Court of Criminal Appeal Supreme Court New South Wales

• Medium Neutral Citation: Queanbeyan City Council v Environment Protection Authority [2011] NSWCCA 108
• Hearing dates: Friday 6 May 2011
• Decision date: 06 May 2011
• Before: Whealy JA at [1]; Hall J at [45]; McCallum J at [46]

Decision

(1) The decision below be varied but only to the extent necessary to vacate the order for costs made by Pepper J.

(2) Otherwise leave to appeal should be refused.

• Catchwords: CRIMINAL LAW - Appeal against interlocutory decision - prosecution under Protection of the Environment Operations Act 1997 - refusal to grant stay - failure of sewerage pumping station - pollution not permissible under environment protection licence - procedural unfairness - judicial discretion as to factual findings - public interest in prosecution.
• Legislation Cited: Criminal Appeal Act 1912 s 5F; Protection of the Environment Operations Act 1997 ss 120, 122
• Cases Cited: R v Van Phu Ho (Unreported, NSW Court of Criminal Appeal, 18th July 1994, Gleeson CJ, Mahoney JA, Dunford J); House v The King (1936) 55 CLR 499 at 504 - 504; R v Steffan (1993) 30 NSWLR 633 at 644 - 645; R v Matovski (1989) 15 NSWLR 720 at 723; R v Dinh [2000] NSWCCA 536 at [34]; R v Einfeld [2008] NSWCCA 215; 71 NSWLR 31; R v Ulman-Narumiec [2003) 143 A Crim R 531 at [24] and [70] - [72]; Jago v District Court of New South Wales (1989) 168 CLR 23 at 34 per Mason CJ, at 76 per Gaudron J; Dupas v R (2010) 241 CLR 237; R v Glennon (1992) 173 CLR 592 at 605 - 606
• Category: Principal judgment
• Parties: Queanbeyan City Council (Applicant); Environmental Protection Authority (Respondent)
• Representation: Counsel: R S McIlwaine SC / T To (Applicant); J L Glissan QC / G Preston (Respondent); Solicitors: Herring & Associates Lawyers (Applicant); Office of Environment and Heritage, Department of Premier and Cabinet (Respondent)
• File Number(s): 2011/13689

Decision under appeal

• Citation: [2010] NSWLEC 237
• Date of Decision: 2010-12-21 00:00:00
• Before: Pepper J
• File Number(s): 2008/50080

Judgment

1 WHEALY JA: This is an application for leave to appeal under section 5F(3)(a) of the Criminal Appeal Act 1912 from an interlocutory judgment in Class 5 of the Land and Environment Court's jurisdiction. Queanbeyan City Council (the applicant) had been charged with an offence of polluting waters in contravention of section 120(1) of the Protection of the Environment Operations Act 1997 ("the Act"). The Council pleaded not guilty to the charge.

2 By Notice of Motion filed on 22 nd July 2009, the applicant sought a permanent stay of the prosecution, on the basis that the proceedings were an abuse of process. The foundation for the stay application was an assertion that the conduct of the prosecutor, the Environment Protection Authority ("EPA"), in not issuing an Environment Protection Licence under the Act, had deprived the applicant of the opportunity to avail itself of the only statutory defence to the charge.

3 The stay application was heard over a number of days in August 2009. Pepper J (the primary judge) reserved her decision and, on 21 st December 2010, refused to grant the permanent stay. Her Honour determined that the prosecution, if permitted to continue, would not result in unfairness. Moreover, her Honour determined that the public interest lay in the trial proceeding. Not only did the facts and circumstances in the application not warrant the cessation of the proceedings, her Honour said, rather, in her opinion they mandated the continuance of the trial.

Grounds of appeal

4 The Notice of Appeal and Application for Leave to Appeal were filed on 4 th February 2011. The grounds of appeal were originally some five in number, although, in more recent times, permission has been sought to add a new ground. The grounds may be summarised as follows:

1) A denial of natural justice;

2) Error of statutory construction;

3) Error in identification of proper legal test for permanent stay;

4) Misuse of evidence;

5) Costs ordered in the absence of power; and

6) A new ground: findings were made that were not supported by the evidence.

The particulars of these grounds are extensive, but their details are comprehensively set out in the document attached to the Notice of Appeal.

Background

5 As I have said, the applicant was charged with a strict liability offence of polluting waters, in contravention of section 120 of the Act. The Council operated a sewerage treatment system. The actual sewage treatment plant itself (being the principal part of the system) was located at Oak's Estate in the Australian Capital Territory. There were, however, a number of associated reticulation and pumping stations in Queanbeyan.

6 There had been in the past a number of incidents of overflow of sewage at the Morissett Street Sewage Pumping Station in Queanbeyan. The EPA issued a series of statutory prevention notices requiring the council to review the operation of this point of the sewerage system, which was apparently old and in somewhat poor condition. These notices required the construction of an underground retention system at an appropriate location identified by the council, and the preparation of a maintenance and inspection plan to reduce effluent surcharges. In compliance, the Council designed, constructed and installed the Wanniassa Street Overflow Outlet as an augmentation to the pumping station.

7 The Council did not apply for an Environmental Protection Licence, in respect of either the pumping station or the outlet. However, all sewerage at the pumping station went to the treatment plant in the ACT. This treatment plant at all material times had been subject to a licence issued by the ACT.

8 As has been mentioned earlier, the absence of a licence for the NSW pumping station, and indeed for the New South Wales reticulation system, was to become an important matter in relation to the stay application. The EPA had indicated that it would not have issued any such licence. It has maintained, throughout these proceedings, that the legislation simply did not enable the issue of such a licence to the applicant.

9 On 4 th and 5 th November 2007, there were two overflow incidents, the second of which resulted in the discharge of some 1.5 million litres of untreated sewage into the Queanbeyan River. The prosecution case is that this was caused by a pump and alarm failure at the pumping station. The alarm had been designed to notify the Council if one of the pumps at the pumping station had failed, but as I have said, the Council case is that it also failed to operate.

10 After the first incident on 4 th November 2007, the Council, it is alleged, was aware that the alarm system had not operated properly. It was not until council employees arrived for work on 5 th November, however, that the second pump failure was discovered. Twelve hours had elapsed between the failure of the pump, and its reactivation, the delay resulting in the enormous spillage of sewage that has been identified.

11 Although there were two pollution incidents, the Council was charged with water pollution only in respect of the second pollution, the incident occurring on 5 th November 2007.

12 It may b helpful, however, to briefly set out the following matter of detail which I take from an affidavit in the proceedings sworn by Darren Laws.:-

9. About 2004 QCC installed an underground sewerage holding system consisting of 5 X 1800 millimetre storm pipes, 12 X 75 millimetre, all connected to an overflow pit with surface grate between Morissett and Wanniassa Streets, Queanbeyan.

10. The overflow pit within this system is located within Wanniassa Street Park approximately 10 metres from the Queanbeyan River. There is no other sewage overflow outlet for the Morissett Street SPS.

...

12. The Wanniassa Street overflow pit is directly connected to the Morissett Street SPS. I estimate that the sewerage holding pipes and overflow pit is able to hold approximately 1 - 2 mega litres of untreated sewage.

13. The purpose of the sewerage holding system and overflow pit is to store untreated sewage.

14. In the event that the Morissett Street SPS pumps fail to activate, the Wanniassa Street Sewerage holding system is designed to store untreated sewage for a limited time before the holding pipe system and the overflow pit fills to capacity.

15. When capacity is exceeded, the untreated sewage will overflow from the Wanniassa Street Park overflow outlet and run directly into the Queanbeyan River.

These facts, of course, are derived from prosecution material and are intended to do no more than flesh out the nature of the prosecution case. The affidavit was admitted into evidence on a limited basis, namely to expose and explain matters relevant to the discretion to prosecute.

The stay application

13 I turn now to consider the stay application. The case sought to be made by the applicant before the primary judge may be best seen by the introductory submission in its written outline of submissions filed on 24 th August 2009. It states:-

The defendant seeks a permanent stay of the prosecution because it is an abuse of process, for the following reasons:

2.1 The defendant has been deprived by the conduct of the prosecutor of the opportunity to avail itself of the statutory defence provided to the charge set out in section 122 of the Act because:

(a) The prosecutor determined that the sewerage reticulation system operated by the defendant in New South Wales did not, and does not, require an Environmental Protection licence under the Act;

(b) The prosecutor represented to the defendant that its sewerage reticulation system in New South Wales did not require an Environment Protection Licence under the Act;

(c) The prosecutor did not issue an Environment Protection Licence for the sewage reticulation system, or any part of it, operated by the defendant in New South Wales.

2.2 It is a misuse of this court's process for the prosecutor to bring these proceedings against the defendant alleging pollution of the Queanbeyan River from the overflow structure in circumstances when:

(a) The overflow structure was designed to release storm water and untreated sewage into the Queanbeyan River; and

(b) The prosecutor approved the design, location and installation of the overflow structure; and

(c) And directed the defendant, pursuant to its powers under section 96 of the Act to construct the overflow structure, under the threat of criminal prosecution, if it did not do so.

14 The EPA response to these submissions was, first, that the respective failure of both the pump and alarm systems had been the cause of the major overflow of untreated sewage into the adjacent area and the Queanbeyan River. This, and the delay in repumping, were said to be important reasons why the prosecution was instituted.

15 Secondly, the Section 96 Notices issued by the EPA, and the consequent overflow works, had no factual connection to the circumstances involved in the failure of the systems responsible for the overflow. Indeed, nothing in the Notices would have caused the applicant to have relied on them as a cause for its failure to properly monitor its pumps, knowing its telemetry was inoperative.

16 Thirdly, and most significantly, the fundamental basis of the stay application was misconceived. This was because neither EPA policy nor the surrounding circumstances would ever have permitted a licence, if issued, to contain a condition which would have permitted or excused the extensive pollution, which were the subject of the proceedings.

17 Fourthly, in regard to this contention, the dealings between the parties did not amount to a representation and the council did not rely on it as such.

18 In the context of these propositions, I should mention that section 122 of the Act, which is at the core of the applicant's abuse of process argument, provides a defence where an environment protection licence is held, but only where the conditions to which the licence were subject were not contravened.

19 I turn now to the primary judge's decision. In short, her Honour stated that the council's motion, in the exercise of her discretion, should be refused upon three bases. First, the primary judge said, the submission put by the council that the Morissett Street Sewage Pumping Station was required to be licensed was not correct.

20 Secondly, even if a license should have been issued, the unfairness about which the council complained simply did not exist. This was because, both as the evidence and the Act showed, no conditions attached to any license issued would have permitted the second overflow incident the subject of the charge.

21 In other words, I understood her Honour to be saying that the extremely large overflow of untreated sewage that occurred on the 5 th November could never have been sanctioned by the terms of any conditions, or purported compliance with those conditions.

22 Thirdly, her Honour posited that, in the light of the council's history of sewage overflows, with their attendant risk of harm to the environment and to human safety, the public interest in permitting the prosecution to proceed clearly outweighed any unfairness alleged to have been created by the absence of the licence.

23 Each of these findings was examined in considerable detail by her Honour, and supported by a careful analysis of the material before her.

Leave is required

24 Section 5F(3)(a) of the Criminal Appeal Act requires the applicant to obtain leave to appeal against an interlocutory order of judgment. There is no dispute that the order made by her Honour answers that description. The principles under which leave is granted are not in dispute. They are regularly applied in this court.

25 First, leave should not readily be granted unless an appropriate case is made out, showing an error of principle apt to cause irregularity or injustice ( R v Van Phu Ho (Unreported, NSW Court of Criminal Appeal, 18 th July 1994, Gleeson CJ, Mahoney JA, Dunford J)).

26 Secondly, where the order involves the exercise of a discretion, as is the case here, the usual restraint and limitation placed upon an appellate court's intervention will apply ( House v The King (1936) 55 CLR 499 at 504 - 504).

27 Thirdly, it has been held that leave will only be granted where the decision which is the subject of the application is attended with sufficient doubt so as to warrant the matter being argued on appeal ( R v Steffan (1993) 30 NSWLR 633 at 644 - 645) or where the interests of justice otherwise require the intervention of the court at this stage of the proceedings ( R v Matovski (1989) 15 NSWLR 720 at 723. See also R v Dinh [2000] NSWCCA 536 at [34]; R v Einfeld [2008] NSWCCA 215; 71 NSWLR 31).

28 In the circumstances of the present application, there are two further principles that require consideration. The essence of the applicant's submission here is that the proceedings should be stayed on the basis of unfairness. In that regard, the applicant, who carries the onus, must demonstrate not merely a perception of unfairness, but actual unfairness that is incapable of correction ( R v Ulman-Narumiec [2003) 143 A Crim R 531 at [24] and [70] - [72]).

29 Secondly, it is necessary to keep in mind that a permanent stay of criminal proceedings represents an exceptional remedy. It is exercisable only in extreme and exceptional cases ( Jago v District Court of New South Wales (1989) 168 CLR 23 at 34 per Mason CJ, at 76 per Gaudron J). In that regard, in Dupas v R (2010) 241 CLR 237, the High Court quoted with approval R v Glennon (1992) 173 CLR 592 at 605 - 606:

A permanent stay will only be ordered in an extreme case and there must be a fundamental defect "of such a nature that nothing that a trial judge can do in the conduct of the trial can relieve against its unfair consequences".

Resolution

30 For my part, I have reached the firm conclusion that this is a matter in respect of which the court should not grant leave. It is clear, from the primary judge's carefully reasoned decision, that she was not satisfied that the unfairness alleged by the applicant had been established. On this central point, her Honour's decision is not attended with sufficient doubt to warrant the matter being argued on appeal.

31 As I read the decision, there were essentially three reasons that underpinned the conclusion reached by the Pepper J. First, the applicant could not demonstrate that a licence must have been issued for the pumping station and its augmentation system.

32 Secondly, if contrary to this finding, a licence had been issued, it would not have provided a defence for the present prosecution involving, as the incident did, a massive eruption of untreated sewage. Thirdly, the second "overflow" was not causally related to the work carried out by the council as a consequence of the EPA's prevention notices. Fourthly, her Honour found that no representation as alleged had either been made or relied upon. The limited evidence of Mr Chapman (to which I have earlier made reference) could not have amounted to a representation that would support the central argument advanced by the applicant.

33 True it is that Mr Chapman gave oral evidence on the subject, as mentioned during submissions this morning by senior counsel for the applicant, but her Honour was not bound to accept that evidence, and indeed, it is clear, she was not persuaded by it.

34 In relation to the disciplinary aspect of her Honour's decision, no error has been demonstrated. In my opinion, her Honour took into account all relevant matters, and did not overlook any matter of relevance. The ultimate decision, based as it was on the public interest in maintaining a prosecution of a significant kind, was well within her Honour's discretion. In addition, I have concluded that none of the matters alleged to be errors in the primary judge's decision warrant the grant of leave. I shall deal with each of these separately. I accept, as senior counsel for the applicant argued, that her Honour effectively examined need for a licence by reference to the Morisset Street Pumping Station, rather than by reference to the New South Wales reticulation system. Her Honour gave a number of reasons for this basis of examination.

35 In this regard, the first conclusion reached by her Honour was favourable to the council. This was that the pumping system, indeed, fell within the definition of "sewage treatment systems" in the Schedule to the Act. However, the EPA had unsuccessfully argued that it did not. Notwithstanding this finding, her Honour thought that the capacity of the pumping station rendered it ineligible to be separately licensed. That aspect of her Honour's decision was criticised because a calculation of the capacity of the entire New South Wales reticulation system would have yielded a much greater and different result. While there is force in this submission, the remaining reasons advanced by her Honour as to why a licence was not required were plainly applicable however, not only to the Morisset Street pumping station, but to the New South Wales system as a whole. Indeed, these were the principal reasons, as I read the decision, that supported the primary judge's conclusions on this point. It could not therefore be said, despite the forceful arguments put by senior counsel for the applicant, that her Honour did not deal with the case advanced by the applicant.

36 Secondly, I am not persuaded that her Honour's construction of the relevant legislation, both in Chapter 3 of the Act and Schedule 1, was other than broadly correct and was indeed appropriate to the circumstances of the argument presented before her. There may well have an arguable case relating to the first conclusion I have set out above but this aspect of the decision was, as I have said, favourable to the applicant.

37 Thirdly, the argument relating to the legal test for a permanent stay does not, in my opinion, raise a question of principle and in any event the test is settled and well established, as her Honour noted in her decision.

38 Fourthly, the evidence which was admitted for a limited purpose, was relied upon by the primary judge in an appropriate manner. Mr McIlwaine argued that certain evidence had been admitted on a limited basis under section 136 of the Evidence Act 1995 but that, despite this limitation, her Honour had in fact made factual findings beyond that permitted by the limitation. The evidence in question, including in particular that concerning the circumstances leading to the second overflow on the evening of 4 th November 2007, was said to have been admitted only on the basis that it was evidence of matters that the EPA had were entitled to have regard to in exercising its prosecutorial discretion in deciding whether to charge the council in respect of the second pollution incident.

39 I do not, with all due respect, consider that there is any validity in this complaint made by Mr McIlwaine. There is no dispute that the evidence referred to in the written submissions filed on behalf of the applicant, and about which complaint is made, was admitted for the purpose stated. I do not consider that the findings made contravene this limitation.

40 Particular attention was drawn to paragraph [155] of the judgment in which her Honour referred to the fact that the pollution was caused not by a failure of the structures but by the failure of the pump at the Morisset Street pumping station, combined with the failure of the council to provide a timely response to the stoppage. When considered in context, however, it is clear that her Honour was doing no more than evaluating the material available to the prosecutor which, on the assumption that the evidence were accepted, indicated that the cause of the failure in the system was as stated by her Honour. That was a significant matter underpinning the decision to prosecute. I do not consider that the finding made in this respect was one that went beyond the scope of the limitation under section 136. It is necessary to read the primary judge's decision fairly, and when read in that way, this seems to me to be the inevitable consequence.

41 Fifthly, the argument concerning the power to award costs is of itself not sufficient to warrant the grant of leave. It can have no real connection to the corrections or otherwise of the decision on the stay application. However, Mr Glissan QC has indicated his instructions are that, on this limited point, this Court may, if it thinks appropriate, vacate the costs order particularly as it was not the subject of any submissions or debate in the court below. I consider that the order should be vacated because it was not a matter brought to either partiy's attention before it was made. As a consequence, neither party had an opportunity to make any submissions concerning the order. The vacation of the order for costs will enable the court below to consider that issue at some future point of time if it becomes necessary. I prefer not to express any opinion on the availability of the power to order costs in the present situation.

42 Finally, the additional ground (relating to facts that should have been found at first instance) does not commend itself to my mind as a matter warranting the grant of leave. Her Honour's findings in this regard are clearly set out between paragraphs [151] to [171] of the decision. These findings, and her Honour's overall analysis of the factual situation, demonstrate the inherent weakness of the representation argument sought to be relied upon by the applicant at first instance. There was nothing to stop the council, if it wished, from applying for a licence and if refused to appeal the decision to the Land and Environment Court. More importantly, as her Honour found, the EPA's attitude that it could not issue a licence, or that a licence was not required for the pumping station, simply could not equate to a representation by the EPA that pollution occasioned by a major sewage surcharge would ever be regarded as permissible. Nor could it amount to a representation that a prosecution would not be mounted if such an event occurred. Mr Chapman himself acknowledged, as her Honour noted, the EPA had made it "perfectly clear" that no licence would be issued that permitted "an overflow structure which would discharge untreated sewage".

43 Finally, her Honour noted at paragraph [155] that the pollution was caused not by a failure of the underground retention system and earth bund installed as a result of the prevention notices. It was caused by the failure of the pump at the Morisset Street Pumping Station, combined with the failure of the council to provide a timely response to the stoppage. This evidence was before her Honour precisely on the point of the prosecutorial discretion. For that reason, it was available to her to consider on both the unfairness and discretion issues. It was not of course evidence of the truth of the facts for the purpose of the proposed prosecution. Mr Glissan QC agreed that this was the case and that the findings are not to be findings in the trial, nor could they be treated as such.

44 In these circumstances the factual findings at paragraphs [151] and [153] which are challenged were plainly open to her Honour and there is no sufficient doubt, in my opinion, as to the correctness of those findings. In these circumstances I would propose the following orders:

(1) The decision below be varied but only to the extent necessary to vacate the order for costs made by Pepper J.

(2) Otherwise leave to appeal should be refused.

45 HALL J: I also agree that leave should not be granted from the judgment of her Honour Justice Pepper on the stay application. In the circumstances in which the costs order was made, and having regard to the fair and proper concession by senior counsel for the respondent, I am also of the view that the costs order should be set aside. I otherwise respectfully agree with the reasons of the presiding judge and the orders that he proposes.

46 MCCALLUM J: I agree with the orders proposed by the presiding judge for the reasons his Honour has stated.

47 WHEALY JA: The orders of the Court will be as I have proposed. The Court will now adjourn.

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Decision last updated: 12 May 2011