Environment Protection Authority v Wollondilly Abattoirs Pty Limited & Davis

1. [1]

   BRERETON JA: Wollondilly Abattoirs Pty Ltd (Wollondilly) operates an abattoir near Picton, in respect of which it holds an environment protection licence under Protection of the Environment Operations Act 1997 (NSW) (the POEO Act). At the relevant time, Gregory John Davis (Mr Davis) was its general manager, and Tiffany Ward (Ms Ward) its office manager; their employment had been terminated by the time of the hearing in the Court below.

2. [2]

   The licence required Wollondilly to take an effluent quality sample from a particular effluent pond on its licensed premises once each quarter, have the samples analysed for particular pollutants in accordance with the Approved Methods for the Sampling and Analysis of Water Pollutants in New South Wales, and provide the results of analysis to the Environment Protection Authority (EPA) in quarterly reports and in its annual return. It also required Wollondilly to take three annual surface soil samples and three annual subsurface soil samples from the main effluent irrigation area on its Premises, have the samples analysed for particular pollutants in accordance with the licence, and provide the results of analysis to the EPA in the next quarterly report and in its annual return.

3. [3]

   Wollondilly’s quarterly reports submitted on or about 11 May 2017 (for the January 2017 quarter, and for the April 2017 quarter), on or about 20 July 2017 (for the July 2017 quarter), and on or about 24 October 2017 (for the October 2017 quarter), contained information that was false or misleading – in particular, by including a false certificate of analysis containing false results for the samples, which purported to have been created by “ALS Environmental” (a trading name of Australian Laboratory Services Pty Ltd (ALS)), whereas the certificates had not been created by or on behalf of ALS. Wollondilly’s annual return submitted on or about 30 November 2017 (for the year to September 2017) contained information that was false or misleading, in that it included false monitoring data for the effluent samples, surface soil samples and subsurface soil samples; falsely stated that the number of effluent samples required to be tested for pH and Conductivity was nil; failed to report under “Details of Non-Compliance with Licence” any breaches of condition M2 of its environment protection licence; and contained an inaccuracy in relation to dates of non-compliances with the provision of quarterly reports. In the course of investigating those matters, EPA gave Wollondilly a notice, under s 193 of the POEO Act, requiring it to provide information and records in relation to the suspected failure to monitor pollutants as required by the licence and the suspected provision of false information in the quarterly reports. Wollondilly provided a response to that notice which included false information, falsified invoices and falsified bank records.

4. [4]

   Wollondilly was charged with the following six offences:

   1. (1)

      an offence under s 66(2) of the POEO Act as the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 11 May 2017, Wollondilly Abattoirs provided the EPA with a quarterly report which was required to be submitted by 10 January 2017 pursuant to condition R4.1 of its licence and that report contained false or misleading information (2018/145824);

   2. (2)

      an offence under s 66(2) of the POEO Act as the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 11 May 2017, Wollondilly Abattoirs provided the EPA with a quarterly report which was required to be submitted by 20 April 2017 pursuant to condition R4.1 of its licence and that report contained false or misleading information (2018/145826);

   3. (3)

      an offence under s 66(2) of the POEO Act as the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 20 July 2017, Wollondilly Abattoirs provided the EPA with a quarterly report which was required to be submitted by 20 July 2017 pursuant to condition R4.1 of its licence and that report contained false or misleading information (2018/145825);

   4. (4)

      an offence under s 66(2) of the POEO Act as the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 24 October 2017, Wollondilly Abattoirs provided the EPA with a quarterly report which was required to be submitted by 20 October 2017 pursuant to condition R4.1 of its licence and that report contained false or misleading information (2018/145828);

   5. (5)

      an offence under s 66(2) of the POEO Act as the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 30 November 2017, Wollondilly Abattoirs provided the EPA with its Annual Return for the reporting period 1 October 2016 to 30 September 2017 which was required to be submitted by 29 November 2017 pursuant to condition R1.1 of its licence and the Annual Return contained false or misleading information (2018/145827); and

   6. (6)

      an offence under s 211(2) of the POEO Act of furnishing information to the EPA in purported compliance with a notice to provide information and records issued under s 193 of the POEO Act, knowing that it was false or misleading in a material respect (2018/145882).

5. [5]

   Mr Davis was charged with five offences against s 66(2) of the POEO Act by reason of s 169(1) of that Act, in that at the time when Wollondilly committed each of the offences referred to in (1) through (5) above, he was a person concerned in the management of Wollondilly, as its general manager.

6. [6]

   Wollondilly pleaded guilty to the five charges under s 66(2), and also to the charge under s 211(2). On 5 June 2019, following a four day hearing between 11 and 14 March 2019, Pain J convicted the company of each of the six offences, without further penalty, pursuant to Crimes (Sentencing Procedure) Act 1999 (NSW) s 10A, and (by agreement) ordered that the company pay the EPA’s costs in the amount of $40,000. [1] Mr Davis pleaded guilty to the five charges against him. On 11 June 2019, Pain J convicted him of each of the five offences, imposed a fine of $10,000 on the first and $500 on each of the others – a total of $12,000 – and (by agreement) ordered that he pay the EPA’s costs in the amount of $40,000. [2]

7. [7]

   The EPA appeals, pursuant to Criminal Appeal Act 1912 (NSW) s 5D(1A), to this Court from the sentences in both matters. Section 5D(1A) gives the EPA an appeal, as of right, against the sentences:

8. [8]

   The principles relating to Crown appeals against inadequacy in sentencing have been stated in the context of appeals by the Crown under s 5D. However, there is no reason why the same principles should not inform an appeal by the EPA under s 5D(1A), which is analogous. Thus, to sustain a claim of manifest inadequacy requires the EPA to establish that the sentence imposed was unreasonable or plainly unjust, in an environment where there is no single correct sentence, and judges at first instance are to be allowed as much flexibility in sentencing as is consonant with the application of proper principle and consistency of approach. [3] A claim of manifest inadequacy is a conclusion, which does not depend on the establishment of specific error. [4] Where there is in substance but one ground of appeal – namely, manifest inadequacy – identification of specific error is not required; however, identification of specific error may assist to explain why a sentence is manifestly inadequate. [5]

9. [9]

   The principles relevant to Crown appeals have been helpfully summarised by Hoeben CJ at CL in R v Barker, [6] as follows:

10. [10]

    Before the sentencing judge the cases against Wollondilly and against Mr Davis were heard concurrently, but evidence in one was not evidence in the other, and as a result there were important differences in the facts on which each was sentenced.

The Wollondilly appeal

1. [11]

   In the case against Wollondilly (but not in the case against Mr Davis), there were agreed facts that:

   1. (1)

      Ms Ward created at least two of the false ALS reports (being those contained in the January 2017 quarterly report and the April 2017 quarterly report) that are the subject of the charges, at Mr Davis’s direction, by creating a Microsoft Word document, and scanning in the ALS Environmental logo from a genuine (earlier) ALS report.

   2. (2)

      Mr Davis directed Ms Ward to prepare the first false ALS reports, because Mr Davis had not done the required effluent sampling and analysis.

   3. (3)

      It was more likely than not that Ms Ward and/or Mr Davis created the false ALS reports contained in the July 2017 quarterly report and the October 2017 quarterly report.

   4. (4)

      Mr Davis authorised Ms Ward to log in to his account to complete the Annual Return online. Ms Ward entered the information in the Annual Return, then printed it out and asked Mr Davis to have a look at it. Mr Davis looked at it and said it was “all good”.

   5. (5)

      On 10 November 2017, the EPA received Wollondilly's initial response to the s 193 notice, which was signed by Mr Davis. Ms Ward and Mr Davis prepared the s 193 response together.

   6. (6)

      On 11 January 2018, the EPA received by Express Post from Wollondilly a further response to the s 193 notice, consisting of four purported invoices from ALS to Wollondilly over the relevant period and three purported National Australia Bank direct credit reports for Wollondilly's bank account. The invoices and the direct credit reports were falsified.

   7. (7)

      It is more likely than not that Ms Ward and/or Mr Davis created the false invoices and the false credit reports.

2. [12]

   The grounds of appeal were:

3. [13]

   However, EPA eschewed any submission that the penalty was manifestly inadequate independently of the errors referred to in grounds (1) and (2). In particular, although it appears anomalous that, having pleaded guilty to an offence under s 211 of furnishing information knowing that it was false or misleading in a material respect, the company was sentenced on the footing that its criminal responsibility was not exacerbated by any element of intention, recklessness or negligence, no ground of appeal challenged that. The responsible approach was taken that on a prosecutor’s appeal, the real concern was with questions of principle, and in this respect the issue of principle pertained to the role of s 169C. The Court should respect that exercise of prosecutorial discretion, and not embark on a wider inquiry.

4. [14]

   It follows that the essential question is that raised by ground 1. It was EPA’s contention that the sentencing judge erred in evaluating the objective seriousness of the offences only by reference to the state of mind of the directors, and not also by reference to the state of mind of the employees Mr Davis and Ms Ward, and that, properly applying s 169C, her Honour ought to have concluded that the offences were conducted by the company knowingly and deliberately.

5. [15]

   Section 169C – which appears in Part 5.9 of the POEO Act dealing with “General Offences”, alongside provisions concerning special executive liability, executive liability and accessorial liability – provides as follows:

6. [16]

   The sentencing judge recorded the submissions of the prosecutor:

7. [17]

   And those of the respondent:

8. [18]

   Her Honour dealt with this issue as follows:

9. [19]

   Her Honour thus accepted that in the circumstances of the case, the company’s criminal responsibility fell to be ascertained according to the state of mind of the directors. This is consistent with the traditional view that the usual rule of attribution is that an officer or agent’s state of knowledge may be attributed to a corporation where the agent was so centrally concerned with the corporation’s operations as to be considered its “directing mind or will”. [7] Typically, a corporation’s directing mind and will is its board of directors.

10. [20]

    However, that is not a universal rule. Lennard’s Carrying Company Ltd v Asiatic Petroleum Company Ltd did not establish that a person whose acts or omissions or state of mind are to count as those of the corporation must always be its directing mind and will, and it is necessary to identify, in each case, the relevant rule of attribution. [8] In many cases, the conduct of persons in actual control of particular operations of the company will constitute the company for particular statutory purposes. [9] However, this will vary according to the specific context, and the rule to be applied when a court is considering vicarious liability for a tort committed by a person associated with a corporation will not be the same as the rule applicable to establish criminal liability of a corporation for the conduct of a person. [10]

11. [21]

    In Director General, Department of Education and Training v MT, Spigelman CJ referred with approval to Lord Hoffmann’s judgment in the Meridian Global Funds Management case: [11]

12. [22]

    His Honour also referred, with approval, to the judgment of Callaway JA in Director of Public Prosecutions Reference No 1 of 1996: [12]

13. [23]

    These authorities, however, are concerned with criminal liability in the context of whether or not the company has committed an offence, rather than with sentencing. In the context of sentencing, one relevant consideration must be the criminal culpability of the corporation, bearing in mind that the penalty (at least, where it is a fine) will be borne, ultimately, by the shareholders – not the directors and certainly not the employees, however senior and however implicated in the offending they may be. Of course, directors or employees might be liable – as Mr Davis was here – as accessories. But often, the criminal blameworthiness of the corporation will lie in failing to have in place adequate measures to supervise or control the activities of its officers and/or employees.

14. [24]

    In any event, the appellant did not contend that the state of mind of Mr Davis was attributable to Wollondilly on the basis that, apart from the effect of s 169C, his state of mind was to count as that of the company. The argument was confined to the operation and effect of s 169C.

15. [25]

    Although, before us, it was submitted that s 169C had limited if any operation in sentencing proceedings as distinct from in proceedings to determine liability, there is no basis for depriving it of operation in sentencing proceedings. However, its relevance and importance is diminished, since once criminal liability is established, on sentencing what is required is a broad evaluation of the criminal culpability of the company, not confined to questions of actual intention, recklessness or criminal negligence, but having regard to the circumstance that those who ultimately bear the burden of any penalty are the shareholders. The distinction between the culpability in this sense (that is to say, for the purpose of sentencing for an offence of strict liability) of the relevant employee, and that of the corporation, was adverted by Giles JA in Cabonne Shire Council v Environmental Protection Authority, as follows: [13]

16. [26]

    Where there is an explicit attribution provision, its terms provide the starting point for determining whether an employee’s state of mind is to be attributed to the corporation. [14] EPA submitted that:

    1. (1)

       Section 169C operated to attribute a state of mind held by an employee to a corporation in circumstances where the employee possessed the relevant state of mind while acting in his or her capacity as such, and that if Mr Davis and/or Ms Ward held the relevant state of mind (that is, intentionally to supply information that was misleading in a material respect), then that state of mind had to be attributed to the company.

    2. (2)

       Contrary to [41] of the judge’s reasons, s 169C did not enable the Court to choose to gauge the company’s state of mind by reference to the directors to the exclusion of the employees where there are differences between the discrete groups or individuals mentioned in the section.

    3. (3)

       To the extent that the judge reasoned that “completely opposite state of mind of an employee carrying out fraudulent activity is arguably not knowledge gained while acting in their capacity as an employee, being outside any reasonable scope of employment”, that was inconsistent with the terms of s 169C and with the context and purpose of the provision.

17. [27]

    I am content to accept that it would have been erroneous to disregard the state of mind of the employees on the basis that, in engaging in fraudulent activity, they were acting outside any reasonable scope of employment. The operation of s 169C is conditioned on the employee acting “in his or her capacity as such”, and not on whether the activity was within the scope of the employee’s authority. However, her Honour did not dispose of the matter on that basis, observing only that it was “arguably” the case.

18. [28]

    In interpreting s 169C, in its context and having regard to its purpose, the starting point is its express terms. In this respect, the opening phrase of subsection (1) “Without limiting any other law or practice regarding the admissibility of evidence” characterises the provision as one relating to the admissibility of evidence. The operative words make “evidence” of the state of mind of particular individuals “evidence” of the state of mind of the corporation.

19. [29]

    In Myer Queenstown Garden Plaza Pty Ltd v Corporation of the City of Port Adelaide, [15] Wells J, dealing with a statutory provision that the mere production of a paper purporting to be printed by the Government Printer or by the authority of the Government of the State shall in all courts be evidence that the paper was printed by the Government Printer or by such authority, [16] said: [17]

20. [30]

    A similar approach has been adopted in respect of provisions which make averments in information evidence of their truth. In R v Hush, ex parte Devanny, Dixon J wrote: [18]

21. [31]

    In Ex parte Ryan; Re Johnson, [19] Regulation 32A of the National Security (Prices) Regulations 1940 (Cth) provided that in any prosecution for a contravention of those regulations, the averment of the prosecutor contained in the information or complaint shall be prima facie evidence of the matter or matters averred. Jordan CJ (with whom Maxwell and Roper JJ concurred), said:

22. [32]

    In view of this well-established approach to provisions which make something merely “evidence” (as distinct from “conclusive evidence”) of something else, there is no reason to think that s 169C was intended to have any more extensive operation. This is fortified by contrasting s 169C with the “deeming” provision found in Competition and Consumer Act 2010 (Cth) s 84, which was the subject of Commonwealth Bank of Australia v Kojic, [20] and which provides that where “it is necessary to establish the state of mind of the body corporate, it is sufficient to show that” the relevant officer who engaged in the conduct in the scope of his or her authority had that state of mind.

23. [33]

    Section 169C does no more than make evidence of the state of mind of a relevant individual some evidence of the state of mind of the corporation; it does not attribute the individual’s state of mind to the corporation. It is an evidentiary provision, in the sense that it provides for means, additional to other means, by which the state of mind of a corporation may be proved. It is not a conclusive evidence provision. It does not deem the state of mind of the relevant individual to be the state of mind of the company. Typically of such evidentiary provisions, it facilitates proof, especially where the question is not put in issue, but it does not alter what must ultimately be proved. It facilitates proof of a corporation’s state of mind, in that if the only evidence adduced is that of the state of mind of a relevant individual, that will be sufficient evidence to discharge the prosecutor’s onus of proof. But where there is other evidence, all the evidence must be considered and weighed to determine whether the corporation had the relevant state of mind. In the context of corporate criminal liability, it should be borne in mind that those who ultimately are disadvantaged by any penalty are the shareholders, and sometimes the directors, but not employees, however senior or implicated. Where, as here, the directors give evidence, which is accepted, inconsistent with their having the alleged state of mind, the circumstance that one or two employees did have that state of mind will not – in the absence of a special attribution provision – prove that the corporation had that state of mind.

24. [34]

    This does not mean, as was submitted for EPA, that the provision is unworkable, or has no utility, or that such a construction defeats the intention of Parliament. The unworkability, or lack of utility, was said to arise from effectively conferring a choice as to whose state of mind could be relied on. However, the section performs a useful function in facilitating proof of a corporation’s state of mind, by providing that evidence of the state of mind of a relevant individual is some evidence of the state of mind of the company. This enables a prosecutor to adduce legally sufficient evidence of the company’s state of mind by relying on evidence of the state of a single relevant individual. As explained in the passage extracted above from Ex parte Ryan; Re Johnson, it has the practical effect of casting on the corporation the evidentiary onus of adducing some evidence to the contrary. Absent evidence from the directors to the contrary, a Court would be entitled to treat that evidence as proving that the company had the relevant state of mind. However, where there is other evidence, all the evidence must be weighed to determine the ultimate question, which is whether the company, by its controlling mind, had the relevant state of mind.

25. [35]

    As to the intention of Parliament, no extrinsic material illuminating that intent was identified. In the light of the established interpretation of “evidence” clauses in the authorities to which I have referred, the better view of the Parliament’s intent is that the provision have the same effect as was held in those cases.

26. [36]

    Accordingly, her Honour, having admitted and considered evidence of the state of mind of Mr Davis and Ms Ward, nonetheless correctly identified that it was ultimately the state of mind of the controlling mind that was in issue, and that the effect of the evidence as a whole was that the controlling mind was not intentional, reckless nor criminally negligent.

27. [37]

    It follows that ground 1 fails, and the others with it. Given the manner in which the appeal was conducted, it is neither necessary nor appropriate for this Court to consider whether, in the context of an offence of strict liability, once criminal liability was established, it was an unduly narrow approach to confine consideration of the company’s state of mind to whether it amounted to actual intention, recklessness or criminal negligence, as distinct from evaluating more broadly the criminal responsibility of the Company without interposing those tests. In any event, the approach adopted by her Honour involved an examination of the extent to which the company – and ultimately its shareholders and directors who would bear the burden of any penalty, as distinct from the relevant employees, who would not – should be regarded as criminally culpable.

28. [38]

    EPA eschewed any complaint that the sentence for the sixth offence – being an offence against s 211(2) of the POEO Act of furnishing information to the EPA in purported compliance with a notice to provide information and records issued under s 193 of the POEO Act, knowing that it was false or misleading in a material respect – was manifestly inadequate independently of the s 169C issue. It is therefore neither necessary nor appropriate, on what is equivalent to a Crown appeal, to consider whether the sentence for that offence, which appears very lenient, miscarried on those or any other grounds.

29. [39]

    The appeal in the Wollondilly case should therefore be dismissed.

The Davis appeal

1. [40]

   The facts on which Mr Davis was sentenced differed in significant respects from those on which Wollondilly was sentenced, both by reason of differences in the agreed facts, and by reason of differences in the evidence that was received. In particular, the agreed facts in Mr Davis’ case included that it was by the office manager Ms Ward that Wollondilly provided to the EPA the four false quarterly reports and submitted the false annual report. The additional agreed facts in the Wollondilly case, referred to above, which implicated Mr Davis, were not agreed in his case.

2. [41]

   EPA sought to adduce evidence against Mr Davis, from the office manager Ms Ward. Her affidavit deposed to her acts in preparing and submitting the false documents, and that she had done so with the knowledge and approval, and upon the instructions and directions of Mr Davis, and to conversations with him which would have evidenced his knowing involvement in those matters. However, objection was taken to so much of Ms Ward’s affidavit evidence as would have tended to evidence that Mr Davis was an intentional participant in Wollondilly’s offences. Her Honour upheld that objection, [21] essentially on the basis that the principle in The Queen v De Simoni [22] – that a sentencing judge is entitled to consider all the conduct of the accused, including that which would aggravate the offence, but cannot take into account circumstances of aggravation which would have warranted a conviction for a more serious offence – meant that evidence that Mr Davis was knowingly concerned was irrelevant, as it would tend to show that he was guilty of an offence against s 169B of being knowingly concerned in, or party to, the commission of the corporate offence. Once the evidence adverse to Mr Davis was excluded, the effect of the remainder of Ms Ward’s evidence was to inculpate herself with responsibility for the offence, to the exclusion of Mr Davis, who was sentenced on that basis.

3. [42]

   The grounds of appeal are:

4. [43]

   The grounds give rise to two main questions, which overlap: the first being the relevance of the offender’s state of mind in sentencing for the offence under s 169 and, in particular, whether it is limited to the extent of “due diligence”; and the second being the relationship between s 169 and s 169B, and in particular whether the De Simoni principle is offended if, in sentencing for an offence under s 169, it is taken into account that the offender was an intentional participant. A third question is whether “unfair prejudice” would have been occasioned by the receipt of Ms Ward’s evidence.

5. [44]

   Part 5.9 of the POEO Act contains several provisions creating what might broadly be characterised as offences of accessorial liability.

6. [45]

   Section 168 creates accessorial liability for aiding, abetting, counselling or procuring another person to commit, or attempting or conspiring to commit, an offence under another provision of the Act or the Regulations, for which the penalty is the same as the penalty applicable to an offence against that other provision. However, by s 168(2), a person does not commit an offence because of s 168 for any act or omission that is an offence under s 169B.

7. [46]

   Section 169 creates “special executive liability” in respect of offences by corporations against certain specified provisions of the Act, the effect of which is that each person who is a director, or is concerned in the management of the corporation, is taken to have contravened the same provision, unless the person satisfies the court that the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or the person, if in such a position, used all due diligence to prevent the contravention by the corporation. Section 169(1) provides:

8. [47]

   The consequence is that a person convicted of “special executive liability” is guilty of the same offence as the corporation, and is liable to the penalty applicable for that offence. The offence provisions which attract special executive liability applies are specified in sub-s (1A), and are sections 49(2), 64(1), 66(2) or (4), 102, 113, 115(1), 116(1) or (2), 117(1), 120(1), 124, 125, 126, 128, 142A(1), 143(1), 144(1), 144AAA(1), 144AAB, and 152.

9. [48]

   Section 169A creates “general executive liability” in respect of offences by corporations against other specified provisions of the Act, the effect of which is that each person who is a director, or is involved in the management of the corporation and is in a position to influence the conduct of the corporation in relation to the commission of the offence, and knows or ought reasonably know that the executive liability offence (or an offence of the same type) would be or is being committed, and fails to take all reasonable steps to prevent or stop the commission of that offence, commits an offence, for which the maximum penalty is the maximum penalty for the executive liability offence if committed by an individual. By s 169A(1), the offence provisions to which general executive liability applies are sections 47(1), 48(2), 86(3), 91(5), 97, 112, 129, 136, 137, 139, 140, 144AA(1), 153A, 153B(2), 153D, 153E, 153F, 155, 156, and 167(4). Section 169A(2) provides:

10. [49]

    The prosecution bears the legal burden of proving the elements of the offence against the section (s 169A(3)); and the section does not affect the application of any other law relating to the criminal liability of any persons (whether or not directors or other managers of the corporation) who are accessories to the commission of the executive liability offence or are otherwise concerned in, or party to, the commission of the executive liability offence (s 169A(6)).

11. [50]

    Section 169B creates offences of accessorial liability in respect of offences against the Act or Regulations committed by corporations, by directors and persons involved in management, for which the maximum penalty is the maximum penalty for the corporate offence if committed by an individual. Section 169B relevantly provides:

12. [51]

    The following observations can be made about those provisions:

    1. (1)

       In the case of s 169A (general executive liability) and s 169B (director’s accessorial liability), the prosecution explicitly bears the onus of proof of all elements of the offence (including, in the case of s 169A, failure to take all reasonable steps), and while there is no similar express provision in s 168, the same would undoubtedly apply. However, under s 169 (special executive liability), the defendant bears the onus of satisfying the court that he or she was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or if in such a position used all due diligence to prevent the contravention by the corporation.

    2. (2)

       An additional defence, in former s 169(1)(a), that “the corporation contravened the provision without the knowledge actual, imputed or constructive of the person”, was repealed with effect from 1 May 2006.

    3. (3)

       Section 168 does not apply where s 169B applies. Section 169B applies in respect of all offences by corporations against the Act or Regulations, including but not limited to those listed in s 169 and s 169A. Section 169 and s 169A each apply to specific offences against the Act (not the Regulations). The offences to which s 169 (special executive liability) applies are Tier 1 offences, which are the most serious offences against the Act. The offences referred to in s 169A (general executive liability) are less serious.

    4. (4)

       In each case, the maximum penalty for the ancillary offence is the same as for the principal offence, although this result is reached by a different route in the case of s 169 (special executive liability), which makes the “accessory” guilty of the principal offence, rather than of an offence of accessorial liability.

13. [52]

    This analysis shows that the scheme of the legislation is that, in addition to imposing accessorial liability in a conventional way and with the conventional onus of proof on directors and individuals involved in management (under s 169B), directors and those involved in management would incur a somewhat stricter liability for certain offences against the Act (s 169A: general executive liability), and a much stricter liability in respect of the most serious offences (s 169: special executive liability). Thus it is intended to be easier to hold executives liable in respect of offences attracting special executive liability than in respect of other offences by corporations, and that they would be exposed to the same maximum liability where special executive liability was established as where conventional accessorial liability was established.

14. [53]

    In De Simoni, [23] Gibbs CJ, with whom Mason and Murphy JJ agreed (Wilson and Brennan JJ contra on this point), said it would have been an error for the sentencing judge to take into account matters of aggravation which would have justified a charge for a more serious offence; but the judge had not. Gibbs CJ referred to a general principle that no one should be punished for an offence of which he or she has not been convicted (emphasis added): [24]

15. [54]

    As his Honour explained, a common law principle that circumstances of aggravation not alleged in the indictment could not be relied upon for purposes of sentence if those circumstances could have been made the subject of a distinct charge had been recognised since the eighteenth century, [25] but was affirmed in R v Bright, [26] in which Darling J, delivering the judgment of the Court of Criminal Appeal, said that the judge “must not attribute to the prisoner that he is guilty of an offence with which he has not been charged — nor must he assume that the prisoner is guilty of some statutory aggravation of the offence which might, and should, have been charged in the indictment if it had been intended that the prisoner was to be dealt with on the footing that he had been guilty of that statutory aggravation”. [27]

16. [55]

    The application of the principle where there is a hierarchy of offences and one carries a greater penalty than the other is well-established. Because, in the present case, both s 169 and s 169B would carry the same maximum penalty, the question arose whether the principle (or an analogous one) was capable of application.

17. [56]

    Two bases were advanced for its application. The first was that the maximum penalty was not the only indicator, and the respective moral obloquy associated with the offences was another. The sentencing judge must have accepted this, as her Honour appears to have concluded that the offence under s 169B was more serious than the offence under s 169; her Honour said: [28]

18. [57]

    And later (emphasis added):

19. [58]

    The second was that there was an analogous principle that an offender was not to be sentenced for a crime of which he or she had not been charged, regardless of whether it was more serious than that for which the offender had been convicted.

20. [59]

    Support for the first proposition was sought in the judgment of Basten JA in Cassidy v The Queen, [29] where his Honour said:

21. [60]

    The sentencing judge also made reference to the following observations of Bathurst CJ, with whom Hoeben CJ at CL and Button J agreed, in Erector Group Pty Ltd v Burwood Council; Liverpool Developing Pty Ltd v Burwood Council: [30]

22. [61]

    Prior to – and since – Cassidy, the maximum penalty has consistently been used as the yardstick for measuring whether one offence was more serious, for the purposes of the De Simoni principle, than another. In De Simoni itself, Gibbs CJ concluded (emphasis added): [31]

23. [62]

    In R v Crump, [32] Hunt CJ at CL said that the principle applied only where the circumstance of aggravation would have exposed the offender to a more serious penalty (emphasis added):

24. [63]

    In R v Hooper, [33] James J (with whom Howie J and Smart AJ agreed) said that an offence was “more serious” for relevant purposes if it carried a higher maximum penalty:

25. [64]

    In Davies v R, [34] Basten JA (with whom Johnson and RA Hulme JJ relevantly agreed) said:

26. [65]

    In R v Fangaloka, [35] Basten JA (with whom Johnson and Price JJ agreed) described the principle as applying where the aggravating circumstances would render the offender liable to a greater maximum punishment than that prescribed for the offence charged:

27. [66]

    In Cassidy, only Basten JA invoked the relative moral culpability of the offences to measure their respective gravity for the purposes of the De Simoni principle. [36] The other members of the Court (Blanch J, with whom Beech‑Jones J agreed) held that the De Simoni principle was engaged exclusively on the basis that the offence of attempted murder carried a standard non-parole period, while that of intentionally destroying property with intent to endanger life did not. [37] It is now well-established that the maximum penalty, and the standard non-parole period where there is one, are the legislative signposts which inform the sentencing process. [38] For present purposes, they provide clear objective markers for comparing the relative seriousness of the offences. Their use as the exclusive indicator of relative seriousness is consistent with the underlying rationale of the principle, which is that an offender should not be exposed, on conviction for a lesser offence, to being sentenced in respect of conduct which would have made it a greater offence, of which he or she has not been convicted. They also provide objective criteria, for Courts, prosecutors and defendants alike, whereas the evaluation of the relative moral obloquy associated with different offences will often be impressionistic and uncertain. Use of such a yardstick would introduce uncertainty where it is neither required nor desirable. Using anything other than the statutory signposts of maximum penalty and standard non-parole period would involve introducing very difficult questions of discretionary judgment about relative moral culpability, which are undesirable in principles of the criminal law.

28. [67]

    On that approach, neither offence is more serious; they are equivalent. It is therefore unnecessary to address the EPA’s contentions that, if there is a hierarchy, the offence under s 169 is the more serious, because the deemed offence against the primary provision is more serious than accessorial liability, and s 169 picks up only the most serious offences (Tier 1 offences), while s 169B picks up all offences. However, for the reasons explained above, the legislative scheme does not involve a hierarchy of offences relating to accessorial liability for corporate offences, in terms of their relative gravity and associated maximum penalties; rather, it provides a menu of offences of accessorial liability (in which for present purposes I include s 169) all of which carry the same maximum penalty, but the strictness of liability for which increases according to the gravity of the principal offence. This does not support the argument that s 169B is the more serious offence.

29. [68]

    The second proposition does not depend on the relative seriousness of the offences, but on their different elements. It is reflected in the statement of Gibbs CJ in De Simoni of the “fundamental and important principle, that no one should be punished for an offence of which he has not been convicted”, and in the first limb of the statement of Darling J in R v Bright, which was cited by Gibbs CJ in De Simoni, that the sentencing judge “must not attribute to the prisoner that he is guilty of an offence with which he has not been charged”. The judge in the present case referred to its expression by Simpson J, as her Honour then was, in Harris v Harrison: [39]

30. [69]

    It is this principle that explains a number of cases which were cited on behalf of Mr Davis for the proposition that De Simoni was not confined to situations in which the maximum penalty for the aggravated offence was greater than for the lesser offence. Thus, in McCullough v R, [40] the offender was charged with malicious wounding, and not with the malicious infliction of grievous bodily harm. At the time of the commission of the offence s 35(1) contained both offences: s 35(1)(a) malicious wounding and s 35(1)(b) malicious infliction of grievous bodily harm, and both carried the same penalty. A wounding does not necessarily amount to grievous bodily harm and grievous bodily harm does not necessarily include a wounding. While the two offences were included in the one section and carried the same penalty, they were distinct offences. In sentencing for malicious wounding, the judge took into account other injuries inflicted upon the victim that were not wounds and were more serious than the wounds. Howie J (with whom McLellan CJ at CL and Simpson J agreed) held that this was impermissible, because although the same penalty applied for both malicious wounding and malicious infliction of grievous bodily harm, there were two separate offences depending upon the type of injury inflicted, and it was not permissible to sentence an offender for injuries not charged where those injuries are more serious:

31. [70]

    Similarly, in R v Young, [41] where the offender had been indicted on alternative charges of robbery and stealing from the person – both offences under the same section of the Crimes Act, which carry the same maximum penalty – and the Crown had accepted a plea of guilty to the charge of stealing from the person in full discharge of the indictment, it was held impermissible to take into account for the purposes of sentencing a threat or force putting the victim in fear, which was an element of robbery but not of stealing. After referring to observations in the judgment of Smart AJ (with whom Wood CJ at CL agreed) in R v Hua, [42] to the effect that “too much should not be made of the distinction between steal from the person and robbery”, and that in sentencing for stealing “[i]t would not be wrong for the judge to take into account that the offence had the potential for violence or the potential for putting the victim in fear” [43] , Hidden J (with whom Greg James J and Smart AJ agreed) said:

32. [71]

    Thus the real question is whether, in sentencing for an offence under s 169, taking into account as a potentially aggravating circumstance the offender’s state of mind involves punishing the offender for a matter which is extraneous to the offence, though it could be relevant to a different offence. In my judgment it does not, for the following reasons.

33. [72]

    First, it is uncontroversial that the state of mind of an offender – including actual intention, recklessness, or negligence – is relevant to culpability for the purposes of sentencing for an offence of strict liability, notwithstanding that the offender’s state of mind is not an element of liability. An offence that is committed intentionally, recklessly or negligently is objectively more serious than one not so committed, and those states of mind exacerbate the objective culpability of an offender. [44]

34. [73]

    Secondly, Mr Davis accepted that his state of mind was relevant, at least to the extent of “due diligence”, with the consequence that her Honour considered whether his culpability was exacerbated by recklessness or negligence. There is no sense in recklessness or negligence being relevant, yet actual intention not.

35. [74]

    Thirdly, and fundamentally, the scheme of provisions for accessorial liability in the POEO Act, as explained above, is not to confine all prosecutions of officers who are knowingly concerned in a corporate offence to s 169B, but to facilitate prosecutions in respect of offences which attract special executive liability under s 169 – and carry the same maximum penalty as officer accessorial liability under s 169B – regardless of whether or not the officer is an intentional participant. This does not render state of mind – including actual intention (or knowing concern) – irrelevant to culpability for the purposes of sentencing under s 169.

36. [75]

    Accordingly, taking into account the offender’s state of mind – including actual intention – in sentencing for an offence under s 169 does not involve punishing the offender for a matter which is extraneous to the offence, nor for a different offence. It follows that the exclusion of the evidence of Ms Ward was not justified on the basis of the De Simoni principle, or any analogous principle. Ground 1 is established.

37. [76]

    That was not the only basis on which Ms Ward’s evidence was not admitted; her Honour rejected it also on the basis that it would be “unfairly prejudicial”:

38. [77]

    However, in the course of argument it became apparent – and counsel for Mr Davis rightly accepted – that this ground of objection could not succeed independently of the De Simoni ground. The concern was that, if he chose to give evidence, Mr Davis might have been cross-examined “about a more serious offence which he has not been charged with”. [45] But this ground could not succeed if the De Simoni point did not, because if evidence of intention was not irrelevant to culpability for the s 169 offence, it could not be unfair to adduce evidence of it; and (as already explained) the offence under s 169B is not, for relevant purposes, a “more serious offence”.

39. [78]

    Moreover, although counsel was repeatedly pressed to identify the unfair prejudice said to be involved, this was never satisfactorily explained. It was not suggested that by giving evidence Mr Davis might expose himself to conviction for another offence, it being acknowledged that he would have available a plea of autrefois. But even if that be incorrect, that would not be unfair prejudice, but the result of a forensic decision to give evidence. In particular, Lee v The Queen, [46] which counsel for Mr Davis invoked, states only the fundamental proposition that the prosecution cannot compel a person charged with an offence to assist in the discharge of its onus of proof, and cannot be required to testify. As counsel for EPA submitted, this says nothing about conducting a case in a manner that results in a defendant being confronted with having to make a forensic decision whether or not to give evidence, which frequently arises. [47]

40. [79]

    Unfair prejudice, therefore, did not provide a proper basis for excluding the relevant evidence of Ms Ward. Ground 2 is established.

41. [80]

    Error in the sentencing process having been established, the question is what is then to be done. Her Honour’s erroneous exclusion of the disputed evidence of Ms Ward resulted in the somewhat bizarre outcome that Mr Davis was sentenced on the basis of so much of the evidence of Ms Ward as emphasised her own role, to mitigate or exonerate Mr Davis, while excluding so much of her evidence as deposed that she had done what she did following conversations with or instructions from Mr Davis. The usual practice of the Court is to resentence on the material before the sentencing judge and any additional material adduced in this Court. That would necessitate not only receiving the rejected evidence of Ms Ward, but also permitting cross‑examination on it. No doubt for that reason, EPA submitted that the matter should be remitted to the Land and Environment Court for resentencing.

42. [81]

    Criminal Appeal Act, s 5D(1A), which has been set out above, provides that on an appeal by the EPA against sentence, “the Court of Criminal Appeal may impose such sentence as to it may seem proper”. It is to similar effect as s 5D(1) which, in respect of Crown appeals, provides:

43. [82]

    Similarly, in respect of appeals by convicted persons against sentence, provision is made, by s 6(3):

44. [83]

    Those provisions do not appear to contemplate remitter of the matter for resentencing by the first instance court, but envisage that this Court will resentence the offender. In contrast, in respect of appeals against conviction, provision is made for the Court to order a new trial by s 8(1):

45. [84]

    There is no corresponding provision authorising remitter for sentence to the first instance court. However, s 12(2) provides:

46. [85]

    This Court has considered that provision to permit remitter for resentencing and, as the EPA noted, remitter for resentence had been ordered in a number of cases [48] in reliance on it. However, residual doubt as to whether it does so has been enlivened by the observations of the High Court in Betts v The Queen, in which French CJ, Kiefel, Bell, Gageler and Gordon JJ said: [49]

47. [86]

    In the light of the above observations of the High Court, I doubt that this Court is empowered, in an appeal against sentence, to remit the matter for resentencing in the court below. First, all the provisions dealing with appeals against sentence, which have been referred to above – including s 5D(1A) – indicate that this Court is to substitute such sentence as it considers appropriate. Secondly, the supplemental powers to receive evidence enable this Court to do so, even where the sentence hearing has been tainted by procedural irregularity or the incorrect reception or rejection of evidence. That does not deny the utility of a power to remit, but it does suggest that it is not essential. Thirdly, a power to remit for resentencing is not a “supplemental power”, of the kind contained in s 12, in connection with the hearing and determination of an appeal, but a substantive outcome of the appeal. Fourthly, if the Court were intended to have that power, one would expect to find it in a provision analogous to s 8(1). Fifthly, as noted by the High Court, the second reading speech on the introduction of s 12(2) provides no support for a conclusion that it was intended to qualify conditional re-sentencing obligation imposed by s 6(3) – or for that matter by s 5D(1), or s 5D(1A).

48. [87]

    However, it is unnecessary finally to resolve that question, because in my judgment the Court should, notwithstanding the error in the sentencing process, decline as a matter of discretion to interfere with the sentence. In the context of Crown appeals – to which the present appeal is analogous – a primary consideration relevant to the exercise of the Court’s residual discretion is the purpose of such an appeal, which is to lay down principles for the governance and guidance of sentencing courts. [50] Related to this, another powerful consideration for exercising the residual discretion against allowing a Crown appeal would be if the result were to create an unjustifiable disparity between any new sentence and an unchallenged sentence previously imposed on a co-offender. [51] Another relevant consideration is the impact on the respondent, [52] who has already once been sentenced. The appellant must “negate any reason why the residual discretion of the Court of Criminal Appeal not to interfere should be exercised”. [53] Consistent with the purpose of a Crown appeal and the factors which inform the exercise of the residual discretion, remitter for resentencing – assuming it is available – would be appropriate only if there is at least a strong prospect that a substantially greater sentence would be imposed.

49. [88]

    While there is some prospect that, if Ms Ward’s wrongly rejected evidence were admitted, a greater sentence could be imposed, there are significant factors to the contrary. First, there are reasons for doubting that even if Ms Ward’s evidence had been received, it would have been accepted, or preferred to that of Mr Davis, so as to establish beyond reasonable doubt that he and not Ms Ward was the architect of the offending conduct. The sentencing judge appears to have accepted only so much of Ms Ward’s evidence as was adverse to herself or favourable to Mr Davis, and to have noted inconsistencies in it: [54]

50. [89]

    Ms Ward’s cross-examination revealed other difficulties. She conceded that she had lied to EPA during her record of interview, in that she had said that she had made up the numbers for one report only; [55] and gave conflicting accounts of how she had obtained the falsified documents submitted to EPA, in that in her interview she accepted that she collated the documents submitted in answer to the notice to produce, collecting the documents herself from the filing cabinet; [56] while in her affidavit she claimed that Mr Davis had obtained them from the filing cabinet and given them to her. [57] In those circumstances, it is far from clear that Ms Ward’s evidence, if admitted, would have satisfied the sentencing judge beyond reasonable doubt that Mr Davis was an intentional participant in the offending conduct.

51. [90]

    Secondly, notions of parity – to which great significance was given in the context of a Crown appeal in Green v The Queen – weigh against an outcome in which, as a result of a successful prosecution appeal, Mr Davis should suffer a penalty very much greater than the principal offender; and that is all the more so when, unlike the principal offender, he was not convicted, as the company was, of the offence under s 211. This consideration is not deprived of relevance by the circumstance that, by operation of s 169, he is deemed to be guilty of the principal offence, rather than liable as an accessory.

52. [91]

    Thirdly, Mr Davis suffered considerable extra-curial punishment. He has lost his job as a result of his role in the offences, which has occasioned considerable hardship to himself and his family. In addition to the fines imposed, he has incurred substantial costs of his own, and submitted to an order that he pay $40,000 costs to EPA, at first instance; and he will have incurred his own costs of this appeal.

53. [92]

    Fourthly, the cases considered by the sentencing judge under the rubric of “even-handedness” illustrate that, while the penalty may have been lenient, it was not wholly discrepant with sentencing practices. [58]

54. [93]

    When regard is had to all those matters, I am unpersuaded that, despite the errors in the sentencing process, there is a sufficient prospect that a substantially greater sentence would be imposed if the matter were remitted, as to warrant that course if it were available. For the same reasons, despite the errors in the sentencing process, I am unpersuaded that the sentence is, in all the circumstances, so inadequate as to amount to “an affront to the administration of justice” such as to require intervention. [59] Accordingly, despite the errors in the process, as a matter of discretion, in my view, this Court should not interfere.

55. [94]

    In Mr Davis’ case, therefore, although grounds 1 and 2 succeed, as a matter of discretion the appeal should be dismissed.

Costs

1. [95]

   Before the sentencing judge, costs orders were made in each matter, by agreement. They were made pursuant to Criminal Procedure Act 1986 (NSW) ss 257B and 257G. However, as Criminal Appeal Act, s 17(1), provides that on the hearing or determination of an appeal, no costs shall be allowed on either side, no question of costs arises in this Court.

Disposition

1. [96]

   I propose the following orders:

2. [97]

   In Environment Protection Authority v Wollondilly Abattoirs Pty Ltd (Nos 2018/145824–145828, 145882):

   1. (1)

      That the appeal be dismissed.

3. [98]

   In Environment Protection Authority v Davis (Nos 2018/145865–145869):

   1. (1)

      That the appeal be dismissed.

4. [99]

   HARRISON J: I agree with the judgment of Brereton JA and with the orders that he proposes.

5. [100]

   However, although his Honour found it unnecessary finally to resolve the question, I would not wish to be taken to endorse the proposition that there can never be circumstances in which this Court may remit an appropriate matter for re-sentence to the court below. In this respect I refer to Pym v R [2014] NSWCCA 182 and Rae v R [2019] NSWCCA 284.

6. [101]

   BELLEW J: I agree with Brereton JA.