This case note by Matt Floro, EDO Solicitor, and Jasper Brown, Legal Administrator, Sydney, was originally published in the Australian Environment Review, Vol 34, No 6 2019.

In a separate case (Inland Rivers Network vs Harris & Another), EDO on behalf of the Inland Rivers Network has commenced civil enforcement proceedings in the NSW Land and Environment Court in relation to allegations of unlawful water pumping by a large-scale irrigator on the Barwon-Darling River. This hearing will be held over 10 days, commencing on 9 March 2020.

Introduction

In recent times, the use and allocation of our scarce water resources has become a flashpoint for conflict among irrigators, pastoralists and other water users, local communities and environmental groups. Over the last 2 years, media investigations have shed light on claims that taxpayer-purchased environmental water intended for inland rivers may have been harvested by irrigators,1 and that controversial practices such as “floodplain harvesting” may have occurred.2 There have also been allegations of breaches of the Water Management Act 2000 (NSW) (WMA), including claims that water has been taken contrary to water access licence conditions and associated approvals.3

The recent New South Wales Land and Environment Court decision in Water NSW v Barlow4 concerned a high-profile case5 in which the defendant, Mr Anthony Barlow, was charged with one offence relating to taking water contrary to a Ministerial direction and two offences relating to taking water while metering equipment was not operating properly. Mr Barlow’s conduct involved the take of a total of 894.14 ML of water. In November 2018, Mr Barlow pleaded guilty to all three offences and in March 2019, Preston CJ delivered judgment, convicting Mr Barlow of all three offences and fining him a total of nearly $190,000.

The decision in Water NSW v Barlow demonstrates that the sustainable and integrated management of New South Wales’s water sources depends fundamentally on the integrity of the regulatory scheme established by the WMA. When the regulatory scheme is undermined by conduct contrary to the WMA, such as contravening a Ministerial direction or taking water while metering equipment is not operating correctly, the management of New South Wales’s water sources is impaired and environmental prosecutions may result.

Material facts

Mr Barlow occupied and managed “Burren Downs”, an agricultural property adjacent to the Barwon River. The Barwon River is an unregulated river, meaning that it is “not controlled by releases from a dam or regulated via the use of weirs and gated structures”.6 The Barwon River is located within the Barwon–Darling Unregulated River Water Source (Water Source), which is regulated by the Water Sharing Plan for the Barwon–Darling Unregulated and Alluvial Water Sources 2012 (NSW).

Mr Barlow’s parents were the joint holders of Water Access Licence (WAL) 33618 and Water Supply Works and Water Use Approval (Approval) 85CA753238. WAL33618 was a B Class licence, which permits access to water when water flows are at a higher “B Class” flow rate compared to when flows are in the “A Class”.7 The Approval authorised the construction and use of two mixed flow pumps and the use of water from those pumps to irrigate Burren Downs.

The first two offences occurred during the operation of the pumps between 16–18 May 2015 (the first period). During the first period, the taking of water from the Water Source using a B Class licence was prohibited by an order made in February 2015 by the Minister’s delegate under s 324 of the WMA: the “Temporary Water Restrictions Order Upper Darling Basin 2014 (No 2)” (Ministerial Direction). The Ministerial Direction was made in the public interest in response to a water shortage in Broken Hill, New South Wales. Accordingly, the taking of water during the first period was an offence under s 336C(1) of the WMA, which provided that a person who failed to comply with a relevant direction was guilty of an offence.

In addition, during the first period, the metering equipment associated with the pumps did not operate properly. Taking water from the Water Source via a metered work (the pumps) while its metering equipment was not operating properly was an offence under s 91I(2) of the WMA.

The third offence occurred during the operation of the pumps between 29 May–2 June 2015 (the second period). Whilst the prohibition imposed by the Ministerial Direction was effectively lifted on 29 May 2015, meaning that pumping was allowed to resume, the metering equipment associated with the pumps did not operate properly during the second period. Thus, a further offence against s 91I(2) was committed in the second period.

As Mr Barlow gave instructions to an employee to operate the pumps during the first and second periods, Mr Barlow was charged with the three offences. He later pleaded guilty to all three offences.

A sentencing hearing was held on 6–8 February 2019 and the court handed down its judgment on conviction and sentence on 22 March 2019.

Court’s findings

The court convicted Mr Barlow for each of the three offences and fined him $86,625 for the offence against s 336C(1), $48,726 for the offence against s 91I(2) committed in the first period, and $54,140 for the offence against s 91I(2) committed in the second period. The court ordered that Mr Barlow pay the prosecutor’s costs of the proceedings.

In sentencing Mr Barlow, the court considered the objective seriousness of the offences and Mr Barlow’s subjective circumstances. These objective and subjective factors, and the synthesis of these factors with the purposes of sentencing, are detailed below.

Objective seriousness of offences

The first factor relevant to the objective seriousness of the offences was the nature of the offences. The court stated that a “fundamental consideration” was:

… the degree to which, having regard to the maximum penalty prescribed by the statute for the offence, the offender’s conduct would offend against the legislative objective expressed in the offence.8

The objects of the WMA were to “provide for the sustainable and integrated management of the water sources of the State” and to, among other things, “apply the principles of ecologically sustainable development”.9 The court recognised that the objects were achieved through the regulation of the taking and use of water from water sources. As “[a]ccurate metering is essential for fairness and equity of water sharing between users”, the court found that Mr Barlow’s conduct in taking water while the metering equipment was not operating properly contrary to s 91I(2) “undermine[d] the regulatory scheme”.10

The court noted that the objects of the WMA were also achieved through provisions empowering the Minister to make various directions in relation to water source use, such as the Ministerial Direction.11 As the Ministerial Direction was made in the public interest in response to a water shortage in Broken Hill, Mr Barlow’s conduct in taking water despite the Ministerial Direction and contrary to s 336C(1) “undermined the regulatory scheme”.12Accordingly, the court found that Mr Barlow’s conduct offended against the objects of the WMA and the objective seriousness of the offences was increased.

The second objective factor was the relevant maximum penalty. The court referred to both offences against s 91I(2) and s 336C(1) prescribing a Tier 2 penalty, which, at the relevant time, was 2250 penalty units (PUs) ($247,500) in the case of an individual and a further penalty of 600 PUs ($66,000) for each subsequent day an offence continued.

The third objective factor was the harmfulness of the offences. Relevant considerations included the impact of the offences on other persons’rights and the extent of the harm caused or likely to be caused to the environment. The prosecution submitted that the significant amount of water taken in both periods (totalling 894.14 ML) “necessarily impacted on the rights of water users downstream”.13 While the prosecution conceded that there was no evidence of actual environmental harm, it submitted that harm was likely to have been caused because the water taken during the first period was taken during water shortage. However, the court found, while taking water in contravention of the Ministerial Direction “had the potential to impact on people’s rights and on the environment, the evidence does not establish the likelihood or actuality of any such impacts”.14

The fourth objective factor was the foreseeability of harm and practical measures to prevent harm. The prosecution submitted that Mr Barlow did not have systems in place to prevent the commission of the offences. The prosecutor also submitted that simple measures, such as enquiring with the regulator as to the Ministerial Direction or checking the metering equipment display panel, could have prevented the offending conduct. The court found that Mr Barlow “could and should have put in place proper systems for checking whether water was available to be taken … and whether the metering equipment was operating properly”.15

The fifth objective factor was Mr Barlow’s control over the causes giving rise to the offences. The court found that Mr Barlow had “complete control” over these causes as the manager of the property.16

The sixth objective factor was the commission of offences during water shortage. The court found that this consideration was only relevant for the purpose of imposing the penalty for the offence against s 91I(2) committed in the first period, subject to the totality principle (discussed below). It was not relevant for the offence against s 336C(1) because contravention of the Ministerial Direction was already an element of that offence.

The seventh objective factor was Mr Barlow’s state of mind in committing the offences. The court noted that “the state of mind of an offender in committing a strict liability offence can have an effect on increasing the seriousness of the offence”.17 Importantly, the offences under s 91I(2) and s 336C(1) were strict liability offences.

Regarding Mr Barlow’s state of mind in respect of the offences under s 91I(2), the court found that the prosecution had “not proven, beyond reasonable doubt, that Mr Barlow committed the offences intentionally, negligently or recklessly”.18 The court found several “most likely explanations” as to why the metering equipment did not work properly. Firstly, “loose connection of the sensor leads in the meter might have resulted in zero velocities and flow rates being recorded for most of the first period.”19 Secondly, “swapping of the sensor leads in the meter resulted in negative velocities and flow rates being recorded for the balance of the first period and most of the second period.”20 In this regard, Mr Barlow’s employee had taken the plugs of the sensor leads out, cleaned them, and then put them into the incorrect sockets. Thirdly, the “turning off of one pump or another in the second period could result in no velocity or flow rate being recorded for the pump that had been turned off.”21 Mr Barlow agreed that this may have occurred because the pumps were being serviced or because only one pump was needed to operate to capture falling water flows. While the court did not accept Mr Barlow’s submission that the incorrect operation of the metering equipment was “an accident without human intervention”, the court also rejected the prosecutor’s submission that there had been deliberate tampering or interference with the metering equipment.22

Regarding Mr Barlow’s state of mind in respect of the offence under s 336C(1), the court found that Mr Barlow was “recklessly indifferent to whether the embargo was still in place” during the first period.23 Even though, as the court found, the Minister had incorrectly advised a meeting of water users at Bourke on 25 March 2015 that “there is currently no embargo on the Barwon–Darling”,24 Mr Barlow did not check whether the Ministerial Direction had actually been lifted, whilst knowing that it could only be lifted by formal process. Moreover, inApril 2015, Mr Barlow received emails noting that the embargo remained in force, although he said that he did not read the emails at the time.25

The eighth objective factor was Mr Barlow’s reason for committing the offences. The court found that the prosecution had “not proven, beyond reasonable doubt, that Mr Barlow committed the offences against s 336C(1) and s 91I(2) of the [WMA] for financial gain.”26 This was because the volume of water taken was within Mr Barlow’s paid water allocation. Further, the court found that Mr Barlow did not gain a financial advantage by taking water during the embargo (as opposed to after the embargo had been lifted), nor by taking water while the metering equipment was working incorrectly.

From the above analysis, the court found that the offence against s 336C(1) was of “medium objective seriousness” (emphasis added) and the offences against s 91I(2) were of “low objective seriousness”(emphasis added).27

Mr Barlow’s subjective circumstances

The court then dealt with Mr Barlow’s subjective circumstances, the first of which was the mitigating factor that Mr Barlow had no prior convictions for environmental offences.28

The second subjective factor was Mr Barlow’s good character, although the court noted that “[t]his factor has less significance for environmental offences, as they are typically committed by persons of prior good character”.29

The third subjective factor was Mr Barlow’s pleas of guilty, although these came at a late stage in the proceedings. After the summons was filed, Mr Barlow indicated that he intended to plead not guilty to the charges. He formally entered pleas of not guilty on 9 November 2018. However, on 22 November 2018, Mr Barlow indicated to the prosecution and to the court that he intended to plead guilty to the charges; this was 2 working days before the trial was due to commence. Mr Barlow formally changed his pleas to guilty on the first day of the trial, 26 November 2018. Accordingly, due to the “significant delay”, the court found the utilitarian value of the guilty pleas to be “at the lower end of the range of 10%–25%, namely at 12.5%”.30

The fourth subjective factor was Mr Barlow’s remorse for the offences. The court found that Mr Barlow had demonstrated remorse in accepting responsibility for his conduct and in attempting to make reparations, including instigating “changes to the systems to prevent a reoccurrence of the offences”, offering to “make recompense for the water taken” and offering to have the water taken deducted from his current water allocation.31

The fifth subjective factor was Mr Barlow’s assistance to authorities. The court found that Mr Barlow had assisted the prosecution at the time the offences were committed by providing information on 18 May 2015 and participating in a record of interview on 2 June 2015. Further, the court noted that Mr Barlow had complied with inspection notices and had agreed to a statement of agreed facts.

Synthesis of objective and subjective factors and purposes of sentencing

The court found that the sentencing purposes of punishment, retribution, denunciation and general deterrence were relevant, but that there was no need to individually deter Mr Barlow given the subjective factors discussed above and that it was unlikely that Mr Barlow would reoffend.32

The court found that the sentencing purposes of punishment, retribution, denunciation and general deterrence were relevant, but that there was no need to individually deter Mr Barlow given the subjective factors discussed above and that it was unlikely that Mr Barlow would reoffend.32

The court initially set penalties of $99,000 for the offence against s 336C(1) and $61,875 for each of the offences against s 91I(2) and then applied a 12.5% discount to the penalties for the utilitarian value of the guilty pleas. The court declined to order a further penalty for the two continuing days of the offence against s 336C(1), instead having regard to the further 2-day period as part of its consideration of the objective seriousness of the offence. Further, as there was an overlap in the factual circumstances giving rise to the two offences in the first period, the court applied the totality principle to reduce the penalty for the first offence against s 91I(2) by a further 10%. These adjustments resulted in the sentences handed down by the court.

Conclusion

The decision in Water NSW v Barlow comes at a time of heightened concern over the management of the state’s water resources,33 as tensions surrounding water allocations worsen,34 allegations of government maladministration arise,35 and further criminal proceedings alleging contraventions of the WMA by irrigators are afoot.36 Water NSW v Barlow therefore serves as a timely reminder of the importance of complying with the regulatory scheme governing New South Wales’s water sources to ensure the sustainable and integrated management of our most precious resource.

Footnotes