Environment Protection Authority v Wollondilly Abattoirs Pty Ltd; Environment Protection Authority v Davis

[2019] NSWLEC 26

Land and Environment Court

New South Wales

Medium Neutral Citation:	Environment Protection Authority v Wollondilly Abattoirs Pty Ltd; Environment Protection Authority v Davis [2019] NSWLEC 26
Hearing dates:	11-12 March 2019
Decision date:	12 March 2019
Jurisdiction:	Class 5
Before:	Pain J
Decision:	See [18] of judgment
Catchwords:	PRACTICE AND PROCEDURE – sentencing for special executive liability charge – evidence of fraudulent behaviour cannot be relied on as not relevant to element of special executive liability charge
Legislation Cited:	Protection of the Environment Operations Act 1997 ss 66, 169, 169B, 211
Cases Cited:	Cassidy v The Queen (2012) 220 A Crim R 420; [2012] NSWCCA 68 Environment Protection Authority v Gilder [2018] NSWLEC 119 Environment Protection Authority v Hogan [2008] NSWLEC 125 Environment Protection Authority v Peters [2006] NSWLEC 465 Environment Protection Authority v Rands [2019] NSWLEC 23 Environment Protection Authority v Terrace Earthmoving Pty Ltd (No 3) (2016) 217 LGERA 222; [2016] NSWLEC 60 Harris v Harrison (2014) 86 NSWLR 422; [2014] NSWCA 84 Hills Shire Council v Suciu (2009) 168 LGERA 302; [2009] NSWLEC 145 R v De Simoni (1981) 147 CLR 383; [1981] HCA 31
Category:	Procedural and other rulings
Parties:	Matter Nos 18/145824-145828, 18/145882 Environment Protection Authority (Prosecutor) Wollondilly Abattoirs Pty Limited (Defendant – company)   Matter Nos 18/145865-69 Environment Protection Authority (Prosecutor) v Gregory John Davis (Defendant – individual)
Representation:	COUNSEL: J Single (Prosecutor) C Carroll (Defendant – company) R O’Gorman-Hughes (Defendant – individual)   SOLICITORS: NSW Office of Water (Prosecutor) M J Law Sydney (Defendant – company) Pikes Lawyers (Defendant – individual)
File Number(s):	18/145824-8, 18/145882 and 18/145865-9

Judgment

1. The Environment Protection Authority (EPA) has charged Mr Davis with five offences relying on s 169(1) of the Protection of the Environment Operations Act 1997 (POEO Act), a special executive liability provision. Mr Davis has pleaded guilty to all charges. Another defendant in separate proceedings Wollondilly Abattoirs Pty Ltd (Wollondilly Abattoirs) has pleaded guilty to five charges under s 66(2) of the POEO Act of providing false information in relation to its 2017 quarterly reports to the EPA for January, April, July and October, and its 2017 annual return. The basis on which Mr Davis was charged under s 169(1) arises from the five charges of Wollondilly Abattoirs. Mr Davis was the general manager during the charge periods and was charged under s 169(1) as a person concerned in the management of a company. A matter has arisen in the course of the sentence hearing for Mr Davis which requires determination before an affidavit in the EPA’s case can be read.

2. Wollondilly Abattoirs has also pleaded guilty to an offence under s 211(2) of the POEO Act of providing false information to the EPA knowing that it is false or misleading. I do not need to consider that charge in this judgment.

3. The EPA wishes to adduce evidence in the affidavit of Ms Ward dated 7 August 2018 to the effect that the false records she provided to the EPA were a result of Mr Davis’ direction and done with his knowledge. The EPA wishes to argue that Mr Davis was knowingly involved in the falsification of the records giving rise to the five charges under s 66(2) against Wollondilly Abattoirs and hence the five charges against him under s 169(1).

Protection of the Environment Operations Act 1997

4. Relevant sections of the POEO Act provide:

Chapter 3 Environment protection licences

…

Part 3.5 Particular licence conditions

…

66 Conditions requiring monitoring, certification or provision of information, and related offences

(1)   Monitoring The conditions of a licence may require:

(a)   monitoring by the holder of the licence of the activity or work authorised, required or controlled by the licence, including with respect to:

(i)   the operation or maintenance of premises or plant, and

(ii)   discharges from premises, and

(iii)   relevant ambient conditions prevailing on or outside premises, and

(iv)   anything required by the conditions of the licence, and

(b)   the provision and maintenance of appropriate measuring and recording devices for the purposes of that monitoring, and

(c)   the analysis, reporting and retention of monitoring data.

(2)   False or misleading information A holder of a licence who supplies information, or on whose behalf information is supplied, to the appropriate regulatory authority under the conditions of the licence is guilty of an offence if the information is false or misleading in a material respect.

Maximum penalty:

(a)   in the case of a corporation—$1,000,000, or

(b)   in the case of an individual—$250,000.

…

Note. An offence against subsection (2) or (4) committed by a corporation is an offence attracting special executive liability for a director or other person involved in the management of the corporation—see section 169.

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Chapter 5 Environment protection offences

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Part 5.9 General offences

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169 Liability of directors etc for offences by corporation—offences attracting special executive liability

(1)   If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that:

(a)   (Repealed)

(b)   the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or

(c)   the person, if in such a position, used all due diligence to prevent the contravention by the corporation.

(1A)   For the purposes of this section, each of the following provisions attract special executive liability:

...

(c) section 66 (2) or (4),

...

(2)   A person may be proceeded against and convicted under a provision pursuant to this section whether or not the corporation has been proceeded against or been convicted under that provision.

(3)   Nothing in this section affects any liability imposed on a corporation for an offence committed by the corporation against this Act or the regulations.

(4), (5) (Repealed)

…

169B Liability of directors etc for offences by corporation—accessory to the commission of the offences

(1) For the purposes of this section, a corporate offence is an offence against this Act or the regulations that is capable of being committed by a corporation, whether or not it is an offence referred to in section 169 or 169A.

(2)   A person commits an offence against this section if:

(a)   a corporation commits a corporate offence, and

(b)   the person is:

(i)   a director of the corporation, or

(ii)   an individual who is involved in the management of the corporation and who is in a position to influence the conduct of the corporation in relation to the commission of the corporate offence, and

(c)   the person:

(i)   aids, abets, counsels or procures the commission of the corporate offence, or

(ii)   induces, whether by threats or promises or otherwise, the commission of the corporate offence, or

(iii)   conspires with others to effect the commission of the corporate offence, or

(iv)   is in any other way, whether by act or omission, knowingly concerned in, or party to, the commission of the corporate offence.

Maximum penalty: The maximum penalty for the corporate offence if committed by an individual.

(3)   The prosecution bears the legal burden of proving the elements of the offence against this section.

(4)   The offence against this section can only be prosecuted by a person who can bring a prosecution for the corporate offence.

(5)   This section does not affect the liability of the corporation for the corporate offence, and applies whether or not the corporation is prosecuted for, or convicted of, the corporate offence.

(6)   This section does not affect the application of any other law relating to the criminal liability of any persons (whether or not directors or other managers of the corporation) who are concerned in, or party to, the commission of the corporate offence.

Submissions

5. Mr Davis submitted that the evidence the EPA seeks to read cannot be relied on in his sentencing under the principle in R v De Simoni (1981) 147 CLR 383; [1981] HCA 31 (De Simoni). If the EPA wanted to bring forward this kind of evidence it should have charged Mr Davis under s 169B alleging that he was knowingly concerned in or party to the commission of the corporate offence inter alia, an element of that offence under subs (2)(c).

6. Cassidy v The Queen (2012) 220 A Crim R 420; [2012] NSWCCA 68 (Cassidy) identifies that when assessing the seriousness of an offence not only does the maximum penalty require consideration, the objective moral culpability of an offence is also relevant per Basten JA at [7]. Section 169B is objectively more serious than s 169.

7. In Harris v Harrison (2014) 86 NSWLR 422; [2014] NSWCA 84 Simpson JA at [82] identified that care must be taken to ensure that an offender is not punished for an offence which is not charged.

8. The EPA argued that as part of sentencing Mr Davis under s 169(1) it can adduce evidence proving that his behaviour was fraudulent to establish the objective seriousness of the offence. The maximum penalty for both ss 169 and 169B is the same, $250,000 so that the De Simoni principle does not apply. Section 169B is not a more serious offence than s 169 given the same maximum penalty applies to both. The De Simoni principle applies where there is a hierarchy of offences in a particular act.

Finding

9. The special executive liability provision in s 169(1) has been described as a deeming of liability provision. If a company has contravened certain provisions of the POEO Act as specified in subs (1A), a person who is a director or is a person involved in management of the company is taken to have contravened the same provision as a separate offence under s 169(1). An example of a company being charged with an offence under s 143(1) and separately a person being charged under s 169(1) can be seen in Environment Protection Authority v Terrace Earthmoving Pty Ltd (No 3) (2016) 217 LGERA 222; [2016] NSWLEC 60. Under s 169(2) a person can be convicted under s 169(1) whether or not a company has been proceeded against or convicted under an offence provision referred to in s 169(1A). Examples of the application of s 169(1) and (2) include Environment Protection Authority v Peters [2006] NSWLEC 465 at [49], Environment Protection Authority v Hogan [2008] NSWLEC 125 at [13] and Hills Shire Council v Suciu (2009) 168 LGERA 302; [2009] NSWLEC 145 at [2].

10. The elements of the s 169(1) offences are firstly that a company, here Wollondilly Abattoirs, contravened the POEO Act, secondly that a person here Mr Davis concerned in the management of the company is taken to have contravened the same provision unless that person used all due diligence to prevent the contravention by the company (subs (1)(b)). Subsection (1)(a) does not arise on the facts in this case. That is the offence to which Mr Davis pleaded guilty in relation to five charges. Those are the elements of the offence to which questions of objective seriousness can be directed.

11. The EPA is not arguing that the company acted in a fraudulent manner in committing the five offences under s 66. The circumstances concerning fraudulent behaviour the EPA seeks to establish are in relation to the objective seriousness of the special executive liability offences committed by Mr Davis which are separate from the Wollondilly Abattoirs offences. The circumstances the EPA seeks to rely on, if proved, would fall within s 169B the elements of which are that a company commits a corporate offence (subs (2)(a), a person is involved in management and is in a position to influence the conduct of the company in relation to the offence (subs 2(b)(ii)) and that person aids and abets or is knowingly concerned in the commission of the offence (subs 2(c)(i),(iv)). Mr Davis is not charged under that section. Section 169B was introduced in 2013. I am informed that there has been no prosecution commenced under it to date. The EPA’s submissions appeared to equate the two sections but they have very different work to do, not least because of their different wording.

12. In De Simoni, Gibbs CJ stated at 389 (with Mason and Murphy JJ agreeing at 395) that there is a common law principle that circumstances of aggravation not alleged in the relevant indictment cannot be relied upon for purposes of sentence if those circumstances could have been made the subject of a distinct charge. His Honour went on to find at 392 that:

… where the Crown has charged the offender with, or has accepted a plea of guilty to an offence less serious than the facts warrant, it cannot rely, or ask the judge to rely, on the facts that would have rendered the offender liable to a more serious penalty.

13. Is s 169B more serious than s 169 so that the De Simoni principle applies? I accept the parties’ submissions that the same maximum penalty of $250,000 applies for both charges. The EPA has submitted that because both ss 169(1) and 169B have the same maximum penalty s 169B is not more serious than s 169(1) and that is the only ratio of De Simoni. The summary above refers to circumstances of aggravation which could have been the subject of a separate charge. The elements of s 169B are more objectively serious in terms of personal moral culpability given the factors in subs (2)(c), a matter considered by Basten JA in Cassidy at [7]. Evidence seeking to prove Mr Davis acted fraudulently which would fall within s 169B(2)(c) is clearly more serious than the elements of s 169(1) of failing to exercise due diligence. Consideration of objective seriousness of the offence is limited to the elements of s 169(1). The EPA can seek to establish absence of due diligence to prevent Mr Davis relying on that provision in relation to which he has the onus of proof on the balance of probabilities. Evidence concerning objective seriousness in relation to due diligence would be admissible.

14. Whether Mr Davis acted fraudulently separately to anything done by the company which resulted in offences under s 66(2) being committed is not part of the elements of these five offences. Justice Simpson’s statement in Harris v Harrison at [82] that care must be taken not to punish an offender for an offence he or she is not charged with applies to prevent the EPA relying on the contested parts of Ms Ward’s affidavit.

15. Further cases relied on by the EPA include Environment Protection Authority v Gilder [2018] NSWLEC 119 and Environment Protection Authority v Rands [2019] NSWLEC 23. The Court has considered the state of mind of an offender charged under s 169(1) to determine if his or her behaviour was intentional, reckless or negligent with findings made of gross negligence and negligence respectively. Each defendant was dealt with separately and on the basis of different facts. Fraud was not alleged in either case and there is no reference to s 169B suggesting it was not raised. These cases do not support the EPA’s approach in this case.

16. I also agree with Mr Davis’ submission that reliance on the contested parts of Ms Ward’s affidavit if read would give rise to unfair prejudice to him. Absent some statutory provision reversing the onus of proof, a prosecutor must establish matters in contest beyond reasonable doubt. In order to challenge that evidence if read, Mr Davis may have to give evidence concerning matters he is not charged with.

17. Further, I agree with Mr Davis’ submissions that he suffers practical prejudice in this matter if the EPA is allowed to proceed as it seeks to do. If Mr Davis gives evidence on matters relevant to sentencing he runs the risk of being cross-examined about a more serious offence which he has not been charged with.

18. In conclusion, the EPA cannot rely on the disputed part of Ms Ward’s affidavit dated 7 August 2018 as identified in the objections to her affidavit in relation to the whole or part of pars [29], [32]-[33], [37], [40], [42], [44]-[45] and [52].

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Decision last updated: 14 March 2019