Director-General, NSW Department of Industry & Investment v Coomes - [2012] NSWLEC 251

Land and Environment Court

New South Wales

Medium Neutral Citation: Director-General, NSW Department Of Industry & Investment v Coomes [2012] NSWLEC 251
Hearing dates: 4 May, 13 - 14 June, 24 August 2012
Decision date: 13 November 2012
Jurisdiction: Class 5
Before: Pain J
Decision:
The Court:
1. Grants certificates under s 2 of the Costs in Criminal Cases Act 1967 to the Defendants in relation to the charges under the Environmental Planning and Assessment Act 1979 in matter numbers 50063 and 50067 of 2009.
2. Orders that costs be reserved.

Catchwords: COSTS - defendants claim for costs from prosecutor following unsuccessful prosecution under Criminal Procedure Act 1986 - whether unreasonable investigation or failure to properly investigate - whether proceedings initiated without reasonable cause - certificate under Costs in Criminal Cases Act 1967
Legislation Cited: Costs in Criminal Cases Act 1967 s 2, s 3
Criminal Procedure Act 1986 s 257C, s 257D
Environmental Planning and Assessment Act 1979 s 76A(1)(b)
Fisheries Management Act 1994 s 220ZD
Evidence Act 1995
Cases Cited: Cliftleigh Haulage Pty Ltd v Byron Shire Council [2007] NSWCCA 13
Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199
Cittadini v R [2010] NSWCCA
De Varda v Constable Stengord (NSW Police) [2011] NSWSC 868
Director-General, NSW Department of Industry & Investment v Mato Investments Pty Limited (No 4) [2011] NSWLEC 227
Fosse v DPP [1999] NSWSC 367
JD v DPP [2000] NSWSC 1092
Mordaunt v Director of Public Prosecutions [2007] NSWCA 121; (2007) 171 A Crim R 510
Pavy v R (1997) 98 A Crim R 396
Pittwater Council v A1 Professional Tree Recycling Ltd [2008] NSWLEC 325; (2008) 165 LGERA 1
Port Macquarie-Hastings Council v Lawlor Services Pty Limited [2008] NSWLEC 75; (2008) 159 LGERA 87
R v Dunne (NSWSC, Hunt J, 17 May 1990, unreported)
R v Manley [2000] NSWCCA 196; (2000) 49 NSWLR 203
R v Reid [1999] NSWCCA 258
R v Tooes [2008] NSWSC 291
R v White (No 5) [2012] NSWSC 469
The Queen v Noakes (1986) 42 SASR 489
Category: Costs
Parties: Director-General, NSW Department Of Industry & Investment (Prosecutor)
James Lawrence Coomes (First Defendant)
Ian Charles Bennett (Second Defendant)
Representation: Mr I Lloyd QC with Mr T Howard (Prosecutor)
Mr C Ireland (First Defendant)
Ms A Pearman (Second Defendant)
Crown Solicitor's Office (Prosecutor)
Moray & Agnew (First Defendant)
Neville & Hourne Legal (Second Defendant)

File Number(s): 50060, 50061, 50062, 50063, 50064, 50065, 50066, 50067 of 2009

Judgment

I dismissed the charges in each of proceedings 50060 - 67 of 2009, being three charges under the Fisheries Management Act 1994 (the FM Act) and one charge under the Environmental Planning and Assessment Act 1979 (the EPA Act) of carrying out development forbidden by s 76A(1)(b) against two Defendants, Mr Coomes and Mr Bennett, on 2 February 2012. Mr Coomes was Mato Investments Pty Limited's (Mato's) project manager and Mr Bennett was one of its directors. The FM Act charges related to the destruction of habitats of an endangered species of fish, a vulnerable species of fish and an endangered ecological community. The offences arose from the removal of a large number of snags in a stretch of the Murray River adjoining a property known as Kunanadgee, owned by Mato. A contractor Mr Michael Hanger, through his employee and subcontractor, removed the snags between 5 and 16 October 2007. The circumstances of the removal are set out in Director-General, NSW Department of Industry & Investment v Mato Investments Pty Limited (No 4) [2011] NSWLEC 227 (Mato (No 4)). A stated case has been lodged in the Court of Criminal Appeal in relation to my findings concerning two defendants Mato, and Mr Ceman, another of its directors.

The two Defendants Mr Coomes and Mr Bennett now seek costs under s 257C of the Criminal Procedure Act 1986 (the CP Act) or a certificate under s 2 of the Costs in Criminal Cases Act 1967 (the CCC Act).

Criminal Procedure Act 1986 grounds

Section 257C of the CP Act states:

(1) A court may at the end of proceedings under this Part order that the prosecutor pay professional costs to the registrar of the court, for payment to the accused person, if the matter is dismissed or withdrawn.

(2) The amount of professional costs is to be such professional costs as the court specifies or, if the order directs, as may be determined under section 257G.

(3) Without limiting the operation of subsection (1), a court may order that the prosecutor in proceedings under this Part pay professional costs if:

(a) the accused person is discharged as to the offence the subject of the proceedings ...

The Court's discretion to award costs to a defendant under s 257C is subject to s 257D which is in the following terms:

(1) Professional costs are not to be awarded in favour of an accused person in proceedings under this part unless the court is satisfied as to one or more of the following:

(a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner,

(b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an improper manner,

(c) that the prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought,

...

(2) This section:

(a) does not apply to the awarding of costs against a prosecutor acting in a private capacity, ...

There is no dispute that the Prosecutor was acting in a public capacity and therefore s 257D applies. The Defendants bear the onus of establishing one of the paragraphs in s 257D(1) per Fosse v DPP [1999] NSWSC 367 at [16] cited in Port Macquarie-Hastings Council v Lawlor Services Pty Limited [2008] NSWLEC 75; (2008) 159 LGERA 87 at [65].

Mr Potter, the principal investigating fisheries officer from the Department of Industry and Investment, undertook a site visit to Kunanadgee with some of the Defendants and others, including officers of the Department of Environment and Climate Change (DECC), on 25 October 2007. Records of interview (ROIs) were held with Mr Bennett on 12 November 2007, Mr Hanger (contractor) on 13 November 2007, Mr Coomes on 12 December 2007 and Mr Ceman on 16 December 2007. A second ROI was held on 18 January 2008 with Mr Hanger. Mr Hanger swore an affidavit on 23 September 2009. Criminal proceedings were commenced against Mato, Mr Bennett, Mr Coomes and Mr Ceman on 30 September 2009. Mr Hanger was not charged with any offence. Unexpectedly Mr Hanger did not appear at the trial so that his ROIs and affidavit were not read. In the absence of Mr Hanger the Prosecutor relied on admissions in the ROIs inter alia. The individual Defendants gave oral evidence at trial. This is set out in Mato (No 4) in relation to Mr Bennett at [237] - [266], Mr Coomes at [276] - [341] and Mr Ceman at [205] - [236].

The Defendants rely upon s 257D(1)(a), the investigation into the offences was conducted in an unreasonable manner; s 257D(1)(b), the proceedings were initiated without reasonable cause; and s 257D(1)(c), the Prosecutor unreasonably failed to investigate (or investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested that the accused person might not be guilty. The Defendants' counsel agreed that the easiest case they must satisfy is in subsection (1)(a).

Following oral argument on 14 June 2012 the amended grounds relied on by Mr Coomes in relation to the CP Act were identified in a list filed on 15 June 2012 as:

(a) the investigation was conducted in an unreasonable manner, due to the failure to interview Mr Smit (s 257D(1)(a))

(b) the investigation was conducted in a unreasonable manner due to failure to properly investigate the development consent (s 257D(1)(a))

(c) the investigation was conducted in an unreasonable manner, due to the failure to conduct a second recorded interview, and by reason of Mr Potter's refusal of Mr Coomes' reasonable offer to provide information in an unrecorded discussion with Mr Potter (s 257D(1)(a))

(d) there was an unreasonable failure to investigate, within the meaning of s 257D(1)(c) in relation to the development consent

(e) the prosecution was brought without reasonable cause, within the meaning of s 257D(1)(b), having regard to the facts as known by the Prosecutor as at the date of institution of the proceedings in relation to the development consent.

The amended grounds relied on by Mr Bennett as identified in a list filed on 5 July 2012 are:

(a) the investigation was conducted in an unreasonable manner, due to the failure to interview or contact Mr Smit (s 257D(1)(a)) (same ground as Mr Coomes, additional reasons)

(b) the investigation was conducted in a unreasonable manner due to failure to properly investigate the development consent (s 257D(1)(a)) (Mr Coomes' arguments adopted)

(c) the investigation was conducted in an unreasonable manner, due to the failure to conduct a second recorded interview with Mr Bennett (s 257D(1)(a)) (similar ground to Mr Coomes)

(d) (i) there was an unreasonable failure to investigate within the meaning of s 257D(1)(c) in relation to Mr Smit. (Mr Bennett only)

(ii) there was an unreasonable failure to investigate, within the meaning of s 257D(1)(c) in relation to the development consent. (Mr Coomes' argument adopted).

(e) The prosecution was brought without reasonable cause within the meaning of s 257D(1)(b) having regard to the facts known by the Prosecutor as at the date of institution of the proceedings in relation to Mr Smit. (Mr Bennett only)

Prosecutor's evidence

The Prosecutor relied on the following evidence from the trial. Mr Coomes' ROI dated 12 December 2007; Mr Ceman's ROI dated 16 December 2007; affidavit of Mr Parr, Corowa Shire Council's (the Council's) director of environmental services, dated 22 September 2009; the Corcoran consent; Mr Coomes' email dated 1 November 2007 to Mr Bennett and Mr Smit in which he suggested that the resolutions of the August and September shareholders' meetings relating to the site clean-up work be rewritten; Mr Coomes' email to Mr Bennett dated 28 November 2007 attaching an electronic version of extracts from the minutes of Mato meetings; an email from Mr Coomes to Mr Smit dated 17 August 2007 stating "Scope of works as discussed with Michael" and attaching the scope of works; Mr Coomes' invoices to Mato covering work done from July to November 2007; a version of Mr Coomes' invoice to Mato dated 1 October 2007.

Additional evidence not read/tendered at trial

The Prosecutor read the affidavit of Mr Potter dated 18 April 2012 and tendered the following evidence not relied on at the trial: the contractor Mr Hanger's ROIs dated 13 November 2007 and 18 January 2008; affidavit of Mr Hanger dated 23 September 2009; an email from Mr Bennett to Mr Potter dated 28 November 2007 attaching an extract from the minutes of Mato meetings.

Mr Hanger's evidence

Mr Hanger's first ROI dated 13 November 2007 states he approached Mr and Ms Ceman requesting an opportunity to purchase one of the lots of Kunanadgee. They verbally agreed that his services were to be offset against the price of the lot. Mr Hanger visited Kunanadgee with Mr Ceman and Mr Smit in late August or early September 2007. It was a social drive and walk around the site. Mr Smit, he explained, was Ms Ceman's partner and Mr Hanger had known him for a while. Mr Smit was a taxi driver that day and did not have a great deal of input into what was going on. They walked along the Murray River from the northeast portion downstream to its confluence with the Big River Billabong and the unnamed creek on the southern portion. Mr Hanger said he received instructions on what was required. This was a grey area because there was nothing in writing.

After returning from the site visit Mr Hanger met with Mr Coomes in late August or early September, prepared a scope of works with Mr Coomes and gave him a costs estimate. In September Mr Hanger received a telephone call on speakerphone from Mato's board of directors who told him to carry out the clean up works at Kunanadgee as soon as he could. There was no further detailed conversation. Mr Hanger's understanding of "clean up" meant removing all the dead timber and cleaning up the place. He was told to remove dead timber out of the creek. His understanding was that removing it from the banks and the water of the Murray River was also part of his scope of works. Mr Hanger said there was a grey area about who gave him instructions to do this. Although it was not directly mentioned during his conversation with the board, it was part of what he had "discussed with them, with Jim [Coomes]" when he gave Mr Coomes the scope of works list. He did not have a copy of that list at the ROI.

Mr Hanger stated that when Mr Bennett and an engineer visited Kunanadgee on 12 October 2007, Mr Bennett was aware of the snag removal from the Murray River, Big River Billabong and the unnamed creek as it was finished by the time he arrived. That day Mr Bennett had told him to stop pulling logs out of the River because he had a telephone call from a Council officer. This was the second time he had a conversation with Mr Bennett, the first being during the previous week when he telephoned Mr Bennett to say that a Council officer had visited the site.

Mr Hanger's second ROI dated 18 January 2008 states that on the site visit (in late August or early September 2007) with Mr Ceman and Mr Smit, Mr Ceman "absolutely" gave instructions to remove snags from the unnamed creek and asked him to clear the dead timber while Mr Hanger pointed to the creek. Mr Hanger said he also "absolutely" received instructions to remove dead timber from the Murray River from Mr Ceman and Mr Bennett. When Mr Potter asked what Mr Bennett said to him, Mr Hanger said he had not met him on site to talk about the scope of works but had telephone conversations with Mr Bennett when he went through the list of what he was going to do. In response to whether Mr Bennett gave verbal instructions, Mr Hanger said he did not know whether it was a direct instruction but he had a "direct conversation, the walk around the site" with Mr Ceman and that Mr Bennett certainly did not tell Mr Hanger not to pull the snags out. Later Mr Hanger clarified that Mr Bennett did not verbally instruct him to pull logs out of the Murray River, the unnamed creek and Big River Billabong. Nor did Mr Bennett tell him not to pull the logs out during their telephone conversation after his site visit with Mr Ceman when he discussed the scope of works which included "Remove the logs from the creek and clean up the river."

Mr Hanger had the same discussion with Mr Coomes at their meeting when Mr Coomes jotted it all down and presented it to the board the night that Mr Hanger received a telephone call from the board. During that telephone call nobody told Mr Hanger not to pull the logs out. Mr Hanger said Mr Bennett was in agreement with his statement that he would be removing snags from the unnamed creek and the Murray River, and Mr Coomes knew through their conversation that he was going to remove the snags from the unnamed creek and Murray River.

Mr Hanger recalled that Mr Coomes and Mr Bennett talked at length about "what he saw as important with the snag removal from the creek". When asked to elaborate on this statement by Mr Potter, Mr Hanger said that Mr Coomes was very concerned about making sure that any logs stretching across the creek acting as bridges were removed, including the log that the contractors had difficulty getting out which started higher up the bank and around which Mr Hanger put cables in an effort to remove it. He confirmed that both Mr Coomes and Mr Bennett knew of his intentions to remove snags from the Murray River and the unnamed creek because they wanted to know what he was doing for $205,000. He said he knew of Mr Bennett for about three years but had not met him or Mr Coomes until the project.

When asked whether Mr Smit had provided instructions, Mr Hanger said he "might have had a minor input here and there". He could not tell Mr Potter what the instructions were. Mr Smit was there on the walk around the site with Mr Ceman but was primarily the chauffeur who accompanied Mr Ceman and Mr Hanger part of the way and had no other involvement. Mr Hanger said Mr Smit may have made some comments, not instructions, during the walk around the site. He could not specifically recall what comments Mr Smit had made but agreed to provide Mr Potter with a handwritten statement of them. He had known Mr Smit, a friend, for a few years.

Mr Hanger asserted that every owner/shareholder of Mato was aware of his intentions to remove snags from the unnamed creek and Murray River because the process to give him a job was discussed at a shareholders' meeting. What he was going to do, how much he was going to be paid, and that payment was to be in the form of an offset to a piece of land which he wanted to purchase was discussed at that meeting. Mr Hanger was not present at this meeting but received a telephone call after it. The purpose of his visit to Mr Coomes was to give him the scope of works so he could present it to the board.

Mr Hanger's affidavit of 23 September 2009 states that in March 2007 Mr Ceman and Ms Ceman spoke to him about the proposed eco-tourist resort and he offered to help. In late July 2007 Mr Ceman asked Mr Hanger to help by doing some preliminary works. Around the week commencing 20 August 2007 he met with Mr Bennett and Mr Coomes at Mr Coomes' office and discussed his engagement by Mato to conduct clean up works on Kunanadgee. Mr Coomes told Mr Hanger to go to Kunanadgee and formulate the cost based on a scope of works and afterward, to provide him with the scope of works and associated costs.

Mr Hanger accompanied Mr Ceman and Mr Smit on a site inspection of Kunanadgee around 27 August 2007 to formulate a scope of works and gain an estimate of costs from instructions he received from Mr Ceman. During his return trip to Melbourne Mr Hanger told Mr Bennett by telephone that he was going to clean up the property and make a few tracks and asked whether they had a permit for conducting works on Kunanadgee. Mr Bennett had replied that they did. On or about two weeks before the AFL grand final in 2007, Mr Hanger visited the office of Mr Coomes where he marked up a site plan, discussed the scope of works and gave a costs estimate. Mr Coomes told Mr Hanger, "Ok. That will be good. We have a board meeting tonight I'll present your scope of works to them." Around 8pm that day he received a telephone call which he recognised was on speakerphone and heard the voices of Mr Bennett, Mr Ceman and Mr Coomes. Mr Coomes said to start work on Kunanadgee.

On 12 October 2007 Mr Hanger accompanied Mr Smit and Mr Coomes to Kunanadgee where he saw Mr Bennett and met Mr Bird. Around 3:30pm he drove Mr Coomes and Mr Smit to the Council. Between 5pm and 6pm Mr Hanger was accompanied by Mr Smit, Mr Bennett and Mr Coomes in Mr Smit's car on an inspection of the works undertaken on Kunanadgee. He recalls having a conversation with Mr Bennett during the inspection where Mr Bennett said that he was doing a good job. Mr Hanger stopped the car upstream along the Murray River where he saw Mr Adrian Hanger, Mr Damon and Mr Root trying to remove a large log with an excavator and a bulldozer. He recalled Mr Bennett saying he was amazed at how the operators were able to get something that big out of the River. The next day, 13 October 2007 at about 9:30am Mr Hanger, in the company of Mr Ceman and Mr Smit, saw Mr Damon removing logs from the River with the excavator. About 30m away he saw Mr Bennett, Mr Coomes and Mr Bird watching Mr Damon. At around 10:30am Mr Hanger returned to the Kunanadgee homestead where he had a conversation with Mr Bird in the presence of Mr Bennett and Mr Coomes. On 20 October 2007 Mr Hanger received a telephone call from Mr Bennett who said it looked like they had problems with the Council and to stop pulling logs out of the River.

Mr Potter's evidence

Mr Potter's affidavit dated 18 April 2012 states that he did not at any stage during the investigation form the opinion that Mr Smit was likely to be centrally involved in the circumstances of the offences. Mr Bennett, Mr Ceman, Mr Coomes and Mr Hanger made no statements during their ROIs that led him to believe otherwise. He formed the opinion that Mr Bennett, Mr Ceman, Mr Coomes and Mr Hanger were centrally involved. At no stage during the investigation did Mr Potter receive any information which led him to believe that by pursuing inquiries of Mr Smit he might receive information suggesting that either Mr Bennett and/or Mr Coomes might not be guilty of the offences.

During Mr Ceman's ROI he did not indicate that Mr Smit had provided instructions to Mr Hanger during the walk on site in September 2007. When asked of Mr Smit's relationship with Mato, Mr Ceman said he did not have any role other than being Ms Ceman's partner. Mr Hanger's ROI on 13 November 2007 confirmed to Mr Potter that it was Mr Ceman, not Mr Smit, who had given Mr Hanger instructions.

Mr Bennett's ROI indicated to Mr Potter that Mr Bennett was the main decision-maker in relation to the circumstances in which snags were removed from the waterways and that Mato accepted responsibility for the removal of snags. Neither Mr Hanger nor Mr Coomes made any statement suggesting Mr Smit played a central role in the circumstances of the offences during their ROIs.

At the time of deposing this affidavit Mr Potter recalled that some stage after the proceedings had commenced Mr Coomes offered to give further information to Mr Potter off the record. Mr Potter accepted it was possible that Mr Coomes made a similar offer after his ROI. He would have rejected the offers as it was not in accordance with his training and practice to conduct off the record interviews with persons of interest in the investigation of a criminal offence.

Cross-examination of Mr Potter

Failure to interview Mr Smit

Mr Potter attested that it was the first investigation he conducted into an offence against four defendants directed towards a case running for some two to three weeks before a judge in a superior court of record. Investigation was a facet of his job. If he had been made aware of the full circumstances at the time of conducting the investigation, he would have interviewed Mr Smit. Mr Potter clarified in re-examination that at the time of the investigation, none of the Defendants told him that Mr Smit was a person who made decisions on behalf of Mato and that the Defendants were following his directions, he only learned this at the trial.

Mr Potter's email to his superior, Mr Tilbrook, dated 14 November 2007 attaching a briefing note records his view that it was necessary to interview "a part owner of Kunanadgee". He confirmed that he was referring to Mr Smit and at that time he considered it necessary to shed some light on the situation. Mr Potter's diary entry for Monday 19 May 2008 indicated he had to contact Mr Smit. An entry for Tuesday 20 May 2008 recorded that Mr Potter had telephoned Mr Smit that day about an interview at 12:15pm and left a voicemail message. Mr Potter confirmed he arranged to interview Mr Smit in May 2008 but after discussing it with Mr Tilbrook, decided to cancel the interview, as noted in his field notes for 28 May 2008. He and Mr Tilbrook discussed the evidence obtained during the ROIs, identified the potential defendants and agreed on who was not relevant owing to the lack of evidence, which included Mr Smit. Mr Potter came to the conclusion that he did not need to interview Mr Smit based on the ROIs of Mr Bennett, Mr Coomes, Mr Damon, Mr Root, Mr Ceman, Mr Adrian Hanger, and Mr Hanger and statements from Mr Parr and Mr McHugh. He was lead to believe from the ROIs of Mr Ceman on 16 December 2007 and Mr Hanger on 18 January 2008 that Mr Smit was not a person of particular interest. He also took Mr Hanger's first ROI on 13 November 2007 into consideration in making that decision although his view expressed in the briefing note dated a day later was that it was necessary to interview Mr Smit.

Mr Potter confirmed he met Mr Smit during the on-site meeting on 25 October 2007 when Mr Bennett informed him that Mr Smit was a part owner of Kunanadgee and he recorded this in his file notes for that day. He could not recall Mr Smit telling him at the time that he had initiated his friend's, Mr Michael Hanger's, engagement as a contractor, but he did know that from Mr Hanger's first ROI and Mr Ceman's ROI.

Mr Potter's pre-interview questions for Mr Coomes' ROI on 12 December 2007 do not mention Mr Smit despite him forming the view on 14 November 2007 that he needed to interview Mr Smit. Mr Potter explained he did not ask Mr Coomes about Mr Smit because the purpose of interviewing Mr Coomes was to ascertain his involvement in the works conducted on the property, not Mr Smit's. However, he did ask Mr Coomes if there was anything else he wanted to add and if he would like to make a handwritten statement. Both of these requests were declined with the result that Mr Potter did not have a truthful account of events on which to base his brief of evidence. He also did not ask Mr Coomes about the joint venture and its relationship with Mato, Mato's directors and other persons involved such as Mr Smit. Mr Potter was expecting that from the questions he asked, Mr Coomes would provide information to the best of his knowledge.

Mr Potter knew that Mr Smit was present at the meeting at Mr Parr's office on 12 October 2007, as indicated in Mr Parr's email dated 2 April 2008, but he was not the only person there. Mr Potter did not know what Mr Smit's status was in Mato's hierarchy at that time. He confirmed that his draft brief of evidence did not refer to Mr Smit in a substantive way.

Mr Potter recalled that Mr Bennett told him Mr Smit was part owner of Kunanadgee at the on-site meeting on 25 October 2007 but did not recall Mr Bennett describing Mato's structure in detail. During the trial Mr Potter could not recall a lot of the details of the day. Mr Potter did not remember Mr Smit saying anything at the meeting or at the walk around on 25 October 2007.

During Mr Bennett's ROI, Mr Potter did not ask any questions about the joint venture behind Mato after Mr Bennett named the directors and the shareholders and said they were different. He did not consider he needed to do so as he had the names of the directors from a company search and that was the main point of investigation at that stage. He knew that Mr Smit's partner, Ms Ceman, was a director of Mato. At the time he understood that there were owners and directors.

Mr Potter did not receive any modified minutes before Mr Bennett's ROI on 12 November 2007. He received an extract of modified minutes afterward, on 28 November 2007. Mr Potter assumed that the extract of minutes he was provided with were of the only minutes pertaining to the development. He took it on good faith that Mr Bennett provided a full account of the minutes. He could not determine what a person of interest gave to him willingly. He had no power to go to Victoria and seize the minutes of Mato meetings. In his view Mr Bennett was being dishonest by not providing the full minutes. He did not recall seeing or getting a copy of modified minutes or the original minutes before the trial. The email from Mr Bennett attaching the extract of minutes indicated that Mr Potter had requested the minutes in the ROI. Mr Potter had no idea at the time that there may have been other minutes or versions of minutes that might have been relevant to the site clean up and neither Mr Coomes nor Mr Bennett told him as much. If Mr Potter had seen the minutes showing Mr Smit had been involved in the site clean up, being the original minutes, he would have interviewed Mr Smit. The extract of minutes did not indicate that Mr Smit, whom he knew to be a shareholder at the time, was present at the meetings.

Mr Potter was not aware at the time of Mr Hanger's second ROI that Mr Smit was involved in every Mato shareholders' meeting. He was aware of this after the trial given that was the Defendants' evidence.

Failure to conduct a second recorded interview with Mr Coomes/Mr Bennett and rejection of Mr Coomes' offer for unrecorded interview

Referring to Mr Hanger's ROI dated 18 January 2008, Mr Potter confirmed that he did not think it necessary to reinterview Mr Coomes to corroborate Mr Hanger's information that Mr Smit was a chauffeur who provided comments not instructions. Nor was it necessary in order to resolve the direct conflict between Mr Hanger's implication of Mr Coomes in relation to the scope of works and Mr Coomes' denials in his ROI that he had carriage of the matter. Mr Potter assumed that Mr Coomes gave a truthful account of events in his ROI. Mr Hanger's implication of Mr Coomes in relation to the scope of works also conflicted with Mr Bennett's version of events but Mr Potter did not think he needed to reinterview Mr Bennett. If Mr Coomes wished to add anything further he had the opportunity to do so.

Mr Potter thought it was unethical to have unrecorded interviews with potential defendants. He did not explore the possibility of having Mr Coomes' lawyer present during an unrecorded interview. During the investigation Mr Coomes did not convey his concerns about his circumstances to explain why he wanted to guide questioning in a later recorded interview. (I note that Mr Coomes gave oral evidence about these concerns of being made the scapegoat at trial (see Mato (No 4) at [295], [311], [338])).

Mr Potter did not think to reinterview Mr Bennett after Mr Hanger said in his second ROI that he discussed the scope of works with Mr Bennett over the telephone, including removing logs from the creek and cleaning up the River because Mr Potter's investigation covered both acts and omissions. He also did not think he needed to reinterview Mr Bennett regarding the conversations Mr Hanger deposed to having with Mr Bennett in his affidavit dated seven days before the summonses were filed alleging a positive act only. Mr Potter reinterviewed Mr Hanger because in the first ROI he failed to answer direct questions. In relation to whether his position was the same after the trial, Mr Potter said if the Defendants had provided accurate information in their ROIs, for example, if Mr Bennett had provided the full minutes, it may have been reasonable to reinterview Mr Bennett.

Failure to investigate properly/Unreasonable failure to investigate the development consent

Contrary to his evidence at trial that he had only seen the Corcoran consent, Mr Potter confirmed that an email from Mr Hughes of Corowa Shire Council to himself dated 9 November 2007 attaching the Parr consent suggested he had received that version of the consent before the trial. Mr Potter was not aware that there would be implications of there being different versions of development consents because his brief of evidence dealt with the FM Act not the EPA Act. Nor was he aware of anyone else in his department considering that issue.

Evidence for Mr Coomes

Mr Coomes relied on the following evidence from the trial: the statement of Mr Wood, chairman of Mato meetings, filed in Court on 28 March 2011. Additional evidence was also relied on: Mr Potter's briefing note of 14 November 2007; Mr Potter's diary entries; Mr Potter's field notes for 28 May 2008; Mr Potter's pre-interview questions for Mr Coomes' ROI; Mr Parr's email to Mr Potter dated 2 April 2008; Mr Hughes' email to Mr Potter dated 9 November 2007 attaching the Parr consent; Mr Coomes' mobile phone records; and the transcript of the trial.

Mr Wood attested at trial that no instructions, by telephone communication, speakerphone or link up, were given to Mr Hanger in relation to the clearing or other works at Kunanadgee during any meeting he attended. He was sure of this because no communication with any person purporting to be a contractor engaged to carry on work at Kunanadgee was made and because his acquaintance with Mr Hanger meant he would have remembered if Mr Hanger had been instructed in that way or spoken to via telephone during a shareholders' meeting he attended.

Evidence for Mr Bennett

Mr Bennett relied on the following evidence from the trial: the NSW Department of Primary Industries' letter to himself dated 15 September 2009 about the resnagging works; the joint venture agreement made on 21 February 2006 between the four trustee companies which invested in the Kunanadgee project, Mato, and the four representatives of the trustee companies; Mr Potter's notes of the on-site meeting at Kunanadgee dated 25 October 2007; the DECC officer, Mr Whitehead's notes for the on-site meeting at Kunanadgee dated 25 October 2007; original minutes of Mato meetings; modified minutes of Mato meetings on 3 August, 21 August, and 5 September 2007.

Grounds relating to Mr Smit

(a) Section 257D(1)(a) - Unreasonable investigation, failure to interview Mr Jack Smit (Coomes, Bennett) (FM Act)

(d) Section 257D(1)(c) - Unreasonable failure to investigate within the meaning of s 257D(1)(c) in relation to Mr Smit (Bennett) (FM Act)

(e) Section 257D(1)(b) - Prosecution brought without reasonable cause having regard to the facts as known by the prosecution as at the date of institution of the proceedings in relation to Mr Smit (Bennett) (FM Act)

Mr Coomes' submissions

Mr Coomes' counsel submitted that notwithstanding the qualified answer of Mr Potter that he should have interviewed Mr Smit (given that certain facts were not disclosed and original minutes of Mato meetings were not provided), Mr Potter conducted an unreasonable investigation by failing to interview Mr Smit.

After interviewing Mr Hanger on 13 November 2007 Mr Potter formed the view recorded in a briefing note dated 14 November 2007, that it was necessary to interview Mr Smit to get the full picture of the circumstances surrounding the offences he was investigating. Mr Potter's evidence is that he came to the conclusion that he would not interview Mr Smit after he had conducted all his recorded interviews, the last of which was with Mr Hanger on 18 January 2008. However, inconsistently, Mr Potter spoke to Mr Smit and an interview was actually arranged for 20 May 2008 with Mr Smit, but was cancelled by Mr Potter. There was no persuasive explanation advanced by Mr Potter for the cancellation of his interview with Mr Smit other than Mr Potter's change of mind that he was persuaded that it was not necessary to interview Mr Smit after interviews with Mr Ceman and Mr Hanger some months earlier. An objective examination of Mr Ceman's ROI provides no reason not to interview Mr Smit. On the contrary it squarely indicates his presence on site at material times, and would have led a reasonable investigator to interview him.

An associate, Mr Hanger (who Mr Potter intended to prosecute until granted an indemnity late in the investigation), may have downplayed Mr Smit's involvement (saying he was a mere chauffeur). This would not have dissuaded a reasonable and diligent investigator from interviewing Mr Smit.

Mr Potter specifically asked Mr Hanger to provide a handwritten statement as to what instructions or comments Mr Smit gave him, as Mr Hanger expressly declined to reveal that in his ROI. Even in the absence of further information being provided by Mr Hanger, it was necessary to interview Mr Smit, and Mr Hanger's affidavit sworn 23 September 2009 only made this more important as it repeatedly refers to Mr Smit's involvement and presence in the unfolding events: see for example par 14, 15, and 17. This is especially the case when Mr Potter knew that Mr Hanger and Mr Smit were friends and that Mr Smit had initiated his involvement as contractor.

Unlike Mr Coomes, Mr Smit was a party to the joint venture agreement and his partner had a 25 per cent interest in the joint venture undertaking the development: Mato (No 4) at [417], [422], [413]. Mr Potter was alerted to this by his interviews with Mr Coomes and Mr Ceman.

The key question in the case was who gave instructions to Mr Hanger. Although three of the persons who may have been thought to have been in this category (Mr Bennett, Mr Coomes and Mr Ceman) were interviewed, unaccountably Mr Smit was not. This inevitably left room for a reasonable doubt in the prosecution of the other persons, and in particular, Mr Coomes. The difficulties arising at hearing due to the absence of Mr Smit in relation to Mr Coomes' case were identified Mato (No 4) at [486]. The presence of Mr Smit at key events is referred to in the evidence of Mr Hanger, which records Mr Smit as attending a site inspection in Kunanadgee, the purpose of which was to formulate a scope of works. Mr Coomes' counsel relied on Cliftleigh Haulage Pty Ltd v Byron Shire Council [2007] NSWCCA 13 and De Varda v Constable Stengord (NSW Police) [2011] NSWSC 868.

Mr Bennett's submissions

Mr Potter was an inexperienced investigator. He failed to consider the nature of the joint venture agreement and Mr Smit's role. A more experienced investigator would have tried to understand Mr Smit's role, and better appreciated that he should be interviewed. There were clear internal inconsistencies in Mr Hanger's evidence which Mr Potter should have attempted to resolve through interviewing Mr Smit. Regarding instructions about snag removal, in the first ROI in November 2007 Mr Hanger said that he walked around the site with Mr Ceman and Mr Smit in September 2007 and that Mr Smit was just a driver that day. He described a general discussion about tidying up the place. In the second ROI in January 2008 he said that Mr Ceman definitely told him to remove snags from the unnamed creek on Kunanadgee. He was also told to remove the dead timber from the Murray River as well by Mr Ceman. Mr Hanger said providing instructions was a grey area as there was nothing in writing. He came back from the site visit and prepared a scope of works with Mr Coomes. Even if Mr Smit was just a chauffeur it was unreasonable not to interview Mr Smit given these inconsistencies.

Further, Mr Potter knew that Mr Smit was a partner in the joint venture since 25 October 2007 from his own notes. Mr Whitehead of DECC also took notes identifying all present including Mr Smit which Mr Potter could have accessed. Mr Potter in fact determined after the first ROI with Mr Hanger that he should interview Mr Smit but then changed his mind.

There are internal inconsistencies in Mr Hanger's evidence about when all the logs had been removed from the Murray River. In his ROIs he said all the logs had been removed by 12 October 2007 but in his affidavit he said that Mr Bennett saw logs being pulled from the River on that day and commented on the good work being done. Mr Smit was present on 12 October 2007 when Mr Hanger alleged that there were still snags being removed from the River. Mr Hanger said that logs were still being removed on 13 October as he went on a walk and saw this with Mr Ceman and Mr Smit. Mr Potter should have investigated these inconsistencies by interviewing Mr Smit.

Additionally, there was a meeting between Mr Parr from the Council, Mr Bennett, and Mr Smit and others on 12 October 2007. It can be inferred from the dot points of discussion topics in the email from Mr Parr to Mr Potter that the meeting was at a reasonably high level. Mr Smit's role in attending that meeting was as more than a chauffeur. In Mr Bennett's ROI he indicates that Mr Smit visited Kunanadgee as an investor. This should have led to Mr Potter asking questions about Mr Smit's role. Mr Bennett also said Mr Smit approached the contractor as he had known him from the past. This clearly suggests that Mr Smit should have been interviewed as the first person in contact with Mr Hanger. All these matters suggest that Mr Smit was an eyewitness to certain key events, who should have been interviewed.

Mr Bennett referred to the joint venture structure in his ROI about which Mr Potter should have asked more questions. Mr Potter stated at trial that he did not understand the joint venture agreement which shows that four parties including Mr Smit had signed it. Mr Potter could have asked for this document from Mr Bennett but did not. Section 257D(1)(a) applies in these circumstances.

In relation to s 257D(1)(c), in addition to the above matters, the case against Mr Bennett, in the absence of Mr Hanger, depended largely on his informal admissions during the ROI. That does not equate to sworn evidence. Additional matters which were known or ought to have been known by the Prosecutor which suggested that Mr Bennett was not responsible for the instructions giving rise to the offences and was not therefore guilty of them were:

(a) In the ROI Mr Bennett denied having given any instructions to remove snags from the waterways.

(b) He had no motive to carry out such an offence as the removal of snags provided no benefit to the eco-tourism resort. Mr Coomes's ROI confirmed that Mr Bennett wanted to create a sanctuary between the lower creek and the River on the southern portion of the site.

(d) Mr Bennett had no knowledge of the unauthorised work by Mr Hanger before it was done.

(e) Mr Bennett had only met or spoken to Mr Hanger on two occasions prior to the removal of the snags and had not met Mr Hanger until the Kunanadgee project.

(f) Mr Bennett ordered the work to stop as soon as he became aware of snags having been removed on 12 October 2007.

(g) Mr Bennett did not cause the snags to be put back immediately as he was mindful that remediation had to be conducted to a standard acceptable to government departments.

In addition to the above matters, in relation to s 257D(1)(b), Mr Bennett's counsel argued that it was unreasonable or improper to bring the proceedings where all directly relevant enquiries had not been carried out and in circumstances where Mr Bennett had at all times cooperated with the authorities in the resnagging works.

Prosecutor's submissions

Mr Potter's actions in the investigation were reasonable given the matters before him. He was not provided with a copy of the original minutes of Mato meetings, which included potentially relevant references to Mr Smit, by Mr Bennett in November 2007. Nor was he subsequently told by either Mr Coomes or Mr Bennett that references had been deleted in the extract sent to him. Mr Potter was deprived of this information in his investigation. None of the Defendants made statements in their ROIs which could have led Mr Potter to believe Mr Smit was centrally involved in giving instructions to Mr Hanger. Further Mr Hanger's affidavit did not refer to Mr Smit having any role in providing instructions.

Consideration of Mr Smit grounds

The absence of a interview with Mr Smit is relied on by one or both of the Defendants in seeking costs under s 257D(1)(a), (b) and (c). Paragraphs (a) and (c) relate to the investigation phase as identified by the Prosecutor's submission, supported by Cliftleigh Haulage at [17] - [18] per Hodgson JA (Howie and Price JJ agreeing). In Pittwater Council v A1 Professional Tree RecyclingLtd [2008] NSWLEC 325; (2008) 165 LGERA 1, Biscoe J states at [15]:

...

(c) ... A prosecutor's failure to interview an eye witness when it was not known what the witness' evidence might be, could satisfy the test in (a) but not the test in (c) because of the additional requirement: Wollongong at [7].

(d) as to the exception in s 257(1)(a) (that the investigation was conducted in an unreasonable or improper manner)

(i) the test is purely objective. The test is not whether the investigation fell "grossly below optimum standards": JD at [29]-[30]; Wollongong at [77] (sic). The question whether proceedings have been initiated without reasonable cause is to be answered by reference to the quality of the evidence gathered "with an eye not only to the enquiries which had been made but also to those which should have been made": JD at [28]; Wollongong at [8];

(ii) it is unnecessary in every case for the defendant to show that an investigation conducted in a reasonable manner would have suggested that the defendant might not be guilty or that the proceedings ought not to be brought: Cliftleigh at [21];

(iii) a conclusion that the investigation was conducted in an unreasonable manner does not impugn the general competence, far less the integrity, of those responsible for the investigation: JD at[31], Wollongong at [7].

That Mr Smit appeared to be a relevant witness is supported by Mato (No 4) as I chose to accept the evidence of Mr Coomes in relation to the potential involvement of Mr Smit in the events leading up to the snag clearing (see Mato (No 4) at [486] - [487]). My observations in the judgment informed by the Defendants' oral evidence accepted at trial concerning Mr Smit are irrelevant to an assessment of whether the earlier investigation was reasonably conducted by Mr Potter as that evidence was not given to Mr Potter during the ROIs by Mr Coomes in particular.

What Mr Smit may have said about these matters is unknown as he was not interviewed by Mr Potter. In CliftleighHaulage the Court of Criminal Appeal held at [21] that it did not matter that the defendant did not prove what the evidence of an eyewitness would have been. The defendant could rely on a similar provision to s 257D(1)(a) where the prosecution failed to interview the sole eyewitness to car crushing, relying on a circumstantial case, resulting in a mistrial. The facts of CliftleighHaulage are quite different to the circumstances here where there were several potential eyewitnesses to the giving of instructions to Mr Hanger as well as the snag removal, according to Mr Hanger's evidence, some of whom became defendants being Mr Ceman, Mr Bennett and Mr Coomes. I agree with the Prosecutor that CliftleighHaulage is not an authority which supports the Defendants' submissions in the circumstances of this case.

De Varda, relied on by the Defendants, also does not assist in the circumstances of this case. Davies J in considering s 214(1)(a), an identical provision to s 257D(1)(a) applying to lower courts, held at [31] that the "paragraph can be satisfied without proof of what an uncalled witness would have said". If the "prosecution interviews and calls fewer than the available eye-witnesses the section may apply". If a "witness who was not interviewed and called might have thrown a different perspective on the matter the paragraph may apply". These are not binding statements of principle which require that every eyewitness be interviewed regardless of the circumstances.

The conduct of the whole investigation and what Mr Potter was told by the Defendants and Mr Hanger at various times needs to be considered in assessing this part of the Defendants' case. I adopt the Prosecutor's submissions that in determining whether the investigation was conducted in an unreasonable manner, the Court should have regard, inter alia, to the steps taken by an investigator and to what reasonably was within the knowledge of that investigator having regard to statements made and information conveyed during the investigation.

Mr Potter was assisted by fisheries officers Mr Tilbrook and Mr McBurnie. Mr Potter's evidence at trial is summarised in Mato (No 4) at [21] - [54]. The major steps in the investigation included:

(a) multiple inspections and investigations of the subject land and subject waterways both on land and from water craft

(b) identification, examination and counting of the snags and snag piles, including the creation of an extensive record of what had occurred by photographs and video

(d) conducting an initial formal interview with the person who expressly put himself forward as both a director and the authorised representative of Mato - namely Mr Bennett

(e) identifying and conducting interviews with the workers who carried out the works (Mr Root, Mr Damon and Mr Adrian Hanger)

(f) conducting interviews with the contractor engaged to carry out the works (Mr Hanger)

(g) conducting further interviews with Mr Ceman and Mr Coomes, respectively a director and project manager, each of whom had been identified as a person of interest by reason of the earlier interviews with Mr Bennett and Mr Hanger

(h) obtaining and analysing numerous documents provided to him during the investigation.

The Defendants' submissions stress the references to Mr Smit in the evidence being: his presence at the walk around the site with Mr Hanger and Mr Ceman in late August or September 2007; Mr Smit's attendance at a meeting with Mr Bennett and others from Mato with Mr Parr, Council officer, at the Council chambers on 12 October 2007; at the site visit by Mr Potter and others on 25 October 2007; the identification of Mr Smit as a part owner of Kunanadgee as recorded in Mr Potter's notes of 25 October 2007 and in Mr Whitehead's notes; the qualified reference to Mr Smit in Mr Bennett's ROI as being a possible source of instructions for Mr Hanger; and the joint venture agreement to which Mr Smit was a signatory.

The Prosecutor relied on Mr Potter's affidavit evidence that he did not form the view that Mr Smit was centrally involved in the circumstances of the offences but that Mr Bennett, Mr Ceman, Mr Coomes and Mr Hanger were. I agree that on an objective review of the statements made to Mr Potter during the ROIs and the information provided to him during the investigation, his actions were reasonable.

As the Prosecutor submitted, Mr Potter asked Mr Bennett to provide minutes of Mato meetings. The original minutes did refer to Mr Smit's role in engaging a contractor (later identified as Mr Hanger) and in briefing him. Mr Bennett provided Mr Potter with an extract of the minutes. These had been changed by Mr Coomes before being sent to Mr Bennett who sent them to Mr Potter. The original minutes only came to light during trial preparations when the records of the Commonwealth Department of Environment, Water, Heritage and the Arts, as it was then known, were subpoenaed and found to contain them. Mr Coomes had supplied the original minutes to that department in December 2008 unbeknown to Mr Potter or anyone else in his department. The steps taken by Mr Coomes to change the minutes to remove references to Mr Smit, inter alia, are set out in Mato (No 4) at [307] - [310]. I found at [480] that the modification of the minutes removed references to the significant role of Mr Smit in engaging the contractor Mr Hanger. While Mr Bennett's counsel submitted that Mr Potter should have requested all the minutes as he was clearly only provided with an extract, why that is the case is not made out. Mr Potter reasonably assumed he was supplied with the relevant parts of the minutes and did not have the power to compel production of these (or the joint venture agreement) from another state (Victoria) in any event. Given that Mr Bennett had agreed in the ROI to provide Mr Potter with the part of the minutes relevant to the site clean up, that Mr Potter did not see the need to ask for anything more was reasonable. Neither Mr Bennett nor Mr Coomes told Mr Potter at any stage of the truncated extract of the minutes he was provided with.

As the Prosecutor also submitted, Mr Potter's affidavit (summarised above at par 23 - 25) states that none of the persons interviewed made statements to him which led him to believe that Mr Smit was likely to be centrally involved in the circumstances of the offences. That is also his oral evidence, summarised above at par 27. None of the matters put to him in cross-examination concerning his lack of experience in running a large prosecution, not asking questions of Mr Coomes about Mr Smit, or not investigating the joint venture agreement, undermines the reasonableness of this opinion. Mr Potter had before him Mr Bennett accepting responsibility for Mato in his ROI, there was no or no significant mention of Mr Smit by Mr Coomes or Mr Bennett or Mr Ceman in their ROIs. Mr Potter knew that Mr Bennett's understanding, according to his ROI, was that Mr Smit approached Mr Hanger to engage him to undertake works. Mr Potter said Mr Hanger was actually engaged by Mr Ceman because they had discussions regarding him doing works and offsetting the cost with a lot from the property. Mr Potter stated what Mr Hanger was engaged to do was not determined in his mind until the ROIs. When Mr Bennett stated in his ROI that he was not sure whether Mr Hanger was given a site plan of Kunanadgee but believed he would have been, Mr Potter did not ask him who would have given it to him because Mr Bennett seemed unsure of the answer. It did not alarm Mr Potter when Mr Bennett said Mr Smit was one of the four parties present at the meeting with Mr Parr of the Council on 12 October 2007 because his understanding was that any time Ms Ceman went up with her father, Mr Smit would go with her.

The statements made by Mr Coomes at trial about Mr Smit's role were not told to Mr Potter during his investigation. Mr Coomes' actions in this regard were considered in Mato (No 4) at [481] - [487]. While I accepted Mr Coomes' evidence at trial, Mr Smit was not there to confirm or contradict that evidence.

The Defendants emphasised the inconsistencies between Mr Hanger's two ROIs and between Mr Hanger's evidence and Mr Bennett's and Mr Coomes' evidence. In his two ROIs Mr Hanger gave differing accounts of who gave instructions when but in neither ROI did he say that Mr Smit gave him instructions. He simply referred to occasions when Mr Smit was present.

The inconsistencies in Mr Hanger's ROIs concerning what Mr Ceman said to Mr Hanger about the scope of works has to be viewed as part of the whole evidence collected by Mr Potter. This included Mr Ceman's ROI. Mr Ceman admitted that he gave some instructions to Mr Hanger at Kunanadgee during the walk around in August or September 2007. The ROIs with Mr Bennett and Mr Coomes did not draw attention to Mr Smit playing any particular role in giving instructions to Mr Hanger. Further context which Mr Potter was able to weigh up as part of his investigation was also provided by Mr Hanger's ROIs, and affidavit in which he deposes to the involvement of Mr Bennett, Mr Coomes and Mr Ceman in engaging Mr Hanger (including terms whereby one lot of Kunanadgee was to be transferred to him) giving instructions and preparing a scope of works, not Mr Smit.

Mr Coomes' counsel explored in cross-examination with Mr Potter his decision initially to interview Mr Smit, including lining up a date for a ROI, and later deciding this was not necessary after discussions with his superior reviewing the evidence he had from various ROIs. Mr Coomes' counsel submitted no persuasive explanation was provided for Mr Potter's change of mind but this decision demonstrated that he was undertaking his role as investigator diligently weighing up the evidence he had and making decisions about who he should interview. While emphasis was placed on the references to Mr Smit by Mr Hanger in his affidavit, these did not suggest Mr Smit provided instructions. They did confirm Mr Smit's presence at Kunanadgee in August or September 2007 with Mr Ceman and on 12 and 13 October 2007 with other defendants. Those circumstances were known to Mr Potter and were part of the information he had to weigh up.

Inconsistencies between Mr Hanger's evidence and Mr Bennett's suggesting that Mr Bennett saw logs being removed on 12 October 2007 and on 13 October 2007 that Mr Ceman and Mr Smit saw logs being removed were also relied on by Mr Coomes' counsel as further support that a reasonable investigator would have interviewed Mr Smit. I consider that submission is adopting a "fine-tooth comb" approach to the investigation. A reasonable investigation does not require that every inconsistency in evidence be investigated.

Counsel for Mr Bennett suggested that a reasonably thorough investigator would have wanted to satisfy himself that he understood the structure behind Mato and who was involved in making decisions. Mr Potter responded that he wanted to know the truth but did not get it. The truth, according to the Defendants during the trial, was that Mr Smit made all the decisions. The Defendants did not give him this information during his investigation. In light of the information from Mr Coomes and Mr Bennett, it was reasonable for Mr Potter not to consider he had to better understand the joint venture structure behind Mato in addition to understanding who were its directors. These circumstances are a complete answer to the Defendants' case that as a reasonable investigator Mr Potter could have been expected to interview Mr Smit.

As observed by Hidden J in JD v DPP [2000] NSWSC 1092 at [31] an investigation not achieved at an optimal level does not render its conduct unreasonable. That Mr Potter said at trial it would have been preferable to interview Mr Smit (Mato (No 4) at [46]) is simply not relevant. I agree with the Prosecutor's submission that a concession at trial that with the benefit of hindsight it would have been preferable to interview Mr Smit does not render this aspect of the investigation unreasonable. Mr Bennett's counsel submitted (par 54) that there were a number of matters which should have been known to Mr Potter in the context of s 257D(1)(c) which suggested that Mr Bennett was not guilty. That subsection concerns the investigation phase and so the absence of Mr Hanger at trial was not then known to Mr Potter. Mr Potter had to weigh up the conflicting evidence of Mr Hanger and Mr Bennett (as outlined in par 53) as part of his investigation. That there was conflict in their evidence does not suggest there was an unreasonable failure to investigate. At trial in the absence of Mr Hanger the Prosecutor relied on admissions made by Mr Bennett in his ROI and that was not unreasonable.

I do not consider the Defendants have established that the investigation into the FM Act charges was conducted in an unreasonable manner (subsection (1)(a)) in not conducting an interview with Mr Smit. Nor was there an unreasonable failure to investigate in relation to the FM Act charges (subsection (1)(c)) on this basis.

Mr Bennett's counsel also relied on s 257D(1)(b) which refers to the initiation of proceedings without reasonable cause. As identified in A1 Professional Tree Recycling at [15(e)] that proceedings fail does not mean they were initiated without reasonable cause. The reasonableness of the decision to institute proceedings is not based upon the test used by prosecution authorities for continuing to prosecute (whether there is a reasonable prospect of conviction), or the existence of a prima facie case: R v Manley [2000] NSWCCA 196; (2000) 49 NSWLR 203 at [12]. The failure to make a no prima facie case application after close of the Prosecutor's case is not relevant, contrary to the Prosecutor's submission that it was.

If objectively assessed on the facts, or those apparent at the time of initiation, the proceedings had no real prospects of success or were doomed to fail, paragraph (b) can apply; Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199 at [60] cited in A1 Professional Tree Recycling at [15(e)]. The relevant facts are those known at the time of commencement of the proceedings: Lawlor Services Pty Limited at [63]; JD v DPP at [28]. In this case, the evidence of Mr Hanger was then available to the Prosecutor. His unexpected failure to appear at trial does not suggest that the initiation of proceedings was without reasonable cause. That Mr Bennett caused resnagging of the river some months after the clearing in cooperation with the prosecuting department is irrelevant to whether the commencement of these proceedings was without reasonable cause. As Mr Bennett's counsel accepted, the s 257D(1)(b) case is not strong. It is not maintainable given my conclusions above in relation to subsection (1)(a) and (c).

Grounds relating to the development consent

(b) Section 257D(1)(a) - Investigation conducted in an unreasonable manner - failure to properly investigate development consent (Coomes, Bennett) (FM Act, EPA Act)

(d) Section 257D(1)(c) - Unreasonable failure to investigate development consent (Coomes, Bennett) (FM Act, EPA Act)

(e) Section 257D(1)(b) - Prosecution initiated without reasonable cause (Coomes) (FM Act, EPA Act)

During the trial two different notices of determination of development consent dated the same day issued by the Council to the applicant, Mr Bennett on behalf of Mato, for the development at Kunanadgee were tendered in evidence. These were known at the trial as the Parr consent and the Corcoran consent. The Parr consent included deferred commencement conditions and was tendered at trial by the Defendants. The Corcoran consent was in the terms approved by the councillors when they resolved to grant development consent and did not have deferred commencement conditions. At trial the Prosecutor relied on the Corcoran consent which was mentioned in the affidavit of Mr Parr, the Council's director of environmental services, as the relevant development consent granted by the Council. A copy was exhibited to Mr Potter's affidavit. Evidence concerning the two versions is set out at [516] - [540] in Mato (No 4).

I found that the Parr consent was the version notified to Mato for the purposes of s 81 of the EPA Act. Its deferred commencement conditions had not been satisfied at the time of the offences. No development consent was in force at the time of the snag clearing: Mato (No 4) at [561]. Consequently, there was no legal basis for the EPA Act charges: at [562]. Further, a presumption that a defendant knew habitat was of a certain kind if a development consent was breached in s 220ZD(2) of the FM Act could not operate as a result: Mato (No 4) at [563].

The Defendants tendered at the costs hearing an email from Mr Hughes, a Council officer, to Mr Potter attaching the Parr consent dated 9 November 2007. Mr Potter's evidence in cross-examination was that he must have received the email and that no one in his department considered the issue of the validity of the development consent in the circumstances that two different notices had been issued for the same consent.

Defendants' submissions

That there was no relevant development consent in force is a relevant fact and meant that the commencement of the EPA Act charge was not reasonable. Mr Potter equivocated on this issue, first denying that he had seen the Parr consent then conceding that he had received the Parr consent on 9 November 2007. He was not aware of the implications of there being two purported development consents (his task being confined to the FM Act charges). Consequently there was no evidence that a crucial and essential element of the EPA Act charges was given any consideration. The absence of a development consent is determinative in relation to the issue of costs for the EPA Act charges. On any view, there should be a 25 per cent or proportionate costs order in relation to the EPA Act proceedings, even if the Court is against the Defendants' costs application in relation to the three FM Act proceedings.

The significance of the finding at hearing that there was no development consent also conclusively supports a costs order in favour of the Defendants for the FM Act charges (pursuant to s 257D(1)(a), (b) (Coomes only) and (c)). In the absence of a development consent and the consequent inability to rely on the s 220ZD(2)(b) deeming provision, the Prosecutor had to prove actual knowledge that the area in question was habitat of the relevant kind (silver perch, trout cod, or Murray River endangered ecological community). There was no evidence that Mr Coomes or Mr Bennett had actual knowledge of that fact.

Prosecutor's submissions

Mr Potter acted reasonably in relying on Mr Parr's evidence in relation to the development consent granted to Mato.

Consideration of s 257D(1)(a), (b), (c) alleging unreasonable investigation due to failure to properly investigate development consent and proceedings brought without reasonable cause (FM Act, EPA Act)

At trial Mr Potter, for the Prosecutor, relied on the evidence of Mr Parr, the Council's director of environmental services, to provide the requisite development consent obtained by Mato from the Council for development at Kunanadgee. Mr Potter's affidavit dated 22 September 2009 read at trial stated that he contacted Mr Parr within three days of becoming aware of the snag removal. Mr Parr then emailed Mr Potter a copy of the notice of determination of the development application, which was the Corcoran consent. Mr Parr referred to the Corcoran consent in his affidavit dated 22 September 2009 read by the Prosecutor at trial. As the Prosecutor submitted, at no time did Mr Parr identify to Mr Potter there existed a different version of the development consent to that referred to in his affidavit. Given Mr Parr's senior position in the Council, responsible for the issuing of development consents including the Parr consent, Mr Potter's reliance on Mr Parr's evidence was entirely reasonable. That finding is not undermined by Mr Potter's receipt of an email from a Council officer dated November 2007 attaching an unsigned copy of the Parr consent. It looks very similar to the Corcoran consent but for two deferred commencement conditions. I agree with the Prosecutor that the issuing of two different notices of determination for the same development by the Council dated the same day were unusual circumstances which a reasonable investigator could not be expected to consider a possibility.

The Prosecutor sought to rely on the circumstance that Mr Bennett and Mr Coomes were shown the Corcoran consent in the ROIs. However, given the relative similarity between the two notices it is not surprising that the Defendants did not comment about receiving a different version with deferred commencement conditions. Further, as is clear from my reasoning in Mato (No 4) at [554] - [561], whether a development consent was in force was not a straightforward legal question. I had to make a legal finding on that issue on the basis of contested evidence in uncertain factual circumstances of whether or when both notices of determination were sent by the Council and received by Mr Bennett on behalf of Mato.

Both Defendants relied on subsection (1)(a) and (c) in relation to this aspect of their case. They have not made out the ground relying on subsection (1)(a), that this aspect of the investigation of the FM Act and EPA Act charges was conducted in an unreasonable manner. Nor do the Defendants succeed under subsection (1)(c) that there was an unreasonable failure to investigate.

In addition Mr Coomes' counsel relied on subsection (1)(b) to argue that the proceedings were initiated without reasonable cause. That subsection imposes a more onerous threshold for a defendant to satisfy than subsections (1)(a) and (c). Mr Potter could reasonably rely on the sworn evidence from Mr Parr at the time of the initiation of proceedings concerning the issuing of a notice of determination. This suggested a development consent was in force at the relevant time. This ground has also not been established in relation to the FM Act and the EPA Act charges.

Grounds relating to further interviews

(c) Section 257D(1)(a) - Failure to accept Mr Coomes' offer of unrecorded discussion

Mr Coomes' counsel submitted that Mr Potter denied that Mr Coomes had asked if it was possible to speak to him in an unrecorded discussion: Mato (No 4) at [47]. It was the clear evidence of Mr Coomes that he had made such an offer: Mato (No 4) at [295]. Mr Potter has now conceded that Mr Coomes may have offered to provide further information in an unrecorded discussion with Mr Potter after his ROI on 12 December 2007. The failure to accept this reasonable offer of an unrecorded discussion was unreasonable in the circumstances. This was particularly so because Mr Coomes was a person of interest. It was made even more important because, unlike Mr Hanger, Mr Coomes was not given the opportunity of a second recorded interview.

The Prosecutor's role was to gather information in an effort to determine whether charges should be laid. In these circumstances, it made no sense to refuse an offer that potentially important information be supplied whether in a recorded or unrecorded form. If Mr Potter had met and heard what Mr Coomes had to tell him, then there would have been nothing preventing him (ethically or otherwise) from asking wide ranging questions arising directly out of what he had been told. Alternatively he could have put the matters that had been provided to him in the unrecorded interview in a subsequent recorded interview preceded by the required caution to ensure admissibility. Further, the evidence of Mr Coomes indicates that what he would have told Mr Potter in an unrecorded discussion would have militated against the key defect in the Prosecutor's case at trial, namely the absence of Mr Smit: Mato (No 4) at [295].

Mr Potter did not explore the possibility of Mr Coomes having the unrecorded discussion with his lawyer present and was concerned about being subject to scrutiny and criticism for being seen to favour some people over others. Mr Potter's response to the proposition that he did nothing apart from saying "no" when faced with a person of good character offering potentially important information to him, was that he relied on the opportunity Mr Coomes had to provide a handwritten statement. This is an unsatisfactory response in terms of demonstrating the reasonableness of the investigation because when Mr Coomes requested an unrecorded discussion after his ROI, he had already refused in his ROI to provide a handwritten statement.

The distinction between admissibility of admissions made in interviews and the scope of legitimate inquiries by police in this context is established in the authorities: R v Reid [1999] NSWCCA 258 at [6] per Spigelman CJ; R v White (No 5) [2012] NSWSC 469 at [26]. Even in relation to admissibility, s 281 of the CP Act requiring recording of interviews only applies to indictable offences.

Non-acceptance of Mr Coomes' offer of an unrecorded interview reasonable

The Prosecutor submitted, and I agree, that Mr Potter's explanation summarised above at par 37 of why he would not have agreed to an unrecorded discussion for ethical and correct investigatory procedure reasons is entirely proper. As the Prosecutor submitted, apart from submitting that a failure to follow up with an unrecorded discussion was unreasonable in the circumstances, no precedent or objective support for that submission is provided. I agree with the Prosecutor that it is entirely reasonable and serves the interest of due process and probity for an investigator to take the position that all statements made by persons of interest are to be recorded. It was entirely proper procedure to offer Mr Coomes the opportunity to provide additional information on the record. Difficulties, if the course urged by Mr Coomes' counsel had been adopted, arose in TheQueen v Noakes (1986) 42 SASR 489. In that case the South Australian Court of Criminal Appeal set aside a conviction for rape and indecent assault where an important part of the evidence at trial was an admission made during an unrecorded discussion. King CJ (Mohr and von Doussa JJ) found at 492 - 493 that in asking for an off the record discussion the appellant was requesting that anything he said would not be used in evidence. By not typing during the discussion the detectives were agreeing to that request. What occurred was an improper inducement to the appellant to make a further statement and what the appellant said after the detectives stopped typing was not voluntary.

The cases which considered admissibility of unrecorded admissions referred to by Mr Coomes' counsel support Mr Potter's approach. In Reid the Court of Criminal Appeal quashed the appellant's conviction for maliciously inflicting grievous bodily harm. The appellant made admissions during unrecorded conversations with police officers which he was not later asked to confirm during a recorded interview. Those admissions were allowed into evidence and used to undermine the appellant's credibility. At [6] Spigelman CJ (James J agreeing) observed admissions made during police investigations could not be tendered unless the requirements of a precursor to s 281 of the CP Act were met. Smart AJ (Spigelman CJ and James J agreeing subject to qualifications) observed at [66] that for serious crimes it was preferable for interviews at crime scenes to be tape-recorded.

In White the defendant was charged with murder in NSW. He was arrested, given a caution and informed of his rights at his property in Victoria. During a conversation with a detective the defendant made an admission. The detective took contemporaneous notes, the standard practice in Victoria. In NSW s 281 of the CP Act provides that an admission made by a suspect during official questioning for an indictable offence is inadmissible unless tape-recorded or there was a reasonable excuse not to tape record the conversation. Hulme J found at [29] that there was no reasonable excuse for the failure to make an electronic recording of a conversation where there was equipment to do so. The evidence of the admission was inadmissible. Both cases suggest that an investigator who considers that all interviews should be recorded is following a prudent course.

The Defendant submitted that Mr Potter was confusing admissibility of evidence in accordance with the Evidence Act 1995 with information gathering processes in an investigation. Even if Mr Potter was, and I do not accept that submission, that is irrelevant to the assessment of the reasonableness of Mr Potter's actions. That an investigator adopts a certain principled approach to the conduct of an investigation cannot be a basis for submitting that approach was unreasonable. There is nothing about the circumstances relating to the investigation of Mr Coomes that suggests to the contrary.

Whether a particular course of conduct was unreasonable must be assessed from Mr Potter's perspective as the principal investigator. Further, even if Mr Coomes' view was relevant (which it was not), Mr Coomes did not tell Mr Potter why he requested such a discussion so that Mr Potter was unaware of Mr Coomes' concern for his own safety (outlined in Mato (No 4) at [470], [473], [486]). While Mr Coomes might have considered an off the record discussion was a good idea it does not follow that Mr Potter should. Even if he had been aware, the investigation was not conducted in an unreasonable manner by Mr Potter in not agreeing to an unrecorded discussion with Mr Coomes and this ground relying on s 257D(1)(a) is not successful.

(c) Section 257D(1)(a) - Failure to have second recorded interview with Mr Coomes/Mr Bennett

Mr Coomes' submissions

Mr Coomes' counsel submitted that Mr Potter acted unreasonably in not requesting a second recorded interview with Mr Coomes because of inconsistencies in Mr Hanger's evidence about Mr Coomes' involvement.

A table handed up by Mr Coomes' counsel purported to show inconsistencies between Mr Hanger's affidavit and Mr Coomes' evidence at trial. Firstly Mr Hanger's statement (at par 13) that Mr Coomes asked him to formulate a cost based on a scope of works and to provide it to Mr Coomes, conflicted with Mr Coomes' evidence at trial that Mr Hanger knew Mr Coomes did not have carriage of the tree clearing work. Secondly, Mr Hanger's statement (at par 22 - 24) that he met with Mr Coomes about two weeks before the AFL grand final and dictated a scope of works which Mr Coomes approved, conflicted with Mr Coomes' evidence that the meeting was on 16 August 2007 and that Mr Hanger came unannounced, presenting him with a handwritten document. Mr Coomes said Mr Hanger was working under or in association with Mr Smit and asked Mr Coomes to type the document which Mr Coomes did. Mr Coomes advised Mr Smit not to carry out the works as they were prohibited by the development consent. Mr Coomes did not instruct Mr Hanger on the scope of works document. Thirdly, Mr Hanger said Mr Coomes called him to give instructions on behalf of Mato joint venture (at par 25) which contradicted Mr Coomes' evidence that he did not give instructions. Fourthly, Mr Hanger's statement that Mr Coomes inspected snag removal on site on 12 October 2007 (at par 50) was at odds with Mr Coomes' evidence that he did not recall seeing snags.

Mr Potter did not investigate further in relation to Mr Coomes, for example, by requesting his mobile phone records which would have contradicted Mr Hanger's evidence and questioned his credibility as a witness, per R v Dunne (NSWSC, Hunt J, 17 May 1990, unreported). Mr Coomes' counsel handed up a second table to show purported inconsistencies between Mr Hanger's affidavit and other evidence. Firstly, contrary to Mr Hanger stating that Mr Coomes was at Kunanadgee at about 10.30am on 13 October 2007 (par 55 and par 67), entry 527 of Mr Coomes' mobile phone records (exhibit 12) shows that a call from his mobile at 10.55am was made from Mount Waverley in Melbourne. Mr Potter's estimate (in re-examination) was that this is around four hours' drive from Corowa. Mr Potter noted down Mr Coomes' mobile phone number at the onsite meeting on 25 October 2007 (exhibit 8). Secondly, although on Mr Hanger's account he received a telephone call during a board meeting in mid September (par 22 and par 25), the original minutes of Mato meetings records that a meeting occurred on 5 September 2007 not mid-September (exhibit 6, exhibit P at trial) and Mr Wood's statement confirms no such call could have been made (exhibit 5 par 4).

Mr Bennett's submissions

Mr Bennett's counsel submitted that the Prosecutor's case against Mr Bennett relied on the establishment of a positive act by him of instructing Mr Hanger to carry out the works. The Prosecutor had to ensure that there was sufficient material before the Court to establish that fact. Reliance on Mr Hanger without corroboration or checking with Mr Bennett was not sufficient regardless of the fact that Mr Hanger did not show up for the trial. The inconsistencies in Mr Hanger's evidence in the two ROIs in relation to Mr Bennett warranted a second recorded interview with him. There were also inconsistencies between Mr Hanger's first ROI and his affidavit.

Mr Hanger said he received telephone instructions from Mr Bennett about the scope of works and that he never met Mr Bennett on site to discuss this. When asked if Mr Bennett gave him verbal instructions to remove snags from the Murray River he responded that he did not know whether he received a direct instruction from Mr Bennett but he did not say not to pull them out. Mr Hanger said he told Mr Bennett that he was going to pull them out. He said that he did not get direct instructions to remove or not remove logs from the Murray River from Mr Bennett but he discussed with him the scope of works which included the removal of logs from the creek and River. These inconsistencies suggest that a reasonable investigation required that a second interview be conducted.

Prosecutor's submissions

The Prosecutor submitted that the allegation of the failure to have a second recorded interview with Mr Coomes is misconceived as his position was that he would only disclose the involvement of Mr Smit to Mr Potter off the record. It would have been pointless to conduct a second recorded interview with Mr Coomes in these circumstances.

Nor is there any precedent or principle as to why it is unreasonable for an investigator to conduct one recorded interview with a suspect or person of interest. Both Mr Bennett and Mr Coomes were provided with the opportunity to provide a full account to Mr Potter including at the end of their respective ROIs. That they chose not to fully divulge to Mr Potter the role of Mr Smit was a course entirely of their own choosing.

No failure in no second recorded interview with Mr Bennett/Mr Coomes

Both Defendants identified inconsistencies between Mr Hanger's evidence and that of Mr Coomes at trial, and of Mr Bennett. The extensive evidence of Mr Hanger in his two ROIs and affidavit is summarised above at par 12 - 22. An important matter to remember in relation to Mr Coomes' submissions in par 96 is that the inconsistencies between Mr Hanger's evidence and Mr Coomes' identified in par 97 were unknown to Mr Potter until the trial as Mr Coomes' oral evidence varied in some important respects from his ROI. These inconsistencies cannot therefore be relevant to considering subsection (1)(a) which concerns the investigation phase. The reliance on possible discrepancies in the evidence based on Mr Coomes' mobile phone records does not appear to have much significance and does not suggest unreasonableness on Mr Potter's part.

A further matter to consider is that Mr Bennett and Mr Ceman were given an opportunity by Mr Potter to provide further information during the investigation and did not avail themselves of that offer. At trial Mr Bennett and Mr Coomes said they gave incorrect information during the ROIs to Mr Potter. While the test to be applied to s 257D(1)(a) and (c) is an objective one, the decision whether to have a second interview must depend on the myriad circumstances of the investigation being conducted. Mr Potter stated in oral evidence that he did not ask Mr Bennett in the ROI when he met Mr Hanger or what conversations they may have had. He did not consider that after he had conducted ROIs with other people including Mr Hanger, it would have been reasonable to call Mr Bennett back and put various questions to him including about when he first met Mr Hanger. There is no objective standard of investigation which requires that a second interview be conducted where there are inconsistencies in evidence between different witnesses.

As the Prosecutor submitted, whether a second interview is required is a matter for Mr Potter to determine. He chose to rely on the evidence of Mr Hanger inter alia and that was not unreasonable behaviour on his part.

Conclusion on CP Act grounds

The Defendants have not made out any of the grounds relied on in relation to the CP Act claims for costs.

Costs in Criminal Cases Act 1967

The relevant provisions of the CCC Act are:

2 Certificate may be granted

(1) The Court or Judge or Magistrate in any proceedings relating to any offence, whether punishable summarily or upon indictment, may:

(a) where, after the commencement of a trial in the proceedings, a defendant is acquitted or discharged in relation to the offence concerned, or a direction is given by the Director of Public Prosecutions that no further proceedings be taken, or

...

grant to that defendant a certificate under this Act, specifying the matters referred to in section 3 and relating to those proceedings

...

3 Form of Certificate

(1) A certificate granted under this Act shall specify that, in the opinion of the Court or Judge or Magistrate granting the certificate:

(a) if the prosecution had, before the proceedings were instituted, been in possession of evidence of all the relevant facts, it would not have been reasonable to institute the proceedings, and

(b) that any act or omission of the defendant that contributed, or might have contributed, to the institution or continuation of the proceedings was reasonable in the circumstances.

3A Evidence of further relevant facts may be adduced

(1) For the purpose of determining whether or not to grant a certificate under section 2 in relation to any proceedings, the reference in section 3 (1) (a) to all the relevant facts is a reference to:

(a) the relevant facts established in the proceedings, and

(b) any relevant facts that the defendant has, on the application for the certificate, established to the satisfaction of the Court or Judge or Magistrate, and

(c) any relevant facts that the prosecutor or in the absence of the prosecutor, any person authorised to represent the Minister on the application, has established to the satisfaction of the Court or Judge or Magistrate that:

(i) relate to evidence that was in the possession of the prosecutor at the time that the decision to institute proceedings was made, and

(ii) were not adduced in the proceedings.

...

Defendants' submissions

Both Defendants submitted that it would not have been reasonable for the Prosecutor to have instituted the proceedings had the Prosecutor been in possession of all the relevant facts as they emerged at trial and a certificate should be issued.

The reasons relied on by Mr Coomes are:

(i) the absence of Mr Smit, which in the context of Mr Coomes' evidence at hearing, necessarily entailed a reasonable doubt as to causation of the snag clearing (which established that a direction from Mr Smit to Mr Hanger was a reasonable hypothesis, or that Mr Hanger might have acted alone, or with his long term associate Mr Smit, without any causative involvement by Mr Coomes)

(ii) the fundamental evidential conflict between Mr Hanger's affidavit evidence and Mr Coomes' evidence at trial, Mr Wood's statement of evidence, and the original minutes

(iii) the absence of any development consent to support the fourth EPA Act charge, and the FM Act charges in three of the summonses (which, as found in Mato (No 4) at [564], are limited to reliance on s 220ZD(1)(b) of the FM Act), meaning that none of the charges could ever have been made out against Mr Coomes completely apart from the question of causation which was the actual basis of acquittal.

The similar but not identical reasons relied on by Mr Bennett are:

(i) the absence of Mr Smit, which in the context of Mr Bennett's evidence at hearing, necessarily entailed a reasonable doubt as to causation of the snag clearing (which established that Mr Hanger might have acted alone, or with his long term associate Mr Smit, without any causative involvement by Mr Bennett)

(ii) the fundamental evidential conflict between Mr Hanger's affidavit evidence and Mr Bennett's evidence at trial

(iii) the absence of any development consent to support the fourth EPA Act charge, and the FM Act charges in three of the summonses (which, as found in Mato (No 4) at [564], are limited to reliance on s 220ZD(1)(b) of the FM Act), meaning that none of the charges could ever have been made out against Mr Bennett completely apart from the question of causation which was the actual basis of acquittal. (Mr Bennett adopts Mr Coomes' submissions)

For an application for costs to succeed under the CCC Act, it need not be shown that the Prosecutor was left without any case on the evidence as it emerged at trial: Cittadini v R [2010] NSWCCA at [45] per Fullerton J (McClellan CJ at CL and Schmidt J agreeing). The relevant principles are identified in Mordaunt v Director of Public Prosecutions [2007] NSWCA 121; (2007) 171 A Crim R 510 at [36]. The Defendants submitted that all of the facts as found at hearing, in the documentary evidence admitted and as recorded in the evidence of the witnesses on the transcript at hearing, make out the proposition required by the CCC Act that it would not have been reasonable to institute the proceedings against Mr Coomes if the Prosecutor had known of all the relevant facts at the time the decision to institute the proceedings was made.

In relation to par 109(i) and par 110(i) above, the Prosecutor was required to prove beyond reasonable doubt that the Defendants caused damage to the habitats particularised in the charges. As noted in Mato (No 4) at [419] - [427], in the absence of evidence from Mr Smit or Mr Hanger there was no direct evidence establishing how the snag removal came to be carried out by Mr Root and Mr Damon, employed by Lance Excavations Pty Ltd, and Mr Hanger's brother, Mr Adrian Hanger. The evidence from Mr Adrian Hanger established that all the instructions for the work to be carried out came from Mr Hanger alone.

In relation to par 109(ii) and par 110(ii) above, the facts found at trial cast significant doubt on the Prosecutor's reliance on the affidavit of Mr Hanger given the inconsistencies with the evidence of Mr Bennett and Mr Coomes, the evidence of Mr Wood and the original Mato minutes.

In relation to par 109(iii) and par 110(iii) above, no development consent was held to be in force during the offences period in Mato (No 4). The Defendants submitted that Mr Potter was not aware of the implications of there being two competing purported development consents as he was focussed on the FM Act offences. He was not aware of anyone else within the Department turning their minds to that issue.

There was no disentitling conduct by Mr Coomes or Mr Bennett relevant to s 3(1)(b).

Prosecutor's submissions

Section 3(1)(a) requires an inquiry to be made of whether it was reasonable to institute proceedings in light of the relevant facts. The circumstances relied on by the Defendants are not relevant facts. In relation to par 109(i) and par 110(i) above, the absence of Mr Smit is not a relevant fact but relates to the conduct of the proceedings alleging a failure to call him as a witness by the Prosecutor. This does not fit into the wording of the section.

In par 109(ii) Mr Coomes' counsel submits as a relevant fact the fundamental evidential conflict between Mr Hanger's affidavit and Mr Coomes evidence at trial, and between Mr Hanger's evidence, Mr Wood's statement and the original minutes. This also cannot be a relevant fact within the terms of the section. The same submission applies to Mr Bennett's reason at par 110(ii).

In relation to par 109(iii) and par 110(iii) above, the absence of development consent is a legal conclusion rather than a relevant fact. On the facts as found it would not have been unreasonable for the Prosecutor to institute proceedings on the basis that those facts supported the conclusion that the consent was in force. That the Court held to the contrary does not mean that it was unreasonable for the Prosecutor to have taken that position. The situation is analogous to A1 Professional Tree Recycling where the Court was not satisfied that the investigation was conducted in an unreasonable manner. That case concerned the construction of a tree preservation order.

Section 3(1)(b) applies as there were significant acts and omissions of the Defendants that contributed or might have contributed to the institution and continuation of these proceedings which were not reasonable in the circumstances. Each Defendant deliberately misled Mr Potter concerning the role of Mr Smit through the provision of modified minutes of Mato meetings. No Defendant later told Mr Potter of this fact. Neither Defendant asserted that Mr Smit had played a significant role in the circumstances of the commission of the offences. These matters were raised for the first time at trial. Mr Bennett put himself forward as the authorised representative of Mato at the ROI with Mr Potter and stated that Mato accepted responsibility.

In relation to the EPA Act charges the Defendants were aware the charge was based on the Corcoran consent. They were aware of the Parr version but omitted to inform the investigator prior to trial. The Defendants are not entitled to a certificate under the CCC Act.

Certificate for EPA Act prosecution costs should issue

Whether a certificate ought be issued under s 2 of the CCC Act is essentially a matter for the Court to determine in the exercise of its discretion. In this case the Prosecutor has adopted the role of contradictor to the exercise of discretion in the Defendants' favour. Under s 3(1)(a), in granting a certificate, I must consider whether if the Prosecutor had been in possession of all relevant facts it would not have been reasonable to commence the proceedings. I must also consider in forming that opinion in s 3(1)(a) whether the Defendants contributed to the institution of or continuation of the proceedings under s 3(1)(b). The parties agree that the relevant principles to be considered in applications under the CCC Act are identified in Mordaunt at [36] by McColl JA (Beazley and Hodgson JJA concurring) as follows:

(a) The CCC Act is reforming legislation with a beneficial purpose designed to confer valuable privileges upon persons who succeed in criminal prosecutions; its provisions should not be narrowly construed so as to defeat the achievement of its general purposes: Nadilo v Director of Public Prosecutions (1995) 35 NSWLR 738 at 743 per Kirby P; see also Allerton v Director of Public Prosecutions (1991) 24 NSWLR 550 (at 559-560) per Kirby P, Meagher JA, Handley JA;

...

(d) The applicant for a s 2 certificate bears the onus of showing it was not reasonable to institute the proceedings; it is not for the Crown to establish, nor for the Court to conclude, that the institution of the proceedings, was, or would have been in the relevant circumstances, reasonable: Manley (at [15]) per Wood CJ at CL; R v Johnston [2000] NSWCCA 197 (heard concurrently with Manley) (at [17], [29]) per Simpson J (Wood CJ at CL agreeing);

(e) The task of the court dealing with an application under the CCC Act is to ask the hypothetical question, whether, if the prosecution had evidence of all the relevant facts immediately before the proceedings were instituted it would not have been reasonable to institute the proceedings: Allerton (at 559-560); the judicial officer considering the application must find what, within the Act, were "all of the relevant facts" and assume the prosecution to have been "in possession of" all of them and must then determine whether, if the prosecution had been in possession of those facts before the proceedings were instituted, "it would not have been reasonable to institute [them]; an applicant for a certificate must succeed on both the "facts issue" and the "reasonableness issue": Treasurer in & for the State of New South Wales v Wade & Dukes (Court of Appeal, 16 June 1994, unreported, BC9402561) per Mahoney JA (with whom Handley and Powell JJA agreed); Ramskogler (at 134-135) per Kirby P;

(f) The hypothetical question is addressed to evidence of all of the relevant facts, whether discovered before arrest or before committal (if any); after committal and before trial; during the trial; or afterwards admitted under s 3A of the CCC Act; all of the relevant facts proved, whenever they became known to the prosecution and whether or not in evidence at the trial, must then be considered by the decision-maker: Allerton (at 559-560); Manley per Wood CJ at CL (at [9]); the relevant facts include those relevant to the offences charged and the threshold question posed by s 3(1)(a); other facts will also be relevant and admissible going, amongst other things, to the question posed by s 3(1)(b) and to the ultimate question whether, assuming that the court if of the opinion required to be specified, it should exercise its discretion under s 2: Gwozdecky v Director of Public Prosecutions (1992) 65 A Crim R 160 (at 164-165) per Sheller J (with whom Mahoney JA and Hope AJA agreed);

...

(h) The reasonableness of a decision to institute proceedings is not based upon the test that prosecution agencies throughout Australia use as the discretionary test for continuing to prosecute, namely whether there is any reasonable prospect of conviction, nor is it governed by the test in s 41(6) of the Justices Act 1902 [prior to its repeal] applied by magistrates, namely whether no reasonable jury would be likely to convict; the test cannot be a test of reasonable suspicion which might justify an arrest and it cannot be the test which determines whether the prosecution is malicious: R v McFarlane (Blanch J, 12 August 1994, unreported); app. Manley per Wood CJ at CL (at [12]) per Sully J (at [42]); R v Hatfield (2001) 126 A Crim R 169 per Simpson J; and adopted by Blanch AJ (with whom Spigelman CJ and Simpson J agreed) in R v Ahmad [2002] NSWCCA 282;

...

(m) Section 3 calls for an objective analysis of the whole of the relevant evidence, and particularly the extent to which there is any contradiction of expert evidence concerning central facts necessary to establish guilt, or inherent weakness in the prosecution case; matters of judgment concerning credibility, demeanour and the like are likely to fall on the other side of the line of unreasonableness being matters quintessentially within the realm of the ultimate fact finder, whether it be Judge or Jury: Manley per Wood CJ at CL (at [14]); Johnston (at [26] [29]) per Simpson J (with whom Wood CJ at CL and Sully J agreed); it is not sufficient to establish the issue of unreasonableness in favour of an applicant for a certificate that, in the end, the question for the jury depended upon word against word; in a majority of such cases, it would be quite reasonable for the prosecution to allow those matters to be decided by the jury; it would be different where the word upon which the Crown case depended had been demonstrated to be one which was very substantially lacking in credit: R v Dunne (Hunt J, 17 May 1990, unreported);

...

The following reasoning in Pavy v R (1997) 98 A Crim R 396 (at 401) was relied on by the Defendants:

The legitimate interest which the community has in serious crimes being prosecuted by the Director of Public Prosecutions is not disputed. That cannot, in our judgment, make it reasonable as between the Crown and the Accused/Applicant to prosecute in the face of significant weaknesses in the Crown Case of which the Crown, acting reasonably, ought to have been aware.

I must determine whether that observation applies in this case.

The Court of Criminal Appeal noted in Pavy that the CCC Act requires a court to approach the s 3(1) question from the point of view of the hypothetical prosecutor, who is taken to have known all the evidence as it emerges in the case (at 400). See also R v Tooes [2008] NSWSC 291 at [5] - [7], and [11] per Studdert AJ.

Mordaunt identifies ([36(d)]) that the Defendants bear the onus of establishing that the Prosecutor's behaviour was unreasonable. It further identifies ([36(e)]) that the task of the Court is to ask whether "if the prosecution had evidence of all the relevant facts immediately before the proceedings were instituted it would not have been reasonable to institute the proceedings". Section 3A(1) of the CCC Act provides that all relevant facts include those established in the proceedings (subsection (1)(a)) and any relevant facts that a defendant has established to the satisfaction of the Court in the certificate application (subsection (1)(b)). Subsection (1)(c) encompasses the evidence of Mr Hanger read in this costs hearing.

As identified in the Prosecutor's submissions, an issue that arises is whether the Defendants' grounds are based on evidence of facts established for the purposes of s 3(1)(a). Whether there are settled facts which support the Defendant's grounds in (i) and (ii) is debatable. As to facts established at trial, Mato (No 4) at [19] - [92], [102] - [123], [171] - [204] identifies evidence adduced at trial by the Prosecutor. A key witness, Mr Hanger, unexpectedly did not appear at trial. Consequently, the Defendants' extensive oral evidence was largely uncontested. Mr Hanger's evidence, which the Prosecutor had intended to adduce at trial, was tendered in the costs hearing and can be taken into account in relation to costs under the CCC Act. There are however a number of significant conflicts in the evidence of Mr Hanger and Mr Coomes, and Mr Bennett and Mr Wood, which remain unresolved as their evidence was not tested together at trial.

In 109(i) and 110(i), the Defendants rely on the absence of evidence from Mr Smit at the trial as a relevant fact. The possibility that Mr Smit played a role in instructing Mr Hanger arises because of my acceptance of Mr Coomes' uncontested oral evidence in Mato (No 4). That evidence suggested that Mr Smit had an active role in both engaging and briefing Mr Hanger on what work was required at Kunanadgee. The evidence of Mr Bennett suggested some role for Mr Smit to a lesser extent. Mr Hanger's evidence which has been tendered in this costs hearing does not suggest that Mr Smit had any role in providing instructions to Mr Hanger beyond driving him and Mr Ceman around the property on 25 September 2009. As Mr Smit was not interviewed, charged, or called as a witness, his evidence is unknown.

The original minutes of Mato meetings tendered at trial record that Mr Smit suggested that a contractor he knew be engaged and, more importantly for present purposes, had a role in providing instructions to the contractor. All that can be said of this evidence is that had it been known before the commencement of proceedings Mr Potter would have interviewed Mr Smit concerning his role if any in giving instructions to Mr Hanger. The evidence of Mr Hanger in his ROIs and affidavit does not identify Mr Smit as the person from whom he obtained instructions, rather Mr Hanger names Mr Ceman, Mr Bennett and Mr Coomes in various contexts. What Mr Smit might have said about briefing of Mr Hanger and whether he would have concurred with the evidence of Mr Coomes is unknown. It follows that there is no established fact about Mr Smit's involvement in relation to giving instructions to Mr Hanger which the Defendants can rely on for this ground. This is a longer way of stating what the Prosecutor put succinctly, namely that Mr Smit not appearing as a witness concerns the conduct of the case and is not an established fact to which s 3 refers. There is accordingly no basis to conclude that there was a reasonable doubt as to causation of the snag clearing absent Mr Coomes or Mr Bennett. No unreasonableness by the Prosecutor in instituting proceedings is established by the Defendants.

In relation to 109(ii) and 110(ii), as already stated the conflict in evidence as between Mr Hanger and Mr Bennett and between Mr Hanger and Mr Coomes was not tested in Court. The existence of that conflict was known by the Prosecutor before the commencement of proceedings. As identified in Mordaunt at [36(m)], it is not unreasonable for matters of judgment concerning witness demeanour and credibility to be left for the ultimate fact-finder, here a judge. That observation applies to this ground. It was reasonable for the Prosecutor to decide that Mr Hanger's evidence was sufficient to establish the elements of the offence. The evidence of Mr Wood, a witness called by Mr Coomes at trial, also contradicted parts of Mr Hanger's evidence. It was reasonable for the Prosecutor to place that conflicting evidence before the trial judge.

In relation to 109(iii) and 110(iii), I drew the legal conclusion in Mato (No 4) that no development consent was in force under the EPA Act at the time of the work giving rise to the offences. The relevant fact established during the trial was that the Council issued two notices of determination in different terms for the same development application. Mr Potter did have possession of the Parr consent by virtue of the email of 9 November 2007 from a Council officer as well as the Corcoran consent obtained from Mr Parr before proceedings were commenced. The November 2007 email was tendered during this costs hearing. That two notices of development consent were issued was not appreciated by Mr Potter before the commencement of proceedings. It is therefore more accurate to say that Mr Potter did have possession of the two notices but lacked awareness of that fact and that there were possible legal consequences arising from it.

Had the Prosecutor been aware of the two different notices issued by the Council before proceedings commenced, was it reasonable to commence these on the assumption that there was a development consent in force at the time of the work giving rise to the offences? The conclusion that there was a consent in force is a mixed question of fact and law. The circumstances surrounding the communication of the notices was not straightforward and required me to draw conclusions of fact from which a legal conclusion was then drawn, as set out in Mato (No 4) at [554] - [561]. In these circumstances it is finely balanced whether the commencement of the EPA Act proceedings based on a breach of development consent in particular was reasonable in the context of the CCC Act. On balance if that information had been known to the Prosecutor, including awareness of the possible legal consequences, I consider that it was not reasonable to commence the proceedings in relation to the EPA Act charges against both Defendants.

An element of the FM Act charges required the Prosecutor to prove the Defendants had knowledge that habitats of the relevant kinds were damaged. The issue therefore arises of whether commencement of the FM Act proceedings was reasonable where reliance was placed on the presumption under s 220ZD(2)(b). It is to be conclusively presumed that a person knew that the habitat was of the specified kind if the act causing damage to habitat was a failure to comply with a development consent. I ultimately held there was no development consent in force at the time of the offences so that this statutory presumption could not operate. It was unnecessary for me to resolve in Mato (No 4) whether Mr Bennett or Mr Coomes had knowledge of habitat because I held at [505] that the Prosecutor had failed on the element of causation of the offences in relation to both Defendants. I noted at [508] that Mato accepted that Mr Bennett had knowledge of the presence of habitat. I note however that Mr Bennett and Mato were separately represented and Mr Bennett did not admit this element of the offence at trial.

The Prosecutor relied on both the statutory presumption and actual knowledge of habitat in relation to Mr Bennett at trial: see written closing submissions at trial at par 89, 93. Mr Bennett said in his ROI that he was aware of the contents of the Habitat Planning's ecology report regarding fish habitat, the endangered ecological community, and that snags provide habitat: Mato (No 4) at [181]. Mr Bennett was also aware that the work breached condition 16 of the development consent: Mato (No 4) at [250]. The commencement of the FM Act charges against Mr Bennett did rely in part only on the presumption in s 220ZD(2)(b).

Mr Coomes' counsel submitted that there was no evidence that Mr Coomes had knowledge of the relevant habitats and the Prosecutor therefore had to rely on both the statutory presumption of knowledge. The Prosecutor relied on the statutory presumption of knowledge and evidence of actual knowledge in relation to Mr Coomes, as can be seen from its written closing submissions at trial at par 89, 93.

Even if the Prosecutor had known that the statutory presumption was not available before trial, this does not mean it was unreasonable to commence the FM Act prosecutions given that evidence of actual knowledge was also adduced by the Prosecutor.

The Prosecutor submitted that s 3(1)(b) applies to the behaviour of the Defendants. If it does I can exercise my discretion not to award a certificate in relation to the EPA Act charges. There was evidence at trial that Mr Coomes made deliberate omissions about Mr Smit in his ROI in relation to the role he said was played by Mr Smit (Mato (No 4) at [486]). Mr Coomes also made deliberate changes to the minutes of Mato meetings omitting references to Mr Smit and himself regarding the clearing work on Kunanadgee and the preparation of a scope of works. These were passed to Mr Bennett to be sent to Mr Potter. I made no specific finding in relation to Mr Bennett and the alteration of the minutes. I identify in Mato (No 4) at [486] the occasions on which there were changes made to the minutes of Mato meetings, Mr Coomes' creation and then deletion of a draft letter of engagement for Mr Hanger based on the scope of works which he knew contained unauthorised work, deletion of Mr Coomes' email to Mr Smit attaching the scope of works, and deletion of the reference in the invoice to the preparation of the draft letter of engagement. The Prosecutor submitted that acts and omissions by Mr Coomes and Mr Bennett contributed to the institution or the continuation of proceedings and were not reasonable.

Mr Coomes' counsel submitted that even if the original minutes had been available to the Prosecutor before trial, charges would still have been pressed against Mr Coomes and s 3(1)(b) does not apply. The Prosecutor accepted that submission during the hearing. It is difficult to say whether the acts and omissions of Mr Coomes and Mr Bennett to a lesser extent contributed to the institution or continuation of proceedings against them as a number of factors were relevant to the commencement of proceedings, not least the evidence of Mr Hanger. On balance I consider s 3(1)(b) does not apply to the acts and omissions by Mr Bennett and Mr Coomes more particularly, as these did not contribute to the institution or continuation of proceedings against these Defendants.

In conclusion, certificates under s 2 of the CCC Act are to be issued in relation to the EPA Act charges for Mr Coomes and Mr Bennett. Costs of the costs hearing will be reserved.

Order

The Court:

(1) Grants certificates under s 2 of the Costs in Criminal Cases Act 1967 to the Defendants in relation to the charges under the Environmental Planning and Assessment Act 1979 in matter numbers 50063 and 50067 of 2009.

(2) Orders that costs be reserved.

**********

Decision last updated: 15 November 2012

Medium Neutral Citation:	Director-General, NSW Department Of Industry & Investment v Coomes [2012] NSWLEC 251
Hearing dates:	4 May, 13 - 14 June, 24 August 2012
Decision date:	13 November 2012
Jurisdiction:	Class 5
Before:	Pain J
Decision:	The Court: 1. Grants certificates under s 2 of the Costs in Criminal Cases Act 1967 to the Defendants in relation to the charges under the Environmental Planning and Assessment Act 1979 in matter numbers 50063 and 50067 of 2009. 2. Orders that costs be reserved.
Catchwords:	COSTS - defendants claim for costs from prosecutor following unsuccessful prosecution under Criminal Procedure Act 1986 - whether unreasonable investigation or failure to properly investigate - whether proceedings initiated without reasonable cause - certificate under Costs in Criminal Cases Act 1967
Legislation Cited:	Costs in Criminal Cases Act 1967 s 2, s 3 Criminal Procedure Act 1986 s 257C, s 257D Environmental Planning and Assessment Act 1979 s 76A(1)(b) Fisheries Management Act 1994 s 220ZD Evidence Act 1995
Cases Cited:	Cliftleigh Haulage Pty Ltd v Byron Shire Council [2007] NSWCCA 13 Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199 Cittadini v R [2010] NSWCCA De Varda v Constable Stengord (NSW Police) [2011] NSWSC 868 Director-General, NSW Department of Industry & Investment v Mato Investments Pty Limited (No 4) [2011] NSWLEC 227 Fosse v DPP [1999] NSWSC 367 JD v DPP [2000] NSWSC 1092 Mordaunt v Director of Public Prosecutions [2007] NSWCA 121; (2007) 171 A Crim R 510 Pavy v R (1997) 98 A Crim R 396 Pittwater Council v A1 Professional Tree Recycling Ltd [2008] NSWLEC 325; (2008) 165 LGERA 1 Port Macquarie-Hastings Council v Lawlor Services Pty Limited [2008] NSWLEC 75; (2008) 159 LGERA 87 R v Dunne (NSWSC, Hunt J, 17 May 1990, unreported) R v Manley [2000] NSWCCA 196; (2000) 49 NSWLR 203 R v Reid [1999] NSWCCA 258 R v Tooes [2008] NSWSC 291 R v White (No 5) [2012] NSWSC 469 The Queen v Noakes (1986) 42 SASR 489
Category:	Costs
Parties:	Director-General, NSW Department Of Industry & Investment (Prosecutor) James Lawrence Coomes (First Defendant) Ian Charles Bennett (Second Defendant)
Representation:	Mr I Lloyd QC with Mr T Howard (Prosecutor) Mr C Ireland (First Defendant) Ms A Pearman (Second Defendant) Crown Solicitor's Office (Prosecutor) Moray & Agnew (First Defendant) Neville & Hourne Legal (Second Defendant)
File Number(s):	50060, 50061, 50062, 50063, 50064, 50065, 50066, 50067 of 2009