Harris v Natural Resources Access Regulator; Timmins v Natural Resources Access Regulator

Court of Criminal Appeal (NSW)|2022-08-22|Before: Beech-Jones CJ, Price J, Garling J, Ms J, Pain J

The Dismissal of the Charges

In light of the matters raised on appeal it is necessary to explain further the reason for the dismissal of the charges.
The respondent's case was that the appellants had taken water from a water source in August 2015 at a time when the "MACE" meters and "analogue engine hour meters" attached to pumps 3, 4 and 5 were not working properly, or at all. A MACE meter is a type of ultrasonic flow (or "doppler") meter which measures the velocity of water movement with ultrasonic beams to calculate volume flow. [4] A photograph of the MACE meters attached to pump 4 suggests that "MACE" is a brand name. With an engine hour meter, the reading on an engine hour meter "ticks over" each time a pump's motor is switched on. They usually measure time in six-minute increments and are used to provide an indication to the owners of the period of time the pump has been in operation. [5]
At the hearing of the charges before the primary judge, the respondent read an affidavit affirmed by a Customer Field Officer employed by WaterNSW, [6] Trevor Pearce. He said he attended Mercadool on 6 August 2015 and inspected pumps 3, 4 and 5. He observed that none of the MACE meters on those pumps were working properly, that the engine hour meter for pump 4 was not working properly and that the engine hour meters for pumps 3 and 5 were not working at all.
The respondent also read an affidavit of an investigator employed by WaterNSW, Zachary Blackwood, affirmed on 29 June 2020. He visited Mercadool on 19 August 2015. The exhibit to his affidavit included photographs he had taken of the MACE meters and the analogue engine hour meters on pumps 3, 4 and 5 during that visit. In cross-examination, he was shown three photographs of the complete meter boards which were not included in the exhibit to his affidavit but had been disclosed to the appellants. Mr Blackwood agreed he had taken those photographs. The appellants tendered those photographs which included the following:
This photo does not depict the MACE Meter which was located elsewhere. The meter with the heading "quartz" is the analogue engine hour meter.
After the respondent closed its case, the appellants read an affidavit of Mr Timmins affirmed on 14 July 2020. Mr Timmins stated that "[i]n about July 2015 I decided to replace the existing analogue engine hour meters with new digital engine hour meters, and to get new tachometers fitted to each of the Murphy boxes for the pumps at Mercadool." He said he contacted an electrical engineer about the installation of the meters and was present when the electrical engineer installed them at Mercadool. He annexed a tax invoice for the work done which bears the date 31 July 2015.
By reference to the above photograph, Mr Timmins identified that the new meter that was fitted was the large circular dial on the top left of the above photograph. The rectangular box at the bottom of that dial was a digital read out. He said that, although he had no specific recollection of whether this meter was working on 6 August 2015, it was his regular practice to check it was operating correctly and he would have remembered if it was not. He annexed a video recording made in early 2020 of one of the digital engine hour meters at Mercadool, which was played at the hearing. The video showed that to produce and view any reading on the displays of the digital engine hour meters installed at the property, it was necessary not only to turn a key, but also to press a button known as a "Murphy Switch". Mr Timmins was not cross‑examined.
In closing submissions, the respondent conceded that it could not exclude the reasonable possibility that pumps 3, 4 and 5 had functioning digital engine hour meters installed on them in the charge period. [7] However, the respondent maintained that it could prove its case by reference to the fact that the MACE meters were fitted to the pumps and those meters were not working on the relevant day.
The primary judge made the following findings which resulted in the charges being dismissed. [8]
First, her Honour found that there was insufficient evidence to demonstrate that, as at August 2015, the MACE meters were installed to the pumps in the sense of being actually connected and configured for the purpose of calculating volume flow and, thus, an essential element of each offence failed. [9]
Second, her Honour found that there was no evidence of any "requirement", in either the "water access licence" or the "Water Supply Works Approval", for metering equipment to be installed at any of the pumps or for water to be taken by means of metered work. [10]
Third, her Honour found that neither the WM Act nor the Water Supply Works Approval required the use of any specific metering equipment such as the MACE meters or the analogue engine hour meters. As Mr Timmins used a digital engine hour meter, which was not said to be faulty, there was no contravention of s 91I(2) of the WM Act. [11]
Fourth, her Honour found that the respondent had not established that the MACE meters were "used" or that water was extracted "by means of" the MACE meters in the charge periods. [12]
Fifth, her Honour found that the respondent had to prove that the water was taken "by means of" the pleaded meters, ie, the MACE meters, and it did not do so. [13]
The present significance of these findings is that, based on the primary judge's construction of the legislative provisions and characterisation of the prosecution case, the presence of functioning digital engine hour meters on the pumps was fatal to the charges brought against the appellants. Otherwise, at this point it should be noted that her Honour's decision to refuse the appellants' application for costs did not turn upon the matters noted in [16] and [17], which arguably suggest that the prosecution case was flawed even without the adducing of evidence about the existence of functional digital engine hour meters in August 2015. In any event, no complaint concerning this was raised on appeal.

The Costs Application

The application to the primary judge for an award of costs in the appellants' favour was governed by ss 257C and 257D of the CPA which relevantly provides: "257C When professional costs may be awarded to accused person (1) A court may at the end of proceedings under this Part order that the prosecutor pay professional costs to the registrar of the court, for payment to the accused person, if the matter is dismissed or withdrawn. (2) … (3) ... 257D Limit on award of professional costs against a prosecutor acting in a public capacity (1) Professional costs are not to be awarded in favour of an accused person in proceedings under this Part unless the court is satisfied as to one or more of the following - (a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner, (b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an improper manner, (c) that the prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought, (d) that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award professional costs. (2) This section - (a) does not apply to the awarding of costs against a prosecutor acting in a private capacity, and (b) does not apply in relation to proceedings for an offence against the Work Health and Safety Act 2011 or the regulations under that Act. (3) …"
Section 257C confers on a court a power to awards costs against an unsuccessful prosecutor. It is expressed in terms that are consistent with the statutory provisions that were addressed in Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 ("Latoudis"). However, unless s 257D(2) applies, the power is circumscribed by s 257D(1). In this case, it was common ground that the respondent was not a prosecutor acting in a private capacity and, thus, s 257D(1) was engaged.
The appellants contended that: the prosecutions were conducted in an improper manner (s 257D(1)(b)); the investigation into the alleged offences was conducted in an improper manner (s 257D(1)(a)); the prosecutions were initiated without reasonable cause (s 257D(1)(b)), and that, because of other exceptional circumstances relating to the conduct of the prosecutions by the respondent, it was just and reasonable to award costs (257D(1)(d)). [14]
Before the primary judge, the onus was upon the appellants to demonstrate they had an entitlement to costs, that is by establishing one or more of ss 257D(1)(a) to (d). This onus "extend[ed] to satisfying the [c]ourt of the component parts of s 257D upon which a discretionary determination is based" (Southon v Plath (2010) 181 LGERA 352; [2010] NSWCCA 292 at [68] per Beazley JA with whom Kirby and Johnson JJ agreed; "Southon").
Critical to the appellants' application for costs was their contention that various officers from WaterNSW were aware of the digital engine hour meters at Mercadool in August 2015. [15] In addition, and in the alternative, they contended that they became aware of the meters from material obtained by an officer, Mr Wheatley, in July 2017 from another investigation into the appellants that led to further charges (known as "Mercadool 2"). [16]
At the hearing of the costs application the appellants read an affidavit from their solicitor who annexed various documents that were disclosed in the Mercadool 2 proceedings after the hearing of the charges but before her Honour published reasons dismissing them. This material included notes prepared by Mr Wheatley of a site visit by him and Mr Pearce in July 2017 and a draft affidavit of Mr Wheatley prepared in 2019 concerning that visit. These documents refer to digital engine hour meters being present on pumps 3 and 5, however, the notes record that the meters had no batteries and the tachometers appeared to be broken. [17] The materials attached to the solicitor's affidavit also included documents prepared by a different officer, Mr Mannall, which suggested that in 2019 he reviewed Mr Wheatley's material from 2017. [18]
The respondent read an affidavit from Mr Mannall sworn on 27 November 2020. He said that he conducted a site inspection at Mercadool on 24 July 2019. He observed that the pumps 3 and 5 were not fitted with batteries. He attempted to access the information stored on the engine control display of pump 4 by turning on its ignition key but the LED display was blank. He said that when he inspected the engine control display for pump 3, the tachometer was displaying a reading of approximately 1500 "rpm" even though the engine was not running. He concluded that there were various faults on the tachometers and batteries installed on the engines of each pump. Mr Mannall said that on 14 July 2020 he viewed the video of the operation of a digital engine hour meter using the "Murphy switch" described above. Mr Mannall said that, "[p]rior to viewing this video, I had no knowledge of the Murphy Switch, its operation or effect on a digital display fitted to a motor" and that "[i]ts installation was not a common occurrence on pump sites that he had inspected during his career." Mr Mannall was not cross‑examined.
Otherwise, the costs application proceeded by reference to the evidence tendered at the substantive hearing. The respondent did not adduce any further evidence from Mr Pearce or Mr Blackwood.

The Costs Judgment

After recounting the above and the manner in which the appellants put their application for costs, the primary judge found that the officers who gave evidence at the substantive hearing were not aware of the digital engine hour meter being "present and/or in use in August 2015". [19] This finding is the subject of challenge by ground 1 of the appeal. Having regard to that finding, or at least a finding that it was not established that they were so aware, the primary judge rejected the contention that the prosecutions were conducted in an improper manner by reason of a failure to disclose material concerning the digital engine hour meter. [20] Also, the primary judge did not accept that there was a failure to call a material witness, being Mr Wheatley. [21] Her Honour observed "that Mr Wheatley identified that there were digital engine hour meters present on pumps 3 and 5 in 2017 which were possibly in use … does not mean that he should have assumed these were relevant to the 2015 charge". [22]
The primary judge was also not satisfied that the investigation into the alleged offences was conducted in an unreasonable or improper manner. Her Honour rejected the contention that the respondent should have ascertained that functional digital engine hour meters were operating on the three pumps in August 2015. [23] In so finding, her Honour placed particular reliance on the answers given by the appellants to the notices issued under s 338A of the WM Act in 2015 and 2018. They required the provision of information about the meters installed on the subject pumps. [24] Her Honour found that none of the answers to those notices "gave any hint of the presence of digital engine hour meters let alone their use on pumps 3, 4 and 5 in 2015". [25] Given the primary judge's finding about the respondent's knowledge of the existence and functioning of the digital engine hour meters and that the proceedings involved "a number of statutory construction issues", her Honour was also not satisfied that the proceedings were commenced without reasonable cause. [26]
As the proceedings were commenced within the three-year time period allowed for by s 364(2) of the WM Act, the primary judge was not satisfied that the prosecution was "unduly delayed" and that there were any exceptional circumstances for the purposes of s 257D(1)(d) of the CP Act. [27]
Even though none of the preconditions to the power to award costs arose, the primary judge nevertheless addressed the exercise of the discretion to award costs. Her Honour observed that an important consideration for the exercise of that discretion was that the appellants did not rely on Mr Timmins' affidavit until after the prosecution case closed and did not cross‑examine the prosecution witnesses about the presence of digital engine hour meters on pumps 3, 4 and 5. [28]

The Appeal

An appeal under s 5AA is an appeal in the strict sense. To succeed, the appellant must show a relevant form of error being an error of law or the application of wrong principles in the fact-finding exercise (Bulga Underground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37 at [96]).

Ground 1: Alleged knowledge of deficiency in prosecution case

Ground 1 of the appeal contends that "the learned judge erred in finding that the respondent was not aware of the deficiency in its case".
To address this ground, it is necessary to set out her Honour's reasons in relation to the findings concerning the respondent's knowledge of the presence of the digital engine hour meters: [29] "93. The Defendants asserted that the Prosecutor's officers did know of the presence of digital engine hour meters at Mercadool in August 2015. The Defendants' counsel submitted that I cannot conclude the Prosecutor's witnesses, the authorised officers Mr Pearce, Mr Blackwood and Mr Mannall, were taken by surprise at the hearing by Mr Timmins' evidence. The Defendants asserted that it was for the Prosecutor to prove it did not know and, in the absence of any evidence about the officers' states of mind, an adverse conclusion ought to be drawn - namely that they were aware. The Defendants criticised the Prosecutor's evidence in this costs application because Mr Mannall who swore an affidavit for the purposes of the costs hearing did not say anything in his affidavit on this matter and no further affidavit was provided by Mr Pearce and Mr Blackwood concerning their state of knowledge in August 2015… … 96. Given the dramatic impact of Mr Timmins' affidavit on the prosecutions, it being a substantial reason for the charges being dismissed, I do not consider an explanation about the lack of knowledge of the Prosecutor's officers of digital engineer hour meters on pumps 3, 4 and 5 in 2015 is necessary in order to avoid an adverse finding that they knew of the pumps in the charge period. Such a finding is not warranted. The evidence of Mr Pearce and Mr Blackwood makes no mention of digital engine hour meters. The photographs taken by Mr Blackwood on 19 August 2015, which became Ex 1 for the Defendants, show the digital engine hour meters on pumps 3, 4 and 5 …. No reference at all was made to the existence of digital engine hour meters by the Prosecutor despite these photographs being disclosed to the Defendant. It is highly unlikely no mention would have been made of them given their clear relevance to the charges had their significance been understood by the Prosecutor's officers. The answers to the various statutory notices, which I consider below, did not alert the Prosecutor to the presence of the digital engine hour meters. 97. It is readily inferred that the Prosecutor's officers relied on for the 2015 charge period did not know of the presence of the digital engine hour meters or their use in August 2015. As the Prosecutor submitted, no cross-examination of Mr Pearce, Mr Blackwood or Mr Mannall concerning the presence of digital engine hour meters on pumps 3, 4 and 5 was undertaken in the liability proceedings. No submission was made by the Defendants in the liability hearing that the Prosecutor's officers should have known of the presence of the digital engine hour meters. As the Prosecutor submitted, any failure to disclose was unintentional. I have not found there was any such failure. Ferrcom does not apply to preclude a favourable finding that the Prosecutor's officers were unaware of the digital engine hour meters on the three pumps in the charge period. 98. An alternative submission made by the Defendants is that because photographs were taken in 2017 and 2019 which show the digital engine hour meters in the same location as appears in the photographs taken by Mr Blackwood in 2015 … the connection that such meters were present in 2015 before the commencement of proceedings in 2018, and therefore possibly in use, should have been made by the Prosecutor. That submission must be weighed up against the Defendants' responses to the three statutory notices issued to them, one in 2015 and two in 2018 as I discuss below. Mr Mannall's affidavit dated 27 November 2020 attests to the unusual operation of the digital engine hour meters installed which were unfamiliar to him as an experienced officer. I consider this below in the context of whether the investigation by the Prosecutor was inadequate." (emphasis added)
In [96] of this extract, her Honour referred to the potential to make an adverse finding "that they [ie, the prosecution witnesses] knew of the pumps in the charge period". I take the reference to the "pumps" as being a reference to the digital engine hour meters (to which pumps were attached), ie, her Honour was referring to whether the relevant officers were aware of the presence of digital engine hour meters during the relevant charge period. Read in this way the above extract contains two relevant findings, namely, a finding by her Honour that it was not shown that the relevant "Prosecutor's officers" were aware of the digital engine hour meters in 2015 (in [96]), and a positive finding that they were not aware of the digital engine hour meters in 2015 (in [97]).
The appellants submissions in support of this ground attacked the latter finding; ie, the positive finding that the respondent's witnesses at the trial were not aware of the presence of digital engine hour meters in 2015. I consider that it was incumbent on the appellants to go further and establish that it was erroneous for her Honour to fail to find that they were so aware. The appellants' pitched their application for costs on the basis they were so aware and her Honour's reasons for rejecting the application are supportable on the basis that that was not established. Nevertheless, I will address this ground as framed.
In support of this ground, the appellants contended that, to the extent that the above reasoning referred to the lack of reference to the digital meters in the evidence of the respondent's witnesses at the trial, despite the photographs depicting the meters being disclosed to the appellants, then that was merely a "restatement of the appellants' complaint, as opposed to a reasons to reject it". This contention fails to engage with the primary judge's reasoning. The point being made by the primary judge is that, if the principal prosecution witnesses were aware of the existence of functioning digital hour meters from their inspections in 2015 yet proceeded to pursue a prosecution based on dysfunctional MACE meters, then they would have been foolish not to address that in their evidence. On the appellants' case, the respondent's officers disclosed photos containing what they (supposedly) knew were digital hour meters to the appellants. On that reasoning, those officers would also have concluded that the appellants were aware of those meters. Put another way, her Honour considered that the manner in which the prosecution was conducted was only consistent with the relevant prosecution witnesses not being aware of the existence of those meters. Her Honours reasoning in this respect was not erroneous.
The appellants contended that the primary judge's reliance on the fact that the answers to the statutory notices did not alert the respondent to the existence of the digital meters was erroneous because "[i]t did not begin to follow from [that matter] that the respondent did not appreciate the significance of the digital meters, particularly when the respondent itself had photographed the [meters]". The appellants also submitted that as the "respondent's officers" knew of the digital engine hour meters from at least July 2017 and, as proceedings were not brought until January 2018, then the appellants' responses could not be relevant to the court's determination of costs.
I understand the reference to the "respondent's officers" having knowledge of the digital meters in July 2017 to be a reference to what Mr Wheatley and Mr Pearce learnt in 2017 based on the notes and draft affidavit described above. At most, the material demonstrated that as at 2017 they were aware of the presence of digital engine hour meters which were not functioning.
To address this submission, and so much of this ground that challenges the reasoning in [98] of the above extract, it is necessary to describe the statutory notices that were issued in 2015 and 2018. At the substantive hearing, the respondent proved that on or about 2 November 2015 it sent to Mr Harris a notice under s 338A(2) of the WM Act requiring that he provide certain information and records. This notice recited that on 6 August 2015 representatives of WaterNSW attended at Mercadool and "observed 3 of 5 pumps extracting water without any properly functioning meters to record water usage". Amongst other matters the notice sought answers to the following questions: "M. Do any of the pumps marked from 1-5 in "Annexure A" have metering devices installed? If so what metering devices are installed? Please provide meter type, make and model. … O. Were the meters working properly on 6th August 2015? …. S. Is there any further information that DPI - Water should know about in relation to 'the incident' [i.e. the extraction of water on 6 August 2015] or any other potential offences against the [WM Act]?"
On 25 November 2015 Mr Harris' solicitor responded. In relation to M and O he stated: "M. All of the pumps have Mace Mark 2 meters installed. … O. No. The meters have been removed for repair sometime prior to … 6 August 2015. State Water were aware of this arrangement and were in agreement."
In relation to S, it suffices to state that the response did not suggest that there were any functioning meters on the subject pumps as at 6 August 2015 or that functioning digital engine hour meters were ever installed on the subject pumps at any time.
The respondent also proved that in January 2018 a further notice under s 338A(2) of the WM Act was sent to both Mr Harris and Mr Timmins which, inter alia, recited that on 6 August 2015 various pieces of metering equipment were observed not to be functioning and requesting information about, for the 2014/2015 and 2015/2016 "water years", the periods of time in which the metering equipment was not working and when it was removed for repairs. Mr Harris' response stated that he did not possess the details requested but referred to certain "MACE" meters not being operational during that period (ie, October 2014 to March 2015) and being serviced on 18 September 2015. Mr Timmins responded that he did not have access to the relevant records but was aware "that the Occupier [ie, Mr and Mrs Harris] hired an Independent Contractor to service the Metering Equipment and undertake repairs on an as needs basis."
The appellants' submissions in reply noted that, in the primary judge's reasons for dismissing the charges, her Honour discounted the reliance sought to be placed on the notice issued to Mr Harris in November 2015 on the basis that question M was construed as being directed to the date of the notice, ie, 2 November 2015, and not the alleged date of the offence, ie, 6 August 2015, and the answer to Question O should be construed as confined to the MACE meter which on the evidence was not functioning as at 6 August 2015. Even allowing for this very generous (to the appellants) construction of the 2015 notices, her Honour was not in error in placing reliance on the notices on the issue of costs. As her Honour observed, the answers to the notices did not give any suggestion or hint that at any time from 6 August 2015 to early 2018 functioning digital engine hour meters were installed on the subject pumps. Even if one accepts the primary judge's construction of Mr Harris' response to question M of the notice dated 2 November 2015 as being confined to the date of the notice, it still means the response conveyed that, as at that date, the digital engine hour meters were not installed on the subject pumps. That assertion is inconsistent with the appellants' contention that at least Mr Pearce should have concluded, from observing what appeared to be dysfunctional digital engine hour meters in 2017 on two pumps, that there were functional digital engine hour meters present in August 2015.
The appellants' submissions also contended that her Honour relied on irrelevant matters by referring in [97] of the Costs Judgment to the absence of cross-examination of the respondent's officers about the existence of the digital engine hour meters and the absence of any submission at the substantive hearing that the prosecutor's officers "should have known about the existence of the digital meters". The appellants submitted that there was no need for such cross-examination or submission until the issue of costs came to be addressed after the charges were dismissed. However, while it was not obligatory for the appellants to cross‑examine on that topic at the substantive hearing, it was certainly open to them to do so. The appellants could have sought to extract evidence about the existence of functioning digital engine hour meters and thereby avoid the necessity to call Mr Timmins in their own case. In any event, the absence of cross‑examination of the respondent's witnesses to the effect that the appellants were aware of the existence of such meters but chose not to address them in their evidence when there was an opportunity, but not necessarily an obligation, to do so was a matter her Honour was entitled to consider.
The appellants also submitted that the fact that the respondent's witnesses at the substantive hearing did not adduce evidence "relating to digital meters gives rise to a number of available inferences, including, for example, that the information was deliberately withheld; that it was not mistakenly considered not to be relevant; or that there was a failure of communication such that some officers of the respondent did not have actually have awareness of the information, while others did". This contention appears to assume what the appellants seek to prove, namely, that the respondent's witnesses were aware that it had evidence "relating to [the presence of] digital meters" in August 2015. In any event, the present ground of appeal does not concern what inferences were "available" to the primary judge but simply whether the primary judge erred in either positively finding that the respondent's witnesses were not aware of the digital engine hour meters, or failing to find that they were. I am not satisfied her Honour did so in either respect.
Finally, I note that parts of the appellant's submissions in relation to this ground drift from the specific complaint about her Honour's finding in relation to the knowledge of the respondent's witnesses of the presence of (functioning) digital engine hour meter to a broader complaint that her Honour refused to award them costs on the basis that the respondent should have ascertained their existence as at the charge date. Hence it was submitted that "a failure by a prosecutor to appreciate the relevance of its own evidence is not a basis to deny a successful defendant their costs under the relevant statutory provision". The short answer to that contention is that it depends on the circumstances in which the "failure … to appreciate" occurred and how that engages with the relevant provisions of the CPA. In this case, her Honour engaged with this broader complaint in [98] of the above extract (and elsewhere in the Costs Judgment). I do not discern any error in the manner in which her Honour did so.
I would reject ground 1.

Ground 2: Failure to Alert the Prosecution

Ground 2 of the appeal contends that the learned judge erred in having regard to the fact the appellants did not "alert" the respondent to the deficiency in their case.
This ground makes complaint about her Honour's reliance, at various points in the Costs Judgment (such as [96] above), to the failure of the appellants to "alert" the respondent to the presence of (functioning) digital engine hour meters on pumps 3, 4 and 5 at Mercadool. As noted, in considering the exercise of the discretion to award costs on the hypothesis that the power to award them had arisen, her Honour observed that an important consideration would have been that the appellants did not rely on Mr Timmins' affidavit until after the prosecution case closed and did not cross‑examine the prosecution witnesses about the presence of digital engine hour meters on pumps 3, 4 and 5. [30] Her Honour considered that such circumstances "fall squarely within the observations made by Kirby and Johnson JJA in the Court of [Criminal] Appeal in Southon …. at [83]-[84]".
The appellants submitted that her Honour's reliance on Southon was misplaced in that "[p]rosecutions that fail because of a competition between the evidence of two parties, such as in Southon, are not analogous to the present proceedings" and that her Honour's emphasis on the appellants' lack of disclosure was misplaced. It was submitted that it was the photographic evidence the respondent's obtained that was said to be "ultimately fatal to the proceedings".
The appellants' attempt to confine the effect of the decision in Southon is itself misplaced. In Southon, the appellants were charged with harming trees forming part of an "endangered ecological community". They served a report of their soil expert after the prosecution had closed its case. The service of the report resulted in the prosecution withdrawing the charges as that report was evidence that the land on which the trees had been harmed did not form part of an endangered community. The appellants' costs application was dismissed by the primary judge as was their appeal. In a passage from Southon which the appellants rely on, Beazley JA observed that s 257D(1)(c) of the CPA "does not provide an entitlement to costs merely because one expert trumps another, or where one aspect of the evidence is found to be unmaintainable either because of contrary evidence given by the defence, or because the prosecution evidence has been effectively undermined in cross-examination" (at [73]). As noted, the appellants contended that this characterisation of what occurred in Southon does not embrace the circumstances of what occurred in this case.
However, in Southon, Kirby and Johnson JJ, who agreed with Beazley JA, also addressed a circumstance raised in argument about the appellants' case for costs being strengthened had they served their report on the prosecution in advance. Their Honours observed that "considerations of [that] type … would be pertinent to the exercise of discretion on costs" and that "[w]here an accused person held back from the prosecution an expert report until after the prosecution had closed its case", then that "would operate strongly against that accused person in any subsequent application for costs" by the accused (at [85]).
The observations of Kirby and Johnson JJ are consistent with numerous decisions in relation to the awarding of costs in criminal cases that have held that it is relevant to consider the timing of the disclosure to the prosecution of evidence that exonerates the accused notwithstanding that the accused bears no onus of proof and is (usually) entitled to withhold that evidence until the close of the prosecution case (see for example R v Dainer; Ex parte Milevich (1988) 91 FLR 33 at 35 to 36; Farlie v Ross [2004] NSWSC 1001 at [25]). Thus, in Latoudis Toohey J observed (at 565): "….if a defendant has been given the opportunity of explaining his or her version of events before a charge is laid and refuses the opportunity, and it later appears that an explanation could have avoided a prosecution, it may well be just and reasonable to refuse costs: see, by way of illustration, Reg. v. Dainer; Ex parte Milevich. This has nothing to do with the right to silence in criminal matters. A defendant or prospective defendant is entitled to refuse an explanation to the police. But if an explanation is refused, the successful defendant can hardly complain if the court refuses an award of costs, when an explanation might have avoided the prosecution."
To similar effect, in Latoudis Mason J stated (at 544): "I agree with Toohey J that, if a defendant has been given an opportunity of explaining his or her version of events before a charge is laid and declines to take up that opportunity, it may be just and reasonable to refuse costs."
These observations concern the absence of disclosure prior to charges being laid but are also applicable to the time after the prosecution commences. Depending on the circumstances, these observations are also capable of applying to ss 257D(1)(a) to (d) and s 257C of the CPA.
In this case, once the primary judge was not satisfied that the respondent was aware of the presence of (functional) digital engine hour meters on the subject pumps as at August 2015 (or that they should have been aware) then the proper characterisation of what occurred is that the acquittal arose in circumstances where the appellants could have disclosed their existence but chose not to until after the close of the prosecution case. That is more than sufficient to bring the matter within the circumstances envisaged by Kirby and Johnson JJ in Southon. The position only becomes stronger if account is taken of the appellants' failure to mention the digital engine hour meters in their responses to the notices issued under s 338A of the WM Act.
I would reject ground 2.

Ground 3: Alleged Breach of Duty of Disclosure

Ground 3 of the notice of appeal contends that "[t]he learned judge erred in determining that there was no failure by the respondent in its prosecutorial duty to disclose relevant evidence".
As part of its contention that the proceedings were conducted in an improper manner (CPA, s 257D(1)(b)), the appellants contended that the respondent failed to comply with its prosecutorial duty of disclosure by its failure to disclose the material noted above (at [27]), being the material disclosed in the Mercadool 2 proceedings. [31]
The primary judge dealt with this contention as follows: [32] "100 The duty to disclose relevant information in s 247E(1)(i) of the CP Act is no doubt well known to the Prosecutor and while the Defendants have emphasised that obligation in their written submissions with reference to Grey v The Queen, Mallard, R v Lipton, Reardon (No 2) and R v Mockbel, all those cases deal with situations where a prosecutor had information that was unknown to a defendant which was material to or had the potential to be material to a charge. Where a defendant as here is aware of the relevant circumstances, indeed caused them to exist, it is not apparent that such a duty does arise. As relied on by the Prosecutor, in Spiteri Simpson J (Grove and Shaw JJA agreeing) stated there was no obligation on the Crown to make available material concerning a defendant's own conduct. 101 In any event, the affidavit of Mr Archer identifies that substantial efforts to disclose material were made by the Prosecutor as summarised above …. with some 42,000 documents apparently being reviewed for that purpose. Further, a duty of disclosure of specific material cannot arise in a practical sense if the Prosecutor's officers did not make the connection between the 2017 and 2019 information known to them as relied on by the Defendants and the 2015 charge period. I have accepted above that the Prosecutor's officers who gave evidence at the liability hearing were not aware of the digital engine hour meters being present and/or in use in August 2015. 102 I agree with the Defendants that the presence of digital engine hour meters was highly relevant to the charges. The failure of the Prosecutor to make the evidentiary connection contended for by the Defendants really sounds in the adequacy of the investigation, to which I turn to below, rather than an improper failure to disclose material which, from the Prosecutor's point of view, never became relevant. No improper behaviour meaning abnormal or irregular on the basis of failure to disclose material evidence is established." (emphasis added)
The appellants contended that her Honour erred in having accepted that the material the subject of this complaint was highly relevant but finding that there was no breach of the duty of disclosure because the "respondent's officers did not realise the relevance of the information they held". It was submitted that these statements were "incorrect" or "irrelevant" to the costs application. To the extent that it was said they were incorrect, this appears to correspond to the complaint made with ground 1, which has been rejected. To the extent that it was submitted that they were irrelevant, it was contended that the respondent's subjective understanding of the significance of the material was irrelevant to whether the prosecutor's duty of disclosure had been complied with.
The appellants also contended that her Honour overstated the effect of the decision in R v Spiteri (2004) 61 NSWLR 369; [2004] NSWCCA 32 ("Spiteri") where the duty of disclosure was held not to extend to material in the possession of the Crown concerning the accused performing push ups in his cell that only became relevant to assailing the accused's credit after he gave evidence that his hand was incapacitated at the relevant time (at [28]). As Simpson J observed in Spiteri, the "Crown had no reason to anticipate that the appellant would embellish his evidence about his 2002 incapacity by asserting the same incapacity continuing to 2003" and there was no obligation on the Crown "to deter an accused person from creating a trap for himself; nor need it anticipate that he will do so" (at [28]).
The respondent contended that the material the subject of the complaint of non-disclosure was not directly probative of the state of the metering equipment as at August 2015. It contended that the true nature of this complaint is that it did not disclose the state of its knowledge about the present of digital engine hour meters in 2017 and 2019, which was not a matter engaged by the duty of disclosure, but better analysed by reference to a consideration of the adequacy of the investigation. The respondent further contended that, even if this material should have been disclosed, it did not constitute evidence that there were functioning digital engine hour meters and, in any event, the presence of such meters was already known to the appellants. The respondent submitted that her Honour did not err in concluding that there was no breach of the duty of disclosure.
Both parties' submissions appear to wrongly assume that the primary judge accepted that a per se breach of the prosecutorial duty of disclosure necessarily amounted to the conduct of proceedings in an "improper manner" for the purposes of s 257D(1)(b) of the CPA. I do not accept that her Honour assumed that and I consider her Honour was correct not to.
The scope of the prosecutorial duty of disclosure was described by Hodgson JA in R v Reardon (No 2) (2004) 60 NSWLR 454; [2004] NSWCCA 197 at [54]. Its application to a particular body of evidence said to be relevant at a particular point of time during a particular prosecution can be a subject upon which reasonable minds may differ, turning as it does "on a sensible appraisal by the prosecution" (ibid at [48]; citing R v Keane [1994] 2 All ER 478). As the facts of Spiteri illustrate, reasonable understandings of whether material implicates or exonerates an accused can alter during the course of a prosecution depending, inter alia, on what witnesses state or how the defence is conducted. There is no justification for immediately reasoning from a conclusion that the duty of disclosure is engaged in relation to a body of evidence or material which has not been disclosed to conclude that the prosecution has necessarily been conducted in an "improper manner". Instead, there must be considered the degree of any departure from the duty, the reason for the departure and the significance of the departure (see generally Director of Public Prosecutions (Cth) v Kinghorn; Kinghorn v Director of Public Prosecutions (Cth) (2020) 102 NSWLR 72; [2020] NSWCCA 48 at [124] to [142]).
The primary judge addressed the duty of disclosure in [100] of the above extract. Even if her Honour overstated the effect of Spiteri, [101] of the above commences with the phrase "[i]n any event". I take that paragraph and [102] as reasoning that, regardless of whether or not the failure to disclosure the 2017 and 2019 material in this prosecution was a breach of the duty of disclosure, the prosecution was not conducted in an "improper manner" within the meaning of s 257D(1)(b) of the CPA. According to the primary judge, this was so because the respondent was clearly cognisant of its disclosure responsibilities and the "failure" to disclose this material was inadvertent because the respondent's officers "did not make the connection between the 2017 and 2019 information known to them … and the 2015 charge period". [33] Hence the duty may have been engaged in a formal sense but not in a "practical sense". This conclusion is only reinforced when regard is had to the fact that the subject material was disclosed in a prosecution between the same parties at around the same time and the material concerned a matter that was always known to the appellants.
I would reject ground 3.

Ground 4: Alleged Unreasonable Delay

Ground 4 contends that the primary judge "erred in determining there had been no unreasonable delay by having regard only to the date proceedings commenced".
This ground of appeal relates to the manner in which her Honour addressed so much of the appellants' case that relied on s 257D(1)(d) of the CPA; ie, that because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award costs.
In the Costs Judgment, Her Honour accurately recorded the appellants' submission in relation to s 257D(1)(d) of the CPA as being that there was an "extraordinary delay in bringing the prosecution" and that the appellants "incurred substantial additional costs thrown away in the two-year litigation". These extra costs included "having to attend various mentions while the Prosecutor requested additional extensions to file its disclosure notices (despite which were never properly complied with), and other interlocutory matters, including having to argue a motion for separation of the trials, in which the Prosecutor was entirely unsuccessful". Her Honour also noted the respondent's contention that there was no such delay as the proceedings were commenced within the statutory time limit, that the various case management hearings related to 10 different summonses and not just these proceedings, and that various issues "added significantly to the complexity of the pre-trial issues". [34]
Her Honour addressed this contention as follows: [35] "The summonses commencing all six prosecutions were filed on 3 August 2018 just within the three year limitation period specified in s 364(2) of the WM Act. Given that timeframe is allowed by statute, it is difficult to describe the prosecutions as being unduly delayed. No exceptional circumstances arise for the purposes of s 257D(1)(d)."
The appellants complain that the primary judge rejected the contention that there had been unreasonable delay by simply noting that the proceedings had been commenced with the three-year statutory limitation period. The appellants contended that her Honour's reasons were deficient in that the reasons did not address the appellants' contention of delay arising from the various interlocutory applications.
The primary judge's reliance on the proceedings being commenced within the statutory time limit addressed so much of the appellants' contention that there was an unreasonable delay in the commencement of the proceedings. The balance of its contentions in relation to s 297D(1)(d) concerned delay in the conduct of the proceedings because of the time taken up with interlocutory applications. The primary judge rejected this contention with the brief statement that "no exceptional circumstances arise". While this was less than an ideal discharge of her Honour's obligation to address the appellants' contention, it related to matters of procedure debated before the primary judge, being matters which her Honour was presumably very familiar with. In these circumstances, I am not satisfied that her Honour erred in failing to elaborate upon her rejection of this part of the appellants' case. Even if her Honour did so err, the error would not be material as no error was demonstrated in relation to her Honour's reasons for refusing to exercise the discretion to award costs.
I would reject ground 4.

Conclusion

It follows from the above that I would dismiss the appeal.
I propose the following order: (1) The Appeal be dismissed.
PRICE J: I agree with Beech-Jones CJ at CL.
GARLING J: I agree with Beech-Jones CJ at CL.

Endnotes

Natural Resources Access Regulator v Harris; Natural Resources Access Regulator v Timmins [2020] NSWLEC 104 ("Liability Judgment").
Liability Judgment at [7], [11] and [139].
Natural Resources Access Regulator v Harris; Natural Resources Access Regulator v Timmins (No 2) [2021] NSWLEC 18 ("Costs Judgment").
Liability Judgment at [19].
Liability Judgment at [20].
Being the statutory corporation created by the Water NSW Act 2014 (NSW).
Liability judgment at [85].
See Costs Judgment at [70].
Liability Judgment at [117] to [119].
Liability Judgment at [110].
Liability Judgment at [123].
Liability Judgment at [124].
Liability Judgment at [135].
Costs judgment at [42].
Costs Judgment at [93].
Costs Judgment at [21] and [94].
Costs Judgment at [21] and [23].
Costs Judgment at [22] to [24] and [94].
Costs judgment at [101].
Costs Judgment at [102].
Costs Judgment at [105].
Costs Judgment at [106].
Costs Judgment at [112] to [115].
Costs Judgment at [35] to [41].
Costs Judgment at [114].
Costs Judgment at [119].
Costs Judgment at [120].
Costs Judgment at [121].
Costs Judgment at [93] to [98].
Costs Judgment at [121].
Costs Judgment at [43] to [57].
Costs judgment at [100] to [102].
Costs Judgment at [101].
Costs Judgment at [91].
Costs Judgment at [120]. 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: 15 February 2023

Solicitors: Horton Rhodes Lawyers (Appellants) Crown Solicitor's Office (Respondent) File Number(s): 2018/238837; 2018/238877 Decision under appeal Court or tribunal: Land and Environment Court Jurisdiction: Class 5 Citation: [2021] NSWLEC 18 Date of Decision: 10 March 2021 Before: Pain J File Number(s): 2018/238837; 2018/238838; 2018/238839; 2018/238877; 2018/238878; 2018/238879

HEADNOTE [This headnote is not to be read as part of the judgment] The appellants, Peter Harris (Mr Harris) and Justin Timmins (Mr Timmins), were prosecuted by the respondent, the Natural Resources Access Regulator (the respondent), for three offences under s 91I(2) of the Water Management Act 2000 (NSW) (the WM Act) in relation to metered water pumps at rural properties known as "Mercadool". Subsection 91I(2) provides that "[a] person who takes water from a water source … by means of a metered work while its metering equipment is not operating properly or is not operating is guilty of an offence." The offences were alleged to have been committed by Mr Harris between 6 and 8 August 2015 and by Mr Timmins on 6 August 2015. Mr Harris was the occupier of Mercadool. Mr Timmins was the farm manager of Mercadool. The respondent's case before the primary judge was that water had been taken from a water source at a time when the "MACE" meters and "analogue engine hour meters" attached to three pumps (3, 4, and 5) were not working properly or at all. During the hearing of the charges the appellants tendered a photograph taken on 19 August 2015 of the meters attached to the pumps. After the close of the Crown case, Mr Timmins gave evidence that the photograph depicted digital engine hour meters attached to the pumps in July 2015. Mr Timmins said that, although he had no specific recollection of whether these meters were working on 6 August 2015, it was his regular practice to check if they were operating correctly and he would have remembered if they were not. The primary judge dismissed the charges. Based on the primary judge's construction of the legislative provisions and characterisation of the prosecution case, the evidence of the presence of functioning digital engine hour meters on the pumps was fatal to the charges brought against the appellants. The appellants applied for their costs pursuant to s 257C of the Criminal Procedure Act 1986 (NSW) (the CPA). The appellants contended that various officers from WaterNSW were aware of the presence of functioning digital engine hour meters at Mercadool in August 2015 and, in the alternative, that they became aware of the meters from material obtained from another investigation of the appellants. On 3 March 2021, the application was dismissed. The primary judge made several findings in relation to the respondent's investigation and prosecution: the respondent was not aware of (functioning) digital engine hour meters in August 2015; the appellants had failed to "alert" the respondent of the digital meters; the respondent had not breached its prosecutorial duty to disclose relevant evidence; and the prosecution was not unduly delayed as the proceedings were commenced within the specified three year limitation period (s 364(2) of the WM Act). The appellants appealed against the refusal to award them costs. The principal issues on appeal were:

whether the primary judge erred in finding the respondent's witnesses were not aware of the existence of (functioning) digital engine hour meters (the alleged knowledge issue);
whether the primary judge erred in having regard to the appellants' failure to alert the respondent to the existence of the digital engine hour meters prior to the close of the prosecution case (the failure to alert issue);
whether the primary judge erred in determining that there was no breach by the respondent of its prosecutorial duty of disclosure (the alleged breach issue);
whether the primary judge erred in determining there had been no unreasonable delay by having regard only to the date on which the proceedings were commenced (the alleged unreasonable delay issue). The Court held (Beech-Jones CJ at CL, Price J and Garling J agreeing), dismissing the appeal: As to the alleged knowledge issue
The primary judge's positive finding that the respondent's witnesses were not aware of the presence or use of digital engine hour meters in August 2015 was not erroneous: [39]. The manner in which the prosecution was conducted was only consistent with the relevant prosecution witnesses not being aware of the existence of the digital engine hour meters. The appellants' responses to statutory notices issued by the respondents did not give any suggestion or indication that at any time from 6 August 2015 there were functioning digital engine hour meters or that digital engine hour meters were ever installed at the relevant pumps: [44]−[46].
While the appellants were not obliged to cross-examine the respondent's witnesses about the existence of the digital engine hour meters, it was open to them to do so and for the primary judge to consider the absence of such cross-examination: [47]. As to the failure to alert issue
The appellants' failure to alert the respondent to the existence of the digital engine hour meters until the close of the prosecution case was a relevant consideration: [54]−[60]. Latoudis v Casey (1990) 170 CLR 350; [1990] HCA 59 followed; Southon v Plath (2010) 181 LGERA 352; [2010] NSWCCA 292, applied. R v Dainer; Ex parte Milevich (1988) 91 FLR 33; Farlie v Ross [2004] NSWSC 100; considered. As to the alleged breach issue
The primary judge's finding that the prosecution was not conducted in an "improper manner" was not erroneous. A breach of the prosecutorial duty of disclosure does not necessarily amount to the proceedings being conducted in an "improper manner" for the purposes of s 257(D)(1)(b) of the CPA. Consideration must be given to the degree of (any) departure from the duty, reason for the departure and significance of the departure: [67]−[69]. R v Spiteri (2004) 61 NSWLR 369; [2004] NSWCCA 32; Director of Public Prosecutions (Cth) v Kinghorn; Kinghorn v Directory of Public Prosecutions (Cth) (2020) 102 NSWLR; [2020] NSWCCA 48, approved. As to the alleged unreasonable delay issue
The primary judge's reliance on the proceedings commencing within the statutory limitation period addressed the appellants' contention of unreasonable delay in the commencement of the proceedings. The primary judge's failure to elaborate upon the finding that there were "no exceptional circumstances", while brief, was not an error as it concerned matters of procedure.

JUDGMENT

BEECH-JONES CJ at CL: This is an appeal under s 5AA(1)(b) of the Criminal Appeal Act 1912 (NSW), as extended by s 5AB to summary criminal proceedings in the Land and Environment Court, against the dismissal by that court of an application for costs by two defendants who successfully defended summary prosecutions brought against them.
Although an appeal against the making of a costs order requires a grant of leave to appeal (Criminal Appeal Act, s 5AA(1A)) there is no such requirement in respect of a refusal to make such an order. The conferral of a right of appeal to an intermediate court of appeal in respect of a refusal to make a costs order is a relatively rare phenomenon. The imposition of the necessity to obtain a grant of leave in such cases "promotes the availability … speed and ... efficiency of justice" in this Court and "also represents a constraint upon the overall cost of litigation" (Coulter v The Queen (1988) 164 CLR 350; [1988] HCA 3 at 359 per Deane and Gaudron JJ). The inclusion of a requirement to obtain a grant of leave in cases such as this is a matter that warrants the attention of the legislature.

(2010) 181 LGERA 352

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