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

Catchwords

[2006] FCAFC 199 Director of Public Prosecutions (Cth) v Ngo (2012) 227 A Crim R 287[2012] NSWSC 1521 Dyers v The Queen (2002) 210 CLR 285[2002] HCA 45 Fosse v Director of Public Prosecutions [1999] NSWSC 367 Gordon Plath of the Department of Environment and Climate Change v VurlowHockeySouthton [2009] NSWLEC 102 Gould v Director of Public Prosecutions (Cth) (2018) 273 A Crim R 91[2018] NSWCCA 109 Grey v The Queen (2001) 75 ALJR 1708[2001] HCA 65 JD v Director of Public Prosecutions [2000] NSWSC 1092 Jones v Dunkel (1959) 101 CLR 298[1959] HCA 8 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257[1992] FCA 539 Kogarah City Council v El Khouri (2014) 212 LGERA 208[2014] NSWLEC 196 Latoudis v Casey (1990) 170 CLR 534[1990] HCA 59 Lismore City Council v Ihalainen (No 3) (2015) 212 LGERA 222[2015] NSWLEC 53 Mallard v The Queen (2005) 224 CLR 125[2005] HCA 68 Natural Resources Access Regulator v Budvalt Pty LtdHarrisHarrisTimmins (2019) 240 LGERA 221

Judgment (49 paragraphs)

[1]

Re Australian Education Union (NT) (No 2) [2011] FCA 728 Southon v Plath on behalf of the Department of Environment and Climate Change (2010) 181 LGERA 352; [2010] NSWCCA 292 Wollongong City Council v Ensile Pty Ltd (No 9) [2008] NSWLEC 248 Texts Cited: Macquarie Dictionary (online at 5 March 2021) Category: Costs Parties: Matter Nos 18/238837-39 Natural Resources Access Regulator (Prosecutor) Peter Harris (Defendant)

[2]

Matter Nos 18/238877-79 Natural Resources Access Regulator (Prosecutor) Justin Timmins (Defendant) Representation: COUNSEL: M Elliott SC and G Lewer (Prosecutor) E Muston SC and G Wright (Defendants)

[3]

SOLICITORS: Crown Solicitor's Office (Prosecutor) Horton Rhodes (Defendants) File Number(s): 18/238837-39; 18/238877-79

[4]

Judgment

The Defendants (here the Applicants for costs) were each charged with three offences under s 91I(2) of the Water Management Act 2000 (NSW) (WM Act) in relation to water metering. The offences were alleged to have been committed between 6-8 August 2015 for Mr Harris and on 6 August 2015 for Mr Timmins in relation to the use of metering equipment installed at three pumps at a property known as Mercadool. The proceedings were commenced on 3 August 2018. All charges were dismissed in Natural Resources Access Regulator v Harris; Natural Resources Access Regulator v Timmins [2020] NSWLEC 104 (NRAR v Harris) on 31 July 2020. The Defendants seek their costs of the multiple proceedings pursuant to ss 257C and 257D of the Criminal Procedure Act 1986 (NSW) (CP Act). There is no dispute that the Court has power to award costs to the Defendants if the statutory preconditions in the CP Act are met.
The Natural Resources Access Regulator (NRAR) was established on 30 November 2017. The NRAR took over investigations from the previous regulator WaterNSW in April 2018. WaterNSW had previously assumed responsibility from the Department of Primary Industries - Water (DPI Water) in July 2016.

[5]

Criminal Procedure Act 1986 (NSW)

Relevant provisions of the CP Act provide: Division 2A Case management provisions and other provisions to reduce delays in proceedings … 247E Notice of prosecution case to be given to defendant (1) The prosecutor is to give to the defendant notice of the prosecution case that includes the following - … (i) a copy of any information, document or other thing provided by authorised officers to the prosecutor, or otherwise in the possession of the prosecutor, that may reasonably be regarded as relevant to the prosecution case or the defence case, and that has not otherwise been disclosed to the defendant, … … Division 4 Costs … 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) The amount of professional costs is to be such professional costs as the court specifies or, if the order directs, as may be determined under section 257G. (3) Without limiting the operation of subsection (1), a court may order that the prosecutor in proceedings under this Part pay professional costs if - (a) the accused person is discharged as to the offence the subject of the proceedings, or (b) the matter is dismissed because the prosecutor fails to appear, or (c) the matter is withdrawn or the proceedings are for any reason invalid. 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) An officer of an approved charitable organisation under the Prevention of Cruelty to Animals Act 1979 is taken not to be acting in a private capacity if the officer acts as the prosecutor in any proceedings under that Act or section 9(1) of the Veterinary Practice Act 2003. … 257G Calculation of costs The professional or other costs payable by a prosecutor or accused person in accordance with an order directing that the amount of costs is to be determined under this section are to be determined - (a) by agreement between the prosecutor and accused person, or (b) if no such agreement can be reached, in accordance with the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) (with or without modifications prescribed by the regulations).

[6]

Water Management Act 2000 (NSW)

Section 91I of the WM Act provides: Part 3 Approvals Division 1 Preliminary … 91I Taking water when metering equipment not working … (2) A person who takes water from a water source to which this Part applies by means of a metered work while its metering equipment is not operating properly or is not operating is guilty of an offence. Tier 2 penalty. …

[7]

Natural Resources Access Regulator v Harris; Natural Resources Access Regulator v Timmins [2020] NSWLEC 104

In NRAR v Harris three charges of failure of the occupier Mr Harris to take water when metering equipment was not operating or not operating properly at Mercadool between 6 and 8 August 2015 were dismissed. Three similar charges in relation to Mr Timmins the farm manager at Mercadool on 6 August 2015 were dismissed.
The elements of the charges against Mr Harris were set out at [7] of the judgment as follows: Element 1: Water was taken from the Barwon River Element 2: From a water source to which Pt 3 of Ch 3 of the WM Act applied Element 3: By means of a metered work Element 4: While its metering equipment was not operating properly or not operating Element 5: On land occupied by the Defendant (his liability being pursuant to s 91L of the WM Act)

[8]

The elements of the charges against Mr Timmins were set out at [11] of the judgment as follows: Element 1: The Defendant took water from the Barwon River Element 2: From a water source to which Pt 3 of Ch 3 of the WM Act applied Element 3: By means of a metered work Element 4: While its metering equipment was not operating properly or not operating

[9]

The evidence relied on by the Prosecutor consisted of certificates of evidence concerning factual matters under the WM Act. A "Water Supply Works Approval 85WA753317" (Water Supply Works Approval) authorising the use of water supply works, was held for five pumps at Mercadool.
An affidavit of Mr Trevor Pearce an employee of WaterNSW and its predecessors from 1987 to 2017 and authorised officer under the WM Act, who had checked water meters for years including in the Barwon-Darling River system, affirmed 17 May 2019 was read. Mr Pearce attested to the use of MACE meters and engine hour meters in the Barwon-Darling River system. He attended Mercadool on 6 August 2015 and described inspecting three pumps known as pumps 3, 4 and 5 on a raised platform on the bank of the Barwon River which were extracting water. None of the MACE meters on pumps 3, 4 and 5 were working properly so Mr Pearce took readings from the engine hour meters located on each of the pumps. Mr Pearce noted the following engine hour displays in his diary entry dated 6 August 2015. Pump 3 displayed 5,898.0 hours, pump 4 displayed 4,250.4 hours and pump 5 displayed 4,384.1 hours. The engine hour meters for pumps 3 and 5 had not moved since Mr Pearce's previous visit to Mercadool on 26 February 2015. The engine hour meter for pump 4 had moved from 4,250.2 hours on 26 February 2015 to 4,250.5 hours on 6 August 2015. This showed that pump 4 had been running for approximately 12 minutes. Mr Pearce agreed in cross-examination that the engine hour meters he referred to in his evidence were analogue engine hour meters, a photograph of which was included at [32] of the judgment. He agreed that a photograph at [34] of the judgment was of a MACE meter, also located at pumps 3, 4 and 5.
An affidavit of Mr Zachary Blackwood authorised officer under the WM Act affirmed 29 June 2020 was also read concerning his inspections of the MACE and engine hour meters meaning analogue meters on the three pumps at Mercadool the subject of the charges. Mr Blackwood visited Mercadool in August 2015. On 2 November 2015 Mr Blackwood issued a statutory notice to Mr and Mrs Harris under s 338A(2) of the WM Act concerning the taking of water on 6 August 2015. The exhibit to Mr Blackwood's affidavit included photographs, taken by Mr Blackwood, which showed only the analogue engine hour meters and MACE meters associated with pumps 3, 4 and 5. In cross-examination Mr Blackwood was shown three photographs taken by him during his visit to Mercadool which showed the complete meter boards with various controls, including digital engine hour meters, associated with pumps 3, 4 and 5 (see NRAR v Harris at [51]-[52]). The large circular object on the left side of the photographs is the digital engine hour meter and the display of the analogue engine hour meter is at the bottom left of the four circular objects on the right hand side of the photographs. These photographs were tendered as Ex 1 by the Defendants in the liability proceedings.

[10]

Evidence

The parties referred to documents in the original court book. The particulars in the summonses issued in the liability proceedings included that at specified times pumps 3, 4 and 5 at Mercadool were used to take water, that the relevant engine hour meters, meaning analogue, were not working at all and the MACE meters were not working properly.
The parties referred to the following affidavits which were read in the liability proceedings and are summarised above: Mr O'Neill's affidavit sworn 2 August 2018, Mr Pearce's affidavit affirmed 17 May 2019 and Mr Blackwood's affidavit affirmed 29 June 2020. The parties also provided the Court with a supplementary court book on costs which included Mr Timmins' affidavit affirmed 14 July 2020.

[11]

Mr Archer's affidavit

The Defendants read the affidavit of Mr Neil Archer solicitor affirmed 20 November 2020 and tendered the bundle of documents marked NJA-1 as Ex A. Information collected during WaterNSW's investigation for the liability proceedings was stored on a database called "CiRam" under case number 647-2015. The Prosecutor had tendered an "Item Detail Report" for case number 647-2015 dated 3 August 2017 in the liability proceedings. The Defendants tendered an updated Item Detail Report for case number 647-2015 dated 10 September 2018, marked Ex B. For clarification, the Item Detail Reports referenced in Mr Archer's affidavit are also called CiRam reports.
Mr Archer's affidavit identified the extensive pre-trial disclosure timeline for the liability proceedings. The Prosecutor was required to file material that may reasonably be regarded as relevant to the prosecution or defence case under s 247E of the CP Act. The Court made orders on 14 September 2018, 17 October 2018, 14 December 2018, 22 March 2019, 26 April 2019, 31 May 2019, 12 July 2019 and 28 October 2019 requiring the Prosecutor to give the required CP Act notices disclosing all relevant material. On 30 May 2019, the Prosecutor had advised that it was intending to file and serve expert evidence. The Prosecutor's solicitor wrote to the Defendants' solicitors on 15 October 2018, 15 March 2019 and 14 June 2019 advising that it was having difficulty meeting the timetable for service of disclosure documents. A letter to the Defendants' solicitors dated 13 December 2018 stated that reasons for the Prosecutor's delay in providing material included that these matters had been inherited from the previous regulator and its lawyers and there were approximately 42,000 documents to review. Mr Archer attested that in summary, the Prosecutor received seven extensions spanning a year to provide the material required by s 247E of the CP Act. The Prosecutor provided the Defendants with one tranche of material on 23 November 2018, a second tranche of disclosure material on 5 April 2019, updated s 247E notices on 17 May 2019 and 20 June 2019, notices of the prosecution case pursuant to s 247J of the CP Act on 25 July 2019 and provided a third disclosure of documents on 1 November 2019. On 6 July 2020 the Prosecutor provided further amended notices pursuant to s 247J of the CP Act.
In April 2020, the Prosecutor charged Mr Harris with 10 offences under s 91G(2) of the WM Act of taking water in contravention of a water approval on Mercadool, occupied by him between 6 and 15 July 2015 (Mercadool 2 proceedings). In August 2020, Mr Archer commenced a review of the documents that the Prosecutor disclosed for the Mercadool 2 proceedings.

[12]

Mr Mannall's affidavit

The Prosecutor read the affidavit of Mr Mannall lead investigator within the Water Enforcement Taskforce at the NRAR, sworn 27 November 2020. Mr Mannall visited properties of water licence holders on a regular basis. During those visits he inspected equipment used to pump water onto properties and metering devices. Mr Mannall estimated that he had seen and inspected approximately 375 pump sites since commencing with the DPI Water in 2012.
On 24 July 2019, Mr Mannall attended Mercadool and conducted a site inspection of all water supply works authorised by the Water Supply Works Approval. During the course of that inspection, at each pump site, Mr Mannall took the following actions and recorded details in his official notebook: took GPS co-ordinates using a handheld device; photographs of the water supply works and associated metering equipment, including the digital engine hour meters; and took meter readings from the engine and associated metering equipment. The photographs Mr Mannall took are included in Annexure A to his affidavit dated 27 November 2020. Copies of the notes that Mr Mannall took during the inspection are included in Annexure B to his affidavit.
Mr Mannall attested that at approximately 12:30 pm on 24 July 2019, he inspected Barwon pumps 3, 4 and 5. It was his usual practice when inspecting pumps to turn the ignition key on the instrument panel if a battery was in place. Pumps 3 and 5 were not fitted with batteries. Mr Mannall attempted to access information stored on the engine control display of pump 4 by turning its ignition key. When Mr Mannall turned the key on pump 4 he saw nothing displayed on the light emitting diode (LED) display. When Mr Mannall inspected the engine control display at pump 3, the tachometer was showing approximately 1,500 rpm when the engine was not running. Mr Mannall concluded that there were various faults with the tachometers and batteries installed in the engines of each pump.
Mr Mannall attested that on 14 July 2020 he received a video from the NSW Crown Solicitor's Office which showed a key being turned and then a red button pressed shortly after a digital reading on a "VDO" gauge is displayed. The LED remained blank until the red button, the "Murphy" switch, was pressed. Mr Mannall attested that prior to viewing this video he had no knowledge of the Murphy switch, its operation or effect on a digital display fitted to a motor. Its installation was not a common occurrence on pump sites that he had inspected during his career.

[13]

Statutory notice responses

Three notices inter alia were issued by the Prosecutor in the course of its investigations which resulted in the liability proceedings. The notices and response to the notices are set out below.

[14]

Section 338A(2) Notice to Provide Information and / or Records addressed to Mr and Mrs Harris dated 2 November 2015

A "Notice to Provide Information and/or Records" issued to Mr and Mrs Harris by Mr Blackwood on 2 November 2015 included the following questions: BACKGROUND … C. DPI Water is investigating matters associated with the administration and enforcement of the WM Act and its associated legislation. D. DPI Water is investigating a potential breach(es) of the Water Management Act 2000 that occurred on or about 6th August 2015, at "Four-G" 3345 Mercadool Road, Walgett NSW 2832 also known as (Lots 32,36 of DP:752231 & Lot 19,27 and 28 of DP:752260 within the county of Denham, in the parish of Barwon) ("The Premises"). … M. Do any of the pumps marked from 1-5 in "Annexure A" [should be "B"] have metering devices installed? If so what metering devices are installed? Please provide meter type, make and model. N. Are the meters functioning accurately and in good working order? When was the last time the meters were checked for faults? O. Were the meters working properly on 6th August 2015? … Is there any further information that DPI - Water should know about in relation to "the incident" or any other potential offences against the Water Management Act 2000 or Water Act 1912? S.

[15]

Annexure B was two photographs with pumps 3, 4 and 5 marked on one of these. Annexure A was a map of the Mercadool property. The incident referred to in the 2015 notice are the potential breaches of the WM Act on or about 6 August 2015.

[16]

Response to s 33A(2) Notice to Provide Information and / or Records issued to Mr and Mrs Harris on 2 November 2015, dated 25 November 2015

The response to the Notice to Provide Information and/or Records provided the following answers: … We act for Mr and Mrs Peter Harris and have to hand your letter to our clients dated 2 November 2015. In relation to the request pursuant to Section 338A(2) of the Water Management Act 2000 we are instructed to advise as follows:- … M. All of the pumps have Mace Mark 2 meters installed. N. All of the meters are functioning accurately and in good working order. They have recently been checked and repaired by our clients' contractor Mick Allen who is a certified meter installer and is a former employee of the DPI - Water. O. No. The meters had been removed for repair sometime prior to the 6 August, 2015. State Water were aware of this arrangement and were in agreement. … S. See our comments below. …

[17]

We make the following further comments in relation to Item 1 S above: (a) It is not correct that water was pumped whilst the relevant river gauge was below the required flow rate of 430 megalitres/day. Records obtained from your Office of Water website clearly show that when pumping commenced the flow rate at the relevant river gauge was indeed in excess of the required rate. You should recheck your records. Please advise the date and time of day when your meter reader allegedly attended the pump station; (b) The maintenance of the metering equipment has for many years been the responsibility of the Department but in recent years (since about 2009) the Department has failed to carry out its obligations in this regard and some of our clients' meters had ceased to operate correctly and were in need of maintenance and repair. As a result of this unfortunate position, our clients were obliged to engage their own contractor to repair and maintain the metering equipment at their own cost notwithstanding that this is in fact the Department's responsibility. A certified meter installer, Mick Allen, who is a former employee of the Department has been carrying out the Department's responsibilities as our clients' contractor and at our clients' cost for about the last 12 months. (c) The abovementioned measuring equipment was installed prior to the 30 June, 2010 and does not need to include a data logger because of the grandfathering provisions adhered to by the Department (see letter from Paul Pendlebury, Director of Water Systems to Ian Cole, President Barwon-Darling Water dated 21 December, 2012); (d) This matter has already been raised with the Minister for Land and Water, the Honourable Niall Blair. Should our clients be further harassed with any further unwarranted allegations and demands, we have instructions to make further complaints to the Minister and the Director-General.

[18]

Section 338A(2) Notice to Provide Information and / or Records addressed to Mr Harris dated 22 January 2018

A Notice to Provide Information and/or Records issued to Mr Harris by Mr O'Neill on 22 January 2018 included the following questions: BACKGROUND … E. On 6 August 2015 at approximately 9.00am, Customer Field Officer Trevor Pearce attended the Premises. During this visit, CFO Pearce observed pumping from various pumps at the Premises, took a series of readings from Metering Equipment and observed that a number of pieces of Metering Equipment were not functioning properly or, in some cases, not functioning at all. …

[19]

REQUIREMENT TO PROVIDE INFORMATION AND/OR RECORDS 1 Information Information about, for the 2014/2015 and 2015/2016 water years: (a) the periods of time, including start and end dates, during which any Metering Equipment at the Premises was not properly operating; 1.4 (b) the date on which any of the Metering Equipment at the Premises was removed for repair or repaired on site; (c) the precise nature of those repairs; and (d) when any Metering Equipment which was removed for repair as identified in response to paragraph 1.4(b) was reinstalled at the Premises. … 2 Records Without limiting the generality of paragraph 2.1, records and documents recording, for the 2014/2015 and 2015/2016 water years: (a) the periods of time, including start and end dates, during which any Metering Equipment was not properly operating; 2.6 (b) the date on which any of the Metering Equipment was removed for repair or repaired on site; (c) the precise nature of those repairs; and (d) when any Metering Equipment was removed for repair as identified in response to paragraph 1.4(b) was reinstalled.

[20]

Response to s 338A(2) Notice to Provide Information and / or Records issued to Mr Harris on 22 January 2018

The response to the Notice to Provide Information and/or Records provided the following answers: … 1.4 (a)-(d), The Respondent does not hold precise details in relation to these questions. The Respondent engaged an Independent Contractor to service, advise on and carry out any necessary repairs to the MACE Meters at the Premises. The Respondent is aware from information provided by the Independent Contractor that certain MACE Meters were not operational in the period October 2014 to March 2015. The MACE meters were not Metering Equipment the Respondent was obliged to install. The Notice states that Metering Equipment was not operational in August 2015. The Independent Contractor serviced the Metering Equipment at the site on 18 September 2015. … The Respondent has attached to this Response all documents in its possession called for in the Notice. 2

[21]

Section 338A(2) Notice to Provide Information and / or Records addressed to Mr Timmins dated 23 January 2018

A Notice to Provide Information and/or Records issued to Mr Timmins by Mr O'Neill on 23 January 2018 included the following questions: BACKGROUND … E. On 6 August 2015 at approximately 9.00am, Customer Field Officer Trevor Pearce attended the Premises. During this visit, CFO Pearce observed pumping from various pumps at the Premises, took a series of readings from Metering Equipment and observed that a number of pieces of Metering Equipment were not functioning properly or, in some cases, not functioning at all.

[22]

REQUIREMENT TO PROVIDE INFORMATION AND/OR RECORDS … 1 Information Information about, for the 2014/2015 and 2015/2016 water years: (a) the period of time, including start and end dates, during which any Metering Equipment at the Premises was not properly operating; 1.3 (b) the date on which any of the Metering Equipment at the Premises was removed for repair or repaired on site; (c) the precise nature of those repairs; and (d) when any Metering Equipment which was removed for repair as identified in response to paragraph 1.3(b) was reinstalled at the Premises. … 2 Records Without limiting the generality of paragraph 2.1, records and documents recording, for the 2014/2015 and 2015/206 water years: (a) the periods of time, including start and end dates, during which any Metering Equipment was not properly operating; 2.5 (b) the date on which any of the Metering Equipment was removed for repair or repaired on site; (c) the precise nature of those repairs; and (d) when any Metering Equipment which was removed for repair as identified in response to paragraph 1.3(b) was reinstalled.

[23]

Response to s 338A(2) Notice To Provide Information and / or Records issued to Mr Timmins on 23 January 2018

The response to the Notice to Provide Information and/or Records provided the following answers: … 1.3 (a)-(d), The Respondent does not have knowledge of the details of the answers to these questions. The Respondent is aware that the Occupier hired an Independent Contractor to service the Metering Equipment and undertake repairs on an as needs basis. … 2.5 The Respondent is employed as a Farm Manager. The balance of the material requested is not the property of the Respondent.

[24]

Defendants' submissions

The bases on which the Defendants seek their costs are as follows: 1. The proceedings were conducted by the Prosecutor in an improper manner: s 257D(1)(b) of the CP Act, because the Prosecutor: 1. breached its disclosure obligations; 2. withheld evidence from the Defendants that was exculpatory to them; 3. did not call an available material witness; and 4. relied upon evidence that was incomplete and/or misleading. 1. The investigation into the alleged offences was conducted in an unreasonable or improper manner: s 257D(1)(a) of the CP Act and the Prosecutor unreasonably failed to investigate (or to investigate properly) relevant matters of which it was aware or ought reasonably to have been aware and which suggested either that the Defendants might not be guilty or that, for any other reason, the proceedings should not have been brought: s 257D(1)(c) of the CP Act. 2. The proceedings were initiated without reasonable cause: s 257D(1)(b) of the CP Act. The evidence in the Crown case was such that it was not possible for it to prove its case beyond a reasonable doubt. 3. That because of other exceptional circumstances relating to the conduct of the proceedings by the Prosecutor, it is just and reasonable to award costs: s 257D(1)(d) of the CP Act. Namely, for the delay in commencing proceedings and interlocutory matters which unduly prolonged the litigation.

[25]

A. Proceedings conducted in improper manner - s 257D(1)(b)

[26]

Failure to disclose material evidence

The Prosecutor was bound by s 247E(1)(i) of the CP Act to disclose information and documents that may reasonably be regarded as relevant to the Prosecutor or defence case. Numerous orders were made in the course of preparation for the liability proceedings that the Prosecutor disclose all relevant material. Disclosable material as identified in Mr Archer's affidavit was not disclosed as required.
The obligation of the Prosecutor to disclose is emphasised in numerous cases including Boucher v The Queen [1955] S.C.R. 16 where Rand J said at [26] that the Prosecutor has "a duty to see that all available legal proof of the facts is presented …" The Prosecutor's duty to disclose should be honoured without the need for prompting by the defence: Grey v The Queen (2001) 75 ALJR 1708; [2001] HCA 65; Mallard v The Queen (2005) 224 CLR 125; [2005] HCA 68 (Mallard) at [16]-[17] per Gummow, Hayne, Callinan and Heydon JJ. The Prosecutor has a duty to disclose material in its possession, or available to it, that is relevant or possibly relevant to the contested issues in the case: R v Reardon (No 2) (2004) 60 NSWLR 454; [2004] NSWCCA 197 (Reardon (No 2)) per Hodsgon J at [46]-[48]; Mallard per Gummow, Hayne Callinan and Heydon JJ at [17] and per Kirby J at [77] and [81]. The duty to disclose also covers material which raises a new issue or has a real prospect of doing so. The duty covers material that might assist the defence, and it does not need to be admissible: R v Mockbel (Ruling No 1) [2005] VSC 410 (R v Mockbel).
The duty of disclosure extends to material held either by the Prosecutor or by the investigating agency: Gould v Director of Public Prosecutions (Cth) (2018) 273 A Crim R 91; [2018] NSWCCA 109 per Basten JA at [15] (Johnson and Adamson JJ agreeing); R v Lipton (2011) 82 NSWLR 123; [2011] NSWCCA 247 per McColl JA at [119] citing Mallard. Documents or knowledge held by the investigating agency is imputed to the Prosecutor: R v Farquharson (2009) 26 VR 410; [2009] VSCA 307 at [212].
At the time the liability proceedings were commenced on 3 August 2018, the Prosecutor was in possession of the following materials: 1. Diary notes and photographs taken by Mr Wheatley authorised officer under the WM Act on 12 July 2017 when he attended Mercadool with Mr Pearce (see above in [21]). 2. By July 2019, the Prosecutor came into possession of further evidence, diary notes and photographs taken by Mr Mannall, lead investigator at the NRAR, on 24 July 2019 when he attended the relevant properties (see above in [23]) (the Defendants' submission incorrectly said 12 July 2019). 3. By August/September 2019, the Prosecutor came into possession of further evidence, namely the draft affidavits of Mr Wheatley (see above in [24]-[25]).

[27]

The significance of that evidence

The case at trial concerned whether the metering equipment installed on the three pumps was "not working properly" or "not working at all". An important matter at trial was what metering equipment was installed and working as at the time of the charged offences. The Prosecutor particularised against each Defendant for each pump that the "engine hour meter" was not working. The prosecution case made no reference to there being any digital engine hour meters installed on the pumps.
The Prosecutor read in the liability proceedings the affidavit of Mr Pearce, a customer field officer with WaterNSW, dated 17 May 2019. The Prosecutor alleged, based on Mr Pearce's evidence, that when he visited Mercadool on 6 August 2015 the analogue engine hour meters on each of the three pumps were not working (see above in [10]). The affidavit of Mr Pearce excluded entirely any evidence of his later site visit with Mr Wheatley on 12 July 2017.
Firstly, there is evidence that the Prosecutor knew of the digital engine hour meters on pumps 3, 4 and 5 in 2015. The Prosecutor tendered in the liability proceedings a series of photographs of the metering equipment present at the pumps when visited by investigators on 19 August 2015. This included a photograph of the instrument cluster and what was purported to be the engine hour meter (referred to in NRAR v Harris as the "analogue hour meter"). The Prosecutor relied on evidence that the numbers on the display of the analogue hour meter had not changed and this was the state of the meters as at the time of Mr Pearce's visit. Mr Pearce confirmed this in his evidence (see above in [10]).
The Prosecutor was in possession of other photographs taken during this visit in August 2015 which it did not tender in the liability proceedings. The Defendants tendered the photographs which became Ex 1. These photographs showed the complete instrument panel for each of the pumps in August 2015. They are referred to above in [11]. These photographs showed that as at the alleged dates of the offences a digital display was present. This was not depicted in the limited photographs the Prosecutor tendered but could be observed in Ex 1.
Secondly, the Prosecutor knew of the digital engine hour meters on pumps 3, 4 and 5 in 2017 before the commencement of the proceedings in 2018. Mr Wheatley attended Mercadool with Mr Pearce in 2017 and took photographs of the metering equipment on the pumps. He made contemporaneous diary notes for the relevant investigation case number 647-2015. This inspection was being conducted as part of this investigation (see above in [21]).

[28]

Failure to call material witness

The Prosecution has an obligation to call all available material witnesses (R v Apostilides (1984) 154 CLR 563; [1984] HCA 38). Mr Wheatley was a material witness because he was in a position to give evidence to accept the existence of digital engine hour meters in 2017 (and that there was no problem with pump 4). Mr Wheatley had taken file notes on his July 2017 site visit to Mercadool which did not record any problem with the digital engine hour meter attached to pump 4, and he took photographs. Mr Wheatley should have been called by the Prosecutor to acknowledge those matters and their potential significance.

[29]

Reliance on incomplete or misleading evidence

As set out in [50] above, the Prosecutor limited its tender of Mr Blackwood's photographs to those which did not disclose the digital engine hour meter (leading the defence to tender Ex 1). Why it did not tender the photographs showing the digital engine hour meters is not disclosed on the evidence.
That failure is surprising given the obligation to put before the Court all available material evidence. It is also surprising that neither the witnesses Mr Pearce nor Mr Blackwood made any reference to the digital engine displays as part of their evidence, again presenting a somewhat misleading picture of the state of the metering equipment on the relevant days. The Prosecutor was also aware that Mr Pearce had attended the site with Mr Wheatley in July 2017 when the digital engine hour meters were observed. However, the Prosecutor read the affidavit of Mr Pearce which omitted entirely this site visit and what was observed.
Furthermore, (and after a significant period in which to seek instructions the Prosecutor did not challenge Mr Timmins's evidence (set out in NRAR v Harris at [59]), which included that in July 2015 he had discussed with Mr Pearce replacing the analogue hour meters with new digital engine hour meters. Again, any such conversation was entirely absent from Mr Pearce's affidavit as read by the Prosecutor, as is any reference at all to the digital displays he must have observed on the meters when they were pumping water during his attendance at the site.
The Prosecutor also read affidavits sworn by Mr Mannall dated 17 May 2019 and 25 June 2020 in the liability proceedings. None refer to his site visit of July 2019. At the time of swearing both affidavits he knew that there was a digital display on the instrument panel of the pumps, and only because there were no batteries available when he visited the site in July 2019 that he determined to record the hours using the analogue meter (see above in [31]-[32]).
These further examples of impropriety establish that the Defendants' costs should be met by the Prosecutor pursuant to s 257D(1)(b) of the CP Act.

[30]

B. Failure to investigate ss 257D(1)(a), (c)

The Prosecutor failed to make enquiries of the Defendants (and particularly Mr Timmins) about the nature of metering equipment installed, see above in [28].
The judgment reveals the following about Mr Timmins: 1. the installation of digital engine hours had been discussed between Mr Timmins and Mr Pearce (and this evidence was unchallenged) (NRAR v Harris at [59]); 2. Mr Timmins, the person responsible for the taking of water, was not asked to provide a statement or be interviewed about what happened in August 2015 (and this evidence was unchallenged) (NRAR v Harris at [59]); 3. the more detailed evidence from Mr Timmins provided a reliable guide to findings of fact (NRAR v Harris at [137]); 4. the notices issued to the Defendants did not direct attention to the relevant issues at the relevant time (NRAR v Harris at [137]-[138]).
The Prosecutor had clear powers to compel Mr Timmins to provide information about the relevant matters about what occurred in August 2015. There is no explanation provided by the Prosecutor as to why this was not done. Such investigations would have readily revealed that the case had insufficient prospects of success.
Despite causing delays in the liability proceedings by late suggestions that expert evidence would be obtained (see above in [19]), the Prosecutor ultimately failed to adduce or serve any such expert evidence. Expert evidence about the control panel at the pumps would likely have readily revealed a fundamental defect in the Prosecutor's case.

[31]

Criticism of statutory notices

In oral submissions, the Defendants were critical of how the statutory notices had been phrased. The statutory notice dated 23 January 2018 addressed to Mr Timmins only asked about metering equipment that was not working properly or that was removed for repair, as opposed to asking about what metering equipment was in existence on the pumps during the charge period (see above in [40]). Mr Timmins' subsequent answer therefore made no reference to the digital engine hour meters which were working. The statutory notice dated 22 January 2018 addressed to Mr Harris asked about meters or metering devices without the questions specifying what this included (see above in [38]). Mr Harris believed the questions referred only to the MACE meters and answered accordingly. Mr Harris did not receive any reply seeking clarification. It was not up to the Defendants to volunteer further information.

[32]

C. Proceedings instituted without reasonable cause s 257D(1)(b)

As to what constitutes "reasonable cause" for the purposes of s 257D, it has long been accepted that a prosecution will not have been commenced or continued with reasonable cause unless there were "substantial prospects of success": see, for example, Director of Public Prosecutions (Cth) v Ngo (2012) 227 A Crim R 287; [2012] NSWSC 1521 (Commonwealth v Ngo) at [44]-[48].
A summary of the findings of fact made by the Court as to why the liability proceedings should be dismissed is as follows: 1. the Prosecutor could not (at least) exclude the reasonable possibility that pumps 3, 4 and 5 had functioning digital engine hour meters installed on them in the charge period meaning an essential particular in the case as pleaded failed (NRAR v Harris at [85]); 2. there was not sufficient evidence to demonstrate that as at August 2015 the MACE meters were actually installed to the pumps in the sense of being actually connected and configured for the purpose of calculating volume flow meaning an essential element failed (NRAR v Harris at [117]-[119]); 3. there is no evidence of any requirement in either part of 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 (NRAR v Harris at [110]); 4. in the present case neither the legislation nor the Water Supply Works Approval required the use of any metering equipment let alone the specific MACE meters or the analogue engine hour meters. In fact, water was taken by means of pumps which did not use the analogue engine hour meters or the MACE meters. Instead Mr Timmins used a digital engine hour meter, which is not said to be faulty. That being so, there was no contravention of s 91I(2) of the WM Act (NRAR v Harris at [123]); 5. the Prosecutor did not establish the MACE meters were "used" or that water was extracted "by means of" the MACE meters in the charge periods, an essential element of the offence (NRAR v Harris at [124]); and 6. the consequence of the proper construction of s 91I(2) of the WM Act is that the Prosecutor had to prove that the water was taken "by means of" the pleaded meters and it did not do so (NRAR v Harris at [135]).
In relation to the issues of "installation" and "by means of" the Defendants note that the Prosecutor's case failed on the Prosecutor's own evidence (Commonwealth v Ngo; Kogarah City Council v El Khouri (2014) 212 LGERA 208; [2014] NSWLEC 196). It was important to note that this was not a case involving competing evidence on relevant topics, or the reliability of certain evidence, but a case involving the absence of sufficient evidence to prove the charges. The lacunae in this evidence is apparent and reflected in the Court's findings.

[33]

D. Exceptional circumstances s 257(1)(d)

There are other exceptional circumstances that militate an award for costs in accordance with s 257(1)(d) of the CP Act. There was extraordinary delay in bringing the prosecution, which may well have reflected the proper prospects of success, as well as potentially adversely influencing the quality of evidence adduced. The Defendants incurred substantial additional costs thrown away in the two-year litigation. These included having to attend various mentions while the Prosecution 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 unsuccessful: Natural Resources Access Regulator v Budvalt Pty Ltd; Harris; Harris; Timmins (2019) 240 LGERA 221; [2019] NSWLEC 169.

[34]

Prosecutor's submissions

Professional costs in criminal proceedings are not generally awarded in favour of an accused. None of the preconditions for an award of costs in s 257D(1) to the Defendants are satisfied here.
No evidence of digital engine hour meters was brought by the Prosecutor. It can be accepted that investigators would appear to have been aware in 2017 and 2019 that there was a blank digital engine hour display on the instrument panel of each pump the subject of the proceedings. The blank screen of the digital engine hour meter was also visible on a photograph taken by Mr Blackwood in 2015 tendered by the Defendants at the hearing (which became part of Ex 1).
However, the material relied upon by the Defendants being Mr Wheatley's diary notes and draft affidavit annexed to Mr Archer's affidavit in [21] and [24]-[25] above, suggests that the observations made by investigators were to the effect that in 2017 the digital engine hour meters were blank and the tachometers "stuck" such as to give the appearance that the meters were not functioning. The analogue engine hour meter was not functioning properly, and this was not in dispute. The Defendants chose not to cross-examine Mr Blackwood or Mr Pearce about the presence or operation of any digital engine hour meter. Mr Blackwood and Mr Pearce both attended Mercadool closest in time to when the offences allegedly occurred in 2015. Mr Mannall was not cross-examined at all.
At the hearing, the Defendants called evidence in their own case consisting of a short video recording. The recording showed that in order to view a reading on the digital engine hour display, a person was required to turn a key and then press the Murphy switch. A reading could not be detected by only turning the key.
Mr Mannall has provided an affidavit sworn 27 November 2020 about his inspection of the pumps at Mercadool on 24 July 2019. Mr Mannall states that it was his usual practice to turn the key on the instrument panel if a battery was in place and that he did this for pump 4 during his visit to Mercadool in 2019 (see above in [32]). The LED on the engine hour meter did not display any information. He was not familiar with the Murphy switch (red button) as, in his experience, these buttons are not commonly installed at pump sites (see above in [33]). The other two pumps (known as pumps 3 and 5) did not have batteries at the time of his visit. Mr Mannall concluded that there were various faults with the tachometers and batteries installed on the engines of each pump (see above in [32]). For example, the pump 3 tachometer showed a reading of 1,500 rpm while the engine was not running. His observations are similar in effect to those made by Mr Pearce who gave evidence in the liability proceedings (see above in [10]).

[35]

A. No failure to disclose

The seriousness with which the Prosecutor took its disclosure obligations is demonstrated by the history of the proceedings and the correspondence the Prosecutor's solicitor sent to the Defendants over the course of the interlocutory steps.
The Prosecutor does not accept that there has been a breach, let alone a "serious breach", of the Prosecutor's disclosure obligations. Even if the Prosecutor should have disclosed its knowledge of the existence - around two years after the offences the subject of these proceedings - of a digital engine hour meter display (noting the breadth of the term "Prosecutor" for the purpose of the duty of disclosure), the digital engine hour meter was necessarily already known to the Defendants. They were involved in its installation and operated it and subsequently relied upon it to defend the charges. In those circumstances, there was no failure to disclose evidence of its existence or presence: R v Spiteri (2004) 61 NSWLR 369; [2004] NSWCCA 321 (Spiteri) at [30]. This is particularly so in light of the Defendants' deliberate forensic decision to withhold any reference to the digital engine hour meters or their intention to rely on an assertion that they were present at the time of the offending until after the closure of the prosecution case: Spiteri at [25].
The Defendants' submissions also complain that there were "clear powers to compel [Mr Timmins] to provide information ... about what occurred in August 2015" and suggest that the Prosecutor did not avail himself of those powers. As the evidence before the Court shows, in 2018 the Prosecutor did issue a statutory notice to both Mr Timmins and Mr Harris which included questions about the metering equipment. A statutory notice was also issued to Mr Harris in 2015.
Those questions were clearly directed to understanding what metering equipment the Defendants were using to record the take of water at this pump site. The Defendants chose to withhold from their responses to those notices - and then over a period of years until after the close of the prosecution case - any reference to the presence of digital engine hour meters on the relevant pumps. Interpreting the statutory notices strictly does not avoid that conclusion. Their entitlement to have withheld this information is not in issue but is a highly relevant discretionary factor militating against an award of costs in this matter.

[36]

B. Investigation carried out in unreasonable manner / failure to investigate matter of which aware or ought reasonably to be aware

"Unreasonable" and "improper" have their ordinary meanings. Justice Hidden said in JD v Director of Public Prosecutions [2000] NSWSC 1092 (JD v DPP) at [29]-[31] that the test for whether an investigation was conducted in an unreasonable manner does not require proof that the investigation fell "grossly below optimum standards". An "investigation which fails to meet optimum standards is not necessarily unreasonable. … The test is purely objective. To find that the conduct of the investigation of a particular case was unreasonable does not necessarily impugn the general competence, far less the integrity, of those responsible for it."
At no stage prior to the hearing did the Defendants give any notice to the Prosecutor of their intention to rely on the presence of digital engine hour meters on pumps 3, 4 and 5, a matter known particularly to them. In these circumstances, there was no unreasonable failure to investigate. The following aspects of the investigation are relevant: 1. investigators did investigate the metering equipment in that they attended the site twice to inspect, after observing faulty equipment in 2015 (Mr Pearce followed by Mr Blackwood), and took notes and photographs; 2. Mr Pearce gave evidence in his affidavit affirmed 17 May 2019 that he compared his analogue meter readings taken on the dates of the alleged offences, with readings he had recorded during an inspection he conducted earlier in 2015. He observed that the engine hour meters for pumps 3 and 5 had not increased since that earlier inspection (see above in [10]). Mr Pearce observed that the engine hours shown on pump 4 did not increase while he was at Mercadool, despite the pumps operating to extract water during that time. It was not put to Mr Pearce by the Defendants during cross-examination that a digital engine hour meter was in place or that he should have, or could have, been aware of its existence or taken a reading from it. It was thus no part of the Defendants' case that a person viewing the instrument panel could or should have seen anything on the digital engine hour meter's LED display. As stated, the presence of a digital engine hour meter was never put to Mr Pearce, nor was any alleged discussion with Mr Timmins. In light of Mr Timmins' evidence, it is clear that Mr Pearce would not have seen anything on the LED display (of what is now known to have been a digital engine hour meter) when he inspected each pump; 3. Following his inspection in 2015, Mr Blackwood issued a statutory notice for information to Mr Harris which included specific questions about the metering equipment. Mr Harris did not make any mention of the digital engine hour meters in his response. One question was: O. "Were the meters working properly on 6th August 2015?" The response was "No". The meters had been removed for repair sometime prior to 6 August 2015. State Water were aware of this arrangement and were in agreement". In response to a question "Do any of the meters marked from 1-5 in 'Annexure' have metering devices installed? If so, what metering devices were installed? Please provide meter type make and model?", the reply was that pumps 3, 4 and 5 have "Mace Mark 2 meters installed". Again, no reference whatsoever was made to digital engine hour meters. Question S asked "is there any further information that DPI Water should know about …" This was an open-ended request. Whilst Mr Harris was under no obligation to volunteer information about functioning digital engine hour meters, he did provide information on his thoughts and complaints about the metering system. Again, no mention of digital hour meters; 4. Further notices were sent in 2018 asking both Mr Harris and Mr Timmins about the metering equipment. Mr Timmins replied that he had no knowledge when any metering equipment was removed for repair or repaired on site (which sits uncomfortably with the evidence he subsequently gave in the proceedings to the effect that he "decided" to have digital engine hour meters installed to replace the analogue engine hour meters and "saw" their installation (NRAR v Harris at [59]). Similarly, Mr Harris' response referred only to there being "MACE Meters at the Premises". It would be disingenuous to suggest that no question in any notice prompted disclosure of the existence of the digital engine hour meters, particularly if (as would now appear to be suggested by the Defendants but not accepted by the Prosecutor), the presence of functioning digital engine hour meters would have provided a complete answer to the matters being investigated. Proceedings were commenced, making references to the engine hour meters not working. Someone in Mr Harris' or Mr Timmins' position who had been proceeding under a misapprehension or misunderstanding as to what the statutory notices in 2018 were referring to, would have clearly come to understand that it included a digital engine hour meter. The Defendants did not say anything, which was their right. 5. Mr Mannall has sworn an affidavit on this costs application that he turned the key on pump 4 in 2019 and saw nothing on the LED display of the digital engine hour meter.

[37]

C. Proceedings not initiated without reasonable cause or conducted in improper manner

Proceedings will be instituted without reasonable cause if, objectively assessed on the facts apparent at the time of initiating the proceedings, they had no real prospects of success or were doomed to failure: Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275; [2006] FCAFC 199 at [60]; Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257; [1992] FCA 539 (Kanan) at 264. The failure of proceedings does not mean that the proceedings were initiated without reasonable cause: Pittwater Council v A1 Professional Tree Recycling Pty Ltd (No 3) (2009) 165 LGERA 6; [2009] NSWLEC 21 (A1 Professional Tree Recycling) at [10], [14] and [15(a)]; R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470; [1978] HCA 51 at 473: Wollongong City Council v Ensile Pty Ltd (No 9) [2008] NSWLEC 248 at [9].
If success depends upon the resolution in the Prosecutor's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where, on the Prosecutor's own version of the facts, the proceeding must clearly fail, it may properly be said that the proceeding lacks reasonable cause: Canceri v Taylor (1994) 123 ALR 667 at 676 where Moore J adopted the approach of Wilcox J in Kanan at 264.
The Defendants complain that the Prosecutor failed to disclose in the liability proceedings, material that was disclosed in the separate Mercadool 2 proceedings. This complaint is not to the point. Even if there was a failure to disclose information which the Prosecutor was under an obligation to disclose (which is not accepted), that could not of itself provide a basis for a costs order. It has been held that "given the principle that costs are compensatory and not punitive, [a] failure to disclose does not … sound in any adverse costs consequences": Lismore City Council v Ihalainen (No 3) (2015) 212 LGERA 222; [2015] NSWLEC 53 (Ihalainen (No 3)) at [34]. In any event, the existence of the digital engine hour meters was a matter of which the Defendants were already aware as they had installed and were apparently operating them.

[38]

D. No exceptional circumstances s 257(1)(d)

The proceedings were commenced within the statutory time limit in s 364(2) of the WM Act. No basis for submitting inexcusable delay therefore exists. The directions hearings and steps in the disclosure process that the Defendants refer to as extraordinary delay, entirely glosses over the fact that the directions hearings related to the case management of 10 different summonses not just those six that were the subject of the liability proceedings. There had been a debate about whether there was sufficient commonality for all these proceedings to be heard together, which the Prosecution lost. There were issues in the case which added significantly to the complexity of the pre-trial issues, transfer of functions from WaterNSW to NRAR, change in solicitors, review of some 42,000 documents and correspondence between the current Prosecutor and lawyers and their predecessors. It is an oversimplification to assert that there was extraordinary delay in bringing the liability proceedings to a hearing.

[39]

Consideration

As the Prosecutor submitted, that the six charges were dismissed in NRAR v Harris alone does not give rise to any costs consequences for the Prosecutor. Important context for my assessment of the Defendants' arguments on costs is that they were aware that digital engine hour meters were being used at pumps 3, 4 and 5 in the charge period in August 2015 as they caused them to be installed. Mr Timmins' evidence at the hearing on liability was to that effect. According to the Prosecutor's submissions, the first time legal representatives and the Prosecutor's officers became aware of that fact was after the prosecution case had closed during the hearing on liability and Mr Timmins' affidavit was read.
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. The Defendants submitted that no explanation was provided by the Prosecutor as to why digital engine hour meter photographs which became Ex 1 were not annexed to Mr Blackwood's affidavit, which is correct.
The Defendants assert that the Prosecutor did know about the presence of such meters at Mercadool in August 2015 before proceedings were commenced in August 2018 because Mr Wheatley identified the presence of digital engine hour meters on pumps 3 and 5 in his notes of a site visit in 2017 and in his draft affidavit prepared for other proceedings. Mr Pearce, who did give evidence in the liability proceedings, accompanied Mr Wheatley in 2017 and can be taken to also have then become aware, if he was not already, that the pumps had digital engine hour meters. I note that there is no evidence from Mr Pearce about the site visit in 2017, a matter the Defendants complain about. His understanding about the presence of digital engine hour meters in 2017 is unknown. Mr Mannall's affidavit confirms that in 2019 he was aware of the presence of digital engine hour meters at Mercadool and this should also have informed these prosecutions which were not heard until July 2020.

[40]

A. Proceedings conducted in improper manner (s 257D(1)(b))

The Defendants are alleging that the proceedings were conducted in an improper manner. No statutory definition of "improper" is identified in the CP Act. Its ordinary meaning can be applied. "Improper" is defined as "abnormal or irregular" inter alia in the Macquarie Dictionary (online at 5 March 2021).

[41]

Failure to disclose material evidence

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.
In any event, the affidavit of Mr Archer identifies that substantial efforts to disclose material were made by the Prosecutor as summarised above in [19] 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.
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.

[42]

Failure to call material witness

The obligation on a prosecutor to call an available material witness is stated in numerous authorities. In Dyers v The Queen (2002) 210 CLR 285; [2002] HCA 45 Gaudron and Hayne JJ stated at 292-293 (citations omitted): If persons are able to give credible evidence about matters directly in issue at the trial, those facts, standing alone, would ordinarily suggest that the prosecution should call them. As has been pointed out in several decisions of this Court, a basic requirement of the adversary system of criminal justice is that the prosecution, representing the State, must act ''with fairness and detachment and always with the objectives of establishing the whole truth in accordance with the procedures and standards which the law requires to be observed and of helping to ensure that the accused's trial is a fair one'' (emphasis added). That requires the prosecution to call all available material witnesses unless there is some good reason not to do so. The fact that a witness will give an account inconsistent with the prosecution case is not a sufficient reason for not calling that person.
The Prosecutor is not required to call all possible witnesses. The key issue here is whether Mr Wheatley was a material witness. He did not attend Mercadool in 2015 during the charge period or shortly thereafter. The officers who visited Mercadool closest in time to the offence were Mr Pearce and Mr Blackwood who provided affidavits which were read in the liability proceedings. The answer to the s 338A(2) notice to provide information to Mr and Mrs Harris in 2015, the notice and answer extracted above in [35] and [37], concerning what metering devices were installed on specified pumps was that MACE meters were installed. While the Defendants' counsel submitted that "metering" was an imprecise term, it is certainly broad and not limited to any particular kind of metering. The answer to the question "were the meters working properly on 6th August 2015?" was "no". The general Question S asking if there was any further information that DPI Water should know, while responded to in several paragraphs, made no references to digital engine hour meters.
Similarly, the separate notices issued in January 2018 to Mr Harris and Mr Timmins were not answered in a way that gave any hint of the presence and use of digital engine hour meters at Mercadool in 2015. It is not therefore apparent that Mr Wheatley was a material witness about events in 2015 as a result of attending Mercadool in 2017 in relation to the investigation giving rise to the charges.

[43]

Reliance on incomplete or misleading evidence

Essentially the same arguments are made in alleging that the Prosecutor relied on incomplete or misleading evidence. Although criticism is made of the photographs in Ex 1 not being tendered by the Prosecutor, these were provided to the Defendants. No impropriety arises in this context.
The Defendants have not established that the proceedings were conducted in an improper manner.

[44]

B. Section 257D(1)(a), investigation conducted in unreasonable or improper manner, (c) failure to investigate relevant matter

I have found above that no improper purpose was established for the purposes of subcl (1)(b) which relates to the conduct of the proceedings. That finding also applies in relation to subcl (1)(a) concerning improper investigation. Subclause (1)(a) otherwise refers to investigations conducted in an unreasonable manner. Subclause (1)(c) refers to failure to investigate any relevant matter of which a prosecutor was aware or ought reasonably to have been aware. As both grounds concern alleged inadequacies in the investigation, and overlap, they are considered together.
No definition for "unreasonable" is located in the CP Act. Its ordinary meaning can be applied. It is defined in the Macquarie Dictionary (online at 5 March 2021) as "not based on or in accordance with reason or sound judgment" inter alia. The Prosecutor also relied on JD v DPP where Hidden J stated at [29]-[31] that the test for whether an investigation was conducted in an unreasonable manner does not require proof that the investigation fell "grossly below optimum standards" (see above in [84]).
The evidence relied on by the Defendants was the material attached to Mr Archer's affidavit which was discovered by him in the course of another investigation into activities at Mercadool, namely Mr Wheatley's notes and draft affidavit and Mr Mannall's knowledge in 2019 of digital engine hour meters before the liability hearing.
Failures to investigate according to the Defendants are set out in [65] above. Firstly, Mr Timmins' affidavit stated that he discussed with Mr Pearce the installation of digital engine hour meters. The content of the conversation is not provided in Mr Timmins' affidavit. Mr Pearce was not cross-examined about it. Whether the conversation should have alerted Mr Pearce to the installation of digital engine hour meters in the future at Mercadool is not known from this evidence. In other words, no failure on Mr Pearce's part arises from this evidence in Mr Timmins' affidavit.
Secondly, the Defendants are also critical that Mr Timmins was not interviewed by the Prosecutor's officers and thirdly, the notices did not direct attention to relevant issues at the relevant time in 2015. Fourthly the Prosecutor's officers failed to notice that the meter boards on the pumps photographed in 2017 showed the digital engine hour meter also present in 2015. These last three matters are related.

[45]

C. Proceedings commenced without reasonable cause s 257D(1)(b)

The Prosecutor's submissions correctly identify the principles relevant to whether proceedings were initiated without reasonable cause, in particular failure of proceedings does not mean they were initiated without reasonable cause: A1 Professional Tree Recycling at [10], [14] and [15(a)]. Authorities regularly cited are Kanan and Re Australian Education Union (NT) (No 2) [2011] FCA 728 cited in Commonwealth v Ngo: 44 As was said by Wilcox J in Kanan v Australian Postal and Telecommunications Union at 264: It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. 45 Furthermore, in Re Australian Education Union (NT) (No 2), it was said at [30]: Finally, the test to be applied in relation to the expression "without reasonable cause" is similar to that adopted in an application for summary judgment, viz "so obviously untenable that it cannot possibly succeed", "manifestly groundless" or "discloses a case which the Court is satisfied cannot succeed": see Heidt at 272-273; Geneff v Peterson (1986) 19 IR 40 at 87-88; Hatchett at 327 and Crozier at [12]. …
In Ihalainen (No 3) at [26] Biscoe J observed: Failure of proceedings does not, of itself, mean they were initiated without reasonable cause: A1 Professional Tree Recycling at [10], [14] and [15(a)]. One way of testing whether they were initiated without reasonable cause is to ask whether, objectively assessed on the facts apparent to the prosecutor at the time of initiating the proceedings they had no substantial prospect of success or were doomed to failure. The question may be answered by reference to the quality of the evidence gathered, with an eye to the enquiries made and not made: A1 Professional Tree Recycling at [13] and [15(e)]; D v DPP at [28].
I have considered above, in the context of whether the investigation was conducted unreasonably, the facts known to the Prosecutor. The facts at the time the prosecutions were initiated did not suggest they were doomed to fail.

[46]

D. No exceptional circumstances s 257D(1)(d)

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).

[47]

Exercise of discretion

None of the matters identified in s 257D(1) of the CP Act relied on by the Defendants have been established. If they had been, an important consideration would have been that the Defendants did not rely on Mr Timmins' affidavit affirmed in July 2020 until after the close of the prosecution case and did not cross-examine the Prosecutor's witnesses about the presence of digital engine hour meters on pumps 3, 4 and 5, ensuring forensic advantage in doing so. The Defendants submitted that the fact it could have alerted the Prosecutor to the presence of digital engine meters was irrelevant as no such obligation arose upon it under the criminal justice system. That is true in terms of the liability hearing and the Defendants were successful in having the charges against them dismissed in large part due to Mr Timmins' evidence. Such circumstances are relevant to costs considerations and fall squarely within the observations made by Kirby and Johnson JJA in the Court of Appeal in Southon v Plath at [83]-[84]. The changes in the CP Act they discuss were enacted in December 2009 by the Criminal Procedure Amendment (Case Management) Act 2009 (NSW) which introduced s 143 identifying matters required in a defence response to a prosecutor's case. Section 143(1)(f) includes a statement of whether the accused person intends to give notice under s 150 (notice of alibi). In Southon v Plath at first instance the defendant did not disclose an expert report until very late in a liability hearing, resulting in the charges being dismissed: Gordon Plath of the Department of Environment and Climate Change v Vurlow; Hockey; Southton [2009] NSWLEC 102.
The Defendants' application for costs should be dismissed. Costs of the costs hearing have not been discussed with the parties. Before making any orders I will provide the parties with an opportunity to make submissions on costs if needed.

[48]

Orders

The Court orders: 1. The Defendants' application for costs under the Criminal Procedure Act 1986 (NSW) is dismissed. 2. Costs are reserved. 3. The Prosecutor has liberty to apply. 4. The exhibits are returned.

[49]

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: 11 March 2021

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