Skyline Landscape Services Pty Limited v G.M.R. Schembri trading as Parklea Sand & Soil

[2025] NSWSC 492

Supreme Court

New South Wales

Medium Neutral Citation:

Skyline Landscape Services Pty Limited v G.M.R. Schembri trading as Parklea Sand & Soil [2025] NSWSC 492

Hearing dates:

1 May 2025

Date of orders:

20 May 2025

Decision date:

20 May 2025

Jurisdiction:

Equity - Commercial List

Before:

Williams J

Decision:

Conditional upon the cross-defendants/stay applicants giving certain undertakings, the interests of justice require these proceedings to be stayed until the accused in the criminal proceedings in the Land and Environment Court enter pleas or respond to the prosecution disclosure in those proceedings. Parties to bring in short minutes of order giving effect to these reasons within seven days.

Catchwords:

PRACTICE AND PROCEDURE - stay of proceedings - where cross-defendants in these civil proceedings are the accused in concurrent criminal proceedings - whether civil proceedings should be stayed pending final determination of criminal proceedings - where civil and criminal proceedings are each at an early stage and criminal proceedings may not be resolved for several years – whether there is real risk of prejudice to the accused in the conduct of their defence of the criminal proceedings if these civil proceedings are not stayed - whether protective measures other than a stay could ameliorate risk of prejudice - whether it is in the interests of justice to grant a stay – consideration of terms and conditions of stay

Legislation Cited:

Civil Liability Act 2002 (NSW), Pt 4

Civil Procedure Act 2005 (NSW), s 67

Competition and Consumer Act 2010 (Cth), Part VIA

Criminal Procedure Act 1986 (NSW), Div 2A, s 247A(b)

Evidence Act 1995 (NSW), s 190

Land and Environment Court Act 1979 (NSW), s 21

Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5(1)(c)

Protection of the Environment Operations Act 1997 (NSW), ss 48, 64(1), 144AAB, 169, 169A, 184, 185, 191, 203, 203A, 211, 212, 215, 216, 217

Protection of the Environment (Waste) Regulation 2014 (NSW), cll 91-93

Uniform Civil Procedure Rules 2005 (NSW), r 25.8

Cases Cited:

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39

Australian Competition and Consumer Commission v Meta Platforms Inc (formerly Facebook Inc) (No 2) [2023] FCA 1234

Australian Securities and Investments Commission v Australia and New Zealand Banking Group Ltd (2019) 138 ACSR 42; [2019] FCA 964

Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46; [2015] HCA 5

Commonwealth v Helicopter Resources Pty Ltd (2020) 270 CLR 523; [2020] HCA 16

Construction, Forestry, Mining and Energy Union v Australian Competition and Consumer Commission (2016) 242 FCR 153; [2016] FCAFC 97

Environment Protection Authority v Blacktown Waste Services Pty Ltd [2025] NSWLEC 31

European Bank Limited v Evans (2010) 240 CLR 432; [2010] HCA 6

McMahon v Gould (1982) 7 ACLR 202

Reid v Howard (1995) 184 CLR 1; [1995] HCA 40

State of Victoria v 5 Boroughs NY Pty Ltd [2023] VSCA 101

Sutherland Shire Council v Benedict Industries Pty Ltd (No. 2) [2013] NSWLEC 121

Telstra Ltd v Sulaiman [2024] NSWSC 971

X7 v Australian Crime Commission (2013) 248 CLR 92; [2013] HCA 29

Texts Cited:

N/A

Category:

Procedural rulings

Parties:

Skyline Landscape Services Pty Limited (ACN 073 170 279) (Plaintiff)
G.M.R. Schembri Pty Limited (ACN 085 287 636) trading as Parklea Sand & Soil (Defendant/Cross-Claimant)
Freescale Trading Pty Limited (ACN 616 226 101) (First Cross-Defendant)
Runkorp Pty Limited (ACN 650 861 377) (Second Cross-Defendant)
VE Resource Recovery Pty Ltd (ACN 656 004 983) (Third Cross-Defendant)

Representation:

Counsel:
Mr J Lazarus SC with Ms T L Phillips (Plaintiff)
Mr D T Miller SC with Mr S D Puttick (Defendant/Cross-Claimant)
Mr B F Katekar SC with Mr Q M Noakhtar (First and Second Cross-Defendants)
Mr D B Studdy SC (Third Cross-Defendant)

Solicitors:
Clayton Utz (Plaintiff)
GLC Legal (Defendant/Cross-Claimant)
Fishburn Watson O’Brien (First and Second Cross-Defendants)
Marsdens Law Group (Third Cross-Defendant)

File Number(s):

2025/40214

Publication restriction:

N/A

JUDGMENT

Introduction

1. At all material times leading up to the commencement of these proceedings, the first cross-defendant Freescale Pty Limited (Freescale) and the second cross-defendant Runkorp Pty Limited (Runkorp) operated in partnership a business trading under the name Greenlife Resource Recovery Facility (Greenlife).

2. Mr Domenic Vitocco is the sole director of Freescale.

3. Mr Adrian Runko is the sole director of Runkorp.

4. It is alleged in the present proceedings, and in proceedings that the Environment Protection Authority has commenced in the Land and Environment Court of New South Wales against Freescale, Runkorp, and others for alleged breaches of the Protection of the Environment Operations Act 1997 (NSW) (the POEO Act), that the Greenlife business involved the supply of organic and recycled building and landscape materials, including mulch, that was processed at and supplied out of premises at 761 The Northern Road, Bringelly (the Premises).

5. It is alleged in the present proceedings that Greenlife sold to the defendant GMR Schembri Pty Ltd trading as Parklea Sand & Soil (Parklea) a product processed at and supplied out of the Premises known as 25mm Recycled Coarse Mulch (Greenlife Mulch).

6. Under Chapter 3 of the POEO Act, environment protection licences (or EPLs) may be issued to authorise the carrying out of “scheduled activities” at any premises as required by s 48 of that Act. Section 48 provides that the occupier of any premises at which an activity designated in Schedule 1 to the Act is carried out is guilty of an offence unless that person holds an EPL authorising that activity to be carried on at those premises.

7. The Premises are the subject of EPL No 11233 that was issued to VE Resource Recovery Pty Limited (VERR) on or about 18 October 2020 and, at all material times, authorised VERR to carry out the scheduled activities of composting, waste storage and recovery of waste at the Premises.

8. Mr Arnold Vitocco is the sole director of VERR.

9. It is alleged in the present proceedings that, during the period between about 21 June 2023 and 20 December 2023, Parklea supplied a mulch product known as Forest Mulch to the plaintiff, which was then known as Skyline Landscape Services Pty Limited but which has since changed its name to Green by Nature Landscape Services Pty Ltd (Skyline).

10. Skyline alleges that it supplied that Forest Mulch to the Council of the City of Sydney (the Council) as part of Skyline’s contract to provide landscaping services within the City of Sydney Local Government Area. Skyline alleges that the Forest Mulch was deposited in at least 25 parks and reserves in that area, and was subsequently discovered to be contaminated with asbestos.

11. Parklea alleges that the Forest Mulch that it supplied to Skyline (and other customers) was Greenlife Mulch, which Parklea had acquired from Greenlife and on-sold under the name Forest Mulch or Forest Blend Mulch.

12. The EPA commenced an investigation into the supply of mulch from the Premises in January 2024.

13. On 23 December 2024, the EPA commenced the proceedings in the Land and Environment Court to which I have referred above against Freescale, Runkorp, VERR and Mr Arnold Vitocco for 102 alleged offences under the POEO Act. Those criminal proceedings fall within Class 5 of the jurisdiction of the Land and Environment Court and will be tried summarily. [1] It is convenient to refer to them in these reasons as the Class 5 proceedings and to refer to the defendants to those proceedings collectively as the Class 5 defendants.

    1. Land and Environment Court Act 1979 (NSW), s 21; POEO Act, s 215.

14. On 31 January 2025, Skyline commenced the present proceedings in this Court claiming damages of approximately $7.5 million against Parklea in respect of remediation costs that it claims to have incurred as a result of the alleged asbestos contamination of the Greenlife Mulch that Skyline supplied to the Council as Forest Mulch. Skyline’s claim against Parklea is pleaded in contract, under the Sale of Goods Act 1923 (NSW), and under the Australian Consumer Law.

15. Parklea contends that, if the Forest Mulch that it supplied to the Council was contaminated (which it denies), then that can only have occurred if asbestos was present in the Greenlife Mulch that was supplied by Freescale and Runkorp to Parklea and manufactured at the Premises either by VERR, or jointly by Freescale, Runkorp and VERR utilising VERR’s EPL No 11233 in circumstances not known to Parklea.

16. In its response to Skyline’s claims, Parklea contends that any liability that it may have to Skyline for alleged breach of contract or alleged misleading or deceptive conduct (which is denied) should be wholly apportioned to Freescale and Runkorp. Parklea has also filed a cross-claim against Freescale and Runkorp claiming damages equivalent to any liability that Parklea may be found to have to Skyline by way of damages for breach of contract, breach of conditions implied under the Sale of Goods Act, or breach of the Australian Consumer Law or, alternatively, equitable contribution towards any such liability that Parklea may be found to have to Skyline.

17. Parklea has recently amended its cross-claim to include a claim against VERR for alleged breach of a duty of care said to be owed to Parklea as a consumer and to Skyline as an end-user of the Greenlife Mulch manufactured at the Premises by VERR (or by Freescale and Runkorp jointly with VERR). Parklea alleges that the duty of care required VERR to take reasonable care in sourcing, mixing and manufacturing mulch materials to prevent asbestos materials being mixed in or becoming part of the mulch product. Parklea claims that VERR is liable to Skyline and to Parklea for alleged breach of that duty of care, and is liable pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) to contribute to, or indemnify Parklea for, any liability that Parklea may be found to have to Skyline.

18. On 25 February 2025, the Court made freezing orders in these proceedings against Freescale and Runkorp in respect of their assets in Australia up to the unencumbered value of just over $7.5 million. Those orders were made on the basis of Parklea giving the usual undertaking as to damages. Freescale and Runkorp did not oppose the extension of those freezing orders after being served, and those orders continue to apply until further order of the Court.

19. On 28 March 2025, the Court made a further freezing order on the application of Parklea against Freescale Trading Two Pty Limited, an associated entity of Freescale (Freescale Two). That order was also given on the basis of Parklea’s usual undertaking as to damages, and applies until further order of the Court.

20. On 25 February 2025, the Court made disclosure orders requiring Freescale and Runkorp to produce five categories of documents to Parklea by 4 March 2025. The time for compliance with those orders was subsequently extended until further order of the Court. The documents have not yet been produced.

21. By notice of motion filed on 7 April 2025, Freescale and Runkorp seek an order that Parklea’s cross-claim be stayed pending final determination of the Class 5 proceedings. VERR supports that application. Freescale, Runkorp and VERR (together, the stay applicants) contend that the continuation of Parklea’s cross-claim in these proceedings while the Class 5 proceedings are pending gives rise to a real risk of prejudice to each of them and to Mr Arnold Vitocco in the conduct of their respective defences in the Class 5 proceedings, and that Mr Domenic Vitocco, Mr Adrian Runko, Mr Arnold Vitocco and certain other witnesses are not willing to give evidence for the stay applicants in these proceedings while the Class 5 proceedings are pending because that evidence may tend to incriminate them.

22. Parklea opposes any stay of its cross-claim, but contends that, if it is stayed, then Skyline’s claim must also be stayed. Parklea therefore filed a notice of motion on 14 April 2025 seeking an order that Skyline’s claim be stayed pending the final determination of the Class 5 proceedings.

23. Skyline and Parklea contend that the stay applicants have failed to establish that the continuation of these proceedings while the Class 5 proceedings are pending gives rise to a real risk that they would be prejudiced in the conduct of their defences in the Class 5 proceedings.

24. Alternatively, both Skyline and Parklea contend that any real risk of prejudice (if any) can be adequately addressed by confidentiality orders in respect of cross-claim responses filed, evidence served and documents disclosed in these proceedings, at least until these proceedings reach the point at which they are ready for final hearing. Parklea and Skyline contend that there is insufficient evidence about the Class 5 proceedings, and about the manner in which the stay applicants propose to defend Parklea’s cross-claim in these proceedings, to determine at this early stage of both proceedings that these proceedings could not be heard and determined while the Class 5 proceedings remain on foot without a risk of prejudice to the stay applicants in the conduct of their defences in the Class 5 proceedings.

25. Alternatively, Skyline and Parklea contend that any stay should operate only until such time as the Class 5 defendants enter pleas in the Class 5 proceedings or give their responses to the prosecution case in accordance with the pre-trial procedures that apply in those proceedings, with the burden of establishing grounds for any further stay of these proceedings thereafter to fall on the cross-defendants.

26. There is a divergence between Skyline and Parklea as to whether any such stay should apply only to Parklea’s cross-claim against the stay applicants, or whether it should also apply to Skyline’s claim against Parklea. Skyline accepts that the claim and cross-claim must ultimately be heard and determined at the same time, but submits that the preparation and service of evidence in relation to its claim against Parklea can and should continue during any period in which the cross-claim is stayed. Parklea resists such a course on the basis that much of the evidence on the claim and the cross-claim will overlap, and the scope of the evidence that Parklea wishes to adduce will depend in part on the cross-defendants’ pleaded responses to Parklea’s cross-claim. Parklea also contends that compliance with the existing disclosure orders against Freescale and Runkorp made on 28 February 2025 should be excluded from the scope of any stay.

27. Skyline and Parklea contend that any stay of the cross-claim or the proceedings should be subject to certain conditions, including an undertaking by the cross-defendants to use their best endeavours to ensure that the Class 5 proceedings are resolved efficiently, and to preserve documents relevant to facts in issue in the present proceedings. Skyline contends that the conditions should also include undertakings by the cross-defendants to submit to such order as the Court may consider just to compensate Skyline for any loss suffered by reason of the delay in the determination of these proceedings that will be occasioned by any stay. Parklea contends that the conditions should also include an order discharging it from its usual undertaking as to damages given in support of the freezing orders that have been made against Freescale, Runkorp and Freescale Two.

28. The stay applicants maintain that, unless these proceedings are stayed pending final determination of the Class 5 proceedings, they will be placed in the invidious position of having to choose between prejudicing their defence of the cross-claim or prejudicing their conduct of their defences in the Class 5 proceedings. The stay applicants acknowledge that, if these proceedings are stayed pending the final determination of the Class 5 proceedings, that will result in a significant delay to the final determination of these proceedings.

Applicable principles

29. The stay applicants invoke the Court’s wide discretion to stay proceedings in the exercise of its inherent power to control its proceedings or pursuant to s 67 of the Civil Procedure Act 2005 (NSW) where it is in the interests of justice to do so. [2]

    2. Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46; [2015] HCA 5 at [35]-[36] (French CJ, Hayne, Kiefel, Bell and Keane JJ) (Zhao); Australian Securities and Investments Commission v Australia and New Zealand Banking Group Ltd (2019) 138 ACSR 42; [2019] FCA 964 at [53] (Moshinsky J) (ANZ); Australian Competition and Consumer Commission v Meta Platforms Inc (formerly Facebook Inc) (No 2) [2023] FCA 1234 at [22] (Cheeseman J) (Meta); Telstra Ltd v Sulaiman [2024] NSWSC 971 at [29] (Black J) (Sulaiman).

30. As the stay applicants accepted, Skyline and Parklea are prima facie entitled to have their claim and cross-claim heard and determined in the ordinary course. [3] The stay applicants bear the burden of demonstrating proper grounds for a stay of these civil proceedings pending the determination of the Class 5 proceedings.

    3. Zhao at [39] (French CJ, Hayne, Kiefel, Bell and Keane JJ); ANZ at [54] (Moshinsky J); Meta at [23] (Cheeseman J); Sulaiman at [29] (Black J).

31. As Skyline submitted, civil proceedings will not be stayed merely because related or overlapping criminal proceedings are pending. [4]

    4. Zhao at [35] (French CJ, Hayne, Kiefel, Bell and Keane JJ); ANZ at [55] (Moshinsky J); Meta at [23] (Cheeseman J); Sulaiman at [29] (Black J).

32. However, as the stay applicants submitted, the interests of justice may warrant a stay if the continuation of the civil proceedings while the criminal proceedings are on foot would give rise to a real risk of prejudice to the accused’s conduct of their defence of the criminal proceedings, including a real risk of their privilege against self-incrimination or their right to silence being effectively eroded. [5]

    5. Zhao at [35]-[36], [47] and [50] (French CJ, Hayne, Kiefel, Bell and Keane JJ).

33. The privilege against self-incrimination is the substantive common law right of natural persons to be excused from answering any question or producing any document under compulsion if that would have the tendency to expose them directly or indirectly to the risk of being found to have committed a criminal offence. The protection that the privilege confers on natural persons extends to the risk of indirect incrimination that arises if a disclosure made under compulsion is used as a basis of investigation or informs the conduct of a prosecution. [6]

    6. Reid v Howard (1995) 184 CLR 1; [1995] HCA 40 at 5-6 (Deane J), 11-12 (Toohey, Gaudron, McHugh and Gummow JJ) (Reid v Howard); X7 v Australian Crime Commission (2013) 248 CLR 92; [2013] HCA 29 at [104] (Hayne and Bell JJ, Kiefel J agreeing) (X7).

34. The privilege against self-incrimination may be modified by legislation, but is otherwise unqualified. It is not to disregarded, overridden or eroded by “judicially devised exceptions or qualifications”. [7]

    7. Reid v Howard at 5 and 8 (Deane J), 14 (Toohey, Gaudron, McHugh and Gummow JJ).

35. It is a fundamental principle underpinning the accusatorial system of criminal justice in Australia that, in any criminal proceeding, the burden of proving the guilt of the accused beyond reasonable doubt rests on the prosecution. It is a companion rule to that fundamental principle that the accused cannot be compelled to assist the prosecution in the discharge of its onus of proof. The accused therefore has a right to silence in the criminal proceedings. The companion rule applies only to the accused. It does not apply to preclude any other person from being compelled to give evidence, even if any admission made by that witness may be treated as an admission by the accused, and even if any such admission or other evidence given by the witness may be of central importance to the accused’s defence of the criminal proceedings. [8]

    8. X7 at [99]-[105] (Hayne and Bell JJ, Kiefel J agreeing), [159]-[160] (Kiefel J); Zhao at [18] (French CJ, Hayne, Kiefel, Bell and Keane JJ); Commonwealth v Helicopter Resources Pty Ltd (2020) 270 CLR 523; [2020] HCA 16 at [16]-[22] (Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ) (Helicopter Resources).

29. Thus, the companion rule does not entitle the accused to object to another person being compelled to give evidence in the criminal proceedings, or in any other proceedings, by a subpoena or other compulsory process lawfully issued or initiated by a prosecuting authority or by some other person, even if the evidence of that witness may incriminate the accused. [9]

    9. Helicopter Resources at [16]-[22] (Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ).

30. However, the courts have recognised that, where civil and criminal proceedings are on foot at the same time, and the same person is a defendant in the civil proceedings and an accused in the criminal proceedings, any defence that the defendant may file in the civil proceedings and any evidence that would be likely to be adduced by the defendant from witnesses who give evidence voluntarily at the defendant’s request or under the compulsion of a subpoena issued by the defendant may reveal or telegraph to the prosecutor information about the accused’s defence in the criminal proceedings, and that this may fundamentally alter the position of the prosecution vis-à-vis the accused in the criminal proceedings in a manner that is contrary to the accusatory system of criminal justice and undermines the companion rule. An accused person in that position has been described in some cases as facing an “invidious choice”, if the civil proceedings are not stayed, between: (1) defending the civil proceedings in the manner which they would choose if the criminal proceedings were not on foot; and (2) prejudicing the conduct of their defence of the criminal proceedings. [10]

    10. Zhao at [18] (French CJ, Hayne, Kiefel, Bell and Keane JJ); Construction, Forestry, Mining and Energy Union v Australian Competition and Consumer Commission (2016) 242 FCR 153; [2016] FCAFC 97 at [22]-[23] and [32] (Dowsett, Tracey and Bromberg JJ); ANZ at [65]-[100] (Moshinsky J) (CFMEU); Meta at [87]-[111] (Cheeseman J).

31. To the extent that Skyline submitted that the cases and principles referred to immediately above were overruled by the High Court in Helicopter Resources, I reject that submission. As referred to at [36] above, the High Court held in that case that a lawful process may be invoked by the prosecution to compel any person other than the accused to give evidence in the criminal trial of the accused or in other proceedings involving overlapping issues without offending the companion rule. That does not call into question the authorities referred to immediately above which have held that the companion rule is undermined if the accused is simultaneously defending civil proceedings in which they must file a defence and serve any evidence if they wish to advance their interests in those proceedings, and if the information revealed by that defence and evidence would directly or indirectly assist the prosecution to discharge its onus of proof against the accused in the criminal proceedings. Those cases are not concerned with any lawful process by which the prosecution may compel any person to give evidence, but rather with the invidious position in which an accused person may be placed if any steps that they would choose to take in their defence of the civil proceedings would have the consequence of undermining the protection that the companion rule otherwise affords them in the criminal proceedings.

32. In some circumstances, there may be relevant prejudice to a party to the civil proceedings who is not an accused in the criminal proceedings, or to an accused in the criminal proceedings who is not a party to the civil proceedings. [11]

    11. ANZ at [58]-[60] (Moshinsky J); Meta at [23] (Cheeseman J).

33. The accusatorial nature of the system of criminal justice and the right to silence can be qualified by legislation. [12] As Skyline submitted, the right to silence has been qualified to some extent by Part 5, Chapter 4, Division 2A of the Criminal Procedure Act 1986 (NSW), which applies to the prosecution of criminal offences summarily in the Land and Environment Court.

    12. X7 at [119]-[123] (Hayne and Bell JJ, Kiefel J agreeing) and [158] (Kiefel J).

34. The right to silence is distinct from the privilege against self-incrimination. [13]

    13. X7 at [102] (Hayne and Bell JJ, Kiefel J agreeing).

35. While the privilege against self-incrimination applies only to natural persons, the companion rule and the right to silence apply to both natural persons and corporations.

36. Whether the continuation of civil proceedings gives rise to a real risk of prejudice to the accused’s conduct of their defence in related or overlapping criminal proceedings that remain on foot is a question of fact that must be evaluated with care in the particular circumstances of the case, including any protective measures that may be available in the civil proceedings to manage any such risk in lieu of granting a stay of the civil proceedings. [14] As Skyline acknowledged, guidelines expressed in other cases [15] are merely guidelines and are not determinative of whether, in the case at hand, a real risk of prejudice exists which warrants a stay of the civil proceedings in the interests of justice. [16]

    14. Meta and State of Victoria v 5 Boroughs NY Pty Ltd [2023] VSCA 101 (5 Boroughs) are examples of cases in which protective orders were held to be sufficient to manage the risk in the circumstances of those cases at the early stage of the civil proceedings at which the stay applications were determined. ANZ and Sulaiman are examples of cases in which protective measures were held not to be adequate to manage the risk.

    15. Including McMahon v Gould (1982) 7 ACLR 202 at 206-207 (Wootten J).

    16. ANZ at [51] and [63] (Moshinsky J); Meta at [23] (Cheeseman J).

37. As Skyline and Parklea submitted, the risk of prejudice must be real. [17]

    17. Zhao at [9], [17] and [47] (French CJ, Hayne, Kiefel, Bell and Keane JJ); CFMEU at [22] (Dowsett, Tracey and Bromberg JJ); ANZ at [55] (Moshinsky J).

38. A real risk of prejudice may be plain from the extent of the overlap between the offences that are the subject of the criminal proceedings and the issues raised by the civil proceedings which the stay applicant wishes to defend, together with evidence from the stay applicant concerning the matters about which they would wish to give evidence or to adduce evidence from other witnesses in the civil proceedings. Although the stay applicant bears the onus of demonstrating proper grounds for the stay, they are not required to identify specific matters of prejudice if this would make the risk of prejudice a reality by requiring them to reveal information about their defence, that being the very situation which the stay seeks to avoid. [18]

    18. Zhao at [42]-[43] (French CJ, Hayne, Kiefel, Bell and Keane JJ); CFMEU at [28]-[38] (Dowsett, Tracey and Bromberg JJ); ANZ at [56] (Moshinsky J); Sulaiman at [29]-[35] (Black J).

39. If a real risk of prejudice to the conduct of the defence of the criminal proceedings is established, it is necessary to weigh that risk against the prejudice that a stay of the civil proceedings would occasion in order to determine what the interests of justice require in the particular case. [19] In undertaking that assessment, the risk of prejudice to the fair and efficient conduct of the criminal trial should be given special significance because that is a matter of public importance. [20]

    19. Zhao at [47] and [50]; ANZ at [61] (Moshinsky J); 5 Boroughs at [70] (Beach, T Forrest and Hargrave JJA); Meta at [112] (Cheeseman J).

    20. CFMEU at [58]-[59] (Dowsett, Tracey and Bromberg JJ).

40. Care needs to be taken that any proposed protective measures that may be considered as a means of avoiding the risk of prejudice to the criminal trial as an alternative to a stay of the civil proceedings would not override or erode the privilege against self-incrimination. The privilege can be modified only by legislation, as I have noted above. Moreover, as the majority of the High Court said in Reid v Howard: [21]

“… it is inimical to the administration of justice for a civil court to compel self-incriminatory disclosures, while fashioning orders to prevent the use of the information thus obtained in a court vested with criminal jurisdiction with respect to the matters disclosed. Nor is justice served by the ad hoc modification or abrogation of a right of general application, particularly not one as fundamental and as important as the privilege against self-incrimination.”

21. (1995) 184 CLR 1; [1995] HCA 40 at 17 (Toohey, Gaudron, McHugh and Gummow JJ).

48. Depending on all the circumstances of the case, however, there may be protective measures available which do not erode the privilege or undermine the accusatorial system of criminal justice and which mitigate the risk of prejudice to the conduct of the accused’s defence of the criminal proceedings to an extent sufficient to avoid the need to stay the civil proceedings in the interests of justice. I reject the stay applicants’ submission that the possibility of protective measures is never adequate protection against a risk of prejudice to the accused.

49. As Skyline and Parklea emphasised, these civil proceedings have only been commenced very recently. The question is whether it is in the interests of justice to stay the claim and cross-claim at this very early stage and, if so, for how long and on what terms.

50. Any stay that may be granted should operate only for the minimum period that the interests of justice require. [22]

    22. Meta at [23] (Cheeseman J).

51. The starting point for the application of those principles to the circumstances of the present case is a detailed analysis of the subject matter of these proceedings and the subject matter of the Class 5 proceedings, and the evidence on which the stay applicants rely as demonstrating a real risk of prejudice which they contend warrants a stay of these civil proceedings pending the final determination of the Class 5 proceedings in the interests of justice.

The EPA’s investigation and the Class 5 proceedings

52. As Skyline submitted, Chapter 7 of the POEO Act confers investigative powers on the EPA which may be exercised for the purposes of, inter alia, determining whether there has been a contravention of the POEO Act, the regulations, or any EPL, and administering the POEO Act and generally protecting the environment. [23]

    23. POEO Act, s 184.

53. The powers conferred on the EPA under Chapter 7 which may be exercised for those purposes include: (1) power to issue a written notice to any person requiring them to furnish to the EPA such information or records as it requires in connection with any matter relating to the EPA’s responsibilities or functions under the POEO Act; [24] and (2) power to require persons who are suspected on reasonable grounds to have knowledge of matters in respect of which information is reasonably required for the purpose of the POEO Act to answer questions about those matters and to make a recording of those questions and answers. [25]

    24. POEO Act, s 191.

    25. POEO Act, ss 203-203A.

54. A person who neglects or fails to comply with such a notice or requirement without lawful excuse, or who furnishes information in purported compliance with such a notice or requirement knowing that it is false or misleading in a material respect, is guilty of an offence under s 211 of the POEO Act.

55. Section 212 of the POEO Act provides:

“212     Provisions relating to requirements to furnish records,    information or answer questions

(1)   Warning to be given on each occasion A person is not guilty of an offence of failing to comply with a requirement under this Chapter to furnish records or information or to answer a question unless the person was warned on that occasion that a failure to comply is an offence.

(2)   Self-incrimination not an excuse A person is not excused from a requirement under this Chapter to furnish records or information or to answer a question on the ground that the record, information or answer might incriminate the person or make the person liable to a penalty.

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

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

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

(4)   Records admissible Any record furnished by a person in compliance with a requirement under this Chapter is not inadmissible in evidence against the person in criminal proceedings on the ground that the record might incriminate the person.

(5)   Further information Further information obtained as a result of a record or information furnished or of an answer given in compliance with a requirement under this Chapter is not inadmissible on the ground—

(a)    that the record or information had to be furnished or the answer had to be given, or

(b)    that the record or information furnished or answer given might incriminate the person.

(6)   Requirement to state name and address This section extends to a requirement under this Chapter to state a person’s name and address.”

56. Section 185 of the POEO Act provides that nothing in Chapter 7 affects any function under any other Chapter of the POEO Act.

57. Chapter 8 of the POEO Act relevantly provides that the EPA may institute proceedings for offences against the POEO Act or the regulations. [26] The regulations made under the POEO Act include the Protection of the Environment (Waste) Regulation 2014 (NSW) (the Waste Regulation). The Mulch Exemption 2016 and Mulch Order 2016 are statutory orders made pursuant to ss 91-93 of the Waste Regulation which, respectively, exempt mulch consumers from the requirement under s 48 of the POEO Act to hold an EPL for the application of mulch to their land in respect of certain specified activities, and require suppliers of mulch to which the Mulch Exemption 2016 applies to ensure that the mulch does not contain asbestos and is ready for land application, and to keep a written record of its risk management protocol. [27]

    26. POEO Act, s 217.

    27. Affidavit, Geoffrey Louis Castellan, 25 February 2025 at pars 15-20.

58. As I have already mentioned, the EPA commenced an investigation under Chapter 7 of the POEO Act into the supply of mulch from the Premises in or about January 2024 and commenced the Class 5 proceedings under Chapter 8 of the POEO Act on 23 December 2024.

59. Mr Ross Fox acted as the solicitor for Freescale, Runkorp, VERR and Mr Arnold Vitocco from the inception of the investigation, and now acts for all of them as defendants in the Class 5 proceedings.

60. Freescale, Runkorp and VERR rely on evidence adduced from Mr Fox in support of the application to stay Parklea’s cross-claims against them in the present proceedings.

61. Mr Fox’s evidence establishes that, in the course of its investigation, the EPA issued notices requiring certain persons to provide information and to participate in recorded interviews, including Mr Arnold Vitocco, Mr Domenic Vitocco, Mr Adrian Runko, Ms Jessica Vitocco, Ms Nancy Runko and Ms Belinda Vella. Mr Fox deposed that each of those persons is an officer of VERR, Freescale or Runkorp, was familiar with the Greenlife business through their work for that business, and/or worked at the Premises. As I have already mentioned, Mr Arnold Vitocco is the sole director of VERR, Mr Domenic Vitocco is the sole director of Freescale, and Mr Adrian Runko is the sole director of Runkorp.

62. Section 64(1) of the POEO Act provides that the holder of an EPL is guilty of an offence if any condition of a licence is contravened by any person.

63. VERR is charged in the Class 5 proceedings with one offence under s 64(1) of the POEO Act on the basis of an alleged contravention by Freescale and Runkorp of EPL 11233 during the period from about 8 September 2022 until about 31 December 2023 by carrying out the licensed activity of resource recovery at the Premises and failing to do so in a competent manner. It is alleged that Freescale and Runkorp failed to carry out resource recovery in a competent manner by:

1. failing to adequately differentiate and label stockpiles or create trackable lots in relation to feedstock received at the Premises;

2. failing to undertake a risk management assessment of the incoming feedstock at the Premises;

3. failing to have in place a written feedstock acceptance criteria in relation to feedstock received at the Premises;

4. receiving and utilising pre-shredded feedstock in the production of recycled timber mulch without having received assurances the feedstock met the requirements of the Mulch Order 2016 issued by the EPA under clause 93 of the Waste Regulation;

5. failing to carry out adequate testing and sampling of mulch produced at the Premises;

6. failing to carry out audits of processes at the Premises even after receiving complaints of physical contaminants being detected in mulch produced at the Premises;

7. failing to adequately train staff in the processing of mulch to ensure that it met the requirements of the Mulch Order 2016; and

8. generating recycled timber mulch products intended for consumer land applications that were contaminated with asbestos and other foreign materials.

64. Section 169 of the POEO Act provides that contraventions of certain provisions of the Act committed by corporations attract “special executive liability”. For those offences, 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 that person satisfies the court that they were not in a position to influence the conduct of the corporation in relation to its contravention, or that they used all due diligence to prevent the contravention by the corporation.

65. Section 64(1) of the POEO Act is a special executive liability provision.

66. On that basis, Mr Arnold Vitocco is charged with the same contravention of s 64(1) of the POEO Act as the contravention charged against VERR as the sole director of VERR at the time of its alleged contravention.

67. If VERR is convicted of the offence charged against it under s 64(1) of the POEO Act, the penalty will be a significant fine.

68. If Mr Arnold Vitocco is convicted of the offence charged against him under s 64(1) of the POEO Act, he faces a lesser but nevertheless significant fine.

69. As I have mentioned earlier in these reasons, s 48 of the POEO Act provides that the occupier of any premises at which an activity designated in Schedule 1 to the Act is carried out is guilty of an offence unless that person holds an EPL authorising that activity to be carried on at those premises.

70. Freescale and Runkorp are each charged with two offences under s 48(2) of the POEO Act. It is alleged that Freescale and Runkorp occupied and carried out scheduled activities at the Premises without an EPL during the period from about 8 September 2022 until about 25 January 2024. The alleged scheduled activities are the recovery of general waste, involving the receipt from off site, processing and storage of more than 6000 tonnes of waste per year.

71. Section 48(2) of the POEO Act is an “executive liability offence” pursuant to s 169A of the POEO Act. A person commits an offence against s 169A if they are a director of a corporation that commits an executive liability offence or if they are involved in the management of the corporation and are in a position to influence the corporation’s conduct in relation to the commission of the executive liability offence, and if the person knows or ought reasonably to know that the offence would be or is being committed and fails to take all reasonable steps to prevent or stop the commission of that offence.

64. Mr Domenic Vitocco and Mr Adrian Runko have not been charged under s 169A of the POEO Act with any executive liability offence by reason of the alleged offence against s 48(2) of the POEO Act committed by Freescale and Runkorp (respectively).

65. If Freescale and Runkorp are convicted of the offences charged against them under s 48(2) of the POEO Act, the penalty will be a significant fine.

66. Section 144AAB of the POEO Act provides that a person must not cause or permit asbestos waste in any form to be re-used or recycled.

67. Freescale and Runkorp are each charged with 25 offences under s 144AAB of the POEO Act. It is alleged that they caused shredded wood and timber waste containing asbestos to be re-used, in that they produced that waste at the Premises, sold it as a product suitable for application to land as recycled timber mulch, and delivered it from the Premises to 25 specified sites during the period from about late 2022 until about February 2024.

68. Section 144AAB of the POEO Act is a special executive liability provision. However, Mr Domenic Vitocco and Mr Adrian Runko have not been charged with any offence under s 144AAB on that basis.

69. If Freescale and Runkorp are convicted of the offences charged against them under s 144AAB(2) of the POEO Act, the penalty will be a significant fine.

70. Freescale and Runkorp are each charged with 23 offences under clause 93(7) of the Waste Regulation. At the time of the commission of the alleged offences, clause 93(7) of the Waste Regulation provided that a person must comply with requirements imposed on them (or on a class of persons to which they belong) in relation to the supply of resource recovery waste by an order made under clause 93. The Mulch Order 2016 was made under clause 93 of the Waste Regulation. It is alleged that Freescale and Runkorp were the processors of mulch who failed to comply with the Mulch Order 2016 by supplying mulch containing asbestos and various other contaminants to 23 specified sites at various times during the period from late 2022 until about February 2024 without first ensuring that the mulch did not contain asbestos or the other specified contaminants.

71. If convicted of the offence against clause 93(7) of the Waste Regulation, Freescale and Runkorp each face a fine.

72. All of the alleged offences arise out of the production and supply of mulch from the Premises during the period from about September 2022 to February 2024. The specific sites that are the subject of the charges under s 144AAB of the POEO Act and clause 93(7) of the Waste Regulation are not the parks and reserves to which Skyline claims in these proceedings Parklea delivered asbestos-contaminated Forest Mulch.

73. Section 216 of the POEO Act requires proceedings for offences under s 48(2) and s 144AAB of that Act to be commenced within three years of the date of the alleged offence or the date on which the alleged offence first came to the attention of an authorised officer of the EPA. By contrast, a one-year limitation period applies to proceedings for an alleged offence against clause 93(7) of the Waste Regulation. As I have already mentioned, the proceedings may be tried without a jury in the Land and Environment Court’s summary jurisdiction for environmental planning and protection enforcement, [28] and Division 2A of Part 5 of Chapter 4 of the Criminal Procedure Act applies to such proceedings. [29]

    28. Land and Environment Court Act 1979 (NSW) s 21; POEO Act, s 215.

    29. Criminal Procedure Act 1986 (NSW), s 247A(b).

74. The purpose of Division 2A is to reduce delays in proceedings, including by requiring the prosecution to give detailed disclosure of its case to the defence in accordance with directions made at the first mention of the proceedings, and requiring the defendant to give the prosecutor notice of the defence response including the name of any legal practitioner to appear for the defendant at the hearing and notice of any consent that the defendant proposes to give at the hearing under s 190 of the Evidence Act 1995 (NSW) in respect of any prosecution witness statement or any summary of evidence that the prosecution proposes to adduce. [30]

    30. Criminal Procedure Act 1986 (NSW), ss 247B-247F.

75. The Land and Environment Court may subsequently order “preliminary disclosure” – which has been referred to in the authorities as a “second round” of disclosure – but only if that court is of the opinion that it would be in the interests of justice to do so. If ordered, the prosecutor’s second round of disclosure is required to include all of the detailed information that was included in the first round, plus a copy of any information, document or thing in the prosecutor’s possession that would reasonably be regarded as adverse to the credit or credibility of the defendant, and a list of all affidavits or statements of witnesses proposed to be called by the prosecutor at the hearing. The defence response, if a second round of disclosure is ordered, must contain, inter alia: (1) a statement as to whether the defendant agrees to or disputes each fact set out in the prosecutor’s statement of facts; (2) a statement as to whether the defendant takes issue with each matter or circumstance set out in the prosecutor’s statement of facts; and (3) a copy of any expert report on which the defendant intends to rely at the hearing. The defendant is not required to disclose any non-expert or documentary evidence on which they intend to rely at the hearing. [31] If the defence, in responding to the prosecution’s second round disclosure, fails to notify an intention to dispute a particular alleged fact, matter or circumstance set out in the prosecution’s notice, then the court may order that the hearsay rule does not apply to any document asserting that fact, matter or circumstances, and the defendant may not be permitted to adduce evidence contradicting or qualifying the alleged fact, matter or circumstance without leave of the court. [32] However, any statement by or on behalf of a defendant for the purpose of complying with a second round disclosure order does not constitute an admission. [33]

    31. Criminal Procedure Act 1986 (NSW), ss 247I-247L.

    32. Criminal Procedure Act 1986 (NSW), s 247M.

    33. Criminal Procedure Act 1986 (NSW), s 247X.

76. The second round of disclosure that may be ordered pursuant to Division 2A in Class 5 proceedings in the Land and Environment Court has been described as a “substantial abridgement of the defendant’s right to silence”. [34] However, the power of the Land and Environment Court to order such disclosure is enlivened only if it forms the opinion that it would be in the interests of justice to do so, as I already mentioned, and if the court is satisfied that the defendant will be legally represented.

    34. Sutherland Shire Council v Benedict Industries Pty Ltd (No. 2) [2013] NSWLEC 121 at [5]-[11] (Biscoe J); Environment Protection Authority v Blacktown Waste Services Pty Ltd [2025] NSWLEC 31 at [15]-[18] (Pepper J).

77. Skyline urged this Court to determine the stay applications on the basis that it was “unthinkable” that the Land and Environment Court would not order a second round of disclosure in the Class 5 proceedings in due course. I decline to make any such assumption about how the Land and Environment Court may decide to exercise its discretion in all the circumstances of the Class 5 proceedings at the time when it falls to that court to consider whether or not to order second round disclosure. Even if second round disclosure is ordered in due course, that does not deny that the process of criminal justice in the Class 5 proceedings is an accusatorial process, albeit one in which the Class 5 defendants may not be able to maintain complete silence because they may be ordered to give notice to the prosecution of: (1) the extent to which they agree with or dispute the alleged facts, matters and circumstances on which the prosecution relies (which responses do not constitute admissions); (2) the extent to which they object to the admissibility of the evidence that the prosecution proposes to adduce; and (3) any expert evidence that the defendants intend to adduce. [35]

    35. X7 at [120]-[123] (Hayne and Bell JJ, Kiefel J agreeing).

78. Mr Fox has deposed that the Class 5 defendants have not yet entered pleas to the charges against them. The prosecution has failed to comply with a direction made by the Land and Environment Court requiring it to give the first round of disclosure to the defendants by 2 May 2025, and requires more time to prepare that disclosure in light of the significant number of additional affidavits and evidence it is intending to serve and the scale of the task of collating and reviewing the documents required to be disclosed to the defence. It is not presently known when the prosecution’s first round of disclosure will be completed, when the Class 5 defendants will be required to enter pleas to the charges against them, or what plea will be entered by each Class 5 defendant in respect of each charge against it.

79. The evidence served by the EPA in the Class 5 proceedings to date comprises 36 affidavits, approximately 16,000 documents, and an expert report regarding the production of mulch at the Premises during the period from about 8 September 2022 to 25 January 2024 in which the alleged offences are said to have occurred. Mr Fox has deposed that the expert report discusses the conduct of Freescale and Runcorp and their officers, and contains findings relating to the proceedings against Mr Arnold Vitocco and VERR.

80. The EPA’s solicitor has notified Mr Fox that it intends to serve further evidence in the Class 5 proceedings. Based on his extensive experience in prosecutions under the POEO Act and his familiarity with the issues in these Class 5 proceedings, Mr Fox has deposed that he expects that the EPA will serve a considerable volume of evidence.

81. Mr Fox has also been notified by the Manager of Litigation at the EPA that it intends to rely on tendency and coincidence evidence in the Class 5 proceedings.

82. I have had regard to the evidence given by Mr Fox, and by VERR’s solicitor Mr Bharath Balasubramanian, about the issues likely to arise in the Class 5 proceedings. Based on the elements of the alleged offences that are the subject of those proceedings, which I have summarised above, it seems to me those issues will include:

1. whether Freescale and Runkorp carried out the activity of resource recovery at the Premises during the period from about September 2022 until about February 2024;

2. if so, whether Freescale and Runkorp failed to carry out that activity in a competent manner by reason of one or more of the alleged omissions and acts referred to at [63] above;

3. if so, whether that constituted a contravention of any condition of EPL11233 held by VERR in respect of the Premises (noting that Mr Domenic Vitocco’s evidence filed and served in the proceedings in this Court to date refers to EPL11233 held by VERR as the EPL “on which the licensed activities” of Freescale and Runkorp “took place”); [36] and

4. whether Freescale and Runkorp caused shredded wood and timber waste containing asbestos to be re-used by producing timber mulch at the Premises, and selling and supplying that mulch from the Premises to 25 sites during the period from about late 2022 until February 2024.

   36. See [106] below.

91. I have also had regard to the evidence of Mr Fox and Mr Balasubramanian about the topics about which evidence will be relevant to the Class 5 proceedings. It seems to me that those topics include:

1. evidence of the occupation of the Premises by any person, including Freescale and Runkorp, during the period from about September 2022 to about February 2024;

2. evidence of the activities carried out at the Premises to produce, sell and supply mulch, including:

1. evidence of the nature and source of the feedstock used to produce mulch at the Premises;

2. evidence of any procedures and processes for the differentiation and labelling of stockpiles and the creation of trackable lots of feedstock received at the Premises, and evidence of the extent to which those procedures and processes were followed in practice;

3. evidence of any procedures and processes for undertaking risk management assessments in respect of feedstock used at the Premises, and evidence of the extent to which those procedures and processes were followed in practice;

4. evidence of any written feedstock acceptance criteria in relation to feedstock received at the Premises, and evidence of the extent to which and the manner in which those criteria were applied or implemented in practice;

5. evidence of whether or not pre-shredded feedstock was received and utilised in the production of mulch at the Premises without having received written assurances from the feedstock supplier that the feedstock met the requirements of the Mulch Order 2016;

6. evidence of any procedures and processes for testing and sampling of mulch produced at the Premises, evidence of the extent to which those procedures and processes were followed in practice, and evidence of any results of such testing and sampling;

7. evidence of any procedures for auditing of processes at the Premises, and evidence of any such audits carried out during the period from about September 2022 to February 2024, including after complaints were received about physical contaminants being detected in mulch produced at the Premises;

8. evidence of whether or to what extent staff at the Premises were trained in the processing of mulch to ensure that it met the requirements of the Mulch Order 2016 that mulch be free of contaminants, including asbestos;

3. evidence of any contamination identified at the Premises or potential sources of contamination of mulch produced at the Premises, including by way of laboratory testing of samples of mulch; and

4. evidence of any contamination detected in mulch at the 25 sites allegedly supplied by Freescale and Runkorp (and, noting EPA’s intention to rely on tendency and coincidence evidence, any other sites supplied by Freescale and Runkorp).

92. As I have already mentioned, the alleged offences with which Freescale and Runkorp are charged have a limitation period of three years for the commencement of any prosecution, running from the date on which the offence is alleged to have been committed or the date on which the alleged offence first came to the attention of an authorised officer of the EPA. [37] Mr Fox has given evidence that, in his view, it is possible that the prosecutor may add further charges to the Class 5 proceedings. Mr Fox considers that, if the civil proceedings in this Court are not stayed, and if Parklea were to establish the supply of contaminated mulch by Freescale, Runkorp and/or VERR in the civil proceedings, there is a real prospect that the EPA will bring further criminal proceedings against them and against their directors Mr Domenic Vitocco, Mr Runko and Mr Arnold Vitocco. Mr Balasubramanian embraces this aspect of Mr Fox’s evidence.

    37. POEO Act, s 216.

93. Mr Fox has described the procedural steps that he expects will occur in the Class 5 proceedings based on his experience and the Land and Environment Court’s Class 5 Practice Directions. Mr Fox acknowledges that it is difficult to estimate how long it will take for the Class 5 proceedings to be heard and determined, particularly in circumstances where it is not yet known how each defendant will plead. However, if pleas of not guilty are entered by the defendants, Mr Fox expects that the hearing would not occur before March 2026, and may be delayed beyond that date. Mr Fox’s March 2026 estimate was given before the EPA notified him of its inability to make the first round disclosure within the time directed by the Land and Environment Court due to the extent of the further evidence that it was preparing. The March 2026 estimated hearing date now seems to me to be wholly unrealistic. Ms Claire Smith, the solicitor on the record for Skyline in the proceedings in this Court, has given evidence that, based on her extensive experience in Class 5 proceedings, the proceedings against Freescale, Runkorp, VERR and Mr Arnold Vitocco will take several years to proceed to final hearing and determination, even if the defendants enter guilty pleas. Ms Smith anticipates that the Class 5 proceedings will not be heard earlier than the end of 2026, and says that there is a real prospect that they may not be determined until well after the end of 2026 given the scale of the EPA’s investigation and the number of alleged offences and sites involved. I consider that Ms Smith’s estimate of late 2026 is a realistic estimate for the timing of the commencement of the hearing of the Class 5 proceedings, assuming that the Class 5 defendants plead not guilty. Understandably, neither solicitor has been able to offer an estimate of the likely duration of the hearing at this stage when the extent of the legal and factual contest is unknown. As I have already mentioned, the offences will be tried summarily by a Judge of the Land and Environment Court. Judgment will necessarily be reserved for some period of time after the conclusion of the trial.

The civil proceedings

94. Skyline alleges that it purchased Forest Mulch from Parklea during the period between about 21 June 2023 and 20 December 2023, which Parklea delivered directly to some 25 parks and reserves nominated by Skyline in the City of Sydney Local Government Area. Skyline then spread the Forest Mulch into the ground at those parks and reserves in the course of providing landscaping services under its contract with the Council. Skyline alleges that an inspection and targeted sampling program instituted by the Council in early 2024 discovered that asbestos was present in mulched areas at some of those parks and reserves. During February and March 2024, the Council exercised its contractual right to issue a direction to Skyline to undertake the works necessary to remove the asbestos from those locations and to obtain an asbestos clearance certificate from a licensed asbestos assessor. Skyline claims to have undertaken the necessary remediation works at a total cost of approximately $7,500,000. Skyline sues to recover that sum from Parklea as: (1) damages for alleged breach of contract; (2) damages for alleged breach of the Sale of Goods Act; and (3) damages for alleged misleading or deceptive conduct in representing that the mulch would be reasonably fit for use in landscaping parks and reserves, would be of merchantable quality, would not contain asbestos in any form, and would comply with the requirements of the POEO Act, the Waste Regulation, the Mulch Order and the Mulch Exemption with respect to mulch and landscaping supplies. Central to Skyline’s claims is the allegation that the Forest Mulch was not of merchantable quality and was not fit for purpose, having regard to the prohibitions on the use of asbestos waste in mulch under the POEO Act, the Waste Regulation, the Mulch Order and the Mulch Exemption.

95. The 25 parks and reserves identified in Skyline’s Commercial List Statement as the locations to which Parklea is alleged to have delivered asbestos-contaminated mulch to fulfill orders placed by Skyline are different from the 25 sites that are the subject of the Class 5 proceedings. The sites that are the subject of the Class 5 proceedings are locations to which Freescale and Runkorp (as opposed to Parklea) are alleged to have delivered asbestos-contaminated mulch.

96. Parklea admits that it delivered Forest Mulch to the some of the parks and reserves that are the subject of these proceedings, and says that it sourced that mulch from Greenlife. Parklea denies that it was the sole supplier of the mulch that Skyline applied at those parks and reserves, and says that Skyline was responsible for applying the mulch at those locations. Parklea denies that the Greenlife-sourced mulch which it supplied to Skyline contained asbestos, and puts Skyline to proof to identify precisely what deliveries of mulch (to what sites and when) contained asbestos and to specify in what quantities and in what form asbestos is said to have been present in each delivery. Parklea denies the alleged breaches of contract, denies the alleged breaches of the Sale of Goods Act, and denies that it engaged in misleading or deceptive conduct. In the event that Skyline establishes those alleged breaches and/or misleading or deceptive conduct and is found to have suffered loss as a result thereof (which Parklea denies), Parklea pleads that Skyline failed to mitigate that loss by carrying out remediation works that were unnecessary and out of all proportion to the risk, in that alternative methods were available to remove any asbestos.

94. Insofar as Skyline’s claims are for loss said to have been suffered as a result of Parklea’s alleged breach of contract or alleged misleading or deceptive conduct (which Parklea denies), Parklea pleads that Freescale and Runkorp are concurrent wrongdoers and that any liability that Parklea may be found to have to Skyline should be wholly apportioned to Freescale and Runkorp under Part 4 of the Civil Liability Act 2002 (NSW) and Part VIA of the Competition and Consumer Act 2010 (Cth). Parklea has also filed a cross-claim against Freescale and Runkorp for damages for alleged breach of contract, alleged breach of the Sale of Goods Act and alleged misleading or deceptive conduct, and against VERR for alleged breach of a duty to exercise reasonable care in sourcing, mixing and manufacturing mulch materials to prevent asbestos materials being mixed in or becoming part of the completed mulch product, particularly when using recycled building materials as part of the mulch mix.

95. In support of its proportionate liability defences and cross-claims against Freescale and Runkorp, Parklea pleads that:

1. it entered into a contract with Freescale and Runkorp (trading as Greenlife) on about 7 November 2022 for the supply of landscaping materials, including mulch (the Greenlife Mulch);

2. the Mulch Order required Greenlife to ensure, before supplying the Greenlife Mulch, that it does not contain asbestos and is ready for land application, and to keep a written records of its risk management protocol and all supporting documentation;

3. between about 12 July 2023 and 7 December 2023, Greenlife supplied the Greenlife Mulch and other materials to Parklea pursuant to that contract;

4. Parklea supplied the Greenlife Mulch to Skyline and delivered it to locations in the City of Sydney Local Government Area as directed by Skyline, during the period between about 12 July 2023 and 20 December 2023;

5. the Greenlife Mulch was the only mulch that Parklea supplied to Skyline during that period;

6. if the Court finds that the Forest Mulch that Skyline supplied to the Council contained asbestos, then the Greenlife Mulch that Greenlife supplied to Parklea did not comply with the requirements of the POEO Act, the Mulch Exemption and the Mulch Order, contained asbestos, was not ready for land application, was not of merchantable quality, and was not reasonably fit for the purpose of landscaping; and

7. in that event, Freescale and Runkorp are liable to Parklea for damages for breach of contract, breach of conditions implied in the contract by the Sale of Goods Act, and/or misleading or deceptive conduct.

99. Parklea also pleads that it made requests on 14 February 2024 and again on 2 May 2024 for Greenlife to provide the results of any testing of the Greenlife Mulch conducted during the period between June and December 2023, and the results of any testing of Greenlife Mulch that was supplied to Parklea. Parklea pleads that Greenlife refused to provide that information, notwithstanding that the Mulch Order requires Greenlife to keep all testing results and records and to provide those testing results and records to consumers of its mulch on request.

100. In support of its cross-claim against VERR, Parklea pleads that:

1. between about 12 July 2023 and 7 December 2023, VERR was engaged in manufacturing, generating, processing, recovering, mixing, blending and producing the Greenlife Mulch for sale (by itself, or together with Greenlife);

2. the Mulch Order required VERR to ensure, before supplying the Greenlife Mulch, that it does not contain asbestos and is ready for land application, and to keep a written records of its risk management protocol and all supporting documentation;

3. the Greenlife Mulch was sold to Parklea;

4. VERR knew, or ought to have known, that the Greenlife Mulch was being sold to Parklea in order to be on-sold to end-users (such as Skyline) for landscaping material;

5. there was a reasonably foreseeable and not insignificant risk that a consumer of the Greenlife Mulch, such as Parklea, would suffer economic harm and/or personal injury if the Greenlife Mulch contained asbestos;

6. as the holder of EPL11233, VERR exercised control over all aspects of the production of the Greenlife Mulch at the Premises;

7. by applying for the EPL and producing the Greenlife Mulch at the Premises, VERR accepted or assumed responsibility to purchasers or end-users of the Greenlife Mulch to ensure that it did not contain asbestos and that it was fit for use and ready for land application;

8. VERR knew or ought to have known that Greenlife did not, or did not adequately, test the Greenlife Mulch that was produced at the Premises before supplying it to its consumers for use by them or by end-users such as Skyline;

9. Parklea had no way of detecting whether the Greenlife Mulch produced by VERR (by itself, or together with Greenlife) and supplied by Greenlife was contaminated with friable (un-bonded) asbestos, and could only detect non-friable (bonded) asbestos to the extent to which it was visible to the naked eye but that such detection was not practically able to be achieved given the quantities of Greenlife Mulch supplied;

10. Parklea relied on the fact that the Greenlife Mulch was produced pursuant to EPL11233; and

11. in those circumstances, VERR owed each of Parklea and Skyline as purchasers and end-users of its products a duty of care which required VERR to exercise reasonable care in the sourcing, mixing and manufacturing of mulch materials to prevent asbestos materials being mixed in or becoming part of its completed mulch products, particularly when using recycled building materials as part of the mulch mix.

101. Parklea pleads that, if the Court finds that any mulch supplied by Parklea to Skyline was contaminated, then the Court would find that the Greenlife Mulch produced by VERR (by itself or together with Greenlife), and sold by Greenlife to Parklea, did not comply with the requirements of the POEO Act, the Mulch Exemption and the Mulch Order, contained asbestos, was not ready for land application, was not of merchantable quality, and was not reasonably fit for the purpose of landscaping.

102. Parklea further pleads that VERR breached its duties of care owed to each of Parklea and Skyline by:

1. failing to have an adequate written risk management protocol in place;

2. failing to implement and apply adequately the measures required by any written risk management protocol that it did have in place;

3. failing to have proper systems in place to identify whether any materials that were to be used for the purpose of producing the Greenlife Mulch contained asbestos;

4. failing to have a proper system in place to ensure that the Greenlife Mulch did not become contaminated with asbestos in the production process;

5. carrying out the scheduled activities of composting, resource recovery and waste storage pursuant to EPL11233 in breach of s 48 of the POEO Act; and/or

6. failing to carry out any testing, or any adequate testing, of the Greenlife Mulch.

103. Parklea claims that it and Skyline have suffered loss as a result of the alleged breaches of duty by VERR in the form of the costs incurred by Skyline in removing asbestos contaminated mulch and remediating the land to which it had been applied, and any liability that Parklea may be found to have to Skyline and the costs incurred by Parklea in defending Skyline’s claims in these proceedings. Parklea claims damages against VERR in any amount that will indemnify Parklea in respect of any damages and costs liability that it may be held to owe to Skyline, and contribution pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).

104. Freescale, Runkorp and VERR have not yet filed cross-claim responses.

105. As I mentioned earlier in these reasons, the Court made freezing orders against Freescale and Runkorp, together with ancillary orders requiring disclosure of their assets, on 25 February 2025.

106. Mr Domenic Vitocco swore an affidavit on 20 March 2025 in compliance with the asset disclosure orders in which he deposed that:

1. until about 31 January 2025, Freescale and Runkorp operated in partnership a business supplying building and landscape materials under the name Greenlife;

2. Greenlife operated the partnership business from the Premises, which are owned by V E Land Holdings Pty Limited, pursuant to a sub-lease from VERR;

3. VERR holds EPL11233 “on which the licensed activities took place”; and

4. in operating the partnership business, Mr Domenic Vitocco worked closely with Mr Adrian Runko.

107. The Court also made orders on 25 February 2025 requiring Freescale and Runkorp to produce the following five categories of documents:

1. any document created in the period from 1 June 2023 to 31 January 2024 that contains the results of any testing of the mulch product that Freescale and/or Runkorp (trading as Greenlife) produced and sold to Parklea in the period from 12 July 2023 to 7 December 2023;

2. a copy of the written risk management protocol that Freescale and Runkorp were required to keep under the Mulch Order that relates to the mulch product that Freescale and/or Runkorp (trading as Greenlife) produced and sold to Parklea in the period from 12 July 2023 to 7 December 2023;

3. a copy of any supporting documentation that Freescale and Runkorp were required to keep under the Mulch Order that relates to the mulch product that Freescale and/or Runkorp (trading as Greenlife) produced and sold to Parklea in the period from 12 July 2023 to 7 December 2023;

4. any document that records Freescale’s and/or Runkorp’s quality control procedures or protocols relating to the mulch product that Freescale and/or Runkorp (trading as Greenlife) produced and sold to Parklea in the period from 12 July 2023 to 7 December 2023; and

5. any document that records any details of any processing, mixing, sourcing, inspection and/or testing of the mulch product that Freescale and/or Runkorp (trading as Greenlife) produced and sold to Parklea in the period from 12 July 2023 to 7 December 2023.

108. Time for compliance with those disclosure orders has been extended until further order of the Court, and no documents have been produced at this stage.

109. Mr Fox has given evidence that any documents in the possession of Freescale and Runkorp within the five categories of documents required to be produced by those disclosure orders would also be relevant to the Class 5 proceedings and would therefore “tend to incriminate” Freescale, Runkorp, Mr Domenic Vitocco and Mr Adrian Runko, and “may prejudice all defendants” in the Class 5 proceedings, including Mr Arnold Vitocco.

110. Mr Fox has also given evidence that Mr Domenic Vitocco and Mr Adrian Runko each wish to assist Freescale and Runkorp in defending these proceedings, including by giving instructions for the preparation of cross-claim responses and by giving evidence. Mr Fox deposed that Mr Domenic Vitocco and Mr Adrian Runko are concerned that by, doing so, they would be providing instructions or evidence that is relevant to the Class 5 proceedings “and that this might prejudice their right to silence and privilege against self-incrimination”. Mr Fox deposed that Mr Domenic Vitocco and Mr Adrian Runko are therefore unwilling to give instructions and evidence for Freescale and Runkorp’s defence of these proceedings while the Class 5 proceedings are ongoing, but that they will do so once the Class 5 proceedings are at an end. Thus, according to Mr Fox’s evidence, Freescale and Runkorp may be required to defend Parklea’s cross-claim in these proceedings without the benefit of instructions and evidence from the sole director of each company if the proceedings are not stayed pending the final determination of the Class 5 proceedings. It was submitted on behalf of the stay applicants that the evidence that would be given in these proceedings by Mr Domenic Vitocco and Mr Adrian Runko would concern the procedures and protocols employed by Greenlife in producing mulch and the input materials used by Greenlife for the production of mulch.

111. Mr Fox has also given evidence that Mr Arnold Vitocco, Ms Jessica Vitocco, Ms Nancy Runko and Ms Belinda Vella are familiar with Greenlife’s business and/or worked at the Premises, and would “like to give evidence” in these proceedings “if they could do so free of the risk of prejudice to the EPA Criminal Proceedings or their incrimination”. The risk to the Class 5 proceedings identified by Mr Fox is the risk of revealing the nature of any of the Class 5 defendants’ defences to the charges ahead of any obligation to do so in the Class 5 proceedings, identifying matters that are relevant to the defence of the Class 5 proceedings, and revealing the substance of the evidence that will be adduced by the Class 5 defendants.

112. Mr Balasubramanian embraces these aspects of Mr Fox’s evidence, and adds that the evidence that VERR would need to adduce in defence of Parklea’s cross-claim “would traverse the legal and factual issues” raised in the Class 5 proceedings. Mr Balasubramanian has given evidence that VERR’s defence of Parklea’s cross-claim in these proceedings would require instructions from Mr Arnold Vitocco who would also be likely to give evidence in support of that defence. Mr Balasubramanian expresses concern that, if Mr Arnold Vitocco was to provide instructions in relation to the defence or to give evidence in these proceedings before the charges against him and against VERR in the Class 5 proceedings have been determined, “that might prejudice the right to silence and the privilege against self-incrimination”.

113. It is appropriate at this point to note the following difficulties with the evidence of Mr Fox and Mr Balasubramanian referred to above.

114. First, any instructions given by the sole director of Freescale, Runkorp and/or VERR to a solicitor acting for that company in these proceedings would be the subject of client legal privilege. Although the contents of any cross-claim response filed or any affidavit served in these proceedings may come to the knowledge of the prosecutor in the Class 5 proceedings, any instructions given to the solicitor for the purpose of preparing a cross-claim response or an affidavit of the cross-defendant’s sole director would remain confidential as between solicitor and client. The assertion made by Mr Fox and Mr Balasubramanian that the provision of instructions “might prejudice their right to silence and privilege against self-incrimination” is therefore misconceived.

115. Second, to the extent that Mr Fox and Mr Balasubramanian refer to a “right to silence”, that consideration is relevant to Freescale, Runkorp, VERR and Mr Arnold Vitocco, who are the Class 5 defendants. It is not relevant to Mr Domenic Vitocco, Mr Adrian Runko, or any of the other potential witnesses identified by Mr Fox, who have not been charged with any offence.

116. Third, to the extent that Mr Fox and Mr Balasubramanian refer to the “privilege against self-incrimination”, that privilege is not available to Freescale, Runkorp and VERR. Nor is it available to Mr Arnold Vitocco, Mr Domenic Vitocco, Mr Adrian Runko, or any of the other potential witnesses identified by Mr Fox unless they give evidence under compulsion in the present proceedings which would tend to incriminate them personally. There is no suggestion in the evidence of Mr Fox or Mr Balasubramanian that Freescale, Runko or VERR would issue subpoenas to those persons in the present proceedings to compel them to give evidence. On the contrary, the tenor of the evidence given by Mr Fox and Mr Balasubramanian is that those persons would not give evidence voluntarily while the Class 5 proceedings remain pending, and that Freescale, Runko or VERR would therefore be required to defend the present proceedings without the benefit of such evidence if the present proceedings are not stayed.

117. Skyline’s Chief Financial Officer, Mr Virginio Sorrentino, has given evidence that Skyline incurred costs of approximately $7.5 million in the months leading up to 23 September 2024 in remediating sites where the allegedly asbestos-contaminated mulch supplied by Parklea had been applied, that this represents a significant financial burden to Skyline, and that it has resulted in Skyline deferring going live with new asset management software as a result of its operational focus and financial resources being diverted to addressing the alleged contamination, deferring non-critical capital expenditure which has resulted in higher repair and maintenance costs for aging plant and equipment that has been retained rather than being replaced, inability to pursue high-yielding long-term contracts, and forgoing opportunities to grow its business and increase its revenue through strategic acquisitions of other business. Mr Sorrentino’s evidence was expressed in the form of a series of bare assertions or conclusions, and therefore carries little weight notwithstanding that no objection was taken to it.

Consideration and determination

118. I have considered all of the parties’ written and oral submissions.

119. As the stay applicants submitted, and contrary to Skyline’s submissions, there is a substantial overlap between the issues raised in these proceedings and the issues raised in the Class 5 proceedings.

120. Both proceedings are concerned with the manner in which Freescale and Runkorp engaged in the activities necessary to produce mulch at the Premises, in respect of which VERR was the licensee for those scheduled activities under EPL11233, during the period from about September 2022 until February 2024 in the case of the Class 5 proceedings and during a narrower period of between about July 2023 and 7 December 2023 in the case of the present proceedings. Save for the longer time period that is relevant to the Class 5 proceedings, those issues are identical in both proceedings. That is illustrated by the fact that the five categories of documents that Freescale and Runkorp have been ordered to disclose in these proceedings would be directly relevant to the issues in the Class 5 proceedings. [38]

     38. See [107] above and [62]-[64], [69]-[70], [74]-[75] and [78] above.

121. More specifically, both proceedings raise allegations that the procedures and practices that applied to the production of mulch at the Premises were inadequate to ensure that the mulch was not contaminated with asbestos, including by reason of lack of testing and sampling or inadequate testing and sampling of the mulch before it was supplied to third parties for application to land, and allegations that mulch produced at and supplied from the Premises was in fact contaminated with asbestos.

122. It follows that there is also a substantial overlap between the evidence that will be relevant to the stay applicants’ defence of Parklea’s cross-claim in these proceedings, and the evidence that will be relevant to their defence of the charges against them, and Mr Arnold Vitocco’s defence of the charge against him, in the Class 5 proceedings.

123. As I have already mentioned, these proceedings and the Class 5 proceedings concern the delivery and application of allegedly contaminated mulch to different sites. However, as the stay applicants submitted, that does not detract from the substantial overlap of issues between the two proceedings. In both proceedings, the mulch is alleged to have emanated from the same Premises during a specified period of time. The six-month period of time that is relevant in the present proceedings falls wholly within the 17-month period that is relevant in the Class 5 proceedings.

124. As the stay applicants submitted, the extent of the overlap between the issues raised and the evidence that will be relevant in the two proceedings is such that there is a real risk that any cross-claim response filed in the present proceedings, any affidavits served by any stay applicant as cross-defendant, and any evidence adduced from those witnesses under cross-examination at any future hearing of the present proceedings, may prejudice that stay applicant’s conduct of its defence of the Class 5 proceedings by revealing to the prosecution information about that defence in advance of it being required to enter a plea or respond to the prosecution’s first round disclosure and any second round disclosure that may be ordered in the Class 5 proceedings, and in advance of the time for it to go into evidence if it ultimately chooses to do so in defending the Class 5 proceedings. Indeed, the information disclosed in any cross-claim response and evidence filed and served in these proceedings concerning the issues outlined above would be likely to be more extensive than the information that the stay applicant would be required to disclose in order to comply with first round disclosure and any second round disclosure that the Land and Environment Court may order in the Class 5 proceedings. In addition, it may arm the prosecution with information about the mulch that was supplied to Parklea and delivered to the 25 sites that are the subject of the present proceedings. That information may assist the prosecution in proving coincidence and tendency as it has informed Mr Fox it intends to do in the Class 5 proceedings. The accusatorial system of criminal justice under which the offences charged in the Class 5 proceedings are to be tried, as modified by Division 2A of Part 5 of Chapter 4 of the Criminal Procedure Act, would thereby be undermined and the companion rule would be eroded.

118. That risk of prejudice to the conduct of each stay applicant’s defence to the Class 5 proceedings is real, irrespective of the identity of the lay witnesses from whom each stay applicant may wish to adduce evidence in these proceedings in support of its defence to Parklea’s cross-claim, and irrespective of whether any or all of those witnesses would be entitled to resist giving that evidence under compulsion by invoking their privilege against self-incrimination. As I have observed earlier in these reasons, there is no suggestion that the stay applicants intend to compel any witness to give evidence in the present proceedings which would tend to incriminate that witness. [39]

     39. See [116] above.

119. As a matter of forensic reality, it is likely that the witnesses who Freescale and Runkorp would wish to call in defending Parklea’s cross-claim would include the sole director of each company – Mr Domenic Vitocco and Mr Adrian Runko – who are said to have worked closely together in the operation of the Greenlife business. I accept Mr Fox’s evidence to that effect. I also accept Mr Fox’s evidence that each of those witnesses is unwilling to give evidence in these proceedings while the Class 5 proceedings remain pending. Those aspects of Mr Fox’s evidence are not infected by the matters referred to at [113]-[116] above. On any objective view of the subject matter of the Class 5 proceedings and the legislative provisions that apply to the offences charged, there is an obvious risk to Mr Domenic Vitocco and Mr Adrian Runko that any evidence which they may give in the present proceedings might tend to expose them to special executive liability or executive liability under ss 169 and 169A of the POEO Act in respect of the alleged offences with which the EPA has already charged Freescale and Runkorp under s 48(2) and s 144AAB of the POEO Act. The EPA is within the three year limitation period to commence proceedings against Mr Domenic Vitocco and Mr Adrian Runko. [40] As the stay applicants submitted, to require them to adduce more specific evidence about the extent of the risk and how it may manifest would have the perverse consequence of exposing Mr Domenic Vitocco and Mr Adrian Runko to that very risk even before this stay application has been determined.

     40. See [81] above.

120. It follows from that obvious risk to Mr Domenic Vitocco and Mr Adrian Runko that, if the present proceedings continue while the Class 5 proceedings remain on foot, Freescale and Runkorp will be in the invidious position of being unable to defend the present proceedings with the benefit of evidence from those two witnesses. That prejudice is likely to be compounded by the need for those persons, as the sole directors of Freescale and Runkorp (respectively), to verify the cross-claim response of each of those cross-defendants.

121. I reject Skyline’s submission that there is no risk, or no real risk, of Mr Domenic Vitocco and Mr Adrian Runko being charged, simply because they have not been charged to date. The fact that they have not been charged to date is no reliable guide to what steps the EPA might take if provided with cross-claim responses verified by them or affidavits made by them in the present proceedings. It cannot be said that they will be charged. Nor can it be said that they will not. There is a real risk.

122. Having regard to Mr Domenic Vitocco’s evidence to the effect that Freescale and Runkorp carried out the scheduled activities to which VERR’s licence applied, [41] the unwillingness of the sole directors of Freescale and Runkorp to give evidence in these proceedings while the Class 5 proceedings remain on foot is also likely to prejudice VERR in its defence of these proceedings if they are not stayed. I refer, in particular, to the allegations in these proceedings that VERR exercised control over all aspects of the production of Greenlife Mulch at the Premises, that VERR accepted or assumed responsibility to purchasers or end-users of Greenlife Mulch to ensure that it did not contain asbestos, and that VERR failed to exercise reasonable care in the sourcing, mixing and manufacturing of mulch to prevent asbestos materials becoming part of the completed mulch mix. [42] That prejudice to VERR arises irrespective of whether Mr Arnold Vitocco would be willing to give evidence in these proceedings. Mr Balasubramanian’s evidence about Mr Arnold Vitocco’s position was somewhat equivocal. [43] To be fair, that evidence was given in circumstances where VERR was notified of Parklea’s application to join it as a cross-defendant in these proceedings only a very short time before the hearing of the stay applications.

     41. See [106] above.

     42. See [100]-[102] above.

     43. See [116] above.

123. My analysis of the risk of prejudice to the conduct of the stay applicants’ defences in the Class 5 proceedings and to the conduct of their defences of Parklea’s cross-claim in the present proceedings is necessarily based on the evidence that is currently before the Court about both proceedings. I reject Skyline and Parklea’s submission that the stay applicants have applied too early to stay these proceedings, and that they should be required to comply with the existing disclosure orders, file cross-claim responses, and comply with such pre-trial directions as this Court may make for the filing and service of evidence unless and until a real risk of prejudice becomes apparent, at which point Skyline and Parklea accept that the stay applicants would be entitled to make a fresh application to stay the present proceedings. There is a present real risk of prejudice to the conduct of the stay applicants’ defences of the Class 5 proceedings for all of the reasons I have explained above, and I reject the submissions made by Skyline and Parklea to the contrary. As I have explained above, the present risk arises principally from the stay applicants themselves being required to prepare, file and serve cross-claim responses and any affidavit evidence on which they wish to rely in these proceedings, which may directly or indirectly assist the prosecution in its conduct of the Class 5 proceedings over and above the extent to which the prosecution would be assisted by the more limited disclosures that the stay applicants may be required to make in the Class 5 proceedings. Speculation that the prosecution might be able to independently piece together substantially the same information from the material gathered in its investigation under Chapter 7 of the POEO Act is not to the point. I reject Skyline’s submission that the stay applicants were required to prove the contents of the material amassed by the EPA during its Chapter 7 investigation, and then prove that the cross-claim responses and affidavits which they would file and serve and any documents that they would be required to disclose in these proceedings would go beyond that material, in order to demonstrate a real risk of prejudice to the conduct of their defences of the Class 5 proceedings. I accept the stay applicants’ submission that this would expose them to the very prejudice that they seek to avoid by applying for a stay of these proceedings. I reject Skyline’s submission that the stay applicants could have adduced such evidence in support of the stay application under a confidentiality regime that would have avoided exposing them to that prejudice. The efficacy of any such confidentiality regime would be doubtful for reasons that I refer to below. In any event, I do not accept that the Court cannot determine what the interests of justice require without receiving such evidence and embarking on the granular, document-by-document forensic assessment envisaged by Skyline’s submission.

124. It remains to consider whether there are protective measures that are appropriate to ameliorate the present risk, or whether the interests of justice require that these proceedings be stayed and, if so, on what terms. Before addressing those issues, I acknowledge that it is possible that the present risk may be reduced, or may cease to exist, as the Class 5 proceedings progress towards hearing and determination. It is therefore appropriate that the situation be re-examined at regular intervals during the Class 5 proceedings, including immediately after the Class 5 defendants enter pleas to the charges, and immediately after the Class 5 defendants respond to any second round prosecution disclosure that the Land and Environment Court may order in the Class 5 proceedings. As Skyline submitted, it is reasonable to think that the “prejudice calculus” might change at one or both of those stages of the Class 5 proceedings. To put it another away, the Court cannot presently determine that the interests of justice require a stay of these proceedings for a period that extends beyond the earlier of entry of pleas or responses to second round disclosure in the Class 5 proceedings. Any stay ordered at this stage will only be for a period up to that stage of the Class 5 proceedings.

125. Skyline and Parklea submitted that any risk of prejudice (which they disputed) can be adequately addressed, at least until these proceedings reach the point at which they are ready for final hearing, by confidentiality orders to prevent cross-claim responses filed, affidavits served, and any documents disclosed by the stay applicants in these proceedings from falling into the hands of the prosecution in the Class 5 proceedings. Skyline and Parklea failed to articulate how any such confidentiality orders could be effective to excuse any party to these proceedings from complying with any notice that may be issued by the EPA under Chapter 7 of the POEO Act, or any subpoena that may be issued in the Class 5 proceedings, requiring production of the cross-claim response, the affidavits, or any documents disclosed. I was not referred to any authority about whether the EPA’s power under Chapter 7 of the POEO Act may lawfully be exercised by issuing notices to third parties to produce documents for the purpose of the EPA investigating alleged offences that are already the subject of criminal proceedings under Chapter 8 of the POEO Act. In my view, there is no utility in giving further consideration to imposing a confidentiality regime which is at risk of being undermined by the EPA obtaining the confidential materials through those means if, as Skyline and Parklea implicitly accepted, the confidentiality regime would cease to be effective in any event once the final hearing of the present proceedings commenced. If the present proceedings are not stayed, the final hearing is likely to commence some considerable time before the Class 5 proceedings are determined. Consistently with the principle of open justice, the present proceedings will be heard in open court. At that point, the proposed confidentiality regime would be ineffective to prevent the substance of the stay applicants’ defence and evidence in the present proceedings from becoming known to the prosecution in the Class 5 proceedings.

126. It was also submitted on behalf of Skyline that the risk of prejudice to the stay applicants in the conduct of their defences of the Class 5 proceedings could be ameliorated by any admissions in their cross-claim responses in the present proceedings being made on the express basis that they are admissions for the purpose of the present proceedings only. In my respectful opinion, the notion that the prosecutor in the Class 5 proceedings would glean nothing of relevance to the prosecution from any such limited admissions made in these proceedings, in which the stay applicants are being sued for a sum that may exceed $7.5 million is unrealistic. Any such admissions would telegraph to the prosecution that the stay applicants were unlikely to dispute or run positive cases in defence of similar allegations made in the Class 5 proceedings.

127. For those reasons, I do not consider that there are any protective measures short of a stay of the present proceedings that would be effective in all the circumstances of this case to ameliorate or appropriately manage the risk of prejudice to the stay applicants’ conduct of their defences in the Class 5 proceedings which I have identified above.

128. It remains to consider whether the interests of justice require that these proceedings be stayed, having regard to the nature of the risk of prejudice to the stay applicants on the one hand, and the prejudice to Skyline and to Parklea that would flow from a stay of these proceedings on the other hand.

129. I accept Parklea’s submissions that, if its cross-claim is stayed, then Skyline’s claim should also stayed. In circumstances where Parklea claims to have been a mere supplier of the allegedly contaminated mulch, and where Parklea alleges that the mulch was produced by the cross-defendants and that any asbestos contamination (if any) was introduced during that production process, I accept that the further steps that Parklea will wish to take in defence of Skyline’s claim are highly likely to be shaped by the substance of the cross-defendants’ responses to Parklea’s cross-claim, by information obtained through disclosure orders that Parklea will seek against the cross-defendants, and by any evidence that the cross-defendants serve in these proceedings. I therefore reject Skyline’s submission that any stay of Parklea’s cross-claim should not delay the exchange of evidence as between Skyline and Parklea.

130. Having regard to the evidence referred to at [93] above, I consider that any stay of the present proceedings until the Class 5 proceedings are determined would result in a substantial delay to the final determination of the present proceedings. That would necessarily delay Skyline’s recovery of any part of the $7.5 million that it claims to have incurred in remediation costs which it might ultimately be held to be entitled to recover from Parklea in these proceedings. Skyline would therefore continue to bear the whole of the financial burden of those remediation costs for a longer period of time than would be the case if these proceedings were heard and determined in the ordinary course, and if Skyline’s claim against Parklea succeeded in whole or in part. That is a real risk of prejudice to Skyline that would flow from any stay of these proceedings. Mr Sorrentino asserts that a cascading series of increasingly remote consequences will flow from Skyline being potentially kept out of pocket for the duration of any stay. Those assertions carry little weight, as I have said earlier in these reasons, and therefore add nothing of substance to my assessment of the prejudice to Skyline that is to be weighed against the prejudice to the stay applicants in deciding what the interests of justice require in this case. I reject Skyline’s submission that any stay for any period of time should be conditional on the stay applicants undertaking to compensate Skyline for any such financial consequences. In my opinion, imposing such a “price” on a stay of civil proceedings to avoid a real risk of prejudice that would otherwise arise to the conduct of the defence of overlapping criminal proceedings would fail to give due weight to the public interest in the fair and efficient conduct of criminal proceedings in assessing what the interests of justice require. [44]

     44. See [46] above.

131. Parklea will not suffer any financial prejudice of the kind asserted by Skyline if these proceedings are stayed. As the stay applicants submitted, the freezing orders already made address any risk of dissipation of the stay applicants’ assets which might otherwise have been said to prejudice Parklea’s ability to enforce against the stay applicants any judgment that might ultimately be entered in its favour on the cross-claim. On the other hand, as Parklea submitted, any stay of these proceedings will cause it to be exposed to liability under the usual undertaking as to damages given in support of those freezing orders for a longer period of time than would otherwise be the case. I accept Parklea’s submission that the Court has power to release it from that undertaking if a change in circumstances since the undertaking was given would render its enforcement unjust. [45] However, the usual undertaking is an undertaking to the Court to submit to such order (if any) as the Court may consider to be just for the payment of compensation to the person against whom the freezing order is made or to any other person affected by the operation of the freezing order. [46] It will not fall to be enforced unless and until Parklea’s cross-claim fails. The Court will have a discretion at that time whether to enforce the undertaking. Parklea’s application to be released from the undertaking as a condition of any stay of these proceedings erroneously assumes that the Court would exercise that discretion by enforcing the undertaking in circumstances where it would be unjust to do so. The Court is capable of assessing at the time that any future claim for compensation arises whether it is just to enforce the undertaking and, if so, what order for payment of compensation is just and equitable in all the circumstances, including by having regard to the connection between the freezing order and the loss for which compensation is sought and whether or not the loss could have been foreseen when the freezing order was granted. [47] To release Parklea from the usual undertaking as a condition of staying these proceedings to avoid a real risk of prejudice to the stay applicants’ defence of the Class 5 proceedings would deprive those stay applicants who are bound by the drastic remedy of the freezing orders of any means of obtaining such compensation as the Court may consider to be just for any loss suffered as a result of the freezing orders in the event that Parklea’s cross-claim fails, irrespective of whether the stay of these proceedings could be said to have caused or contributed to that loss. I decline to impose any such condition on a stay of these proceedings.

     45. Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39 at 177-178 (Gibbs CJ, Aickin, Wilson and Brennan JJ).

     46. Uniform Civil Procedure Rules 2005 (NSW), r 25.8.

     47. European Bank Limited v Evans (2010) 240 CLR 432; [2010] HCA 6, especially at [15]-[18] and [29] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ).

132. For all of those reasons, as things presently stand, there is a real risk that the stay applicants will be prejudiced in the conduct of their defence of the Class 5 proceedings by the verified cross-claim responses they will be required to file imminently and by the evidence they will be required to serve in due course if these proceedings are not stayed. There are no protective measures short of a stay that would effectively avoid that prejudice.

133. However, as I have already stated, it cannot be said at this early stage that a stay of these proceedings until the final determination of the Class 5 proceedings is necessary to avoid that prejudice. Rather, the interests of justice require a stay only until such time as the Class 5 defendants have entered pleas, or have responded to any second round disclosure by the prosecution in the Class 5 proceedings, whichever happens first. It will be open to the stay applicants to seek a further stay at that time, and they will bear the onus of satisfying the Court that any such stay is required by the interests of justice in the circumstances then existing.

134. In my opinion, the risk of prejudice to Skyline and Parklea due to these proceedings being stayed until pleas have been entered or second round disclosure and responses have been completed in the Class 5 proceedings is substantially outweighed by the risk of prejudice to the stay applicants’ conduct of their defence of the Class 5 proceedings that will otherwise arise.

135. For the reasons I have already explained, it would be inconsistent with the interests of justice for the stay to be conditional on the stay applicants undertaking to compensate Skyline for the financial loss which it asserts will flow from the stay. If Skyline ultimately succeeds in these proceedings, it will be entitled to recover the time value of money by claiming pre-judgment interest.

118. For the reasons I have already explained, it would not be in the interests of justice to release Parklea from its usual undertaking as to damages given to the Court in support of the freezing orders made on 25 February 2025 and 28 March 2025.

119. Documents that any party is compelled to disclose in these proceedings are subject to an implied undertaking by each other party not to use them for any other purpose. But for the potential reach of the EPA’s statutory investigative powers referred to at [52]-[56] and [133] above, I would have been of the view that compliance with the disclosure orders made on 25 February 2025 could be excluded from the scope of the stay without prejudicing the conduct of the stay applicants’ defence of the Class 5 proceedings. However, having regard to the potential reach of those investigative powers, the stay should extend to those disclosure orders.

120. I accept the submissions made by Skyline and Parklea to the effect that the stay should be conditional on the stay applicants giving to the Court:

1. an undertaking to use reasonable endeavours to progress the Class 5 proceedings efficiently and not to seek to delay or impede the progress of those proceedings in any way;

2. an undertaking to preserve until further order of this Court all documents in their possession, custody or control that are relevant to the issues in these proceedings, including those documents falling within the scope of the disclosure orders made on 25 February 2025; and

3. an undertaking to cause these proceedings to be relisted for directions within 7 days after any or all of the Class 5 defendants enter pleas in the Class 5 proceedings, or within 7 days after any or all of the Class 5 defendants respond to any preliminary disclosure made by the prosecution in the Class 5 proceedings pursuant to orders or directions made by the Land and Environment Court under ss 247I to 247L of the Criminal Procedure Act, whichever happens first, for the purpose of this Court programming a hearing of any application for a further stay of these proceedings or, if no such application is to be made, making directions for the further conduct of these proceedings.

146. Upon the stay applicants providing written, signed undertakings to that effect to the Court, an order will be made staying these proceedings until 7 days after the earlier of any or all of the Class 5 defendants entering pleas in the Class 5 proceedings, or the Class 5 defendants responding to any preliminary disclosure made by the prosecution in the Class 5 proceedings pursuant to orders or directions made by the Land and Environment Court under ss 247I to 247L of the Criminal Procedure Act. If such undertakings are not forthcoming, these proceedings will not be stayed.

147. For the avoidance of doubt, the stay will not apply to the freezing orders made on 25 February and 28 March 2025, and will not apply to the mediation order made on 1 May 2025.

148. The parties are to bring in within seven days short minutes of order giving effect to these reasons, including any signed undertakings of the stay applicants and any agreed orders in relation to the costs of the stay application.

149. In the event of a dispute about the costs of the stay application, the parties are to exchange and send to my Associate written submissions not exceeding three pages in length in support of the costs orders for which they contend, at the same time as bringing in the short minutes of order referred to above. Costs will then be determined on the papers.

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Endnotes

Decision last updated: 20 May 2025