Baranov v Lane Cove Council [2001] NSWLEC 292

Reported Decision : (2001) 117 LGERA 412

Land and Environment Court of New South Wales

CITATION : Baranov v Lane Cove Council [2001] NSWLEC 292 APPLICANT Baranov PARTIES : RESPONDENT Lane Cove Council FILE NUMBER(S) : 60002 of 2001 CORAM: Cowdroy J KEY ISSUES: Environmental Offences :- causation LEGISLATION CITED: Justices Act 1902 ss 133AD, 133AM, 133AN Protection of the Environment Operations Act 1997 ss 120, 257, 258 Bagge v Whithead [1892] 2 QB 355; Coleshill v Manchester Corporation [1928] 1 KB 776; Environment Protection Authority v Multiplex Constructions Pty Limited (2000) 112 LGERA 1; Environment Protection Authority v Metalcorp Recyclers Pty Limited [2001] NSWLEC 207; Hollis v Vabu Pty Limited (2001) 75 ALJR 1356; CASES CITED: Huggins (1730) Ld Raym 1574; 92 ER 518; McConnell Dowell Constructors (Aust) Pty Lmited v Environment Protection Authority (2000) 50 NSWLR 127; Rao v Canterbury City Council (2000) 112 LGERA 360; Royall v The Queen (1990) 172 CLR 378; Tiger Nominees Pty Limited v State Pollution Control Commission (1991) 25 NSWLR 715; Wentworth v Rogers (No 3) (1986) 6 NSWLR 642 DATES OF HEARING: 4/10/01, 18/12/01, 19/12/01 EX TEMPORE JUDGMENT DATE : 12/19/2001

APPLICANT Mr T Howard (Barrister)

SOLICITORS Arraj Lawyers

LEGAL REPRESENTATIVES: RESPONDENT Mr D Parry (Barrister)

SOLICITORS Pike Pike and Fenwick

JUDGMENT:

IN THE LAND AND MATTER No. 60002 of 2001 ENVIRONMENT COURT CORAM: Cowdroy J OF NEW SOUTH WALES DECISION DATE: 19/12/01

Mark Baranov Appellant v Lane Cove Council Respondent JUDGMENT

1. The appellant appeals pursuant to Part 5B of the Justices Act 1902 ("the Justices Act") against a conviction and sentence imposed by Magistrate O'Shane of the Local Court sitting at Ryde on 8 March 2001. Leave to appeal was granted by this Court on 4 October 2001 pursuant to s 133AD(1) of the Justices Act because the appellant was convicted in his absence. The appeal is a rehearing 'on the transcripts of evidence heard before the Magistrate who made the conviction' pursuant to s 133AM(1) of the Justices Act however leave was granted to both the prosecutor ("the council") and the appellant to adduce further evidence pursuant to s 133AN of that Act.

Facts

The penalty infringement notice

2. On 3 March 2000 the council posted to the appellant an infringement notice ("the notice"). The notice required the appellant pay $750 for allegedly committing the offence of 'cause/permit waters to be polluted' pursuant to s 120 of the Protection of the Environment Operations Act 1997 ("the PEO Act"). Section 120(2) of the PEO Act provides:- (2) A person must not cause any waters to be polluted

(3) A person must not permit any waters to be polluted.

3. The notice was issued pursuant to s 224 of the PEO Act.

4. Pursuant to s 223 of the PEO Act the appellant elected not to pay the amount specified in the penalty notice but elected to have the matter delt with by a court.

The hearing of 18 December 2000

5. On 18 December 2000 the proceedings were initially heard before Magistrate Abood, constituting the Local Court at Ryde ("the first hearing"). During the course of the first hearing the prosecutor elected to proceed only in respect of one charge, namely that of 'cause waters to be polluted' pursuant to s 120(2) of the PEO Act.

6. Mr John Noel Riley, a regulatory officer of the council, gave evidence at the first hearing. Mr Riley testified that on 11 March 2000 he attended at 3 Arabella Street in Longuville ("the site"), which was owned by the appellant, where he observed a large deposit of sand placed on the nature strip in front of the site. Mr Riley was of the opinion that the deposit of sand was approximately three or four cubic metres in volume and was for use in building operations which were in the course of construction on the site.

7. Mr Riley testified that on 11 March 2000 there had been a period of heavy rainfall. He observed water running through the sand and travelling into the gutter and down Arabella Street in a southerly direction whereupon it entered a stormwater drain. Mr Riley observed that the water was a dark colour and that there were deposits of sand 'all the way from number 3 Arabella Street, 3A Arabella Street and from there in the other 50 metres down to the drain.' Mr Riley also testified that the stormwater drain would eventually discharge into Woodford Bay in Sydney Harbour.

8. Mr Riley took photographs of the sand and the waters that entered the stormwater drain and such photographs were also adduced as evidence at the first hearing.

9. Mr Riley also testified that the only sediment control measures he observed a the site constituted a sheet of corrugated iron with two star pickets but that such measures 'was doing little or nothing to stop the sand running off the nature strip'. Mr Riley said that the normal sediment control measures adopted by builders include star pickets with 'hessian type material interwoven to stop the sand running down to the gutter and also straw bales wrapped in hessian bags'.

10. The proceedings were adjourned part heard until 1 February 2001. On that date the appellant notified the court and the council that he would not be able to attend at court due to an illness of his son and the proceedings were adjourned until 8 March 2001.

11. On or about 5 January 2001 the appellant received a jury summons requiring him to attend at the Supreme Court for a period of four weeks from 12 February 2001. The appellant deposed that he telephoned the council's solicitors to request them to seek a further adjournment of the proceedings and he believed that this would be sought on 8 March 2001. The appellant did not attend at the Supreme Court on 12 February 2001 nor at the Local Court on 8 March 2001.

The hearing on 8 March 2001

12. On 8 March 2001 the Local Court, now constituted by Magistrate O'Shane, convicted the appellant in his absence and imposed a sentence in the form of a fine for the sum of $12,500 with costs amounting to $4,256 ("the second hearing").

The constitution of the Local Court

13. It should be immediately noted that in the absence of an explicit statutory jurisdiction for the reconstitution of a court in the case of death, illness, resignation, prolonged absence or other incapacity of a judicial officer, such reconstitution of the bench in the middle of proceedings 'will be an irregularity warranting intervention on appeal or review to require a new trial de novo' (Wentworth v Rogers (No 3) (1986) 6 NSWLR 642 at 649 per Kirby P). The Court is mindful of the authorities collected by Kirby P which provide that in some circumstances an order for a new trial should not be made if the interests of justice so demand (Wentworth v Rogers at 649; Brennan v Brennan (1953) 89 CLR 129; Cognoto v Lamb (No 2) (1985) 3 NSWLR 221).

14. In this matter an order for a new trial would result in incurring a considerable delay to already protracted proceedings. Also, pursuant to s 133AO of the Justices Act the Court is empowered to confirm, quash, set aside or vary the conviction, order or sentence appealed against but there is no provision for the Court to remit the proceedings to be reheard by the Local Court. Further, since an appeal to this Court is a rehearing de novo, the equivalent of a new trial has resulted in any event. However, the Court notes and adopts the comments of Scrutton LJ in Coleshill v Manchester Corporation [1928] 1 KB 776 at 784:- I can understand that in the unprecedented and painful circumstances it is unnecessary to take any objection to what happened, but I think it is a precedent which should not be followed in future. I doubt whether a judge has any jurisdiction to continue the hearing of a case in which witnesses have been called in Court in the course of the trial…

The appeal

15. With the leave of the Court the council cross examined the appellant on the nature of the building works undertaken at the site on 11 March 2000. The council tendered in evidence the orders of this Court dated 31 March 1998 granting development consent for the erection of a dwelling upon the site subject to conditions. The council also tendered in evidence development application D194/99 ("the development application") of the appellant for the erection of 'FRONT, REAR & SIDE FENCE' of full brick and steel construction ("the fence"). The development application was approved by the council on 7 July 1999 subject to certain conditions. Relevant conditions of the development consents relied upon by the council include:- 10. (36) Stockpiles of topsoil, sand, aggregate, spoil or other material capable of being moved by water to be stored clear of any drainage line, easement, natural watercourse, footpath, kerb or roadside. … 12. (48) Depositing or storage of builder's materials on the footpath or roadways within the Municipality without first obtaining the approval of Council is PROHIBITED. … 19. (158) The applicant is to ensure the proper maintenance of sediment and erosion controls at all times until the development is completed.

16. With the leave of the Court the appellant relies upon a building contract ("the contract") between himself and Douglas Barry Troope ("the builder"). The contract was for the reconstruction of the site including the completion of a house on the site. Such construction took place on the site between January and May 2000. The appellant relies on cl 7 of the contract which states as follows:- (a) The Builder shall have exclusive and uninterrupted possession of and access to the Site for the performance of this Contract.

(b) The Owner or his duly appointed representative or an authorised officer of the Lending Authority shall have access to the land for the purpose of inspecting and viewing the progress of the Works but only at reasonable times and in such a manner as shall not disrupt the Builder or prevent the Builder from properly discharging contractual obligations.

(c) Neither the owner not any duly representative shall give or be entitled to give at any time directions to the Builder's workers or subcontractors on the Site or elsewhere relating to the Works or any part thereof. All instructions shall be given in writing and directly to the Builder.

Council's submissions on liability

17. The council relies on s 257(1) of the PEO Act which relevantly states as follows:- In any proceedings under this Act, the occupier of premises at or from which any pollution occurs is taken to have caused the pollution, unless it is established that: (a) the pollution was caused by another person, and (b) the other person was not associated with the occupier at the time the pollution occurred, and (c) the occupier took all reasonable steps to prevent the pollution. A person is associated with the occupier for the purposes of paragraph (b) (but without limiting any other circumstances of association) if the person is an employee, agent, licensee, contractor or sub-contractor of the occupier .

18. The term 'occupier' is defined in the Dictionary to the PEO Act to mean 'the person who has the management or control of the premises'. The council submits that the appellant had sufficient control over the site and the nature strip to come within the meaning of the term pursuant to the Dictionary to the PEO Act and accordingly is deemed to have caused the pollution by s 257 of that Act.

19. Section 258 of the PEO Act provides that no proof of the fact that a person is an occupier is required until evidence is given to the contrary. Since the appellant relies upon cl 7 of the contract the council submits that the Court may consider the conditions of the consent to the development application. The council submits that such conditions imposed a legal responsibility upon the appellant to ensure effective sediment control at the site and that the responsibility remains despite the contract and in this respect the council relies upon the decision of the New South Wales Court of Criminal Appeal in Rao v Canterbury City Council (2000) 112 LGERA 360.

Appellant's submissions on liability

20. The appellant does not dispute that that there was pollution of waters occurring at the site on 11 March 2000. The appellant instead submits that he is not liable for such pollution because he was not the 'occupier' of the site. The appellant submits that the pollution was caused by the actions of the builder and that pursuant to cl 7 of the contract he had no control over the actions of the builder. The appellant submits that in these circumstances the Court should uphold the appeal and set aside the conviction imposed at the second hearing.

Causation

21. The prohibition on the pollution of waters pursuant to s 120 of the PEO Act makes unlawful a wide spectrum of activities predicated upon their consequences. If the pollution of waters results from some act of a defendant then the defendant has committed an offence pursuant to s 120 of the PEO Act: see McConnell Dowell Constructors (Aust) Pty Limited v Environment Protection Authority (2000) 50 NSWLR 127 at 134 per Spigelman CJ.

22. Nevertheless, when charged with an offence a defendant may require the prosecutor to prove beyond a reasonable doubt that the actions of the defendant caused the result that is made unlawful by the PEO Act.

23. A defendant may require the prosecution to prove causation as an element of an offence pursuant to s 120 of the PEO Act in one of two ways. First, where a prima facie case is established the defendant may satisfy the Court of the elements of the statutory defence pursuant to s 257 of the PEO Act on the balance of probabilities. The prosecutor will then be required to satisfy the Court that the elements of s 257 of the PEO Act have not been established on the balance of probabilities or prove that the defendant caused the pollution beyond a reasonable doubt.

24. Alternatively, if the defendant satisfies the Court on a evidentiary burden that they were not an 'occupier' of a site for the purposes of s 257 of the PEO Act then the prosecutor will be required to negative this fact beyond a reasonable doubt: Environment Protection Authority v Multiplex Constructions Pty Limited (2000) 112 LGERA 1. The defences are distinct (see Environment Protection Authority v Metalcorp Recyclers Pty Limited [2001] NSWLEC 207) though both require the Court to be satisfied beyond a reasonable doubt that the actions of the defendant caused the pollution.

25. In summary, since the question of causation must be resolved by proof it is ultimately one of fact, with the burden of establishing such facts resting on one party but requiring the Court to be satisfied beyond a reasonable doubt that the defendant is criminally responsible for the pollution.

26. The Court is satisfied prima facie that the actions of the builder caused the pollution of waters on 11 March 2000 and that the appellant was not responsible. There is no evidence that the appellant placed the sand on the nature strip. However the question remains whether the appellant is to be held criminally responsible for the acts of the builder.

For which acts can the appellant be held liable?

27. Save for certain exceptions, the actions of a third party are not attributable to the defendant to prove that the defendant caused the offence: Huggins (1730) 2 Ld Raym 1574; 92 ER 518; Bagge v Whithead [1892] 2 QB 355. Ordinarily only persons directly, substantially or significantly responsible for causing an offence are liable for that offence: Royall v The Queen (1990) 172 CLR 378.

28. There are two relevant exceptions to this doctrine. The first is that s 257 of the PEO Act deems an 'occupier', as someone with the 'management or control' over a premises, to have caused any pollution that occurs at those premises. This would mean that the actions of another person associated with the defendant would be attributed to the defendant even though the defendant has committed no act of pollution.

29. The second exception is that the actions of an employee, servant or other agent are attributable to a principal in circumstances where it can be shown or inferred that the Parliament intended that the principal be vicariously liable for the criminal acts of its agent and the common law presumption against vicarious liability is displaced. In Tiger Nominees Pty Limited v State Pollution Control Commission (1991) 25 NSWLR 715 the New South Wales Court of Criminal Appeal held that a principal would be vicariously liable for pollution caused by an employee pursuant to the Clean Waters Act 1970. It is not challenged by the appellant that he could be vicariously liable under the provisions as they now exist in the PEO Act.

Vicarious liability

30. In Hollis v Vabu Pty Limited (2001) 75 ALJR 1356 Gleeson CJ and Gaudron, Gummow, Kirby and Hayne JJ said at 1363 (omitting citations):- It has long been accepted, as a general rule, that an employer is vicariously liable for the tortious acts of an employee but that a principal is not liable for the tortious acts of an independent contractor .

31. Later, their Honours qualified this general statement and said at 1364:- Two further points should be made. The first is that it is one thing to appreciate the considerations which in modern times support the doctrine of vicarious liability; it is another to select particular terms which provide the criterion of liability in a particular case. Secondly, examination is required of the content of those terms. That content will reflect, from the facts of case to case, the particular force given to the considerations supporting the doctrine of vicarious liability. Terms such as 'employee' and 'independent contractor', and the dichotomy which is seen as existing between them, do not necessarily display their legal content purely by virtue of their semantic meaning.

32. In Vabu the High Court drew particular attention to the requirement for the Court to analyse into the relationship between the agent and principal to determine whether a sufficient nexus of control existed over the agent so that the actions of the agent could fairly be attributable to the principal. This is similar to the approach undertaken by Lloyd J in EPA v Multiplex when faced with a similar plea of not guilty to a charge of polluting waters.

Control

33. It is therefore clear that the central issue in this case involves an analysis of the relationship that existed between the builder and the appellant. If the appellant exercised a sufficient level of control over the actions of the builder then the pollution caused by the builder can properly be attributed to the appellant. Similarly, if the appellant exercised control or management over the site then s 257 of the PEO Act deems him to be responsible for the pollution that occurred on 11 March 2000.

34. However, if the Court is not satisfied that the appellant exercised a sufficient level of control over the builder then the offence will not have been made out and the appellant would be entitled to an acquittal.

Findings

35. Clause 7(c) of the contract substantially restricted the appellant's rights of control over the builder. However, other provisions of the contract also show a clear distinction between the rights and responsibilities of the two parties at the site.

36. Pursuant to cl 4 of the contract the responsibilities of the appellant prior to commencement of the work was limited to producing documentary evidence of title and his capacity to pay to the builder the contracted sum. Pursuant to cl 7 the builder was to have 'exclusive and uninterrupted possession' of the site. Pursuant to cl 8 of the contract the builder was to supply all materials to be used in the works and pursuant to cl 9 any demolished materials became the property of the builder. Pursuant to cl 17 of the contract the builder was obligated to insure the appellant against liability relating to workers compensation and injury to persons or damage to property at the site. Pursuant to cl 27 the appellant executed a charge over the parcel of the land on which the works were to be erected with the payment owed under the contract.

37. Upon no construction of the contract can it be said that the actions of the builder when carrying out the contracted works could be attributed to the appellant. Rather, a more consistent construction of the terms of the contract is that the acts of the builder at the site were to be free of the control of the appellant.

38. The Court is therefore satisfied that the appellant did not exercise the degree of control over the site that would satisfy the definition of 'occupier' pursuant to the PEO Act or render the appellant liable under the accepted legal principles of vicarious liability.

39. The council has submitted that the appellant became the occupier of the nature strip outside the site because the builder had deposited the pile of sand which caused the pollution upon such land. However, if the appellant is not able to be characterised as an occupier of the site, it would strain the interpretation of s 257 of the PEO Act to suggest that he was an occupier of the nature strip. The fact that a breach of council's conditions applicable to the development of the site had occurred is irrelevant to the issue of liability in respect of a statutory criminal offence under the PEO Act.

Non-delegable duty

40. The council submitted that even if the appellant could not be held responsible for the acts of the builder under the general principles of vicarious liability, he should be held responsible since the requirement to maintain sediment control was a direct legal responsibility vested in the appellant and was not delegable to the builder: Rao v Canterbury CC.

41. Section 125 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") provides that it will be an offence against that Act to fail to comply with the conditions of a development consent. Thus, whilst the appellant was under an obligation to maintain adequate sediment control at the site, such obligation was imposed upon the respondent by operation of the EP&A Act. The failure to maintain adequate sediment control therefore made the appellant liable to a prosecution under s 125 of that Act but it did not create a non-delegable duty to ensure that, in a relationship in which he had no legal control over his contractor, the contractor commit no offence under the PEO Act: see also EPA v Multiplex.

The conviction

42. The conviction must be quashed. The appellant, on appeal, has adduced evidence which has resulted in the prosecutor failing to discharge the onus of proof. The appellant's evidence was not adduced at the second hearing at the Ryde Local Court.

43. Because of the failure of the appellant to attend at Ryde Local Court on two successive occasions it is understandable that Magistrate O'Shane considered that the appellant had no defence to the charge and was simply prevaricating.

44. As a further ground for quashing the conviction the Court follows the principle referred to in Wentworth v Rogers (No 3).

Conclusions

45. The council has not discharged the onus of proving causation as a matter of fact. The Court is satisfied that the appellant was in fact neither an 'occupier' of the premises pursuant to s 257 of the PEO Act nor a principal to whom the actions of the builder could be vicariously attributed. The Court is satisfied that the council has therefore not proved that the appellant caused the pollution of waters on 11 March 2000 beyond a reasonable doubt.

Orders

46. Accordingly the Court orders:-

1) The appeal be upheld. 2) The conviction recorded by Magistrate O'Shane on 8 March 2001 be quashed. 3) The orders of Magistrate O'Shane imposing a fine of $12,500, court costs, witness expenses and professional fees are set aside. 4) The charge be dismissed.

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