Fordham v Environment Protection Agency

[2018] NSWCA 167

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Fordham v Environment Protection Agency [2018] NSWCA 167

Hearing dates:

28 June 2018

Date of orders:

01 August 2018

Decision date:

01 August 2018

Before:

Meagher JA at [1];
Leeming JA at [45];
Sackville AJA at [46]

Decision:

1. Appeal allowed in part.
2. Set aside declarations (1) to (3) and orders (1) to (7) made by the Land and Environment Court on 23 March 2018.
3. Direct the appellants to file and serve by 5pm on 8 August 2018 affidavit evidence and written submissions in support of the costs orders sought (those submissions not to exceed 5 pages). The respondent to file and serve any affidavit evidence and submissions in response by 5pm on 15 August 2018. Those questions are then to be determined on the papers.

Catchwords:

DECLARATORY RELIEF – where EPA issued notices to appellant directors or executives under Protection of the Environment Operations Act 1997 (NSW), Part 7.5 requiring answers to questions regarding possible contraventions by a corporation of provisions which may also give rise to a special executive liability under s 169 – where appellants sought declarations that not required to answer questions if did not have benefit of immunity against self-incrimination conferred by s 212(3) – where primary judge held no legal controversy capable of being subject of declaratory relief – where following filing of appeal EPA conceded question in issue, but not on grounds argued before primary judge – whether primary judge erred in not making declarations sought – before concession made there was a sufficient controversy to justify declaratory relief – after concession declaratory relief in terms sought not justified

DECLARATORY RELIEF – where remedial orders sought under Protection of the Environment Operations Act, s 252 and declarations made as to breach of offence provision – where terms of declaration misidentify provision found to have been breached – where foundation for making remedial orders removed by making of concession after appeal proceedings commenced – declarations and remedial orders set aside

Legislation Cited:

Land and Environment Court Act 1979 (NSW), s 58
Protection of the Environment Operations Act 1997 (NSW), ss 115, 119, 169, 203, 212, 252
Supreme Court Act 1970 (NSW), s 75A

Cases Cited:

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10
Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; [1999] HCA 9
British Medical Association v The Commonwealth (1949) 79 CLR 201; [1949] HCA 44
Buck v Bavone (1976) 135 CLR 110; [1976] HCA 24
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73; [1931] HCA 34
Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263; 176 LGERA 424
R v Connell; ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407; [1944] HCA 42
Redpath v Allan (1872) LR 4 PC 511

Texts Cited:

JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2015)

Category:

Principal judgment

Parties:

Bruce Fordham (First appellant)
Andrew Leslie (Second appellant)
Yussef Fahda (Third appellant)

  Environment Protection Authority (Respondent)

Representation:

Counsel:

 

TA Game SC with SJ Buchen (Appellants)
EC Muston SC with BK Lim (Respondent)

 

Solicitors:

  Uther Webster & Evans (Appellants)
Environment Protection Authority (Respondent)

File Number(s):

2018/110347

Publication restriction:

N/A

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 4

Citation:

[2018] NSWLEC 28

Date of Decision:

23 March 2018

Before:

Molesworth AJ

File Number(s):

2017/230653

HEADNOTE

[This headnote is not to be read as part of the judgment]

The EPA issued notices to the appellants under Protection of the Environment Operations Act 1997 (NSW) (the Act), Part 7.5, requiring them to attend and answer questions regarding possible contraventions, by the company in which they were directors or executives, of provisions which might also give rise to a “special executive liability” offence. By s 169, a director or person concerned in the management of the corporation may be taken to have contravened the underlying provision if the corporation is proven to have done so.

It is also an offence “without lawful excuse” not to comply with the requirement to attend and answer compulsory questioning under Part 7.5. It is not a lawful excuse that the answers might incriminate the person (s 212(2)); but information furnished is not admissible against that person in criminal proceedings if before answering the person objected to doing so on the ground that it might incriminate him or her (s 212(3)).

The appellants requested that the EPA undertake that it would not ask questions relating to special executive liability offences; or prosecute them for such offences, relying on their answers. Their concern was that their evidence might be used to prove the corporation’s contravention in proceedings against it, and that s 169 might then be relied on to deem them also to have contravened that provision.

They sought from the primary judge a declaration that answers given in compulsory examination under Part 7.5 would not be admissible for the purpose of any prosecution under s 169. His Honour declined that relief, on the basis that it sought an answer to an advisory question, where no prosecution had commenced. By cross-summons, the EPA sought and obtained declarations that by not attending the examinations the appellants were in breach of s 203; and mandatory injunctions requiring them to attend for questioning.

After the filing of the appeal, the EPA conceded the issue which had given rise to the litigation, but not on the bases argued for by the appellants. The essence of the concession, although not clearly stated, was that one element of the “special executive liability” offence to be proven by evidence admissible against the director is that the corporation has contravened a provision which attracts that liability. That concession satisfied the appellants’ concerns as to self-incrimination and they indicated they were prepared to attend to answer questions. The appeal nevertheless proceeded.

Held (Meagher JA, Leeming JA and Sackville AJA agreeing), allowing the appeal in part:

In relation to the relief sought by the appellants:

1. There was a legal controversy before the primary judge capable of being the subject of declaratory relief. The issue between the appellants and the EPA was whether they were protected by the immunity in s 212(3) from the use of information or answers given where the offence charged was a special executive liability offence and the evidence was to be relied on in proceedings against the relevant corporation to establish a contravention. The appellants contended first that the immunity provided by s 212(3) extended to those circumstances, and secondly that if it did not the absence of the immunity provided them with a lawful excuse for not answering the questions. From their perspective, the choice was to object under s 212(3) and then answer the question on the basis that their answers were protected by the immunity, or to decline to answer the question on the basis that they had a lawful excuse to do so. If they did not have a lawful excuse they would be guilty of an offence under s 211(1). These matters did not raise merely abstract or hypothetical questions: at [32], [34].

2. The Court should not now make a declaration in favour of the appellants in the terms sought, or in the terms of the concession. There is no longer a controversy between the parties as to the application of s 212; and a declaration should not be made in the general terms sought: at [35].

In relation to the relief sought by the EPA:

3.    The declarations made in favour of the EPA misidentify the provision found to have been breached (s 211(1)) and should be set aside. There must be a good reason for making a declaration on the civil standard of proof as to specific conduct constituting an offence. New declarations would serve no useful purpose where there is no longer a justification for making remedial orders: at [38]-[39].

4. If the EPA’s concession had been made before the primary judge, there would have been no need to make the remedial orders. Those orders should be set aside; the requirement for some legal, factual, or discretionary error in the appeal by way of rehearing is satisfied because the further evidence would have produced a different result if it had been available at first instance and requires a different result by reference to the circumstances as they now exist: at [41].

Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40, considered.

Judgment

MEAGHER JA

Overview

1. Ultimately, the question in this appeal is whether the declarations and orders made by the primary judge (Molesworth AJ) in class 4 proceedings in the Land and Environment Court should be set aside in circumstances where, following the judgment in that court (Fordham v Environment Protection Authority [2018] NSWLEC 28) and the commencing of this appeal, the respondent (EPA) conceded the question that had given rise to the litigation, but not on either of the bases argued for by the appellants.

2. Addressed from the perspective of the first appellant (Mr Fordham), the question was whether he could be compelled to answer questions under Part 7.5 of the Protection of the Environment Operations Act 1997 (NSW) (PEO Act). Mr Fordham claimed that the answers might incriminate him yet would be admissible in criminal proceedings against him as a director of Enviro Recycling Pty Ltd, for an offence under that Act attracting “special executive liability”.

3. PEO Act, s 169 describes what is meant by “special executive liability”:

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.

4. Before the primary judge, the arguments of the parties focussed on the construction and application of PEO Act, s 212(3), assuming for that purpose that the deeming provision in s 169(1) could operate upon a finding made on the basis of those answers in criminal proceedings against the relevant corporation.

5. Section 212 relevantly provides:

(2) Self-incrimination not an excuse

A person is not excused from a requirement under this Chapter to furnish records or information or to answer a question on the ground that the record, information or answer might incriminate the person or make the person liable to a penalty.

(3) Information or answer not admissible if objection made

However, any information furnished or answer given by a natural person in compliance with a requirement under this Chapter is not admissible in evidence against the person in criminal proceedings (except proceedings for an offence under this Chapter) if:

(a)    the person objected at the time to doing so on the ground that it might incriminate the person, or

(b)    the person was not warned on that occasion that the person may object to furnishing the information or giving the answer on the ground that it might incriminate the person.

6. The concession eventually made (see [24] below) was informed, although not in terms, by the construction of s 169. The EPA accepted that one element of the “special executive liability” offence under that section which must be proven by evidence admissible in the criminal proceedings against the director is that the corporation has contravened a provision which attracts that liability. If that section is so understood, the application of the immunity in s 212(3) is straightforward.

7. The appeal to this Court is under Land and Environment Court Act 1979 (NSW), s 58. The right of appeal accorded by s 58(1) is not restricted to a question of law and is thus governed by s 75A of the Supreme Court Act 1970 (NSW), the appeal being by way of rehearing: Delta Electricity v Blue Mountains Conservation Society Inc [2010] NSWCA 263; 176 LGERA 424 at [176]. The Court may receive further evidence and its powers are not restricted to making the decision that should have been made at first instance on the evidence at that time. Those powers include to make any order “which the nature of the case requires”(s 75A(5)-(10)); and are exercisable at least where the appellant can demonstrate that, having regard to all the evidence now before the Court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error. In that event this Court can substitute its own decision based on the facts and law as they stand: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 at [23] (Gaudron, McHugh, Gummow and Hayne JJ); CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67 at [109], [111] (McHugh, Gummow and Callinan JJ); Victorian Stevedoring and General Contracting Co Pty Ltd and Meakes v Dignan (1931) 46 CLR 73 at 107 per Dixon J (an appellate court having power to receive further evidence and whose powers include the making of any order as ought to have been made “must decide an appeal by applying to the circumstances as they exist, when the appeal is dealt with, the law which then operates to determine the rights and liabilities of the parties”).

8. There was further evidence led before this Court as to the terms of the concession and the resulting preparedness of the appellants to attend before and be examined by officers of the EPA. That evidence is described in [24] to [26] below.

9. Before considering the grounds of appeal in the light of that further evidence, it is necessary to explain the circumstances in which the proceedings arose, and the way the primary judge dealt with them.

The dispute between the parties and the proceedings at first instance

The EPA’s investigation concerning offences attracting “special executive liability”

10. The offences which attract special executive liability under s 169 include the Tier 1 offence of wilfully or negligently disposing of “waste in a manner that harms or is likely to harm the environment” (s 115) which carries a maximum penalty on conviction, in the case of an individual, of $1 million or seven years imprisonment or both for an offence committed wilfully, and $500,000 or four years imprisonment or both for an offence committed negligently (s 119).

11. Under the PEO Act, Part 7.5, the power to question and require answers (s 203) is conferred on authorised officers of the EPA for purposes which include determining whether there has been a contravention of that Act (s 184(a)). Such an officer may, by notice in writing (s 203(5)) require a person to attend at a specified place and time to answer questions about matters “in respect of which information is reasonably required” (s 203(1)). It is an offence “without lawful excuse” to neglect or fail to comply with such a requirement (s 211). The relevant terms of s 212 are set out above at [5].

12. On 25 May 2016 the EPA issued notices to the first and second appellants in similar terms requiring them to attend at a specified place and time to answer questions about matters including (in relation to Mr Fordham):

Information regarding Enviro Recycling Pty Ltd’s involvement in the transportation and disposal of waste material at the premises is reasonably required by the EPA in order to investigate possible contraventions of s115, s120, s142A(1), s143(1)(a), s144(1) of the Act and cl 80 of the Regulation being the potential unlawful transportation and disposal of material at the premises and s 211(3) willfully [sic] delay or obstruct an authorised officer in the exercise of the authorised officers powers

The EPA suspects that you, Mr Bruce Fordham, have knowledge regarding the transportation, disposal and land application of material at the premises.

13. Separate notices in substantially the same terms dated 20 February 2016 and 25 May 2017 were issued addressed to the third appellant. As appears below, the primary judge found that the first and second appellants did not comply with the requirements of the notices dated 25 May 2016, and the third appellant with the requirements of the notice dated 25 May 2017, by failing to attend for examination at the specified place and time (in the case of each appellant, the relevant notice).

14. The issue of the notices dated 25 May 2016 was the subject of correspondence between the solicitors for the parties. By their letter of 16 August 2016, Mr Fordham’s solicitors sought undertakings that when exercising its power under s 203, the EPA would not ask any questions in relation to potential offences attracting “special executive liability”, and in the alternative that it would not prosecute him personally for any offence on the basis of answers provided. The reason given for the requested undertakings was that the “protection afforded by s 212(3) of the Act” may not be available in the face of the operation of s 169. The EPA declined to provide that undertaking, formally advising of that position by its letter of 4 July 2017 which gave as a reason that the “power exercisable under s 203 and decisions relating to the EPA’s prosecutorial discretion cannot be fettered in this way”.

15. The concern, from Mr Fordham’s perspective, although not clearly spelt out in this letter, was that s 169 might be construed as deeming the director of the corporation to have contravened the relevant provision if it was proved by evidence admissible in proceedings against the corporation that it had contravened that provision. If this was a correct description of the elements of s 169 and how they might be proved, information furnished or an answer given by the executive might not be subject to the protection given by s 212(3) in criminal proceedings brought against the company. Yet the information or answers could be relied on indirectly to establish the “special executive liability” if the deeming provision operated on a finding of contravention by the corporation in those other proceedings (or perhaps in proceedings in which they were prosecuted together).

16. In the face of the EPA’s refusal to give the undertakings sought, the appellants, on 28 July 2017, commenced the class 4 proceedings seeking declaratory relief. Initially, the declaration claimed was directed to the application of the immunity in s 212(3) in the context of criminal proceedings for an offence under s 169. Shortly before the hearing, the summons was amended to claim a declaration that the appellants had a “lawful excuse” under s 211(1) for refusing to answer questions required pursuant to s 203. That subsection provides:

211 Offences

(1)  A person who, without lawful excuse, neglects or fails to comply with a requirement made of the person under this Chapter is guilty of an offence.

The claims and arguments made in the proceedings at first instance

17. The appellants’ primary case was that they were entitled to a declaration in terms of para 1 of the amended summons, namely:

… that, upon the proper construction of section 212(3) of the Protection of the Environment Operations Act 1997 (the POE Act), where a person furnishes any information or gives any answer under section 212 of the POE Act and objects at the time of doing so on the ground that it might incriminate the person, any information furnished or answer given is not admissible for the purpose of any prosecution under section 169 of the POE Act.

18. The argument in support of that declaration accepted that the deeming provision in s 169 could operate upon a contravention by the corporation proved by evidence admissible against it in criminal proceedings, whether those proceedings were heard before or together with the proceedings against the director or executive. Accepting that to be the position, the appellants submitted, as the primary judge recorded at Judgment [44]:

… the Court should favour a construction of s 212 which does not abrogate [the appellants’ common law right to privilege against self-incrimination] … Hence, s 212(3) should be construed so as to mean that compelled answers are not admissible to prove the examinee’s liability even if as an “intermediate step of a corporation’s liability for the same offence”.

19. In the alternative, the appellants contended for the further declaration sought by paragraph 2A of the amended summons:

… that, upon the proper construction of s. 211 of the Act, it is a lawful excuse for the purposes of s 211(1) of the Act for an individual to refuse to answer questions required of that person pursuant to s 203, in circumstances where the individual is in jeopardy of a future prosecution under s 169 and where the investigator/prosecutor refuses to provide an undertaking to the effect that the individual’s compelled answers will not be used against him or her in any such prosecution.

20. This alternative case accepted that the immunity against use would not make a director’s compelled answers inadmissible in criminal proceedings against the corporation for a contravention of a provision attracting special executive liability. As the primary judge recorded at Judgment [47], the appellants claimed:

… that there is a lawful excuse to refuse to answer questions in circumstances where the use of the answers against the Applicants in a special executive liability prosecution “would fundamentally ‘[alter] the position of the prosecution vis-à-vis the accused’ and would be apt to occasion a miscarriage of justice”: citing Lee v The Queen (2014) 253 CLR 455; [2014] HCA 20 at [40]-[51].

21. By its cross-summons, the EPA sought declarations that with respect to each relevant notice, the appellants were in breach of ss 203(5) and (6) by failing to nominate a place and time to attend for examination and, in the absence of having done so, by failing to attend at the specified place and time. Remedial orders were also sought under PEO Act, s 252 permitting each of the appellants to nominate a place and time to attend and answer questions in accordance with the relevant notices, and requiring that they thereafter do so. Section 252 relevantly provides:

252 Remedy or restraint of breaches of this Act or regulations

(1)    Any person may bring proceedings in the Land and Environment Court for an order to remedy or restrain a breach of this Act or the regulations.

[…]

(6)     If the Court is satisfied that a breach has been committed or that a breach will, unless restrained by order of the Court, be committed, it may make such orders as it thinks fit to remedy or restrain the breach.

The relief refused and granted by the primary judge

22. The primary judge rejected the appellants’ claims for relief; made declarations and orders in favour of the EPA, although not in precisely the same terms as were sought by its cross-summons; and ordered the appellants to pay the costs of the proceedings. No formal order was made dismissing the summons. The declarations and orders made in relation to each of the appellants were in substantially the same terms. With respect to Mr Fordham, it was declared:

In respect of notice number 1541013 dated 25 May 2016 issued to [Mr Fordham] (Fordham Notice), by failing to attend at the specified place and time, [Mr Fordham] is in breach of ss 203(5) and (6) of the Protection of the Environment Operations Act 1997 (PEO Act).

And ordered –

Within fourteen days of the date of the Court’s order, in accordance with ss 203(5) and 203(6)(a) of the PEO Act, [Mr Fordham] may nominate to the Respondent a place and time to answer questions in relation to the matters referred to in the Fordham Notice, and thereafter attend at the nominated place and time to answer the said questions.

If [Mr Fordham] fails to comply with order 1 above, or if the place and time nominated by [Mr Fordham] is not reasonable in the circumstances, in accordance with ss 203(5) and 203(6)(b) of the PEO Act, [Mr Fordham] is to attend at a place and time to answer questions in relation to the matters referred to in the Fordham Notice, that is reasonable in the circumstances, as specified in writing by an authorised officer of the Environment Protection Authority (EPA).

23. It is convenient to consider the primary judge’s reasoning supporting the making of these declarations and orders in the course of disposing of the grounds of appeal. Before doing so reference must be made to the further evidence tendered in the appeal concerning the concession and the appellants’ willingness, in the light of that concession, to attend interviews and answer questions in an inquiry under Part 7.5.

The concession

24. The concession was made by the EPA after the delivery of judgment (23 March 2018) and filing of the notice of appeal (9 April 2018). By its letter dated 10 May 2018 to the appellants’ solicitors, the EPA advised:

The EPA has come to the concluded view that on the proper construction of section 212(3) of the [PEO Act], information furnished or on answer given by a natural person in compliance with a requirement under Ch 7, and in relation to which the person objected at the time to doing so on the ground that it might incriminate the person, is not admissible in evidence against the person in a prosecution of the person for an offence to which section 169 of [the PEO Act] applies.

25. The parties accept that this concession satisfies the appellants’ concern that the EPA could otherwise seek to rely on information or answers given after objection to prove in criminal proceedings against the appellants that Enviro Recycling had contravened one or more of the offence provisions attracting special executive liability. However, the terms of the concession do not demonstrate why that is so, having regard to the language s 212(3) and the appellants’ concern as to how the deeming provision in s 169 might operate. Early in the argument before this Court, the basis upon which the concession was given and accepted was clarified. That was achieved by the parties’ agreement that a relevant element of the offence under s 169 is that the corporation contravene an offence provision attracting special executive liability and that this element must be proved in the criminal proceedings against the director and by evidence admissible against him in those proceedings. In other words, the parties now accept that the deeming in s 169(1) only operates upon a contravention by the corporation which is proved in the criminal proceedings against the director or executive, and by evidence admissible against the director or executive.

26. There was also tendered in the appeal a letter from the appellants’ solicitors to the EPA dated 25 June 2018 proposing dates in early July 2018 for them to attend interviews to answer questions in relation to the relevant notices. In the light of that letter it was conceded on behalf of the EPA that at least by that time there was no longer any reason to suppose that the notices issued to each of the appellants would not be complied with promptly.

The arguments in the appeal

27. In their written submissions the appellants contend that the necessary consequence of the EPA’s concession is that the appeal should be upheld and the primary judge’s declarations and orders set aside. That is said to follow because the concession effectively accepts that the appellants were entitled to the primary declarations sought. In turn this is said to call into question “his Honour’s decision and the orders made”. However, the concession of itself does not remove the need to address the appellants’ grounds of appeal and arguments as to why one or other of the declarations sought should have been made, and as to why the declarations and orders made should be set aside.

28. In view of the EPA’s concession, and its effect as understood between the parties, grounds 3 and 4(b) which press the alternative argument that the appellants had a lawful excuse not to comply with the requirements to attend and answer questions no longer arises. The premise of that argument was that the immunity in s 212(3) did not fully protect the appellants from the use in any criminal proceedings prosecuting an offence under s 169 of answers and information provided by compulsion under Part 7.5. The remaining grounds fall into two parts. Grounds 1, 2 and 4(a) contend that the primary judge erred in declining the primary declaratory relief sought on the basis that what was sought was an advisory opinion on an abstract or hypothetical question. Ground 5 challenges the declarations and remedial orders made concerning what are described as breaches of s 203(5) and (6) (see [22] above). The particular arguments relied on in support of the challenges to the making of those declarations and orders are not specified in the notice of appeal.

29. The EPA maintains that the primary judge did not err in refusing each of the declarations sought by the appellants, and that he was correct to grant the relief sought by it. In response to grounds 1, 2 and 4(a), it is submitted that the construction and application of ss 211 and 212(2) and (3) argued for by the appellants has no bearing “on [their] rights, duties or liabilities … other than possible future rights, duties or liabilities in a criminal proceeding” so that it was open to the primary judge to refuse the declaration sought “as lacking sufficiently concrete consequences”. With respect to ground 5 it is submitted that the primary judge did not err in making the declarations as to breach, there being no factual dispute as to the appellants not having complied with the relevant notices.

Appeal against refusal to grant declaratory relief to appellants (grounds 1, 2 and 4(a))

30. The appellants’ arguments to the primary judge are summarised at [17] to [20] above. The first was directed to the construction of s 212(3), and the second to the circumstances which might answer the description “lawful excuse” in s 211(1). In the case of the latter, the appellants’ argument identified the relevant “requirement” as being that they answer questions as provided by s 203(1): Judgment [46], [47]. Significantly, they did not contend they had a “lawful excuse” for not complying with the different requirement that they attend to answer such questions.

31. The primary judge did not squarely address these construction arguments. Instead, having noted that the appellants had not been charged and that there was no prosecution pending against them, his Honour concluded that the principles upon which they relied “in justification for not attending a specified place and time to answer questions” do not apply (Judgment [94]). In doing so, his Honour appears to have misunderstood the focus of the appellants’ arguments which ultimately were concerned with the extent of the immunity provided by s 212(3) in the circumstances of an offence provided for by s 169. Treating the appellants’ arguments as to the construction of these provisions as based on common law presumptions or principles applying to the investigation of offences after the prosecution of an offence has commenced, the primary judge reasoned that the declaratory relief was not directed to an existing dispute but rather to one which addressed a hypothetical situation, namely that a prosecution had been commenced against them: Judgment [96], [97], [100].

32. In so doing the primary judge erred in concluding that there was no legal controversy between the parties which was capable of being the subject of declaratory relief, which attracted the Court’s inherent power to grant such relief. The circumstances in which that jurisdiction arises are summarised in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582 (Mason CJ, Dawson, Toohey and Gaudron JJ):

It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which "[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise." However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have "a real interest" and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen" or if "the Court's declaration will produce no foreseeable consequences for the parties". (Citations omitted)

33. In Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at [48], the plurality described one crucial difference between an “advisory opinion and a declaratory judgment” as being “the fact that an advisory opinion is not based on a concrete situation and does not amount to a binding decision raising a res judicata between parties”. In this context the reference to a “concrete situation” includes one in which the particular facts giving rise to the relevant question are identified and not hypothetical, and the answer to the question is one which has real utility as between the parties.

34. Here, the controversy between the parties was not hypothetical. If the appellants neglected or failed to answer any question without lawful excuse, they were guilty of an offence (s 211(1) read with s 203(1)). The subject matter of the questioning included possible contraventions of “special executive liability” provisions of the PEO Act. The appellants were or had been directors or executives of the company alleged to have contravened such provisions. There was an issue between the appellants and the EPA as to whether the former were protected by the immunity in s 212(3) from the use of information or answers given where the offence charged was a special executive liability offence and the evidence was to be relied on in proceedings against the relevant corporation to establish a contravention. The appellants sought to argue first that the immunity provided by s 212(3) extended to those circumstances, and secondly that if it did not the absence of the immunity provided them with a lawful excuse for not answering the questions. From their perspective, the choice the appellants had was to object under s 212(3) and then answer the question on the basis that their answers were protected by the immunity, or to decline to answer the question on the basis that they had a lawful excuse to do so. If they did not have a lawful excuse they would be guilty of an offence under s 211(1). These matters did not raise merely abstract or hypothetical questions.

35. However, in the circumstances which now exist, the Court should not make a declaration in the terms sought, or in the terms of the concession, for the following reasons. First, and either as a matter going to jurisdiction or discretion, there is no longer any dispute between the parties concerning the application of s 212 to questioning under s 203 directed to whether there has been a contravention of the offence attracting special executive liability under s 169. As a result there is no longer any controversy to be determined by the making of a declaration. Secondly, and as a matter going to discretion, the resolution of the earlier dispute depends on the parties’ agreement that in relation to any liability under s 169 an element of the offence, to be proved against the executive and by evidence admissible in those criminal proceedings, is that the relevant corporation has contravened a provision of the PEO Act attracting that liability. The fact of that consensus is not recorded in or apparent from the form of the declaration sought or concession made. The Court would not make a declaration in the general terms sought. Thirdly, and again as a matter going to discretion, whilst not seeking to cast doubt on the correctness of the construction of s 169 accepted between the parties, this Court has not heard argument on that question or as to the precise terms of any declaration which might be made if that question of construction remained in dispute.

36. Accordingly in relation to the appeal directed to the relief sought by the appellants, the only order to be made is one setting aside the order that they pay the EPA’s costs of the summons and amended summons. Any contest as to who should bear those costs must be dealt with following the receipt of further submissions of the parties.

Appeal against relief granted under cross-summons (ground 5)

37. It remains to consider the relief granted in relation to the cross-summons. That relief falls into two categories. First, declarations were made as to breaches by each of the appellants of PEO Act, s 203(5) and (6). The Court’s power to make remedial orders under s 252 depended on its being satisfied that there had been a breach of a requirement made under Chapter 7. The power to impose the requirement to attend for questioning is conferred by s 203(5). Section 211(1) exacts a penalty for neglecting or failing to comply with such a requirement and accordingly implies a legal obligation to do so. See Redpath v Allan (1872) LR 4 PC 511 at 517, cited by Williams J in British Medical Association v The Commonwealth (1949) 79 CLR 201 at 289; [1949] HCA 44. It follows that the obligation which is breached by any failure to comply with a requirement imposed under s 203(5) arises under s 211(1).

38. The appellants do not contend that the primary judge erred in being satisfied that there had been a breach of the Act by reason of the failure of each to comply with a relevant notice requiring his attendance for questioning. Nor is it contended that his Honour addressed that question with an incorrect understanding of the relevant statutory provision. See R v Connell; ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430; [1944] HCA 42 (Latham CJ) and Buck v Bavone (1976) 135 CLR 110 at 118; [1976] HCA 24 (Gibbs J). Insofar as it was relevant to consider “lawful excuse”, his Honour correctly observed that the “lawful excuse” contended for by the appellants related to a failure to answer questions, rather than to attend for the purpose of doing so: Judgment [92]-[94]. However, it was submitted and must be accepted that the declarations made do not correctly identify the provision found to have been breached, s 211(1). For that reason, the declarations should be set aside. Indeed, ultimately senior counsel for the respondent appeared to accept that the declarations should be set aside.

39. There then arises a question whether declarations correctly identifying that provision should be made. In my view they should not. Whilst declarations may be made as to subject matter that has a criminal element, ordinarily there must be some good reason for doing so, particularly where the declaration is to be made as to specific conduct constituting an offence, but by reference to the civil standard of proof. See generally the commentary in JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis Butterworths, 5th ed, 2015) at [19-320]. Here, particularly in the light of the concession now made, there is no purpose served by the making of declarations of breach, as there is no longer any reason to suppose that the existing notices or any fresh notices will not be complied with promptly.

40. Secondly, remedial orders, in the form of mandatory injunctions, were made under s 252(6). Those orders, in relation to each appellant (a) permit him to nominate a place and time to answer questions and require that he thereafter attend at that time and place to do so and (b) provide that if he does not nominate such a place and time, that appellant is to attend at a place and time to answer questions that is reasonable in the circumstances, and as specified in writing by an authorised officer of the EPA.

37. Although the primary judge does not make such a finding in express terms, it is implicit in his conclusion at Judgment [104] – that the EPA had “made out its case” for the remedial orders – that he considered and proceeded on the basis that the appellants would continue to believe that there was a risk their “compelled answers” could be used against them in special executive liability proceedings and accordingly that they would maintain their objection to attending for questioning in the absence of an order to that effect. The further evidence before this Court establishes, with the benefit of hindsight, that the position is not as his Honour assumed. It is accepted, and could not be controversial, that if the concession had been before the primary judge, there would have been no need to make the remedial orders. It follows that the appeal against the making of these orders should be allowed, the requirement for some “legal, factual or discretionary error” being satisfied because the further evidence admitted in this Court would have produced a different result at first instance and requires a different result by reference to the circumstances as they now exist: Allesch v Maunz at 23.

Conclusion

42. The declarations and remedial orders made under the cross-summons should be set aside, as should the orders that the appellants pay the EPA’s costs of the summons and cross-summons. No declaration should be made in the terms sought by the appellants.

43. There remain questions as to the orders which should be made in relation to the costs of the proceedings at first instance and on appeal. Those questions fall to be considered taking into account the making of the EPA’s concession. During the course of argument both parties indicated that they would wish to make submissions and adduce evidence in support of their respective positions concerning this subject. Accordingly the orders I propose allow for that to occur, and for those questions to be decided on the papers.

44. The orders I propose are:

1. Appeal allowed in part.

2. Set aside declarations (1) to (3) and orders (1) to (7) made by the Land and Environment Court on 23 March 2018.

3. Direct the appellants to file and serve by 5pm on 8 August 2018 affidavit evidence and written submissions in support of the costs orders sought (those submissions not to exceed 5 pages). The respondent to file and serve any affidavit evidence and submissions in response by 5pm on 15 August 2018. Those questions are then to be determined on the papers.

45. LEEMING JA: I agree with Meagher JA.

46. SACKVILLE AJA: I agree with the orders proposed and, subject to the following, with his Honour’s reasons.

47. I accept that there was a genuine controversy between the parties concerning the extent of the immunity conferred by s 212(3) of the Protection of the Environment Operations Act 1997 (NSW) (PEO Act). The dispute related to the extent to which answers given by a person subjected to the powers of compulsion conferred by Part 7.5 of the PEO Act can be used in a prosecution of that person under s 169 for an offence which attracts special executive liability. More specifically, the dispute concerned the extent to which the person’s answers could be used to establish that the corporation had contravened a provision of the PEO Act, this being an essential element of a prosecution of the person under s 169.

48. The declaration sought by the first appellant (Mr Fordham) [1] was not confined to the specific issue that divided the parties (until the respondent made its concession). It is not necessary for present purposes to determine whether it would have been appropriate for a declaration in the form proposed by Mr Fordham to be made, had the primary Judge accepted his argument. However, I think it likely that any declaratory relief would have to be expressed in more specific and confined terms.

    1. Reproduced in the judgment of Meagher JA at [17] above.

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Endnote

Amendments

01 August 2018 - [28] "question" changed to "opinion"; [39] inserted colon in "Equity: Doctrines"

10 August 2018 - [4] "corporations" amended to "corporation"

Decision last updated: 10 August 2018