Mouawad v The Hills Shire Council

[2013] NSWLEC 165

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Mouawad v The Hills Shire Council; Mouawad v The Hills Shire Council [2013] NSWLEC 165
Hearing dates:	5 September, 30 November and 1 December 2011
Decision date:	30 September 2013
Jurisdiction:	Class 6
Before:	Pepper J
Decision:	Appeals dismissed with costs.
Catchwords:	ENVIRONMENTAL OFFENCES: appeals against conviction and sentence from Local Court - unlawful transportation of waste - elements of the offence - whether first company vicariously liable for transportation of waste of second company - whether second company transporting the waste acted as the agent of the first company - whether material classified as "waste" - whether place being used as a "waste facility" without lawful authority - whether penalties imposed by court below excessive - whether costs orders imposed by court below excessive - appeals dismissed.
Legislation Cited:	Crimes (Appeal and Review) Act 2001, ss 31, 37, 39 Crimes (Sentencing Procedure) Act 1999, ss 3A, 21A, 22, 23 Environmental Planning and Assessment Act 1979, ss 76A, 79 Protection of the Environment Operations Act 1997, ss 3, 44, 48, 143, 144, 169, 241, Sch 1 Baulkham Hills Local Environmental Plan 2005, cls 5(1), 13
Cases Cited:	ABC Developmental Learning Centres Pty Ltd v Wallace [2006] VSC 171; (2006) 161 A Crim R 250 Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd [2013] FCAFC 29; (2013) 296 ALR 465 Baini v The Queen [2012] HCA 59; (2012) 246 CLR 469 Blacktown City Council v Pace [2002] NSWLEC 142; (2002) 121 LGERA 432 Coffs Harbour City Council v Hickey [2004] NSWLEC 531 Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co-Operative Assurance Company of Australia Ltd (1931) 46 CLR 41 Department of Environment and Climate Change v Olmwood Pty Ltd [2010] NSWLEC 15; (2010) 173 LGERA 366 Director General, Department of Education and Training v MT [2006] NSWCA 270; (2006) 67 NSWLR 237 Director-General, Department of Environment and Climate Change v Jack & Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232; (2009) 172 LGERA 225 Director-General, Department of Environment and Climate Change v Walker Corporation Pty Limited (No 2) [2010] NSWLEC 73 Director-General of the Department of Land and Water Conservation v Greentree [2002] NSWLEC 102 Director-General of Department of Land and Water Conservation v Greentree [2003] NSWCCA 31; (2003) 131 LGERA 234 Director-General of the Department of Environment, Climate Change and Water v Walker Corporation Pty Ltd (No 2) [2011] NSWLEC 229 Environment Protection Authority v Barnes [2006] NSWCCA 246 Environment Protection Authority v Geoff Robinson Pty Ltd [2011] NSWLEC 14 Environment Protection Authority v Hanna [2010] NSWLEC 98 Environment Protection Authority v Hardt [2006] NSWLEC 438; (2006) 148 LGERA 61 Environment Protection Authority v Hardt [2007] NSWLEC 284 Environment Protection Authority v HTT Huntley Heritage Pty Ltd [2003] NSWLEC 76; (2003) 125 LGERA 332 Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd [2003] NSWLEC 70; (2003) 128 LGERA 240 Environment Protection Authority v Multiplex Constructions Pty Ltd [2000] NSWLEC 6; (2000) 112 LGERA 1 Environment Protection Authority v Shannongrove Pty Ltd [2010] NSWLEC 162; (2010) 176 LGERA 31 Environment Protection Authority v Shannongrove Pty Ltd (No 2) [2012] NSWLEC 202 Environment Protection Authority v Smart Skip (NSW) Pty Ltd [2009] NSWLEC 204 Environment Protection Authority v Snowy Mountains Engineering Corporation Ltd [1994] NSWLEC 55; (1994) 83 LGERA 51 Environment Protection Authority v Terrace Earthmoving Pty Ltd [2013] NSWCCA 180 Environment Protection Authority v Terrace Earthmoving Pty Ltd & Page [2012] NSWLEC 216 Environment Protection Authority v Wyong Shire Council [2012] NSWLEC 36 Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38 Gerondal v Eurobodalla Shire Council [2009] NSWLEC 160 Histollo Pty Ltd v Director-General of National Parks and Wildlife Service (1998) 45 NSWLR 661 Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 International Harvester Company of Australia Proprietary Limited v Carrigan's Hazeldene Pastoral Company [1958] HCA 16; (1958) 100 CLR 644 Kennedy v De Trafford [1897] AC 180 Lloyd v Ryan Borg by his Tutor NSW Trustee and Guardian [2013] NSWCA 245 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 McConnell Dowell Constructors (Aust) Pty Ltd v Environment Protection Authority [2000] NSWCCA 367; (2000) 50 NSWLR 127 Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 North Sydney Council v Moline; North Sydney Council v Tomkinson (No 2) [2008] NSWLEC 169 Parker v Director of Public Prosecutions (1992) 28 NSWLR 282 Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144 Presidential Security Services of Australia Pty Ltd v Brilley [2008] NSWCA 204; (2008) 73 NSWLR 241 Scott v Davis [2000] HCA 52; (2000) 204 CLR 333 Shannongrove Pty Ltd v Environment Protection Authority [2013] NSWCCA 179 South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 1541; (2000) 177 ALR 611 Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; (2006) 226 CLR 161 Terrey v Department of Environment, Climate Change and Water [2011] NSWLEC 141 The Hills Shire Council v Kinnarney Civil & Earthworks Pty Ltd [2012] NSWLEC 45; (2012) 188 LGERA 273 The Hills Shire Council v Kinnarney Civil & Earthworks Pty Ltd & Kinnarney (No 2) [2012] NSWLEC 95 The Hills Shire Council v Suciu (No 3) [2009] NSWLEC 192 Tiger Nominees Pty Ltd v State Pollution Control Commission (1991) 25 NSWLR 715 Tonto Home Loans Australia Pty Ltd v Tavares; FirstMac Ltd v Di Benedetto; FirstMac Ltd v O'Donnell [2011] NSWCA 389 Wakool Shire Council v Garrison Cattle Feeders Pty Ltd (No 2) [2011] NSWLEC 224 Walker Corporation Pty Ltd v Director-General, Department of Environment, Climate Change and Water [2012] NSWCCA 210; (2012) 82 NSWLR 12 Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5); Foxman Environmental Development Services Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 68
Category:	Principal judgment
Parties:	Paul Mouawad (First Appellant) Ninoska Mouawad (Second Appellant) The Hills Shire Council (Respondent)
Representation:	Mr T Howard (Appellants) Mr D Buchanan SC and Mr M Wright (Respondent) Veritas Legal (Appellants) The Hills Shire Council (Respondent)
File Number(s):	60290 and 60291 of 2011

Index

Topic	Paragraph Number
Mr and Mrs Mouawad Appeal Against Their Convictions and Sentences in the Local Court for the Unlawful Transportation of Waste	1
Proceedings Before the Local Court	5
The Appeals to the Land and Environment Court	11
Nature of the Appeals Against Conviction and Sentence	14
Disposition of the Appeals	21
Factual Circumstances Giving Rise to the Offences	22
Mr and Mrs Mouawad's Amended Grounds of Appeal	36
The Offence of Unlawfully Transporting Waste	37
Elements of the Offence	43
The Material Was Transported From the Lindfield Site to the Annangrove Site by FCA as Authorised by FCE	55
Principles of Attribution of Criminal Liability to Corporate Entities	60
Vicarious Liability for the Commission of Environmental Offences	66
Vicarious Liability for the Criminal Acts of Independent Contractors	77
Vicarious Liability for the Criminal Acts of Agents	84
Mr Mouawad, Through FCE, is Vicariously Liable for FCA's Act of Transporting the Waste to the Annangrove Site	98
The Material Transported was "Waste"	119
The Annangrove Site Was Being Used as a "Waste Facility"	135
There Was No Lawful Authority for the Annangrove Site to be Used as a Waste Facility	143
Conclusion on Appeals Against Conviction	159
Appeals Against Sentence	160
Statutory Matters Required to be Taken Into Account	161
Objective Circumstances	167
Maximum Penalty	168
Harm to the Environment	169
The State of Mind of Mr and Mrs Mouawad and the Reasons for Committing the Offences	171
Reasonable Foreseeability of Harm	176
Control Over the Causes of the Commission of the Offences	177
Practical Measures	179
Conclusion as to Objective Circumstances	181
Subjective Circumstances	182
Aggravating Factors	182
Mitigating Factors	183
Conclusion on Subjective Circumstances	186
Deterrence, Denunciation and Retribution	187
Consistency in Sentencing	192
Costs of the Appeals	194
Appeal Against Costs	196
Avoiding Double Punishment	200
Appropriate Penalty	201
Orders	203

JUDGMENT

Mr and Mrs Mouawad Appeal Against Their Convictions and Sentences in the Local Court for the Unlawful Transportation of Waste

1. On 17 November 2009 the Hills Shire Council ("the council") commenced summary criminal proceedings in the Local Court against Mrs Ninoska Mouawad and Mr Paul Mouawad as directors of Frontier Civil (Australia) Pty Ltd ("FCA") and Frontier Civil Engineering Pty Ltd ("FCE") respectively alleging that each corporation had committed an offence against s 143 of the Protection of the Environment Operations Act1997 ("the POEOA") for unlawfully transporting waste to a place that cannot lawfully be used as a waste facility.

1. By way of amended Court Attendance Notices, each corporation was charged that from 11 to 12 May 2009 it transported waste from a residential development site at 7-15 Milray Street, Lindfield ("the Lindfield site") to a rural residential property at 228 Annangrove Road, Annangrove ("the Annangrove site"). The waste was alleged to comprise soil, clay, rock, construction and demolition rubble, including bricks, plastic, concrete, glass and asbestos.

1. In concurrent proceedings against Mr Mouawad, by way of a Further Amended Court Attendance Notice, the council charged that Mr Mouawad, who at the time of the alleged offence was the sole director of FCE, committed the same offence as FCE by virtue of his status as the director of that corporation pursuant to s 169 of the POEOA.

1. Again, in concurrent proceedings against Mrs Mouawad, by way of an Amended Court Attendance Notice, the council charged Mrs Mouawad, who at the time of the alleged offence was the sole director of FCA, with the same offence as FCA by virtue of her status as the director of that corporation pursuant to s 169 of the POEOA.

Proceedings Before the Local Court

1. Mr and Mrs Mouawad pleaded not guilty. A concurrent trial commenced in the Local Court on 12 October 2010.

1. FCA was placed into external administration on 30 July 2010, that is, after the proceedings had commenced but before the hearing of the trial. Its administrator decided that the company would not actively defend the charge against it. The remaining three defendants (Mr and Mrs Mouawad and FCE), however, actively contested the charges.

1. The evidence was heard together over three days from 12 to 14 October 2010. Written submissions were filed after the close of the evidence, following which counsel for the parties addressed the Local Court on 23 February 2011.

1. On 9 March 2011 O'Shane LM found each of the offences proved.

1. That same day, after brief addresses by the parties on sentence, her Honour made the following orders:

(a) FCA was convicted and fined $9,000;

(b) Mrs Ninoska Mouawad, as director of FCA, was convicted and fined $9,000;

(c) FCE was convicted and fined $15,000; and

(d) Mr Paul Mouawad, as director of FCE, was convicted and fined $15,000.

1. On 6 April 2011, again after addresses by the parties to that Court, O'Shane LM imposed costs orders as follows:

(a) Mr Mouawad was ordered to pay the council's costs in the sum of $33,568 (representing two thirds of the total costs); and

(b) Mrs Mouawad was ordered to pay the council's costs in the sum of $16,784 (representing one third of the costs).

The Appeals to the Land and Environment Court

1. Relevantly, on 5 April 2011 Mr and Mrs Mouawad (hereafter referred to, where convenient, as "the appellants") appealed to this Court against conviction and sentence under s 31 of the Crimes (Appeal and Review) Act 2001 (the "Appeal and Review Act"). FCE was placed into external administration after the commencement of its appeal, which was subsequently disposed of by the Court on 17 June 2011.

1. The appellants filed grounds of appeal on 15 June 2011. Initially Mr Mouawad appealed against his conviction and the severity of the sentence, whereas Mrs Mouawad filed a severity appeal only.

1. However, on 5 September 2011 each of the appellants filed amended grounds of appeal with leave of this Court. Significantly, in addition to raising new grounds of appeal, Mrs Mouawad included an appeal against her conviction.

Nature of the Appeals Against Conviction and Sentence

1. An appeal against conviction is made to this Court as of right under s 31(1) of the Appeal and Review Act.

1. An appeal against conviction is dealt with by way of rehearing on the basis of certified transcripts and evidence adduced in the Court below (s 37(1) of the Appeal and Review Act). The Court may grant leave to adduce new evidence only if it is satisfied that it is in the interests of justice to do so (s 37(2) of the Appeal and Review Act).

1. In an appeal against conviction the Court considers the matter afresh and resolves for itself the ultimate issues for determination. It is not necessary for the Court to find fault with the lower court's reasoning (Gerondal v Eurobodalla Shire Council [2009] NSWLEC 160 at [6]). The Court may determine an appeal against conviction by setting aside the conviction or by dismissing the appeal (s 39 of the Appeal and Review Act).

1. There is similarly an appeal as of right against sentence pursuant to s 31(1) of the Appeal and Review Act. However there is a distinction in the Appeal and Review Act between how appeals against sentence and appeals against conviction are to be conducted by appellants insofar as there is no equivalent to s 37 of the Appeal and Review Act applicable to appeals against sentence. The Appeal and Review Act is therefore silent on the nature of an appeal against sentence and whether leave is required to adduce fresh evidence on the appeal.

1. In Terrey v Department of Environment, Climate Change and Water [2011] NSWLEC 141 (at [33]-[51]) the Court discussed this legislative curiosity and concluded that (at [51]):

Notwithstanding the legislative lacuna on the nature of an appeal against sentence only under the Act, the Court proceeded on the basis that the appeal was by way of rehearing, absent the limitation on adducing fresh evidence contained in s 37(2). Thus the Court resolved for itself the ultimate issues for determination, in this case, the appropriate sentence to be imposed for the offence ...

1. Consequently, an appeal against sentence proceeds by way of rehearing with the appellant not having to seek leave of the Court to adduce fresh evidence.

1. The appeal is not for error of law. This means that it is not incumbent on an appellant to show that such a conclusion was not open to the court below "in the sense of being a conclusion to which on the evidence, it should not have come. It is merely necessary to persuade this Court on a review of the evidence that guilt is not, to the necessary standard proved by the prosecutor" (Histollo Pty Ltd v Director-General of National Parks and Wildlife Service (1998) 45 NSWLR 661 at 678C). The role of this Court is to consider for itself afresh the appellant's culpability upon the evidence that was tendered in the court appealed from, in addition to any further evidence adduced with leave on the appeal.

Disposition of the Appeals

1. For the reasons that follow, the appeals against conviction and sentence are dismissed, and the appellants are to pay the council's costs of the appeals.

Factual Circumstances Giving Rise to the Offences

1. The facts largely established on the evidence before the Local Court giving rise to the convictions are summarised below. To the extent that some of this evidence remained contentious on appeal, it is elaborated upon in further detail below where appropriate.

1. On 1 December 2008 IPM Pty Ltd ("IPM") was granted development consent to demolish four existing dwellings and construct a residential flat building on the Lindfield site. IPM was the principal contractor for development of that site.

1. On 6 April 2009 IPM entered into a written subcontract with FCE with respect to the demolition and excavation of the Lindfield site.

1. FCE entered into an oral agreement with FCA regarding the management and execution of the works to be carried out under the contract between IPM and FCE. The agreement was that FCA would execute the works using its own employees, utilising equipment owned by FCE, which included the use of the trucks to transport the material off-site. FCE did not have any employees.

1. On 7 April 2009 the demolition and excavation under the subcontract between IPM and FCE commenced at the Lindfield site. Consistent with the agreement between FCE and FCA, the works were carried out by employees of FCA. Those employees relevantly included the operation manager or site foreman of the Lindfield site, Mr Jim Anjoul, and three truck drivers Mr Thomas Pardo, Mr Peter Thurston and Mr Floyd Murto.

1. On 7 April 2009 Aargus Australia Pty Ltd ("Aargus") provided a soil classification report to FCE ("the Aargus Report"). The report classified the natural underlying soil on the Lindfield site as virgin excavated natural material ("VENM"). However, the Aargus Report stated that there were some piles of material on the site that the classification in the Report did not relate to, and that further assessment would be required for the proposed re-use of the soil for residential land use.

1. The Aargus Report also noted that approximately 15,000m3 of the natural underlying soil was expected to be excavated and taken off-site.

1. The Aargus Report was provided to Mrs Mouawad by FCE for FCA's use because FCA was to carry out the transportation and disposal of material excavated from the Lindfield site by agreement with FCE. Mrs Mouawad proceeded to advise Mr Anjoul, in his capacity as FCA's operational manager and site foreman, that a validation report had been received, a copy of which was left at the Lindfield site and she instructed Mr Anjoul to transport the material to various landfill sites.

1. In early May 2009 Mr Ross Colosimo, who was at all relevant times the owner of the Annangrove site, discussed with a landscaper, Mr Joe Moussa, whom he knew from prior dealings, the possibility of obtaining some clean topsoil for use in landscaping at the front of the Annangrove site. Mr Moussa indicated that this could be arranged. Mr Moussa then contacted either Mr Anjoul or Mr Mouawad (the evidence was equivocal in this regard) to inquire whether he had any clean validated topsoil for use at the Annangrove site.

1. Although he denied it, there is evidence to suggest that Mr Moussa attended the Lindfield site with Mr Anjoul to examine the soil. At the time there were two stockpiles present on the site, one of demolition waste and one of VENM, the latter comprising topsoil with some clay. Mr Moussa indicated that he was interested in the VENM.

1. After this meeting Mr Anjoul contacted Mrs Mouawad to inform her of Mr Moussa's interest in the VENM. He asked her to "organise the paperwork to move that material" and informed her of the need to provide Mr Moussa with a validation report. Mrs Mouawad stated that this was "fine" and that the validation reports could be sent out and "we can start moving the material asap".

1. Either on 11 or 12 May 2009 (or both, it does not matter for the purpose of these appeals), three double trucks bearing either the words "Frontier Civil Engineering" or "Frontier Civil" attended the Annangrove site and deposited the material in mounds on the site. The total amount of material deposited on the Annangrove site from the Lindfield site was between five to seven truckloads. The drivers of the trucks were employees of FCA, namely, Mr Pardo and Mr Thurston.

1. On 12 May 2009 officers of the council attended the Annangrove site and halted any further unloading of soil onto the site.

1. On that same day, Mr Colosimo asked Mr Moussa for a validation certification in relation to the quality and nature of the soil. Mr Moussa then contacted Mr Mouawad in relation to obtaining a validation certificate. According to Mr Moussa (Mr Mouawad's evidence was equivocal in this regard), Mr Mouawad informed him that he would have to pay $2000 in order to obtain such a certificate. Mr Moussa declined to pay the sum and consequently did not obtain a certificate.

Mr and Mrs Mouawad's Amended Grounds of Appeal

1. The appellants' numerous grounds of appeal may be summarised as follows:

(a) that the evidence adduced in the Local Court did not establish that FCE transported waste to the Annangrove site to the requisite criminal standard and thus the offence was not proved against Mr Mouawad as the director of that company (grounds 1 to 5 of Mr Mouawad's amended grounds of appeal);

(b) that the council failed to establish that the Annangrove site was being used as a waste facility (grounds 6 and 1 respectively of Mr and Mrs Mouawad's amended grounds of appeal);

(c) that the council failed to establish that any lawful authority was required for use of the Annangrove site as a waste facility (grounds 7 and 2 respectively of Mr and Mrs Mouawad's amended grounds of appeal);

(d) that in respect of the sentences imposed on Mr and Mrs Mouawad, in each instance they were "excessively severe" (grounds 8 and 3 respectively of Mr and Mrs Mouawad's amended grounds of appeal); and

(e) that the costs orders made against each of Mr and Mrs Mouawad were "excessively severe" (grounds 9 and 4 respectively of Mr and Mrs Mouawad's amended grounds of appeal).

The Offence of Unlawfully Transporting Waste

1. It is convenient at this stage to set out the legislative framework governing the appeals at the time of the alleged commission of the offences.

1. The offence of transporting waste is a strict liability offence created by s 143 of the POEOA. That provision relevantly states as follows:

143Unlawful transporting or depositing of waste

(1) Offence

If a person transports waste to a place that cannot lawfully be used as a waste facility for that waste, or causes or permits waste to be so transported:

(a) the person, and

(b) if the person is not the owner of the waste, the owner,

are each guilty of an offence.

Maximum penalty:

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

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

(2) Proof of lawfulness

In any proceedings for an offence under this section the defendant bears the onus of proving that the place to which the waste was transported can lawfully be used as a waste facility for that waste.

1. The term "owner" is defined in s 143(4) for the purpose of the offence:

"owner" of waste includes, in relation to waste that has been transported, the person who was the owner of the waste immediately before it was transported.

1. The potential liability of the appellants for the commission of an offence contrary to s 143 by reason of the acts of FCE and FCA respectively is established by s 169 of the POEOA, which relevantly provides:

169Offences by corporations

(1)If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, 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.

1. The term "waste" is defined in the Dictionary to the POEOA as:

waste includes:

(a) any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or

(b) any discarded, rejected, unwanted, surplus or abandoned substance, or

(c) any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, processing, recovery or purification by a separate operation from that which produced the substance, or

(d) any processed, recycled, re-used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations, or

(e) any substance prescribed by the regulations to be waste.

A substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re-used or recovered.

1. The term "waste facility" is also defined in the Dictionary as:

waste facility means any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations).

Elements of the Offence

1. Controversy remains over the elements of the offence created by s 143(1) of the POEOA.

1. In Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5); Foxman Environmental Development Services Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 68 (at [226]) and Environment Protection Authority v Shannongrove Pty Ltd [2010] NSWLEC 162; (2010) 176 LGERA 31 (at [75]), it was assumed, in the absence of any argument, that the relevant 'prosecutors' had to prove beyond reasonable doubt the following four elements:

(a)   first, that a person, or the owner of the waste, transports, or causes or permits the transportation of, waste;

(b) second, that substance transported is "waste" within the meaning of the POEOA;

(c) third, that the waste is transported to a place that is being used as a "waste facility" as that term is defined in the POEOA for that waste; and

(d)   fourth, that the place cannot be lawfully used as a "waste facility" for that waste.

1. It is the third and fourth elements over which dispute exists. As to the third element, the issue is whether this is properly an element of the offence at all; as to the fourth issue, the question is who bears the onus of proving that no lawful authority exists to use the place to which the waste was transported as a waste facility.

1. In respect of the existence of the third element, in The Hills Shire Council v Kinnarney Civil & Earthworks Pty Ltd [2012] NSWLEC 45; (2012) 188 LGERA 273, Biscoe J referred to the issue and made the following observation (at [24]):

24 In my opinion, the elements of the offence created by s 143(1) are:

(a) the defendant transported a substance to a place;

(b) that substance was "waste" within the meaning of that word in the POEO Act; and

(c) the place to which the waste was transported could not lawfully be used as a "waste facility", within the meaning of that expression in the Act, for that waste. That is, that lawful authority was required.

1. Subsequently, the Court at first instance in Environment Protection Authority v Terrace Earthmoving Pty Ltd& Page [2012] NSWLEC 216 also described s 143(1) as comprising only three elements.

1. On appeal, in Environment Protection Authority v Terrace Earthmoving Pty Ltd [2013] NSWCCA 180, Basten ACJ declined to answer a question on a stated case touching upon this issue on the basis that it was neither necessary nor appropriate to do so in the circumstances (at [49]-[56]). His Honour noted that "there is, thus, a real issue as to whether the prosecution must establish beyond reasonable doubt that the place to which the waste was taken fell within the description of a 'waste facility'. That question might be thought to be readily capable of discrete treatment from the question of whether an authority or licence existed to use the premises in question for that purpose" (at [54]).

1. In the present case, the council vigorously rejected any suggestion that there was a separate third element embedded in the words "be used as a waste facility" contained in s 143(1) of the POEOA that required it to demonstrate beyond reasonable doubt that the place was being used as a "waste facility" as that term is defined.

1. Commencing, as I must, with a textual analysis of s 143(1) of the POEOA (Shannongrove Pty Ltd v Environment Protection Authority [2013] NSWCCA 179 at [22]-[23]), the language of the provision does not readily support the inclusion of such an element. As Biscoe J noted in Kinnarney (at [28]), the words "is being used" are not present in the section. This conclusion is arguably reinforced by a comparison between s 143 and s 144 of the Act, the latter of which expressly makes the use of a place as a waste facility by a person without lawful authority an offence.

1. But in my opinion, as a matter of logic, before the Court can consider whether a place "cannot lawfully be used as a waste facility" (emphasis added), it must first determine if the place to which the waste is transported can in fact be characterised as a "waste facility". Put another way, it is not possible to consider whether use as a waste facility is a 'lawful use' if it is not first established that this is the use to which "the place" was, has or will be, put. In other words, "use as a waste facility" is a necessary anterior assessment that is built into the third (or fourth) element of the offence under s 143(1) of the POEOA.

1. Support for this construction may be drawn from the definition of "waste facility" itself in the Dictionary to the Act, namely, "any premises used for the storage, treatment, processing, sorting or disposal of waste" (emphasis added). In order for premises to be "used for" these activities, it follows that the premises must have either been used, are being used, or will be used, for these purposes.

1. As a matter of practicality given the expansive definition of "waste facility" in the POEOA, it is difficult to envisage circumstances where the offence will not be proven without a prosecutor also having demonstrated that the place to which the waste was transported had been, was being, or would be, used as a "waste facility" for that waste. Thus whether described as an element of the offence or not, a prosecutor will inevitably be required to undertake the exercise of characterising the place as a "waste facility" to the criminal standard for an offence to be committed under s 143(1) of the POEOA. Were it otherwise, the term "waste facility" within the provision would be wholly otiose. A construction that gives these words work to do is to be preferred to one that does not (Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32; (2011) 244 CLR 144 at [97] and the authorities cited thereat).

1. As to the fourth element, I respectfully adopt the reasoning of Craig J in Page (at [232]-[242]), which was to conclude that this gave rise to a "dual onus" whereby the onus is on the prosecutor to prove beyond reasonable doubt that lawful authority was required to use the Annangrove site as a "waste facility" and only once that has been proved, does the onus shift to the appellants to establish that they held a lawful authority for that purpose. This analysis was not disturbed on appeal and was described by Basten ACJ in Terrace, in a rebuke to the prosecutor's submission in that case, as "by no means 'nonsensical'" (at [56]). Moreover, I do not think Craig J's reasoning in Page is wrong, let alone plainly wrong, as I must, on the basis of judicial comity, find in order to justify any departure from it (Fullerton Cove Residents Action Group Incorporated v Dart Energy Ltd (No 2) [2013] NSWLEC 38 at [278]-[281]). I therefore intend to adopt and apply it in these appeals.

The Material Was Transported From the Lindfield Site to the Annangrove Site by FCA as Authorised by FCE

1. Section 143 of the POEOA is directed towards the transportation of waste to a place. It is not, despite the title to the section ("unlawful transporting or depositing of waste"), directed to the act of depositing the waste onto the land and will not be committed absent transportation of that waste (Shannongrove (NSWCCA) at [38]).

1. The principal plank of Mr Mouawad's appeal against conviction was that the council could not prove to the criminal standard that Mr Mouawad's company, FCE, was criminally liable for the conduct of FCA in transporting the waste to the Annangrove site. Although Mr Mouawad readily conceded that the material was transported from the Lindfield site to the Annangrove site in trucks owned by FCE, he nevertheless contended that the trucks had been driven by drivers employed by FCA (Mr Pardo and Mr Thurston) at the direction of Mr Anjoul, an employee of FCA, who in turn had acted upon instructions he had received from Mrs Mouawad, the director of FCA. Accordingly, Mr Mouawad submitted that neither he nor FCE in fact transported the material to the Annangrove site.

1. In addition, Mr Mouawad submitted that the evidence did not establish that he, or any other officer or employee of FCE, instructed or authorised the individuals who physically transported the waste to the Annangrove site to do so. Nor did he, he submitted, instruct Mr Anjoul or Mrs Mouawad to transport the waste to that site.

1. In short, it was Mr Mouawad's position that he played no role whatsoever in where the material from the Lindfield site was taken.

1. Significantly, it was no part of the proceedings below that Mr Mouawad either permitted or caused, through FCA, the material to be transported to the Annangrove site. It follows, therefore, that some other basis for asserting that Mr Mouawad is criminally responsible for the transportation of the material to the Annangrove site must, if the council is to succeed, be found.

Principles of Attribution of Criminal Liability to Corporate Entities

1. In a detailed analysis in Director-General, Department of Environment and Climate Change v Jack & Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232; (2009) 172 LGERA 225, Biscoe J set out the legal principles that are applicable in determining whether the conduct of a director of a corporate defendant can be regarded as the conduct of the defendant itself (at [78]-[95], cited in Department ofEnvironment and Climate Change v Olmwood Pty Ltd [2010] NSWLEC 15; (2010) 173 LGERA 366 at [343]-[345] and quoted in Director-General, Department of Environment and Climate Change v Walker Corporation Pty Limited (No 2) [2010] NSWLEC 73 at [268]).

1. As his Honour stated (at [79] and [82]-[83]):

79 A company can only act through living persons. In determining whether criminal liability should be attributed to a company for the conduct of a person, a distinction has been drawn between, on the one hand, a person who is the embodiment of the company because, often, he is its relevant "directing mind and will" and, on the other hand, an agent or servant for whom the company is vicariously liable. The former represents an organic theory of liability, the latter an agency theory of liability. The distinction is particularly significant for offences in which mens rea is an element where prima facie (absent a contrary legislative intention) a principal is not vicariously responsible for the acts of agents: The King v Australasian Films Ltd [1921] HCA 11, 29 CLR 195 at 214-215. That inhibition is absent in strict liability offences because mens rea is not an element: Presidential Security Services Pty Ltd v Brilley [2008] NSWCA 204, 73 NSWLR 241 at [150].

...

82 Although the formula "directing mind and will" is often the most appropriate description of the person designated by the relevant rule attributing personal conduct to a company, that is not so in all cases. The real question is, on the proper construction of the statute, whose act is intended to count as the act of the company? see Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 at 511 per Lord Hoffman delivering the judgment of the Privy Council.

83 The act of a high-level employee or director may count as the act of the company because they represent the company's directing mind and will. But even the act of a low-level employee may count if that is required by the terms of the offence and the achievement of the policy objectives of the statute: ABC Developmental Learning Centres Pty Ltd v Wallace [2006] VSC 171, 161 A Crim R 250 at [10] - [14]; affirmed on appeal [2007] VSCA 138, 172 A Crim R 269. Conduct of low-level employees, who did not represent the company's directing mind and will, has repeatedly been held to be sufficient in cases concerning regulatory offences where legislation regulated a sphere of social or economic activity in the public interest (see the cases reviewed in the ABC Developmental Learning Centres case at first instance at [10]-[14]). They are analogous with the present case.

1. In this instance, the express and unambiguous language of s 169 of the POEOA ensures that the acts or omissions of FCE are attributable to Mr Mouawad as the director of FCE for the purpose of liability for a breach of s 143 of that Act. But s 169 is silent on the issue of whether the acts of a third party, for example, FCA can, by recourse to the devices of vicarious liability and agency, be attributed to a corporation, namely, FCE and thus to its directing mind and will, in this instance, Mr Mouawad. Both parties made extensive written and oral submissions on this topic.

1. In essence, the council contended that Mr Mouawad's involvement in the transportation of the material to the Annangrove site was as a de facto decision-maker, and that it was he, and not FCA, who was responsible for whether and where the material would be transported. Whereas Mr Mouawad, through FCE, was the governing "mind", FCA provided the "hands" or the labour to do FCE's work. FCE, and hence Mr Mouawad, was therefore vicariously liable for the actions of FCA either directly, or on the basis that at all relevant times FCA was acting as FCE's agent in the transportation of the material. In other words, the formation of FCA was, in truth, to carry out on FCE's behalf its demolition, excavation and waste transportation activities. This included at those Lindfield and Annangrove sites.

1. In response, Mr Mouawad argued, first, that the council's analysis of the application of principles of vicarious liability and agency to attribute criminal liability to Mr Mouawad for the acts of FCA was wrong in law, and that the proper characterisation of the relationship between FCA and FCE was one of an independent contractor. And second, and in any event, that the evidence did not support a finding to the criminal standard that the drivers who transported the fill to Annangrove were either controlled by Mr Mouawad or that he gave them specific instructions in relation to the transport of material from the Lindfield site to the Annangrove site on the dates of the alleged offence.

1. Accordingly, the dispute between the council and Mr Mouawad gave rise to three principal questions:

(a)   first, can FCE be vicariously liable for the criminal acts of FCA either as its agent or as an independent contractor;

(b)   second, on 11 and 12 May 2009, was FCA an agent of FCE for the class of activity of transporting the fill material to the Annangrove site or was FCA an independent contractor; and

(c)   third, if FCA was FCE's agent in the transportation of the material to the Annangrove site, was FCA acting within the scope of its authority from FCE.

Vicarious Liability for the Commission of Environmental Offences

1. In order to determine what acts, knowledge or mental state of persons can be attributed to an organisation, it is necessary to identify, in each statutory context, what Lord Hoffmann labelled the "rules of attribution" in Meridian Global Funds Management Asia Ltd v Securities Commission ([1995] 2 AC 500 at 506C). In Director General, Department of Education and Training v MT [2006] NSWCA 270; (2006) 67 NSWLR 237 Spigelman CJ stated (at [16]-[19] and [22], with whom Ipp JA and Hunt AJA agreed):

16 The law of agency is not an adequate or complete basis for institutional law. When determining whether conduct or knowledge or mental state of an individual employee or agent should be attributed to a corporation, an organic approach has been developed, which approach goes beyond the individualistic inclinations of the law of agency. (See, for example, Smorgon v Australia and New Zealand Banking Group Ltd (1976) 134 CLR 475 at 482-483; Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 159-160, 201-202; Grantham, "Attributing Responsibility to Corporate Entities: A Doctrinal Approach" (2001) 19 Company and Securities Law Journal 168.) In many cases, the conduct of persons in actual control of particular operations of the company will constitute the company for particular statutory purposes. (See, for example, The Lady Gwendolen [1965] P 294 at 343-344; AAPT Ltd v Cable and Wireless Optus Ltd (1999) 32 ACSR 63 at 88 [91]-[92]; 17 ACLC 974 at 997 [91]-[92].)

17 It is necessary to identify, in each specific statutory context, what Lord Hoffmann has felicitously called "the rules of attribution" (Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 at 506C). These are rules adopted to determine which acts, knowledge or mental states of persons, through whom an organisation necessarily acts, are to be attributed to the organisation for the purposes of the legislative scheme.

18 In a particular context, it may be appropriate to apply to an institution a rule of general applicability, such as the law of agency (called a "general rule" by his Lordship). Determining such issues often turns on the interpretation of the constituent documents of an institution, whether contractual or statutory (called a "primary rule" by his Lordship). However, in a case such as the present, determining when a person's conduct or knowledge should be attributed to an institution turns on the proper interpretation of the regulatory legislative scheme, having regard to the scope and purpose of the scheme (called a "special rule" by his Lordship).

19 As Lord Hoffmann's judgment in the Meridian Global Funds Management Asia Ltd case makes clear, identifying the relevant rules of attribution is a process that must be separately conducted in each particular context. For example, the rule will not be the same when a court is considering vicarious liability for a tort committed by a person associated with a corporation, as the rule that establishes criminal liability of a corporation for the conduct of a person. The policy issues that must be considered in every such context differ considerably. (C/f Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 40 [42].) Similarly the context of different criminal or regulatory provisions may suggest quite different rules of attribution.

...

22 Subsequent development of the case law has emphasised particular features of the legislative scheme under consideration, for example, the protective nature of the statutory regulation. (See, for example, in the case of occupational health and safety legislation, Linework Ltd v Department of Labour [2001] 2 NZLR 639; R v Commercial Industrial Construction Group Pty Ltd [2006] VSCA 181 and, in the case of a child protection statute, ABC Developmental Learning Centres Pty Ltd v Wallace (2006) 161 A Crim R 250.) Each statutory regime must be considered separately, although the case law that has developed, particularly after Meridian Global Funds Management Asia Ltd, will prove instructive about the kinds of indicators that point one way or another.

1. The law as to the nature of the relationships and circumstances which give rise to vicarious liability in civil proceedings informs the law as to the nature of the relationships and the circumstances that give rise to vicarious liability in criminal proceedings (Tiger Nominees Pty Ltd v State Pollution Control Commission (1991) 25 NSWLR 715 at 721A).

1. The question of whether a company can be attributed with the criminal liability of a person acting in furtherance of the company's interests, or at least not against them, is principally one of statutory interpretation (Presidential Security Services of Australia Pty Ltd v Brilley [2008] NSWCA 204; (2008) 73 NSWLR 241 at [4] and [7] per Allsop P).

1. Generally a company is less likely to be found guilty of an offence on the basis of vicarious liability where the criminal offence contains a mental element. In Brilley, Ipp JA opined that (at [145]-[147] and [150], Allsop P and Beazley JA agreeing):

145 Generally speaking, once a company is capable of committing a particular offence, it may be found guilty of that offence on one of two bases, namely, on the grounds of vicarious responsibility or on the basis that the person who committed the actus reus and had the requisite mens rea was the directing mind and embodiment of the company in the Tesco Supermarkets Ltd v Nattrass [1972] AC 153 sense.

146 Whether the company may be found guilty on one or other of these bases depends on the legislation applicable, the nature of the offence in question, and the status and position within the company of the person who performs the acts said to constitute the offence.

147 Generally, a company will not be found guilty, on the basis of vicarious liability, for a criminal offence having mens rea as an element. This is traceable to at least the eighteenth century. In R v Huggins (1730) 2 Stra 883 at 885; 93 ER 915 at 917, Raymond CJ stated: "It is a point not to be disputed, but that in criminal cases the principal is not answerable for the act of the deputy, as he is in civil cases: they must each answer for their own acts, and stand or fall by their own behaviour."

...

150 The situation is different, however, where mens rea does not form part of the offence. Parliament may create offences of strict or absolute liability, and it has long been accepted that, in such a case, the application of vicarious liability principles is not inhibited.

1. In determining whether there is a special rule of attribution it will be necessary to properly construe s 143 of the POEOA, having regard to its text and context, and in particular, to the nature of the offence and the objects of the statute. Statutes concerned with a protective regulatory regime are more likely to have the criminal liability of employees or officers ascribed to the corporate entity (ABC Developmental Learning Centres Pty Ltd v Wallace [2006] VSC 171; (2006) 161 A Crim R 250 at [11]-[13]). In ABC, Bell J stated (at [14]):

14 This feature is important because, where legislation lays down a standard of action or behaviour in the public interest, a company, being an abstract legal entity, can observe the standard only through human agents. To return to my case examples, the company must have employees or similar persons to make full and frank disclosure, to record taxable transactions, to protect the safety of workers at work and, I might add, to properly take care of children. If the persons appointed by the company to observe the standard do not do so, it would frustrate the objectives of the legislation if the company could not be held criminally liable. The imposition of criminal liability is one important way by which persons, including companies, are held accountable for breaching regulatory standards which, on pain of such liability, they are obliged to observe. Therefore, where appropriate, the courts will fashion a rule of attribution that counts, as a company's, the actions of employees, of whatever level, whose work involves the performance of a regulatory obligation on the company's behalf.

1. In the present case, the offence created by s 143 is one of strict liability. The purpose underlying the offence, and more generally of the POEOA, is to, amongst other policy objectives, protect the environment, reduce risks to human health and prevent the degradation of the environment (s 3 of the POEOA). All of these factors militate in favour of finding that a person may be vicariously liable for the breach of s 143 by another. There are none, in my view, that militate against that construction.

1. Mr Mouawad submitted that the Court should not expand the notion of vicarious liability in a way that "would render the defences nugatory in s 169" of the POEOA.

1. As a common law construct, vicarious liability for the wrongful acts of employees, agents or independent contractors, is subject to modification by statute. In my opinion, however, there is nothing in the language, scope or objects of s 169 of the POEOA that abrogates or circumscribes the operation of the common law doctrine.

1. Certainly this was not a matter that concerned the Court of Criminal Appeal in Director-General of Department of Land and Water Conservation v Greentree [2003] NSWCCA 31; (2003) 131 LGERA 234, where the now repealed Native Vegetation Conservation Act 1997 contained a provision relevantly identical to s 169 of the POEOA (s 65(1)). The Court held that there could be liability under s 65 on the part of a director or person concerned in the management of a corporation which committed the principal offence notwithstanding that liability was vicariously attributed to the corporation by reason of the conduct of an agent (at [84] and [105]).

1. There is nothing preventing Mr Mouawad from availing himself of s 169 of the POEOA by demonstrating that, as the sole director of FCE, he was not in a position to influence the conduct of FCA in relation to the contravention of the provision or that he used all due diligence to prevent the contravention of s 143 by FCA.

1. In my opinion, the presence of s 169 of the Act serves to reinforce, not derogate from, the conclusion that s 143 should not be narrowly interpreted in a manner that confines liability for criminal acts committed by officers, employees, or even third persons, acting in furtherance of the interests of a corporation.

Vicarious Liability for the Criminal Acts of Independent Contractors

1. As a general rule, an accused will not be vicariously liable for the conduct of an independent contractor (Colonial Mutual Life Assurance Society Ltd v The Producers and Citizens Co-Operative Assurance Company of Australia Ltd (1931) 46 CLR 41 at 48; Environment Protection Authority v Multiplex Constructions Pty Ltd [2000] NSWLEC 6; (2000) 112 LGERA 1 at [277] and Director-General of the Department of Environment, Climate Change and Water v Walker Corporation Pty Ltd (No 2) [2011] NSWLEC 229 at [115]).

1. But the case law abounds with exceptions to this rule, particularly in the context of the commission of environmental offences (Multiplex at [277], [278] and [280]; Greentree at [81]-[84]; Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd [2003] NSWLEC 70; (2003) 128 LGERA 240 at [104]-[106]; Coffs Harbour City Council v Hickey [2004] NSWLEC 531 at [48]; North Sydney Council v Moline; North Sydney Council v Tomkinson (No 2) [2008] NSWLEC 169 at [114]; Director-General, Department of Environment and Climate Change v Walker Corporation Pty Limited (No 2) [2010] NSWLEC 73 at [311]-[317], undisturbed on appeal: Walker Corporation Pty Ltd v Director-General, Department of Environment, Climate Change and Water [2012] NSWCCA 210; (2012) 82 NSWLR 12 at [91]-[92] and Walker (No 2) 2011 at [115]-[125]).

1. In Moline, Preston J summarised (at [114]) the exceptions to the general principle that a defendant will not be vicariously liable for the conduct of an independent contractor as follows:

114 ...Generally, an accused will not be vicariously liable for the conduct of an independent contractor: Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48; Environment Protection Authority v Multiplex Constructions Pty Ltd (2000) 112 LGERA 1 at 58-59 [277]. There are exceptions to this general principle. An accused may be vicariously liable where the accused has directly authorised the doing of the actus reus by the independent contractor: see Environment Protection Authority v Multiplex Constructions Pty Ltd (2000) 112 LGERA 1 at 59 [278], [280] and Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd (2003) 128 LGERA 240 at 262 [104] - 263 [106]. An accused may be vicariously liable where the work done by the independent contractor is subject to the control and direction of the accused in the actual execution of the work: see Environment Protection Authority v Multiplex Constructions Pty Ltd (2000) 112 LGERA 1 at 59 [280], 61-62 [290]. In Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd (2003) 128 LGERA 240 at 262 [102], Pearlman J described the content of the control test as follows:

"That test involves a right to direct and control a course of action, in circumstances where the right is capable of exercise and is, or is likely to be, effective. It relates to the manner in which the independent contractor undertakes the course of action, that is, the way in which the tasks are to be performed or how they are to be carried out".

1. These exceptions were discussed further by Preston J in Walker (No 2) 2011 (at [116]):

116 One exception is that an accused may be vicariously liable where the accused has directly authorised the doing of the actus reus by the independent contractor: see Environment Protection Authority v Multiplex Constructions Pty Ltd at 59 [278], [280] and Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd (2003) 128 LGERA 240 at 262-263 [104]-[106]. An act constituting the actus reus of an offence will be the act of the accused if the accused orders the contractor to do the act which constitutes the offence, to do some act which comprises that act, or to do some act which leads by all physical necessity to the offence: Stoneman v Lyons (1975) 133 CLR 550 at 573-574; Coffs Harbour City Council v Hickey [2004] NSWLEC 531 at [52]. Another exception is that an accused may be vicariously liable where the work done by the independent contractor is subject to the control and direction of the accused in the actual execution of the work: see Environment Protection Authority v Multiplex Constructions Pty Ltd at 59 [280], 61-62 [290] and Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd at 262 [102].

1. Assuming that FCA was FCE's independent contractor, the question therefore becomes one of fact as to, first, whether or not FCE ordered some or all of the act of transporting the waste from Lindfield to Annangrove, or second, whether FCA was subject to the control and direction of FCE in the actual execution of the transportation of the waste material.

1. The evidence relied upon by the council did not, in my view, to the requisite degree, either directly or by inference, permit either question to be answered in its favour.

1. It is no doubt for this reason that during the hearing of the appeals the council resiled from its initial position that FCE was vicariously liable for FCA's unlawful acts as its independent contractor, and focused instead on its alternative basis of liability for FCE, and thus, Mr Mouawad.

Vicarious Liability for the Criminal Acts of Agents

1. The council further submitted that FCE was vicariously liable for the criminal acts of FCA in the latter's capacity as FCE's agent in the transportation of the waste from the Lindfield site to the Annangrove site.

1. FCE contended that to attribute criminal liability to it in this manner was supported neither by existing authority nor a proper construction of s 143 of the POEOA.

1. I do not agree. When a statute creates an offence for which a person can, upon its proper construction, be vicariously liable, the liability can be for conduct comprising the offence that is committed by a servant or agent (McConnell Dowell Constructors (Aust) Pty Ltd v Environment Protection Authority [2000] NSWCCA 367; (2000) 50 NSWLR 127 at [41]).

1. This Court and other courts have recognised on many occasions the vicarious liability of principals, especially corporate principals, for environmental offences committed by persons acting as their agents or servants (Environment Protection Authority v Snowy Mountains Engineering Corporation Ltd [1994] NSWLEC 55; (1994) 83 LGERA 51 at 55 and 57; Director-General of the Department of Land and Water Conservation v Greentree [2002] NSWLEC 102 at [91] per Lloyd J; Greentree at [84] and [105] per Sheller JA, Levine J and Smart AJ; Moline at [114]-[116], [146] and [162] per Preston J and Issa at [79] per Biscoe J).

1. In Greentree the Court of Criminal Appeal stated (at [81]-[84]):

81 Similar considerations require the conclusion that a corporation or person may be vicariously liable for offences committed under the Act. In Mousell Bros Ltd v London & Northwestern Railway Co [1917] 2 KB 836 Atkin J at 845 said that the authorities made it plain that:

"While prima facie a principal is not to be made criminally responsible for the acts of his servants, yet the legislature may prohibit an act or enforce a duty in such words as to make the prohibition or duty absolute; in which case the principal is liable if the act is in fact done by his servants. To ascertain whether a particular Act of Parliament has that effect or not regard must be had to the object of the statute, the words used, the nature of the duty laid down, the person upon whom it is imposed, the person by whom it would in ordinary circumstances be performed, and the person upon whom the penalty is imposed."

82 In Tiger Nominees at 720 Gleeson CJ remarked that in this passage nothing turned upon any distinction between "absolute" liability and "strict" liability.

83 In R v Australasian Films Ltd (1921) 29 CLR 195 the High Court applied this principle in the case of a corporation prosecuted under s234 of the Customs Act1901. At 215 Knox CJ, Gavan Duffy and Rich JJ said:

"The general object of the statute is to establish machinery for the collection of customs duties in aid of the revenue, and the particular object of Part III (ss 228-243) is to protect the revenue by imposing penalties upon persons doing acts calculated to lead to evasion of payment of the duties imposed. It is apparent that the effective protection of the revenue requires that the same precautions should be taken whether a company or an individual be the owner of goods imported, the fact being that companies are engaged to a greater extent in the importation of goods. Consequently the object of the statute affords no reason for the exclusion of companies from liability under this part of the Act."

84 There is no reason to suppose that the clearing of native vegetation contrary to s21(2) of the Act should be any the less of an activity of a company than of a person. But as has been pointed out in many cases a company can only act through the agency of persons whether those persons be regarded as effectively the mind of the company or, alternatively, the agents of the company in performing the act. To make the Act effective against companies, companies must be vicariously responsible for the acts of their agents. In our opinion, s21(2) imposes a vicarious liability on a person, whether that person be a company (see s21(1) of the Interpretation Act1987 (NSW)) or an individual. In order to deal with this ground of appeal it is unnecessary to say anything about whether that vicarious responsibility in the particular case depends on a relationship of employer and employee, agency, or a contractual relationship.

1. Mr Mouawad relied on a trio of High Court cases (Scott v Davis [2000] HCA 52; (2000) 204 CLR 333; Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 and Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; (2006) 226 CLR 161) as authority for the proposition that a principal cannot be found vicariously liable for the criminal conduct of an agent. Mr Mouawad submitted that the decisions permitting vicarious liability to be attributed to third parties only concerned the "dichotomy" between vicarious liability for, on the one hand, the conduct of employees, and on the other, independent contractors; and not vicarious liability for the acts of agents.

1. But a closer analysis of each of these decisions reveals that the Court either rejected a finding of vicarious liability on the facts before it, or upheld such a finding, but on a basis other than the negligent conduct of an agent. In none of those cases did the High Court reject the proposition that a principal can be found vicariously liable for the criminal acts of the principal's agent. They are therefore of limited assistance.

1. Further, and although strictly irrelevant given the conclusion reached above, the description of a party as an 'independent contractor' does not of itself preclude a finding of agency for the purpose of any attribution of vicarious liability. It is the substance of the relationship that is determinative (Colonial Mutual at 46 and Sweeney at [24]).

1. Having said this, the observation of Lord Herschell in Kennedy v De Trafford [1897] AC 180 should be recalled, viz, that "no word is more commonly and constantly abused than the word 'agent'" (at 188, quoted in Colonial Mutual at 50 and Scott v Davis at [227] and [299]. A more recent statement of this sentiment was repeated in Tonto Home Loans Australia Pty Ltd v Tavares; FirstMac Ltd v Di Benedetto; FirstMac Ltd v O'Donnell [2011] NSWCA 389 at [170]. It is fair to say that there remains much terminological confusion in the various uses of this term, and thus, "one needs to consider the purpose for which one is asking the question whether A is P's agent" (Tonto at [173]). This is all the more important in the present case, where the purpose is to determine whether a person may be vicariously liable for the commission of environmental offences by his or her agent.

1. While, as was submitted by Mr Mouawad, the council's use of the concept of agency appeared, at first blush, to be somewhat unorthodox when compared to other cases where criminal liability for the commission of environmental offences has been attributed to a third party by recourse to the device of vicarious liability, upon closer analysis the principles relied upon by the council in this regard were entirely orthodox. It was their application to an unusual set of circumstances that created the illusion of novelty. To reiterate, there is no statement of legal principle precluding parties from being vicariously liable for the criminal acts of their agents.

1. Put simply, agency is a legal construct to connote an authority or capacity in one person to create legal relations between a person occupying the position of principal and third parties (International Harvester Company of Australia Proprietary Limited v Carrigan's Hazeldene Pastoral Company [1958] HCA 16; (1958) 100 CLR 644 at 652 and Lloyd v Ryan Borg by his Tutor NSW Trustee and Guardian [2013] NSWCA 245 at [38]).

1. A succinct and apposite summary of the uncontroversial elements of the law of agency for present purposes was articulated by Finn J in South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 1541; (2000) 177 ALR 611 (at [132]-[137]):

[132] 1. Those definitions of agency that take the principal and agent relationship itself as their particular focus: contrast International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co (1958) 100 CLR 644 at 652; emphasise that that relationship "can only be established by the consent of the principal and the agent": Garnac Grain Co Inc v HMF Faure & Fairclough Ltd [1968] AC 1130 at 1137; see eg Bowstead & Reynolds on Agency, (16th Ed, 1996), §1-001; Restatement, Third, Agency, Tentative Draft No 1, §1.01; 3 Am Jur 2d, "Agency", §17.

[133] 2. The consents so given need not necessarily be to a relationship that the parties understand, or even accept, to be that of principal and agent: Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552 at 587. It is sufficient if "they have agreed to what amounts in law to such a relationship": Garnac Grain Co Inc, above, at 1137; Nichols v Arthur Murray Inc 56 Cal Rptr 728 at 730-731 (1967); Restatement, Second, Agency, §1 comment b; notwithstanding that they may have "artfully disguised" it by express disclaimers: Board of Trade v Hammond Elevator Co 198 US 424 at 441-442 (1905).

[134] 3. It is legitimate for parties to avoid the "unwanted consequences" of a particular category of legal relationship by seeking to cast it in a form that takes it outside that category of relationship: Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 at 314. But whether or not they are successful in achieving that end does not depend simply upon whether, in an express provision of their agreement, they attribute or deny to their relationship a particular legal character - be this, for example, employer and employee: Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385; principal and principal or principal and agent: Board of Trade v Hammond Elevator Co, above; or partners: Ex parte Delhasse; In re Megevand (1878) 7 Ch D 511. The parties cannot by the mere device of labelling, no matter how genuinely intentioned, either confer a particular legal character on a relationship that it does not possess or deny it a character that it does possess: Ex parte Delhasse, above, at 532; see 2A Corpus Juris Secundum, "Agency", §7; see also the observations of Lord Denning in Massey v Crown Life Insurance Co quoted in the Australian Mutual Provident Society case, above, at 389.

[135] 4. Save where an express labelling provision is shown to be a sham, the provision itself (as a manifestation of the parties' intent) must be given its proper weight in relation to the rest of their agreement and such other relevant circumstances as evidence the true character of their relationship. This may lead to its being disregarded entirely: Ex parte Delhasse, above; Board of Trade v Hammond Elevator Co, above;: or to its being given full force and effect: Australian Mutual Provident Society v Chaplin, above. And such will depend upon whether, given the actual incidents and content of the relationship (ie "the factual relation") to which the parties have consented, they have consented "to a state of fact upon which the law imposes the consequences which result from agency": Branwhite's case, above, at 587; Restatement, Second, Agency, §1 comment b.

[136] 5. Though there is no uniformly agreed definition of agency: see the discussion in Fisher, Agency Law, (2000), 8-11; the two whose authoritative character has resulted in their wide citation are those of the Restatement, Second, Agency, §1 and of Bowstead and Reynolds, above, 1-001 (the latter being based upon the Restatement provision). The Restatement's definition is that:

" §1 Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act."

I would note in passing that the definition proposed in the Restatement, Third, Agency, Tentative Draft No 1, §1.01 proposes no material departure from the above. Bowstead and Reynolds' definition is that:

"Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly consents that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly consents so to act or so acts."

The necessary consents apart, the required characteristics of the relation are that (a) one party acts on the other's behalf but (b) subject to that other's control or direction.

[137] 6. The second of the above characteristics (control or direction) does not appear to figure prominently as a decisive indicator of agency in common law case law save in two settings. The first is where it is contended that a company is an agent of its parent company, shareholders, or of particular officers because of the control it or they exercise over it. Here, and to accommodate the perceived demands of the principle established in Salomon v Salomon & Co [1897] AC 22 that a company is a legal person separate from its parent, officers and shareholders, the control characteristic has had to undergo a degree of refinement which it is not relevant to explore in this proceeding; but see Gramophone and Typewriter Ltd v Stanley [1908] 2 KB 89; Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549; see also Restatement, Third, Agency, Tentative Draft No 1, at 50-52. The second setting in which resort has been had to the control characteristic is where a party that is expressed to stand in the relation of independent contractor to another is claimed as well to be the agent of that other. The two relationships are not mutually exclusive: see CFTO-TV Ltd v Mr Submarine Ltd (1994) 108 DLR (4th) 517; affd (1997) 151 DLR (4th) 382; Lower Hutt City v Attorney-General [1965] 2 NZLR 65 at 71; Restatement, Second, Agency, §14N. Though "[c]ontrol by itself is insufficient to establish agency": Restatement, Third, Agency, Tentative Draft No 1, at 49 - the "acting on behalf of" or "representative" characteristic must be able to be discerned in the factual relation of the parties: Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48-51 - where that characteristic can properly be inferred in circumstances in which the alleged principal exercises, or is entitled to exercise, a significant degree of control over the contractor's performance of its services (and in particular over contracts entered into), the contractor is apt in consequence to be characterised as an agent: see eg CFTO-TV Ltd v Mr Submarine Ltd, above; Northern v McGraw-Edison Co 542 F 2d 1336 (1976); Condus v Howard Savings Bank 986 F Supp 914 (1997); 2A Corpus Juris Secundum, "Agency", §12; see also Bowstead and Reynolds, above, 1-028. It probably is the case that the control exercisable by one party can in some settings itself bear on the determination whether the other acts on its own account or on behalf of the former when dealing with third parties: cf the view expressed in Royal Securities Corp Ltd v Montreal Trust Co (1966) 59 DLR (2d) 666 at 684.

1. This articulation of principle has been endorsed and applied across several jurisdictions since its initial expression (Alliance Craton Explorer Pty Ltd v Quasar Resources Pty Ltd [2013] FCAFC 29; (2013) 296 ALR 465 at [54]-[55] and Tonto at [175]).

1. Distilling these principles, the following propositions emerge:

(a)   it is a general requirement that one party acts with the consent of the other in order to carry out the affairs of the other party;

(b)   the relationship is typically characterised by a degree of control or direction by the principal over the agent;

(c)   control by itself will be insufficient, the representative nature of the relationship must also be present;

(d)   generally the relationship will arise by agreement, which may be express or implied from the conduct of the parties;

(e)   whether a party is the agent of another does not depend on the terminology adopted by the parties to describe their relationship, but on the true nature of the agreement and the circumstances of the relationship between them;

(f)   a person may be an agent in a particular transaction or transactions; and

(g)   the fact that a principal might not have authorised the specific instance of improper or unlawful conduct by an agent will not excuse the principal from liability for the agent's conduct where that conduct was within the scope of the agent's authority.

Mr Mouawad, Through FCE, is Vicariously Liable for FCA's Act of Transporting the Waste to the Annangrove Site

1. It was uncontroversial that the conduct of Mr and Mrs Mouawad was the conduct of FCE and FCA respectively. And nor could it be. Mr Mouawad was the sole director and shareholder of FCE and FCE had no employees. Mrs Mouawad was the sole director of FCA and although the shares in FCA were held by F C Group Pty Ltd ("FCG"), Mrs Mouawad was also the sole director of FCG and held all of the shares in that corporate entity.

1. Mr Mouawad submitted, however, that none of the evidence of his involvement in the transportation of the material to the Annangrove site demonstrated, to the requisite degree, that he had, through FCA, transported material to the Annangrove site in contravention of s 143 of the POEOA.

1. In support of its contentions the council initially relied upon two matters. First, the fact that Mr Moussa believed that he and Mr Mouawad had been a party to a conversation wherein, after Mr Moussa had disclosed to Mr Mouawad that he required some clean soil for a site in Annangrove, Mr Mouawad had told Mr Moussa that there was some clean soil available, it was validated and that he could have it.

1. And second, the council relied upon Mr Mouawad's explanation for commissioning the Aargus Report, namely:

As part of my obligations within my field of work we carry out the requirement to ensure that the material on our sites are disposed in the correct manner, in the lawful manner and the different destinations which should have been in the case of waste materials appropriate waste facility and by having a document like this, being the validation certificate, we are able to understand what materials are classified particular as stated and their final destination is then arranged.

1. Contrary to the finding of the learned magistrate, I accept the submission of Mr Mouawad that this latter testimony is, of itself, insufficient to draw an inference to the criminal standard that either he or FCE was responsible for directing the drivers of the trucks to the nominated destination.

1. I also accept that the terms of the conversation are, of themselves, not capable of permitting a finding beyond reasonable doubt that Mr Mouawad directed or authorised the transportation of the waste from the Lindfield site to the Annangrove site. As Mr Mouawad submitted, this is evidence equally consistent with him conveying to Mr Moussa information that had, in turn, been conveyed to him by a third party, for example, Mr Anjoul or Mrs Mouawad after Mr Moussa had spoken to either or both of those individuals. Care must, in any event, be exercised in placing too much weight on the conversation given Mr Moussa's equivocation regarding whether it was Mr Mouawad with whom he had had the conversation.

1. But this is not the end of the matter.

1. The council drew support from the fact that the fill material transported to the Annangrove site on 11 and 12 May 2009 was transported in FCE trucks, badged as such, using FCA drivers. There was no written contract in place governing the oral arrangement between FCA and FCE, there was no evidence of any fee negotiated for the transportation and no formal invoices appeared to have been issued from FCE to FCA, for the use of FCE's trucks, or by FCA to FCE for the haulage, for that particular transaction.

1. In my opinion, when regard is had to the totality of the evidence, it demonstrates to the criminal standard that FCA was acting as FCE's agent in transporting the waste. My reasons are essentially twofold.

1. First, the almost intimate proximity of the relationship between FCE and FCA was highly probative of a relationship of agency. Before the formation of FCA, FCE had for many years carried on demolition, excavation and waste transport work. From the evidence it may be readily inferred that FCA was recently incorporated to carry out that demolition, excavation and waste transportation work on behalf of FCE. This evidence includes the following facts:

(a)   FCA was incorporated in June 2008. Prior to her becoming a director of FCA, Mrs Mouawad had no experience in civil works and had been working for FCE in January 2008 "merely" answering the telephone. As she stated, "I'm a mother of three kids, I didn't have all the time to sit there";

(b)   according to the appellants' written submissions, as at April 2009 Mr Mouawad was a shareholder of FCA;

(c)   Mrs Mouawad, although the owner of FCA shares, albeit through the vehicle of FCG, was not certain of the share ownership arrangements between the two companies;

(d)   Mr Mouawad described FCA as FCE's "subcontractor" and FCE as the "head contractor" and said that he gave instructions to Mr Anjoul in this capacity;

(e)   Mr Mouawad regarded FCE as the management company and FCA had been established to provide FCE with labour. Although Mr Anjoul became an employee of FCA, his duties remained essentially the same, namely, site foreman and supervisor. Mr Mouawad's role also remained unchanged, namely, project manager;

(f)   the "vast majority" of FCA's work was subcontract work given to it by FCE;

(g)   the business name for "Frontier Civil" was registered to FCE;

(h)   the business name FCE was registered to FCA;

(i)   the registered office for FCA, FCE and FCG was the same;

(j)   the three companies shared a principal place of business, namely, Mr and Mrs Mouawad's family home;

(k)   FCE promoted itself as undertaking excavation and demolition work even though it did not have any employees. Plainly it intended to do so through the vehicle of FCA;

(l)   there was no written contract between FCA and FCE either generally or in respect of particular projects (and none in respect of the transportation of the fill material from Lindfield to Annangrove). Rather, as Mrs Mouawad stated, the work to be performed was determined by oral agreement on a job-by-job basis;

(m)   FCA regularly used FCE's trucks to transport fill material;

(n)   although according to Mr Mouawad some invoices were rendered between FCE and FCA for truck and other equipment hire and labour, Mrs Mouawad was unsure of the invoicing arrangements between the two companies. She agreed that there was nothing recorded in the books of FCA that showed payment by it for the use of FCE's trucks; FCE did not pay FCA for the haulage of any of the materials from Lindfield to Annangrove; FCA did not separately cost any job; and according to Mrs Mouawad, the scope of works performed by FCA was costed by Mr Mouawad;

(o)   although Mrs Mouawad viewed Mr Mouawad as a consultant to FCA to provide her with advice, there was no contract between Mr Mouawad or FCA to this effect and in July 2010 Mrs Mouawad signed an ASIC Summary of Affairs of a Company which showed Mr Mouawad as a substantial creditor of FCA. Although she later orally denied that this was the correct position, she could not explain the statement;

(p)   Mrs Mouawad relied on advice from Mr Mouawad and Mr Anjoul because she had no experience in the conduct of a civil works business;

(q)   although the demolition licence passed from FCE to FCA upon FCA's establishment, Mr Mouawad continued to ensure that demolition works complied with environmental and occupational health and safety obligations under relevant legislation, including with respect to the lawful disposal of materials from building sites. Thus although he expressly denied playing any role in determining whether the material from the Lindfield site should be taken to the Annangrove site, he nevertheless agreed that he had "instructed" Mrs Mouawad "about the removal of the material from the [Lindfield] site";

(r)   Mr Mouawad, initially, at least, described the Aargus Report as a "validation report", the purpose of which was as follows (T 13/10/10 140.0-140.15, emphasis added):

If the client doesn't have a classification then we got out, obtain the validation for the material to be disposed and once the validation is done, it's provided, then analyse to see what the classification of the material has been determined to be and then a determination as to where the disposal of the material can take place. If the - it's my understanding that VENM material is virgin excavated natural material and then if it's other than virgin excavated natural material it can be classified as, you know, certain types of wastes and the degree of contaminants.

My procedure then is to provide the validation report to various sites, landfills, waste facilities and so forth. We then also maintain a report on site so that if any authority needs to come and inspect and once we've determined where the material goes and then it's accepted by the certain end-user, landfill site, tip site, building site, waste facility then we proceed to transport the material. That's the procedure I've adopted from when I started up until this day.

(s)   the FCA drivers recorded their work on FCE log books and the trucks they drove carried FCE's business name and contact details; and

(t)   according to Mrs Mouawad, although FCA was put into external administration in July 2010, FCA was still doing work for FCE up until February 2010.

1. Although Mr Mouawad later testified that: the FCE vehicles were under the control of FCA; it was Mrs Mouawad (subsequently confirmed by her) who was responsible for the day-to-day governance of FCA; and that he gave no instructions to transport the material to the Annangrove site, in my view, when regard is had to the evidence above, FCA was, to all intents and purposes, publicly presented as an emanation of FCE and fully clothed with the authority to act on its behalf. That FCA from time to time obtained business from sources other than FCE does not, in my opinion, materially derogate from this conclusion.

1. Second, it may be inferred that despite protestations to the contrary from Mr Mouawad, FCA was acting within the scope of its authority from FCE when it transported the waste to the Annangrove site. This inference may be drawn from the fact that:

(a)   although FCA physically undertook the work at the Lindfield site, it was FCE that was responsible for that work, including the disposal of the demolition and excavation material. IPM contracted with FCE to provide "demolition, excavation, shotcrete, anchors and oiling" services at the Lindfield site. FCE commenced these works on the site on around 7 April 2009. Contractually, FCE provided the labour, materials and equipment, and received payment for the work it performed. As the evidence of Mr Mouawad disclosed, it was he who instructed Mr Anjoul and FCA what work was to be undertaken at the Lindfield site;

1. Turning to the first reason, at the time the waste was transported to the Annangrove site on 11 and 12 May 2009, s 48 of the POEOA required an environmental protection licence in order to undertake the "premises-based activity" of "waste disposal by application to land", and more specifically, by "depositing on the land". Licences for premises-based activities are specific to the premises on or at which the scheduled activity is conducted (ss 44 and 48 of the POEOA).

1. Thus s 48 of the POEOA provides:

48 Licensing requirement-scheduled activities (premises-based)

(1) Application of section

This section applies to scheduled activities where Schedule 1 indicates that a licence is required for premises at which the activity is carried on.

(2) Offence

A person who is the occupier of any premises at which any such scheduled activity is carried on is guilty of an offence, unless the person is, at the time that activity is carried on, the holder of a licence that authorises that activity to be carried on at those premises.

1. A "licence" is defined in the Dictionary to the Act as an "environment protection licence", which in turn is defined as:

environment protection licence means a licence authorising the carrying out of scheduled development work or scheduled activities or controlling the pollution of water arising from non-scheduled activities, being a licence issued under Chapter 3 and in force.

1. The term "scheduled activity" is defined in the Dictionary to the POEOA to mean "an activity listed in Schedule 1" of the POEOA. And "activity" is defined as meaning:

activity means an industrial, agricultural or commercial activity or an activity of any other nature whatever (including the keeping of a substance or an animal).

1. Pursuant to cl 39(3) of Pt 1 of Sch 1 to the POEOA an activity to which the clause applies is declared to be a scheduled activity. This applies to "waste disposal by application to land" in cl 39(1) which provides that:

39 Waste disposal (application to land)

(1) This clause applies to waste disposal by application to land, meaning the application to land of waste received from off site, including (but not limited to) application by any of the following methods:

(a) spraying, spreading or depositing on the land,

(b) ploughing, injecting or mixing into the land,

(c) filling, raising, reclaiming or contouring the land.

1. There can be no dispute that waste was spread or deposited onto the Annangrove site and that as a result of this activity, an environmental protection licence was required. Further, there can be no dispute that no environmental protection licence existed in respect of the activity.

1. Turning to the second reason, the use of the Annangrove site as a waste facility was development that required development consent under the Baulkham Hills Local Environmental Plan 2005 ("the LEP"), and in breach of s 76A of the EPAA none was in existence.

1. Under the Table to cl 13 of the LEP, the Annangrove site was zoned Rural 1(b) and under that Zone development allowed without consent (item 2) was limited to:

Exempt development and development for the purpose of:

agriculture (other than dams); bed and breakfast establishments; bush fire hazard reduction; home activities; home-based child care or family day care homes.

1. Plainly the development on the Annangrove site did not fall within this description.

1. Development allowed with consent included, however, the "filling of land" (item 3). All other development not dealt within items 1 to 3 was prohibited within the Zone (item 4).

1. The "filling of land" was defined in cl 5(1) of the LEP to mean:

filling of land means filling of land by raising the natural ground level through deposition of clean (uncontaminated) excavated natural, earthy material, such as topsoil, lime, clay or sand, above the natural or pre-existing ground level, in association with agriculture or with a land use for which consent has been granted, where the landfill deposited exceeds one metre in depth or affects a total area of 100m² or more, but does not include top dressing to an average depth of 50mm or less.

1. There was no evidence before the Court suggesting that the development taking place at the Annangrove site constituted the "filling of land" in conformity with the definition contained in the LEP, particularly given the composition of the material deposited at the site. However, even if the activity did constitute the "filling of land", consent for this activity was nevertheless required and had not been obtained from the council.

1. Having regard to the requirements of the LEP and the EPAA, in the absence of either a development consent or an environment protection licence permitting the use of the Annangrove site as a waste facility, I find beyond reasonable doubt that the Annangrove site could not be lawfully used as a waste facility for the waste that was transported there on 11 and 12 May 2009.

1. This reasoning is sufficient to dispose of grounds 7 and 2 respectively of Mr and Mrs Mouawad's amended grounds of appeal.

Conclusion on Appeals Against Conviction

1. The council having demonstrated to the criminal standard the elements of the offence created by s 143(1) of the POEOA in respect of both Mr and Mrs Mouawad, the appeals against conviction must be dismissed.

Appeals Against Sentence

1. Neither party made detailed submissions in respect of the appeals against sentence.

Statutory Matters Required to be Taken Into Account

1. In determining the appropriate penalty to be imposed on Mr and Mrs Mouawad for their respective commission of an offence pursuant to s 143(1) of the POEOA, it is necessary to take into account the purposes of sentencing, as those purposes are stated in s 3A of the Crimes (Sentencing Procedure) Act 1999 ("the CSPA"):

3A Purposes of sentencing

The purposes for which a court may impose a sentence on an offender are as follows:

(a) to ensure that the offender is adequately punished for the offence,

(b) to prevent crime by deterring the offender and other persons from committing similar offences,

(c) to protect the community from the offender,

(d) to promote the rehabilitation of the offender,

(e) to make the offender accountable for his or her actions,

(f) to denounce the conduct of the offender,

(g) to recognise the harm done to the victim of the crime and the community.

1. The Court is also required to take into account the matters in s 241(1) of the POEOA insofar as they are relevant:

241 Matters to be considered in imposing penalty

(1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant):

(a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence,

(b) the practical measures that may be taken to prevent, control, abate or mitigate that harm,

(c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence,

(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence,

(e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee.

1. The Court may also take into account other matters it considers relevant (s 241(2) of the POEOA).

1. And the Court must have regard to the aggravating and mitigating factors identified in s 21A of the CSPA.

1. The appropriate sentence for each of Mr and Mrs Mouawad is to be determined by an instinctive synthesis of all of the relevant objective and subjective circumstances (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).

1. Finally, the sentences must be proportionate to the seriousness of the offence committed when assessed against the objective circumstances.

Objective Circumstances

1. The objective circumstances of the commission of an offence include the maximum penalty, the actual or potential environmental harm caused, the state of mind of Mr and Mrs Mouawad, the reasons for the commission of the offence, the foreseeability of the environmental harm, the practical measures that could have been taken to prevent the environmental harm, and Mr and Mrs Mouawad's control over the circumstances of the offence.

Maximum Penalty

1. The maximum penalty imposed for an offence serves as an indication of the relative seriousness of the offence. In the present case the maximum penalty is sizable. In the case of an individual it is $250,000 (s 143(1) of the POEOA).

Harm to the Environment

1. The relevant environment is the Annangrove site. The issue of the extent of harm caused or likely to be caused to the environment by the commission of the offence (s 241(1)(a) of the POEOA) concerns the damage to that property by the transportation and placing of the waste material on that property.

1. On any view the harm occasioned to the environment by the commission of the offence by Mr and Mrs Mouawad was at the lower end of the scale. Notwithstanding that the waste deposited in Material A tested by Mr Passlow contained small amounts of asbestos and lead and comprised demolition material which included rubble, the majority of the material deposited at the Annangrove site was ENM. There was no suggestion from any of the parties that the Annangrove site could not be remediated by the removal of the waste material.

The State of Mind of Mr and Mrs Mouawad and the Reasons for Committing the Offences

1. Although s 143 of the POEOA is a strict liability offence, the state of mind of Mr and Mrs Mouawad is nevertheless relevant to the question of penalty. A strict liability offence committed intentionally, recklessly or negligently, serves to exacerbate the objective culpability of a defendant.

1. There was no evidence that either Mr or Mrs Mouawad was aware that anything other than VENM, as requested by Mr Moussa, would be taken to the Annangrove site.

1. Rather, it appears that through oversight some of the material loaded onto the FCE trucks and transported to Annangrove and deposited on Mr Colosimo's property was demolition waste and not VENM. In short, the commission of the offence by Mr and Mrs Mouawad was accidental. No authorisation was given by Mr or Mrs Mouawad or Mr Anjoul to transport demolition waste to the Annangrove site. This is consistent with the fact that clean topsoil was among the fill material transported to Annangrove and consistent with the fact that waste from the Lindfield site was taken to various waste facilities authorised to take the waste. There was no intention to treat the Annangrove site as a landfill or waste facility for the demolition material at the Lindfield site.

1. To the extent that Mr and Mrs Mouawad relied on the fact that the material was transported to the Annangrove site at the request of Mr Moussa (and indirectly by Mr Colosimo), this does not assist them. What was requested was clean topsoil, not construction waste.

1. The finding that the commission of the offence was unintentional informs the reasons for committing the offence. That is to say, there was no evidence that the offence was committed for financial gain (s 21A(2)(o) of the CSPA) or to obtain a benefit by Mr and Mrs Mouawad. Instead, it may be readily inferred that the incorrect material was taken to the Annangrove site by reason of a failure to either follow or put measures into place that ensured that the correct material was taken to the correct site.

Reasonable Foreseeability of Harm

1. The Court is required to consider the extent to which Mr and Mrs Mouawad could reasonably have foreseen the harm caused or likely to be caused by the commission of the offence (s 241(1)(c) of the POEOA). In the present case, while it was plainly foreseeable that depositing building material containing asbestos and lead would cause harm to the environment, as stated above, I accept the submissions that in respect of both Mr and Mrs Mouawad there was no evidence to suggest that either of them was aware that material other than clean topsoil would be taken to the Annangrove site.

Control Over the Causes of the Commission of the Offences

1. Insofar as Mrs Mouawad authorised Mr Anjoul to organise the transportation of the waste material to the Annangrove site and insofar as he was, at the relevant time, an employee of FCA, there can be no doubt that she had control over the causes of the commission of the offence (s 241(1)(d) of the POEOA).

1. Likewise to the extent that Mr Mouawad's evidence was that he was responsible for compliance with environmental regulations, he had assumed control over the causes that gave rise to the offence.

Practical Measures

1. It was accepted by Mr and Mrs Mouawad that practical measures could have been taken to prevent the harm occurring by, in turn, preventing the waste material from being transported to the Annangrove site (s 241(1)(b) of the POEOA). Although no guidance was given to the Court as to what these measures were, steps such as Mr Anjoul remaining at the Lindfield site and supervising the loading of all of the material into the trucks destined for the Annangrove site could have been implemented.

1. Mr and Mrs Mouawad relied on the fact that a validation report had been obtained and the provision of instructions to Mr Anjoul to dispose of material classified as waste at appropriate facilities based on that report. While this initial measure must be taken into account, only limited weight may be placed upon it given that no further steps were taken by the appellants to ensure that the demolition waste stream terminated at an appropriate waste facility and not a residential property.

Conclusion as to Objective Circumstances

1. Having regard to the discussion above, the objective seriousness of the offence committed by each of Mr and Mrs Mouawad was low.

Subjective Circumstances

Aggravating Factors

1. The commission of the offences is not marked by any aggravating factors that the Court is required to take into account (s 21A(2) of the CSPA).

Mitigating Factors

1. The subjective mitigating factors relevant to the determination of appropriate sentences in the present appeals (see s 21A(3) of the CSPA) are limited and are as follows:

(a) that the harm caused by the offences was not substantial (s 21A(3)(a) of the CSPA); and

(b) that neither Mr nor Mrs Mouawad has any record of previous convictions for environmental offences (s 21A(3)(e) of the CSPA).

1. Given the overlap, it is convenient to deal with the likelihood of Mr and Mrs Mouawad re-offending (s 21A(3)(g) of the CSPA) below in the discussion concerning deterrence.

1. But importantly, Mr and Mrs Mouawad were unable, on the evidence before me, to take the benefit by way of reduction in penalty of:

(a) the good character of Mr and Mrs Mouawad (s 21A(3)(f) of the CSPA);

(b) an early, or indeed any, plea of guilty (ss 21A(3)(k) and 22 of the CSPA);

(c) a demonstration of remorse (s 21A(3)(i) of the CSPA); or

(d) a demonstration of assistance provided to the relevant regulatory authorities, in particular, the council, in the prosecution of the proceedings (ss 21A(3)(m) and 23 of the CSPA).

Conclusion on Subjective Circumstances

1. The subjective circumstances surrounding the commission of the offences operate only to a very limited degree to mitigate the penalty to be imposed.

Deterrence, Denunciation and Retribution

1. As noted above, the Court is required to take into account the purposes of sentencing, which include both specific and general deterrence (s 3A(b) of the CSPA).

1. General deterrence is important to ensure that the penalty imposed acts to deter those who might engage in similar activities from committing like offences. In the specific circumstances of this case, the purpose is to encourage directors of companies engaged in excavation and demolition activities at construction sites to ensure that the waste generated from those activities is transported only to facilities lawfully able to receive and dispose of such waste.

1. Having said this, in my view, the need for specific deterrence in respect of the activities of Mr and Mrs Mouawad is limited, although not to the point where it should be ignored completely.

1. There is some force in the submission of the council that Mr Mouawad's conduct in seeking to extract the payment of $2000 from Mr Moussa and Mr Colosimo in exchange for a copy of the validation report, his refusal to accept that his trucks had deposited waste on Mr Colosimo's property and his continued denial that he had any role to play in the commission of the offence, is inconsistent with a director of a company anxious to comply with the law. Given FCA's and FCE's intertwined relationship, I therefore consider that the penalty imposed must incorporate some element of specific deterrence in respect of both appellants.

1. Finally, it should be noted that the purposes of retribution and denunciation are also relevant. The Court by its sentence needs to denounce the offences and there must also be an element of retribution for their commission.

Consistency in Sentencing

1. The Court must have regard to comparable cases from which guidance can be obtained to ensure that the penalty imposed is consistent with a pattern of sentencing for like offences. These cases include: Environment Protection Authority v Hardt [2007] NSWLEC 284 (albeit a case concerning a conviction under s 144 of the POEOA); The Hills Shire Council v Suciu (No 3) [2009] NSWLEC 192 (and the cases referred to therein at [75]; Environment Protection Authority v Smart Skip (NSW) Pty Ltd [2009] NSWLEC 204 (again, a case dealing with s 144, and see also the authorities discussed at [46] and [47]); Wakool Shire Council v Garrison Cattle Feeders Pty Ltd (No 2) [2011] NSWLEC 224 (a s 144 decision); The Hills Shire Council v Kinnarney Civil & Earthworks Pty Ltd & Kinnarney (No 2) [2012] NSWLEC 95; Environment Protection Authority v Shannongrove Pty Ltd (No 2) [2012] NSWLEC 202; Environment Protection Authority v Hanna [2010] NSWLEC 98; Environment Protection Authority v Wyong Shire Council [2012] NSWLEC 36 and Environment Protection Authority v Geoff Robinson Pty Ltd [2011] NSWLEC 14.

1. It is somewhat trite to state that each case may be distinguished on its facts from the circumstances germane to the present convictions. The result is that their widely differing factual circumstances render it difficult to obtain all but the most general of guidance. They do, however, confirm that the imposition of a fine is an appropriate form of penalty for this offence.

Costs of the Appeals

1. On the assumption that it would be wholly successful, the council sought its costs of the appeals and submitted that the costs orders made in the court below should remain undisturbed.

1. Costs are part of the overall penalty calculation and may be taken into account in determining the appropriate amount of any fine (Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78]). The quantum of the costs of the appeals has not been agreed upon by the parties, but it may comfortably be assumed that they will, given the complexity of these appeals, be significant. I therefore take this factor into account.

Appeal Against Costs

1. Neither appellant explained why the costs orders imposed on them below were excessive. No evidence was proffered to justify the claim.

1. Given the duration of the proceedings before the lower court and their complexity, I do not consider the costs awarded against Mr and Mrs Mouawad by O'Shane LM to be anything other than ordinary. It is typically the case in prosecutions for environmental offences that the costs awarded in favour of the prosecutor exceed, often by a significant degree, the actual penalty imposed.

1. In my opinion, grounds 9 and 4 of Mr and Mrs Mouawad's respective amended grounds of appeal must therefore be dismissed.

1. But I nevertheless take into account the costs orders imposed on the appellants in the Court below in the overall determination of an appropriate penalty.

Avoiding Double Punishment

1. Although neither FCE nor FCA were parties to this appeal, I am nevertheless cognisant of the fact that at the time of the commission of the offences Mr Mouawad was the sole shareholder of FCE and Mrs Mouawad was the sole shareholder of FCG which owned all of the shares in FCA. Any sentence imposed should therefore avoid punishing the appellants twice in light of the fact that both FCE and FCA were fined in the court below (Kinnarney (No 2) at [39]-[41] and the authorities referred to thereat).

Appropriate Penalty

1. Undertaking the instinctive synthesis required to determine the penalty having regard to the subjective and objective factors discussed above and the comparative sentencing decisions, in respect of Mr Mouawad I consider that a fine of $15,000 is appropriate.

1. In respect of the appropriate penalty to be imposed on Mrs Mouawad, given the close relationship between FCA and FCE as discussed above, and the almost joint nature of the criminal liability of the two companies and their directors, I would have imposed a similar sentence on her. However, because no indication of this potential outcome was given to Mrs Mouawad prior to the publication of this judgment allowing her to consider whether or not to apply for leave to withdraw the appeal (Parker v Director of Public Prosecutions (1992) 28 NSWLR 282 at 295), I refrain from fining her an amount greater than that imposed in the court below, viz, $9000.

Orders

1. The orders of the Court in each appeal are therefore as follows:

No 60290 of 2011

(1) the appeal is dismissed;

(2) the appellant is to pay the prosecutor's costs as agreed or assessed; and

(3) the exhibits are to be returned.

No 60291 of 2011

(1) the appeal is dismissed;

(2) the appellant is to pay the prosecutor's costs as agreed or assessed; and

(3) the exhibits are to be returned.

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Amendments

25 October 2013 - Admin error

Amended paragraphs: Index added before Judgment

Decision last updated: 25 October 2013