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Court of Criminal Appeal 22 August 2024

Environment Protection Authority v McMurray

[2024] NSWCCA 160

Other
CRIMINAL PROCEEDINGS STATED QUESTION OFFENCE COMMITTED BY LOCAL COUNCIL LIABILITY OF GENERAL MANAGER OF COUNCIL

Citation: Environment Protection Authority v McMurray [2024] NSWCCA 160
Court: Court of Criminal Appeal
Date: 22 August 2024
Judge(s): White JA; Mitchelmore JA; Preston CJ of LEC (principal judgment)

Background

The Cootamundra-Gundagai Regional Council operated a sewage treatment plant under an environment protection licence. The Council received leachate waste from a separate landfill and deposited it in a pond at the treatment plant, an activity not authorised by its licence. The Council pleaded guilty to an offence under s 144(1) of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act), which prohibits using or causing a place to be used as a waste facility without lawful authority, and was fined $8,500 in the Local Court.

The Environment Protection Authority (EPA) also prosecuted the Council's General Manager under s 169(1) of the POEO Act. That provision imposes what is called "special executive liability," meaning that a director or person concerned in the management of a corporation can be personally liable when the corporation contravenes certain provisions, including s 144(1). The central difficulty was that the Council is not a corporation; it is a local council.

The General Manager applied for a permanent stay of the proceedings against him, arguing that s 169(1) could not apply to him because he was not a manager of a corporation. The Local Court granted the stay, and the Land and Environment Court dismissed the EPA's appeal. The EPA then brought the matter to the Court of Criminal Appeal by way of a stated question of law.

  • Whether s 169(1) of the POEO Act (special executive liability) applies to the General Manager of a local council, given that the provision is framed in terms of corporations rather than councils.
  • Whether s 220(4) of the Local Government Act 1993 (NSW), which provides that a law of the State applies to a council "in the same way" as it applies to a body corporate (including a corporation), was sufficient to extend s 169(1) to the General Manager.

Decision

Preston CJ of LEC (with White JA and Mitchelmore JA agreeing) answered the stated question in the affirmative: s 169(1) of the POEO Act does apply to the General Manager by operation of s 220(4) of the Local Government Act 1993 (NSW). The Court identified two independent routes by which that result is reached.

The first route was the direct application of s 169(1). Section 220(4) of the LG Act provides that a State law applies to a council in the same way as it applies to a body corporate, including a corporation. Section 169(1) is a law of the State. A law that imposes special executive liability on the executives of a corporation is itself a law that "applies to and in respect of" a corporation, because it regulates how the corporation's affairs translate into personal liability for those who manage it. Section 220(4) therefore extends s 169(1) to the Council, and, by necessary implication, to those persons concerned in the management of the Council, including the General Manager.

The second route operated through s 144(1). Section 220(4) applies s 144(1) of the POEO Act to the Council as it would to a corporation. The Council contravened s 144(1), satisfying the opening condition in s 169(1). Because that contravening "corporation" is to be read, by force of s 220(4), as a reference to the Council, the later phrase in s 169(1) referring to a person "concerned in the management of the corporation" must equally be read as referring to a person concerned in the management of the Council. The General Manager fell squarely within that description.

Both routes led to the same outcome. The Court set aside the orders of the Land and Environment Court and the Local Court and upheld the EPA's appeal, restoring the prosecution against the General Manager.

Orders Made

  • The stated question (whether s 169(1) of the POEO Act applies to the General Manager by operation of s 220(4) of the LG Act) was answered "yes."
  • Question 2 stated in the Court of Criminal Appeal proceeding was unnecessary to answer.
  • The Land and Environment Court's order of 7 February 2024 dismissing the appeal was set aside.
  • In its place, the appeal to the Land and Environment Court was upheld.
  • The Local Court's order of 12 May 2023 permanently staying the proceedings against the General Manager was set aside.
  • The judicial review proceedings were dismissed.
  • No costs orders were made in the Court of Criminal Appeal or in the judicial review proceedings.

Key Takeaways

  • Section 220(4) of the Local Government Act 1993 (NSW) is broad enough to extend the special executive liability regime in s 169(1) of the POEO Act to local councils and their senior officers, even though that provision is expressed in terms of corporations.
  • A law that imposes personal liability on those who manage a corporation qualifies as a law that "applies to and in respect of" a corporation for the purposes of s 220(4), so that the deeming provision pulls both the primary obligation and the executive liability mechanism across to the council context.
  • Under s 169(1) of the POEO Act, once a provision attracting special executive liability is applied to a council by s 220(4), references to "corporation" within s 169(1) are to be read as references to the council, making managers of the council personally liable in the same way as corporate executives.
  • The Court of Criminal Appeal confirmed that "concerned in the management of the corporation" in s 169(1) extends, through s 220(4), to a person concerned in the management of a council, such as a general manager.
  • Two independent routes existed to reach the same conclusion, suggesting that s 220(4) operates robustly to align the legal exposure of councils and their officers with that of corporations across State environmental legislation.

Legislation and Cases Referenced

Legislation:
- Protection of the Environment Operations Act 1997 (NSW), ss 144, 169
- Local Government Act 1993 (NSW), s 220
- Local Government Amendment (Legal Status) Act 2008 (NSW)
- Crimes (Appeal and Review) Act 2001 (NSW), s 42B
- Criminal Appeal Act 1912 (NSW), ss 5BA, 56A
- Interpretation Act 1987 (NSW), s 34

Cases:
- Harrison v Melhem (2008) 72 NSWLR 380; [2008] NSWCA 67
- Hoxton Park Residences Action Group Inc v Liverpool City Council (No 2) (2011) 256 FLR 156; [2011] NSWCA 363
- Secretary, Department of Family and Community Services v Hayward (a pseudonym) (2018) 98 NSWLR 599; [2018] NSWCA 209
- Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45; [1989] HCA 24