FORMER Port Stephens mayor Bruce MacKenzie's family company and his son Robert have been found guilty of running an unlawful waste dump at their Salt Ash business.
The Land and Environment Court decision this month follows a long-running legal battle between Grafil Pty Ltd and the NSW Environment Protection Authority that made it all the way to the High Court.
Grafil and Robert MacKenzie, who manages Macka's Sand at Salt Ash, were found guilty of allowing trucks to unlawfully dump Sydney demolition waste at the business between October 2012 and May 2013.
The ruling potentially exposes the company to $12 million in asbestos waste clean-up costs and heavy fines.
A sentence hearing is expected to be held later this year.
Following a failed High Court appeal bid by the MacKenzie family company in February, the matter returned to the Land and Environment Court earlier this month before Justice Nicola Pain.
"The defendants do not press for the re-determination of any matter, consider that all findings of fact made at first instance can stand and accept that I should make findings of guilt in relation to their liability for the respective offences," Justice Pain said.
Grafil initially successfully defended a charge of using land as an unlawful waste dump, and Robert MacKenzie of special executive liability as a director for the same charge, after a Land and Environment Court hearing in 2018, that included evidence of asbestos in some of the demolition material.
The not guilty finding was overturned by the NSW Court of Criminal Appeal in August last year after Justice Pain was found to have erred in a majority of 15 questions raised by the EPA after the decision against it.
Justice Pain was ordered by the appeal court to redetermine the matter.
"As a result of the Court of Criminal Appeal findings the defendants accept that they are not able to mount any defence to the charges against them," Justice Pain said.
It was found 40,000 tonnes of material was dumped and stockpiled at Macka's Sand from Sydney building demolition sites without lawful authority.
The prosecution was launched three years after stockpiles of waste up to eight metres high, 40 metres wide and 100 metres long were found near and in waterways.
The unlawful waste dumping charge, under the Protection of the Environment Operations Act, carries a $2 million maximum penalty for companies with a further penalty of $120,000 for each day the offence continues.
Robert MacKenzie is facing a maximum $250,000 fine with a further penalty of $60,000 for each day the offence continues.
Justice Pain said the EPA had "proved beyond reasonable doubt" that a continuing offence occurred.
The 2018 hearing was told four Sydney recycling centres dumped the unauthorised waste at the Salt Ash site.
Bruce and Robert MacKenzie, both directors of Grafil, challenged the EPA to prove the company needed a licence to accept the waste, despite Robert MacKenzie conceding in writing shortly after a raid by the environment watchdog that development approval was needed for "use of materials designated as waste on the site".
The hearing in 2018 was told the two men were "the only targets" of the EPA, with no prosecutions against the recycling centres or companies that transported the waste from Sydney to Salt Ash using an unknown number of trucks.
The court heard the material was to be used on an internal road within the site as part of a new sand mining project.
Following the initial three-week trial, Justice Pain savaged the EPA case saying the regulator "consistently failed to recognise" a 2009 sand extraction approval that included road construction and Grafil's argument the demolition waste was stockpiled to build the roads rather than being dumped.
But in August last year, three members of the NSW Court of Criminal Appeal found Justice Pain made errors of law to find the company not guilty.
The court found Justice Pain "misconstrued" the definition of waste under environmental law, misdirected herself, made findings that were not open to her on the facts in the case and "rewrote the language" about exemptions available to Grafil to accord with what the judge "considered to be a sensible and practical outcome".
Land and Environment Court Justice Brian Preston, one of three judges on the appeal court, said they rejected Justice Pain's findings that the demolition material was not waste as defined under NSW environmental law and that it was temporarily stockpiled.
The court also rejected her assessment that the demolition material was not asbestos waste because of the small amount of asbestos detected.
"Very small amounts of asbestos can pose unacceptable risks to human health and the environment," Justice Preston said.
"Here, the trial judge found that the total amount of asbestos in the bulk samples was 634.64 grams.
"Whilst that might be 'incredibly minor' in comparison to the upper estimate of 44,000 tonnes of materials in the stockpiles, it nevertheless was sufficient to cause severe risk to human health if people were to be exposed to the asbestos.
"The amount of asbestos that the material contains or its relative proportion to the volume of material are not relevant to whether the material contains asbestos."
In the High Court in February Grafil and Robert MacKenzie were represented by leading Australian barrister Bret Walker, SC. The High Court rejected Grafil's application for special leave to appeal the Court of Criminal Appeal decision and the case returned to Justice Pain for a redetermination.
Bruce MacKenzie declined to comment because the case "is ongoing". It's understood a directions hearing will be held in coming weeks to determine a date for sentencing.