Land and Environment Court New South Wales

• Medium Neutral Citation: Environment Protection Authority v Aargus Pty Ltd; Kariotoglou; Kelly [2013] NSWLEC 19
• Hearing dates: 6, 7 February 2013
• Decision date: 22 February 2013
• Jurisdiction: Class 5
• Before: Craig J

Decision

Refer to Orders at [135]

• Catchwords: ENVIRONMENTAL OFFENCES - false statement in soil classification report and asbestos clearance certificate - s 144AA of the Protection of the Environment Operations Act 1997 - asbestos had been observed but removed - subsequent discovery of bonded asbestos material - classification report amended - author and reviewer of the report and the certificate together with the company in whose name documents were prepared all charged with offences against s 144AA - plea of guilty by all defendants - sentencing considerations - principles of totality and parity - publication order
• Legislation Cited: Contaminated Land Management Act 1997; Crimes (Sentencing Procedure) Act 1999; Criminal Procedure Act 1986; Environmental Protection Act 1994 (Qld); Protection of the Environment Operations Act 1997; Fines Act 1996; Pesticides Act 1999; Protection of the Environment Operations (Waste) Regulation 2005
• Cases Cited: Aoun v R [2007] NSWCCA 292; Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; 145 LGERA 234; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; Duffy v R [2009] NSWCCA 304; Environment Protection Authority v Djura [2012] NSWLEC 122; Environment Protection Authority v Hargreaves (No 2) [2003] NSWLEC 15; 124 LGERA 57; Environment Protection Authority v Peters [2006] NSWLEC 612; 153 LGERA 238; Markarian v The Queen [2005] HCA 25; 228 CLR 357; R v Holder [1983] 3 NSWLR 245; R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566; R v M.A.K.; R v M.S.K. [2006] NSWCCA 381; 167 A Crim R 159; R v O'Neill [1979] 2 NSWLR 582; Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465; R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383
• Category: Principal judgment
• Parties: Environment Protection Authority (Prosecutor) (Files: 12/50103 - 12/50108); Aargus Pty Limited (Defendant) (Files: 12/50103, 12/50104); Konstantinos Kariotoglou (Defendant) (Files: 12/50105, 12/50106); Mark Kelly (Defendant) (Files: 12/50107, 12/50108
• Representation: A I MacDonald (Solicitor) (Prosecutor); M J Stevens (Defendants); The Office of Environment and Heritage (Prosecutor); Mersal & Associates Solicitors (Defendants)
• File Number(s): 50103 of 2012 - 50108 of 2012

Judgment

1 Aargus Pty Ltd (Aargus), Konstantinos Kariotoglou and Mark Kelly (collectively referred to as "the defendants") have each been charged with two offences against s 144AA of the Protection of the Environment Operations Act 1997 (the POEO Act). Each of the defendants has pleaded guilty to the commission of those offences. They have consented to the conduct of a single sentence hearing with evidence tendered at the hearing to be evidence in all proceedings.

2 All offences arise from a single course of conduct, namely the provision of a Soil Classification Report (the Report) and Asbestos Clearance Certificate (the Certificate), both dated 14 October 2010, to the owner of land to which those documents related. The Report and the Certificate related to a stockpile of soil located on land known as 162 Boundary Road Oakville (the Property). Both documents were prepared by Konstantinos Kariotoglou following his inspection of the stockpiled material on 5 October 2010.

3 Each document was signed by Mr Kariotoglou "for and on behalf of Aargus Pty Ltd", with the words "Project Manager" appearing beneath his signature. Each document is also signed by Mr Kelly. Preceding his signature are the words "Reviewed By" and beneath his signature he is described as "Environmental Manager". Mr Kariotoglou and Mr Kelly are, and were at the relevant time, employees of Aargus. The Report and the Certificate respectively were addressed to Gary Bonadio, the owner of the Property.

4 At the time of inspecting the stockpiled material on 5 October, Mr Kariotoglou observed two pieces of fibre cement lying on the surface. He collected both pieces which he placed in plastic bags and later that day took them to the Aargus office at Petersham for disposal. He anticipated that each piece contained asbestos. His inspection did not otherwise indicate the presence of any material likely to contain asbestos. Two soil samples were taken from the stockpile on that occasion and those samples sent for laboratory analysis. No asbestos was identified as a result of that analysis.

5 Having obtained the results of the soils analysis, Mr Kariotoglou prepared both the Report and the Certificate. Both were reviewed by Mr Kelly who, at the time of his review, was told by Mr Kariotoglou that two pieces of fibre cement had been removed from the stockpiled material prior to the inspection being completed.

6 The Report included the following statement:

"No visible fibro pieces were observed and this issue does not warrant any particular concern."

The Certificate contains the following statement:

"This clearance certificate serves to confirm that no asbestos materials were observed or are currently present within the nominated stockpile of fill materials located at the front of the property." (Original emphasis.)

7 The quoted statement from the Report and the quoted statement from the Certificate respectively found the two offences with which each defendant has been charged and to which each of them has pleaded guilty.

8 Section 144AA of the POEO Act relevantly provides:

"144AA False or misleading information about waste

(1)   A person who supplies information, or causes or permits information to be supplied, that is false or misleading in a material respect about waste to another person in the course of dealing with the waste is guilty of an offence.

Maximum penalty:

(a)   in the case of a corporation - $250,000, or

(b)   in the case of an individual - $120,000.

(2)   It is a defence in any proceedings against a person for an offence under this section if the person establishes that the person took all reasonable steps to ensure that the information was not false or misleading in a material respect.

(3)   In this section, information is taken to be supplied to a person in the course of dealing with waste if it is supplied:

(a)   in the course of an activity relating to the sale or disposal of waste, or

(b)   in the course of an activity relating to the storage, transport, handling, deposit, transfer, processing, recycling, recovery, re-use or use of the waste.

(4)   In this section, information about waste means information about any of the following:

(a)   the type, classification, characteristics, composition or quantity of the waste,

(b)   the actual or proposed storage, transport, handling, deposit, transfer, disposal, processing, recycling, recovery, re-use or use of the waste,

(c) ...

(5)   In this section, information includes a record containing information.

(6) ... ." (Original emphasis)

9 In the context of the offence identified in s 144AA, each of Aargus and Mr Kariotoglou are charged that they "supplied information that was false about waste to another person in the course of dealing with the waste." Mr Kelly is charged that "he permitted information to be supplied that was false about waste to another person in the course of dealing with the waste." The charges against each defendant then identify the statement that I have extracted either from the Report or the Certificate.

The evidence

10 There is substantial agreement between the prosecutor and the defendants as to the evidence relevant to be considered for the purpose of determining the penalty that should be imposed upon each of the defendants. To the extent that there is disagreement between the parties as to relevant facts of any significance, I will identify them and indicate my decision upon them. Those facts that I have already stated in order to explain the charges and the background to them are uncontroversial.

11 A statement of agreed facts has been tendered (Exhibit A) together with an agreed bundle of documents (Exhibit B). Transcripts of interviews conducted by officers of the prosecutor with each of Mr Kariotoglou, Mr Kelly and Nickolaos Kariotoglou (Nickolaos), a director of Aargus, together with documents referred to in each of those records of interview were also tendered. In addition, the prosecutor tendered, without objection, a Verdict and Judgment Record from the Brisbane Magistrate's Court establishing that Aargus had been convicted in that court on 30 July 2003 with an offence against s 481(1) of the Environmental Protection Act 1994 (QLD) for making a false and misleading statement in a report. A transcript of the decision delivered by the learned magistrate on 30 July 2003 was also tendered without objection.

12 Oral evidence was given both by Mr Kariotoglou and Nickolaos, the latter previously having sworn an affidavit which was served on the prosecutor.

13 The Property comprises a large parcel of land apparently used as a rural/residential holding. In July 2010, its owner, Mr Bonadio, indicated to Andrew Irwin, a director of an earthworks and demolition company named Andy's Earthworks Pty Limited, that he was in need of good topsoil to be used for hedging and landscaping on the Property. At the time, Andy's Earthworks was carrying out works on land adjoining the Property and known as 164 Boundary Road Oakville.

14 Some months later, Mr Irwin informed Mr Bonadio that he had located a quantity of available topsoil at a development site in Glendenning. The address of the site was given to Mr Bonadio, who then inspected the material at the development site. Following that inspection Mr Bonadio informed Mr Irwin that the material appeared suitable for his landscaping purposes on the Property. As a consequence, about 20 truckloads of material from the Glendenning site were delivered to the Property by Andy's Earthworks during September 2010 and there placed in a stockpile (the Glendenning stockpile). Mr Irwin estimates that approximately 160 tonnes of material were transported from Glendenning at that time.

15 The stockpiled material apparently gave rise to concern by a third party or parties, resulting in an inspection of the Property by compliance officers from Hawkesbury City Council (the Council). That inspection occurred on 23 September 2010. Mr Ryan Carr was one of the compliance officers from the Council. He observed that an area of about 2,500m2 had been spread with "soil and clay type material" which contained "contaminants including fibre cement sheeting suspected of containing asbestos" (Exhibit A at [14]). The material that had been spread included material that had been brought onto the Property from the neighbouring property at 164 Boundary Road.

16 Mr Carr also observed a quantity of material stockpiled on the Property which he described as being approximately 5m in height and covering an area of about 35m x 25m. Mr Carr observed that this material contained "numerous contaminants including but not limited to concrete, plastics, metals, roof tiles, bricks, tiles, terracotta pipe and fibre cement sheeting suspected of containing asbestos" (Exhibit A at [16]).

17 As a consequence of these observations, Mr Bonadio was instructed by Mr Carr to cease importing any further material onto the Property. He was also instructed to cease spreading the material that was currently on the Property. At the time of the inspection by Mr Carr, earthmoving equipment was being used to spread this material across the Property.

18 Before leaving the property on 23 September, a sample of the fibre cement sheeting observed by Mr Carr was collected by his fellow Council officer, Garry Collins, and submitted to a laboratory for analysis. That analysis showed that the sample contained chrysotile asbestos.

19 While the facts pertaining to the inspection on 23 September by Mr Carr are not in dispute, so far as they have been recited by me, the defendants do dispute that the material observed by Mr Carr, particularly the stockpile to which he refers, was the Glendenning stockpile. As will become apparent, it was only the Glendenning stockpile which was the subject of the Report and the Certificate that found the charges against the defendants.

20 The fact that the defendants disputed the origin of the stockpiled material observed and sampled by Mr Carr and Mr Collins on 23 September 2010 was articulated in the statement of agreed facts (sic). No evidence was tendered otherwise that permitted the resolution of that dispute. Neither Mr Carr nor Mr Collins was called to give evidence by the prosecutor. Moreover, the prosecutor did not cross examine Mr Kariotoglou in the course of giving his oral evidence by posing any question that sought to link the stockpiled material observed by Mr Carr on 23 September with the stockpile first observed and described by Mr Kariotoglou on 5 October. In the absence of evidence directed to resolution of the dispute clearly articulated in the statement of agreed facts, I am unable to find that the material inspected by Mr Carr on 23 September or that the fibre cement sample taken by Mr Collins on that day was material from the Glendenning stockpile, inspected by Mr Kariotoglou on 5 October. The plea of guilty does not extend to an admission of that fact, the onus to prove it falling upon the prosecutor (R v O'Neill [1979] 2 NSWLR 582 at 588; Duffy v R [2009] NSWCCA 304 at [21]).

21 Having become aware of the inspection of the Property by officers of the Council in September, Mr Irwin enquired of Mr Bonadio as to whether he wished to engage Aargus to report upon the materials stockpiled on the Property. At that time Aargus was undertaking soil assessment work on the adjoining property at 164 Boundary Road. Mr Bonadio responded by requesting that Aargus be retained on his behalf.

The Property is inspected on 5 October: The Report and the Certificate prepared

22 Following that retainer conveyed by Mr Irwin, Mr Kariotoglou attended the Property on 5 October 2010. He understood his instruction was to prepare a soil classification report and an asbestos clearance certificate in respect of the Glendenning stockpile. He was accompanied on his inspection by Mr Irwin. Mr Bonadio was not present. The statement of agreed facts records the inspection undertaken by Mr Kariotoglou on 5 October in the following terms:

"23.   Mr Con Kariotoglou walked around the Glendenning Stockpile which was located at the front of the property and estimated its size to be 200-250 cubic metres.

24.   Mr Con Kariotoglou was on the Premises for approximately twenty minutes to half an hour. Mr Con Kariotoglou inspected the Glendenning Stockpile and noticed a small number of pieces of suspected asbestos fibro material. Mr Con Kariotoglou picked up those pieces and put them into thick plastic bags. After removing the two pieces Mr Con Kariotoglou performed another inspection of the Stockpile and satisfied himself the soil was free of visual contaminants. At the time, Mr Con Kariotoglou thought that those pieces looked like pieces of fibre cement sheeting that may contain asbestos.

25.   Mr Con Kariotoglou then took two random soil samples from the Glendenning Stockpile and completed his inspection. The samples were sent to Sydney Diagnostic Services (SGS). No asbestos fibres were found in the soil."

23 Evidence of the action taken by Mr Kariotoglou to investigate the Glendenning stockpile on 5 October was not confined to that which I have quoted from the statement of agreed facts. In his oral evidence before me, Mr Kariotoglou sought to expand upon the nature of his inspection. The passages from which I have quoted in the statement of agreed facts left open the inference that the inspection conducted at that time consisted only of a visual inspection without any significant disturbance of the surface material other than for the purpose of extracting two samples for analysis. According to the oral evidence, those two samples were taken by using a hand trowel which penetrated the surface of the stockpile to a depth of 30cm in two locations.

24 However, it was upon the nature of the inspection following observation and collection of the two fibre cement pieces that the oral evidence of Mr Kariotoglou expanded. In giving evidence in chief, Mr Kariotoglou was asked whether he had undertaken "any other inspection with any implement in respect of the stockpile?" He responded to that question by saying "During my inspections I usually us a rake as well" (Tcpt 38:48). In response to a further question he stated that he had used a rake on this occasion, described as a "small rake" which was hand held. He was then asked the following question and gave the following answer (Tcpt 40:11-18):

"Q.   We got to the point, I think, where we were discussing what you did. You said you used a hand-held rake to look at some material. Are you able to indicate to his Honour whereabouts did you use that hand-held rake in respect of the stockpile that you inspected?

A.   Well, wherever I was walking on stuff, well, I was just raking up the surface layers of the soil so while I was walking on top of it I was just raking aside the soil. I was also kicking the soil away with my boots. As I was walking over the soil and walking around the soil I was raking the surface of the stockpile."

25 The prosecutor challenges this evidence. It submits that although Mr Kariotoglou had earlier been afforded the opportunity to describe soil disturbance by raking as part of his investigation on 5 October, he had not done so until giving his evidence in the course of the hearing before me. The statement of agreed facts describes no such action, as it might have been expected to do. Moreover, so the prosecutor submits, the evidence of raking does not stand scrutiny when considered in the context of explanations given by Mr Kariotoglou when interviewed on 12 November 2010, as recorded in the record of that interview (Exhibit C). Three extracts from that interview, as recorded in Exhibit C, exemplify the prosecutor's submission.

26 Having established by questions that Mr Kariotoglou first attended the Property on 5 October 2010, the interviewer then posed the following question:

"Q86   So while you're there, you meet Andy: what did you do then?"

Mr Kariotoglou gave the following answer to that question:

"A.   He told me to - because he wanted to keep the stockpile on the site there, and the owner wanted to reuse that soil for his landscaping on site there, and to test the - test the soil to determine if it was suitable to remain onsite so he could reuse it for the landscaping and levelling out some areas on his property.

So I - I walked around the stockpile, I took two random samples from the stockpile, and I put them in an esky - proper procedure - or ice brick, and took them to the lab; and while I was there I also walked around just in inspection - general inspection of the stockpile as well, like I usually do."

27 The following questions and answers recorded in Exhibit C are also relevant:

"Q87.   Alright. And what was - what was the stockpile? A stockpile of what?

A. It was fill material.

Q88.   Okay. What do you mean by that?

A.   Clean soil. I mean, from what I saw it probably - I mean, looking around, the property wasn't dug up from within the property so I concluded that it must have come - it was imported fill, and I asked Andy whereabouts it came from, and he - he said it was imported from another site."

28 Later in the course of the interview, Mr Kariotoglou was asked whether he noticed anything about the stockpile "like any odours or anything in the stockpile apart from soil." His response to that question (Q107.) was:

"A.   No, I didn't notice any odours, I didn't notice any staining. I did notice one, two, three, four pieces of little fibro fragments. I picked those up. I bagged those and I just walked around the stockpile again, just to make sure it wasn't any other possible contaminants, visual contaminants of those stockpiles, but I just noticed those three, four - as I say, three or four little fragments of those fibro pieces.

To me it - to me it looked like asbestos pieces, little fibro asbestos cement sheeting pieces, and I just bagged those and continued walking around the site, and after that I - I couldn't see any other pieces. That's when I took my samples and ran locations, and that was it."

29 After being questioned about the soil samples, the interviewer returned to the topic of the fibro fragments that had been collected by Mr Koriatoglou from the stockpile. He was asked the following question and gave the following answer:

Q154.   What was your intention with the bits that you picked up and bagged? If they weren't sent off to be tested, what was your intention to pick them up for?

A.   My intention was because Andy asked me to provide him with a visual clearance on the stockpile as well, and he asked me to provide him with a clearance certificate, with a clearance certificate for asbestos, and that's why I walked around the stockpile and had a look, hence finding those two - three pieces. I noted to him that there was a couple of pieces there, and hence I picked those pieces up. I bagged those, continued with my inspection, and once I was pretty sure there wasn't any more asbestos pieces visually on the stockpile, then I told Andy that it looks - I'll give him a visual clearance on the stockpile."

30 As will shortly become apparent, some weeks after the inspection by Mr Kariotoglou, numerous pieces of suspected asbestos fibro material were found in the Glendenning stockpile. The extent of and manner in which the investigation carried out by Mr Kariotoglou would therefore appear relevant, having regard to the statements that are made in both the Report and the Certificate. Thus the challenge by the prosecutor to the evidence given by Mr Kariotoglou in the course of the sentence hearing that his investigation on 5 October had included surface raking.

31 Having regard to the contents of the record of interview with Mr Kariotoglou together with the description of his actions recorded in the statement of agreed facts, I am not persuaded that he did rake the surface of the Glendenning stockpile as he claims to have done. In the course of his interview with officers of the prosecutor, conducted only five weeks after his inspection on 5 October, he had ample opportunity to detail what he did as part of his inspection. The length of his answers to questions posed to him do not suggest any reticence on his part in describing his actions.

32 He was told at the outset of the record of interview that the prosecutor was investigating the contents of the Report and Certificate prepared in respect of the Property (Exhibit C, Q7.). It may be that the passage of time has dimmed any clear recollection and that his evidence in the course of the hearing before me was the product of applying his "usual" practice of raking during inspections (see [24] above) rather than any clear recollection of what occurred on 5 October 2010.

33 Although the prosecutor submitted that I should not accept that part of Mr Kariotoglou's evidence claiming that his investigation included raking the surface of the stockpile, for reasons that follow I do not need finally to determine that issue. The defendants expressly accept that statements in each of the Report and the Certificate, to the effect that no fibro pieces or asbestos materials were seen in the Glendenning stockpile, when two pieces of such material were observed and collected by Mr Kariotoglou, was evidence that properly founds the offences with which they were charged. However, they contend that the manner in which Mr Kariotoglou assessed the stockpiled material was sufficient to justify so much of the Certificate as asserted that no asbestos materials were currently present.

34 If the evidence of Mr Kariotoglou as to the manner in which he carried out a surface inspection of the stockpiled material was the totality of evidence directed to that topic, there would be substance in the submission of the prosecutor that a statement to the effect that no asbestos materials are currently present within the stockpile was misleading when a wholly insufficient investigation had been conducted in order to make such a statement. However, the evidence of Mr Kariotoglou does not represent the totality of the evidence upon the topic.

35 The defendants read an affidavit of Stephen Smith sworn 3 October 2012. Mr Smith is an environmental consultant specialising in environmental management, site contamination assessment and water and waste treatment. He was asked to express an opinion, as an expert, as to whether the assessment made by Mr Kariotoglou of the stockpiled material assessed on 5 October 2010 followed industry standards "in relation to his visual assessment of the stockpile". For the purpose of expressing an opinion, Mr Smith was provided with the record of interview conducted between officers of the prosecutor and Mr Kariotoglou (Exhibit C) together with the Report and the Certificate. He was also provided with a history pertaining to inspection and sampling of materials from the site, substantially in accordance with the statement of agreed facts. None of the material provided to Mr Smith indicated that Mr Koriatoglou had raked the surface of the Glendenning stockpile at the time of his inspection on 5 October.

36 In the report annexed to his affidavit, Mr Smith described the process that would ordinarily be undertaken to inspect a soil stockpile for the purpose of classification and the nature of the inspection that would be undertaken when "fibre cement sheeting suspected of containing asbestos (bonded asbestos) is suspected of being present".

37 Having regard to the material with which he was provided, Mr Smith expressed his conclusion as follows:

"Based on the time spent by Con [Mr Koriatoglou] performing the inspection, the small size of the stockpile, the fact that he has taken two samples from the stockpile, which have been tested for a variety of analytes including asbestos fibres, I say that he has satisfactory [sic] and competently performed the sampling and inspection of the stockpile."

Mr Smith was not required by the prosecutor to attend for cross-examination upon his affidavit evidence. No reference to that evidence was made in the prosecutor's final submissions.

38 On the state of the evidence before me, I cannot be satisfied to the requisite standard that Mr Kariotoglou's visual inspection of the Glendenning stockpile on 5 October 2010 was so inadequate that the statement in the Certificate to the effect that no asbestos materials were currently present within the stockpile was false or misleading. My intuitive doubts must yield to the evidence as it stands and as a consequence the defendants given the benefit of any doubt that I entertain on this issue.

39 Following his inspection of the Property on 5 October 2010, Mr Koriatoglou received from Mr Irwin a report that had been prepared in July 2009 involving a preliminary contamination and salinity assessment of the soil at the Glendenning site which was the source of soil material transported to the Property. The 2009 Report was prepared by GeoEnviro Consultancy Pty Ltd.

40 The GeoEnviro Consultancy report indicates that soil sampling of the Glendenning site had been undertaken and tested for a number of analytes. The report makes no mention of either testing for or the identification of asbestos on that site. That report was read by Mr Kariotoglou prior to preparing the Report and the Certificate. He states that although he considered its contents as confirming his own observations on 5 October, he did not rely upon that report for the purpose of forming his own conclusions.

41 As I have earlier indicated, the Report and the Certificate were provided to Mr Bonadio and a copy also provided to Mr Irwin. Both documents were thereafter provided by Mr Irwin to the Council who, in turn, provided them to the prosecutor.

Further inspection of the Property on 25 October

42 The Property was reinspected by Council officers on 21 October 2010. They raked through the surface of the Glendenning stockpile and, as recorded in Exhibit A, "unearthed numerous pieces of suspected asbestos fibro material."

43 As a result of these observations being reported to Mr Kariotoglou, he attended the Property on 25 October 2010 where he met Mr Carr and Mr Collins from the Council. All three then walked to the Glendenning stockpile for further inspection.

44 In his oral evidence before me, Mr Kariotoglou stated that his "first impression" of that stockpile on the occasion of this visit was that it "looked different". In response to a question from his counsel as to how it looked different, he responded (Tcpt 42: 48-50):

"Well they [sic] had bricks in it, steel, tiles and timber. Obviously I also saw numerous pieces of asbestos cement sheeting, fragments, on the stockpile itself which was pointed out by the council representatives as well."

In response to further questions, he indicated that the shape of the stockpile looked different and again, when asked in what way, he responded (Tcpt 43: 6-8):

"It wasn't larger, it wasn't smaller, it was just shaped different and had different types of soil on it, it wasn't the sort of homogenous texture, appearance, that I saw the first time."

45 Mr Kariotoglou had been questioned about this visit to the property when interviewed by officers of the prosecutor on 12 November 2010. The record of that interview (Exhibit C) records him telling those officers that after meeting the representatives of the Council at the Property, they told him that they had visited the site "a couple of days ago" where they had observed asbestos pieces on the stockpile that he (Mr Kariotoglou) had previously inspected. His response as recorded in Exhibit C continues (Q. 284):

" ... I think in that period there was a lot of days of heavy rains, and I said, 'Well, whatever pieces were there, the rains sort of washed off the top soils and could have exposed some other pieces underneath', and we walked around together on the stockpiles, and I just found another couple of pieces here and there."

46 In the course of the inspection carried out on 25 October, Mr Kariotoglou was requested by the Council officers to prepare a further report making recommendations on the removal of asbestos contaminated products and soils from the stockpile on the Property. As a consequence, a report was prepared and signed by Mr Kariotoglou and countersigned as having been reviewed by Mr Kelly on 27 October 2010. That report was described as a "Site Remediation and Validation" report (the Remediation Report). It was a report prepared in the name of Aargus.

47 The Remediation Report referred to the earlier inspection carried out on 5 October when "no asbestos materials were observed or were present within surface soils of fill materials within the nominated stockpile located at the front of the property" (Exhibit B Tab 6). The Remediation Report continued:

"However, following adverse wet weather conditions since the initial visual inspection (5 October 2010), asbestos based materials have become evident on all pre-inspected soil surfaces and stockpile. Subsequently a second visual inspection was warranted and requested by Hawkesbury City Council. A visual inspection was therefore conducted by Aargus staff on Monday 25 October in the presence of Mr Garry Collins and Mr Ryan Carr of Hawkesbury City Council. After visual inspection it was determined that asbestos materials are present on surface and within subsurface soils of the nominated stockpile within the front area of the property." (Original emphasis.)

Although this Remediation Report was addressed to Mr Bonadio, copies were provided to the Council officers.

48 The Glendenning stockpile was inspected by officers of the prosecutor on 17 November 2010. They identified that stockpile as one containing "an approximate volume of 200 tonnes [sic] and a perimeter of approximately 100 metres" (Exhibit A at [43]). Samples of suspected asbestos fibro material were taken on that occasion and subsequently subjected to laboratory analysis. The material sampled took the form of broken pieces of fibre cement sheeting. Two of the three samples taken on this occasion and subjected to testing revealed the presence of amosite asbestos. Further samples of fibre cement sheeting from the Glendenning stockpile were taken on 16 December 2010. Two such samples were analysed and found to contain chrysotile and amosite asbestos.

49 On 10 February 2011, Mr Irwin was issued with a draft clean-up notice, prepared pursuant to s 91 of the POEO Act, directing that action be taken to remove imported material from the Property. As a consequence of receiving that notice, Mr Irwin's company removed all imported material from the Property on 26 February 2011.

50 In June 2011, officers of the prosecutor met Mr Kariotoglou at the Sydney office of Aargus. There, they identified and seized the two pieces of fibre cement material that Mr Kariotoglou had removed from the Property in the course of his inspection on 5 October 2010. Those pieces were in a designated asbestos bin outside the Aargus office at Petersham. Subsequent analysis of those two pieces of fibre cement indicated that they contained two types of asbestos, namely chrysotile and crocidolite asbestos.

Purposes of sentencing

51 The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (the Sentencing Act) in the following terms:

"The purposes for which a court may impose a sentence on the offender are as follows:

(a)   to ensure that the offender is adequately punished for the offence,

(b)   to prevent crime by deterring the offender and other persons from committing similar offences,

(c)   to protect the community from the offender,

(d)   to promote the rehabilitation of the offender,

(e)   to make the offender accountable for his or her actions,

(f)   to denounce the conduct of the offender,

(g)   to recognise the harm done to the victim of the crime and the community."

52 The prosecutor submits, and I accept, that the purposes identified in subsections (a), (b), (e) and (f) are relevant in the present case.

Objective factors

Statutory context

53 When determining the objective seriousness of an offence, the Court is entitled to take into account the statutory context in which the offence was created (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; 145 LGERA 234). The objects of the POEO Act are set out in s 3 which relevantly provides as follows:

"3. Objects of Act

The objects of this Act are as follows:

(a)   to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development,

...

(d)   to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following:

(i)   pollution prevention and cleaner production,

(ii)   the reduction to harmless levels of the discharge of substances likely to cause harm to the environment,

(ii)(a)   the elimination of harmful wastes,

...

(v)   the monitoring and reporting of environmental quality on a regular basis,

(e)   to rationalise, simplify and strengthen the regulatory framework for environment protection,

...".

54 Section 144AA is an important provision which gives effect to these objectives. The need to be scrupulous in supplying accurate information about "waste" so that it is correctly categorised is necessary to ensure that pollution is prevented, and that harmful wastes can be eliminated. Moreover, the imposition of an offence for "false or misleading" information about waste is a mechanism designed to "strengthen the regulatory framework for environmental protection".

55 The provisions of the POEO Act regulate the storage, treatment, disposal and transport of waste. Premises that receive waste for disposal to land may, subject to stated exclusions, require a licence to operate. Correct classification of materials received at a site to which waste is taken is essential to the operation of the statutory system of licensing. Classifications of waste are found in cl 49 of Sch 1 to the POEO Act. One such classification is "special waste" which is defined as meaning (among others), "asbestos waste." Clause 50 of the Schedule defines "asbestos waste" as meaning "any waste that contains asbestos."

56 I should interpolate that at one point in his submissions, I understood counsel for the defendants to be contending that the statutory regime directed to waste was irrelevant as the material in the Glendenning stockpile was not waste. If my understanding of the submission is correct, then I cannot accept it. An element of the offence to which the defendants have pleaded guilty is that the false or misleading information that was supplied was "about waste" (s 144AA). Thus, the legislative regime directed to waste is relevant in considering the offences that were committed.

57 Clause 42 of the Protection of the Environment Operations (Waste) Regulation 2005 (the Waste Regulation) is directed to asbestos waste. Relevantly, cl 42 provides:

"42. Special requirements relating to asbestos waste

(1)   This clause applies to any activity that involves the transportation, disposal, re-use or recycling of any type of asbestos waste, regardless of whether the activity is required to be licensed.

(2)   A person who carries on an activity to which this clause applies must comply with the requirements specified in this clause in relation to the activity concerned.

Maximum penalty: 400 penalty units in the case of a corporation, 200 penalty units in the case of an individual.

...

(4)   The requirements relating to the off site disposal of asbestos waste are as follows:

(a)   asbestos waste in any form must be disposed of only at a landfill site that may lawfully receive the waste,

(b)   when asbestos waste is delivered to a landfill site, the occupier of the landfill site must be informed by the person delivering the waste that the waste contains asbestos,

(c)   when unloading and disposing of asbestos waste at a landfill site, the waste must be unloaded and disposed of in such a manner as to prevent the generation of dust or the stirring up of dust,

(d)   asbestos waste disposal of a landfill must be covered with virgin excavated natural material or other material as approved in the facility's environment protection licence:

(i) initially (at the time of disposal), to a depth of at least 0.15 metre, and

(ii) at the end of each day's operation, to a depth of at least 0.5 metre, and

(iii) finally, to a depth of at least 1 metre (in the case of bonded asbestos waste or asbestos-contaminated soils) or 3 metres (in the case of friable material) beneath the final land surface of the landfill site.

(5)   A person must not cause or permit asbestos waste in any form to be re-used or recycled.

(6)   In this clause:

"bonded asbestos material" means any material (other than friable asbestos material) that contains asbestos.

"friable asbestos material" means any material that contains asbestos and is in the form of a powder or can be crumbled, pulverised or reduced to powder by hand pressure when dry."

58 The material that is the subject of evidence in the present case is bonded asbestos. Not only does cl 42(4)(d)(iii) identify the depth to which bonded asbestos must be covered but subclause (3) also requires that bonded asbestos be securely packaged at all times during transportation and the transportation take place "in a covered, leak-proof vehicle."

59 These provisions indicate the strictures that are to be applied to the identification, handling and disposal of waste containing asbestos. The integrity of this system was undermined by the actions of Mr Kariotoglou in failing to report accurately his observations of bonded asbestos material when preparing the Report and the Certificate. His failure when so doing is also a failure to be attributed both to Aargus and to Mr Kelly.

Maximum penalty

60 As my earlier recitation of the provisions of s 144AA(1) of the POEO Act reveals, the maximum penalty for each of the offences charged is, in the case of a corporation, a fine of $250,000, or, in the case of an individual, a fine of $120,000.

 

61 While the seriousness of the particular offences with which each of the present defendants has been charged and pleaded guilty is to be determined in the context of the facts found by me, the maximum penalty stipulated for the offence is important to be considered. That penalty reflects the "public expression" by Parliament of the seriousness with which the commission of the offence is to be considered (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 per Kirby P at 698).

Relevant factors in imposing a penalty

62 Section 241 of the POEO Act sets out matters to be considered when imposing a penalty for offences against that Act. Relevantly, the section provides:

"241. Matters to be considered in imposing penalty

(1)   In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant):

(a)   the extent of the harm caused or likely to be caused to the environment by the commission of the offence,

(b)   the practical measures that may be taken to prevent, control, abate or mitigate that harm,

(c)   the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence,

(d)   the extent to which the person who committed the offence had control over the causes that gave rise to the offence,

(e)   whether, in committing the offence, the person was complying with orders from an employer or supervising employee.

(2)   The court may take into consideration other matters that it considers relevant."

63 Paragraph (e) of s 241(1) would not appear to be of present relevance. While Mr Kariotoglou and Mr Kelly were acting in the course of their employment with Aargus when preparing the Report and the Certificate, it is not suggested that they were acting under direction from Aargus to prepare those documents in the terms in which they were prepared and provided to Mr Bonadio.

64 Each of the defendants had a measure of control over the preparation and provision of the offending statements in the Report and the Certificate (cf s 241(1)(d)). While, in a practical sense, it may be thought that Mr Kariotoglou exercised primary control over the document and responsibility for its contents, that control and responsibility is shared not only by Mr Kelly in the proper exercise of his reviewing function, but also by Aargus in the formulation of its policies and procedures for staff carrying out inspections and providing reports and certificates of the kind in question in the present proceedings. The fact that it had policies and procedures in place is an indication of the control that Aargus sought to impose upon its staff. The fact that the policies and procedures have since been amended so as to impose more stringent site inspection and reporting requirements is an indication of the control sought to be exercised by Aargus over the preparation and dissemination of reports of the kind that found these proceedings.

Harm to the environment

65 The prosecutor does not contend that the commission of the offences caused any harm to the environment. However, it does submit that there was a real and not remote chance that harm could have been caused to the environment by the commission of the offence.

66 I accept the prosecutor's submission in this regard. Had the Report and the Certificate accurately recorded that pieces of fibre cement material, suspected of containing asbestos, were located on the Glendenning stockpile, those concerned to determine whether the material should remain onsite and be used for landscaping purposes may have insisted upon further investigation. Indeed, it would be logical for this to have occurred. The evidence to which I have earlier referred, particularly that undertaken by the return visit by Council officers on 21 October 2010, strongly indicates that further investigation is likely to have revealed the extent of asbestos in bonded form present in that stockpile.

67 The material brought to the Property to be used as a medium for landscaping was, at the time of first inspection by Council officers, being spread by heavy earthmoving equipment. That equipment was undoubtedly to be used to spread the material in the Glendenning stockpile once it had been classified as appropriate for landscaping use. Had that occurred, then the bonded asbestos contained in that material is likely to have been crushed with a real and not remote chance that in the crushing process the bonded asbestos would have become friable.

68 Affidavit evidence of Professor Nico van Zandwijk was read by the prosecutor without objection. Professor van Zandwijk is a professor of medicine at the University of Sydney with long experience in thoracic oncology and a member of the National Asbestos Management Review Panel. He stated that asbestos becomes a risk to human health through inhalation of fibres primarily from contaminated air. Air may become contaminated from friable asbestos materials. He describes such materials in the following way:

"Friable asbestos is material which can be crumbled, pulverised, or reduced to powder by hand pressure. This may also include previously non-friable material (asbestos fibres bonded by cement, vinyl, resin or other similar material) which becomes broken or damaged by mechanical force."

69 Professor van Zandwijk further states that touching or disturbing friable asbestos will cause aeration of asbestos fibres "thereby increasing the chances that these toxic fibres are inhaled by bystanders." He concludes that safe levels of asbestos exposure do not exist. He was not cross-examined on his evidence, nor was his conclusion as to the consequence for human health from friable asbestos challenged in the evidence of Mr Smith.

70 As I have indicated, there was a real and not remote chance that the spreading of material from the Glendenning stockpile would have so diminished the strength of the fibre cement material containing asbestos that it was capable of becoming friable and developing into health risks. It is for this reason that I accept the likelihood of environmental harm by the commission of the offence.

71 As I understood the submissions made on behalf of the defendants, they sought to diminish the prospect of "likely harm" by submitting that the Glendenning stockpile observed by Mr Kariotoglou on 5 October 2010 was not demonstrated to be the same stockpile, or at least containing the same material, as that subsequently observed by Council officers on 21 October and revisited by Mr Kariotoglou on 25 October. They emphasise Mr Kariotoglou's oral evidence to the effect that it "looked different" (see [44]). When read in the context of other evidence directed to the observations of Mr Kariotoglou on 25 October 2010, I do not think that the oral evidence upon which reliance is placed leads to the conclusion for which the defendants contend.

72 The first recorded observations made by Mr Kariotoglou on the occasion of his inspection of the Property on 25 October 2010 is found in the Remediation Report that he prepared. I have earlier recorded the relevant passage from that Report at [47] and will not repeat it. That statement reflects no challenge to the provenance of the materials in the stockpile nor does it question that the content of the stockpile then observed was present when that same stockpile was inspected on 5 October 2010. The relevant statement in the Remediation Report makes tolerably clear that the change observed has come about because surface soil has been washed away by heavy rain, exposing the underlying material, including material that contained asbestos.

73 That understanding of the statement made in the Remediation Report is consistent with the response of Mr Kariotoglou when interviewed by officers of the Prosecutor on 12 November 2010. I have recorded that response at [45].

74 In summary, the description of the changed appearance of the Glendenning stockpile given in oral evidence before me must be understood in the context of Mr Kariotoglou's statements made close in point of time to his inspection on 25 October. So understood, I am satisfied that the material in the Glendenning stockpile observed on 25 October and subsequently shown to contain asbestos was material that was in that same stockpile when inspected by Mr Kariotoglou on 5 October 2010, albeit covered at that time by the "homogenous" surface soil described in his evidence.

75 Matters to which consideration is directed by s 241(1)(b) and (c) are substantially reflected by the observations that I have made in relation to likely environmental harm. Had the Report and the Certificate recorded the fact that fibre cement material suspected of containing asbestos was found on the Glendenning stockpile, more detailed testing may have been initiated leading to the discovery of the extent to which the underlying material contained bonded asbestos. In turn, this discovery is likely to have lead to an articulation of the measures available for site remediation and avoidance of contact with that material by earthmoving equipment.

Explanations proffered by the defendants

76 As I have earlier recorded, both Mr Kariotoglou and Mr Kelly were interviewed by officers of the prosecutor in November 2010 and a record of these interviews tendered in evidence. On 4 February 2011, Nickolaos was interviewed by officers of the prosecutor in his capacity as managing director and principal environmental scientist of Aargus. Again, his interview was recorded and that record tendered in evidence. All three interviewees were asked to address the statements earlier extracted from both the Report and the Certificate.

77 Having had the passage from the Certificate which I have extracted at [6] drawn to his attention and asked to comment upon it, Mr Kariotoglou said (Exhibit C: Q251):

"After inspecting that stockpile, after taking those three little pieces off that stockpile, I concluded that the stockpile was visually cleared of any asbestos pieces - well, so-called fibro pieces. Now - yes, that's - I mean, my first inspection found three little pieces. I bagged those. I did a - I walked around the stockpile again, concluded that the stockpile was visually cleared then.

Now if there was a point where there was 100 pieces there, I would have made a different judgment; I would have said, 'No, I am not - not clearing this stockpile.' Even if there was - I sort of made a judgment then and there on that spot. I saw three little pieces there. I've picked them up, walked around the stockpile, did another visual inspection. I couldn't see any further pieces on that stockpile, and I concluded that stockpile to be visually cleared."

78 Having stated that the pieces of suspected asbestos material were observed by him on the Glendenning stockpile prior to preparing the Certificate, Mr Kariotoglou was asked whether the statement "would be misleading". Mr Kariotoglou responded (Exhibit C: Q258):

"In the overall scheme of things, probably it might be, but it wasn't my intention to be misleading in that, it was just - it was just - going inspecting the stockpile. If it was helping out the owner, just getting rid of two or three pieces from the stockpile, I just made a judgment there. I picked up those two, three pieces and bagged those. I wasn't sort of misleading anyone. At the end of the day we're there to help the owners. We are engaged by the owners of the site, and it wasn't my intent to be misleading."

79 In the course of his interview, Mr Kelly's attention was drawn to the statement in the Report that no visible fibro pieces were observed. The record of interview with him (Exhibit E) then continues:

"Q158.   But visible - fibro pieces were, in fact, observed weren't they?

A.   They were observed. They were removed. So whether it's a statement in the - that maybe it's an incorrect statement because there was, but at the time the pieces were removed. After that there were no further asbestos pieces observed.

Q159.   Could you see how that might be misleading?

A.   Its misleading. It may be a statement that's probably best not placed in this report."

Towards the end of his interview, Mr Kelly was asked whether he wished to say anything further in relation to the questions that had been asked of him. His response included the following (Exhibit E: Q243.):

"Obviously we've been called in. I am not too sure why. Obviously material was found. We've apparently assessed something against the law - fair enough, that's fine. Not to our specific knowledge or acts wilfully. We were trying to carry that out. We were trying to help the client out. Obviously we were trying to minimise the amount of cost for him to remove that material - whether he imported the material legally or not is irrelevant to us.

What we are trying to achieve is the best solution for him at the end of the day, so to save 'X' amount of dollars, to dispose of it to the landfill. If we could reassess the material, if we are happy enough for the material to be kept onsite. That's what we try to achieve. Obviously as part of the EPA's guidelines, we want to reduce the amount of waste minimalisation [6] as well; the material that's taken to landfill, so based on that small amount of supposed contamination, that's what we were trying to achieve."

80 Nickolaos was asked to comment upon the accuracy of the statement that I have earlier quoted from the Certificate, including the statement that no asbestos materials were observed on the site inspection. He responded (Exhibit G):

"Q225. ...

A.   I'd say our limitations clause comes into play, where if any further information is found, or further material or areas of concern is found we should be notified immediately. The accuracy of the clearance certificate is obviously not clear, but based on the sampling, the samples taken, the visual inspection taken at that time, it would be an accurate measurement of what happened at that time when that person went out to the site.

Q226.   Sorry, it's accurate or inaccurate?

A.   It's inaccurate in retrospect, but at the time of the sample taken and visual inspection taken it was provided in those - on that pretext [sic].

Q227.   Okay.

A.   So it's inaccurate now."

81 The statement in the Certificate indicating "that no asbestos materials were observed" was again drawn to the attention of Nickolaos who was again asked whether the statement was accurate. He responded (Q229.):

"A.   If you're inferring to whether a couple of pieces were hand picked prior to that, it's probably something that should be noted in the soil classification report, but usually a clearance certificate is provided after inspections and assessments are undertaken. So at the time of the clearance certificate it most likely is an accurate statement."

82 Although the offences with which the defendants are charged are offences of strict liability, the state of mind of each of the defendants is relevant to be considered when determining the objective seriousness of the offences. The explanations given by each of the defendants which I have just extracted are relevant to the state of mind to be considered. I draw from those explanations the following:

(i)   acknowledgment, consistent with the plea of guilty from each of them, that the statements the subject of the charge were inaccurate;

(ii)   the Report and the Certificate containing those statements were each prepared "to help the client", with the consequence that it was thought unnecessary to mention the fibre cement materials initially observed and then removed, an exercise undertaken with a view to minimising or avoiding expense on the part of the client in relation to the stockpile inspected; and

(iii)   the practical purpose in preparing each document was to report upon the end result of the inspection, namely that the stockpile surface was clear of asbestos material after the fibre cement pieces suspected of containing asbestos had been collected and "bagged".

83 There is no evidence before me to suggest that either document was prepared in order to secure financial gain to any of the defendants beyond the charge by Aargus of a professional fee for preparing the docoments. The statement of agreed facts indicates, and I accept, that the only fee charged by Aargus to Mr Bonadio for providing the Report and the Certificate was approximately $1200.

Prior warning

84 On 14 September 2007 the then Department of Environment and Conservation wrote to Aargus identifying what the Department considered to be shortcomings in a soil classification report that Aargus had prepared for a nominated site. The prosecutor was then an authority administered under the umbrella of the Department. The letter to Aargus, which is in evidence as part of Exhibit H, drew attention to the need for reports prepared by the Aargus to be comprehensive and accurate in classifying waste material. The letter drew attention to the provisions of s 144AA of the POEO Act as relevant to the concern expressed in that letter.

85 While I do not take this letter into account as demonstrating any breach of the Act by Aargus, arising from the matters referred to in that letter, it is evidence of the fact that the provisions of s 144AA were specifically drawn to the attention of the Company as well as the need for accuracy in reporting upon soils or waste which the Company was retained to inspect.

Conclusion on objective seriousness

86 The prosecutor submitted that the offences committed by the defendants should be viewed as in the mid range of objective seriousness. I do not accept that submission. Having regard to all the matters that I have so far addressed, I consider the offences to be in the low range of objective seriousness but certainly not at the bottom of that range.

Subjective factors

87 Within the limits set by the objective seriousness of the offence, the Court is required to take into account subjective factors both favourable and unfavourable to each of the defendants. Consideration of a number of such factors is mandated by s 21A of the Sentencing Act. Subsection (1) of that section relevantly provides:

"(1)   In determining the appropriate sentence for an offence, the court is to take into account the following matters:

(a)   the aggravating factors referred to in subsection (2) that are relevant and known to the court,

(b)   the mitigating factors referred to in subsection (3) that are relevant and known to the court,

(c)   any other objective or subjective factors that affects the relative seriousness of the offence.

The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the Court under any Act or rule of law."

88 The prosecutor submits that the following aggravating factors are relevant to be considered in the present proceedings:

(i)   that Aargus has a record of previous convictions (s 21A(2)(d)), and

(ii)   the offence was committed without regard for public safety (s 21A(2)(i)).

It is necessary to consider each of these matters separately.

89 The prior conviction upon which reliance is placed is that recorded in the Verdict and Judgment Record of the Brisbane Magistrate's Court on 30 July 2003 (Exhibit J). That document indicates that Aargus was then fined the sum of $10,000 together with costs of $990.35 for an offence against the Environmental Protection Act 1994 (Qld) involving the making of a false or misleading statement to an authorised person, contrary to s 481(1) of that Act. Aargus had submitted a report to the Queensland EPA stating that all contaminants had been removed from potentially contaminated land when, in fact, that was not so.

90 Aargus pleaded guilty to the offence, the commission of which then carried a maximum penalty of $62,000. The transcript of proceedings before the Magistrate indicates that the relevant report had been prepared by a contractor to Aargus whose legal representative informed the Court that the Company would not "be carrying out [its] business like this in the future and it has been a learning experience ... ".

91 The fact of the prior conviction seems to me to attract the operation of s 21A(2)(d). This does not mean that it can impact upon the objective seriousness of the offence but rather is a factor informing a determination as to where within the boundaries set by the objective seriousness of the offence, an appropriate penalty should lie (Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465; R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566 at [26]). Clearly, the commission of an offence of like kind is relevant to be considered in this context. It discloses that more weight may need to be given "to retribution, personal deterrence and the protection of the community than would be the case if such a record did not exist" (R v M.A.K.; R v M.S.K. [2006] NSWCCA 381; 167 A Crim R 159 at [51]).

92 Two factors militate against the submission by the prosecutor that disregard for public safety should be taken as an aggravating circumstance in the present case (s 21A(2)(i)). First, for reasons earlier stated, the evidence before me does not permit a conclusion that the inspection carried out by Mr Kariotoglou on 5 October 2010 was inadequate. I am therefore unable to conclude that failing to record the existence of bonded asbestos material lying beneath the apparently "clean" and "homogenous" surface of the Glendenning stockpile resulted in the commission of the offence in disregard of public safety.

93 Second, the actions of Mr Kariotoglou on 5 October resulted in the only observed material potentially containing asbestos being removed from the Glendenning stockpile and taken to the offices of Aargus in Petersham. Although the offence arose from the failure to record the observation of this bonded asbestos material on the surface of the stockpile, likely harm to the environment, which includes public safety, has already been considered by me when determining the objective gravity of the offence. The provisions of s 242 of the POEO Act required as much. It would therefore involve double counting if this factor is again considered.

94 A number of the mitigating factors identified in s 21A(3) of the Sentencing Act are relied upon by the defendants. I accept that commission of the offences did not involve any substantial injury, loss or damage (subsection (3)(a)); and that the offence was not part of a planned or organised criminal activity (subsection (3)(b)). Neither Mr Kariotoglou nor Mr Kelly have been convicted of any prior offence (subsection (3)(e)). The same cannot be said of Aargus. I have already referred to the prior conviction in Brisbane Magistrate's Court and the significance that has in determining the appropriate penalty to be imposed upon it.

95 In the context of s 21A(3)(f), the defendants submitted that each of them is of good character. I accept that there is no evidence before the Court reflecting adversely upon the character of any of them. However, no evidence was tendered seeking to establish good character. Evidence is necessary to prove, on the balance of probabilities, that good character is a mitigating factor (Aoun v R [2007] NSWCCA 292 at [23]).

96 I accept that neither Mr Kariotoglou nor Mr Kelly are likely to re-offend. There is evidence before me that each of them have attended courses, including courses conducted by the prosecutor, the purpose of which has been to improve their understanding of the processes involved in site assessment for soil and waste classification and the provision of reports following such assessments. Since the commission of the present offences, Aargus has twice revised and improved its manuals for site assessment and reporting, intended to guide its staff in the performance of their functions. These matters are relevant having regard to the provisions of s 21A(3)(g) and (h) of the Sentencing Act.

97 Each of the defendants cooperated with the prosecutor in the course of investigating these offences. Both Mr Kariotoglou and Mr Kelly, together with Nickolaos, voluntarily participated in interviews, the records of which have been tendered as evidence without objection. Aargus further cooperated by complying with statutory notices and all defendants cooperated, through their solicitor, in settling the agreed statement of facts. Further, as I have earlier recorded, each of Mr Kariotoglou and Mr Kelly acknowledged the presence of fibre cement pieces on the Glendenning stockpile when inspected on 5 October 2010, that information being volunteered in the course of their respective interviews.

 

98 The defendants submit that they are entitled to a discount upon the penalty that would otherwise be imposed upon them by reason of the utilitarian value of their pleas of guilty. While I accept that some discount is appropriate, it cannot be the discount that would be appropriate had the plea been entered at the first available opportunity. The summonses charging offences against each defendant were filed on 16 February 2012. On 1 June 2012, all defendants entered pleas of not guilty. The proceedings were then fixed for trial. The trial date was subsequently vacated by the defendants who entered pleas of guilty on 27 August 2012.

99 Given this history, the defendants are not entitled to a full discount of 25 percent (cf R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383).

100 The defendants also submit that they are entitled to have the remorse shown by them considered in mitigation of the penalty that might otherwise be imposed. They rely upon the provisions of s 21A(3)(i) which stipulates as a mitigating factor:

"(i)   the remorse shown by the offender for the offence, but only if

(i)   the offender has provided evidence that he or she has accepted responsibility for his or her actions, and

(ii)   the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), ..."

101 The prosecutor submits that this factor in mitigation should not be entertained in the present case. Essentially that is because the preconditions for consideration of this factor have not been met. It points to the fact that there has been no expression of remorse by any of the defendants either in the interviews to which I have earlier referred or in the oral evidence given before me by Mr Kariotoglou and Nickolaos. In their oral evidence, each of those witnesses sought to justify their actions, at least in part, by invoking Western Australian guidelines for the assessment, remediation and management of asbestos contaminated sites as well as guidelines published by the National Environment Protection Council. However, no reference was made to the New South Wales provisions, particularly to cl 42 of the Waste Regulation. Indeed, both witnesses admitted to an imperfect recollection and understanding of that Regulation.

102 Although not expressed as such, I think there is evidence sufficient to engage the factor of remorse, although it will not be one that will weigh heavily when determining penalty. Both Mr Kariotoglou and Mr Kelly acknowledged in their respective records of interview that, with the benefit of hindsight, the critical statements in the Report and the Certificate could be seen as misleading in light of the events that occurred. They have each voluntarily undertaken a further program of education in order better to understand their obligations when inspecting and reporting upon soils and materials in potentially contaminated sites. For its part, Aargus has revised its protocols and procedures applicable to all staff so as to reduce the possibility that offences of the present kind will be committed in the future. Implicit in this action is some evidence of acceptance of responsibility for the conduct that constituted the present offences.

The appropriate sentence

103 I have earlier identified the purposes of sentencing set out in s 3A of the Sentencing Act. In [52] I have, for present purposes, identified the paragraphs of that section that are relevant and which I take into account when determining the appropriate penalty. It will be remembered that the purpose identified in paragraph (b) is deterrence.

General deterrence

104 The accurate classification of waste and accurate reporting of the content of waste material together with any potential contaminants that it may contain serves an important role in the environmental management of such material. Those responsible for undertaking the task of classification and reporting must be aware that failure to perform those tasks in a manner that does not meet the requirements of the POEO Act and Waste Regulation will be visited with penalties that are not trifling. Only by imposing a penalty that reflects an element of deterrence will the important need for care and accuracy be understood.

Specific deterrence

105 Consideration of all the evidence tendered before me, leads me to conclude that there is little need for the penalty to be imposed to reflect specific deterrence in the case of Mr Kariotoglou and Mr Kelly. It is clear that the present prosecutions against them have been salutary in that they have acknowledged the misleading nature of the Report and the Certificate. As I have also recorded, they have since attended additional educational programs so that their obligations are better understood.

106 The position that pertains in respect of Aargus is a little different. The evidence before me indicates that the Company issues between 500 and 700 environmental reports each year. Its work is spread throughout New South Wales and into other states of Australia. Although the Company's field work protocols have been amended with the intention of avoiding events of the kind that founded the present prosecution, those protocols, annexed to the affidavit of Nickolaos, still omit reference to cl 42 of the Waste Regulation and its prohibition on re-use of asbestos waste. While the present proceedings will no doubt have some salutary impact upon the manner in which the Company carries out its activities, an element of specific deterrence will be reflected in the penalty imposed upon it.

Even-handedness

107 According to the prosecutor's records, these are the first prosecutions instituted for offences against s 144AA of the POEO Act. The prosecutor identified three cases involving the provision of false and misleading information contrary to the provisions of environmental legislation. The defendants did not refer to any decided case relevant to the consideration of even-handedness. Those cases to which the prosecutor has referred offer only limited assistance in determining the penalty in the present case. Nonetheless, it is appropriate that I refer briefly to them.

108 In Environment Protection Authority v Peters [2006] NSWLEC 612; 153 LGERA 238, the defendant was charged with an offence against s 211(2) of the POEO Act which created an offence of providing information to the prosecutor in purported compliance with a requirement under Ch 7 of the Act "knowing that it is false or misleading in a material respect". The defendant was found to have provided between 300 and 400 certificates that were falsified in order to conceal the fact that a pesticide used by the defendant's company for the purpose of termite control had been used in breach of the Pesticides Act 1999. The falsified certificates had been provided to the prosecutor in response to a statutory notice requiring provision of those documents. Jagot J determined that the offence fell within the upper range of objective gravity and imposed a fine of $80,000. The maximum penalty for the offence was then $125,000. The present offences do not have the same objective gravity nor did the conduct of the present defendants involve deliberate falsification.

109 In Environment Protection Authority v Hargreaves (No 2) [2003] NSWLEC 15; 124 LGERA 57, Lloyd J was also concerned with an offence against s 211(2) of the POEO Act. The prosecutor had required the defendant, as director of a company, to produce records of the amount of waste deposited at a landfill site. The records produced were found to be fictitious and "designed to deceive" the owner of the landfill site. The motive for the deception was financial gain. Lloyd J fined the defendant $15,000 for each of two offences in the context of a maximum penalty of $120,000. The motive for commission of the offence in that case, namely financial gain, renders it to be a higher level of objective gravity than that which pertains in the present case.

 

110 The final case to which reference was made by the prosecutor is Environment Protection Authority v Djura [2012] NSWLEC 122. There, the defendant pleaded guilty and was convicted of two offences against the provisions of the Contaminated Land Management Act 1997. One of those offences was against s 57(1) which rendered it an offence to make a representation to the effect that a person was an accredited site auditor when such an accreditation was not currently held. He completed a site audit of a suspected contaminated site and signed a declaration attached to the audit indicating that he was an accredited site auditor. Although described by Biscoe J, the sentencing judge, as a highly qualified and experienced environmental scientist, he was not accredited as a site auditor. Nonetheless, he had a mistaken belief that he could carry out the site audit, apparently relying upon his qualifications. At the time that he undertook the work and signed the statement he was found to have been suffering from "a cognitive impairment" that coloured his judgment. The charges against him were not only brought under s 57 to which I have earlier referred but also s 48(1)(a) of the Contaminated Land Management Act which rendered it an offence to carry out a statutory site audit if the auditor did not hold current accreditation under that Act. The defendant was fined $3750 for each of the two offences, the maximum penalty for each offence then being $66,000. His Honour had determined that the offences were in the low range of seriousness.

Totality and parity

111 The defendants have submitted that when determining any penalty to be imposed on all or any of them in the present case, I should apply the principle of totality. The prosecutor accepts that as the two offences committed by each defendant "took place at about the same time and involved the same set of facts", it is appropriate to apply the totality principle. However, it submits that as there were two separate documents containing the false information which founds each charge, there should not be a significant reduction in penalty "given that the two offences are quite distinct."

 

112 The frequently cited articulation of the principle is that given by Street CJ in R v Holder [1983] 3 NSWLR 245. He there described the principle as follows at (260):

"The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight-forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences."

113 In Camilleri's Stock Feeds v Environment Protection Authority, Kirby P observed (at 704) that the principle of totality has application where the penalty imposed is by way of fine. However, his Honour also observed that the principle "may not have the same force in the case of the imposition of fines, as opposed to the imposition of imprisonment where it has a special operation".

114 As will shortly be made apparent, I intend to apply the principle when determining the aggregate penalty to be imposed upon each defendant.

115 The principle of parity requires that when imposing sentences in circumstances such as the present, consideration be given to the avoidance of unjustifiable disparity between sentences imposed when offenders are all involved in the same criminal conduct. This is not to suggest that the same penalty should be imposed upon each offender, even when, as here, essentially the same offences are committed by each defendant and arising from the same event. Clearly, consideration is required of the circumstances of each individual and the involvement of each offender in the commission of the offence.

116 Notwithstanding the submission of counsel for the defendants to the contrary, I am of the opinion that, in a relative sense, the highest penalty should be imposed upon Aargus. Not only does that follow from the fact that it is susceptible to a higher maximum penalty as a corporation than is applicable to an individual, but also from two further factors. The first of those factors is that it was the employer of Mr Kariotoglou and Mr Kelly whose actions in completing the Report and the Certificate as they did are not said to be outside the scope of functions that they were required to perform on behalf of their employer. Aargus had the capacity by imposition of appropriate protocols and controls to ensure that any report or certificate issued in its name complied with the requirements of the POEO Act.

117 The second factor relevant to the greater penalty to be imposed upon Aargus is its prior conviction. There is no need to repeat my earlier discussion in this regard except to notice that it is a point of difference between Aargus and the other two defendants.

118 As between Mr Kariotoglou and Mr Kelly, I consider that the culpability of Mr Kelly is less than that of Mr Kariotoglou. So much was acknowledged by their counsel. When reviewing the Report and the Certificate, Mr Kelly was reliant upon the information supplied by Mr Kariotoglou. It is therefore appropriate that any penalty reflect this disparity in function, all other subjective considerations being equally applicable to them.

The dismissal of charges under s 10 of the Sentencing Act

119 Although not stated in his outline of written submissions, counsel for the defendants submitted that both Mr Kariotoglou and Mr Kelly should have the charges against them dismissed under s 10(1)(a) of the Sentencing Act. Although his submissions were brief, the essence of them, as I understood it, was that each of them had no prior conviction and there was no adverse character reference that would militate against the exercise of the discretion provided under s 10(1). Because the offence, as he categorised it, turned upon the failure to disclose the existence of two pieces of fibre cement, potentially containing asbestos, that were removed from the Property by Mr Kariotoglou, the offences should be seen as trivial.

120 Subsection (3) of s 10 provides:

"(3)   In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors:

(a)   the persons character, antecedents, age, health and mental condition,

(b)   the trivial nature of the offence,

(c)   the extenuating circumstances in which the offence was committed,

(d)   any other matter that the court thinks proper to consider."

In making the brief submissions that he did in this context, the defendants' counsel expressly declined to make any submission by reference to paragraphs (c) and (d) of subsection (3).

121 I do not accept the submission founded upon s 10(1). The absence of prior conviction would not, of itself, inform the exercise of the discretion available under the subsection. As I have earlier indicated, there is no evidence adduced of the good character of each of the two defendants in question.

122 Perhaps of greater significance to my determination in this regard is that I do not regard the offences as trivial. They may be at the lower end of the scale of objective gravity but for reasons earlier explained, they do undermine the importance of waste classification and the need for persons exercising the functions performed by Mr Kariotoglou to be accurate when reporting to third parties on the nature of waste material. Failures of the kind that found the present offences have the potential to create serious environmental harm.

 

Costs

123 The prosecutor has sought an order pursuant to s 248 of the POEO Act that the defendants pay its investigation costs. The defendants have agreed to pay the sum of $946 in that regard. It is appropriate that Aargus should pay those costs.

124 The prosecutor has also sought an order pursuant to s 257B of the Criminal Procedure Act 1986 for payment of its costs of prosecuting these proceedings. The defendants accept that such an order should be made but have not agreed upon the quantum of those costs. No indication of the likely costs sought by the prosecutor has been indicated but I will assume that such costs may be in the vicinity of $50,000.

The defendants' means to pay

125 A brief summary of the financial position of each of the defendants has been provided either in summary written form (Exhibit 4) or by statement made by the defendants' counsel from the bar table. This has been done without objection from the prosecutor. There are statements relating to both Mr Kelly and Mr Kariotoglou indicating gross salaries of $120,000 and $80,000 respectively with lease or mortgage costs together with household commitments leaving little by way of surplus cash.

126 In the case of Aargus, I am told that while revenue in the 2011 financial year was $2.1M, a trading loss of $97,000 was incurred with the net equity of shareholders being the sum of $429,000.

127 All of this evidence is tendered in order to engage the exercise of the Court's discretion under s 6 of the Fines Act 1996. The section requires that the Court consider, from such information as is available to it, the means of a defendant to pay when determining the amount of any fine.

 

Publication order

128 The prosecutor seeks an order under s 250(1)(a) of the POEO Act requiring that there be public a notice both in the Sydney Morning Herald and on the website of Aargus a notice in the form of Exhibit K which publishes the fact that the Company has been convicted of the offences to which it has pleaded guilty, the amount of fine imposed upon it and a summary of the facts giving rise to the offence. The proposed publication order does not identify Mr Kariotoglou or Mr Kelly by name although it does refer to the preparation of the Report and the Certificate by reference to the titles which they held in the Company at the time of commission of the offence.

129 Aargus opposes a publication of any such order, describing it as "draconian, oppressive and disproportionate to the offence". It refers to the fact that following the commencement of the present proceedings the prosecutor issued press releases that were widely publicised and which indicated that each of the defendants had been charged with the offences that are presently being addressed. Alternatively, the Aargus submits that any publication order need only appear in a trade magazine, widely distributed among those environmental consultants practising in the area of site assessment and contamination. It is submitted that the deterrent affect of such publication is unlikely to have an impact in the broader community but greater impact among those pursuing the same business as that pursued by Aargus.

130 It is further submitted on behalf of Aargus that the requirement for notification on the Company's website for a period of 12 months, as is sought by the prosecutor, would be disproportionate to the gravity of the offence to which the Company has pleaded guilty. Such a notice, it is submitted, would be likely to lead to the Company losing its entire business.

131 I accept that there is a sound purpose in publicising sentences imposed for breach of the POEO Act. Such publicity improves the effectiveness of sentences as a deterrent. However, as a component of the overall penalty or punishment imposed on a defendant, a requirement for proportionality must be kept in mind.

132 For this reason, I favour the alternate course advocated on behalf of Aargus. I have determined that the objective gravity of the offence is towards the low end of the scale. If it were at a higher level then there may be some justification for the course which the prosecutor advocates. However, having regard to all of the circumstances attending commission of the offences together with the purpose served by publicity of conviction and penalty, publication in the trade journal known as Waste Management Environmental Magazine, published monthly, is sufficient for the purpose in the present case. I do not propose to order that the notice be published on the Company's website.

Conclusion on penalty

133 The determination of an appropriate penalty ultimately requires an instinctive synthesis of all relevant factors pertaining to each defendant (Markarian v The Queen [2005] HCA 25; 228 CLR 357). Given the three defendants and the different circumstances applicable to each, it is necessary that the defendants be separately considered.

(1)   Aargus

Allowing some discount for the plea of guilty and for other mitigating factors that I have identified, I consider that the appropriate penalty for each offence would be $20,000. However, applying the principle of totality it seems to me that the penalty for each offence should be reduced to $15,000 resulting in a total monetary penalty of $30,000. In addition, the Company will be required to pay the prosecutor's investigation costs and also pay one half of the prosecutor's legal costs. As I have already indicated, the Company will also be required to publish the notice which I have earlier addressed.

(2)   The appropriate penalty to be imposed on Mr Kariotoglou is the sum of $6,000 for each offence. Once again, applying the principle of totality it is appropriate that the penalty for each offence be reduced to $4,500, resulting in a total penalty of $9,000. In addition, he will be required to pay 30 percent of the prosecutor's legal costs.

(3)   The appropriate penalty to be imposed for the offences committed by Mr Kelly are $4,000 for each offence. Applying the principle of totality to those offences, it is appropriate that the penalty for each be reduced to $3,000. In addition, Mr Kelly will be required to pay 20 percent of the prosecutor's legal costs.

134 In nominating the penalties that I have, I have taken into account the financial circumstances of each defendant, so far as they are known, conformably with the requirements of s 6 of the Fines Act. I draw attention to the provisions of s 10 of that Act which allows application to the Registrar of the Court for time to pay should a case so to do be made out.

Orders

135 I make the following orders:

1.   In proceedings 50103 of 2012 (Aargus Pty Ltd):

(1)   the defendant is convicted of the offence charged.

(2)   the defendant is fined the sum of $15,000 for this offence.

(3)   the defendant is ordered pursuant to s 248 of the Protection of the Environment Operations Act 1997 to pay the prosecutor's investigation costs in the sum of $946.

(4)   the defendant is ordered to pay one half of the prosecutor's legal costs as agreed or assessed.

(5)   pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 (the Act), the defendant, within 21 days of this order, is to place a notice in the next edition of Waste Management Environmental Magazine at a size of 10cm by 15cm in the form in Annexure A.

(6)   within 14 days of the date of publication of the notice in the Waste Management Environmental Magazine the defendant is to provide to the prosecutor a complete copy of the page of that publication in which the notice appears.

(7)   the exhibits may be returned.

2.   In proceedings 50104 of 2012 (Aargus Pty Ltd):

(1)   the defendant is convicted of the offence charged.

(2)   the defendant is fined the sum of $15,000 for this offence.

(3)   the defendant is ordered pursuant to s 248 of the Protection of the Environment Operations Act 1997 to pay the prosecutor's investigation costs in the sum of $946.

(4)   the defendant is ordered to pay one half of the prosecutor's legal costs as agreed or assessed.

(5)   pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 (the Act), the defendant, within 21 days of this order, is to place a notice in the next edition of Waste Management Environmental Magazine at a size of 10cm by 15cm in the form in Annexure A.

(6)   within 14 days of the date of publication of the notice in the Waste Management Environmental Magazine the defendant is to provide to the prosecutor a complete copy of the page of that publication in which the notice appears.

(7) the exhibits may be returned.

3.   In proceedings 50105 of 2012 (Konstantinos Kariotoglou):

(1)   the defendant is convicted of the offence charged.

(2)   the defendant is fined the sum of $4,500.

(3)   the defendant is ordered to pay 30 percent of the legal costs of the prosecutor as agreed or assessed.

(4)   exhibits may be returned.

4.   In proceedings 50106 of 2012 (Konstantinos Kariotoglou):

(1)   the defendant is convicted of the offence charged.

(2)   the defendant is fined the sum of $4,500 for this offence.

(3)   the defendant is ordered to pay 30 percent of the legal costs of the prosecutor as agreed or assessed.

(4) exhibits may be returned.

5.   In proceedings 50107 of 2012 (Mark Kelly):

(1)   the defendant is convicted of the offence charged.

(2)   the defendant is fined the sum of $3,000 for this offence.

(3)   the defendant is ordered to pay 20 percent of the legal costs of the prosecutor as agreed or assessed.

(4)   exhibits may be returned.

6.   In proceedings 50108 of 2012 (Mark Kelly):

(1)   the defendant is convicted of the offence charged.

(2)   the defendant is fined the sum of $3,000 for this offence.

(3)   the defendant is ordered to pay 20 percent of the legal costs of the prosecutor as agreed or assessed.

(4)   exhibits may be returned.

****

Annexure A

Aargus Pty Ltd convicted of supplying false information about waste

On 22 February 2013, Aargus Pty Ltd and two of its employees, one of whom was a Project Manager and the other the Environment Manager, were each convicted in the Land and Environment Court of two offences of providing false information about waste to a resident at Oakville.

On 14 October 2010, two employees of Aargus Pty Ltd, prepared a soil classification report and an asbestos clearance certificate relating to waste material imported onto the Oakville property for use in landscaping. Both the report and the certificate contained false information about the presence of asbestos or suspected asbestos in the waste material, by stating that there was no asbestos in the material. However, the Project Manager had found asbestos in the material and the Environment Manager was aware of that fact.

Aargus Pty Ltd and the employees were prosecuted by the Environment Protection Authority (EPA).

Aargus Pty Ltd and the employees pleaded guilty and were convicted and fined the aggregate sum of $45,000 and ordered to pay the EPA's legal costs and investigation costs.

This notice was placed by order of the Land and Environment Court and was paid for by Aargus Pty Ltd.

Decision last updated: 25 February 2013