CSR Ltd v Environmental Protection Authority

Court of Criminal Appeal (NSW)|2000-02-07|Before: Spigelman CJ, Hulme J, Smart AJ, Pearlman J

CITATION : CSR Ltd v Environmental Protection Authority [2000] NSWCCA 373 FILE NUMBER(S) : CCA 60448/1999 HEARING DATE(S) : 7 February 2000 JUDGMENT DATE : 20 September 2000

PARTIES : CSR Limited trading as CSR Woodpanels v Environmental Protection Authority JUDGMENT OF : Spigelman CJ at 1; Hulme J at 2; Smart AJ at 9

LOWER COURT JURISDICTION : Land & Environment Court LOWER COURT FILE NUMBER(S) : 50080/1997 LOWER COURT JUDICIAL Pearlman J OFFICER :

ENVIRONMENT PROTECTION AUTHORTY (EPA) - v - CSR LIMITED trading as CSR WOODPANELS (CSR)

JUDGMENT 1 SPIGELMAN CJ: I agree with Smart AJ. 2 HULME J: In this matter, I agree with Smart AJ as to the answers to be given to the questions posed in the stated case. 3 In respect of questions (a), (c) and (d), I agree also with His Honour's Reasons. 4 So far as question (b) is concerned, it is sufficient in my view to record the following. 5 The matter came before Pearlman J by way of two Notices of Motion, one by the Appellant seeking an order that the proceedings be struck out on the basis that the Respondent had failed to provide particulars in accordance with the order of 18 December 1997 and the second by the Respondent seeking an order that the Summons be amended in the respects to which Smart AJ has referred. 6 The issue as to whether Section 6(1) of the Environmental Offences and Penalties Act 1989 as amended creates an offence which is or may be constituted by continuing conduct arose as an incident of the Appellant's argument under these Notices of Motion. Having identified the issue, Her Honour simply declined to determine the issue, taking the view it was preferable that it be left to the trial judge. 7 That in my view was a course properly open to Her Honour given the nature of the applications before her. 8 I agree with Smart AJ concerning the topic of costs. 9 SMART AJ: CSR appeals by way of case stated against a number of interlocutory decisions by Pearlman J as to amendment of the Summons, the supply of particulars and the nature of the offence charged. 10 By its summons of 1 August, 1997 EPA charged that CSR had "committed an offence against Section 6(1) of the Environmental Offences and Penalties Act 1989, as amended, in that it did, without lawful authority, negligently cause a substance to leak in a manner which harmed the environment." 11 The summons contains these particulars of the substance "Liquid from the effluent/settling pond known as 'Blue Lagoon' containing chemical substances including formaldehyde, bicarbonate, carbonate and high ammonia." The summons alleged that CSR knew, or ought to have known that the "Blue Lagoon" would have leaked the substances mentioned. The summons contained particulars of the environmental harm alleged to have occurred. These included the pollution of a natural spring located on an adjacent property, pollution of waters in Rifle Range Creek and pollution of the ground water between the Blue Lagoon and Rifle Range Creek. It is unnecessary to repeat the other particulars. The summons also sought an Order under S.14 of the Act (restoration, prevention and compensation). 12 By letter of 17 September, 1997 the EPA responded to a request for particulars as follows: "EPA contends that CSR was responsible for the operation of the Blue Lagoon and that as part of its management practices it pumped/placed effluent into the Blue Lagoon when CSR knew or ought to have known that the Blue Lagoon was insufficiently impervious and so would leak. Pumping/placing has occurred since the Blue Lagoon's construction in or about 1980 and evidence indicates leaks occurred at least since 1992. EPA is unable to specify particular dates of the leaks or when environmental harm occurred but relies on ss.12(2) and (3) of the EO & P Act 1989 for the latter." 13 In response, CSR's solicitors wrote to EPA on 7 October, 1997, amongst other things: "Acts of CSR said to have caused the leak".

"We understand from the particulars supplied that the negligent acts alleged by the EPA are that CSR, on a number of separate and unidentified occasions, pumped or otherwise placed effluent into the Blue Lagoon ('the Acts') in circumstances where CSR either knew or ought to have known, on each of those separate occasions, that the Blue Lagoon was insufficiently impervious to receive the effluent and that consequently, it would leak ('the Negligence')." 14 Pearlman J, in her judgment of 18 December, 1997 wrote: "In that same letter, the defendant's solicitors drew some further conclusions from particulars already supplied, and then, stating that the particulars provided by the EPA still left some questions, unanswered, they sought some further particulars. In summary, they asked: (a) whether it was alleged that the defendant had actual or constructive knowledge that the Blue Lagoon was insufficiently impervious; (b) in respect of actual knowledge, who on behalf of the defendant had that knowledge, when that person had that knowledge, and what information formed the substance of that knowledge; and (c) in respect of constructive knowledge, who on behalf of the defendant had that knowledge, when that person had that knowledge, what was the substance of the information that person ought to have known, and what were the facts, matters and circumstances by which that person ought to have known the relevant matter." 15 The judge continued: "The prosecutor replied on 31 October, 1997. It stated that the defendant's solicitors' statement headed 'Acts of CSR said to have caused the leak' quoted above was correct. It also confirmed that the date or dates on which the defendant is alleged to have caused the leak was the period beginning 1980. In reply to the further questions, it stated that those questions were a matter of evidence but it nevertheless furnished some further particulars. In summary, those particulars were: i. Leaks may have occurred at any time during the operational life of the Blue Lagoon and there is evidence that leaks were happening in 1992; ii. The relevant knowledge was that the Blue Lagoon was insufficiently impervious to receive effluent placed in it and as a consequence would leak. The prosecutor's allegation is that the Blue Lagoon was poorly constructed and was of high permeability; iii. As to actual knowledge, since 1992 managers of the defendant had the relevant knowledge; and iv. As to constructive knowledge, from the date of its construction, the management of the CSR Tumut site ought to have known and since 1992 did in fact know that the Blue Lagoon would leak." 16 After a discussion of the principles as to the supply of particulars, the judge held that the particulars supplied were inadequate in two respects and ordered the EPA to provide to CSR answers to its request for particulars of: (1) the date or dates when the acts or omissions alleged to constitute CSR having negligently caused a substance to leak in a manner which harmed the environment occurred; and (2) the facts, matters and circumstances by which the person or persons who managed the defendant's Tumut site ought to have known that the Blue Lagoon was insufficiently impervious to receive effluent and that, consequently, it would leak. 17 This Court dismissed EPA's appeal against that order. By letter dated 9 February 1999 EPA responded to paragraphs 1 and 2 of the order thus: "1. From 1992. The EPA alleges that the offence was a continuing one from 1992 until the decommissioning of the Blue Lagoon. 2. The EPA alleges that from 1992 CSR became aware that the Blue Lagoon was insufficiently impervious to receive effluent. At that time, CSR became aware that the Blue Lagoon was leaking effluent and failed to take any or any sufficient steps to prevent the reception of further effluent into the Blue Lagoon and the leaking of effluent from the Blue Lagoon. The EPA refers you to Annexures H and I to the affidavit of Robert Monteith sworn 24 October 1996." 18 The judge recorded that as to para. (1) the particulars now furnished reveal a change from those originally given and that EPA now claims a continuing offence rather than negligent acts occurring on a number of separate and unidentified occasions. The EPA by its counsel, acknowledged before the judge and in this court that the particulars furnished to CSR by letter of 7 October 1997 were imprecise and may have been confusing. It was no longer basing its case on those particulars. 19 Before the judge CSR contended that the offence created by s 6(1) of the EO & P Act 1989 cannot be correctly interpreted as a continuing offence. Thus the EPA could not furnish particulars of a continuing offence which would be relevant to the pending prosecution. (See para 16 of Stated Case). 20 The judge declined to determine whether an offence under s 6(1) could be a continuing offence or to define precisely what a continuing offence was. She held that these were questions for the trial judge to decide upon all the evidence adduced at the trial. 21 As to the allegation of "negligently causing a substance to leak" the judge noted that the EPA had now stated that, from 1992 and continuing until the Blue Lagoon was decommissioned CSR, intermittently as part of its continuing manufacturing process, placed or pumped effluent into the Blue Lagoon when the Blue Lagoon was leaking and in circumstances where it failed to prevent that leak. She pointed out that it was not the placing of the effluent into the Blue Lagoon which constituted the offence. That was only part of the circumstances. She held that the EPA had now furnished adequate particulars and the date upon which the offence commenced and the period during which it continued. The EPA had complied with order 1 made by the judge on 18 December 1997." 22 As to para 2 of that order (which required particulars to be supplied of the basis of constructive knowledge of imperviousness) the judge noted that the EPA alleged that CSR by the managers of its Tumut premises became aware that the Blue Lagoon was leaking from 1992 and "failed to take any or any sufficient steps to prevent the reception of further effluent into the Blue Lagoon and the leaking of effluent from the Blue Lagoon. EPA relied on identified documents provided by CSR to an officer of the EPA in which it was stated that the Blue Lagoon "has proven to leak effluent into the adjacent earth" and "[T]he aim is to eliminate this dam." The judge held that the EPA had "accordingly furnished an adequate response to the second order … on 18 December 1997." 23 The EPA sought to amend its summons by adding the words "or was likely to harm" so that it read: " … in that it did … negligently cause a substance to leak in a manner which harmed or was likely to harm the environment." 24 The reason for the amendment lay in a report produced by CSR in response to a Notice to Produce. That report contained an estimate that ground water flow rates from CSR's Tumut premises "would have a travel time of between 2.5 - 12 years." The EPA was concerned that CSR might argue that the pollution from the Blue Lagoon had not within the period from 1992 to 1994 reached the points where samples had been taken. 25 The judge held that s 6(1) penalised the one act which possessed one or both of two forbidden characteristics (harming or likely to harm the environment). She said: "The act which is penalised is the negligently causing of a substance to leak, and that is a single act, which in this case has been charged …"

… The single act remains unlawful whether it harmed the environment or whether it was likely to harm the environment." 26 The judge accordingly rejected CSR's submission that the proposed amendment, if granted would result in a summons (or charge) which was bad for uncertainty or duplicity. She rejected the further submission that the amendment would allege an offence outside the 12 months statutory limitation period as no new offence was being charged. She also rejected CSR's submission that she should not grant leave to amend taking into account the expansion of the offence which the amendment would bring about and the proceedings having been on foot for almost two years. She stated that the proceedings were in an early stage despite the lapse of almost two years, CSR had not yet pleaded to the charge, no directions had been given as to the filing and service of any evidence of CSR and the proceedings had not been set down for hearing. The EPA's desire to amend arose out of a document in CSR's possession produced by it in response to a Notice of Produce. 27 With this background I turn to the questions asked in the Case Stated. 28 Question (a) - Amendment of Summons 29 This reads: Did I err in permitting the prosecutor to amend the summons so as to add the words "or was likely to harm" after the word "harmed" in paragraph 1 of the summons. 30 CSR submitted that the effect of the amendment is to produce a summons (or amended summons) which is bad for duplicity as it would charge two offences. CSR contended that the language of s 6(1) compels the conclusion that the prohibited conduct is that of negligently causing a substance to leak in a particular manner, one being that which harms the environment and the other that which is likely to harm the environment and that separate offences were thereby created. 31 In amplification, CSR submitted that the former offence was complete upon harm being caused whereas the latter was complete upon the substance leaking in a particular manner. Consequently, two different limitation periods should be applicable (see EPA v Bathurst City Council (1995) 89 LGERA 79 at 82-83) but a rolled up charge prejudices a defendant by removing the distinction. It was further submitted that evidence admitted on the issue whether the escape was "likely to harm" was unlikely to be admissible on the issue whether the escape harms the environment which may work to the prejudice of the defendant facing a rolled up charge. CSR contended that the different elements of each offence required separate treatment. CSR further contended that the amended summons rolled up in the one count, two allegations of conduct of very different levels of criminality and that the offence of causing a substance to leak in a manner which harms the environment is more serious. 32 CSR emphasised that the judge accepted that the charge as amended extended the scope of the evidence and put a different light on the case which it had to meet. It also emphasised that it would not now be open to EPA to add a second count to the summons based on the element of "likely to harm" because of the limitation provision: s 12(a) of the EO & P Act; s 216(2)(a) of the Protection of the Environment Operations Act 1997 ("The Protection Act"). 33 I disagree that the amended summons charges two offences. I agree with the judge that there was one offence and that it penalised one act (negligently causing a substance to leak) which possesses one or both of two forbidden characteristics. I would follow this statement of principle by Bray CJ in Romeyko v Samuels (1972) 19 FLR 322 at 345: "The time distinction, broadly speaking, … is between a statute which penalises one or more acts in which case two or more offences are created and a statute which penalises one act if it possesses one or more forbidden characteristics. In the latter case there is only one offence whether the act under consideration in fact possesses one or several such characteristics. Of course, there will always be borderline cases …" 34 In Bowling v General Motors-Holden Pty Ltd (1975) 8 ALR 197 at 218 Woodward J said: "Provided only a single act is charged, alternative or cumulative allegations as to the circumstances making it unlawful will not render it bad for uncertainty or duplicity." 35 There is a close connection between the concepts of a leak harming the environment and a leak likely to harm the environment. Frequently, the leak of the polluting substance will do both. Initially, on the leak occurring it will be likely to harm the environment and then it will do so, albeit that there is a time delay. In some cases it will be difficult to determine whether the leak of the polluting substance has reached the second stage of causing harm. 36 While in some cases two different limitation periods may be applicable those cases in which the difference will be significant are likely to be rare. In the circumstances of the present case I would not regard this point as determinative. I do not agree with CSR's submission that the evidence on the issue of likely to harm the environment would not be admissible on the issue of harming the environment. The fact that a leak is likely to harm is probative to some extent of the issue of harming the environment. The former is often the first step towards the latter. 37 I do not accept that a leak which harms the environment and a leak which is likely to harm the environment necessarily involve very different levels of criminality. Everything is likely to depend on the particular facts. Not infrequently, the likely to harm" stage will occur at an earlier point of time than the harming the environment stage. 38 Given the early stage of the proceedings and the fact that the amendment arose out of documents produced by CSR in answer to a Notice to Produce the complaints that the amendment extends the scope of the evidence and puts a different light on the case should not result in the refusal of the amendment. The essential subject matter remains, namely, causing a substance to leak. It is alleged that the Blue Lagoon leaked and that this was known. Notwithstanding, CSR continued to place substances in the lagoon. The judge did not err in permitting the amendment. 39 Question 4(b) - Continuing offence

This reads: Did I err in failing to determine that the offence with which the defendant is charged, as particularised by the prosecution, cannot be a continuous offence? 40 CSR submitted that the judge erred in refusing to decide that the offence charged, as it was particularised, could not be a continuing offence. This was because the offence as particularised could not be constituted by continuous activity and does not involve disobedience to a statutory obligation to do some act. 41 As earlier mentioned, the particulars furnished reveal that the EPA's case was that from 1992 CSR became aware that the Blue Lagoon was insufficiently impervious to receive effluent and was leaking effluent and that CSR failed to take any or any sufficient steps to prevent the reception of further effluent into the Blue Lagoon and the leaking of the effluent from the Blue Lagoon. It was the leaking which was critical. 42 CSR attached importance to the alleged activity of placing effluent in the Blue Lagoon. It contended that the alleged "negligently causing" depended upon it carrying out some activity and that activity was placing the polluting substance in the Lagoon. However, the offence alleged focuses on the leaking or perhaps more correctly negligently causing any substance to leak. The element of negligently causing is, in the context of s 6(1) satisfied by the appellant using a storage area which it knew was not impervious and leaked. I have not overlooked the discussion of 'causing' in Environment Agency v Empress Car Co. 1998 2 WLR at 355 & following. 43 The EPA would face considerable difficulties in pin pointing when effluent was placed in the Blue Lagoon or establishing individual leaks. They would be hard to see or detect. With earth lagoons leaks tend to be gradual as the effluent works its way through the earth or soil in sufficient quantities to harm or be likely to harm the environment. This is a continuing and often slow process. The EPA has taken the practical course in formulating its case of relying upon statements in CSR documents as to leaking of effluent occurring from 1992 and the failure of CSR to stop such leaks. 44 In Hodgetts v Chiltern District Council (1983) 2AC 120 at 128 Lord Roskill, with whom the other members of the House agreed, said: "It is not an essential characteristic of a criminal offence that any prohibited act or omission, in order to constitute a single offence, should take place once and for all on a single day. It may take place whether continuously or intermittently over a period of time." 45 In Walsh v Tattersall (1996) 188 CLR 77 at 91 Gaudron & Gummow JJ indicated that an offence could be defined in terms of a course of conduct or state of affairs. At 107 Kirby J recognised that conduct which need not, but in some circumstances might, be constituted by activity over time could be charged in a single count. 46 The EPA pointed out that conduct which literally continues without a break, such as failing to pay wages (R v Industrial Appeals Court (1965) VR 615) and conduct and a result which continues over a period of time, for example, failing to submit a report to the liquidator (Ganke v Corporate Affairs Commission (1990) 19 NSWLR 449 may constitute a continuing offence. 47 In EPA v Bathurst City Council (1995) 89 LGERA 79 Hunt CJ at CL at 85-86 accepted that environment offences could be continuing offences. CSR did not dispute that proposition. 48 The EPA relied on a series of cases to support the proposition that where the offending conduct of offences is described as "caused" or "causing" the offences can be continuing offences. They included Kirkheaton District Local Board v Ainley Sons & Co (1892) 2QB 274 at 281, 283; Butterworth v West Riding of Yorkshire Rivers Board (1909) AC 45 at 53; Alphacell v Woodward (1972) AC 824; Environment Agency v Empress Car Co. (Supra) and Majury v Sunbeam Corporation Ltd (1974) 1 NSWLR 659. These authorities are directed to the meaning of "caused" or causing in various statutory contexts. Attempts to give those words a restricted or narrow meaning failed. The underlying facts revealed continuing activity and thus a continuing offence. However, there was no debate and no discussion as to whether the offences were continuing offences. Those cases are of little assistance. 49 The EPA submitted that the offence created by s 6(1) has as its premise that the leak, spill or escape of the substance will take place over a period of time. That puts the matter too highly. Some spills, for example, may happen quickly and be over in a few minutes. On the other hand it would be anomalous if, when there was a long slow leak with consequent slow permeation of the surrounding earth or water or both, there was not a continuing offence but a series of offences. Of course there could be a continuing slow leak if the quantities of effluent in the lagoon were replenished on a regular basis or from time to time. 50 The EPA submitted that ss 9(a) and 14(1) of the EO & P Act supported the view that s 6(1) created continuing offences as well as discrete offences. The EPA relied upon the provision in s 9(a) that the extent of the harm be taken into account. I do not find this to be a persuasive argument. The penalty provisions do not drive the liability or offence provisions. The EPA relied on the power in s 14(1) of the Court to order the person convicted to take specified steps to prevent the continuance of the offence. While not a strong factor this provision tends to suggest that an offence under s 6(1) may be a continuing one. 51 The EPA's case was that CSR engaged in a course of continuing conduct both by way of negligent act (continuing to pump or place effluent in the Lagoon) and negligent omission (failing to take any steps to rectify or rectify adequately what was apparent to it, ie, the lagoon was leaking). The EPA cannot say whether the leaking occurred as frequent episodes or as an uninterrupted flow. 52 Having regard to the subject matter and language of s 6(1) offences under that provision can be continuing offences. The provision applies to a wide variety of circumstances. In some instances the leaks can be expected to be prolonged and slow. The permeability of ground may, for example, be poor. Further, the alleged offence as particularised is capable of being a continuing offence. 53 The final determination whether the offence particularised is a continuing one must await the trial and the completion of the evidence. 54 Question (c) - Particulars 55 This reads: Did I err in failing to hold that the particulars as to the date of the offence provided by the prosecutor (from 1992) were inadequate for the offence charged if it could not properly be characterised as a continuous offence? 56 CSR renewed its submission that the offence as charged and particularised was not a continuing offence. It submitted, in the alternative, that even if the summons properly charged a continuing offence the particulars were inadequate and that further and better particulars should be supplied. CSR submitted that it was entitled to know in substantially more detail than had been particularised the nature of the continuing charge. This submission applies with even greater force to the next question. 57 The EPA does not know and cannot further particularise the precise date or precise period during which the offence was committed. The evidence on which it can rely as to dates and knowledge of the leak comes from documents emanating from CSR and its officers. 58 Question (d) 59 This reads: Did I err in holding that the prosecutor has furnished the further particulars which I ordered to be provided on 18 December 1997? 60 I have earlier set out the orders and the replies (see paras 8 & 9). 61 CSR submitted that whether or not the offence charged was a continuing offence, it was unfair to it to particularise the date of the alleged offence as "from 1992". CSR relied on this passage from the earlier decision of this Court in this matter (1998) 45 NSWLR 357 at 360-361 relating to the supply of particulars of the charge. Hidden J, with whom McInerney & Ireland JJ agreed, said: "Those particulars would normally include the date or dates on which the offence is alleged to have been committed: Ex parte Bignell (1915) 32 WN (NSW) 91 at 92-93 per Ferguson J. In some cases the date may be of little significance, but in others it might be crucial to the preparation of the defendant's case." 62 CSR contended that the date was crucial to the preparation of its case. It submitted that the offence turned on the quality of its conduct at a particular time and that the statutory defence in section 7 of the EO & P Act cannot comprehensibly be considered in the absence of proper particulars of the date of the alleged offence. Section 7 provides that it is a defence for the defendant to prove that the commission of the offence was due to causes over which it had no control and that it took reasonable precautions and exercised due diligence to prevent the commission of the offence. 63 CSR submitted that the EPA should be directed to provide particulars of: (i) the acts of CSR said to have negligently caused the leak; (ii) the omissions of CSR said to have negligently caused the leak; (iii) the date or dates of the acts referred to in (i); (iv) the date or dates of the omissions referred to in (ii). 64 The EPA contended that the answers it had supplied effectively covered these matters. The EPA contends that the Blue Lagoon was used by CSR when it was not impervious and that CSR failed to rectify the leaking adequately - see paragraph 43. The EPA is dependant for dates upon the material supplied by CSR, that is, that it was aware from 1992 until the decommissioning of the Blue Lagoon that it was leaking. The matter is relatively simple. Effluent should not be pumped into the Lagoon when it is known that it leaks. If it is desired to continue to use the Lagoon the leak must be stopped. This can no doubt be done in a number of ways including making the sides and bottom of the Lagoon impervious. 65 The judge was right not to order further particulars. 66 Pursuant to previous directions given by the Land & Environment Court the EPA has served CSR with the principal affidavits upon which the EPA proposes to rely. This is in accordance with the procedures often adopted by the Land and Environment Court. CSR now knows the case and the evidence which it has to meet in some detail. 67 The court has not seen the affidavits filed by the EPA, the report which led to the application to amend the summons, and the documents handed by officers of CSR to the EPA including annexures H and I to the affidavit of Robert Monteith of 24 October 1996 referred to in the particulars supplied. The court was not provided with a copy of the letter of 19 March 1999 from CSR's solicitor to the EPA. The court has therefore not directed its attention to the alternative submission of CSR that the court should direct the prosecutor to supply the particulars requested in that letter. Notwithstanding this, the issue of particulars has been well canvassed. The principles enumerated in Johnson v Miller (1937) 59 CLR 469 and Stanton v Abernathy (1990) 19 NSWLR 656 have been kept steadily in mind. The judge does not refer to the letter of 19 March 1999. Apparently, it was written after she heard the applications. 68 CSR complained that the EPA had at no times provided particulars of the manner in which the conduct of the defendant was "likely to harm" the environment. The EPA responded that CSR had never sought such particulars but that in any event the Amended Summons contained such particulars. This Court has not seen the Amended Summons. This is a matter which is better left to the judge rather than being agitated on appeal for the first time. 69 The submissions of both parties contained much extraneous material. The court has preferred to confine its attention to the case stated and the annexed judgments. 70 Costs 71 After judgment was reserved a written submission was received from the EPA seeking an order for costs if the Court did not answer each of questions 4(a) to 4(d) in the affirmative. 72 In response CSR submitted that if all the questions were answered in the negative the EPA should be ordered to pay costs and that if only some questions were answered in the negative the court should make no order as to costs. The words "the negative" seem to be a slip and should read "the affirmative", that is, in CSR's favour. That is how I have read them. While this Court did deal with and answer the questions whether the offence as charged and particularised was capable of being a continuing offence it answered each of the actual questions in EPA's favour. There is no good reason why costs should not follow the event. CSR should pay EPA's costs of the Case Stated. 73 Each of the Questions asked in the Case Stated should be answered in the negative and the case remitted to the Land & Environment Court with that expression of opinion. CSR is ordered to pay the costs of the EPA of the Case Stated.

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Judgment (10 paragraphs)

Parties

Cases Cited (9)