Environment Protection Authority v McMurray

Court of Criminal Appeal (NSW)|2024-06-27|Before: White JA, Mitchelmore JA, Preston CJ, Duggan J

HEADNOTE [This headnote is not to be read as part of the judgment] The Environment Protection Authority ("EPA") prosecuted the Cootamundra-Gundagai Regional Council ("Council") for an offence against s 169(1) of the Protection of the Environment Operations Act 1997 (NSW) ("POEO Act") of causing a place to be used as a waste facility without lawful authority. The Council operated the Cootamundra Sewage Treatment Plant in contravention of an environment protection licence. The Council pleaded guilty and was convicted and sentenced for the offence. The EPA also prosecuted Mr McMurray, the General Manager of the Council, for the same offence, by operation of s 220(4) of the Local Government Act 1993 (NSW) ("LG Act"). The Local Court permanently stayed the proceedings against Mr McMurray on the basis that s 169(1) of the POEO Act did not apply to him as the General Manager of the Council by operation of s 220(4) of the LG Act. The EPA appealed to the Land and Environment Court ("LEC"), which dismissed the appeal. The LEC found that s 169(1) of the POEO Act did not apply by operation of s 220(4) of the LG Act, as s 169 was not a law that applies "to and in respect of" a corporation. The LEC stated two questions of law arising on the appeal. The only question pressed in the Court of Criminal Appeal was whether s 169(1) of the POEO Act applies to Mr McMurray by operation of s 220(4) of the LG Act 1993. The Court held (Preston CJ of LEC, White JA and Mitchelmore JA agreeing): 1. Section 220(4) of the LG Act applies s 169(1) of the POEO Act to Mr McMurray as: 1. s 169 is a "law of the State"; 2. which applies "to and in respect of" a corporation, as a law that provides for special executive liability of executives of a corporation is a law that applies to and in respect of a corporation; and 3. applies to and in respect of the Council "in the same way" as the law applies to a corporation by providing for special executive liability of executives of the Council answering the description of a person in s 169(1) of the POEO Act: [28]-[30] (Preston CJ of LEC). 1. Section 220(4) of the LG Act applies s 144(1) of the POEO Act to the Council, so that s 169(1) of the POEO Act applies to Mr McMurray as: 1. s 144(1) is a law of the State that "applies to and in respect of a body corporate (including a corporation)"; 2. s 220(4) applies s 144(1) to the Council in the same way as it applies to and in respect of a corporation; 3. the Council contravened s 144(1); 4. the reference to a person "concerned in the management of the corporation" includes a person concerned in the management of the Council; and 5. Mr McMurray is a person concerned in the management of the Council: [34]-[36] (Preston CJ of LEC).

JUDGMENT

WHITE JA: I agree with Preston CJ of LEC.
MITCHELMORE JA: I agree with Preston CJ of LEC.
PRESTON CJ of LEC: The Environment Protection Authority (EPA) prosecuted Cootamundra-Gundagai Regional Council (Council) and the General Manager of the Council, Mr McMurray, for each committing an offence against s 144(1) of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act). Section 144(1) provides that: "A person who is the owner or occupier of any place and who uses the place, or causes or permits the place to be used, as a waste facility without lawful authority is guilty of an offence".
The Council was charged with committing the offence against s 144(1) by the Council, being the occupier of the Cootamundra Sewage Treatment Plant (STP), causing that place to be used as a waste facility without lawful authority. The Council was the holder of an environment protection licence (EPL) which authorised the Council to carry out sewage treatment processing at the STP in certain ways and on certain conditions. The Council received waste (leachate) from the Tumblong Landfill and deposited it in a pond at the STP. The EPL held by the Council for the STP did not authorise the receipt and depositing of the leachate in the pond at the STP. The Council pleaded guilty and was convicted and sentenced by the Local Court on 6 December 2022, which imposed a fine of $8,500.
Mr McMurray was charged with committing the offence against s 144(1) of the POEO Act by operation of s 169(1) of the POEO Act. That provision imposes special executive liability on a person who is a director of a corporation or who is concerned in the management of the corporation if the corporation contravenes a provision of the POEO Act attracting special executive liability. Section 144(1) of the POEO Act is one such provision: s 169(1A)(p) of the POEO Act.
Mr McMurray applied in the Local Court for the proceedings against him to be permanently stayed on the basis that s 169(1) of the POEO Act did not apply to him as the General Manager of the Council, as he was not a person who is a director of a corporation or who is concerned in the management of a corporation.
On 12 May 2023, Magistrate McLennan, sitting at Young Local Court, upheld Mr McMurray's application and permanently stayed the proceedings. The Magistrate held that s 220 of the Local Government Act 1993 (NSW) (LG Act) did not operate so as to apply s 169 (1) of the POEO Act to Mr McMurray.
On 8 June 2023, the EPA appealed under s 42(2B)(a) of the Crimes (Appeal and Review) Act 2001 (NSW) against the decision of the Local Court to the Land and Environment Court. On 7 February 2024, Duggan J of the Land and Environment Court dismissed the EPA's appeal. The primary judge also held that s 169(1) of the POEO Act did not apply to Mr McMurray by operation of s 220(4) of the LG Act: [97].
On 5 March 2024, pursuant to s 5BA(1) of the Criminal Appeal Act 1912 (NSW), Duggan J stated two questions of law arising on the appeal to the Land and Environment Court. The first question, and the only question pressed in the Court of Criminal Appeal, was: "Does s 169(1) of the Protection of the Environment Operations Act 1997 apply to Mr McMurray by operation of s 220(4) of the Local Government Act 1993?"
The EPA submitted this question should be answered "yes", and consequential orders should be made setting aside the Land and Environment Court's order dismissing the EPA's appeal and instead making orders that the appeal to the Land and Environment Court be allowed and the Magistrate's order permanently staying the proceedings be set aside.
In case the Court of Criminal Appeal considered that the power under s 5BA(1) of the Criminal Appeal Act to "make any such order or give any such direction to the Land and Environment Court as it thinks fit" did not allow the Court to make the consequential orders sought by the EPA, the EPA also brought judicial review proceedings in the Court of Appeal to quash the primary judge's decision and to make the consequential orders.
Mr McMurray did not contest that the Court of Criminal Appeal had power under s 5BA(1) of the Criminal Appeal Act to make the consequential orders sought by the EPA, if the Court were to answer the stated question in the affirmative. In this circumstance, the EPA did not press its judicial review proceedings and accepted that they could be dismissed.
I determine that the stated question should be answered in the affirmative and the consequential orders sought by the EPA should be made. Section 169(1) of the POEO Act does apply to Mr McMurray by operation of s 220(4) of the LG Act. There are two routes by which s 169(1) applies to Mr McMurray: first, by s 220(4) of the LG Act directly applying s 169(1) to Mr McMurray and second, by s 220(4) of the LG Act applying s 144(1) of the POEO Act to the Council, which leads to s 169(1) applying to Mr McMurray. I will explain each route.

Direct application of s 169(1) of the POEO Act

The EPA's argument that s 169(1) of the POEO Act applies to Mr McMurray depends on the operation of s 220(4) of the LG Act. Section 220(4) of the LG Act provides: "A law of the State applies to and in respect of a council in the same way as it applies to and in respect of a body corporate (including a corporation)."
The EPA submitted that s 220(4) of the POEO Act operates to apply s 169(1) of the POEO Act to Mr McMurray for four reasons.
First, the EPA submitted that s 169(1) of the POEO Act is "a law of the State". Mr McMurray did not contest this proposition.
Secondly, the EPA submitted that s 169(1) "applies to and in respect of" a corporation because it provides for liability of executives of a corporation (persons who are directors or concerned in the management of the corporation) in circumstances where the corporation contravenes a provision attracting special executive liability, of which s 144(1) of the POEO Act is one such provision. A law that provides for special executive liability of executives of a corporation answers the description of being a law which "applies to and in respect of" a corporation.
The EPA argued that this conclusion is reached regardless of how the phrase "to and in respect of" is to be construed. When applied in the context of s 169(1) of the POEO Act, both the word "to" and the phrase "in respect of" are wide enough in meaning to establish the necessary relationship between "a law of the State" and "a body corporate (including a corporation)" by the law (s 169(1)) providing for special executive liability of executives of the corporation. The EPA noted that the connecting phrase "in respect of" can have a very wide meaning, reflecting the context in which the phrase appears: Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45 at 47; [1989] HCA 24; Secretary, Department of Family and Community Services v Hayward (a pseudonym) (2018) 98 NSWLR 599; [2018] NSWCA 209 at [66]. The EPA submitted that the statutory context of s 220(4) of the LG Act confirms that the connecting phrase has a very wide meaning.
The EPA submitted, however, that even if the word "to" was to be read as being narrower than the phrase "in respect of", so that a law which applies "to" a corporation is one that only regulates a corporation's rights and interests while a law "in respect of" of a corporation is one that has a direct and substantial connection to a corporation, including providing for special executive liability of executives of the corporation, s 169(1) would still be a law that applies "to and in respect of" a corporation. The composite phrase "to and in respect of" expands the category of laws that have the necessary connecting relationship to the corporation, not limits that category as the primary judge held. By adding the wider phrase "in respect of" to the narrower word "to", the relationship between the law and the corporation is expanded from being a narrow one ("to") directed only to the corporation itself to being a wider one ("in respect of") with respect to the corporation and its executives, including providing for the liability of the executives of the corporation. A law will satisfy the relationship established by the composite phrase "to and in respect of" if it satisfies either the narrow relationship fixed by the word "to" or the wider relationship fixed by the phrase "in respect of". Here, the EPA argued, s 169(1) of the POEO Act at least satisfies the relationship fixed by the phrase "in respect of", with the result that it also satisfies the aggregate relationship fixed by the composite phrase "to and in respect of".
Thirdly, once s 169(1) of the POEO Act can be seen to be a law that applies "to and in respect of" a corporation, the EPA submitted that s 220(4) of the LG Act operates to apply s 169(1) to and in respect of a council "in the same way" as s 169(1) applies to and in respect of a corporation. The way in which s 169(1) applies to and in respect of a corporation is by providing for special executive liability of executives of the corporation. That is the way s 169(1) applies to and in respect of a council: by providing for special executive liability of executives of a council. Whilst an executive of a council might not readily be described as a person who is "a director" of the council, they can readily be described as a person who is concerned in the management of the council. Section 169(1) operates to provide for special executive liability of executives of the Council in the same way it operates to provide for special executive liability of executives of a corporation.
In the present case, Mr McMurray, as the General Manager of the Council, is a person who is concerned in the management of the Council. Section 220(4) operates to apply s 169(1) of the POEO Act to and in respect of Mr McMurray as a person concerned in the management of the Council.
Fourthly, the EPA submitted that a consideration of the legislative history of the amendment of s 220 of the LG Act supports the interpretation advanced by the EPA. The Local Government Amendment (Legal Status) Act 2008 (NSW) substituted the former s 220 of the LG Act (which simply declared "A council is a body corporate") with the current s 220(1)-(4), which commenced operation on 20 November 2008. The Minister for Local Government explained the government's purpose in making the amendments in the Second Reading Speech as being "to remove the possibility that a council might be characterised as a constitutional corporation and therefore as an employer for the purposes of the Commonwealth's Workplace Relations Act. It will ensure that a council cannot be subject to the Federal industrial relations legislation". The EPA submitted that this limited purpose of the amendment of s 220 did not include relieving a person concerned in the management of a council from liability for an offence attracting special executive liability if the council commits that offence.
Mr McMurray in the court below argued that s 169(1) of the POEO Act was not a law "to and in respect of" a corporation. This argument found favour with the primary judge, who held that s 169 was not a law that applies "to and in respect of" a corporation. The primary judge stated in [86]: "The clear words of s 169 creates a liability of a person that is not a corporation but an individual person in the true, natural sense (rather than the legal sense where a corporation has personality). The reference to the need for the corporation to have contravened a legislative provision is a factual precondition to the liability created but does not cause the liability to affect in any way the corporation. Therefore, it cannot be said to apply to that corporation."
In this Court, whilst Mr McMurray did not abandon this argument that s 169 of the POEO Act is not a law that applies "to and in respect of" a corporation, his primary argument was that even if s 169(1) were to be such a law, the consequential effect of s 220(4) of the LG Act would only be that the law (s 169) would apply in the same way to a council, not to anybody else, including a person concerned in the management of a council (see [12] and [13] of Respondent's submissions). Mr McMurray submitted (at [14]): "It is one thing for a law of the State to apply in respect of a council in the same way as it applies in respect of a corporation. It is another thing entirely for a law of the State to apply to somebody else merely because that other person has a connection with a council. To move from a premise that s 169 of the P[O]EO Act applies in the same way in respect of a council as it applies in respect of a corporation to the conclusion that it applies in the same way to a person concerned in the management of a council as it does to a person concerned in the management of a corporation is to leap beyond the provision made by the law. It is not a result the language of the two provisions would sensibly permit."
Mr McMurray contested the EPA's submission that assistance in determining the meaning of s 220(4) of the LG Act is to be gained from the legislative history. Mr McMurray accepted that the purpose of the amendments to s 220, as revealed in the Second Reading Speech, was to remove the possibility that a council might be characterised as a constitutional corporation to ensure that a council cannot be subject to Federal industrial relations laws, as Basten JA observed in Hoxton Park Residences Action Group Inc v Liverpool City Council (No 2) (2011) 256 FLR 156; [2011] NSWCA 363 of [45].
But Mr McMurray submitted that even if this be the purpose of the amendments to s 220, this did not mean that the amendments did not effect other changes in the law. It is s 220 as amended that needs to be construed, irrespective of what was the purpose of the amendments. Mr McMurray submitted that s 220(4) is clear in only applying a law of the state that applies to and in respect of a corporation, to and in respect of a council, not persons concerned in the management of the council. The Second Reading Speech does not say anything to the contrary of this construction. Indeed, Mr McMurray submitted, the Second Reading Speech does not provide any assistance in ascertaining the meaning of s 220(4) of the POEO Act, as so often is the case: see Harrison v Melhem (2008) 72 NSWLR 380; [2008] NSWCA 67 at [12] and [162].
I find that s 220(4) of the LG Act does operate to apply s 169(1) of the POEO Act to Mr McMurray as a person concerned in the management of the Council, essentially for the reasons advanced by the EPA.
First, s 169(1) is "a law of the State". Secondly, s 169(1) applies "to and in respect of" a corporation. Section 169(1) provides for special executive liability of persons who fall within the class of persons who are executives of the corporation answering the description of being a person "who is a director" of the corporation or "who is concerned in the management of the corporation". A law that provides for special executive liability of executives of a corporation is a law that applies to and in respect of a corporation. That relationship between the law (s 169(1)) and the corporation is established by both the word "to" and the phrase "in respect of".
But even if the relationship were not to be established by the word "to", it is established by the phrase "in respect of". The latter phrase is sufficient for the relationship to be established even if the phrase is a composite phrase. The addition of the wider phrase "in respect of" to the arguably narrower word "to" results in a wider, not a narrower, composite phrase. Hence, even if s 169(1) of the POEO Act, by providing for special executive liability of executives of a corporation, is a law that applies "in respect of" a corporation but not "to" a corporation, that will suffice for s 169(1) to be a law that applies "to and in respect of" a corporation.
Thirdly, s 220(4) of the LG Act operates to apply s 169(1) of the POEO Act to and in respect of the Council "in the same way" as it applies to and "in respect of" a corporation. The way in which s 169(1) applies to and in respect of a corporation is by providing for special executive liability of executives of the corporation answering the description of persons in s 169(1). Hence, in order to apply s 169(1) in the same way it applies to and in respect of a corporation, s 169(1) applies to and in respect of the Council by providing for special executive liability of executives of the Council answering the description of persons in s 169(1).
This is the answer to Mr McMurray's argument in this Court. Whilst s 220(4) of the LG Act in terms only applies a law that applies to "a corporation" to "a council", the application of that law to the council is to be "in the same way" as the law applies to the corporation. The way a law applies will depend on the law. In the case of s 169(1), the law applies to a corporation by providing for special executive liability of executives of a corporation. To apply s 169(1) in the same way to a council, the law must also provide for special executive liability of executives of a council.
The result is that s 169(1) of the POEO Act does apply to persons who are concerned in the management of a council. If a council contravenes a provision of the POEO Act attracting special executive liability, including s 144(1), a person who is concerned in the management of the council is taken to have contravened the same provision, unless the person satisfies the court of one of the matters in s 169(1)(b) or (c).
This construction of s 220(4) of the POEO Act makes it unnecessary to decide the issue joined between the parties of whether and the extent to which the legislative history of the amendment of s 220 in 2008, as evidenced in the Second Reading Speech, assists in construing the current provision. Consideration may be given to the Second Reading Speech (see s 34(2)(f) of the Interpretation Act 1987 (NSW)) in the circumstances stated in s 34(1) of the Interpretation Act. The primary judge found that these circumstances were not engaged in determining the meaning of s 220(4) that she gave to the provision: see at [95]. That meaning is different to the meaning I have determined. Nevertheless, I agree that the circumstances in s 34(1) of the Interpretation Act are not engaged. Consideration of the Second Reading Speech does not assist in confirming that the meaning of s 220(4) is the ordinary meaning conveyed by the text of the provisions (s 34(1)(a)) or in determining the meaning of s 220(4) as the provision is neither ambiguous nor obscure and the ordinary meaning conveyed by the text of the provision does not lead to a result that is manifestly absurd or unreasonable (s 34(1)(b)). The Second Reading Speech does not assist one way or another in ascertaining the meaning of s 220(4).

Application of s 144(1) and s 169(1) of the POEO Act

The second route by which s 220(4) of the LG Act results in s 169(1) of the POEO Act applying to Mr McMurray is through s 144(1) of the POEO Act. Section 144(1) answers the description in s 220(4) of the LG Act of being a law of the State that "applies to and in respect of a body corporate (including a corporation)." Section 144(1) applies to "a person", both an individual and a corporation, and provides for a higher maximum penalty for an offence against s 144(1) committed by a corporation than by an individual.
Section 220(4) of the LG Act operates to apply s 144(1) to and in respect of a council in the same way as it applies to and in respect of a corporation. Indeed, the Council in this case was prosecuted and convicted for committing an offence against s 144(1).
This application of s 144(1) to a council lays the foundation for the operation of s 169(1) to a person concerned in the management of the council. The opening phrase in s 169(1) will be engaged by the council contravening s 144(1) of the POEO Act, which is a provision of the POEO Act attracting special executive liability.
Once this opening phrase is engaged, the balance of s 169(1) operates. The reference in the later phrase to "each person… who is concerned in the management of the corporation" is to be read as a reference to "each person… who is concerned in the management of the council". This is because the "corporation" referred to in the later phrase is the same corporation as is referred to in the opening phrase of s 169(1). That is the corporation that contravenes the provision attracting special executive liability (s 144). By operation of s 220(4), this provision (s 144) applies to and in respect of the council. Hence, if the reference to "corporation" in the opening phrase is to be read as a reference to the council, so too the reference to the "corporation" in the later phrase "concerned in the management of the corporation" is to be read as a reference to the same council.
By this route, s 169(1) of the POEO Act also applies to Mr McMurray as a person who is concerned in the management of the Council which contravened a provision of the POEO Act attracting special executive liability (s 144(1)).

Resolution of the case stated

For these reasons, the stated question should be answered "yes". This answer requires the setting aside of the orders of the Land and Environment Court and the Local Court. It is unnecessary to decide the judicial review proceedings and they should be dismissed. There should be no orders for costs of the case stated in this Court or the judicial review proceedings.
The orders I propose are: 1. The answer to question 1 stated in CCA proceeding 2024/84188 is "yes". 2. Question 2 stated in the CCA proceeding is unnecessary to answer. 3. Order 1 made by the Land and Environment Court on 7 February 2024 dismissing the appeal is set aside. 4. In its place, the appeal to the Land and Environment Court is upheld. 5. The order of the Local Court made on 12 May 2023 permanently staying the proceedings is set aside. 6. Judicial review proceeding 2024/99713 is dismissed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 August 2024

Local Government Amendment (Legal Status) Act 2008(NSW)

Environment Operations Act 1997(NSW)

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