R v Watt
[2021] ACTSC 20
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
| Case Title: | R v Watt |
| Citation: | [2021] ACTSC 20 |
| Hearing Dates: | 15 and 18 December 2020; 5 February 2021 |
| Decision Date: | 9 February 2021 |
| Before: | Mossop J |
| Decision: | See [51] |
Catchwords: | CRIMINAL LAW – JURISDICTION, PRACTICE AND PROCEDURE – Judgment and punishment – sentence – giving false or misleading information as an officer of a corporation – mid range example of offence – offending occurred over a substantial period of time – gross breach of offender’s obligations to the corporation – medium to low risk of reoffending – automatic disqualification from managing corporations – sentence of |
| imprisonment and recognizance release order imposed | |
| CRIMINAL LAW – JURISDICTION, PRACTICE AND PROCEDURE – Judgment and punishment – application for a reparation order in favour of a corporation – satisfied beyond | |
| reasonable double that the corporation suffered a loss as a result | |
| of the offending – difficulty in quantifying the extent of the loss – | |
| therefore inappropriate to make a reparation order | |
| Legislation Cited: | Corporations Act 2001 (Cth), ss 9, 206B, 1309 Crimes Act 1914 (Cth), ss 16A, 17A, 21B Crimes (Sentencing) Act 2005 (ACT), s 19 Environment Protection Act 1997 (ACT) |
| Cases Cited: | Armory v Delamirie (1722) 1 Stra 505; 93 ER 664 Director of Public Prosecutions (Cth) v Couper [2013] VSCA 72; 41 VR 128 Director of Public Prosecutions v Smith and De Alwis [2016] VCC 705 Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 RK v Mirik [2009] VSC 14; 21 VR 623 R v Braham [1977] VR 104 R v CA (No 2) [2016] ACTSC 371; 316 FLR 49 R v Falconer [2018] NSWSC 1765 R v Foster [2008] QCA 90; 1 Qd R 53 R v Landolt (1992) 63 A Crim R 220 R v Raines [2017] NSWDC 217; 25 DCLR(NSW) 239 R v Roussakis [2020] ACTSC 19 R v Steen [2015] ACTSC 259 |
| Parties: | The Queen (Crown) |
| Edward Watt (Offender) | |
| Representation: | Counsel |
| T Hickey (Crown) G Denman and M Hassall (15 December 2020), M Hassall (18 December 2020) and K Clowry (5 February 2021) (Offender) | |
| Solicitors | |
| ACT Director of Public Prosecutions (Crown) Clowry & Associates (Offender) | |
| File Number: | SCC 47 of 2019 |
| MOSSOP J: | |
| Introduction |
1. The offender, Edward Watt, pleaded guilty to one count of, as an officer of a corporation, giving information or authorising or permitting the giving of information to a director of the corporation, which related to the affairs of the corporation and that was, to his knowledge, false or misleading in a material particular or omitted from it a matter or thing which rendered the information misleading in a material respect. This occurred between 10 November 2014 and 19 October 2015. The offence is a contravention of s 1309(1)
of the Corporations Act 2001 (Cth). The maximum penalty for this offence is five years’
imprisonment, a fine of $34,000 or both.
2. His co-offender is Leon Rousakis who is being dealt with at the same time: see R v Roussakis [2021] ACTSC 19.
| Facts | |
| 3. | The facts in relation to the offending were agreed. I summarised them in my reasons in R v Roussakis at [4]-[20]: |
4. Between November 2014 and October 2015 Mr Roussakis’ co-offender, Mr Watt, was
the General Manager of Canberra Concrete Recyclers Pty Ltd (CCR). His role was such that he was an officer of the corporation within the extended meaning of that term in s 9 of the Corporations Act.
5. CCR is a waste construction materials recycler. It operates a site in Pialligo where material recycling activities are undertaken, near one end of the Canberra airport. It recycles mixed building demolition materials such as concrete, bricks, tiles, timber, iron, steel, sand, soil, natural excavated materials and mixed demolition waste. The items are sorted to produce a range of products including crushed concrete sub-base, manufactured sand and drainage materials, which are then on sold. The waste material that cannot be recycled is dumped at the old Woodlawn mine, a waste facility now run by Veolia Environmental Services. Revenue of the business is generated from those providing waste materials to the site and from the sale of the products of the recycling activities.
6. In the period between November 2014 and October 2015 all vehicles that accessed the
CCR site were required to enter through the main access gate and proceed to the ‘in’
weighbridge, where the vehicle and the load were weighed to determine the gross weight. The vehicle was then directed to an area at the rear of the site to deposit the load, before returning to the main access gate where the vehicle was weighed on the
‘out’ weighbridge to determine its tare weight. The cost of dumping was determined by
the net weight of the load deposited at the site. An invoice displaying the net weight
deposited was then printed off and provided to the driver as the vehicle exited.7. Mr Watt was initially employed in 2008 by CCR in the position of Production Manager. After about 12 months he was promoted to the role of General Manager. His services were provided to CCR through a company known as City Access Holdings Pty Ltd. He was responsible for the general running of the site including the maintenance of plant and equipment, sales of products, hiring staff and new business. He reported to the directors of CCR.
8. In May 2014 a Sydney based trucking company, Tip It Interstate Pty Ltd (Tip It), began a business arrangement with CCR to dump building waste or mixed demolition material at the CCR site. This arrangement was made through Mr Watt. Tip It was operated by Mr Roussakis and his brother. Mr Roussakis was a director of the company.
9. Between May and August 2014, two Tip It B-double trucks travelled from Sydney to Canberra each weekday, taking an average of 36 tonnes per truckload of building waste to CCR. Tip It was paid $150 to $160 per tonne to remove waste from several recycling facilities in Sydney. It then took the waste to CCR, who charged $110 per tonne to dump it. By bringing its waste material to CCR, Tip It avoided paying an Environmental Protection Authority (EPA) levy of $120 per tonne, which was charged to all waste dumped in metropolitan areas in NSW.
10. In June 2014 Tip It made a request, through Mr Watt, for a reduced dumping rate. CCR directors had a meeting with Mr Watt where they agreed to reduce the fee for Tip It to $100 per tonne. Over time Tip It moved up to bringing up to five truckloads per day, five days per week. A CCR director, Tony Irwin, set up a separate account for Tip It, which was to be paid on a weekly basis.
11. In November 2014 Mr Watt and Mr Roussakis entered into a “commercial agreement”,
without the knowledge of CCR directors, to allow Tip It trucks to dump building waste material at CCR and to only record and invoice some of the truckloads. As a general rule, the night-time deliveries were not recorded or invoiced. The weights of any loads delivered during the evening were generally not recorded or invoiced in the CCR system. Tip It would generally either send a text message with the registrations and weights for some vehicles or the Tip It driver would provide to CCR staff a copy of weighbridge certifications from the loading sites in Sydney. The CCR staff would then manually input this information into the system to generate invoices. On some
occasions, at Mr Watt’s direction, the weighbridge operator would cancel invoices for
Tip It trucks and delete the truck weights for those invoices in the CCR system. As a result of this, the total amounts of material delivered by Tip It trucks to CCR were not accurately recorded internally within the CCR systems.
12. The basis upon which each of the offenders agreed that he was liable was as follows:
(a)
Mr Watt is liable by authorising the information in CCR records, which was relied on by CCR directors, about the number of Tip It truckloads and the amount of material received that was false or misleading in material particulars. The information omitted from it the true total of Tip It trucks going into the CCR site and the total amount of material received from them, rendering the information CCR had misleading.
(b)
Mr Roussakis is liable by aiding and abetting Mr Watt to commit the offence, by allowing the CCR records and invoices to Tip It to inaccurately reflect the amount of material. His plea of guilty accepts that his conduct would aid or abet the commission of an offence and that he was reckless about the commission of the offence that Mr Watt in fact committed: Criminal Code, s 11.2.
13. In April and May 2015 some reports of issues with the Tip It account were made by a staff member to CCR director, Mr Irwin. In mid-2015, Mr Irwin became aware of a possible issue with more waste being dumped at CCR than what he understood CCR was invoicing. He had noticed stockpiles of recyclable waste at the site continuing to grow.
14. In about August 2015 CCTV footage from the CCR site was obtained by the directors and, following a review of the footage, they became aware that Tip It trucks were accessing the CCR site after business hours, which was not normal procedure. There was no lighting at the back of the facility where the material was dumped unless generators were running, and it was not possible to have lighting in that area at night because of the proximity to the Canberra airport. The review of the footage showed up to four Tip It trucks entering the facility each night. They would bypass the weighbridge.
Mr Watt’s car was present when the Tip It trucks were allowed to enter.
15. As a result of this information, a director arranged for the CCTV recording device to be secured. As the contractor was removing the unit, Mr Watt asked questions of him
including “does this thing record?”. Although the footage only went back as far as March
2014, it showed at least 531 occasions when unauthorised B-double Tip It trucks entered the site between 2am and 6:30am without being weighed on the weighbridge when entering or exiting.
16. When the CCTV recording device was returned to the site in September 2015, the method by which Tip It trucks dumped at the site changed. Tip It trucks only attended the CCR site during business hours (7am to 4:30pm on Monday to Friday and 7am to 3:30pm on Saturday). However, instead of not invoicing truckloads, the truck weights were underreported. This was done either by Tip It sending text messages to CCR staff with incorrect weights or by Mr Watt requiring the weighbridge manager to under record the truck weights on invoices by, on average, 15% to 20%.
17. CCR directors held a meeting with Mr Watt on 19 October 2015. He stated that he allowed Tip It trucks to attend the site after hours, but that those loads were included in
the afternoon invoice. Mr Watt’s employment was terminated immediately and CCR
referred the matter to police.
18. Between 15 April and 12 July 2016 police lawfully intercepted communications between Mr Watt and Mr Roussakis. These communications revealed a close relationship that went beyond a business association. In total during that period, police intercepted 388 recorded phone calls and text messages between them.
19. Documents obtained by search warrants during the police investigation, including CCR
and Sydney waste recyclers’ business records and NSW Roads and Maritime Services
data showing Tip It truck movements between Sydney and Canberra, were reviewed by a financial intelligence analyst at the AFP to identify how many Tip It truckloads were delivered to CCR but not recorded or invoiced. It was found that over the 11 month period between 1 November 2014 and 19 October 2015, 656 Tip-It B-double truckloads with a combined weight of 23,637 tonnes were correctly recorded and invoiced for $2,499,653 (excluding GST). However, 855 B-double truckloads with a combined weight of 30,695 tonnes were delivered to CCR and not recorded or invoiced. Applying the advertised full price CCR prices to the weights, the amount not invoiced was $3,264,399 (excluding GST). A further 45 B-double truckloads were invoiced with an incorrect weight to the total of 299 tonnes. Applying CCR prices to the weights understated, the amount not invoiced was $32,893 (excluding GST).
20. During the relevant two financial years (ending 30 June 2014 and 30 June 2015) the turnover of CCR was almost doubled when compared with that of the previous financial year (ending 30 June 2013). Although the turnover increased, the profit during the period remained unchanged. In contrast to other customers, Tip It paid its bills within seven days rather than the standard 30 day period.
4. The Crown also seeks reparations from the offender in the sum of $895,147.38. This amount represents the difference between the total amount paid by Tip It for the dumping of waste and the total cost of sending to landfill the proportion of that waste which is non-recyclable.
Sentencing considerations
5. Section 16A of the Crimes Act 1914 (Cth) sets out the matters to which the court must have regard in passing sentence for a federal offence. I will refer to a number of those matters.
Nature and circumstances of the offence (s 16A(2)(a))
6. The nature and circumstances of the offence have been described in my reasons given in R v Roussakis. So far as the offender is concerned, the offending involved a gross breach of trust. It involved a gross breach of his obligations to the company. He had been put into the position of General Manager by the directors of the corporation. In that role he had a significant degree of autonomy and control over the operations of the business. The course of conduct that he engaged in was deceitful and dishonest. It involved hiding the manner in which he was managing the business from the company and the provision to the directors of misleading information over a substantial period. The offending only stopped because it was discovered by the directors of the company.
7. The Agreed Statement of Facts does not disclose any financial benefit from the arrangement to the offender. There are some aspects of the Agreed Statement of Facts which suggest that the offender, and at least one director of Canberra Concrete
Recyclers Pty Ltd (CCR), perceived there to be a benefit in increasing CCR’s turnover
to $1 million per month. It also discloses a more than merely commercial relationship
with Mr Roussakis. I do not consider that the reference to a “commercial agreement” in the Statement of Facts is sufficient to reduce the gravity of the offender’s conduct in
circumstances where that was an agreement which the directors of the company would
never have agreed to. The desire to increase turnover and the “commercial agreement”
do not provide an explanation for the deceitful course of conduct engaged in by the offender and the steps that he took to hide what was happening with the Tip It deliveries. On the agreed facts, the motivation of the offender for engaging in such a course of deceitful conduct over a substantial period remains obscure, although it was clearly of considerable financial benefit to Tip It.
8. It can, however, be said that a motivation of personal financial gain has not been established beyond reasonable doubt and hence this is not an aggravating feature in this case. Further, because of the private nature of the company, it cannot be said that there
were wider implications of the offender’s conduct for the operation of the stock market.
9. However, it must also be borne in mind that the consequences of his conduct were not merely limited to financial consequences for a private company but extended to the
proper environmental management of the CCR site. The offender’s conduct meant that
CCR was not able to comply with its obligations under the environmental authorisation that it held under the Environment Protection Act 1997 (ACT), which required that it keep proper records of the amount of material received and processed at the site. Such record-keeping operations are essential to not only the management of waste within the Australian Capital Territory, but also the overall management of the trade in commercial waste that occurs in and between the Australian Capital Territory and New South Wales (NSW).
10. Overall, I would consider this to be a mid range example of this offence.
Course of conduct (s 16A(2)(c)) and loss or damage arising from the offence (s 16A(2)(e))
11. The offence itself encompasses the whole of the offender’s activities. It is a course of
conduct rather than forming part of a series of criminal acts of the same or similar character as contemplated by s 16A(2)(c). It is significant that it occurred over a substantial period. The offender was personally responsible for allowing access to the site by Tip It trucks on hundreds of occasions over the 11 month period. He was also involved, directly or through other staff, in falsely under recording weights or cancelling or adjusting dockets and invoices so as to permit the unrecorded dumping to go undetected.
12. I am satisfied beyond reasonable doubt that the company has suffered a loss as a result of the offending. That loss might be measured in a variety of ways. Had the unreported or underreported loads been paid for, then additional income of $3,264,399 (excluding GST) would have been derived. Given that it is unlikely that such amounts would have been dumped if the market rate for dumping had been paid, an alternative method of assessing the loss should be adopted. There would be a variety of ways in which the loss could be calculated. However, as explained later in these reasons, it is not possible, on the evidence before me, to quantify the size of that loss beyond reasonable doubt.
13. The difficulty in quantifying the loss, because of the nature of the offending and the passage of time, indicates the seriousness of the offending. It is precisely because of the position of control and responsibility held by the offender that detection of his crime was difficult, and assessment of the loss caused by the offending is also difficult because the facts are difficult to establish with precision. Thus, while there is some benefit to the offender arising from the inability of the Crown to establish beyond reasonable doubt the magnitude of the loss suffered by the company, there is a detriment to the offender because this simply illustrates the gravity of his offending conduct.
The offender’s character, age, antecedents and background (s 16A(2)(m))
14. The offender is currently 57 years old. He is one of 10 children from his parents’ union.
He described his childhood in mostly positive terms and stated that the family moved
around frequently due to his father’s employment. His mother died when he was 17
years old and this caused a divide in the family due to differing opinions in relation to her medical treatment. He said that two of his siblings and his father are now deceased. He maintains positive relationships with four of his siblings and they live in close proximity to him.
15. He has been married for approximately 21 years and he and his wife have four children together between the ages of 11 and 18 years old. He described his family relationships in positive terms and said that all his children still live at home. They live at a property in Tarago, NSW. He regularly spends his spare time maintaining the property.
16. He left school after completing Year 9. He went to assist his father who was then working on a farm. He said he has maintained steady employment for the majority of his professional career. His employment at CCR was terminated due to the current offence and he is now working as a subcontractor for a new company and his employer is aware of the offence. His employer identifies him as being a very family oriented, honest, reliable and a hard-working individual. He indicates that he hopes that the offender will be able to continue working for his business. The offender has also done other handyman work and his employer has been impressed with his honest, reliable and forthright manner.
17. The offender reported experiencing mental health concerns since being charged with the current offence. That is consistent with the psychological assessment report of Carol Manns, which indicated a current diagnosis of major depressive disorder (moderate with anxious distress, severe). That condition appears to be associated with the present proceedings.
18. He is a Type 2 diabetic.
19. He is recorded by the author of the pre-sentence report as having agreed to the Statement of Facts and accepted full responsibility for his actions. He said that he was unaware at the time that his actions were unlawful, however, upon reflection and further education, he admitted his wrongdoings. I treat these statements to the author of the pre-sentence report with considerable caution as they are self-serving, not given on oath and unable to be tested by cross-examination.
20. The offender has a number of old driving offences which are irrelevant for present purposes and he can be considered to be a person of good character. Clearly, that is a factor of less mitigatory impact in a case such as this where the offender has achieved a position of trust and responsibility at least in part because of his good character.
21. The offender has spent no time in custody in relation to these offences.
22. The author of the pre-sentence report’s opinion was that he had a medium to low risk of
general reoffending and he has many protective factors through his stable
accommodation, full-time employment and prosocial supports.
Contrition/reparation (s 16A(2)(f)) and cooperation with law enforcement (s 16A(2)(h))
23. While I am satisfied that the offender regrets his conduct, like Mr Roussakis, it is not a case where that regret can be disentangled from his regret for the consequences for him and his family of the present proceedings. He has not shown any contrition in the form of making reparation.
24. There has been no cooperation with law enforcement agencies in relation to the investigation of the offence or other offences. When challenged by directors, he falsely claimed that the truckloads that dumped after hours were included in the afternoon docket or invoice. There is no evidence of him making any admissions or doing anything else to assist the company or the police to investigate his conduct. The only indications from the agreed facts are that he remained hostile to, and uncooperative with, attempts to work out what he had done. The only point at which there has been cooperation is in relation to the plea of guilty.
Plea of guilty (s 16A(2)(g))
25. I have described the history of the proceedings in more detail in my reasons in relation to Mr Roussakis and I will not repeat them here. It is significant that it was the offender who proposed a plea of guilty to the present charge, rather than the more serious charge of obtaining a financial advantage by deception. That charge carried a maximum penalty
of 10 years’ imprisonment.
26. The plea is an early one in one sense because it relates to an entirely different charge to that which was pursued against the offender. Further, a criminal case conference had not been held prior to the date listed for trial. The plea of guilty had very significant utilitarian value, avoiding a trial estimated at between two and four weeks.
27. However, I do not consider that the plea of guilty is truly indicative of remorse or contrition in the same way that an earlier acceptance of responsibility might be.
28. In the circumstances, I consider that it is appropriate to allow a reduction in sentence on account of the plea of guilty of between 15% and 20%.
Specific deterrence (s 16A(2)(j)) and prospects of rehabilitation (s 16A(2)(n))
29. While there were some statements made to the author of the pre-sentence report involving an acceptance of responsibility and a recognition of the wrongfulness of his conduct, I treat those with caution given the circumstances in which they were made and the inability to test their genuineness.
30. I do, however, accept the assessment of the author of the pre-sentence report that the offender is at a medium to low risk of reoffending. That is particularly so given that he is unlikely to participate in the management of a corporation in the future. Nevertheless, specific deterrence must play some role in an appropriate sentence.
General deterrence (s 16A(2)(ja))
31. General deterrence is also an issue of significance. There are, in this case, at least two aspects of general deterrence. First is the general requirement to deter officers of companies from engaging in dishonest conduct within the management of the corporation. It is fundamental to the operation of corporations that those with management responsibilities act honestly and report accurately their activities. Misconduct such as that which occurred here is notoriously difficult to detect because of the extent of trust and responsibility placed upon managers in positions such as that held by the offender. Second, there is a particular need for deterrence of those involved within the very significant waste management industry from engaging in dishonest reporting of their activities because the honest reporting of those activities is fundamental to the proper management of an industry where there are significant financial incentives to misreport waste management activities.
Effect on family (s 16A(2)(p))
32. A summary of income and expenses of the offender and his wife was tendered. That shows a slight excess of income over expenses. I am not satisfied that I can place any weight upon this document having regard to the fact that there was no evidence that supported its accuracy.
33. I have taken into account the evidence about the offender’s family and financial circumstances. I take into account the effect on the offender’s family of a sentence of
imprisonment. There is likely to be a significant financial and emotional effect on his wife and children from any such sentence. The extent of that effect does not fall under the category of exceptional or unusual.
Other matters
34. It is obviously also necessary to take into account the need for adequate punishment (s 16A(2)(k)) and the fact that as a result of the conviction the offender will be disqualified from managing corporations for a period of five years pursuant to s 206B of the Corporations Act. The offender has also suffered some loss as a result of the seizure and subsequent sale of one of his vehicles. The evidence discloses that the vehicle achieved a sale price which was less than might have been expected had he been able to sell it privately.
35. The court was referred to a number of sentencing decisions in relation to breaches of s 1309 of the Corporations Act. They were Director of Public Prosecutions (Cth) v Couper [2013] VSCA 72; 41 VR 128, Director of Public Prosecutions v Smith and De Alwis [2016] VCC 705; R v Raines [2017] NSWDC 217; 25 DCLR(NSW) 239; R v Falconer [2018] NSWSC 1765. I have had regard to these decisions in determining the appropriate sentence.
36. I have taken into account the existence of the COVID-19 pandemic and the likelihood of some additional burdens of imprisonment as a result of measures to address the risks posed by the pandemic. Those impacts would fall both upon the offender as well as upon his family.
Application for a reparation order
37. The Crown submitted that a reparation order should be made in favour of CCR. Section 21B of the Crimes Act provides:
21B Reparation for offences (1) Where:
(a) a person is convicted of a federal offence; or … the court may, in addition to the penalty, if any, imposed upon the person, order
the offender:
…
(d) to make reparation to any person, by way of money payment or otherwise, in respect of any loss suffered, or any expense incurred, by the person by reason of the offence.
38. If such an order is made, then a certificate from the court becomes enforceable as the final judgment in favour of the person to whom reparation is ordered to be made: s 21B(3).
39. The manner in which the Crown quantified the amount that should be ordered to be paid was by reference to the cost of removing the unrecoverable component of the waste that had been dumped, less the total amount paid by Tip It for dumping. That was quantified as follows:
(a)
The total amount of invoiced and non-invoiced waste which was delivered to CCR by Tip It was 48,994.10 tonnes. The total amount paid upon the delivery of the waste was $2,499,653.80. 65% of the material was or is not recoverable and was or will be required to be transported and dumped at the Veolia facility at the old Woodlawn mine.
(b)
The cost of transport to that facility is $106.60 per tonne. The total number of unrecoverable tonnes required to be delivered is 31,846.16 (65% of 48,994.10 tonnes).
(c)
The total cost of doing so would be $3,394,801.18 (31,846.16 tonnes at $106.60 per tonne).
(d)
The net loss to CCR is therefore the difference between the total cost of removing that unrecyclable waste ($3,394,801.18) and the total income generated from its receipt of waste from Tip It ($2,499,653.80), which is $895,147.38.
It must be recognised that the making of a reparation order is discretionary (“the court
may”). Counsel for the offender referred to a number of authorities concerning the
appropriate approach to be taken to the making of reparation orders. In R v Braham [1977] VR 104 (Braham) at 110 the Full Court of the Victorian Supreme Court said in relation to a similar provision under Victorian law:
But we think that for present purposes it should be stated that it would be a proper exercise of the discretion to refuse to make an order where there was involved a complicated or extensive investigation into the conditions of its exercise or the circumstances to be regarded in exercising it. For example, if there were required to be undertaken a complicated or extensive inquiry in order to ascertain whether there had been a loss or destruction of or damage to property, or in order to ascertain whether it or a part of it had arisen through or by means of the offence, or in order to determine what was the value of the property lost, destroyed or damaged, that would be a consideration proper to be regarded as a ground for refusing to make an order and leaving the matter to other processes. We should not, however, be understood as saying that the mere raising of an issue as to whether part of a loss or destruction or damage had been suffered through or by means of the offence, however tenuous the argument might be, would in itself be sufficient to justify the refusal of an order.
41. In R v Landolt (1992) 63 A Crim R 220 the approach in Braham was followed. Hampel J (with whom Phillips CJ and Vincent J agreed) adopted the same approach in relation to subsequent Victorian legislation. His Honour said at 223:
In my opinion, the object of s 92 (which is now replaced by s 86 of the Sentencing Act 1991 (Vic)) is to enable the court to order compensation to the victim in cases in which both liability to compensation and quantum can be simply determined. The procedure is not designed to require a court sitting in its criminal jurisdiction to engage in what amounts to a contest requiring the examination and cross-examination of witnesses, including the convicted person against whom the compensation order is sought. (See the observations of the Full Court in Braham [1977] VR 104.) If upon [an] application for a compensation order it appears to the court that there is a real issue to be determined, it should decline to make an order and leave the question to be determined by a civil court in accordance with its normal procedures.
42. In R v Steen [2015] ACTSC 259 at [51] Refshauge J referred with approval to the judgment of Bell J in RK v Mirik [2009] VSC 14; 21 VR 623, in which his Honour made the following points:
(a) the making of such orders is discretionary; (b)
it is not wrong in principle, however, to order compensation against an offender without means;
(c)
the order is a means of vindicating the invasion of the victim's rights by avoiding the need for expensive civil action;
(d)
the court may have regard to the effect such an order may have on the rehabilitation of the offender and the means available to meet such an order. An order for compensation is not a punishment and is different in its effect on sentencing to a confiscation order;
(e) a lengthy period of payment is not reasonable; and (f) compensation should generally only be ordered in straight forward cases. 43. In R v CA (No 2) [2016] ACTSC 371; 316 FLR 49 at [14] Murrell CJ said, in relation to an application for an order under s 19 of the Crimes (Sentencing) Act 2005 (ACT):
However, the making of a reparation order is not a core part of the sentencing process; rather, it provides quick and convenient redress to a victim of crime, avoiding the need for a civil proceeding in which the evidence will largely duplicate the evidence that is before the court in the criminal proceeding.
44. In R v Foster [2008] QCA 90; 1 Qd R 53 the Queensland Court of Appeal considered an
earlier version of s 21B of the Crimes Act which required a loss to be suffered “as a direct result” of the offence. In that case, the relevant offence was money laundering. An
amount of $214,138.47 had been obtained from a bank as a result of fraud and then laundered by the offender. In relation to s 21B, McMurdo P (with whom McKenzie AJA and Chesterman J agreed) said at [71]:
Parliament intended that this should be done through the simple and cost-effective process of a court order made at, or shortly after, the sentencing proceeding.
45. Her Honour held that in that case there was a sufficiently direct connection in order to satisfy what was then the statutory test. Plainly, in that case there was no issue as to any difficulty of quantification.
46. In the present case counsel for the Crown submitted that, in order for a reparation order to be made, it was necessary for the court to be satisfied beyond reasonable doubt that a loss had been suffered or an expense incurred. It would also be necessary for the court to be satisfied beyond reasonable doubt that that the loss or expense be not less than the amount of the reparation ordered.
47. In the present case I am satisfied beyond reasonable doubt that a loss has been suffered or an expense incurred. I accept, in that regard, the evidence of Thomas Jackson (a CCR director) that the business would not have been able to make a profit from the dumping if in effect there was a two for one deal so that the nominal rate charged was halved and the dumping cost was $50 per tonne. I accept that evidence in the context of the agreed fact that the directors had previously agreed to a discount from the standard rate of $110 to a lower rate of $100 per tonne based upon particular arrangements for dumping by Tip It. However, beyond that finding, in my view the exercise is one of such complexity that it is not appropriate to attempt to resolve the issue of quantum and hence make a reparation order. There are a number of matters which contribute to that conclusion:
(a)
There were differing estimates of the percentage of material in Tip It loads which would be required to be sent to landfill. Ian Oliver, the former external accountant for CCR and a current director, provided an estimate of 65% based on current practices. However, he also gave evidence that in past years timber was able to be recovered and hence that would increase the recoverable proportion. Anthony Irwin, who was a CCR director during the relevant period and for a period of 20 years, estimated that the amount required to be sent to landfill was 30%. The extent of the differences in the estimate of the recoverable material is a significant factor in rendering the calculation exercise a difficult one. I do not consider it appropriate to resolve that issue on the basis of a simple preference for the evidence of one witness over the other. Both appeared to be giving honest evidence. It is likely that with proper investigation the apparent inconsistency in their evidence would be narrowed or eliminated, however, this exercise has not been undertaken.
(b)
There was no evidence as to whether, even though classified as “mixed demolition waste”, the nature of the material dumped by Tip It was such that the
proportion of recoverable or unrecoverable material differed from the overall percentage estimates. If there was a higher than usual proportion of soil and fines then that would reduce or have reduced dumping costs because the evidence established that Veolia did not charge for that material (and, during the relevant period, actually paid $3 per tonne).
(c)
The calculations undertaken by Mr Oliver did not factor in the income that was generated by the sale of products derived from the mixed demolition waste material. That income was not insubstantial. For example, in the financial year ending 30 June 2013, a year unaffected by any distortions created by the Tip It dumping, sales of the products of recycling amounted to 32% of sales income and dumping fees were 68%. That indicates that a calculation of income which ignores income from the sale of recycled products is likely to be materially inaccurate.
(d)
The evidence did not establish whether or to what extent the undocumented truckloads of material were in fact processed during the relevant period. There was general evidence that the levels of unprocessed waste at the premises increased over the relevant period. However, there was also evidence that the costs associated with waste disposal increased as a proportion of dumping income (as opposed to total income) from 10% to 14.5% to 30% over the financial years 2013 to 2015. That would be consistent with the business having processed some of the unpaid dumping. While there are many other possible explanations, the issue was not explored sufficiently in evidence to allow a reliable conclusion to be drawn. The uncertainty surrounding the extent to which the undocumented material was processed introduces uncertainty to the calculation of loss because it is not possible to identify whether the cost of doing so has already been incurred by the company or whether it would be an expense required to be incurred in the future. Whether it is a past or future loss would affect whether income from recyclable material has already been generated, what rates would be applied to the cost of dumping and the degree of certainty that the loss was or would be incurred.
(e)
The evidence as to any existing compulsion upon the business to remove unlawfully dumped waste from the site was minimal. There was some evidence of pressure from the Environment Protection Authority to remove the material
(identified by it as the “Legacy Stockpile”) and some reference to the
requirements of the landlord (identified as the Department of Defence) but there was no evidence as to the likelihood that such action would in fact be compelled. An alternative possibility is that the additional material will simply shorten the overall life of the facility.
(f) The evidence did not disclose any discrete area of waste associated with the Tip It dumping. Mr Jackson and Mr Irwin did identify some areas where dumping by Tip It occurred. However, Mr Jackson’s evidence as to the quantum was
based upon the expert evidence prepared for the purposes of these proceedings, rather than his own knowledge. The references in the evidence
to the “Legacy Stockpile” were not sufficiently explained to allow that evidence
to resolve the uncertainties surrounding the extent of material currently unprocessed on the site (see (d) above) or the proved consequences for the business (see (e) above).
48. Collectively, these factors indicate that this is not an appropriate case in which to attempt to resolve the issues that would be necessary to resolve in order to make a reparation order. The refusal of a reparation order does not affect any rights CCR has to recover from the offender in civil proceedings where CCR may be able to rely upon the principle in Armory v Delamirie (1722) 1 Stra 505; 93 ER 664, as described in Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 at [59].
49. While these points collectively indicate that an assessment exercise is of such complexity as to make it inappropriate to attempt to resolve it in these proceedings, those difficulties
tend to emphasise the gravity of the offender’s offending conduct. It is only because of
his conduct that the company is now placed in a position of considerable difficulty in quantifying its losses. The failure to properly document the Tip It business and the provision of misleading information to the directors meant that there is a substantial period when the dumping occurred and the company has difficulty working out what
occurred. This emphasises the gravity of the offender’s breach of trust and the absence
of any steps on his part to rectify the consequences of that breach of trust.
Conclusion
50. In my view the s 17A threshold under the Crimes Act has been passed in relation to the
offender’s offending. I accept that it has not been proved that he undertook the activity
for personal financial gain. As I have indicated, his motivation remains obscure. Nevertheless, it was a deliberate, dishonest course of conduct over a very substantial period with which he was directly personally involved on hundreds of occasions. In my view, only a sentence of imprisonment that involves a period of full-time detention will be a sentence which is of a severity appropriate in all the circumstances. The appropriate starting point is a sentence of imprisonment of 18 months, reduced to 15 months on account of the plea of guilty. A recognizance release order will require that he be
released after having served a period of six months’ imprisonment.
Orders
51. The order of the Court is:
1. The offender is convicted and sentenced to imprisonment for a period of 15 months from 9 February 2021 to 8 May 2022 subject to a recognizance release order with security in the sum of $1000 which requires that he be released after
having served a period of six months’ imprisonment with the condition that he
be of good behaviour for a period of two years commencing on the date of his
release.I certify that the preceding fifty-one [51] numbered paragraphs are a true copy of the Reasons for Sentence of his Honour Justice Mossop.
Associate:
Date: 17 February 2021
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