sewage system servicing the
site.
- As
a result of the information provided to her by Mr Bourne, Ms Ingham arranged for
two tankers to attend the Premises on 9 March
for the purpose of removing liquid
waste. As a result of that arrangement, Mr Reece attended the Premises on 9
March 2012.
- By
the time Mr Reece arrived at the Premises, the driver of the Transpacific tanker
had already removed one load of liquid waste from
the SRT. Upon returning to the
site, the driver of that vehicle was requested by Mr Reece to remove liquid
waste from a rainwater
tank that had been filled with contaminated waste water
from the SRT by a plumber engaged by Mr Osman-Kerim. That tank, itself,
appeared
to be leaking. When pumped out, the content of liquid waste in that
tank was approximately 8,000L. Once that task was completed,
Mr Reece directed
the tanker driver to remove liquid waste from the tank that had been mounted on
the Better Drums’ truck and
filled with liquid waste from the SRT. When
that tank had been pumped out, the remaining capacity of the tanker truck was
used to
receive waste from the SRT. Upon completion of that process the level of
waste liquid in the SRT was approximately 20cm from the
top.
- On
that same day, Mr Bourne received from Benjamin & Khoury a letter indicating
that it was a response to the prosecutors show
cause letter of 1 March. The
letter stated that instructions from the client were awaited but an invoice from
Ramondis for the removal
of liquid waste from the Premises on 22 February was
enclosed. The only other letter from Benjamin & Khoury that the prosecutor
received, potentially relevant to the “show cause” letter, was a
request that the prosecutor provide chemical analysis
of samples taken from the
site. That analysis was later provided to Mr Osman-Kerim.
- On
14 March 2012, the prosecutor received a letter from Benjamin & Khoury,
acting on behalf of the Company, enclosing invoices
sent to the Company by
Remondis for the removal of 22,220L of liquid waste on 22 February 2012 and
40,000L of liquid waste on 7 March
2012. Mr Bourne had been at the Premises on
22 February. At that time he observed liquid waste within the SRT to be 35cm
from the
top of the tank and given both the capacity of the tank and its depth,
he expressed the opinion that the removal of 22,220L from
the tank on that day
would not reduce the volume of liquid waste that remained to a figure that was
below 30 percent of its maximum
capacity.
- Mr
Bourne also inspected the Premises on 7 March when he observed the SRT to be 90
percent full of liquid waste. Given the maximum
capacity of 200,000L, a
reduction of 40,000 would not have resulted in the remaining volume of waste in
the SRT to be below 30 percent
of maximum capacity.
- In
the early afternoon of 19 March 2012, Ms Ingham left messages both with the
Company and Mr Osman-Kerim, requesting that she be
contacted concerning the SRT
as it appeared likely to overflow. As forecasts from the Bureau of Meteorology
had stated would be the
case, rain had fallen in the area from 16 to 19
March.
- Concerned
that no immediate action would be taken by the Company to empty the SRT and
given the rain that had fallen as predicted,
Ms Ingham arranged for two tankers
from Transpacific to attend the Premises the following day.
- Ms
Ingham attended the Premises on 20 March. She inspected the SRT, observing that
the level of liquid in the tank was only 20-30cm
from the top and that the
liquid had a strong solvent smell. The driver of the tanker sent to the Premises
by Transpacific then began
pumping liquid from the SRT. Ms Ingham’s
inspection of the culvert immediately outside the Premises indicated that water
in
that culvert was running clear so that the SRT did not appear to have been
overtopped at that time.
- There
were occasions during April 2012 upon which the Premises were inspected by
officers of the prosecutor, who found the level of
liquid waste in the SRT to be
almost full or on one occasion to be overflowing. On two occasions, namely on 17
and 19 April 2012
the prosecutor arranged for the removal of liquid waste from
the Premises by pumping out liquid from the SRT.
Water samples
tested
- Liquid
samples taken at various times from within the Premises, the SRT and the unnamed
watercourse were subject to chemical and ecotoxicological
analysis. Those
reports were assessed by Mareno Julli, head of Ecotoxicology Testing Services in
the Ecotoxicology and Environmental
Contaminants Section and Environment
Protection Sciences branch of the Office of Environment and Heritage. Mr Julli
swore an affidavit
for the purpose of the proceedings. He was called to give
evidence by the prosecutor and cross-examined on behalf of Mr Osman-Kerim.
- In
respect of samples collected on 16 January 2012 from within the bund of the
waste water plant, Mr Julli stated at par 27 of his
report (Exhibit
K):
“The samples contained a number of chemicals at concentrations well above
those known to be environmentally hazardous to aquatic
organisms including fish,
frogs and invertebrates.”
- Mr
Julli also discussed samples collected following the second fire at the Premises
on 23 January 2012. Samples taken on that day
from the unnamed watercourse and
in South Creek, together with samples subsequently taken at various locations
both within and outside
the Premises led to the following conclusion at par 50
of his report:
“50. Based on the results of the chemical and
ecotoxicological testing of the collected samples,
I consider that the incident occasioned actual and likely non-trivial harm to
the aquatic eco-system environment of the Dunheved
Golf Course Creek, at least
500 metres from the source of the various chemicals.
The level of acute toxicity to a range of aquatic organisms, evident in samples
collected on 23/01/12 from the Golf Course Creek
(rapid lethal toxicity in 1%
sample concentrations), are sufficient to have effectively eliminated most
aquatic life present.
Various chemicals present in the contaminated liquid in the Dunheved Golf Course
Creek, were detected at trace concentrations downstream
in South Creek. This
indicates significant dilution and/or the EPA sampling missing an earlier pulse
discharged to South Creek. Based
on the collected samples, there is limited
evidence to suggest that actual harm occurred in sections of South Creek,
downstream of
the confluence with the Golf Course Creek.
I consider that without the bunding having been put in place by EPA designed to
stem the flow from the Premises, then there was a
high likelihood of harm
occurring to a significant length of the aquatic eco system of South Creek due
to the highly toxic cocktail
of chemicals contained in the material leased from
the Premises and present in the Golf Course Creek.”
- While
Mr Julli was cross-examined, two fundamental premises of his evidence were not
challenged. Those premises were, first that contaminated
liquid which had the
same characteristics as the contaminants on the Premises was found in the creeks
following the second fire on
23 January and second, that those contaminants were
highly toxic.
- I
accept the evidence of Mr Julli as to the environmental consequences that he
posits.
Further evidence: the fire of 23 January 2012
- There
is further evidence that must be recorded directed to the second fire event at
the Premises, namely that which occurred on 23
January 2012. That fire was one
that occasioned very substantial damage to the factory building on the Premises.
The roof collapsed,
with the result that all internal areas of the factory were
exposed to the elements. Water used to fight the fire resulted in flows
across
the factory floor and external pavement, referred to as “firewater”,
was contaminated. The water flowed towards
the low point of the Premises, being
in the north-western corner of the site, close to where the SRT was located. I
have earlier
described the observations made by Mr Bourne and Mr Reece as
to the flow of contaminated firewater when they visited the Premises
during the
morning of 23 January.
- The
significant damage occasioned by the fire resulted in general access to the
Premises being denied both by officers of Fire and
Rescue NSW and police
officers who were investigating the fire. While all access to the factory
building was absolutely denied because
of its dangerous condition, access to the
external area of the Premises was allowed to officers of the prosecutor, as was
apparent
from the fact that they were able to record the observations that are
earlier stated. The evidence is imprecise as to the exact period
during which
general access to the site was denied but I am satisfied that it was about three
or four days. Clearly, the restriction
upon entry did not prevent trucks being
used to access the external areas in order to remove waste liquid from the
SRT.
- Mr
Osman-Kerim gave evidence that during the restricted access period, he
experienced difficulty in gaining access to the Premises
and, on at least one
occasion he was prevented by security personnel from entering the driveway to
the Premises. I will refer to
his evidence presently.
- Earlier,
reference has been made to the discussion between Mr Bourne and Mr Osman-Kerim
on 24 January when Mr Bourne first gave verbal
clean-up directions to Mr
Osman-Kerim, not only to isolate the SRT but to maintain the level of liquid
waste in the SRT to a level
below 30 percent of its capacity. Having given the
direction verbally, Mr Bourne gave evidence that the conversation proceeded to
the following effect:
“IOK: I am concerned that I will not be able to access
the site to comply with the clean-up direction.
AB: If you have any issues with access to the site in order to
comply with the clean-up directions please advise EPA and EPA will
assist in
gaining entry.
AB: The EPA will be inspecting the site between 2.00 and 3.00
today. Can you be available to meet us there?
IOK: I am not available, however Sandra Kemp, Operations
Manager of Sydney Drum Machinery Pty Ltd, can be present and can act
on behalf
of Sydney Drum Machinery.
AB: Okay.”
- Mr
Osman-Kerim gave evidence. In the course of his cross-examination it was put to
him that Mr Bourne had said words to the effect
“if you have any problems
getting access, let me know and I will see what I can do for you”. Mr
Osman-Kerim’s response
was “maybe he did say that” (Tcpt
470:8-12).
- I
am satisfied beyond reasonable doubt that in the period immediately following
the fire that occurred on 23 January 2012 when access
was denied to the Premises
by police officers, officers of Fire and Rescue NSW or those acting on their
instructions, access to the
Premises, at least to those areas outside the
damaged factory building, could be facilitated by contacting Mr Bourne in
his capacity
as an officer of the prosecutor. I am also satisfied beyond
reasonable doubt that during any period of exclusion from areas of the
Premises
located outside the factory building, Mr Osman-Kerim did not seek to engage Mr
Bourne for assistance in gaining access to
any part of the Premises, either for
himself or for any person on his behalf to carry out the clean-up action that
the Company had
been directed to undertake.
- The
evidence that I have recorded discloses a number of occasions upon which the
prosecutor itself arranged the removal of waste from
the SRT and action to clean
up polluted water that escaped from the Premises. The cost of this work was
borne by the Environmental
Trust, established under the Environmental Trust
Act 1998 (NSW). The net cost so incurred was $205,447.90, reduced by the
forfeiture of the financial assurance bond in the sum of $75,000 that
the
Company was required to provide as a condition of the EPL being granted, leaving
a net loss to the Trust of $130,447.90. The
majority of those costs, itemised in
the evidence, related to the sealing and emptying of the SRT. In addition to
those costs paid
from Environmental Trust funds, laboratory costs of $120,795
were incurred by the prosecutor.
Evidence of Mr
Osman-Kerim
- An
affidavit affirmed by Mr Osman-Kerim was read and he was called to give
evidence. He acknowledged that he was “at all relevant
material
times” a director of the Company. That Company had entered into a lease of
the Premises in November 2007. At the time
of entering into that lease, the
factory building on the Premises had been constructed but not previously
occupied.
- Mr
Osman-Kerim stated that the Company’s business was to acquire plastic
drums that had been used for industrial purposes. Those
drums were either
cleaned and reconditioned for the purpose of resale or cleaned for subsequent
return to their respective owners.
- In
preparing the Premises to conduct its business, work carried out included the
construction of bunding around the above-ground storage
tanks and along the
entrance to the wash bay structure used for the purpose of cleansing drums. In
addition, the bunds around access
doors to the buildings were constructed. All
work had been inspected, after completion, by officers of the prosecutor.
- Mr
Osman-Kerim states that at no time prior to 17 January 2012 was it asserted on
behalf of the prosecutor that the bunding was inadequate.
That statement needs
to be considered in the context of the evidence from Mr Bourne, not
contradicted by Mr Osman-Kerim, that he,
Mr Bourne, had visited the Premises in
2011 with a senior inspector from WorkCover when one of the issues identified
was the inadequacy
of bunding.
- The
escape of liquid waste into the adjoining site and factory of Lisbon Engineering
during 2011 was acknowledged by Mr Osman-Kerim.
He stated that the seal at
various points between the floor and wall closest to the Lisbon Engineering site
had given way, with the
consequence that liquid waste escaped. He states that
the seal was ultimately repaired. The fact that there was liquid waste lying
on
the factory floor and able to escape was attributed by Mr Osman-Kerim to a pump
that had broken down and which was ultimately
replaced by a new pump in December
2011.
- Following
the fire that occurred on 16 January, Mr Osman-Kerim states that the only damage
occasioned to the Premises by fire was
to the upstairs office area. He states
that there was “absolutely no interference by this fire with any of the
processes of
the Company, save for its clerical function”. Nonetheless,
the factory did not operate after that time.
- He
acknowledged receipt of the 17 January Notice and states that following receipt
he contacted Mr Sidaros of Dr H2O, requesting that
he “attend the Premises
and look at the matters raised in that clean-up notice”. He advised Mr
Sidaros that immediate
attention was required to which Mr Sidaros is said to
have responded “I’ll be there as soon as I can”. Thereafter,
he contacted Mr Sidaros “on a few occasions” concerning the work
required by the Notice but on each such occasion Mr
Sidaros is said to have
responded by stating that he would be there “as soon as I can”. It
will be remembered that the
prosecutor retained Mr Sidaros who completed the
isolation or sealing of the SRT on 30 January 2012 and charged the prosecutor
for
so doing.
- Mr
Osman-Kerim states that between 13 or 14 December 2011, when the faulty sealant
of the factory wall was repaired, and 16 January
2012, when the first fire
occurred, there was no “emission” of any waste from the Premises.
Further, he states that prior
to the second fire that occurred on 23 January
there was no escape of liquid waste from storage tanks “over the
bunding”.
- Those
storage tanks that were being used in the Premises on 16 January were the same
storage tanks that had been installed when business
commenced at the Premises.
Nothing that occurred at the time of the first fire in any way increased or
otherwise altered the volume
of liquid that was retained at any one time in
those storage tanks nor, so it is stated, did that fire interfere with the flow
of
material from those storage tanks.
- Mr
Osman-Kerim denied that a photograph exhibited to the affidavit of
Mr Bourne sworn 8 January 2013 showed liquid waste within the
storage tank
area overtopping the bunding. However, Mr Osman-Kerim did not state, in terms,
that Mr Bourne was incorrect in stating
that upon inspection of the Premises on
16 January the storage tank bund was being overtopped by liquid waste from
within the storage
tank bund.
- Mr
Osman-Kerim also denied that a photograph of the area between the factory on the
Premises and the factory on the adjoining Lisbon
Engineering site said to have
been taken by Mr Bourne on 17 January 2012, depicted liquid waste that had
flowed from the Premises
onto that site. He did not offer any explanation for
the liquid apparent in the photograph nor was Mr Bourne cross-examined to
suggest
that his conclusion as to the source of that liquid was incorrect.
- Mr
Osman-Kerim acknowledged that the fire on 23 January occasioned extensive damage
to the factory building on the Premises. He stated
that “a great amount of
water” had obviously been sprayed onto the Premises for the purpose of
extinguishing the fire.
- By
reason of the extensive damage to the factory building both police and fire
officers denied Mr Osman-Kerim access to the Premises
for a period of time. He
states that he went to the Premises almost every day for about two weeks after
the 23 January fire, during
which neither he nor anybody else, other than police
officers “and other officials”, were allowed to enter the site.
He
was informed by the police that the building was too dangerous to allow anybody
onto the site. Mr Osman-Kerim also states that
there was a padlock on the gate
to the Premises, apparently placed there by the lessor, and that it was not
until 7 February 2012
that he was provided with a key to that gate.
- In
his affidavit, Mr Osman-Kerim said that he did not recall Mr Bourne inviting
contact should difficulties in obtaining access be
experienced and continues by
stating that “to the best of my recall, Mr Bourne did not offer any such
invitation”. However,
as I have found at [142], Mr Osman-Kerim resiled
from that statement in cross-examination.
- Mr
Osman-Kerim states that the Company ceased operation following the fire that
occurred on 23 January. As a consequence, the Company
was “devoid of
ongoing income”. Nonetheless, Remondis was retained to remove liquid waste
on 16 February, 22 February
and again on 7 March. The cost incurred for that
removal was $50,256.50 and neither the Company nor Mr Osman-Kerim had funds
to maintain
that level of expenditure for waste removal.
- Following
the fire that occurred on 23 January, Mr Osman-Kerim arranged for Mr Sidaros to
meet with Mr Bourne and Mr Reece to discuss
the suggestions of Mr Sidaros to
address the escaping liquid waste from the Premises. Mr Sidaros is said to
have stated “the
only way to stop any pollution is to divert the material
coming out of the factory”. In order to do so, Mr Sidaros is also
said to
have stated that he required access to the building so that he could get
equipment in “to suck up the material inside”.
Mr Bourne responded
“you can’t go in there, it is too dangerous”.
- At
a later meeting, Mr Osman-Kerim recalls Mr Sidaros suggesting to Mr Bourne
that rather than trying to solve “the problem
by looking at the level in
the SRT”, the better idea was to “bund the factory area and divert
the material coming from
the factory and then remove the material from the
bunded area”. Mr Osman-Kerim recalls the response of Mr Bourne being to
the
effect that it was not “a good idea” and that compliance with
the clean-up notice was required.
- Notwithstanding
that response, Mr Osman-Kerim instructed Mr Sidaros to bund the factory building
in accordance with his suggestion.
While Mr Osman-Kerim states that his
instruction was implemented, he subsequently noticed that the bunding had been
“substantially
destroyed”.
- There
are a number of matters arising from this evidence that are best addressed when
consideration is given to the submissions advanced
on behalf of Mr
Osman-Kerim.
Expert evidence
- John
Forrest, a civil structural engineer, was called by Mr Osman-Kerim, his
intention so to do being notified to the prosecutor (cf
s 247K(f) of the
Criminal Procedure Act). The prosecutor called Gary Ryan, a civil
engineer, to respond to the evidence of Mr Forrest. Each engineer prepared
reports (Exhibits
1 and 2 in the case of Mr Forrest and Exhibit Y in the case of
Mr Ryan). By agreement between the parties at trial, the engineers
gave
their evidence concurrently. Their evidence was directed to the clean-up
directions contained in the 24 January Notice.
- In
his first report (Exhibit 1), Mr Forrest stated that he first visited the
Premises on 9 September 2013, that is almost 20 months
after the fire of 23
January 2012. He was provided with plans, including a site and drainage plan,
the 24 January Notice and the
affidavit evidence prepared by Mr Bourne on behalf
of the prosecutor. At the time of his inspection, the factory building on the
Premises had been substantially demolished, with only the two storey office
addition remaining. The surface of the entire site comprised
hardstand while
some evidence remained of bunding within the former factory building.
- Mr
Forrest expressed the opinion that, following the fire on 23 January 2012, there
were two containment options appropriate to address
the discharge of
contaminated liquid from the Premises, given that all paved areas of the
Premises, including the former factory
floor which had no roof, formed the
catchment area upon which rain would fall because of the collapsed roof. The
first option involved
sand bag “bunding” around the perimeter of the
factory building, built to a height of about 150mm above slab level.
- The
second option he posited was further sand bag bunding around the north and
north-eastern boundaries of the Premises to retain
water to a maximum depth of
about 1m at the lowest or “sag point” level of the Premises. In
addition, both options would
require that the outlet pipe of the SRT be sealed
or “isolated” and that any open-grated drains within the external
pavement
areas also be blocked.
- Mr
Forrest further stated in Exhibit 1 that the requirements of the January 24
Notice, directing that the level of the SRT be maintained
at 30 percent
“was not a reasonable method to achieve the prevention of the spillage of
contaminated liquid into South Creek
(par 8.21). He stated that the requirement
of the Notice was unreasonable “because it placed an unrealistic
expectation on
Better Drums” (at par 8.22). In his report responding to
that prepared by Mr Ryan, Mr Forrest stated in Exhibit 2 that the
core
conclusion of his first report was that Direction 3a in the 24 November Notice
“was demonstrably impractical and consequently
did not contribute to the
elimination of risk of contaminants entering South Creek” (at par
2.1).
- He
also stated that it was a core conclusion of his first report that the 24
January Notice “contributed to the risk of contaminants
entering South
Creek” (at par 2.2). This was said to be so “due to the difficulty
of maintaining a significantly reduced
capacity of the SRT” (Exhibit 1 at
par 8.26).
- Mr
Ryan first inspected the Premises on 18 November 2013. In addition to the report
of Mr Forrest, he was also provided with plans
as well as the affidavit evidence
of Mr Bourne that had been served upon the defendants.
- Addressing
the alternatives suggested by Mr Forrest, Mr Ryan took issue with some of the
calculations applied by Mr Ryan to express
the conclusion that he did. Whereas
Mr Forrest had calculated that 1,050,000L of liquid waste would be retained by
the sandbag bund
proposed, making the same assumption, Mr Ryan calculated
the retained volume to be 433,300L. Mr Forrest subsequently accepted that
his
initial calculation was wrong.
- Mr
Ryan also challenged the calculation of the volume of liquid waste that would
have been retained by a proposed sandbag bund around
the perimeter of the
factory building. The calculation made by Mr Forrest assumed that the entire
floor area was cleared whereas,
according to the evidence of Mr Bourne,
approximately 50 percent of the floor area was, at the time of the fire,
occupied by equipment,
stored material and fire debris, with the result that the
volume of stored liquid waste that could be retained would be significantly
reduced from that hypothesised by Mr Forrest. To the extent that Mr Forrest had
also relied upon rates of evaporation from the ponded
areas that he posited, Mr
Ryan challenged the rate as exceeding that which should properly be applied,
having regard to the rainfall
and weather in the period to which Mr Forrest had
directed his attention. Again, it seems that Mr Forrest ultimately accepted that
his rate of evaporation was probably too high.
- Mr
Ryan also stated, and Mr Forrest accepted, that even if the alternatives
suggested by the latter had been implemented, they would
still have required the
ponded areas to be pumped out, just as the SRT was required to be pumped out in
accordance with the direction
given by the prosecutor. However, both experts
accept that fewer visits would have been required to pump out liquid waste from
the
ponded areas than was required in the case of the SRT. They differed on the
extent to which the number of occasions upon which pump-out
was required in
order to avoid overtopping.
- That
difference turned upon the consequence of the above average rainfall affecting
the Premises between 24 January and April 2012.
The measure of the difference
between them does not address the rainfall that might reasonably have been
contemplated when the decision
to give the 24 January Notice was made.
- Mr
Ryan identified a number of what he called “practical problems”
associated with the construction of sandbag walls as
bunding. Such walls could
only have been a temporary measure and did not offer the structural stability
that the concrete walls of
the SRT provided. In addition, to address the problem
of permeability of liquids through the proposed sandbag walls, Mr Forrest
proposed
to cover those walls with plastic. According to Mr Ryan, the caustic
nature of the stored liquid waste may well have rendered the
plastic sheeting
and sandbags liable to failure by creation of holes resulting in the escape of
liquid. While the use of sandbag
walls to control floodwaters was acknowledged,
neither engineer was able to offer any experience in the construction of such
walls,
covered in plastic, for use in circumstances where the retention of
liquid waste was required.
- Finally,
Mr Ryan expressed the opinion that the requirement to isolate or block the SRT
in the circumstances that prevailed on and
following 23 January 2012 was
“consistent with good practice” (Exhibit Y par 8.2.1). Mr Ryan also
stated that the requirement
to maintain that level in the SRT at 30 percent
capacity provided a buffer for significant events, that buffer providing
“enough
volume to capture approximately 32mm of rainfall falling on all
areas of the Premises. That, so he said, would seem appropriate as
this amount
of rain was exceeded on only 5 out of 98 days over the period being considered,
providing an approximate 95 percent confidence
level (Exhibit Y par 8.2.2.1). He
regarded maintaining the SRT level at 30 percent capacity “to be good
practice given the
circumstances at the Premises” (par 9.3).
- Ultimately,
Mr Forrest conceded, in the course of his oral evidence, that the measures
required by the Prosecutor in the 24 January
Notice reflected an appropriate
emergency response. His thesis was that having imposed that measure, it was
appropriate, at some
unspecified time thereafter, to consider alternatives that
did not result in the frequency of removal that was, in fact, the case
following
the 23 January fire at the Premises. Mr Forrest also acknowledged that his
design took into account the unseasonably high
rainfall that occurred following
23 January 2012 (Tcpt 368:14-25).
The offence against s 91 of the
Act: 17 January Notice
- It
is next necessary to apply the evidence to which I have referred to the elements
of the offences charged. Relevant to the present
charge, the elements of the
offence against s 91(5) would seem to me to require proof of the
following:
- (i) that the
prosecutor was “the appropriate regulatory authority”;
- (ii) that, in
its capacity as such an authority, the prosecutor gave notice in writing to the
Company;
- (iii) that
the notice was directed to the Company as occupier of the premises to which the
notice related;
- (iv) that
at the time of giving the Notice, the prosecutor reasonably suspected that a
pollution event had occurred or was occurring;
- (v) that
the notice specified clean-up action to be taken within a time specified in that
Notice;
- (vi)
that the Company, without reasonable excuse, did not comply with the notice
given to it; and
- (vii) that
Mr Osman-Kerim was, at the time at which the offence is alleged to have been
committed, a director of the Company (cf
s 169(1) of the Act).
- Proof
of elements (i), (ii) and (vii) is not in issue. By operation of s 6(1) the
prosecutor is “the appropriate regulatory
authority” for the
purposes of the Act, subject to exceptions that are not presently relevant.
Further, the Statement of Facts
(Exhibit B) accepts that the 17 January Notice
was given by the EPA and received that same day by Mr Osman-Kerim. Exhibit B
also
acknowledges that during the charge period, Mr Osman-Kerim was the sole
director of the Company, involved in the daily management
of the business of the
Company at the Premises (par 10).
- For
these reasons, I am satisfied beyond reasonable doubt that each of elements (i),
(ii) and (vii) are established.
Element (iii) of the offence: the
Company as occupier of the Premises
- By
its notice under s 247K of the Criminal Procedure Act, it is admitted
that the Company had the care and control of the Premises as lessee until 24
January 2012. Thereafter, it is not
admitted that the Company “was in
possession of the Premises at all of the times that the prosecutor says are all
of the relevant
times”. That qualification was not addressed on behalf of
the defendant in final submissions to me.
- The
prosecutor relies upon a number of matters in support of a submission that the
Company was the relevant occupier. First, it points
to the provisions of s 258
of the Act that provides:
“258 Evidence relating to occupier of premises
(1) In any proceedings under this Act, no proof is required
(until evidence is given to the contrary) of the fact that a person
is, or at
any relevant time was, the occupier of any premises to which the proceedings
relate.
(2) In any proceedings under this Act, the holder of a licence
under this Act in respect of any premises at a particular time or
period is
taken to be the occupier of the premises at that time or during that
period.”
- The
fact that the Company held the EPL which, although suspended, had not been
revoked, would appear sufficient to engage the provisions
of s 258(2). Unlike
the position that pertains in respect of subs (1), the fact that the holder of a
licence “is taken to be
the occupier of the premises” is not subject
to the giving of any contrary evidence. I can only assume that the qualification
expressed by the defendant as to its position after 24 January 2012 is founded
upon the exclusion of Mr Osman-Kerim from the Premises
by police and fire
officers following the fire that occurred on 23 January. However, the fact of
his exclusion for a short period
did not result in the Company ceasing to occupy
the Premises.
- The
evidence of Mr Osman-Kerim is consistent only with a continued assertion of his
entitlement to exercise control over the Premises.
So much is made apparent by
the affidavit affirmed by him for the purpose of these proceedings. He there
states that in the “ensuing
days and weeks” following the second
fire, he “went to the Premises almost every day”. Clearly, he did so
for the
purpose of exercising his entitlement to occupy the Premises. Further,
his actions subsequent to being afforded access to the Premises,
engaging
consultants to advise him as to compliance with the clean-up notices and
arranging to pump out the SRT on three occasions,
are actions consistent with
the right of the Company as occupier of the Premises.
- Mr
Osman-Kerim annexed to his affidavit a copy of the lease into which he entered,
commencing on 14 November 2007 and terminating
on 13 November 2012, subject to
the right to exercise an option for a further five year term. No evidence was
led to suggest that
following the fire on 23 January 2012 the lease was
terminated, at least at any time during the charge period relating to the
present
offence or the charge period relating to the 24 January Notice.
- By
reference to the statutory provision and the evidence to which I have referred,
I am satisfied beyond reasonable doubt that at
all times during the charge
period, the Company was the occupier of the Premises, being the premises to
which the 17 January Notice
relates.
Element (iv) of the offence:
reasonable suspicion that a pollution event has occurred
- This
element of the offence is in issue between the parties. It is clear from the
evidence that the requirement imposed by Direction
3 of the 17 January Notice
had not, as a matter of fact, been obeyed by 5.00pm on 17 January. Indeed, it
was not observed until 30
January when, at the instance of the prosecutor, the
SRT was “isolated” or sealed. Failure to have isolated the SRT is
evident from the inspections carried out by Mr Bourne on 20, 23, 24, 25, 27 and
30 January. On each occasion he observed that the
SRT had not been isolated,
other than by the temporary measure implemented by Mr Reece on 23 January
when he inserted a traffic cone
into the outlet pipe. Evidence of the
observations made on each of those occasions is detailed earlier in these
reasons.
- In
addition to the evidence of Mr Bourne, the evidence of Mr Osman-Kerim in this
context must also be noted. Mr Bourne gave evidence
that on 19 January 2012 he
had a conversation with Mr Osman-Kerim in which isolation of the SRT was
discussed and in the course of
which Mr Osman-Kerim said “Tomorrow I will
get the stormwater retention tank sealed”. Mr Bourne was not challenged on
that evidence. At the time of that conversation the specified time for
compliance had passed although the obligation to comply continued:
s 319A of the
Act. Further, Mr Osman-Kerim acknowledged in cross-examination that the SRT had
not been sealed when the fire of 23
November occurred (Tcpt 461:35-37).
- However,
proof that the requirement of Direction 3 of the 17 January Notice had not been
obeyed by the Company does not provide an
answer to the challenge made by Mr
Osman-Kerim to the validity of the Notice. It is that challenge that must next
be considered.
Reasonable suspicion of a pollution
incident
- Mr
Bourne’s attendance at the Premises on 16 January was triggered by a
report to him that a fire had occurred at the Premises
earlier in the day. When
asked in cross-examination to identify the “pollution incident” he
responded (Tcpt 155:23):
“A. The pollution incident was the – there was the
spill of liquid waste from the tanks, and in my opinion the likelihood
that
without action being taken that that liquid waste would enter the stormwater
system and impact the local creek.”
- The
prosecutor accepts that the formulation by the prosecutor, through its officers,
of a reasonable suspicion that a pollution incident,
as defined, had occurred or
was occurring is a fact that must be satisfied before a valid clean-up notice
could be given (Ryding v Kempsey Shire Council [2008] NSWLEC 306 at
[14]). The section requires that a subjective suspicion be proved and that,
objectively judged, the suspicion is reasonable.
- The
statutory requirement that there be a suspicion of a given state of affairs as a
prerequisite to the exercise of a statutory power
has been considered in a
number of cases. In Queensland Bacon Pty Ltd v Rees [1966] HCA 21; 115
CLR 266, Kitto J said at 303:
“A suspicion that something exists is more than a mere idle wondering
whether it exists or not; it is a positive feeling of
actual apprehension or
mistrust, amounting to ‘a slight opinion, but without sufficient
evidence’, as Chambers’s
Dictionary expresses
it.”
- Other
descriptions of a “suspicion” have been given. In R v Rondo
[2001] NSWCCA 540; 126 A Crim R 562 at [53] Smart AJ (Spigelman CJ and
Simpson J agreeing) said that a “reasonable suspicion involves less than a
reasonable belief but
more than a possibility”. In New South Wales v
Hunt [2014] NSWCA 47, Leeming JA (Barrett JA and Tobias AJA agreeing) said
at [68] that a “reasonable suspicion is a state of mind less certain
than
a belief”.
- In
Goldie v Commonwealth of Australia [2002] FCA 433; 117 FCR 566, Gray and
Lee JJ said at [5]:
“The context of the phrase ‘reasonably suspects’ suggests that
something substantially less than certainty is required.
Reasonable suspicion,
therefore, lies somewhere on a spectrum between certainty and
irrationality”.
- Clearly,
a subjective apprehension or fear is insufficient to found a reasonable
suspicion. Whether a suspicion is reasonable is an
objective question
(McKinnon v Secretary, Department of Treasury [2006] HCA 45; 228 CLR 423
at 429 per Gleeson CJ and Kirby J). The determination of that question must be
considered in light of all the facts known, or reasonably
capable of being
known, to the decision-maker at the time of making the decision (Ruddock v
Taylor [2005] HCA 48; 222 CLR 612 at [40]). Those facts upon which the
suspicion is based must, in order to found a reasonable suspicion, be sufficient
to induce such suspicion
in a reasonable person (George v Rockett [1990]
HCA 26; 170 CLR 104 at 112). As was also observed in the latter case, it is the
very nature of suspicion, as opposed to knowledge or belief, that proof
is
lacking (at 115).
- The
prosecutor submitted and I accept that facts reasonably grounding a suspicion
may be quite insufficient to ground a belief. Those
facts or circumstances upon
which a reasonable suspicion is founded need not consist of admissible evidence
(Environment Protection Authority v Multi-Fill Pty Ltd (1997) 93 LGERA
131 at 140; R v Rondo at [53]).
- In
the context of s 91 of the Act, the reasonable suspicion required is of a
“pollution incident”. It is convenient to
repeat the definition of
that phrase from the Dictionary to the Act as being:
“ ... an incident or set of circumstances during or as a consequence of
which there is or is likely to be a leak, spill or
other escape or deposit of a
substance, as a result of which pollution has occurred or is likely to
occur.”
- The
word “likely” in that definition is taken to mean a “real and
not remote chance or possibility” rather
than the more stringent
requirement of being more probable than not (Pace Farm Egg Products Pty Ltd v
Newcastle City Council
[2006] NSWCCA 403 
; 151 LGERA 260 at [54] - [56] ).
Relevantly, the essential prerequisite to the exercise of power under s 91 is
that the prosecutor, through its relevant office
or officers, hold a reasonable
suspicion that there is a real and not remote chance or possibility that there
will be a leak, spill
or other escape of liquid waste arising from the incident
that occurred or circumstances that existed on 16 January 2012.
- The
relevant pollution event that is “likely to occur” by reference to
the definition just discussed is “water pollution”.
That expression
is also defined in the Dictionary to the Act relevantly to
mean:
“(d) placing any matter (whether solid, liquid or
gaseous) in a position where ...
(ii) it is likely to fall, descend, be
washed, be blown or percolate, into any waters ... or into any drain ... used or
designed
to receive or pass rainwater, floodwater or any water that is not
polluted ... if the matter would, had it been placed in any waters,
have
polluted or have been likely to pollute those
waters.”
- The
analysis of liquid samples taken from within the bunded areas of the factory on
the Premises leaves no doubt that had the liquid
waste so contained, being
the matter identified in the opening words of the definition, been placed
in the unnamed watercourse or South Creek, it would have been likely to
pollute those waters. Applying the jurisprudence directed to
“reasonable suspicion”, the condition precedent to the exercise of
power under
s 91 required that the prosecutor hold a reasonable suspicion
that there is a real and not remote possibility that the liquid waste
observed by Mr Bourne on 16 January 2012 was likely (ie as a real
and not remote possibility) to enter any water or drain. In order to address
that requirement it is necessary to return
to the evidence.
- Mr
Bourne had been employed by the prosecutor as a regional operations officer
since April 2010. He had completed university degrees
as a Bachelor of Science
in Environmental Biology and a Bachelor of Business in 2004. Prior to his
employment by the prosecutor,
he had been employed as an environmental
consultant in which his duties included removing hazardous materials, conducting
site contamination
assessments, preparing remedial action plans, soil disposal
and classification reports, groundwater and surface water monitoring
reports,
and carrying out occupational health and safety projects and projects in the
field of hazardous materials.
- Following
his appointment as an officer of the prosecutor in 2010, his duties have
included conducting site inspections and waste
investigations, regulating
environment protection licences together with the premises to which those
licences relate and investigating
reports made to the prosecutor relating to
waste issues. For the purpose of executing his duties, he was trained in the
methods of
sample taking. Those qualifications are relevant to, although not the
sole determinant of, his capacity to make the assessment and
form the suspicion
that he did following his inspection on 16 January.
- The
liquid waste on the floor of the factory on the Premises that Mr Bourne has
stated to be the pollution incident for the purpose
of the 17 January Notice is
described more fully at [53] above. On the basis of his observations in his
affidavit affirmed 29 August
2013, he identified the matters that he took into
account in recommending the issue of the 17 January Notice. They are relied upon
to inform the suspicion necessary to exist in order to engage the provisions of
s 91. He concluded that approximately 18,000L of
concentrated, mixed dangerous
and hazardous liquid materials were stored in the 18,000L (20,000L) above ground
storage tank. He also
concluded that “up to 180,000L” of mixed
dangerous liquids, hazardous liquids and wash waters were stored in the four
45,000L above ground storage tanks. Sampling of liquid waste from those tanks on
24 November 2011 and 16 January 2012 showed that
the liquid was
“environmentally hazardous, with high levels of pesticides
present”.
- In
addition, he referred to 38,000L of concentrated hazardous and dangerous
residues stored in 1,000L IBCs within the factory but
outside the bunded area of
the four 45,000L storage tanks. Also located outside the bunded area were
quantities of other dangerous
goods and materials associated with the drum
reconditioning process, including caustic materials.
- Mr
Bourne also observed that internal PVC stormwater pipes were located both inside
and outside the bunded area for the four 45,000L
storage tanks. Damage at ground
level to those pipes could cause any liquid escaping into them to drain to the
SRT. Some of those
downpipes were within the bunded area behind wash bays in
which there was liquid waste standing at the time of the inspection.
- The
account taken by Mr Bourne of both the volume and nature of the liquid waste and
chemicals that were present in the factory building
on 16 January must also be
considered in the context of a visit to the Premises occasioned by a fire that
had occurred that day.
As recorded in his inspection report of 16 January
(Exhibit N, Tab 12), he observed that the reported fire had been contained, with
fire damage limited to the office but “minor damage to the
warehouse”. He photographed various areas within the factory
or
“warehouse”, those photographs forming part of his report. While he
recorded that the fire “did not appear to
impact the liquid waste stored
within the warehouse”, he noted that there were minor quantities of
firewater on the floor of
the building; that liquid waste had entered the
bunding of the waste water treatment system and the above ground waste storage
tanks;
that liquid waste had also entered the wash bays and that the fire door
adjacent to the liquid waste treatment plant had been damaged.
- The
fact that the Premises were without any electrical power was also considered by
Mr Bourne to be of some significance. Power was
necessary in order to operate
the pump or pumps that not only remove waste from the wash bay area but also, as
he assumed, operated
to transfer waste among the four 45,000L tanks. Mr
Osman-Kerim had stated in respect of previous spills that he thought were those
due to pump failure. That was an explanation offered in November 2011 for the
escape of liquid waste from the Premises into the site
and factory of Lisbon
Engineering.
- When
the extent of liquid waste within the bunded areas around the storage tanks and
treatment plant and the apparent overtopping
of that waste outside the waste
water treatment system was drawn to the attention of Mr Osman-Kerim on 16
January, Mr Osman-Kerim
stated that he was unaware of the spill of liquid waste,
how the spill had occurred or the source of the leak within the waste treatment
and storage system.
- In
the absence of power for the pumps, Mr Bourne considered that the hydraulic head
or pressure of the liquid in those tanks, standing
8 to 9 metres high, caused
the stored liquid to flow back through the pumps and onto the floor within the
bunded area (Tcpt 153:38-46;
156:39-157:4. He identified that as a possible
explanation to Mr Osman-Kerim, to which Mr Osman-Kerim responded by stating that
he
was unaware of the cause, although it may have been related to the pump. In
that context, the following evidence of Mr Osman-Kerim
is important (Tcpt
442: 39-443:13):
“Q. I’ve moved from the problem with the broken
pump in October/November 2011.
A. Yeah.
Q. To 16 January 2012 when the first fire happened.
A. Yeah.
Q. There was a leak then as well, wasn’t there?
A. Yeah. That’s right.
Q. You didn’t know what caused that leak, did you?
A. I believe I think when the power shut down from the pipe,
from the wash bay into the tank was water must be come out of it and
then flow
to the wash bay and be up to the water treatment there.
Q. When you say you thought you didn’t actually know
that, did you?
A. It was guessed, actually.
Q. You were guessing that it was a problem caused by the power
being off?
A. It was something shut down and then something, like,
suddenly shut down, or that suddenly something come out of this, some water
leaked out.
Q. You just didn’t know what the cause was?
A. Not sure exactly what, exactly 100% but I was guessing it
must be to do with that.”
- Mr
Bourne also considered that the bunding around the waste water treatment plant
and above ground storage tanks was inadequate for
the volume of waste stored in
those tanks. That consideration was founded upon previous inspections that he
had carried out in company
with WorkCover personnel and the notices that had
been given by that Authority to the Company requiring that the bunding be
improved.
Although the WorkCover notices appeared to refer to the bunding around
the wash bay, waste water treatment plant and storage tanks,
he also formed the
view that the bunding at the entry points to the Premises was inadequate for the
volume of waste stored in those
tanks. As he had on prior occasions observed
liquid waste on the floor of the factory outside the bunded areas (Exhibit N,
Tab 9)
he was concerned as to the capacity of the factory perimeter bunding to
contain liquid if the tanks failed.
- At
the time of his inspection on 16 January, Mr Bourne believed that the above
ground storage tanks were “almost at capacity”
(Tcpt 157:50). When
cross-examined as to whether he had enquired of Mr Osman-Kerim as to the volume
of waste in the tanks, he stated
that he could not recall asking that question.
However, he based that belief on three matters. First, on inspecting the
premises
at various times since September 2011, he noted that the 45,000L above
ground tanks had leaked from the top, as was evident from
spillage that could be
seen adhering to the side of the tanks. Although he referred to the tanks in
general, on further questioning,
he noted that his observations applied to two
of the 45,000L tanks. Mr Osman-Kerim did not deny that tanks had overflowed and
that
the overflow was attributed to the tanks being full.
- The
second event that informed Mr Bourne’s belief that the tanks were almost
at capacity was an inspection made of the top of
two of the tanks when he
visited the site on 24 November 2011. At that time he had used a ladder to look
into the top of each tank
and had then observed that in the two tanks that he
was able to inspect the liquid waste was close to the top (Tcpt 204:4-6), being
less than a metre from the top of the tank (Tcpt 232:19-21). He had not used the
ladder to inspect the tanks on 16 January because
WorkCover had determined that
the use of a ladder to inspect the tanks was unsafe. So much was recorded in the
notices given to the
Company by WorkCover in November 2011, copies of which
notices had been provided to Mr Bourne.
- There
was debate as to whether sight gauges installed on the four 45,000L tanks were
operative on 16 January. Mr Bourne said that
none of the tanks had operative
gauges, a circumstance made apparent to him during his prior inspections. When
he had raised the
matter with Mr Osman-Kerim on those occasions, Mr Osman-Kerim
had stated that they became blocked by sediment in the liquid waste.
Believing
that the gauges were not functioning, he did not use them as an indication of
the extent to which the tanks were holding
liquid on 16 January.
- Mr
Osman-Kerim claimed that the sight gauges were operating on three of the four
tanks. For the purpose of giving evidence, the two
above ground tanks closest to
the wash bay were identified as tanks A and B while those behind them were
identified as tanks C and
D. He claimed that at all times, including on 16
January, the gauges on tanks A, B and D were operating while that on tank C had
broken. To the extent to which it is necessary to resolve this debate, I favour
the evidence of Mr Bourne.
- The
notices issued to the Company by WorkCover on two occasions in November 2011
identified broken gauges on the above ground storage
tanks. It was not suggested
by Mr Osman-Kerim in evidence that the identification of broken gauges by
WorkCover was inaccurate nor
did he state that between receipt of those notices
and 16 January 2012 the gauges were repaired. Further, when Mr Bourne was
challenged
in cross-examination as to the presence of operative gauges, it was
put to him that the only tank upon which a gauge was not operative
was tank D
(Tcpt 224:19-21). When Mr Osman-Kerim was called to give evidence, he
stated that it was tank C on which the sight gauge
was broken (Tcpt
390:11-21).
- However,
it seems to me that the debate about the gauges is somewhat sterile. Neither Mr
Bourne nor Ms Osman-Kerim determined the
volume of material in the storage tanks
on 16 January by reference to a gauge. Importantly, when asked in
cross-examination as to
the volume of material in the tanks, Mr Osman-Kerim
stated that tanks A and B were almost full and that tanks C and D each contained
liquid waste but he was unaware of the volume in each (Tcpt 440:6-49). He
explained that because of the manner in which the system
of waste liquid storage
operated, it was necessary for there to be liquid in both tanks C and D as it
was from tank D that washing
water was returned for reuse in the wash bay.
- Mr
Osman-Kerim’s lack of knowledge of the volume of waste stored as at 16
January 2012 extended to the horizontally placed 20,000L
above ground storage
tank. That tank contained the residue liquids extracted from containers brought
to the Premises before they
were washed and processed.
- Apart
from his observation of spills from the top of tanks A and B and his ladder
inspection of those tanks on 24 November, Mr Bourne
also inferred from the fact
that about 1,000L IBCs were being used to store liquid wastes was an indication
that the above ground
storage tanks were at or near capacity. The fact that
these containers were being stored outside the bunded area was also of
significance.
As Mr Bourne’s inspection report of 15 December 2011 with
its attached photograph states and demonstrates, the 1,000L IBCs
were themselves
capable of leaking waste liquid residue onto the floor of the factory if they
were in any way damaged (Exhibit N,
Tab 11).
- A
further factor relevant to Mr Bourne’s assessment of the retained liquid
waste on 16 January was his understanding that the
contents of the tanks had not
been removed from the tanks for some time. His understanding was based on prior
discussion with Mr
Osman-Kerim (Tcpt 229:1-15).
- In
founding his suspicion of a “pollution incident”, Mr Bourne also
took into account the history of liquid waste that
was observed to have spilled
within the Premises prior to 16 January 2012. Observation of spills had been
made by Mr Bourne on 2
September, 28 September, 5 October, 24 November, 25
November and 15 December 2011 (Exhibit N, Tabs 1,2,3,7,8,9 and 11). While these
spills had occurred within the factory building, Mr Bourne was also conscious on
16 January of the liquid waste that had escaped
from the Premises onto the
adjoining property of Lisbon Engineering on 24 November, still evident on 25
November and also on 14 December
2011.
- Not
only was Mr Bourne conscious of the escape of liquid waste to the adjoining
premises that had occurred in November, he was aware
at the time of his
inspection on 16 January that another escape of liquid into the adjoining
factory had occurred.
- All
of these matters were taken into account by Mr Bourne on 16 January,
understanding that any liquid spill from the factory was
likely to drain into
the SRT via the stormwater grated drain that ran outside but parallel to the
front of the building. He was also
aware that the SRT as then constructed
allowed water to be discharged into the unnamed watercourse and ultimately to
South Creek.
- In
the course of Mr Bourne’s cross-examination, it was suggested that the
bunded area of the factory building could contain
about 120,000L. According to
Mr Bourne’s evidence, about 50 percent of the floor area was occupied by
equipment and stored
IBCs, thereby reducing the storage capacity of the bunded
area to about 60,000L, assuming a consistent height of bunding and a perfectly
flat factory floor. Assuming that tanks A and B were almost full, as Mr
Osman-Kerim accepted was the case, waste discharging from
those tanks, should
they fail, would exceed the capacity of the bunded area by approximately 50
percent, that is, there would be
a discharge of almost 90,000L into an area with
a capacity to retain only 60,000L. However, the capacity was likely to be less
than
the 50 percent postulated. The factory floor was not flat and the perimeter
bunding, particularly that near the roller door over
which trucks and equipment
regularly ran, appeared to be worn so that its reduced height would lead to the
prospect, in combination
with the sloping surface, of some of the retained
liquid overtopping the bund and running into the external grated drain (Tcpt
176:41-177:8).
- I
accept the submission of the prosecutor that regardless of whether
Mr Bourne was correct in his belief that all 45,000L tanks were
full, the
acknowledgement by Mr Osman-Kerim that the assumption in respect of two of the
tanks was correct and that the remaining
two tanks did contain liquid, coupled
with the fact that on 16 January one or more of the tanks was leaking from a
cause that neither
Mr Bourne nor Mr Osman-Kerim was able to identify,
demonstrates that Mr Bourne’s suspicion was reasonable. He was entitled
to
be apprehensive that if the discharge of waste continued, the inadequate bunds
and poor sealing of wall to floor in the building
could lead to the escape of
liquid waste from that building. Clearly, it would not require all tanks to fail
for the volume discharged
to exceed the bunded capacity of the factory floor
area.
- However,
analysis honed to that detail would seem to exceed the requirement for the
assessment of the reasonable suspicion to which
I have earlier adverted. As the
prosecutor submitted, that assessment does not allow for hindsight or a fine
analysis of the risk
determined with the benefit of a detailed examination of
facts in the course of a trial. The reasonable suspicion required assessment
in
the light of what was observed, what was known and what ought reasonably to have
been known. Confronted with a spill of liquid
waste within the factory from a
cause that could not be identified by Mr Osman-Kerim and where no power was
available to operate
any plant, including pumps, Mr Bourne held a suspicion that
there was a real and not remote possibility that the liquid waste that
had
escaped was likely to enter the unnamed watercourse through the SRT.
- Despite
the criticisms made of Mr Bourne on behalf of Mr Osman-Kerim, it must be
remembered that Mr Bourne issued an oral clean-up
direction on 16 January that,
in terms, required that the SRT be isolated. That clean-up direction was given
to Mr Osman-Kerim in
person. When the direction was given, Mr Osman-Kerim
neither directed attention to the volume of waste liquid then being stored on
the Premises nor did he suggest that any spill from the tanks could be contained
within the factory building. In short, he gave no
response to the direction,
suggesting that it was unnecessary or inappropriate. Moreover, he did not do so
on 17 January when the
clean-up direction given on 16 January was confirmed by
the delivery to him of the 17 January Notice.
- In
cross-examination, Mr Bourne accepted that it would have been reasonable
for him to ask Mr Osman-Kerim how the system of cleaning and storage worked
on 16 January and whether the gauges on the above ground
tanks were working. I
do not regard Mr Bourne’s response as affecting the reasonableness of his
suspicion. How the system worked
was, in a sense, irrelevant on 16 January as
there was no system able to be operated at that time given the absence of any
electrical
power. I have already addressed the relevance of the tank gauges to
the decision made by Mr Bourne and add nothing further in that
regard.
- Whether
the suspicion of Mr Bourne was reasonable is to be judged objectively having
regard to all of the circumstances that I have
identified, being those
circumstances known to Mr Bourne when the clean-up direction was given. As the
prosecutor submitted, the
fact that Mr Bourne could have asked more questions
neither establishes that he did not reasonably hold the relevant suspicion nor
does it prove that more questions should have been asked.
- In
summary, Mr Bourne’s visit to the Premises on 16 January was made in the
context of a fire that had damaged part of the factory
building; there was a
spill of liquid waste over several areas within the building that appeared to
involve a leak from one or more
of large tanks storing liquid waste and the
cause of that leak was not able to be identified either by Mr Bourne or by
Mr Osman-Kerim.
That context, coupled with the history of liquid waste
spills in and from the Premises causes me to conclude beyond reasonable doubt
that Mr Bourne did hold the relevant suspicion and that suspicion was
reasonable. His report of those facts and circumstances to
Ms Ingham, under
whose hand the 17 January Notice was issued, leads me to conclude that she also
held the relevant suspicion which
was reasonable. Although Ms Ingham was called
to give evidence, she was not cross-examined to suggest that she did not hold
such
a suspicion at the time at which the 17 January Notice was
given.
Clean-up action related to the pollution event
- I
do not accept the contention made by Mr Osman-Kerim that the clean-up action
required by the 17 January Notice was not causally
related to the pollution
event that Mr Bourne identified. I have earlier quoted the definition of
clean-up action from the Dictionary to the Act. Such action is relevantly
directed to preventing, minimising or mitigating any pollution likely to
result from the pollution incident. The pollution incident was the
likelihood of liquid waste from the factory floor flowing into the SRT
and then into the unnamed watercourse ultimately leading to South Creek.
- The
facts to which I have referred, considered in the context of the definitions
that I have discussed, amply demonstrate the relevant
nexus between the
clean-up action requiring the isolation of the SRT, as a consequence of
the pollution event.
- There
are two matters raised on behalf of Mr Osman-Kerim, directed to the 17 January
Notice and the reasonableness of the suspicion
held by Mr Bourne to found the
giving of that Notice, that must be addressed. First, reference is made to
evidence given by Mr Bourne
in cross-examination in which he accepted the
proposition that the sealing of the SRT “had nothing to do with the escape
of
some liquid to the opposite side of the structure where Lisbon Engineering
was” (Tcpt 171:16-19). The submission, as I understood
it, was that
acceptance of that proposition by Mr Bourne meant that it could not be relevant
to the formulation of the clean-up direction
given for sealing of the SRT. I do
not accept that submission.
- The
response of Mr Bourne to the proposition was that the SRT would not capture the
liquid waste escaping to the adjoining premises
of Lisbon Engineering with the
consequence that isolating the SRT would have no impact upon that liquid waste.
Given the evidence
of the site topography, the response is unexceptional.
However, the fact that liquid waste had, in November 2011, escaped from the
internally bunded factory building and was also escaping on 16 January following
a fire, were circumstances relevant to the formation
of a suspicion as to the
occurrence of a pollution event and the need for clean-up action. The
fact that liquid waste had in the past escaped and was then escaping from one
side of the factory building did not render it
irrelevant to consider the
possibility of escape from another part of the building.
- The
second matter to be addressed arising from the submissions by
Mr Osman-Kerim is Mr Bourne’s reliance upon the WorkCover
notices
directed to the inadequacy of bunding. While Mr Bourne accepted that the
reference to inadequate bunding in the WorkCover
Notices was a reference to
bunding around the wash bay and storage tanks rather than perimeter bunding for
the factory building itself,
that, so it seems to me, does not lessen the
relevance of those notices. The fact that the bunding around those two areas was
seen
to be inadequate, coupled with Mr Bourne’s assessment that the bund
located around external doors, particularly the roller
shutter door, appeared to
be worn, remained relevant not only to the reasonableness of his suspicion but
also to the appropriate
clean-up action. Waste liquid overtopping the wash plant
bund and storage tank bund, as he had observed, entitled Mr Bourne reasonably
to
suspect that liquid waste was likely to flow up to and over the bund
intended to protect the roller shutter door and then into the drainage system
leading to the SRT
should further discharge occur.
Terms of
notice vague and uncertain
- Mr
Osman-Kerim submits that the 17 January Notice was vague and uncertain,
rendering it incomprehensible because of what is said to
be the stipulation of
two different times in Direction 3 of that Notice. The first time stipulation
arises from use of the word “immediately”
at the commencement of the
Direction and the second is the time that concludes the Direction, namely
“by 5.00pm on 17 January
2012”. He submits that if the two times
relate to the one event then the Direction is incomprehensible. If the different
times
identify two events, the first of which is the time at which a suitably
qualified expert is to be engaged, then compliance would
be impossible because
it assumes that there is such an expert immediately available who will
immediately agree to undertake the required task. If the second time and
date refers to a different event then, so it is submitted, the requirement
“makes no sense because the time and the date refer to liquid waste not
leaving the Premises by that time and date; the words
do not say that by that
time steps must be taken to ensure that no liquid waste spilt in the Premises
leave those Premises after
that time and date”. I do not accept that
submission.
- The
17 January Notice is, to my mind, tolerably clear in its terms. The first step
to be taken was the engagement “of a suitably
qualified expert”,
that is, a plumber. On any reasonable and rational interpretation, the
obligation cast upon the Company
from the time of delivery of the Notice was to
put in train, without any delay, the process of engaging a plumber to carry out
the
task stipulated in the direction. The stipulation of 5.00pm on 17 January
was a stipulation of the time by which the isolation action
taken as a
consequence of engaging a plumber was to be completed in order to achieve the
objective of preventing the discharge of
liquid waste from the SRT into the
unnamed watercourse.
- The
manner in which I find the Notice should be understood does not do violence to
the language used in Direction 3. In the circumstances
in which the Direction
was given, it was objectively apparent to anyone familiar with the Premises, as
was the Company through Mr
Osman-Kerim, that sealing or isolating the SRT to
prevent discharge from it was the subject matter of the Notice. The
circumstances
to which I refer include not only the state of the Premises on
both 16 and 17 January, as earlier described, but also the circumstance
that an
oral notice had been given to Mr Osman-Kerim on 16 January requiring that the
SRT be isolated (see [55] above).
- Further,
it is relevant to observe that no contemporaneous complaint or challenge was
made by Mr Osman-Kerim when the Notice was given
to him on that day and its
requirements explained both to him and to Ms Kemp by Mr Bourne and Mr Reece
(see [59] above). As I have
earlier recorded at [56] when Mr Bourne gave oral
clean-up directions to Mr Osman-Kerim on 16 January, requiring, amongst other
matters,
isolation of the stormwater retention pit, Mr Osman-Kerim is recorded
by Mr Bourne as stating that he would comply with that Direction.
The absence of
complaint or challenge by the recipient of the Notice is probative of the fact
that the Notice was sufficiently clear
to make apparent the obligation that it
sought to impose.
- Mr
Osman-Kerim also submits that compliance with the 17 January Notice was, having
regard to the time at which it was given, unreasonable
in that it required
compliance “within less than three hours of its issue”. He submits
that the time for compliance provided
no reasonable opportunity to take into
account the ability of the Company to engage “the suitably qualified
expert” and
to have that expert perform the work required by the
stipulated time of 5.00pm on 17 January.
- The
submission that three hours only was available to comply with the Notice does
not accurately reflect the circumstance in which
the Notice was given. As I have
already stated, a direction requiring that the SRT be isolated by 5.00pm on 17
January was given
to Mr Osman-Kerim on 16 January. As s 93(3) of the Act
provided, the oral notice then given ceased to have effect after 72 hours,
unless written notice of the direction was given within that time. That is what
the 17 January Notice did.
- It
is correct to observe that the latter Notice added to the direction for
isolation of the SRT a requirement that a suitably qualified
expert be engaged
to undertake that work. However, that added requirement made explicit that which
was implicit in the oral direction
of 16 January, namely that the isolation of
the SRT was work to be undertaken by someone qualified to do so and in a
competent manner.
- Further,
the requirement that a qualified person be retained is not identified as an
element of the charge against the Company or
against Mr Osman-Kerim. The breach
of the 17 January Notice charged is the failure of the Company to isolate the
SRT by 5.00pm on
17 January 2012. It is accepted by Mr Osman-Kerim that
work undertaken to isolate the SRT did not occur until 30 January and that
work
was undertaken at the request of the prosecutor.
- The
submission that the period allowed for compliance with the Notice was
inordinately and unreasonably short must be considered in
the context in which
the power given by ss 91 and 93 of the Act is able to be exercised. The defined
meaning of “clean-up notice”,
directed, as that definition, to
preventing, minimising, removing, dispersing, destroying or mitigating pollution
resulting from
an incident as a result of which pollution “has occurred,
is occurring or is likely to occur”, demonstrates that the
proper exercise
of power under these sections will often require the recipient of a clean-up
notice to act promptly in order to prevent
or mitigate environmental harm. The
fact that prompt action may be inconvenient or occasion cost to the recipient,
however significant
that inconvenience or cost may be, is no more than an
incident of the power being exercised. Once a reasonable suspicion is held
that
a pollution incident has occurred or is occurring, the direction to the
relevant owner or occupier to take clean-up action within a limited period of
time does not involve an unreasonable exercise of power.
- Whether
a particular limitation upon the time within which such an action is required
will depend upon the circumstances of the particular
case. In context, I have
already referred at length to the circumstances in which the Notice came to be
given. Those circumstances
are not only relevant to the element of reasonable
suspicion, they are also relevant to the appropriate time for compliance with
a
clean-up direction.
- Importantly,
Mr Osman-Kerim did not identify any particular difficulty in complying with
Direction 3 of the 17 January Notice. As
I have already recorded, Mr Osman-Kerim
did not make any complaint on either 16 or 17 January about Direction 3. Indeed,
he stated
to Mr Bourne on 16 January that he would comply with that Direction.
He did not subsequently seek any extension of time to comply
nor did he indicate
that he was having difficulty in obtaining the services of a plumber to attend
the Premises. While Mr Osman-Kerim
stated in evidence that he had
telephoned Mr Sidaros on 16 January (Tcpt 459:9-28), his evidence as to
follow-up action when Mr Sidaros
did not attend on either 16 or 17 January is
somewhat vague, both as to the number of follow-up telephone calls he made and
when
they occurred.
- In
contrast, the evidence led by the prosecutor suggests that the task of isolating
the SRT could be organised quickly and that the
work itself was of short
duration. The evidence of Ms Ingham establishes that having agreed to the quote
received from Mr Sidaros
on 30 January, Mr Sidaros attended the Premises that
same day when he carried out the work necessary to isolate the SRT (Exhibit
N,
Tab 22). The account received by the prosecutor from Dr H20 (Mr Sidaros) showed
a total time charge for work involved in unblocking
a small detention pit at the
Premises and for sealing the SRT as 2.25 hours for two men. That fact speaks
against any suggestion
that the magnitude of the task to be performed in
compliance with Direction 3 was so great that the period specified for
compliance
in the 17 January Notice was unreasonable.
- For
these reasons, I do not accept the submission on behalf of Mr Osman-Kerim
that the 17 January Notice was unreasonable because
it failed to take into
account the ability of the Company to comply with the Notice within the time
specified. Moreover, the obligation
to comply continued after 17 January by
operation of s 319A of the Act, with the result that there was non-compliance
with the Notice
until 30 January 2012.
Failure to take account of
relevant considerations
- Mr
Osman-Kerim also submits that the decision-maker “acted unreasonably and
failed to take into account considerations that
she or he ought to have taken
into account”. Those considerations are generally a recounting of the
basis upon which Mr Bourne
was cross-examined, namely:
- (i) failing
to take any reasonable steps to support his belief that the above ground storage
tanks were nearly full;
- (ii) failing
to check the prosecutor’s record as to “previous records relating to
the failure or otherwise of the tanks
or any of them to maintain the liquid they
stored”;
- (iii) failing
to take steps to ascertain whether the lack of electrical power to the Premises
was likely to bring about “any
significant flooding of the material
contained in any one or more of the storage tanks” (sic);
- (iv) failing
to consider whether, if one or more of the storage tanks failed, the bunding of
the factory was adequate to prevent
the flow of liquid waste to the SRT;
- (v) acting
upon a false understanding of the WorkCover Notices directed to the inadequacy
of bunding to prevent liquid waste discharging
to the SRT and
- (vi) failing
to ascertain from the Company’s officers “the method by which the
factory system operated” namely,
whether there was a system that prevented
any significant flow of water leaving the above ground storage tanks as a result
of the
loss of power.
- It
is not submitted that the considerations identified were mandatory
considerations imposed by or as a consequence of s 91 or any
other provision of
the Act. That is significant and weighs against the submission that
Mr Osman-Kerim makes (Minister for Aboriginal Affairs v Peko-Wallsend
Ltd [1986] HCA 40; 162 CLR 24 per Mason J at 39). As Deane J observed in
Sean Investments Pty Ltd v MacKellar [1981] FCA 191; 38 ALR 363 at
375:
“Where relevant considerations are not specified, it is largely for the
decision-maker, in the light of matters placed before
him by the parties, to
determine which matters he regards as relevant and the comparative importance to
be accorded to matters which
he so regards.”
Observations
to similar effect were made by Mason J in Peko-Wallsend at 39-40.
- What
was required by s 91 was the holding by the prosecutor, through a relevant
officer, of a suspicion, reasonably formed, that a
pollution incident had
occurred or was occurring. Relevant to that suspicion were those facts or
circumstances known to the officer
or officers on 16 and 17 January.
- I
have dealt at some length with those facts and circumstances as they were known
to Mr Bourne and Ms Ingham at that time. I do not
repeat all that has previously
been recorded by me in response to the challenge made to Mr Bourne’s
reasoning, noting that
there was no challenge made to Ms Ingham’s
reasoning and suspicion, notwithstanding the she was the officer of the
prosecutor
who gave the 17 January notice. I do accept that she relied, in part,
upon the observations and reasoning of Mr Bourne.
- Nonetheless,
there are several of the considerations itemised by Mr Osman-Kerim upon
which it is appropriate to add further brief
observations.
- In
cross examination, Mr Bourne was asked whether, when preparing a draft of the 17
January Notice for Ms Ingham, he had checked inspection
reports prepared by him
following his prior visits to the Premises. Contrary to the assertion by Mr
Osman-Kerim, Mr Bourne did not
say that he had not referred to those reports.
Rather, he said that he did not recall, when giving his evidence at trial,
whether
he had done so on 16 January 2012 (Tcpt 166:43-167:14). However, he did
state that at the time of drafting the Notice he did have
regard “to the
history of the site” and, at that time, he had a specific memory of liquid
waste spilling from the above
ground storage tanks on the occasion of his visits
to the Premises prior to 16 January (Tcpt 167:20-24). I regard that as a
credible
statement, given that Mr Bourne had attended the Premises on a number
of occasions in October, November and December 2011 when the
spill of liquid
waste had occurred. Further, the fact that recourse to existing reports or
recall of recent history (or both) were
relied upon when drafting the Notice is
evident from the matters recorded in the Notice under the heading
“[b]ackground”.
Specific reference is there made to clean-up notices
issued to the Company in November and December 2011, as well as to the
improvement
notices issued by WorkCover.
- Reference
in items (iii) and (vi) at [247] of Mr Bourne’s claimed failure to
consider the consequence of the lack of electrical
power to the Premises on 16
January has been addressed earlier in these reasons. Confronted with the liquid
waste that had spilled
at or about the time of the fire; the absence of any
explanation from Mr Osman-Kerim as to the source or cause of that spill; the
fact that earlier spills had been attributed by Mr Osman-Kerim to pump failure;
and the circumstance that Mr Bourne did not then
proceed with a detailed
interrogation of Mr Osman-Kerim as to his perception of the consequence of being
without electrical power
is hardly surprising and certainly not
unreasonable.
- By
reference to item (iv) at [247], it is incorrect to assert that Mr Bourne failed
to consider whether, in the event of one or more
storage tanks failing, the
bunding of the factory was adequate to prevent the escape of liquid to the SRT.
Consideration that he
gave to that topic has earlier been discussed. In the
circumstance of a fire having occurred together with a spill, no detailed survey
or calculation was required in order to consider the prospect of an escape of
liquid waste. Liquid waste had already overtopped one
of the bunds. Given Mr
Bourne’s concern for the adequacy of the building perimeter bunds, he
could not reasonably be criticized
for determining that preventative action was
required against the prospect that further liquid may escape from the tanks,
overtopping
the bunds and then draining to the SRT. The submission to the
contrary is without substance.
Reasonable excuse
- The
final basis upon which Mr Osman-Kerim submits that the offence against s 91,
founded upon the 17 January Notice, has not been
established is that the
prosecutor has “failed to prove that the corporation failed to demonstrate
a reasonable excuse.”
That submission overlooks the provisions of s
256(1), the terms of which are set out at [15].
- The
language of s 256(1) makes clear that the onus falls upon the Company to
establish that it had a “reasonable excuse”
for not complying with
the 17 January Notice. The statutory imposition of that onus makes sense, given
that the facts and circumstances
said to constitute a reasonable excuse would
almost always be peculiarly within the knowledge of a defendant.
- The
use of the word “without” immediately before the phrase
“reasonable excuse” in s 91(5) does not remove
the provisions of the
subsection from the operation of s 256(1). Requiring the prosecutor to prove the
absence of a reasonable excuse
would not be consistent with the language of s
256(1) nor would it give effect to the apparent legislative purpose of that
provision.
- The
words in parenthesis in s 256(1), namely “referred to in any provision of
this Act” are relevant in this context.
The phrase “reasonable
excuse” is “referred to” in s 91(5) and thereby engages the
provisions of s 256(1).
Unless a defendant proves the existence of a reasonable
excuse then, if the other elements of the charge under s 91 are proved, the
failure to comply with a notice will be “without reasonable
excuse”.
- When
ss 91 and 256(1) are read together, an offence against s 91 must be determined
in the following manner:
- (i) the
prosecutor is required to prove beyond reasonable doubt that the nominated
defendant has failed to comply with a clean-up
notice validly given; if that is
proved, then
- (ii) the
defendant is required to prove, on the balance of probabilities, that there was
a reasonable excuse for failing to comply.
If the defendant succeeds in so
doing, that defendant will not be guilty of the offence charged. However, if the
defendant does not
prove that it failed to comply with a notice without
reasonable excuse, that defendant will be guilty of the offence as
charged.
- Mr
Osman-Kerim submits that s 256(1) is not directed to the lawfulness of the
clean-up notices given to the Company. The prosecutor
does not contend to the
contrary. Beyond that, Mr Osman-Kerim does not make any submission directed to
the proper construction and
application of that provision to s 91(5).
- Consistent
with the manner in which I consider the two sections are to be read, it is
necessary to consider whether Mr Osman-Kerim
has established, on the balance of
probabilities, that the Company had a reasonable excuse for its failure to
comply with the 17
January Notice. While, in his final submissions, Mr
Osman-Kerim did not identify specific evidence directed to the excuse of the
Company for non-compliance, the only topic identified as potentially relevant is
“the uncertainty of the direction” contained
in the Notice and the
“time frame or time frames specified therein”.
- The
only measures taken by Mr Osman-Kerim to address the 17 January Notice are those
to which I have already referred. As best as
I can understand it, the evidence
discloses that upon receipt of the oral notice on 16 January 2012, Mr
Osman-Kerim telephoned Mr
Sidaros, requesting that he attend the Premises to
“look at the matters raised” in the clean-up notice. He understood
that Ms Kemp contacted another plumber who came to the Premises but indicated
that he was unable to undertake the required task.
When Mr Sidaros did not
attend promptly, he was contacted “on a few occasions” thereafter
concerning the work but had
not attended to undertake the work by the time the
second fire occurred on 23 January. Mr Sidaros was the only plumber that Mr
Osman-Kerim
contacted.
- I
am not satisfied that, on the balance of probabilities, Mr Osman-Kerim has
established a reasonable excuse on the part of the Company
for its failure to
comply with the 17 January Notice. The evidence does not disclose any particular
or unreasonable difficulty in
complying with that Notice. The fact that a
plumber was contacted who did not arrive when he promised to do so does not, to
my mind,
constitute a reasonable excuse. If Mr Osman-Kerim was genuine in his
endeavours to have what ultimately proved to be a task that
could be completed
within the space of a little more than two hours on an urgent basis, it is
inconceivable that he would make contact
with only one plumber and accept that
plumber’s statement that he would be there “as soon as I can”.
The fact that
the prosecutor was able to negotiate with that same plumber to
undertake the task and then to have the task undertaken all on the
same day,
rather suggests that the efforts of Mr Osman-Kerim to secure the services of
that plumber were not consistent with establishing
the necessary will to address
the requirements of the Notice.
- The
conclusion I have reached as to the efforts made by Mr Osman-Kerim on behalf of
the Company to comply with the Notice are made
the stronger when the operation
of s 319A of the Act is taken into account. By operation of that section, the
obligation to comply
with the 17 January Notice continued until the work was
done on 30 January. No reasonable explanation emerges from the evidence as
to
why a plumber could not be retained to carry out the work between 17 January and
30 January.
Section 169(1) of the Act
- Mr
Osman-Kerim did not address any submission directed to s 169(1)(c) of the Act in
as much as that provision provides a defence if,
in his capacity as a director,
he “used all due diligence to prevent the contravention” of s 91 by
the Company. It is
clear from the chapeau to that subsection that the onus of
establishing use of “all due diligence” is upon Mr Osman-Kerim.
- Any
reliance upon that defence would, in the present case, involve recourse to those
same facts upon which the “reasonable excuse”
defence arises under s
91(5).
- I
accept that the defence available under s 169(1)(c) requires proof on the
balance of probabilities. However, for the reasons I have
given in respect of
the “reasonable excuse defence”, I am not satisfied, on the facts,
that the defence under s 169(1)(c)
has been made out.
Conclusion
in respect of the 17 January Notice
- For
the reasons stated, I am satisfied beyond reasonable doubt that the 17 January
Notice given by the prosecutor:
- (i) was given
in writing by the prosecutor in its capacity as the appropriate regulatory
authority;
- (ii) that
it was given to the Company as occupier of the Premises to which the Notice
related;
- (iii) that
at the time of giving the Notice the prosecutor reasonably suspected that a
pollution incident had occurred;
- (iv) that
the direction given to the Company in the Notice specified clean-up action to be
taken within the time specified in the
Notice and was given consequent upon the
pollution incident;
- (v) that
the Company failed to comply with the Notice; and
- (vi) that
between 17 January and 30 January 2012, Mr Osman-Kerim was the sole director of
the Company.
- I
am not satisfied, on the balance of probabilities, that:
- (i) the Company
has a reasonable excuse for failure to comply with the Notice; or that
- (ii) Mr
Osman-Kerim used all due diligence in his capacity as a director of the Company
to prevent the Company from failing to comply
with the Notice.
- Further,
I am satisfied beyond reasonable doubt, that the Company, by its failure to
comply with the Notice given to it by the prosecutor
under s 91(1) of the Act
has contravened s 91(5) of the Act. I am also satisfied beyond reasonable doubt
that, by operation of s
169(1) of the Act, Mr Osman-Kerim has also contravened s
91(5) of the Act. He is therefore guilty of the offence with which he has
been
charged as it relates to the Notice given on 17 January 2012.
The
offence against s 91 of the Act: 24 January Notice
- As
would be obvious, the elements of the offence already identified in respect of
the 17 January Notice are identical to those applicable
to the offence charged
in respect of the 24 January Notice. However, the issues directed to those
elements in respect of the present
charge differ from those raised in respect of
the earlier Notice.
- Mr
Osman-Kerim does not challenge the occurrence of a pollution incident,
nor, as I understand his submission, does he challenge, at least in principle,
the entitlement of the prosecutor to have issued
a clean-up notice in
response to the pollution incident that occurred on 23 January 2012.
- Mr
Osman-Kerim challenges the 24 January Notice as being invalid. Applying the
jurisprudence of administrative law, his challenge
is correctly expressed as
being one directed to the decision of the prosecutor to give that Notice because
the clean-up requirement
expressed in the Notice was unreasonable and therefore
the exercise of discretion to give the Notice miscarried. As I have earlier
indicated, the impugned direction was that expressed as direction 3a, the
provisions of which I will, for convenience, repeat:
“3a Immediately monitor and maintain the
appropriate level of liquid waste in the stormwater retention tank and the
adjacent stormwater pit ensuring
that the retention tank does not fill in excess
of 30 percent of their [sic] capacity.”
- It
is the breach of that direction that is the subject of the present charge. The
Statement of Facts (Exhibit B) accepts that officers
of the prosecutor observed
the SRT to be more than 30 percent full on 25 January, 27 January, 7 February,
15 February, 16 February,
20 February, 21 February, 22 February, 29 February, 2
March, 7 March, 8 March, 9 March and 20 March 2012.
- Mr
Osman-Kerim submits that the level of liquid in the SRT on 9 March and 20 March
2012 is irrelevant because the evidence does not
establish that liquid in the
SRT on those dates was “liquid waste”, being the substance
identified in Direction 3a. That
is a matter to which I will return in due
course. If it be the fact, that circumstance does not provide a defence to the
charge but
does limit the period during which any offence can be found to have
been committed.
The challenge to validity of the 24 January
Notice: defendant’s submission
- Central
to Mr Osman-Kerim’s challenge to the decision of the prosecutor to issue
the 24 January Notice is that, when framing
the directions, it was obliged to
consider the effect that compliance with those directions would have upon the
recipient of the
Notice. He contends that the power to direct clean-up action is
limited to action that is reasonably necessary “to achieve
the objective
that the legislation makes clear”. Having regard to the definition of
“clean-up action” in the Act,
the action directed to be taken is
limited to that which is reasonably necessary to prevent, minimise, remove,
disperse, destroy
or mitigate any pollution resulting or likely to result from
the pollution incident. The fact that the clean-up action directed by
the Notice
may have such an effect does not justify the imposition of a requirement that
goes beyond that which is necessary to achieve
that result.
- He
argues that implicit in the exercise of the discretionary power, the prosecutor
“should” give consideration to the
economic and practical
consequences upon the recipient when framing a particular direction. If that
direction “imposes an extremely
harsh burden” upon the recipient but
a different direction is sufficient to achieve clean-up action, the imposition
of the
more burdensome requirement would involve “a wrong exercise of
power”.
- Further,
where the utility of the clean-up direction and its financial consequences for
the recipient are being considered, the authority
must “where it is
practical and reasonable to do so”, take appropriate advice concerning
such matters including, where
necessary, from sources not available from those
in the employ of the prosecutor. The entitlement to exercise power under s 91(1)
does not extend to the framing of a direction, the terms of which require
“the input of knowledge and experience” outside
that held by
officers of the prosecutor.
- Reliance
is placed upon the decision of the High Court in Minister for Immigration and
Citizenship v Li [2013] HCA 18; 249 CLR 332. The gravamen of Mr
Osman-Kerim’s argument, in principle, is said to be supported in the
judgment of French CJ where in [30]
the Chief Justice said (omitting the
citation of authority):
“A distinction may arguably be drawn between rationality and
reasonableness on the basis that not every rational decision is
reasonable. It
is not necessary for present purposes to undertake a general consideration of
that distinction which might be thought
to invite a kind of proportionality
analysis to bridge a propounded gap between the two concepts. Be that as it may,
a disproportionate
exercise of an administrative discretion, taking a
sledgehammer to crack a nut, may be characterised as irrational and also as
unreasonable
simply on the basis that it exceeds what, on any view, is necessary
for the purpose it serves.”
- Mr
Osman-Kerim also made reference to the judgment of the plurality in that case
where at [68] their Honours stated that the legal
standard of unreasonableness
when seeking to impugn the exercise of statutory power was not limited to an
irrational or bizarre decision,
being one that is so unreasonable that no
reasonable person could have arrived at it. He also suggested that the plurality
recognised,
at [73], the validity of “a proportionality analysis by
reference to the scope of the power”. It was submitted that such
an
analysis was appropriate in the present case. However, it should be observed
that at [74] their Honours stated that “an
obviously disproportionate
response is one path by which a conclusion of unreasonableness may be
reached”, noting that the
submissions in the case before them did not draw
upon such an analysis.
- Mr
Osman-Kerim accepts that the validity of the decision to issue the 24 January
Notice is to be assessed at the time at which the
decision was made and the
Notice given. He accepts that the direction in the Notice to seal the SRT
(repeating the then unfulfilled
direction in the 17 January Notice) was
reasonable. The issue he takes is with the decision to give Direction 3a, that
is to retain
the liquid waste in the SRT at a level that did not exceed 30
percent of its capacity “on a permanent basis”.
- He
contends that given the risk of rainfall, the size of the catchment for the SRT
“and the lack of any expert knowledge”
within the offices of the
prosecutor as to the way in which contaminated water might be contained, it was
incumbent upon the EPA
to obtain expert advice promptly. It could be expected
that such advice would be directed to steps to mitigate or remove the threat
of
pollution by discharges from the SRT in the event of heavy rainfall and assess
the practicality of requiring the Company to maintain
the level of storage in
the tank at 30 percent. Yet, so the submission runs, such expert advice was not
sought.
- It
was further submitted, having regard to the terms of Direction 3a, that the
Company would be guilty of an offence at any time at
which the level of liquid
waste in the SRT was above 30 percent of its capacity. The evidence given
demonstrated that an obligation
imposed in those terms was unreasonable because
of the criminal sanctions that attended the breach, when compliance imposed an
unachievable
obligation.
- In
support of that submission, reference was made to the following evidence given
by Mr Bourne (Tcpt 187:28):
- (i) “Q: You
would agree with this, that the feasibility of what you put in the clean-up
notice in terms of maintaining the
level of SRT at 30 percent depended on how
much rain happened to fall?
- (ii) A: Yes.”
- However,
to put that evidence in context, Mr Bourne was thereafter asked whether it would
be impossible to continue maintaining the
level in the SRT at 30 percent if
heavy rain occurred, Mr Bourne responded, “No – I don’t think
so” (Tcpt
188:22-29).
- Mr
Osman-Kerim also points to the evidence of Mr Bourne where he agreed that when
deciding to give the 24 January Notice there was
potential for heavy rainfall
(Tcpt 191:8-13). However, to be fair to Mr Bourne, his answer acknowledged that
the prospect of heavy
rainfall (not defined) had been considered but nonetheless
he maintained that Direction 3a was reasonable, in the expectation that
the
Company was able to comply. Shortly before giving that answer, Mr Bourne stated
that before issuing the 24 January Notice he
had enquired of “the
licensee” as to whether “they” had any comments to make upon
the terms of the order
and no comments were forthcoming (Tcpt 190:39-43). As I
have recorded at [69], Mr Bourne had telephoned Mr Osman-Kerim before attending
the Premises and given him verbal clean-up directions that included the
direction to maintain the level of liquid waste in the SRT
to below 30 percent
of its maximum capacity.
- The
final aspect of Mr Bourne’s evidence upon which Mr Osman-Kerim relies for
the purpose of the present submission is the acknowledgement
by Mr Bourne
that at the time at which the decision to issue the 24 November Notice was made,
it did not occur to him to limit compliance
with Direction 3a to circumstances
in which “rainfall didn’t exceed a certain level”, to use the
language of the
question posed (Tcpt 194:14-17). Further, Mr Osman-Kerim relied
upon the fact that the first calculations made by Mr Bourne of the
catchment
area of the SRT and the volume of water likely to flow from that catchment to
the SRT in a given rainfall event was a calculation
undertaken on 28 February
2012 (Tcpt 215:24-30).
- Mr
Osman-Kerim then referred to the expert evidence given by Mr Forrester and Mr
Ryan as to their respective approaches to Direction
3a of the 24 January Notice,
its consequences and the alternatives available to address both the arrest of
contaminated liquid that
would otherwise discharge into the SRT and the removal
of that liquid from the Premises. Various points of difference between those
experts were identified although much of that discussion did not substantially
advance the basis upon which Mr Osman-Kerim challenged
the validity of the
decision to impose Direction 3a. There was considerable focus upon the
consequence of the above average rain
that fell on the Premises after 24 January
2012. However, that focus transgresses the submission, correctly made by
Mr Osman-Kerim
that, in assessing whether the decision to give the
direction was unreasonable in the sense discussed in Li, it was necessary
to do so by reference to the facts and circumstances existing and known at the
time the decision was made.
- I
have earlier referred, in summary form, to the alternate proposal advanced by Mr
Forrest. That involved sandbag retaining structures
in an endeavour to contain
contaminated liquid flowing from the factory Premises so as to avoid, or at
least limit, the volume of
contaminated liquid that entered the SRT. Both
experts accepted that addressing the need to prevent contaminated liquid waste
from
leaving the site, through the mechanism of Direction 3a or containment by
sandbag structures, could only ever be a temporary or interim
measure until such
time as the source of contaminants was removed. Both interim measure
necessitated retained liquid waste being
removed from the Premises by tanker but
removal would be required less frequently in the case of the proposal advanced
by Mr Forrest
than was the case if the mechanism for containment was that
required by Direction 3a.
- Ultimately
it was submitted by Mr Osman-Kerim that the question was not whether, from an
engineering perspective, one solution was
better than another but that the
solution advanced by Mr Forrest was credible, was able to be put in place
relatively easily and
cheaply and reduced the risk of the Company breaching the
law. In contrast, it was said that the onus cast upon the Company to pump
out
the SRT at any time, day or night, “in the face of the risk of any unknown
quantity of rainfall” when there was an
alternative “that was not
likely to have that effect” demonstrated that Direction 3a was
unreasonable. Further, it was
submitted that it was not for the Company to
suggest an alternative proposal because the prosecutor decided to impose the
Direction
and in doing so had to “look past the simplistic notion of
whatever the licensee is required by [it] to do (the Company) shall
do”.
The prosecutor’s submissions
- The
prosecutor correctly observes that the submissions made by Mr Osman-Kerim
directed to each notice given under s 91 involves a
collateral challenge to the
decisions made by the prosecutor to issue those Notices. It accepts that it is
open to Mr Osman-Kerim
to make such a challenge in these proceedings
(Liverpool City Council v Cauchi [2005] NSWLEC 675; 145 LGERA 1 at [41];
Ryding v Kempsey Shire Council at [9]).
- At
a level of general principle, the prosecutor submits that a decision is
relevantly unreasonable only if it can be concluded that
the decision-maker must
have misunderstood the power being exercised because no reasonable
decision-maker, understanding that power,
could have made the decision. Reliance
is placed upon the judgment of the plurality in Li at [66]-[67] for that
proposition. Unless the decision can be so categorised, the decision-maker is
left with a freedom as to the
decision made, provided it is made within the
confines of the power given by the relevant statute.
- In
the present case, the power available to the prosecutor under s 91 was enlivened
because a pollution incident had occurred on 23 January and was
continuing on 24 January 2012. The fact that there was a pollution incident that
occurred and was
occurring on those dates is acknowledged by
Mr Osman-Kerim.
- Whether
the terms of Direction 3a were outside the power conferred by s 91 requires an
analysis of both the scope of the power and
the purpose for which the power is
able to be exercised (Li at [67]). The prosecutor contends that the
response to both the scope of the power and the purpose of its exercise are
addressed by
the respective definitions of “pollution incident” and
“clean-up action” found in the Dictionary to the Act.
They are
definitions that I have earlier quoted.
- As
my earlier recitation of fact indicates, the pollution incident involves
the escape of liquid waste from the premises into the SRT and then into the
unnamed watercourse, leading ultimately to South
Creek. Further, as the state of
the Premises was on 23 and 24 January, there was a risk of further escape
of that liquid waste.
- The
response of the prosecutor was to direct that liquid waste discharging into the
SRT be kept at a level that was below 30 percent
of its capacity, clearly
intended to prevent overflow of that liquid waste into the adjoining
watercourse. That solution met the
description of clean-up action in that
it was intended to prevent water pollution resulting from the
incident.
- That
analysis, so it is submitted, demonstrates that the exercise of discretion
available to determine an appropriate means or method
of clean-up action
was exercised following the pollution incident. The evidence of Mr
Forrest does not advance a case to the contrary. The only difference between the
solution posited by him and
the direction given by the prosecutor was that
“the SRT, having less capacity than the lake” he proposed creating,
may
require more frequent pump-out (Tcpt 285:24-29). Moreover, Mr Forrest
acknowledged that “the 30 percent selection is a good
solution in an
initial emergency response” but that, as a long-term measure, a further
review of that requirement should have
been considered (Tcpt 287:13-23). In
short, Mr Forrest considered Direction 3a of the 24 January Notice to be
workable but imposed
a potentially more onerous obligation on the Company than
did his solution. That does not demonstrate a decision that is, in the
relevant
legal sense, unreasonable.
- The
submission by Mr Osman-Kerim that the direction challenged was unreasonable
because it was not limited in time is answered by
a proper analysis of the
provisions of s 91. At the time at which the decision to give the Notice was
made, the likely duration of
the pollution incident was unknown. Had the
30 percent capacity requirement been limited in time there would potentially
have been a disconnect between that
limitation and the pollution
incident. A reasonable construction of the direction indicates that
Direction 3a remained an operative direction only while the pollution
incident pertained. That construction is consistent with the power being
exercised.
- I
observe that the submission just summarised is implicitly accepted by
Mr Osman-Kerim by dint of his challenge to an allegation of
breach of the
Notice after 8 March because, on his analysis, there is no evidence that liquid
in the SRT after that date was “liquid
waste”. Once the content of
the SRT ceased to be “liquid waste”, Direction 3a ceased to be
engaged. Apart from
applying the definition of “waste” in the
Dictionary to the Act, the clear purpose reflected in the Directions given
in
the 24 January Notice is to prevent the escape of liquid that was contaminated
by or had come into contact with both the firewater
and liquids that emanated
from the fire-damaged factory building. That was the “liquid waste”
to which the Direction
related.
- The
prosecutor submits that the circumstances in which the 24 January Notice came to
be given are relevant to the reasonableness of
the Directions given. Although
earlier described in more detail, those circumstances are
relevantly:
- (i) the
factory on the Premises had been substantially destroyed by fire with liquid
waste flowing directly from the damaged factory
building into the stormwater
system;
- (ii) liquid
contaminated by chemicals as well as material washed to the ground by
firefighters was flowing into the SRT and then
surcharging into the unnamed
creek;
- (iii) as
a temporary measure to stem the escape of liquid from the SRT, a traffic cone
had been jammed into the discharge pipe from
the SRT in an endeavour to prevent
the escape of further contaminated liquid;
- (iv) contaminated
liquid was observed to have escaped and by observation could be determined to
have polluted the nearby watercourse
and creek.
- Mr
Bourne and Mr Reece, both experienced officers of the prosecutor, were present
on the site immediately following the fire on 23
November. Mr Bourne was present
for some hours while Mr Reece was onsite for the entire day seeking to address
the escape of contaminated
liquids across the boundaries of the Premises. Mr
Reece learned that some 60 firefighters had attended to control the fire but,
understandably,
the focus of the efforts of the firefighters was to extinguish
the blaze without undue concern as to the extent to which liquids
used to that
end were either contained within or discharged from the Premises. A great part
of the day was spent by Mr Reece addressing
the escape of contaminated liquid
both in assessing its extent and supervising its removal. (Exhibit U, Tab
5).
- Both
officers returned the following day, observing that firewater and liquid waste
was flowing from the eastern side of the factory
premises, being the waste that
was directed by booms into the SRT. Failure of the above ground storage tanks
was a risk that had
been materially increased by the fire that occurred on 23
January. Mr Bourne gave evidence that when looking into the damaged factory
building from the outside he could see that one of the above ground storage
tanks was at an angle with the top of that tank “somewhere
between 30 and
45 degrees” (Tcpt 219:37-41). He remained of the opinion that if the large
storage tanks failed, none of the
bunding within the factory, including that
which was supposed to protect the openings, was likely to be adequate to retain
any significant
spill from those tanks.
- These
were all circumstances that caused Mr Bourne to frame the 24 January Notice in
the terms that he did. Directing that contaminated
liquids within the SRT be
maintained at 30 percent of maximum capacity was a level chosen so as to afford
capacity to retain contaminated
liquids in the event of tank collapse or
rainfall. The circumstances that led to the decision to issue the 24 January
Notice in those
terms render, according to the submission, the decision as being
one that is “unimpeachable”.
- The
reasonableness of the decision cannot be judged by taking into account events
that occurred after but not reasonably foreseen
on 24 January. Moreover, so it
is submitted, the contention that the decision was unreasonable cannot be judged
by now determining
whether the decision was either the “best” or
even “preferable” decision. The correct inquiry is whether
the
decision was within power and not unreasonable in the relevant sense.
- An
argument advanced by Mr Osman-Kerim was that Mr Sidaros had, during February
2102, advanced an alternate proposal which, he submitted,
had been rejected by
the prosecutor. It was submitted by the prosecutor that, for several reasons,
that submission failed to identify
any proper basis for challenge to the 24
January decision.
- First,
the proposals by Mr Osman-Kerim and his plumber were irrelevant to the question
as to whether the impugned decision was unreasonable
given that they were
proposals advanced well after the decision was made. Mr Osman-Kerim had not
demurred to the critical direction
when it was shown to him in draft.
- Secondly,
some of the measures that were taken by or on behalf of Mr Osman-Kerim did
not prevent the liquid waste flowing into the
SRT. Mr Bourne’s
evidence that subsequent overflows from the SRT occurred demonstrated that the
work failed to achieve its
stated purpose.
- Thirdly,
the proposals advanced seem to assume that the bunds constructed within the
factory building would be adequate to prevent
the escape of contaminated liquids
whereas evidence, earlier recorded, had shown that the bund in the storage tank
and wash bay area
had overtopped on prior occasions.
- Fourthly,
the proposal by Mr Osman-Kerim’s plumber to place concrete around the
eastern door of the factory building was anticipated
by Mr Bourne to fail and,
as Mr Osman-Kerim acknowledged, did in fact fail to arrest the flow of liquid
from the building.
- Fifthly,
to the extent that other proposals were advanced by or on behalf of
Mr Osman-Kerim, they were articulated on a conceptual
basis but not
followed up with detail, despite Mr Bourne’s request for details so that
the proposals could properly be considered.
- A
second basis upon which Mr Osman-Kerim contended that the decision to impose
Direction 3a was “grossly unreasonable”
was the financial burden
that it imposed upon the Company. However, as the prosecutor submits, an
obligation to prevent pollution
was an obligation imposed by the EPL granted to
the Company and by s 120 of the Act, rendering it an offence to pollute waters.
Costs
incurred in addressing a pollution event are an incident of carrying on
the Company’s business. First and foremost, the consideration
to be
brought to bear when determining to issue a notice under s 91 is the achievement
of its objects. Those objects are sought to
be achieved by giving power for
urgent or prompt measures to be taken, necessary to avoid pollution occurring or
the imminent likelihood
of pollution occurring (Lismore City Council v
Ihalainen [2013] NSWLEC 149; 198 LGERA 47 at [59]).
- Reliance
by Mr Osman-Kerim on the exceptionally high rainfall that occurred after 24
January as manifesting the unreasonable cost
burden that is asserted is an
argument based on hindsight. It provides no sound basis upon which to assert
that the decision made
on 24 January 2012 was unreasonable.
- As
I have earlier recorded, one of the bases upon which Mr Osman-Kerim submitted
that the decision to issue the 24 January Notice
was unreasonable was that the
prosecutor failed to seek and to consider appropriate engineering advice in
order to determine the
best means of avoiding waste liquids contaminating the
nearby watercourse and South Creek. The prosecutor submits that there is no
substance in that submission and that it cannot ground the challenge to validity
that is made by Mr Osman-Kerim. It submits that
the submission involved a
misconception of a prosecutor’s power, the circumstances of exercise of
the power and the concept
of unreasonableness as a basis upon which to challenge
the exercise of power by an administrative decision-maker.
- The
power conferred by s 91 is, as already stated, a power the exercise of which
directed to the prevention or minimisation of environmental
harm. As the
circumstances in which the power was exercised in the present case demonstrates,
it will often be exercised in emergency
or urgent circumstances. In those
circumstances it will often, if not usually, require the exercise of that power
without the benefit
of engineering evidence or upon expert advice directed to
competing considerations, such as undertaking a cost/benefit analysis.
It is a
power that allows a range of effectively evaluative considerations made by staff
whose function it is to respond to the occurrence
of a pollution incident. The
decision to be made by reference to the section falls within the
prosecutor’s “area of decisional
freedom” provided that it is
not arbitrary, capricious or without commonsense (Minister for Immigration
and Border Protection v Singh [2014] FCAFC 1; 231 FCR 437 at [44]).
- Moreover,
had the prosecutor sought the advice of Mr Forrest at the time, it must be
assumed that his response would have been consistent
with the evidence that he
gave. That evidence was to the effect that the requirement of Direction 3a was
effective to address the
pollution incident and an appropriate response, at the
time. That, so it was submitted, was a sufficient answer to Mr
Osman-Kerim’s
submission that appropriate engineering advice should have
been sought. It is therefore a sufficient basis upon which to conclude
that the
decision was within power, absent the rejection of an alternate response that
rationally was required to be preferred. For
reasons already stated, none of the
suggested alternatives, advanced well after the relevant decision was made,
identify a basis
upon which it was unreasonable to impose Direction 3a on 24
January.
Consideration
- I
have concluded that Mr Osman-Kerim’s challenge to the decision of the
prosecutor to give the 24 January Notice must fail.
I reach this conclusion
essentially for the reasons advanced by the prosecutor. Mr Osman-Kerim has not
established, on the balance
of probabilities, that the decision to give that
Notice was, in the relevant legal sense, unreasonable.
- Mr
Osman-Kerim’s submissions fail to grapple, in a principled manner, with
the considerations that must be brought to bear when
exercising the discretion
under s 91. Only the failure to take account of factors or matters that the
prosecutor was bound to take
into account when making its decision will render
that decision susceptible to challenge. Those factors or matters must be
determined
upon the proper construction of the statute conferring the power.
Where the statute does not expressly circumscribe the discretion,
its ambit must
be determined by reference to the subject matter, scope and purpose of the
legislative provision conferring power
(Minister for Aboriginal Affairs v
Pekoe-Wallsend Ltd at 39-40).
- The
limit of the discretion imposed by s 91 is the scope of clean-up action,
as defined, so as to give effect to the purpose of the section, namely to
address the consequence of a pollution incident, as defined. So
understood, the cost of clean-up action to address a pollution
incident is not expressly or impliedly a mandatory consideration nor is the
seeking of specialist advice, notwithstanding that each may inform
the decision
that is made.
- The
fact that cost is addressed in s 91(4) supports the conclusion that the cost of
compliance in determining the exercise of discretion
is not a mandatory
consideration. The subsection makes apparent that the entity responsible for the
pollution incident is the entity responsible for payment of the cost of
complying with a notice given under s 91(1). The imposition of that liability
renders it unlikely that when determining the scope of clean-up action
that is the subject of a direction, the financial circumstances of or
economic impact upon the polluter is a mandatory consideration.
- Likewise,
inconvenience or difficulty in complying with a direction given under s 91(1)
are not mandatory matters for consideration
when deciding whether the power
should be exercised. So much is apparent from the provisions of s 91(5). By
operation of that subsection,
if the requirement imposed is, in the
circumstances, unable to be performed, that circumstance, if properly
established, potentially
affords the “reasonable excuse” defence
identified in that subsection.
- I
have accepted that the power available under s 91(1) will, more often than not,
be required to be exercised in circumstances that
require prompt action. The
overriding power provided in s 91(2) for the present prosecutor to give a notice
under s 91(1) in an emergency,
even if it is not “the appropriate
regulatory authority” with respect to the particular pollution incident,
speaks against
a general obligation to obtain expert advice before giving such
notice. That is particularly relevant in the present case because
neither of the
expert engineers called at trial gave evidence to the effect that the
determination to give Direction 3a necessitated
prior input of an expert in
order to understand its implications. Clearly, compliance with that direction
did not involve the erection
of any structure requiring engineering input nor
did it involve the assessment of the stability or integrity of any existing
structure
in order to give effect to the direction.
- I
accept that the cost of compliance, the capacity to comply with a requirement
imposed (objectively judged) and the input of specialist
skills may be relevant
when determining whether a direction imposed by a notice is reasonable in the
relevant sense. However, there
are two important limitations upon that
acceptance. First, the relevance of those factors can only be determined by
reference to
the facts and circumstances pertaining at the date of the decision
to give the relevant direction. Second, each of the factors require
objective
assessment rather than by assessment directed to the circumstances of the
particular recipient. Thus, the financial burden
to be considered would only be
relevant to demonstrate that there was an alternate measure to be taken than
that directed, which
was equally effective in addressing the pollution event,
and where, at the date of decision, the cost of complying with the direction
was
disproportionate to the cost of implementing the alternative. Even a
disproportionate cost of compliance would be a factor to
be considered rather
than a sole determinant that a decision was unreasonable.
- I
have already indicated that if a challenge to a decision was made on the basis
of capacity to comply with the direction given, an
objective assessment would be
necessary. The assessment would be ‘can it be done by a competent
operator’ rather than
whether ‘the recipient can do it’.
Likewise, whether expert input is required to formulate the direction and assess
its
implications will depend upon the apparent complexity of the action required
by the direction that is in contemplation. However,
once again, all the
circumstances would need to be considered.
- In
addressing the principles of reasonableness in the context of administrative
decision-making, Mr Osman-Kerim characterised the
power of a court to review
such a decision too broadly. I accept that as a consequence of the decision of
the High Court in Li the bar to a successful challenge on that ground is
not necessarily set at the height of a decision that is irrational or bizarre
such that it must be described as so unreasonable that no reasonable person
could have arrived at it. However, the High Court made
clear that review on the
ground that a decision was unreasonable did not permit a reviewing court, in
effect, to conduct a merit
review. As French CJ stated in the opening passage of
[30]:
“The requirement of reasonableness is not a vehicle for challenging a
decision on the basis that the decision-maker has given
insufficient or
excessive consideration to some matters or has made an evaluative judgment with
which a Court disagrees even though
that judgment is rationally open to the
decision-maker. Gleeson CJ and McHugh J made the point in Eshetu that the
characterisation of somebody’s reasoning as illogical or unreasonable, as
an emphatic way of expressing disagreement
with it, ‘may have no
particular legal consequence’.”
- In
the same case the plurality said at [66] (omitting citation of
authority):
“This approach does not deny that there is an area within which a
decision-maker has a genuinely free discretion. That area
resides within the
bounds of legal reasonableness. The courts are conscious of not exceeding their
supervisory role by undertaking
a review of the merits of an exercise of
discretionary power. Properly applied, a standard of legal reasonableness does
not involve
substituting a court’s view as to how a discretion should be
exercised for that of a decision-maker.”
- To
similar effect are the observations of Gageler J in the same case where his
Honour said at [105] (omitting citation of authority):
“Review by a court of the reasonableness of a decision made by another
repository of power is ‘concerned mostly with
the existence of
justification, transparency and intelligibility within the decision-making
process’ but also with ‘whether
the decision falls within a range of
possible, acceptable outcomes which are defensible in respect of the facts and
law’.”
- The
decision of the High Court in Li was considered by the Full Federal Court
in Minister of Immigration and Border Protection v Singh. In a joint
judgment the Court said at [45]:
“In circumstances where no reasons for the exercise of power, or for a
decision, are produced, all a supervising court can
do is focus on the outcome
of the exercise of power in the factual context presented, and assess, for
itself, its justification or
intelligibility bearing in mind that it is for the
repository of the power, and not for the court, to exercise the power but to do
so according to law.”
- For
reasons that I have earlier given, the decision to give the 24 January Notice
met the criteria for a pollution incident and the requirement for
clean-up action to which s 91(1) is directed. Therein lies its legal
“justification” (Li at [105]).
- In
his submissions, Mr Osman-Kerim focussed upon that part of Direction 3a
requiring the Company to “ensure” that the
retention tank did not
fill in excess of 30 percent of its capacity. Focus upon that part of the
direction was too limiting. The
intelligibility of the Direction required it to
be read and considered as a whole. Properly understood, the Direction
required:
- (i) the
monitoring of liquid waste within the SRT and adjacent stormwater pit;
- (ii) when, as a
consequence of monitoring, the level of liquid waste was in excess of 30 percent
of capacity, steps were required
to be taken to dispose of the excess so that
the level returned to a level that was at or below 30 percent.
- The
purpose and intended effect of Direction 3a is made apparent when read in the
context of Directions 1 and 2. Direction 1 required
isolation of the pit so that
its contents did not discharge through the outlet pipe and Direction 2 clearly
intended that there would
be run-off from the factory building directed to the
SRT. That process, coupled with any rainfall that might reasonably have been
anticipated as at 24 January 2012 was predicted to be captured in the SRT. The
contemplation was that the 30 percent level may well
be exceeded but with an
appropriate monitoring regime, sufficient capacity would be preserved to capture
run-off so that volume above
30 percent could be accommodated without surcharge
but then removed.
- I
do not accept the submission of Mr Osman-Kerim that the Direction was unduly
onerous upon the Company because, at the instant at
which capacity of the SRT
exceeded 30 percent, he was potentially guilty of an offence against s 91(5).
Reading Direction 3a as a
whole, an offence was committed only if he failed
appropriately to monitor the level of liquid waste within the SRT and, having
done
so, then failed with appropriate promptitude to reduce the liquid waste to
the 30 percent level. The evidence establishes that he
did neither.
- I
do not overlook the expert engineering evidence given by Mr Forrest and
Mr Ryan. Their evidence is referred to at [165]-[176]. The
essence of the
evidence given by Mr Ryan is summarised at [175]. Mr Forrest’s concession
that the direction to isolate the
SRT and maintain the level of liquid waste in
the SRT at or below 30 percent of capacity was “a good solution in an
emergency
situation” and that the alternate solution posited by him would
also require removal of retained liquid waste by tanker trucks,
satisfies me
that there was no difference of present relevance between the experts. That
being so, it is unnecessary to resolve differences
of detail between them, being
detail that is not directed to the fundamental consensus that they reached.
- There
is a further observation to be made in response to the contention that Mr
Osman-Kerim’s access to the Premises was limited
for a time following the
fire that had occurred on 23 January. Clearly, officers of the prosecutor were
able to gain access to the
Premises for the purpose of pumping out the SRT. I
have accepted the evidence of Mr Bourne that he offered to assist
Mr Osman-Kerim
to gain access to the Premises should the police or fire
authorities seek to restrict that access. This offer was not taken up. While
Mr Osman-Kerim originally suggested that no such offer was made, his final
response to the proposition that it had was, as I have
earlier recorded, that
Mr Bourne “may have said that”. Given that the prosecutor did
in fact gain access to the areas
external to the damaged factory building for
the purpose of sealing, observing liquid in the SRT and then having excess
liquid pumped
out, it is apparent that had the offer made by Mr Bourne been
accepted by Mr Osman-Kerim, the Company would have had access necessary
to
comply with Direction 3a. For that reason Mr Osman-Kerim cannot properly contend
that the Direction was unreasonable on the basis
that lack of access prevented
him complying with the Direction.
- The
reasons that I have expressed found my conclusion that the challenge to the
validity of the 24 January Notice, on the basis that
the decision to give it was
unreasonable, cannot be supported. The decision to give Direction 3a was within
a range of acceptable
responses to the pollution incident and is defensible in
the circumstances that existed on 24 January, thereby engaging the provisions
of
s 91(1).
Reasonable excuse
- I
have earlier held that by operation of s 256(1) of the Act, the onus is upon
Mr Osman-Kerim to establish, on the balance of probabilities,
that the
Company had a reasonable excuse not to comply with the 24 January Notice. Only
very brief submissions were made at the conclusion
of the hearing on behalf of
Mr Osman-Kerim directed to this defence.
- As
the prosecutor submits, the phrase “reasonable excuse” derives its
content and meaning from the context of the particular
statute in which it
appears, particularly having regard to the purpose of the provision to which
“reasonable excuse”
is a defence (Taikato v The Queen [1996]
HCA 28; 106 CLR 454 at 464; SD v New South Wales Crime Commission [2013]
NSWCA 48; 84 NSWLR 456 at [17]). The purpose of s 91(5) is a mechanism to punish
non-compliance with a notice given under s 91(1) which, in turn, is directed to
the prevention or mitigation of environmental harm. The defence of reasonable
excuse does not import a choice on the part of the recipient of the notice
as to whether he, she or it will comply.
- In
Corporate Affairs Commission (NSW) v Yuill [1991] HCA 28; 172 CLR 319
Dawson J said at 336 that reasonable excuse “aptly refers to any
physical or practical difficulties in complying with” the statutory
requirement. Although being considered
in a different statutory context, his
Honour’s observation is apt to be applied to the present offence. At
least, factors having
the character that he identified must be the primary focus
of the reasonable excuse defence under s 91(5).
- The
basis upon which Mr Osman-Kerim submitted that the defence was made out was
founded upon the rainfall that occurred after the
Notice had been given.
Reference is also made to “the amount of water pumped onto the site by the
Fire Brigade”. The
severity of the damage occasioned by the fire on 23
February and the number of fire fighting personnel present would suggest that
extinguishing the fire involved a significant operation. However, the evidence
does not provide any basis upon which to consider
“the amount of
water” used in extinguishing the fire. The submission is that the
firewater together with the rainfall
“occurring in such volume and falling
at any time of the day and night created a situation where it was reasonable for
the
defendant not to be able to comply with such notices [sic]”.
- The
facts established and Mr Osman-Kerim accepts (Exhibit B, par 48) that there were
14 occasions between 25 January and 20 March
2012 when officers of the
prosecutor observed the liquid in the SRT to exceed 30 percent of its maximum
capacity. Only the last two
of those observations, namely those made on 9 and 20
March occurred when, so it is argued, the content of the SRT has not been shown
to be “liquid waste”. The evidence of Mr Osman-Kerim does not
suggest that the rainfall that occurred in that period,
somehow prevented tanker
trucks entering the site and removing waste from the SRT. Indeed, the evidence
readily discloses that such
a contention could not be made, not only because
there were, throughout this period, trucks attending to remove waste at the
request
of the prosecutor, but also because Mr Osman-Kerim established that he
engaged Remondis to remove liquid waste from the SRT on 16
February, 22 February
and 7 March 2012.
- Moreover,
Mr Osman-Kerim advanced no evidence to demonstrate that he was unable to monitor
the liquid level in the SRT because of
the weather or for any other reason, nor
did he adduce evidence indicating that because of the weather or volume of
liquid on the
site, tankers were unable to attend the Premises and remove the
contents of the SRT. His evidence establishes only that he did as
much as he was
prepared to do or able to do because of his financial circumstances.
- I
have earlier referred to the obligation imposed by Direction 3a to monitor the
level of liquid in the SRT so as to determine when
removal of liquid was
required. Evidence from the prosecutor demonstrates that there were a number of
occasions during the charge
period on which the SRT overflowed. That
circumstance casts considerable doubt upon whatever monitoring regime had been
put in place.
Moreover, on those occasions upon which Mr Osman-Kerim did
arrange for tankers to attend and remove liquid waste, the volume removed
by him
could not have reduced the level in the SRT to 30 percent capacity. Why the
tankers could not have returned to reduce the
capacity of stored liquid to the
required level was not explained.
- Although
cost was not identified in final submissions as the basis upon which
non-compliance was sought to be excused, costs of compliance
was one of the
bases upon which it was submitted that the Direction was unreasonable. I have
already addressed that submission. To
the extent that cost might be thought to
be relevant to the reasonable excuse defence, the evidence is not
persuasive, even on the balance of probabilities standard. Indeed, it is
conflicting. At one point in
his record of interview (Exhibit P, question 406),
Mr Osman-Kerim was asked whether the Company was in a financial position to
comply
with the requirement in January 2012. The recorded answer was
“Always. No problem. There was no problem. This question –
we
didn’t have drama.”
- However,
when being pressed by Mr Bourne in January, February and March 2012 to take
action to remove liquid waste from the SRT, Mr
Osman-Kerim complained that he
could not obtain the services of contractors because their bills had not been
paid and that it was
costing too much to remove the material. In evidence, he
stated that, at the time, he did not have enough money to meet ongoing pump-out
costs (Tcpt 405:47-49).
- At
[115] I have set out a conversation that took place between Mr Bourne and Mr
Osman-Kerim on 5 March 2012 in which Mr Osman-Kerim’s
financial means to
comply with the 24 November Notice was raised and in which he was asked to
provide financial statements demonstrating
his position. As I have recorded at
[117], no financial information relating to the Company was provided. When asked
in the course
of his record of interview whether the Company was in a good
financial position, Mr Osman-Kerim indicated that the financial position
of the
Company was a private matter (Exhibit B, question 408) which, in the course of
cross-examination at trial, he explained as
indicating that he did not wish to
disclose the financial position of the Company in the course of the interview
(Tcpt 424:12-14).
Upon being further questioned, he stated that it was not the
prosecutor’s business to know the Company’s financial position
in
January and February 2012. He stated that in February 2012 he decided that no
further money would be spent on emptying out the
SRT because he believed it was
costing too much money for nothing and that the prosecutor had made a mistake in
issuing the Direction
in the terms that it did (Tcpt 427:13-29).
- On
the evidence that I have identified, Mr Osman-Kerim has not established that
there were physical or practical difficulties that,
objectively judged,
prevented him from complying with the 24 January Notice. It has not been
established that the Company sought
to comply with the obligation imposed upon
it. Rather, Mr Osman-Kerim’s own evidence established that he chose not to
comply
because of the costs being incurred and the fact the he considered the
prosecutor to be mistaken in giving Direction 3a.
- For
these reasons, it has not been established that the Company had a reasonable
excuse for failing to comply with the 24 January
Notice.
Section
169(1)(c)
- No
facts have been adduced additional to those given and discussed when addressing
the reasonable excuse defence. For reasons expressed when addressing that
defence, Mr Osman-Kerim has not established, on the balance of probabilities,
that, in his capacity as a director of the Company, he used all due diligence to
prevent the Company failing to comply with the 24
January Notice, the failure to
comply with which was a contravention by the Company of s 91(5) of the
Act.
Conclusion on offence by reference to 24 January
Notice
- For
the reasons I have stated, I am satisfied beyond reasonable doubt that the
Notice given on 24 January 2012:
- (i) was given
in writing by the prosecutor in its capacity as the appropriate regulatory
authority;
- (ii) that
the Notice was given to the Company as occupier of the Premises being the
premises to which that Notice related;
- (iii) that
at the time of giving the Notice the prosecutor reasonably suspected that a
pollution event had occurred;
- (iv) that the
directions given in the Notice required clean-up action to be taken consequent
upon the pollution event;
- (v) that the
Company failed to take the clean-up action required by Direction 3a of the
Notice;
- (vi) that
at the time at which the Notice was given to the Company and thereafter, Mr
Osman-Kerim was a director of the Company.
- The
one matter about which I have not yet recorded any finding is the period during
which the Company failed to comply with the 24
January Notice. The charges in
the respective summonses served upon the Company and Mr Osman-Kerim allege
that the offence occurred
between 24 January 2012 and 30 March 2012.
- I
have earlier stated that the relevant obligation imposed upon the Company by
Direction 3a was to maintain the level of “liquid
waste” in the SRT
at a level that did not exceed 30 percent of the capacity of the SRT.
Relevantly, “liquid waste”
was any liquid that did or might flow to
the SRT and which was either the product of fire residue or chemical substances
emanating
from the damaged factory building.
- The
analyses of liquid waste samples taken from the Premises, including the SRT,
were tendered (Exhibit L) and were the subject of
evidence given by
Mr Julli for the purpose of establishing their likely environmental impact
of the liquid waste. The latest of the
samples that were the subject of analysis
and upon which Mr Julli has given evidence were samples taken on 8 March 2012.
As a consequence,
I have no evidence establishing beyond reasonable doubt that
liquid waste was present in the SRT after 8 March 2012. As a consequence,
I
cannot determine that there was a failure by the Company to comply with
Direction 3a after that date.
- Accordingly,
I find beyond reasonable doubt, that the period during which the Company failed
to comply with the 24 January Notice
was from 24 January to 8 March 2012.
- I
am not satisfied, on the balance of probabilities, that:
- (i) the
Company had a reasonable excuse for not complying with Direction 3a in the 24
January Notice; or that
- (ii) Mr
Osman-Kerim, as a director of the Company, used all due diligence to prevent the
Company from contravening the 24 January
Notice.
- I
am therefore satisfied beyond reasonable doubt that the Company, by its failure
to comply with the 24 January Notice given to it
under s 91(1) of the Act, has
contravened s 91(5) of the Act. I am also satisfied beyond reasonable doubt
that, by operation of s
169(1) of the Act, Mr Osman-Kerim has also contravened s
91(5) of the Act.
Orders
- The
orders that I make are as follows:
- (1) In
proceedings 2016/158256 (50010 of 2013) I record the plea of guilty entered by
the defendant on 29 September 2014.
- (2) In
proceedings 2016/158257 (50011 of 2013) I find the defendant guilty of the
offence that between 24 January 2012 and 8 March
2012, at or near St Marys in
the State of New South Wales, he committed an offence against s 91(5) of the
Protection of the Environment Operations Act 1997 (NSW) by reason of s
169(1) of that Act in that:
- (a) he was a
director of Sydney Drum Machinery Pty Ltd (ACN: 102625507); and
- (b) that
Company was given a clean-up notice and did not comply with that clean-up notice
without reasonable excuse.
- (3) In
proceedings 2016/158258 (50012 of 2013) I find the defendant guilty as
charged.
- (4) In
proceedings 2016/158195 (50007 of 2013) I order that the summons be
dismissed.
- (5) In
proceedings 2016/158196 (50008 of 2013) I order that the summons be
dismissed.
- (6) In
proceedings 2016/158197 (50009 of 2013) I order that the summons be
dismissed.
- (7) In
proceedings 2015/158256, 2016/158257, 2016/158258 (50010, 50011 and 50012 of
2013) I order that the proceedings be stood over
to Friday 24 June 2016 for
directions and to fix a date for hearing on
sentence.
**********
Amendments
06 June 2016 - Coversheet typo
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URL: http://www.austlii.edu.au/au/cases/nsw/NSWLEC/2016/59.html
