DPP v Italiano & Anor

1. SKM Services Pty Ltd ('SKM') was a proprietary company which occupied 90-110 Maffra Street Coolaroo Victoria, with Robert Italiano ('Mr Italiano') operating as the sole director of SKM. It is understood that SKM is in receivership/liquidation and will not appear at trial.
2. SKM operated a business which processed recycled materials, including paper, plastic, metal, aluminium and glass.
3. Prior to the alleged events which make up the basis of the charged offences, on 28 February 2017 a fire had broken out at SKM which significantly damaged one of the buildings. The result of this damage was that SKM's capacity to process recycled materials was reduced, and subsequent to the fire the volume of recycled materials stored on the property increased significantly.
4. On 13 July 2017, a fire broke out within a rubbish heap and the Metropolitan Fire Brigade ('MFB') was notified. The rubbish heap covered 25,000 square meters and spread across multiple holding yards at the SKM facility. The rubbish heap was made up of a mixture of paper, plastics, scrap metal, glass and food scraps, these materials being both loose and in bails which had been stacked.
5. The fire spread rapidly due to strong winds and became out of control. The fire was declared under control approximately 48 hours after it began, however the fire continued to burn for several days, and was only fully extinguished after approximately 10 days.
6. A state-wide emergency management response was triggered in response to the fire. The Environment Protection Authority ('EPA'), MFB, and other State agencies assisted during the fire, including Victoria Police, Ambulance Victoria, Hume City Council and the State Emergency Service ('SES').
7. The result of the fire was, amongst other things, a considerable amount of smoke in the air which spread into nearby areas. EPA air-monitoring equipment revealed that the smoke contained PM 2.5 particles, exceeding the national air quality standard of 25ug/m^3.
8. In the opinion of Dr Martina Dennekamp, it is highly likely that exposure to PM 2.5 particles from the 13 July 2017 fire was harmful to human health. Similarly, Dr Mohammednoor Alwneh opines that the detected levels of PM particles were much higher than safe limits, and that there were health impacts to those exposed to it.
9. Several residents in the area around Dallas were evacuated from their homes, and witnesses reported a variety of health impacts.
10. SKM,[1] and Mr Italiano,[2] have been charged with five offences under the EP Act, namely:

(a) Pollution of the atmosphere so as to make it noxious or offensive;[3]

(b) Polluting the atmosphere so as to make it harmful to health;[4]

(c) Polluting the atmosphere so as to make it detrimental to any beneficial use;[5]

(d) Permitting an environmental hazard;[6] and

(e) Aggravated pollution.[7]

1. Mr Livermore submits that Charges 1-3 on the indictment are laid pursuant to s 66B of the EP Act. By this means, if a corporation contravenes, by act or omission, any provision of the EPA, the corporation's director is also guilty. Whilst Charges 1-3 on the indictment allege breaches of s 41(1), these breaches are said by the prosecution to be breaches made by the corporation the liability for which can be sheeted home to Mr Italiano as director by operation of s 66B.
2. Mr Livermore submits that s 66B operates only where the contravention of any provision of the EP Act is by an identified act or omission of the corporation, in this case SKM.
3. He argues that the prosecution does not identify in Charges 1-3 an act or omission of the corporation SKM which enlivens the operation of s 66B.
4. He also argues that s 66B(1) of the EP Act is not invoked in this case as a consequence of the prosecution's decision to rely on s 62C of the EP Act which relieves the prosecution of the burden of demonstrating an act or omission by SKM.
5. Section 62C provides:

If any segment or element of the environment is polluted as a result of a discharge, emission or deposit of any substance from or on any premises on which there is conducted any commercial or industrial undertaking, the occupier of the premises is deemed to have polluted that segment or element of the environment unless the occupier proves that the discharge, emission or deposit was unrelated to the commercial or industrial undertaking.

6. Mr Livermore submits that the manner in which the prosecution puts its case against SKM involves no allegation that any act or omission on the part of SKM caused the fire that caused the smoke that caused the pollution. He argues that the prosecution case is one whereby the actus reus of Charges 1-3, namely causing the pollution, is deemed by operation of s 62C.
7. That deeming provision renders the occupier liable for pollution that occurs on the premises used by the occupier for industrial purposes unless he can demonstrate that the act causing the pollution was unrelated to his commercial or industrial undertaking.
8. Mr Livermore contends that the prosecution's Charges 1-3 do not require proof of an act or omission because of the reliance by the prosecution of s 62C and where no act or omission is identified by the prosecution or necessary to its proofs s 66B cannot be engaged.
9. Where s 66B is incapable of being engaged, the statutory reverse-onus defences in s 66B(1A) cannot be engaged.
10. Section 66B provides:

(1) If a corporation contravenes, whether by act or omission, any provision of this Act or a notice or a licence or permit under this Act, each person who is a director or is concerned in the management of the corporation is also guilty of the offence which relates to the contravention and liable to the penalty for that offence. > > (1A) It is a defence to a charge brought under subsection (1) against a person who is a director or is concerned in the management of a corporation if that person proves that - > > (b) the person was not in a position to influence the conduct of the corporation in relation to the contravention; > > (c) the person, being in such a position, used all due diligence to prevent the contravention by the corporation; or > > (d) the corporation would not have been found guilty of the offence by reason of its being able to establish a defence available to it under this Act.

11. Charge 1 on the indictment alleges a contravention of s 41(1)(a) of the EP Act by polluting the atmosphere so as to make it noxious or offensive to the senses of human beings. Charge 2 alleges a breach of s 41(1)(b) of the EP Act by polluting the atmosphere so as to make it harmful to the health of human beings. Charge 3 alleges a contravention of s 41(1)(e) of the EP Act by polluting the atmosphere so as to make it detrimental to any beneficial use of the atmosphere.
12. The particulars relied on for charges 1-3 are almost identical, save for particular (h) in each charge, which replicates the specific sub-division pursuant to which each charge is laid. Charge 1 reads as follows:

CHARGE 1 The Director of Public Prosecutions charges that SKM SERVICES PTY LTD (ACN:130 867 220) at Coolaroo in Victoria between the 13th day of July 2017 and 15th day of July 2017 did pollute the atmosphere so that the condition of the atmosphere was so changed as to make, or be reasonably expected to make, the atmosphere noxious or offensive to the senses of human beings. > > Particulars: > > a) At all material times the Accused was a body corporate. > > b) At all material times the Accused occupied the Premises located at 90-110 Maffra Street Coolaroo ("the Premises"). > > c) At all material times the Accused undertook a commercial enterprise from the Premises relating to the collection and handling of large amounts of recyclable materials. > > d) On or around 13 July 2017, a large fire occurred at the Premises. > > e) The fire took several days to be brought under control. > > f) The fire burned through the recyclable materials that were handled and stored at the Premises. > > g) Large amounts of smoke were generated by the fire, resulting in pollution of the atmosphere. > > h) The pollution of the atmosphere was noxious or offensive to the senses of human beings.

13. Mr Livermore relies on Director of Public Prosecutions v Hazelwood Pacific Pty Ltd and Ors (Ruling 4) as authority for the proposition that the acts or omissions constituting the offence under s 41(1) of the EP Act are those alleged to have caused the pollution.[8] Where causation is deemed, the actus reus is deemed to have been proved, not by an act or omission but by operation of the deeming provision.[9]
14. Keogh J in Hazelwood Ruling 4 says, relevantly:

In order to rely on s 62C the prosecution must prove that the atmosphere is polluted, that the pollution was as a result of a discharge, emission or deposit from or on premises on which there is conducted a commercial or industrial undertaking, and, that the accused is the occupier of the premises. If those matters are proved, an accused is deemed to have polluted the atmosphere, and the offence created by the substantive provision is complete, unless the accused proves the discharge, emission or deposit was unrelated to the undertaking conducted on the premises. > > The purpose of s 62C is to assist with prosecutorial proofs, and to make the occupier of premises on which an industrial or commercial undertaking is conducted responsible for an emission of pollution on or from the premises. Consistent with that purpose, in order for the deeming provision to operate it is not necessary to prove that the accused caused or permitted the pollution, conducted the undertaking, was aware of the manner in which it was being conducted or the risk of pollution which might eventuate. The effect of s 62C is to deem the actus reus of the offence. Because it is not relevant to consider whether the accused caused the pollution, the accused's state of mind, knowledge or belief as to whether an act or acts by it will or may cause pollution does not relate to the matter to be proved to establish the offence.[10]

15. I note that the prosecution in Hazelwood Ruling 4 relied on alternative bases for making out the charges laid under s 41 and in Hazelwood Ruling 2 the court held that there was nothing to prevent the prosecution from relying on s 62C as an alternative to demonstrating, in accordance with s 41, that the accused caused the pollution.[11] That situation is different to the one here where the prosecution does not assume the obligation of demonstrating causation.
16. Mr Livermore relies on Kirk v Industrial Relations Commission of New South Wales,[12] as establishing the principle that in cases which have reverse onus defence provisions, there is an obligation on the prosecution to identify with precision the act or omission alleged to have constituted the contravention so as to enable the accused to engage the defence provisions.
17. He contends that the failure of the prosecution to identify what the corporation did or failed to do in this case prevents Mr Italiano from demonstrating, for example, that he was not in a position to influence the conduct of the corporation in relation to the acts or omissions constituting the alleged contravention. The prosecution, by availing itself of s 62C, has eschewed the obligation to demonstrate what acts or omissions produced the contravention. Similarly, he cannot demonstrate that he as director used all due diligence to prevent the contravention of the corporation if the prosecution has no obligation in making its case against him to identify or prove the acts or omissions said to constitute the contravention.
18. The case of Kirk was concerned with the requirement of an employer to ensure inter alia a safe workplace for employees and third-party visitors to the work site. An employee was killed whilst driving an all-terrain vehicle and a director was charged with similar offences to the corporation. The statement of offence did not disclose, amongst other things, what was deficient in the safety procedures adopted by the corporation.
19. Kirk dealt with breaches of the Occupational Health and Safety Act 1983 (NSW) ('The OHS Act'). Section 15(1) of the OHS Act required every employer to ensure the health, safety and welfare at work of all the employer's employees. Section 16(1) required every employer to ensure that persons not in the employer's employment were not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they were at the employer's place of work.
20. Section 53(a) made it a defence for a person charged with an offence to prove that it was not reasonably practicable to comply with the provision of the OHS Act the breach of which constituted the offence. Section 50(1) of the OHS Act provided that where a corporation contravenes any provision of the OHS Act, whether by act or omission, each director of the corporation, and each person concerned in its management, shall be deemed to have contravened the same provision unless he or she satisfies the Industrial Court that he or she was not in a position to influence the conduct of the corporation in relation to its contravention or, being in such a position, used all due diligence to prevent the contravention.
21. The High Court found that the statements of the offences as particularised did not identify what measures the Kirk company could have taken but did not take. They did not identify an act or omission which constituted a contravention of sections 15(1) and 16(1).
22. The statements of offences in that case did little more than follow the words of the sub-section. The High Court found that the statements of the offences in that case as particularised, "do not identify what measure the Kirk company could have taken but did not take. They do not identify an act or omission which constitutes a contravention of ss 15(1) and 16(1)."[13] The court held that a statement of an offence must identify the act or omission said to constitute a contravention of s 15 or s 16.
23. Mr Livermore says that the principle to be distilled from Kirk is that where an accused is deemed to be liable unless he avails himself of a reverse-onus defence, it is incumbent on the prosecution to particularise the acts or omissions constituting the contravention so that the defence provisions can be engaged. He says the same deficiencies in the way the charges have been laid and the inability to identify acts or omissions on the part of the corporation prevents the prosecution from relying on s 66B(1) and prevents the accused from invoking the defences in s 66B(1A).
24. Mr Livermore argues that if Parliament sought to automatically attribute liability to a director of a corporate offender against the EP Act where a deeming provision applies, it could have done so by removing the phrase "whether by act or omission" in s 66B(1) of the EP Act. In interpreting s 66B of the EP Act these words cannot be omitted or put to one side.

1. Mr Mandy with Ms Locke on behalf of the prosecution made the following submissions in relation to the construction of the EP Act and interpretation of the deeming provisions.
2. Construing any provision of the EP Act must be undertaken with its obvious, titled purpose central to the consideration. The principles of environmental protection (ss 1B to 1L) guide the administration of the EP Act.
3. The prosecution contended that the EP Act articulates a results-based statutory regime. It prescribes penalties for damaging the environment. It regulates, amongst other things, pollution. A focus is on big polluters: business and industry. As the definition makes clear, pollute 'includes causing or permitting pollution'. Polluting is an act.
4. The prosecution noted that s 41 of the EP Act is concerned with the pollution of the atmosphere by a person. Expressly, Parliament has said that the generality of s 41(1) is not limited in any way. It is an offence of strict liability, where the defence of honest and reasonable mistake may arise. Proof of an intention to pollute is not required, although proof of the acts or omissions may be required to prove, amongst other things, the identity of the alleged polluter.
5. The prosecution argued that if a substance is discharged, emitted, or deposited from or on any premises where a commercial or industrial undertaking is being conducted, the proof of any cause is unnecessary, because s 62C anchors the allegation to premises where a commercial or industrial undertaking is occurring, and deems the occupier, in this case SKM Services Pty Ltd, liable for it. It was submitted that Parliament placed a significant responsibility on occupiers of those kinds of premises and this was the reason the s 62C presumption was enacted.
6. The prosecution submitted that it is not the cause of the pollution that is deemed or presumed by s 62C, but rather the responsibility for it - because businesses and industry must be held liable for pollution emanating from their premises. Simply, to prevent liability under the section, occupiers conducting commercial and industrial activities must ensure that no pollution emanates from the premises. There is no defence if it does, unless the pollution was emitted independently of the commercial or industrial undertaking.
7. The prosecution submitted it would be an odd result if directors of occupying corporations, who have legal control and corporate responsibility for ensuring that no pollution from the premises occurs, cannot be held liable for the occupier's pollution unless the prosecution can prove the initiating cause of that pollution. Most often that root cause could never be discovered, and often remains opaque. That does not (and should not) prevent the occupier (which could be an individual) being held liable under s 62C, and if it is a corporation, its director under s 66B.
8. The prosecution identified the contravention by SKM for the purposes of s 66B as the pollution which was the discharge or emission of smoke from its premises (having particular s 41 effects). The cause of the discharge was a very large fire, which burnt through very large piles of paper, cardboard, and plastic. The act of contravention was the discharge, or emission of smoke and toxic chemicals. If a director, pursuant to s 66B(1A)(c) can prove that he used all due diligence as a director to prevent the discharge or emission of smoke from SKM's premises then he would be acquitted.
9. The prosecution highlighted that if Parliament had intended that where a director was charged with the contravention of their corporation, the prosecution must be required to prove the act or omission which was the root cause of the pollution, there are many ways that it could have made that intention clear, most obviously by saying so expressly. The words 'whether by act or omission' (emphasising the word 'whether') in s 66B, do no more than make clear that a corporation could contravene provisions of the EP Act by omission, as well as by positive acts.
10. The prosecution filed further written submissions specifying that the act for the purpose of s 41 of the EP Act is the discharge or emission of smoke from the premises (to the relevant extent) and the contravening act for the purposes of s 62C of the EP Act is the discharge or emission of smoke. Therefore, the act for the purpose of s 66B of the EP Act is the discharge and emission of smoke.
11. Section 62C of the EP Act requires an act, namely the discharge or emission of pollutants from the premises. Section 62C of the EP Act does not deem a cause for the pollution; rather it operates to deem the occupier of a premises on which a commercial or industrial activity occurs as having caused it (with the reverse onus defence available).
12. Section 66B of the EP Act also requires an act (or omission) of contravention, and for the purposes of this prosecution it is the same act. Where the occupier of a premises on which a commercial or industrial activity occurs is a corporation, s 66B of the EP Act operates to deem the director of that corporation personally responsible for the corporation's act of discharging or emitting the polluting substance(s).
13. The prosecution made the following observations about the historical construction of s 62C of the EP Act which illustrate the purpose of the EP Act, and the intention of Parliament in enacting of these provisions.
14. The starting point for construing s 62C is the actual words of the provision, read in light of the context in which the words are used and the purpose which they are intended to serve.[14] 'Context' also includes legislative history and extrinsic materials, although they cannot displace the meaning of the statutory text.[15] Further, context:

"...include[s] such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy..."[16]

15. Mr Mandy with Ms Locke submitted that where legislation contains a deeming provision, questions of construction generally turn upon the statutory purpose of the provision, including whether the legislature is intending to create a statutory fiction or whether it is merely making a provision for the removal of doubt which might otherwise exist.[17]
16. The prosecution say the terms in which s 62C of the EP Act is expressed make it clear that there are three basal elements which must be proven:

(a) a segment of the environment has been polluted; and

(b) such pollution was a result of a discharge, emission or deposit from certain premises (the act); and

(c) a commercial or industrial undertaking is conducted on those premises.

1. The prosecution asserted that other than these three elements, s 62C of the EP Act is unqualified in its operation. There is nothing in the text of s 62C which gives cause to read down its operation as applying only if and when the prosecution is unable to prove that a particular pollution offence occurred, or the particular circumstances pursuant to which a discharge, emission or deposit occurred. Provided the three basal elements above exist, then the provision has effect and the onus of proof falls on the accused.
2. The prosecution submitted the legislative history of s 62C of the EP Act makes it plain that its intended purpose was to overcome the difficulties faced by prosecutors in discharging the very significant burden of proving the circumstances in which environmental pollution occurs and identifying the person or persons responsible for same.
3. Mr Mandy with Ms Locke note that the EP Act as originally passed by Parliament did not include any 'occupier deeming provision' with respect to pollution offences. However, in April 1972, less than a year after the EP Act took effect, Parliament passed the Environment Protection (Amendment) Act 1972 ('the 1972 Amendment Act'). Section 11 of the 1972 Amendment Act introduced s 63(2) to the Act ('the first deeming provision'), which provided:

(2) Where any offence against this Act with respect to the discharge or emission of waste or pollutants occurs in upon or from any premises in the course of any trade carried on in those premises the owner or occupier of the premises (as the case requires) shall be deemed to be guilty of the offence.

4. In the second reading speech to the 1972 Amendment Act, the purpose of this provision was stated to be as follows:

It has also been deemed advisable to strengthen the principal Act to make the owner or occupier of premises responsible for an act of pollution or an offence in relation to a discharge of waste from those premises. This is necessary in order to prevent the owner or occupier of the premises avoiding prosecution on the ground that the pollution was caused by an employee who may even remain nameless or unknown.[18]

5. Five years later, s 63(2) was considered by the Supreme Court in Window v The Phosphate Co-operative Company of Australia Ltd.[19] At the time of Window, it appears that there had not been any cases considering the interpretation of s 63(2).[20]
6. Window concerned pollution of the atmosphere by sulphur dioxide emitted from the Phosphate Co-operative Company of Australia's ('Phosphate Co') premises in North Shore, Geelong. The sulphur dioxide resulted from a fire which occurred in a sulphur storage pit at the premises (sulphur being used to manufacture sulphuric acid, an input material in the manufacture of superphosphate). The cause of the fire could not be ascertained or proven. There was evidence that such fires could start by any number of causes, including inadvertence or spontaneous combustion.
7. Phosphate Co was charged with committing an offence against s 41(1) of the EP Act. At the time of the offence, that provision read: "No person shall pollute the atmosphere or cause or permit the atmosphere to be polluted". The information alleged that Phosphate Co "caused pollution of the atmosphere" (and did not allege that they "polluted the atmosphere" or "permitted pollution of the atmosphere"). The informant alleged that the act which "caused" the pollution was the simple act of Phosphate Co bringing sulphur onto its land. The informant relied on s 63(2) as an additional basis to prove the charge. The Magistrates' Court held that there was a prima facie case that Phosphate Co committed the offence, and rejected an application to dismiss the information at the close of the prosecution case.
8. On review of this decision before the Supreme Court, Phosphate Co successfully argued that the Magistrate erred in finding that there was a prima facie case, because there was no evidence that pollution of the atmosphere was "a natural consequence" of the simple act of Phosphate Co bringing sulphur onto its premises.
9. In relation to s 63(2), the court held that the deeming provision could only attribute liability to the occupier in circumstances where there was evidence that some person had committed an offence on the premises. Because there was no evidence as to how the fire in the sulphur pit started, and because the evidence left open the possibility that no person had done an act which was causative of the fire starting, there could be no proof that any offence of "causing pollution of the atmosphere" had been committed. Because s 63(2) in its original form operated only "[w]here any offence against this Act... occurs in upon or from any premises", that provision could not attribute liability to Phosphate Co for causing pollution in circumstances where there was no proof of such an offence - irrespective of the fact that pollution had occurred. Further, the court held that it must be shown that any discharge was connected with the trade or part of the trade at the relevant premises. It held that there was no evidence to show that the discharge occurred as an incident to, connected with or part of the Phosphate Co's undertaking.
10. An amendment was introduced in the Environment Protection (Review) Act 1984 ('the 1984 Amendment Act') in response to this decision. Section 26 of the 1984 Amendment Act substituted an entirely new occupier deeming provision in s 63(2) ('the second deeming provision'):

(2) Where any segment or element of the environment is polluted as a result of a discharge, emission or deposit of waste from or on any premises on which there is conducted any commercial or industrial undertaking the occupier of the premises shall be deemed to have caused the discharge or emission unless the occupier proves that the discharge or emission was unrelated to any commercial or industrial undertaking.

11. In the Explanatory Memorandum to the 1984 Amendment Act, the purpose was explained as follows:

The object of this Bill is to enhance the ability of the Environment Protection Authority to effectively perform its role of protecting the environment. The major issues addressed are the introduction of a works approval system and pollution abatement notice system; changes to the licensing system; wider powers to control noise emissions; new powers to control sewer inflows; the removal of various impediments in enforcing the Act; and the restructuring of the Authority and the Environment Protection Council. > > ... > > Clause 26 amends section 63 (2) to provide that where any part of the environment is polluted as a result of a discharge from commercial or industrial premises then the occupier of those premises is deemed to have caused the discharge unless he can establish that the discharge was unrelated to the commercial or industrial undertaking. The circumstances where the Authority can prove that a particular polluting discharge emanated from certain premises, but is not in a position to prove that the occupier of the premises caused or permitted the polluting discharge to occur.[21]

12. In the second reading speech to the 1984 Amendment Act, the purpose of the amendment was stated to be as follows (under the heading "Removal Of Enforcement Barriers"):

The ability of the Environment Protection Authority to enforce licences and to successfully prosecute pollutors has been constrained by the legislation. The Bill enhances the Environment Protection Authority enforcement role by clarifying certain matters which have restricted the intended scope of the pollution offence provisions by strengthening the provisions dealing with prosecutorial proofs; by extending the time in which certain proceedings may be taken; by restricting the operation of section 30 in relating to offensive odours; and by enhancing the ability of the authority to obtain admissible evidence. > > ... > > Clause 26 amends section 63(2) and deals with prosecutorial proofs where a polluting discharge occurs from trade premises. The section is amended to provide that where it can be established that pollution has been caused by a discharge from any commercial or industrial premises, then the occupier of those premises is deemed to have caused the pollution to occur unless he can establish that the discharge was unrelated to any commercial or industrial undertaking. This represents a significant change, as perhaps the most serious difficulty confronting the authority in enforcing the Act is to prove that the defendant caused the polluting discharge which emanated from his premises. In most cases the discharge has ceased by the time an inspector has arrived. If the occupier of the premises does not co-operate and provide the authority with sufficient admissible evidence then it is often impossible to establish the precise cause of the discharge. The amendment of section 63(2) reverses the onus of proof in cases where the Environment Protection Authority can prove that a particular discharge caused pollution and that the discharge emanated from certain premises, but where it cannot be proved that the occupier of the premises caused or permitted the polluting discharge to occur.[22]

13. The second deeming provision was the subject of the Supreme Court's decision in Allen v United Carpet Mills Pty Ltd.[23] The change between the first and second deeming provisions (considered in Window and Allen respectively) is significant.
14. The two significant changes of note are:

(a) There was no longer any requirement for there to be proof that an offence of polluting (or causing or permitting pollution) was committed on the premises; instead, there need only be proof that there was an emission from the premises which resulted in pollution; and

(b) There was no longer any requirement to prove that the emission occurred "in the course of trade" carried on at the premises; instead, the occupier must prove that the emission was "unrelated to any commercial or industrial undertaking" at the premises.

1. In Allen, Nathan J noted that provided the three basal elements mentioned above were established, the onus of proof would shift to the occupier to establish that the cause of the discharge was unrelated to any commercial or industrial undertaking. His Honour also rejected an argument that the provision should be read as only applying in circumstances where the facts do not reveal the actual polluter, on the basis that it would constitute an injustice or absurdity.
2. Prior to the decision in Allen (but after the events which were the subject of that case occurred), Parliament passed the Environment Protection (Amendment) Act 1988 ('the 1988 Amendment Act'). Once of the stated purposes was "to facilitate prosecutions by the Authority".[24] Section 21(3) of the 1988 Amendment Act repealed s 63(2) entirely, and introduced s 62C ('the current deeming provision') instead:

If any segment or element of the environment is polluted as a result of a discharge, emission or deposit of any substance from or on any premises on which there is conducted any commercial or industrial undertaking, the occupier of the premises is deemed to have polluted that segment or element of the environment unless the occupier proves that the discharge, emission or deposit was unrelated to the commercial or industrial undertaking.

3. In the Explanatory Memorandum to the 1988 Amendment Act, the purpose was explained as follows:

Clause 21(3) clarifies the wording of a presumption in relation to pollution arising from commercial or industrial premises and a deeming provision in relation to ships.[25]

4. During oral submissions, Mr Mandy submitted that the present case can be distinguished from Kirk as the alleged offences in Kirk were not of strict liability and the purposes of the EP Act are far stricter than the OHS Act.
5. Mr Mandy submitted that the policy reasons for the EP Act are important, as the cause of pollution is often opaque.
6. Mr Mandy pointed to the words 'acts or omissions' in s 66B of the EP Act and submitted that the use of the word 'whether' was intended to show that it was either way or any way that the EP Act is contravened. This indicated that corporations can contravene the EP Act by omission.
7. Mr Mandy then referred to s 66B(1A) of the EP Act and the available defences. Mr Mandy submitted the cause of the pollution was a fire, however there was some speculation as to how the fire started. The prosecution submitted that it would be open to the Defence, notwithstanding the deeming provision under s 62C of the EP Act, to establish due diligence in prevention of the pollution and prevention of the fire.
8. Mr Mandy referred to extrinsic materials in oral submissions to support the argument that the view and intention of Parliament was to hold individuals personally responsible for the pollution and contraventions of the EP Act by corporations.
9. Mr Mandy argued that there were no provisions in the EP Act which stated that if the prosecution chose to rely on s 66B of the EP Act, then the prosecution would be unable to rely on the deeming provisions at s 62C of the EP Act.
10. Mr Mandy submitted the question for the court to consider was whether s 62C of the EP Act applies if the prosecution is relying on s 66B as against the director. Section 62C places a heavy burden on undertakings which are conducted for a commercial or industrial purpose.

1. To determine the meaning of statutory provisions, the starting point is the 'consideration of the text of the statute'. In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue, the High Court stated that:

'the language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the content, which includes the general purpose and policy of a provision...'[26]

2. Context can help construe the meaning of the text, but cannot act as a substitute or displace the meaning of the text.
3. In Project Blue Sky, the High Court held:

'...the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.' > > Importantly, it is necessary to read the whole Act and read the Act as a whole. [27]

4. In Visy Paper Pty Ltd v Australian Competition and Consumer Commission,[28] it was held that where a law is in the form of legislation, the correct starting point for analysis is the text of the legislation and not judicial statements of the common law or even judicial elaborations of the statute.
5. In Collector of Customs v Agfa-Gevaert Ltd, it was held that to find meaning from the text, in order to fulfil the purpose of the legislature, it is a mistake to consider statutory words in isolation. The proper approach is to source the meaning of words from the legislative context in which those words appear. Such as examining the sentence, paragraph, immediately surrounding provisions, or wider statutory context.[29]
6. I have also considered the Interpretation of Legislation Act 1984 (Vic) ('ILA'), which provides principles and aids to statutory interpretation and construction.
7. Section 35 of the ILA provides a guide to the use of extrinsic material such as the second reading speeches relied on by the prosecution in its submissions:

In the interpretation of a provision of an Act or subordinate instrument:

(a) a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object; and

(b) consideration may be given to any matter or subordinate instrument that is relevant including but not limited to -

(i) all indications provided by the Act or subordinate instrument as printed by authority, including punctuation;

(ii) reports of proceedings in any House of the Parliament;

(iii) explanatory memoranda or other documents laid before or otherwise presented to any House of the Parliament; and

(iv) reports of Royal Commissions, Parliamentary Committees, Law Reform Commissioners and Commissions, Boards of Inquiry, Formal Reviews or other similar bodies.

1. Section 1A of the EP Act defines the purposes of the legislation as seeking to create:

"...a legislative framework for the protection of the environment in Victoria having regard to the principles of environment protection." [30]

1. The 'principles of environmental protection' are defined as those principles set out in sections 1B to 1L of the EP Act.[31] Parliament has declared that, when administering the EP Act, regard should be given to these principles.[32]
2. Section 1G outlines the principle of shared responsibility:[33]

"Protection of the environment is a responsibility shared by all levels of Government and industry, business, communities and the people of Victoria."

1. Each of the individual principles of environmental protection must be balanced against each other.[34]
2. The EP Act is intended to be exercised in the public interest and particularly the interest in the protection of the environment.[35]

Analysis and Ruling on section 66B and section 41 Offences

1. The prosecution case underpinning Charges 1-3 identifies the discharge or emission of smoke from a fire on SKM's premises as the contravention infringing s 41 of the EP Act.
2. The prosecution also rely on the discharge of smoke as the act which it says engages s 62C. Section 62C creates a rebuttable presumption that the occupier is criminally responsible for any pollution on premises they occupy as a result of a discharge, emission or deposit. The prosecution has characterised the term 'discharge' as an act.
3. The words discharge, emission and deposit are not defined in the definition section of the EP Act. I am not satisfied that these words necessarily denote acts or omissions as opposed to the consequences of acts or omissions. In this case it is alleged that a fire occurred and an emission of smoke resulted and polluted the atmosphere. The emission therefore relied upon by the prosecution was the consequence of an act or an omission which has not been identified.
4. The prosecution also relies on the discharge of smoke as the act which it says engages the operation of s 66B. Again, for the reasons previously articulated I am not satisfied, without more, that the discharge of smoke is an act as opposed to the consequence of an act.
5. Its reliance on s 62C relieves the prosecution of the burden of establishing an act or omission on the part of the corporation which caused or contributed to the pollution.
6. Section 66B is enlivened where the contravention by the corporation is by an act or omission.
7. It is not possible to ignore these words. Applying standard principles of statutory construction, these words need to be given their ordinary meaning. To that end, I need to keep the objects of the EP Act squarely in mind. I must give the words "whether by act or omission" the meaning which the legislature has intended.[36] The surest guide to this intention is typically the language used in the text of the legislation.[37] However, the context within which these words are used may ascribe a different legal meaning to the words from their ordinary or grammatical meaning.[38] Finally, in construing statutory provisions, the construction which promotes the purposes of the EP Act or provisions is to be preferred to other constructions.[39]
8. An "act" cannot be attributed to a director where no "act or omission" has been attributed to the corporation.
9. The emission or discharge of smoke is not an act. It is the consequence of an act or omission.
10. If Parliament sought to attribute liability to a director of a corporation, without qualification, against the EP Act where a deeming provision applies, it could have done so by removing the phrase "whether by act or omission". It was an intentional inclusion by Parliament to ensure that those who are in control of a contravening corporation's actions or failures to act are made liable for those action or failures to act. Where there is no action or inaction identified in the contravention against any provision of the EP Act, the contravention cannot be attributed to a director.
11. In Director of Public Prosecutions v Hazelwood Pacific Pty Ltd and Ors,[40] Keogh J found that the jury's verdict did not determine which of the paths to guilt had been established. The particulars in relation to the s 41 offences alleged against Hazelwood were precisely articulated in the indictment. The nature of those particulars were failures to have adequate water reticulation systems in the worked-out areas of the mine; failing to adequately control vegetation in the worked-out areas of the mine; failing to maintain adequate staff resources to prepare for and respond to the fires; failing to have adequate backup power supply for the water-reticulation system; failing to employ adequate mine-emergency-management arrangements to prepare for and respond to the fire. These failures were omissions.
12. By contrast, the particulars relating to Charges 1-3 in the indictment against Mr Italiano do not allege failures in the management, storage or handling of the waste paper, cardboard or plastic on the premises occupied by SKM. The reason for not particularising any failings in the way in which the recyclable waste was managed stored or handled may simply be a consequence of the fact that in this case the alternative path to conviction, namely, by demonstrating that acts or omissions on the part of SKM caused or contributed to the fire which produced the pollution, is not relied upon.
13. Kirk provides some guidance, but I am mindful that Kirk involved an analysis of a different Act with different statutory onuses and obligations. Nonetheless, the principles in Kirk's case have application here.
14. As to Mr Mandy's argument that this case can be distinguished from Kirk because the offences Mr Italiano has been charged with are strict liability offences, two points need to be made. The first is that Kirk is relied upon for its statement of principle set out in paragraph 33 above. Secondly, sections 15 and 16 of the OHS Act are contravened where there has been a failure, on the part of the employer, to take particular measures to prevent an identifiable risk eventuating. That is the relevant act or omission giving rise to the offence. Where an employer is charged with a contravention of either section 15 or 16, it will be necessary for the employer to establish one of the defences available in order to avoid conviction. It is in that context that the High Court considered the adequacy of the particulars provided to Mr Kirk and determined that the offences, as particularised, did not identify what measures the Kirk company could have taken but did not take. Mr Italiano's case is analogous to the extent that where the prosecution deems him liable for the contraventions of the occupier, he needs to establish one of the defences available in s 66B(1A) in order to avoid conviction and where the prosecution fails to particularise an act or omission which produced the contravention, his ability to avail himself of one or more of the statutory defences is either impossible or all but.
15. The prosecution reliance on the legislative changes made in the wake of Window assists in understanding why a deeming provision relating to causation was introduced into the EP Act in order to make liable the occupier of an industrial site upon which there had been a polluting event. Here, SKM, as occupier, has been charged with the same offences as Mr Italiano. The path to conviction against SKM is made easier by resorting to s 62C, but the second reading speeches and extrinsic materials relied upon in the prosecution's further submissions do not assist in demonstrating that the legislative changes made since Window had as their aim the intention to render a non-occupying director liable for a polluting event without having to identify an act or omission said to be causative of the polluting event.
16. Mr Italiano has been charged under s 66B and that section is enlivened when a corporation contravenes by act or omission a provision of the EP Act. Here, I am not satisfied that the prosecution has identified acts or omissions by the occupier which enliven the operation of s 66B of the EP Act. Had the prosecution identified acts or omissions by the corporation which resulted in the contraventions of s 41 in a manner similar to the way in which the various acts and omissions of the corporation were particularised in the s 41 charge laid in Hazelwood, a path to conviction of Mr Italiano was then available to the prosecution by relying on s 66B of the EP Act.
17. The purpose of s 66B of the EP Act is to make a director of a corporation personally criminally liable for the acts or omissions of the corporation. Whilst s 62C was introduced to relieve prosecutors of the obligation of identifying the cause of a polluting event or from nominating an individual within the corporation responsible for it, s 66B, when invoked, seeks to render an individual criminally liable for the acts or omissions of another or others unless that individual can demonstrate, on the balance of probabilities, either that he was not in a position to influence the conduct of the corporation in relation to the contravention or that he used all due diligence to prevent the contravention by the corporation or that the corporation would not have been found guilty of the offence by reason of its being able to establish a defence available to it under the EP Act.
18. Using the first of these defences as an example, what conduct of the corporation does the accused need to address in engaging this defence? The reference to conduct in s 66B(1A) connotes an act or omission. Without an act or omission by the occupying corporation it is not open to Mr Italiano to engage this defence because the conduct of the corporation to which this defence applies has not been identified by the prosecution.
19. I therefore rule that the prosecution has not identified an act or omission on the part of SKM Pty Ltd that enlivens the operation of s 66B of the EP Act.

[3] Environment Protection Act 1970 (Vic) ss 41(1)(a), 66B(1).

[8] [2019] VSC 873 ('Hazelwood Ruling 4').

[9] Director of Public Prosecutions v Hazelwood Pacific Pty Ltd & Ors (Ruling 2) [2019] VSC 871; 281 A Crim R 1 ('Hazelwood Ruling 2'), [9-10]; Hazelwood Ruling 4, [21-22].

[11] Hazelwood Ruling 2, [69]-[70].

[12] [2010] HCA 1; (2010) 239 CLR 531, [12]-[17], [19], [24], [27] ('Kirk').

[14] Project Blue Sky Inc v Australia Broadcasting Authority (1998) 194 CLR 355, [79] ('Project Blue Sky').

[15] Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503, 268-269.

[16] CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408.

[17] Macquarie Bank Ltd v Fociri Pty Ltd (1992) 27 NSWLR 203, 207.

[18] Victoria, Parliamentary Debates, Legislative Council, 19 April 1972, 5148 (Vance Oakley Dickie, Minister for State Development).

[19] [1983] VicRp 88; [1983] 2 VR 287 ('Window').

[21] Explanatory Memorandum, Environmental Protection (Review) Bill 1984.

[22] Victoria, Parliamentary Debates, Legislative Council, 4 April 1984, 2215, (Evan Harris Walker, Minister for Planning and Environment).

[23] [1989] VicRp 27; [1989] VR 323 ('Allen').

[24] Environment Protection (Amendment) Act 1988 (Vic) s 1(a)(ii).

[25] Environment Protection (Amendment) Bill (No. 3) 1988, 2.

[26] [2009] HCA 41; (2009) 239 CLR 27, [47] ('Alcan').

[28] [2003] HCA 59; (2003) 216 CLR 1.

[29] [1996] HCA 36; (1996) 186 CLR 389.

[30] Environmental Protection Act 1970 (Vic) s 1A(1).

[33] Environment Protection Act 1970 s 1G(1).

[34] Geelong Community for Good Life v Environmental Protection Authority & Ors [2008] 20 VR 338, [34].

[35] Yarra City Council v Metropolitan Fire and Emergency Services Board & Ors [2017] VSCA 194, [250]-[251].

[38] R v A2 [2019] HCA 35; (2019) 269 CLR 507, [32].

[39] Interpretation of Legislation Act 1984 (Vic) s 35(a).

[40] Director of Public Prosecutions v Hazelwood Pacific Pty Ltd & Ors (Sentence) [2020] VSC 279, [15] ('Hazelwood').