EPA v Emerald Peat Pty Ltd (In Liq) [1999] NSWLEC 147 (10 June 1999)

Last Updated: 22 June 1999

NEW SOUTH WALES LAND AND ENVIRONMENT COURT

CITATION: EPA v Emerald Peat Pty Ltd (In Liq) [1999] NSWLEC 147

PARTIES:

PROSECUTOR:

Environment Protection Authority

DEFENDANT:

Emerald Peat Pty Ltd (In Liq)

CASE NUMBER: 50125 of 1998

KEY ISSUES: Environmental Offences continuing offence

LEGISLATION CITED:

Environmental Offences and Penalties Act

Clean Waters Act s 16(1), s 16(7)

Land and Environment Court Act s 49

CORAM: Talbot J

DATES OF HEARING: 07/06/99, 08/06/99, 09/06/99, 10/06/99

EX TEMPORE DATE: 10/06/1999

REVISION DATE:

APPEARANCES

PROSECUTOR:

Mr D Buchanan SC

SOLICITORS:

Environment Protection Authority

DEFENDANT:

N/A

JUDGMENT:

IN THE LAND AND Matter No. 50125 of 1998

ENVIRONMENT COURT Coram: Talbot J

OF NEW SOUTH WALES Decision Date: 10 June 1999

Environment Protection Authority

Prosecutor

v

Emerald Peat Pty Ltd (In Liq)

Defendant

EX TEMPORE REASONS FOR JUDGMENT

1. HIS HONOUR: The defendant is charged that on or about 4 August 1997 and continuing on each day thereafter until about 17 September 1997, at Burrawang in the State of New South Wales it committed an offence against the Environmental Offences and Penalties Act 1989 (the EOP Act) in that it polluted waters contrary to s 16(1) and (7) of the Clean Waters Act 1970 (the CW Act).

2. The waters have been particularised as part of Wingecarribee Swamp and the waters stored in Wingecarribee Reservoir, and there are detailed particulars of the alleged pollution.

3. The Court has been informed that the defendant is now in liquidation and that, notwithstanding the earlier entry of a plea of not guilty, the Liquidator does not propose to defend the charge. Accordingly, the hearing proceeded ex parte pursuant to s 49 of the Land and Environment Court Act (the Court Act).

4. The evidence is comprehensive and there is a considerable amount of detail provided by the prosecutor through a plethora of witnesses. In summary, the defendant operated a peat mine within a peat basin forming part of the area known as Wingecarribee Swamp. The Wingecarribee Reservoir is situated to the west of the swamp, and it operates as a storage for drinking water to supply the Southern Tablelands in particular and as a reserve source of drinking water for Sydney. There are drinking water offtakes into the Wingecarribee River, which I understand leads to Warragamba Dam, and there is at least one further offtake to the Nepean River and storage in that locality.

5. The peat mine was operated at the relevant time by a dredge mounted on a barge. Peat was extracted from the base of a dredging pond, placed in a hopper on the barge and then transported through a pipeline floating on the pool surface to a processing shed on adjacent land. Residues remaining after the processing and extraction of the peat product were then directed to sediment ponds, and the liquid ultimately was directed back to the pool by allowing it to run overland by force of gravity.

6. By way of background, in the time immediately preceding the events relating to the charge by a few months, there had been a Mining Warden's inquiry into the effects of the mining operation in the swamp, and the environmental impacts on the swamp and the reservoir. A large part of the swamp has been declared a special area under the Threatened Species Conservation Act 1995 in order to provide protection for a particular native plant.

7. The relevant characteristics of dredging by mechanical means have been described by an expert as being the creation of relevantly minor turbidity from the dredging of peat in the water column. Turbidity from peat can be expected to disperse or settle out quickly.

8. In the present case, the dredging undertaken by the defendant was hydraulic dredging. By that process, large quantities of water are mixed with the material and passed through the pipeline, as I have already indicated. Where the material contains clay, and the relevance of this will become evident later on, the clay breaks down during a hydraulic process to a size which allows it to pass through the pipeline, making it suitable for transport. The peat dredged by the hydraulic process, without the presence of any clay seams or lenses, would settle out relatively quickly, as would the clay in those circumstances, and as a consequence there would not be any significant turbidity caused as a consequence of the process.

9. It is important to understand that using the hydraulic method when dredging clay, the clay is broken down prior to introduction into the pipeline, and according to the expert, depending on its moisture content it continues to break down as it is transported in the pipeline. That is more so over a greater distance. Clay pieces settle, but the remaining transport or storage water comprises what the experts describe as rich colloidal slimes. Fine colloidal clay material in this form, according to the evidence, will take an extremely long time to settle.

10. In the early days of August 1997 and at least by 4 August 1997, a split occurred in the western face of the dredge pool. The evidence discloses that as a consequence of that split, large volumes of water emptied from the pool directly into the swamp and then flowed through a channel in the swamp to the reservoir. To some extent, the water sheeted over part of the swamp. The channel appears to have been an old drain running into the eastern end of the reservoir.

11. The split was first observed by an employee of the defendant on 4 August when he noticed that water was rushing through the gap in the dredge pool wall at a fair rate. Employees of the defendant attempted to plug the split with peat material, with the object of stopping the water leaving the pond. The evidence is that the level of the water in the pool or pond dropped fairly dramatically. An expert has told the Court that the flow from the break in the wall was not effectively blocked by the plug placed in the split due to the nature of the material used, the difficulty in constructing a homogeneous joint with the surrounding peat bed, the continuing flow through the break and the saturated nature of the surrounding material.

12. Due to the drop in the level of water in the pond, the capacity to move the dredge, which operated on the surface, became restricted. On 4 August 1997, a process was undertaken whereby the dredge dug its way back from the western face of the pond in a south easterly direction towards a boat launching area, about 300 metres from its location near the split in the wall.

13. There is no direct evidence of the exact mechanical means by which the barge or dredge dug its way back, but the expert evidence suggests the bucket was placed forward of the barge, it was then placed on the dredge pool floor with its mouth open, the mouth was closed over material on the floor and the barge pulled towards the bucket by the crane's tag line. If that method of movement was employed, then the evidence is that the dredge bucket would have required considerable purchase on the floor of the dredge pond. It appears that the process of digging back involved the hydraulic dredging of the layer of clay material, and that the process of digging the dredge back would have involved the conversion of the clay into a slurry. It would have been a slow process and there is direct evidence, confirmed by the evidence of at least one expert, that the digging back would have taken at least a week.

14. If the digging back involved removing material from the dredge pool by pumping it out through the pipeline, then that would have, for the reasons already explained, turned the clay material extracted from the bottom of the pool into a colloidal form. If that process was not undertaken and instead of being pumped all the way up the pipeline, the material was simply fed into the hopper on the barge from the bucket and pumped through a short length of pipe directly into the dredge pool, the process would have taken just as long and any turbidity caused by the discharge of the material into the water would have been severe. Turbidity in the water would also have been caused if, instead of being fed into the hopper and transported through a pipeline at all it was directed by the bucket into the pool itself.

15. There is direct evidence from an employee of the defendant, Mr Gibson, who says that after the dredge dug itself back towards the boat launching or wharf area, the water in the pool had been changed in part to a light clayey colour. It was also described by others as being milky white coloured and turbid, or simply a grey colour.

16. On 18 August there is confirmation that there was a good flow of very turbid water out of the dredge pond, through the gap and into the swamp. Over the next few days the water was variously described as it flowed into the channel as being chocolate brown and very dirty, there was a broad sluggish flow of turbid water, there was a strong overland flow near the dredge pool, there was a distinct area of brown water in the reservoir. The water in the dredge pool was described on Tuesday 19 August as being extremely turbid, the colour of milk coffee or chocolate. The water at that time was said to be rushing out of the pool. On 20 August, the water in the dredge pool was described as being light brown in colour.

17. As from about Friday 22 August and certainly over the following weekend, probably on the Saturday, the defendant caused excavation to take place in the boat launching area. The need for this undertaking was identified in the evidence as being the reduced level of water in the dredge pond, thereby creating a problem for bringing the barge containing the dredge to shore and for launching of other boats used, including a fuel barge. The company, through at least one employee, operated an excavator for the purpose of removing material from the area surrounding the boat launching ramp or wharf. Independent contractors were also involved.

18. On Monday 25 August an employee of a private contractor gave evidence that he started excavation at the boat launching area. He described that area as full of black sediment and dark sludge. As the excavation progressed, the area filled with water and was described as full of dark yellow, clayey coloured water which had flowed in from the rest of the dredge pool.

19. There is direct evidence of observations of the dredge barge being in the immediate location of the wharf area from at least 22 August, the Friday, and there is direct evidence of observations of the dredge assisting in the excavation process adjacent to the wharf area. The operation of the dredge was described as placing material in the hopper on the barge, thereby leading to the reasonable conclusion that the dredge was operating during the excavation process by extracting material which was then transported to the processing area.

20. The Court was told that on Monday 25 August the barge was within 20 feet of the shore and that the water in the dredge pool on that day was a clayey colour.

21. By Wednesday 27 August there was a large plume of brown coloured water spreading out from the area of the swamp where the dredge pool had been discharging. The plume extended over an area approximating 300 metres by 100 metres. In the week up to 29 August, there is evidence of a number of observations which describe a developing plume at the eastern end of the reservoir.

22. The Court has heard evidence which satisfies it beyond reasonable doubt that the light brown turbid plume which extended from the eastern end of the swamp and out into the reservoir was as a direct consequence of discharge of the disturbed turbid water through the split in the peat wall of the dredge pond, and that the turbidity had been caused by the activity of the dredge digging its way back towards the shore, and the further activity of excavation in the area of the wharf.

23. The operations manager of the defendant was interviewed on 27 August, and when asked why there was discoloured water coming from the dredge pond, he said, "The discolouration or stain in the water in the dredge pool is from the excavation of new area for the barge to transport fuel to the dragline which is used for the excavation of the peat. We excavated through a clay seam and the recent strong winds had caused the clay particles to remain suspended."

24. The prosecutor relies on that statement as an admission that the excavation was the cause of the brown coloured disturbance. It is interesting however, as a comment against the veracity of the operations manager, who did not give direct evidence of course, that he makes no reference to the digging back process which was undertaken in the period after 4 August and before the excavation commenced.

25. When asked why it was leaving the dredge pond, he said, "The bund wall gave way allowing one metre of water to escape into the swamp but it had been repaired." Then when asked on 27 August when that happened, he said, "It only happened a few days ago." If the report of that conversation is correct, then the operations or site manager was clearly lying, as there is no doubt on other evidence before the Court that the split in the wall occurred at least by 4 August.

26. In the period including and after 30 August, there is evidence almost on a daily basis of the existence of dark bands of turbid water extending out from the eastern end of the swamp and into the reservoir, gradually spreading in a western direction. The Court is satisfied beyond reasonable doubt that the brown stain observed in the water over those days was caused as a consequence of the discharge of water from the dredge pond, and that the discolouration of that water was as a consequence of the disturbance of clay material following at least the two activities that I have described as being the digging back and the excavation.

27. On 28 August, the site manager again repeated in a conversation that he did not know how the turbid water reached the reservoir. He said that the bund wall on the dredge pool failed on 4 August "but we repaired it the next day." That statement is partly true, but it defies any logic for the site manager to be saying that he did not know how turbid water was reaching the reservoir when the gap, although it may have been repaired temporarily on 4 August, was clearly in existence after that date and water was observed to be flowing out of the pool. He reiterated again, on that same day, that the clay material discolouring the dredge pool was caused by excavation of an area for the refuelling barge to come closer to the bank. He further said the excavation was within a clay seam in the peat layers and was started on 23 August. Again, there is no mention of the process of digging back with the barge, but at least the date of 23 August is consistent with other evidence.

28. Finally, in so far as the observations of the discharge to the swamp and the reservoir is concerned, on 17 September water in the dredge pond was observed as being brown and clay coloured, and that water in the channel below the split in the wall was the same colour. The Court is therefore satisfied that the discharge from the dredge pond containing material generated from the two activities already referred to continued until 17 September.

29. There is a large volume of evidence about water quality monitoring, sampling and water movement. Some of this comprises direct evidence of the visual observations of water movement and colour which I have described. They are accepted by the Court. Other more formal monitoring and information gathering was undertaken by the analysis of samples, the use of probes and other measuring devices.

30. The expert evidence before the Court, which the Court accepts, is that the observations and results of the analyses are consistent with the flow of turbid waters into the waters of the swamp and into the waters of the reservoir coming from the dredge pond. The evidence is that the flow of the turbid waters changed the physical composition of the waters of the swamp and the reservoir. This is established by the perceived change in colour of the waters, which I have already described. There was also a change in the measured turbidity of the waters, indicated by the difference in the measured turbidity between the waters of the reservoir outside the plume that could be observed, and the waters within the plume.

31. The flow of the turbid waters also changed the chemical composition of the waters. This is established by expert evidence which shows changes in the measured levels of total phosphorus and nitrogen between the waters in the plume and the waters of the reservoir outside the plume. The Court has also been told as part of the expert evidence - and again I might say I accept the whole of the expert evidence that has been presented to me, and the findings that I make are based on it - that the ratios of organic to inorganic suspended solid in samples taken, for example, on 18 and 19 August 1997, are consistent with the clays underlying the dredge pool. The Court has been told that the proportion of inorganic solids is remarkably high, which leads to the conclusion that the major source of the inorganic material is that clay. Data collected on 30 August 1997 is consistent with an unusual and massive discharge of clay laden water from the swamp into the reservoir on or before 30 August 1997.

32. The Court has also been told that suspended solids and turbidity are different ways of measuring the level of particulate material in water. Based on the evidence, the turbidity of this plume, the subject plume, was extreme. The results recorded for suspended solids in the samples are consistent with the results recorded for turbidity. These particular results are said to be consistent with a plume of highly turbid water entering the reservoir from the eastern end of the reservoir.

33. The results for phosphorous on 30 August 1997 show high levels close to the eastern end of the reservoir and decreasing concentrations as the sampling sites move to the west towards the outlet for the drinking water. This is consistent with the plume in the reservoir containing elevated levels of phosphorus and with the plume entering the reservoir from the eastern end.

34. The figures for nitrogen in that same sampling exercise are consistent with the presence in the reservoir of a plume of inorganic material entering from the eastern end. The Court has been told they are consistent more with a plume of particulate matter comprising predominantly clay material than a plume of predominantly peat. This is because of the small difference in nitrogen content between the turbid and non-turbid samples.

35. The results of sampling for total aluminium are also consistent with sampling in a plume originating on the eastern margin of the reservoir and comprising predominantly clay material.

36. Mr Buchanan SC, appearing for the prosecutor, has been at particular pains to draw the Court's attention to evidence which deals with potential defences that were initially foreshadowed and indeed might otherwise have been raised to explain this pollution event.

37. The evidence shows that the upstream flow into the dredge pond was relevantly clear at all of the particular times in the period during which the offence is alleged.

38. There was no significant rainfall during the period.

39. Alternative potential channels for the polluted material either side of the dredge are shown as being either dry or clear.

40. A suggestion that lowering of the level of the water in the reservoir caused the split, even if it was technically feasible, which the Court has been told is not so, is totally discounted by evidence of consistent water levels throughout the period of months leading up to and through August and September 1997. The water levels I am referring to there are levels in the reservoir.

41. Based on routine monitoring of the inflow to the dam, it would appear that outflow was continuous from the dredge pond from the beginning of August 1997 to late in September.

42. The prosecutor alleges that the offence is a continuing one. The Court accepts that the offence is the introduction by the defendant of water containing clay into the particularised waters. The Court is satisfied beyond reasonable doubt that this dynamic state of affairs continued during the whole of the period charged. There is direct evidence and expert evidence that it continued without a break.

43. The relevant conduct of the defendant to be taken into account in determining whether or not there is a continuing offence, is firstly the mobilisation of the clay material in the waters in the dredge pond which ultimately escaped from the pool into the swamp and the reservoir. Secondly, the relevant conduct on the part of the defendant was the failure to prevent those clay laden waters from leaving the pool. I am satisfied that liability continued to be incurred after the first introduction of clay laden water into Wingecarribee Swamp and the reservoir because of the failure of the defendant to prevent the discharge. While ever the uncontrolled discharge continued to introduce additional matter into the swamp or the reservoir itself, then the offence continued. The act causing the pollution was not a single act. The relevant consequence of or result of the offence is the placing of the clay material into the particularised waters. New material was introduced over the continuous period from at least 4 August 1997 to 17 September 1997 as alleged in the summons.

44. In addition to the evidence that the defendant caused the water escaping to become laden with clay, the Court is also satisfied beyond reasonable doubt that the defendant had access to advice which could have led to the implementation of measures to prevent the escape of the polluted water from the dredge pond. The advice of its own consultants to that effect is before the Court. There is evidence that the commercial imperatives of the defendant made it difficult to install a membrane across the channel discharge from the dredge pond because of the continuing activity of peat recovery at the western end of the pond.

45. Mr Buchanan submits, and the Court accepts, that the prosecutor has proved beyond reasonable doubt that firstly there was introduced into the waters matters which changed the physical and chemical condition of those waters, namely a quantity of water containing clay in suspension to which absorbed quantities of nitrogen and particularly phosphorus had been bound. Secondly, the waters were those particularised, namely the Wingecarribee Swamp and the Wingecarribee Reservoir. Thirdly, the introduction of the polluting matter was caused by the excavation of a trench for a distance of about 300 metres across the dredge pool in the process of walking the dredge from the western end. The introduction was also caused by the excavation in the boat launching area at the southern side of the pool. The quantities of clay were dislodged from the area below the peat bed at a time when there was a breach in the containing edge of the pool, being the split which had occurred in the peat, and the defendant effectively did nothing to prevent the escape of that material from the dredge pool. The polluting matter was the excavated clay which had been processed, as the evidence shows, into fine colloidal clay or, as Mr Buchanan prefers, slimes.

46. The Court, as I have said, is satisfied beyond reasonable doubt that the pollution of the swamp first occurred on 4 August when the disturbance commenced by the introduction of the digging back process. It took some days for the polluted material to appear in the reservoir, but that probably first occurred by the second week in August 1997.

47. I am satisfied that the actions of the defendant caused the pollution of the swamp below the dredge pond, the channel flowing through the swamp, the area immediately adjacent to the swamp as it bounded the reservoir, and the reservoir itself. The Court is satisfied on the basis of the direct evidence before it that the offence occurred continuously until 17 September 1997. Indeed, there is evidence which shows that the flow continued and the presence of the pollutants in the reservoir and the introduction of those pollutants continued beyond that date.

48. The Court is also satisfied beyond reasonable doubt that the prosecutor has met and answered any competing hypothesis regarding the source of the polluting material. I have already detailed the particulars of those possibilities.

49. The Court is therefore satisfied beyond reasonable doubt that the prosecutor has proved the offence as charged.

50. Apart from the general principles of sentencing, the Court is also required to take into account the matters referred to in s 9 of the EOP Act when imposing a penalty for an offence against that Act. An offence under the CW Act, and in particular s 16, is an offence against the EOP Act. It might even go without saying, because it is self-evident, that the offence in the circumstances of this case must be regarded as a very serious offence.

51. The evidence shows that both bodies of water were particularly sensitive to pollution, in need of and demanding protection against pollution by their very nature. A very large quantity of clay laden water, extending over a significantly long period of time, was discharged. The harm caused was serious. It threatened the drinking water supply for a large part of the population of the Southern Highlands and the back up supply for Sydney.

52. Not only was there the effect of the clay plume itself, there was a blue green algae bloom outbreak which occurred over the summer months of 1997, 1998.

53. The evidence is that in 1997, Wingecarribee Reservoir supplied some 45 per cent of the water needs of Wingecarribee Shire, which involved about 15,000 persons. The plume of turbid water which entered the Wingecarribee Reservoir in August 1997 and continuing after that was a serious threat to that drinking water supply. The reason for the threat was the high level of turbidity, which was higher than the plant of Sydney Water was equipped to handle. The maximum level it is designed to handle, so the Court has been told, is about five NTU, although it can treat and process up to about 35 NTU. The level of turbidity in the reservoir was measured at many times these levels.

54. A silt curtain was installed by Sydney Water outside the offtakes in the reservoir to reduce the turbidity in the water going into the offtakes. The Court has been told that turbidity also causes problems with disinfection of drinking water. Turbidity can be a vehicle for bacteria and parasites to pass through the filtration processes in the treatment plant. It obviously makes the water unclean and hence impure. It has been explained that a typical response would be to treat the water passing through the plant with elevated doses of chlorine, but this can cause a number of adverse aspects to drinking water as sections of the population are, so the Court has been told, to varying degrees sensitive to elevated levels of chlorine, and health problems can result.

55. The turbidity of the subject plume was extreme.

56. Additionally, elevated levels of nutrients are undesirable in drinking water. They contribute to the build up of algae in water supply infrastructure, neutralise the chlorine which is present as a disinfectant, thereby making it less effective as a disinfectant, and, again, increased levels of chlorine may be needed to combat this risk.

57. The results for phosphorus measured on 30 August 1997 show high levels close to the eastern end of the reservoir, that is the end nearest to the swamp, and decreasing concentrations as the sampling sites move to the west, that is the end where the out takes are situated. This is consistent, so the Court has been told, with the plume in the reservoir containing elevated levels of phosphorus and with the plume entering the reservoir from the eastern end.

58. The figures for nitrogen in the same sampling exercise are consistent with the presence in the reservoir of a plume of inorganic material entering from the eastern end.

59. The expert evidence satisfies the Court that nitrogen and phosphorus are plant nutrients. Elevated levels of nitrogen assist, but may not be essential to, blue green algal growth. The levels of phosphorus detected on 30 August 1997 increased as the sampler got closer to the source. That suggests that the impact of the nutrient content of the plume would be more significant to the phosphorus availability in the water body than the nitrogen availability.

60. The average concentration of phosphorus at the wall site in Wingecarribee Reservoir from 18 October 1995 to 18 August 1997 was 0.018 mg/L. In the months between 30 August 1997 and January 1998, the mean value of phosphorus at the wall site was 0.025mg/L, an increase of 39 per cent.

61. It has been explained to the Court that blue green algae is a type or major taxonomic classification of algae. Phytoplankton are a functional group of algae which grow suspended in water rather than attached to substratas such as rocks. Microcystis is a potentially toxic phytoplanktonic blue green algae which grows in standing or slow flowing water.

62. The records show that over the period since 1974 there have been several recorded blooms of microcystis in the reservoir. Until the summer of 1997/98, the maximum abundance of microcystis in Wingecarribee Reservoir was between 20000 to 40000 cells/mL. After the spill of the turbid and phosphorus rich water into the lake in August 1997, the Court has been told that the microcystis population in the following summer exceeded 160000 cells/mL. This population started rising in November 1997. There was an algal bloom in the reservoir lake in the summer of 1996/97. In the opinion of the prosecutor's experts, had the spill event in August/September 1997 not occurred, it is likely that the bloom from the summer of 1996/97 would have recurred once the temperature of the water became sufficiently warm. However, based on prior behaviour of the lake, it is very unlikely that, if there had not been an introduction by the spill of nutrients at elevated levels, the bloom in the summer of 1997/98 would have exceeded the density of the bloom achieved in the summer of 1996/97.

63. The measures which were taken by Sydney Water and which were necessary to control, abate and mitigate the harm were a silt screen installed to protect the drinking water offtakes in the reservoir, and the dosing of the water reservoir with copper sulphate in an attempt to kill off the algal bloom. The result of the copper sulphate doctoring was a fish kill and harm to macroinvertebrates in the reservoir.

64. The measures which could have been taken by the defendant in order to prevent the offence being committed were not excavating the clay substratum by any of the means described, or taking the advice of its own consultants, especially the recommended step of installing a membrane screen at the split.

65. I am satisfied, as I have already indicated, that the actions of the defendant were driven by the commercial imperative to continue its mining activities, and that it was a concern that installing a membrane screen appropriate to filter the flow would interfere with its ongoing operations in the immediate area of the split.

66. I am satisfied that the defendant had complete control over the causes which gave rise to the offence. It had all of the information available to it that could have led to taking remedial measures, and it failed to do so. It is not relevant that the split might have occurred as a consequence of natural pressures and that the difficulties in blocking the flow through the gap was something, having regard to the nature of the material through which the water was flowing, which was difficult to deal with. The remedy was otherwise in the defendant's hands in that it could have ceased excavating until the problem had been solved, or at least installed a membrane to filter the discharge.

67. The harm caused and likely to be caused to the environment was foreseeable, particularly having regard to the fact that the defendant itself had been involved in an inquiry before the Mining Warden in regard to the impact on the environment of the continuation of the peat mining operation. In February 1997 a report of the history of water qualities of Wingecarribee Dam prepared by Australian Water Technologies for the inquiry by the Mining Warden concluded that:

"Continuing removal of peat will release phosphorus into the lake, and will reduce the capacity of the swamp to ameliorate the effects of flood events. It is likely that water quality will deteriorate progressively, and the frequency and magnitude of algal blooms will increase.

The interests of water quality in Lake Wingecarribee would be best served if an extension to the lease is not granted."

68. That came from a report to the Mining Warden inquiry in respect of the applicant's application for extension of its lease. Apart from anything else, it begs belief that the defendant was not aware that any discharge of pollutants from the dredge pond had the potential to enter the important water supply reservoir.

69. The defendant took no action to report the offence. Its employees either were uncooperative or reluctant to cooperate, and indeed there is even a suggestion that they took active steps to hinder the investigation. Misleading information was given either by omission or by deliberate misrepresentation of the facts. Neither Sydney Water, the most obvious authority, nor the EPA were advised that the discharge was taking place.

70. All of those matters which I have outlined are relevant matters raised by s 9(a) to (d) of the EOP Act and generally which must be taken into account in consideration of the penalty to be imposed.

71. Section 9(e) of the EOP Act has no relevance in the present circumstances.

72. Section 8B of the EOP Act provides for a penalty for any person who, by virtue of any provision of the CW Act is guilty of an offence, as being in the case of a corporation a penalty not exceeding $125,000 and in the case of a continuing offence to a further penalty not exceeding $60,000 for each day the offence continues.

73. I have already said that I am satisfied that the offence which I have described and which I have found proved was a continuing offence for the period set out in the charge.

74. The principle of totality requires that the Court evaluate the overall criminality involved in order to determine whether a downward adjustment in order to achieve an appropriate relativity between the totality of the criminality, on the one hand, and the sentence on the other, is appropriate.

75. The defendant, although, as I have said, self evidently aware of the environmental concerns caused by the discharge of turbid waters into a very significant drinking water supply reservoir, took no action to respond to the situation and continued to operate the dredge pond without adopting preventative measures.

76. Giving the defendant the benefit of any doubt that it may not have immediately appreciated the serious threat to the water supply, it nevertheless must have appreciated the consequences of standing by, at least by the middle of August 1997. The actions of the operations manager, or site manager, in seeking to downplay the extent of disturbance caused by the movement of the dredge and the excavation in the boat launching area, and the period over which the break in the wall of the pond had occurred, and misleading information given to the investigating authorities, showed a total disregard for anything beyond commercial interest.

77. The evidence discloses that the offence must be regarded, as I have said, as extremely serious, and that notwithstanding the present impecunious state of the company's financial affairs and the apparent lack of liquidity in so far as the ability to meet the commitment to a substantial fine is concerned, nevertheless a significant penalty for the offence and a further penalty for each of the 44 days during which the offence continued, is justified.

78. The prosecutor also claims $85,000 liability for costs. This has not been finally determined.

79. The Court finds the offence proved. The offence continued until 17 September 1997, having commenced on 4 August 1997 as charged.

80. The defendant is convicted.

81. The defendant is ordered to pay a fine in the sum of $85,000 and a further penalty of $3,000 for each of 44 days during which the offence has been proved to continue, a total of $217,000.

COUNSEL ADDRESSED ON COSTS

82. I am satisfied Mr Buchanan that your submission in regard to the application of s 52(1) to the effect that the Court has a discretion to order the defendant to pay to the prosecutor's costs of such amount as are specified in the order, or alternatively, to proceed in accordance with subs (2).

83. I have regard to the whole of the circumstances of the conduct of this case, the fact that the defendant's Liquidator was informed that the prosecutor would be making a claim in the sum of $89,925 (and I accept that that has been done as I have been informed by senior counsel) noting again that there is no appearance on the part of the defendant, and that the prosecutor has presented the Court with an itemised assessment of the costs which it claims. A perusal of that latter document shows that, at least by the description in the document, the matters in respect of which charges have been made are relevant to the conduct of the proceedings, and indeed it appears that the prosecutor, if it was so minded, could have made further claims in respect of other work which would otherwise be treated as being costs in the proceedings. Accordingly I order that the defendant pay the prosecutor's costs in the sum of $89,925.

84. The exhibits may be returned.