Filipowski v Terminals Pty Ltd and Ethell
[1999] NSWLEC 233
•10/07/1999
Land and Environment Court
of New South Wales
CITATION:
Filipowski v Terminals Pty Ltd and Ethell [1999] NSWLEC 233
PARTIES
No 50016 of 1998
DEFENDANT
PROSECUTOR
Filipowski
Terminals Pty LtdNo 50017 of 1998 and No 50136 of 1998
DEFENDANT
PROSECUTOR
Filipowski
Ethell
NUMBER:
50016 of 1998, 50017 of 1998 and 50136 of of 1998
CORAM:
Pearlman J
KEY ISSUES:
Environmental Offences :- costs - final orders
LEGISLATION CITED:
Marine Pollution Act 1987 s 27(1), s 28(1)
DATES OF HEARING:
08/27/1998; 09/10/1998; 05/12/1999; 05/13/1999; 05/14/1999; 08/16/1999
DATE OF JUDGMENT DELIVERY:
10/07/1999
LEGAL REPRESENTATIVES:
PROSECUTOR
Mr A L Hill (Barrister)SOLICITORS
Abbott ToutDEFENDANT (Terminals Pty Ltd)
Mr B W Larkin (Barrister)SOLICITORS
Freehill Hollingdale & PageDEFENDANT (G Ethell)
SOLICITORS
Mr B W Larkin (Barrister)
Norton White
JUDGMENT:
IN THE LAND AND 50016/98, 50017/98 and 50136/98
ENVIRONMENT COURT Pearlman J
OF NEW SOUTH WALES 7 October 1999
No 50016 of 1998
- Prosecutor
- Defendant
No 50017 of 1998 and No 50136 of 1998
- Prosecutor
- Defendant
Introduction
1. This judgment is concerned with the formal conviction of the defendants, Terminals Pty Ltd (“Terminals”) and Mr Gerard Ethell, for three separate offences under the Marine Pollution Act 1987 (“the Act”).
2. Terminals and Mr Ethell respectively pleaded guilty to charges under s 27(1) of the Act, and Mr Ethell pleaded guilty to a charge under s 28(1) of the Act. All of the charges relate to a discharge of a substance known as nonyl phenol into the waters of Port Botany.
3. In a judgment which I delivered on 14 July 1999 (“the July judgment”), I made various findings of fact, and reached a conclusion on the appropriate penalties which should be imposed. However, I did not proceed to formal conviction of the defendants but instead stood the proceedings over so as to give the parties an opportunity to make submissions as to costs. The costs hearing has now taken place. It remains therefore for the Court to determine the question of costs, and then make its final orders.
History of the litigation
4. In order to understand the considerations relevant to the determination of costs, it is necessary to relate briefly the course which the litigation took:
(a) Three prosecutions, which by leave were heard together, took a normal course which ultimately proceeded to a hearing on penalties and costs on 27 August 1998;
(b) After judgment had been reserved, but before it had been delivered, the defendants, by notice of motion, applied to the Court for an order permitting them to resile from their agreement with the prosecution as to the amount of nonyl phenol which had discharged, and to re-open their case to tender a Sydney Ports Corporation Marine Response Report Form (“the Report Form”) and to make submissions on the issue of the amount of the discharge;
(c) At the same time as the notice of motion was heard, a question arose as to whether the charge against Mr Ethell under s 28(1) of the Act contained a defect and whether it should be struck out as failing to disclose an offence;
(d) In a judgment which I delivered on 27 October 1998 (“the October judgment”), I made orders granting leave to the defendants and to the prosecution to adduce further evidence relating to the amount of nonyl phenol which discharged into the water, and I dismissed with costs the summons against Mr Ethell under s 28(1) of the Act;
(f) The hearing of the s 28(1) proceedings and the question of the amount of the discharge took place over two and a half days, on 12, 13 and 14 May 1999. The s 28(1) proceedings occupied very little time in the hearing, since no further evidence was adduced in respect of those proceedings. Almost all the hearing was concerned with evidence and submissions about the amount of nonyl phenol which was discharged.(e) Subsequently, the prosecutor charged Mr Ethell a second time for an offence under s 28(1) of the Act. These proceedings were numbered 50136 of 1998, and I shall refer to them as the “s 28(1) proceedings”. I shall refer to the other two proceedings as “the s 27(1) proceedings”;
The discretion to award costs
5. In relation to summary proceedings in class 5 of the Court’s jurisdiction, s 52(1) of the Land and Environment Court Act 1979 (“the Court Act”) provides as follows:
52 (1) Where a Judge -
(a) convicts any person of an offence punishable in the summary jurisdiction of the Court;
(b) makes an order dismissing the charge for any such offence; or
(c) makes an order under section 556A(1) of the Crimes Act 1900, in respect of any such offence,
the Judge may, in and by the conviction or order, order the defendant, in the case of a conviction or order referred to in paragraph (a) or (c), to pay to the prosecutor, or, in the case of an order referred to in paragraph (b), order the prosecutor to pay to the defendant, costs of such amount as are specified in the conviction or order or, if the conviction or order so directs, as may be determined under subsection (2).
6. Subsection (2) provides that costs payable under s 52 are to be determined by agreement between the prosecutor and the defendant, or, if no agreement is reached, in accordance with regulations.
7. Two things may immediately be noticed about s 52(1). First, the power to award costs in the circumstances set out in the section is discretionary. Secondly, there is no power to order the prosecutor to pay the costs of the defendant in a case where the Court convicts the defendant of the particular offence.
8. The discretion of the Court to award costs is wide and unfettered, but principles have been evolved to guide judicial discretion. The fundamental principle is that costs are not awarded as a punishment. “They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings” (per Mason CJ in Latoudis v Casey (1990) 170 CLR 534 at 543).
The s 28(1) proceedings
9. No real costs issue arises in relation to these proceedings. Mr Ethell pleaded guilty to the charge, and I have set out in the July judgment my conclusion that a penalty of $1000 is appropriate. It is also appropriate to award costs against Mr Ethell in favour of the prosecutor in relation to this offence. There are no facts or circumstances which require a contrary exercise of the Court’s discretion.
The s 27(1) proceedings
10. The parties are at issue on the question of costs in relation to the s 27(1) proceedings.
11. The prosecution seeks an order in its favour for the whole of the costs of the s 27(1) proceedings. The defendants do not object to an order for costs in favour of the prosecution up to and including the hearing on 27 August 1998, but they seek an order for costs on an indemnity basis in their favour in relation to the determination of the amount of the discharge, or, in the alternative, no order as to costs.
12. The basis for the defendants’ claim for costs turns upon the Report Form. As I indicated in my October judgment, the Report Form came to the notice of the defendants’ respective solicitors shortly before the completion of the hearing on 27 August 1998 when it was produced by the prosecution in connection with discussion about clean-up costs. The reference to an amount of 20 to 30 litres in the Report Form led the defendants to seek to resile from their agreement that 60 litres was the amount of the discharge. The defendants claim that the prosecutor acted unfairly in the circumstances. It did not produce a relevant piece of material, and it has never explained its failure to do so. In the defendants’ submission, because the prosecutor conducted itself unfairly, the prosecutor unnecessarily prolonged the proceedings.
13. The prosecutor’s response to this claim is that, when the defendants resiled from the agreement as to the amount of the discharge, the prosecutor was obliged to adduce evidence as to how the Report Form came to be completed and as to the amount of the discharge. The prosecutor denies that it acted unfairly or withheld a relevant document.
The appropriate costs order
14. In relation to the s 27(1) proceedings up to and including the hearing on 27 August 1999, there are no facts or circumstances which would lead to any order but that the defendants pay the costs of the prosecutor. The issue of the amount of the discharge was not in dispute up till then, since the parties were agreed as to the amount.
15. In relation to the s 27(1) proceedings since 27 August 1998, including the notice of motion heard on 10 September 1998 and the hearing over two and a half days in May 1999, I have come to the conclusion that I should make no order as to costs. I have reached that conclusion for the following reasons.
16. First, it cannot be said, in my opinion, that either the prosecutor or the defendants were successful in the s 27(1) proceedings after 27 August 1998, in the sense that either of those parties should be compensated for the expenses which each party has incurred in relation to the s 27(1) proceedings since that date. I found in the July judgment that the amount of the discharge did not exceed 40 litres. The defendants did not succeed in establishing that the amount of the discharge was 20 to 30 litres, and the prosecutor did not succeed in establishing that the amount of the discharge was instead about 200 to 400 litres.
17. Secondly, I remain of the view which I expressed in the July judgment. The amount of the discharge is not an element of any of the offences with which the defendants are charged. It is only relevant to the question of penalty, considered in the context of possible environmental harm. In this case, the difference between the parties as to the amount of the discharge was not critical. There is, as I said in the July judgment, a substantial difference between the amount of 20 to 30 litres contended for by the defendants, and 200 to 400 litres contended for by the prosecutor. But both these amounts fall within the lower range of the whole spectrum of possible environmental harm. A finding for either contention would have not substantially decreased or substantially increased the appropriate penalties to be imposed. Accordingly, it is hard to justify a hearing of two and a half days on the issue.
18. Thirdly, I am not prepared to find that the prosecutor acted unfairly in failing to produce the Report Form prior to the hearing. No evidence was adduced in relation to the negotiations which led the parties to agree initially on an amount of 60 litres, but there was an agreement and it was on foot when the hearing commenced on 27 August 1998. Since the parties had agreed on the amount of the discharge it does not seem to me to be highly material that the Report Form be produced prior to or during that hearing.
19. Fourthly, I am somewhat at a loss in understanding why it was necessary to pursue the question of the amount of the discharge when the Report Form was produced. The defendants already had an estimate of the discharge from Mr Ethell. They knew when the proceedings commenced that his estimate was 20 to 30 litres, which was the same estimate shown in the Report Form. The production of the Report Form did not disclose anything new. Its only use to the defendants was that it might have amounted to independent corroboration of Mr Ethell’s estimate (although, as it turned out, it did not do so, because I found that it was itself based upon Mr Ethell’s estimate).
20. Furthermore, in this connection, the defendants were in possession of evidence of contemporaneous estimates of about 40 litres. I refer in this regard to the evidence of Mr Mandros (his affidavit sworn 21 October 1997), Mr Clarkson (his affidavit sworn 4 June 1998), and Mr Kelly (his written report dated 7 July 1996 given to the investigator Mr Rawlings), all of whom gave estimates of about 40 litres. In the light of this evidence, the tendering of the Report Form was not likely to be significant, and my ultimate finding (that the amount of the discharge did not exceed 40 litres) was likely to be, and was in fact, based on the evidence of contemporaneous or nearly contemporaneous estimates. It is not as though an agreement as to 60 litres was reached in the absence of estimates of any other amount and, when the Report Form was produced, contrary evidence came to light for the first time.
21. I have considered whether, having regard to the matters I have set out, the prosecutor should be entitled to its costs because it was the defendants who opened up the whole issue of the amount of the discharge, and the prosecutor was forced to adduce evidence to meet the defendants’ claims on the issue. I am prepared to accept that the prosecutor was required to respond, but the prosecutor went further than mere response. Once the issue was opened up, and in conformity with the leave granted to adduce further evidence, the prosecutor did not merely endeavour to refute a finding according to the estimate in the Report Form, but went further and brought evidence designed to establish that the amount of the discharge was 200 or 400 litres.
22. I have also considered the defendant’s claim that the prosecutor should be ordered to pay their costs after 27 August 1998 (on an indemnity basis). The defendants acknowledge that s 52 does not empower to the Court to make such an order where the defendants are convicted, but they claim that the Court has an inherent power to control and supervise the conduct of the proceedings so as to prevent unfairness. I have already said that I am not prepared to make a finding that the prosecutor acted unfairly in the conduct of the proceedings, and I can see no basis for an award of costs against the prosecutor.
Final orders
23. I proceed then to make final orders in relation to all three proceedings. Those orders are as follows:
Proceedings 50016 of 1998:
(1) The defendant, Terminals Pty Ltd, is convicted of the offence with which it is charged.
(3) The defendant must pay the costs of the prosecutor up to and including the hearing on 27 August 1998. Such costs are to be as agreed, or if not agreed, as determined in accordance with the regulations. I make no order as to costs in respect of any other part of the proceedings.(2) The defendant is fined the sum of $30,000 to be paid to the Registrar of the Court within one month of the date of this judgment.
Proceedings 50017 of 1998:
(1) The defendant, Gerard Ethell, is convicted of the offence with which he is charged.
(2) The defendant is fined the sum of $7,000 to be paid to the Registrar of the Court within one month of the date of this judgment.
Proceedings 50136 of 1998:(3) The defendant must pay the costs of the prosecutor up to and including the hearing on 27 August 1998. Such costs are to be as agreed, or if not agreed, as determined in accordance with the regulations. I make no order as to costs in respect of any other part of the proceedings.
(1) The defendant, Gerard Ethell, is convicted of the offence with which he is charged.
(3) The defendant must pay the costs of the prosecutor as agreed, or if not agreed, in accordance with the regulations.(2) The defendant is fined the sum of $1,000 to be paid to the Registrar of the Court within one month of the date of this judgment.
24. The exhibits in all proceedings may be returned.
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