Bailey v Director General, Department of Natural Resources (formerly known as Department of Land and Water Conservation)

The plaintiffs, Mr Bruce Bailey and his sister Ms Janet Shafik-Bailey, are the registered proprietors of a rural property known as Hazeldene situated at Boomi in northern New South Wales. Hazeldene is located within a designated floodplain known as the Lower Macintyre, Whalan Creek and Boomi River Flood Plain. The Macintyre River, which borders Hazeldene to the north, is part of a regulated river system in the Border Rivers region of New South Wales and Queensland from which river waters are extracted under licence for irrigation farming in both States.

Hazeldene is operated primarily as an irrigated farming enterprise for the production of cotton under the business name "BC and JBS Bailey". Mr Bailey is also the registered proprietor of another rural property at Boggabilla, 60 kilometres east of Hazeldene, known as Rosewood West where cotton is also grown as part of the plaintiffs' business. Mr Bailey made all management and operational decisions for the business. His sister, the second plaintiff, did not give evidence in the proceedings.

The plaintiffs purchased Hazeldene in 1996 from their siblings following the death of their father in 1994. The purchase was funded by the sale of nine water licences which had been granted to their late father in the early 1980's under Part 2 of the Water Act 1912 (NSW). The licences authorise the extraction of water from the Macintyre River for irrigation purposes. The rights in the remaining six water licences were transferred to the plaintiffs in 1996. In 1998, 2003 and 2008, the plaintiffs applied for and were granted a renewal of the six water licences under s 20C of the Water Act for a further period of five years. Collectively, the six water licences authorise the extraction of 5880 megalitres annually from the Macintyre River for the specified purposes of irrigating no more than 972 hectares on Hazeldene. The licences also provide that two axial flow pumps ("the Macintyre River pumps") are the authorised means by which the river water is extracted. As a condition of the licence the plaintiffs are required to meter and record all water diverted from the Macintyre River by means of the authorised works. A below ground system of irrigation channels, forming part of the irrigation infrastructure on Hazeldene, carries the allocated water to the areas under cotton cultivation in the north and south of the property.

Between 1985 and 1991, when it appears Hazeldene was being developed for cotton farming, Mr Bailey arranged for the construction of two water storage units. The first unit was built in 1985 with a surface area of 65 hectares. The second was built in 1991 with a surface area of 75 hectares. The water storage units were filled from the irrigation channels utilising lift pumps which had been installed on Hazeldene for that purpose. The two water storage units had a combined capacity of 4600 megalitres of water.

In addition to the allocated or regulated water pumped under licence from the Macintyre River into the below ground system of irrigation channels, Mr Bailey gave evidence that when the Macintyre River broke its banks and river water flowed across the floodplain, he turned off the Macintyre River pumps and, using the existing lift pumps, pumped floodwaters directly into the two water storage units either from Tarpaulin Creek (as to which see below) or floodwaters which flowed into the below ground channels.

This process of water collection and extraction either from Tarpaulin Creek or the Macintyre River floodplain is "floodplain harvesting" as defined in the "Water Sharing Plan - NSW Border Rivers Regulated Water Source" and adopted as the working definition in a joint agronomists' report tendered in the proceedings. The water thereby collected or extracted is similarly defined as "floodplain harvest water".

In May 2000 the plaintiffs purchased a parcel of land, known as "the Strip", bordering Hazeldene to the east. The Strip was also on the designated Lower Macintyre, Whalan Creek and Boomi River Floodplain. The Strip was purchased by the plaintiffs with the intention of clearing it of native vegetation and constructing a third water storage unit with a surface area of 84 hectares and a carrying capacity of 3000 megalitres of water. The clearing of native vegetation on private land was at that time subject to the provisions of Part 2 of the Native Vegetation Conservation Act 1997 (NSW) (since repealed).

The third water storage unit was also to be used in the cotton farming operations at both Hazeldene and Rosewood West. It was constructed with the intention that it would store water harvested from the floodplain during a flood event in the same way that Mr Bailey had harvested and stored floodwater in the past. According to a survey prepared for the purposes of the proceedings and tendered by the plaintiffs, the water harvested for this purpose was to be lifted by means of an additional lift pump to be installed proximate to the proposed third water storage unit near a below ground channel.

Between February 2000 and 21 July 2000, 64 hectares of native vegetation on the Strip was cleared by contractors retained by Mr Bailey in what I have referred to as "the first clearing event". In April 2002 an additional 20.4 hectares was cleared, including the island of native vegetation retained in the centre of the area cleared in June 2000, in "the second clearing event".

It was common ground that the plaintiffs did not obtain development consent under Part 2 of the Native Vegetation Conservation Act before clearing the native vegetation on the Strip in either the first or second clearing events.

The proposed third storage unit was to be constructed with levees extending 1.4 kilometres along its eastern side and 1.8 kilometres along the western side. The design of the unit allowed for a borrow pit to be dug leaving an island of vegetation in the centre of the pit and a 100 metre corridor on the western side adjacent to a dedicated travelling stock route.

Given that the design envisaged levee banks being constructed "on land that ... is within a floodplain" the construction of the unit was within the definition of "controlled work" in s 165A within Part 8 of the Water Act 1912 (NSW) and, that being the case, it was subject to approval being granted under Part 8 of the Water Act.

It was also common ground that the plaintiffs had not lodged an application for approval to build the water storage unit under Part 8 of the Water Act at the time of the first clearing event. The question whether they had lodged an application before the second clearing event was in dispute. It was their case that an application was lodged with the second defendant for processing on 19 July 2000, and that the refusal of Departmental officers to process the application at that time (or any time prior to January 2004) was tortious. The defendants submitted that there was no valid or complying application lodged by the plaintiffs until January 2004 and, even if there were, the Department was entitled to defer further consideration of it while the legality of the first and second clearing events was investigated.

It was a matter of considerable dispute in the proceedings as to whether, even with approval to construct the third water storage unit, the plaintiffs had a legal right to harvest floodplain water to fill it.

On 18 July 2002 the Director General of the Department of Land and Water Conservation (the first defendant in these proceedings) commenced proceedings against Mr Bailey by the issue of two summonses in the criminal jurisdiction of the Land and Environment Court for what were alleged to be two offences of clearing of native vegetation, being the first and second clearing events, without development consent in contravention of s 21(2)(a) of the Native Vegetation Conservation Act.

During the investigation into the illegal clearing which preceded the issue of the summonses, and in defence of the criminal proceedings in the Land and Environment Court, Mr Bailey relied upon legal advice he obtained in April 2000 from Allen Allen & Hemsley Lawyers ("the Allens' advice") to the effect that he was exempt from the need to obtain development consent under Part 2 of the Native Vegetation Conservation Act before clearing the Strip of native vegetation because the clearing was for the purpose of constructing a "rural structure", namely a "farm dam". The Allens' advice did not refer to the legislative source of the "rural structures exemption" being within Schedule 3 to the State Environmental Planning Policy No 46 - Protection and Management of Native Vegetation ("SEPP 46") and did not directly address the question whether an irrigation storage unit of the size Mr Bailey proposed building could properly be described as a "farm dam" to attract the exemption. Rather, the advice assumes that the size of the "farm dam" is not a material consideration so long as the clearing is to the minimum extent necessary for its construction.

Despite the repeal of SEPP 46 by s 70 of the Native Vegetation Conservation Act, the clearing of native vegetation for a purpose described in Schedule 3 to SEPP 46 continued to be exempt from any requirement for development consent under Part 2 of the Act. Although Mr Bailey informed Departmental officers of the tenor of the Allens' advice and provided them with a copy of the advice, the advice was not considered by the Department to be persuasive. They took the view that the "farm dam exemption" in SEPP 46 did not extend to the construction of an irrigation storage unit of the size and capacity of the third water storage unit Mr Bailey intended constructing on the Strip.

In the Land and Environment Court Mr Bailey also relied upon the exemption under s 12(f) of the Native Vegetation Conservation Act from the need to obtain development consent as an additional defence to the charges of illegal clearing. This was not referred to in the Allens' advice and was raised only obliquely in correspondence between the parties after the summonses issued. It was, however, relied upon expressly at the hearing of the summonses where it was argued on Mr Bailey's behalf that the construction of the third water storage unit was an "artificial water body" as provided for in Schedule 3 of the Environmental Planning and Assessment Regulation 1994, and therefore a designated development within the meaning of the Environmental Planning and Assessment Act 1979 (NSW). On that additional basis, it was submitted by senior counsel then appearing that Mr Bailey was not obliged to obtain development consent before clearing the Strip in either the first or second clearing events the subject of the criminal proceedings.

On 1 July 2003 Talbot J held that Mr Bailey was entitled to be acquitted of both offences having discharged the burden of establishing, on the balance of probabilities, that the clearing was for the purpose of the construction of a "farm dam" as provided for in Schedule 3 to SEPP 46 (Director-General of the Department of Land and Water Conservation v Bailey [2003] NSWLEC 160). Talbot J also considered whether the exemption in s 12(f) of the Native Vegetation Conservation Act was an additional basis upon which Mr Bailey was entitled to be acquitted. His Honour followed the decision of Bignold J in Director-General Department of Land and Water Conservation v Jackson And Ors [2003] NSWLEC 81 and held that without a development consent issuing under the Environmental Planning and Assessment Act, the exemption under s 12(f) of the Native Vegetation Conservation Act was not available.

Rather than formally dismissing both summonses, Talbot J acceded to a request that two questions of law be stated for the opinion of the Court of Criminal Appeal pursuant to s 5BA of the Criminal Appeal Act 1912 (NSW). The first question was advanced by the Department. It concerned whether the farm dam exemption under Schedule 3 to SEPP 46 applied where what was proposed to be constructed was a water storage unit of the size and scale of the third water storage unit Mr Bailey proposed building. The second question proposed by Mr Bailey related to whether the decision in Jackson as to the operation of s 12(f) of the Native Vegetation Conservation Act was correct in law.

On 5 December 2003, the Court of Criminal Appeal answered both questions in Mr Bailey's favour. It confirmed that the interpretation given to the "farm dam exemption" by Talbot J was available and held that the decision in Jackson as to the construction of s 12(f) was wrong in law and that Mr Bailey was also entitled to rely on the exemption in s 12(f) in defence of the allegation of illegal clearing.

On 17 December 2003, Talbot J dismissed both summonses.

Approval to build the third water storage unit under Part 8 of the Water Act was granted to the plaintiffs in December 2005 (but not issued until March 2006) after an application lodged by them in January 2004 was processed. The approval expressly noted that the clearing was approved by the Land and Environment Court. At that time Mr Bailey resolved not to construct the irrigation unit as market and seasonal conditions had changed and construction costs had increased.

By an amended statement of claim dated 27 April 2007, the plaintiffs claim damages for the interruption to their farming business and the consequential diminishment of returns from cotton yields on both Hazeldene and Rosewood West over successive growing seasons between 2000 and 2006, by reason of what they claim was the tortious conduct of the defendants in preventing them from constructing the proposed third water storage unit on the Strip in 2000. The plaintiffs claim that but for the tortious conduct of the defendants, they would have harvested water from the floodplain between 2000 and 2006 (or accessed water otherwise legally entering the irrigation system on Hazeldene) and stored it in the proposed third storage unit to irrigate unexploited or underexploited areas of Hazeldene and Rosewood West and to improve cotton yields on the existing areas under irrigation on both properties.

Separate actions for the intentional interference in the plaintiffs' business by the unlawful acts of Departmental officers (or some of them); the negligent misrepresentations by other Departmental officers alleged to have induced the plaintiffs to act to their detriment; and the conduct of named officers said to constitute misfeasance in public office were pleaded in the alternate.

A Minister of the Crown in the State of New South Wales was at all relevant times responsible for administering the Water Act, utilising the resources of relevant departments established as divisions of the New South Wales public service. The Department of Land and Water Conservation ("the Department") was the administering department between 1995 and 2 April 2003. It was abolished as a department of the public service on 2 April 2003. The administering department was thereafter known as the Department of Natural Resources ("DNR") until it was abolished in April 2007.

The Department was also the administering department for the Native Vegetation Conservation Act whilst that Act remained in force. That Act was repealed on the commencement of s 52 of the Native Vegetation Act 2003 (NSW) on 1 December 2005. (These proceedings relate only to the operation of the Native Vegetation Conservation Act.)

The Director General of the Department, and the Director General of its successor, the DNR, (the first defendant in the proceedings), was responsible to the appropriate minister for the general conduct and management of the operations and functions of the Department. For the purposes of these proceedings, that included taking such steps as were necessary to consider, and if accepted to act upon the recommendation from the Legal and Compliance Branch of the Department that Mr Bailey be prosecuted for breaches of the Native Vegetation Conservation Act by the clearing of native vegetation in the first and second clearing events. In that capacity, the first defendant was a servant or agent of the third defendant (the State of New South Wales) for the purposes of performing such administrative or statutory functions or duties assigned to him.

The second defendant, the Water Administration Ministerial Corporation ("WAMC"), is the body responsible for receiving and considering applications under Part 8 of the Water Act for the construction of controlled works on a floodplain (the construction of the proposed third water storage unit being a controlled work as defined, and the Strip being part of a floodplain as defined). The WAMC is constituted under s 371 of the Water Management Act 2000 (NSW). That section provides: (1) There is constituted by this Act a corporation with the corporate name "Water Administration Ministerial Corporation". (2) The affairs of the Ministerial Corporation are to be managed by the Minister. (3) Any act, matter or thing done in the name of, or on behalf of, the Ministerial Corporation by the Minister, or with the authority of the Minister, is taken to have been done by the Ministerial Corporation. (4) The Ministerial Corporation is, for the purposes of any Act, a statutory body representing the Crown.

The functions of the WAMC are provided for in s 372. Relevantly, ss 372(3) and (4) provide: (3) The Ministerial Corporation may exercise any of its functions, and may otherwise act, in the name of the Department. (4) It is the duty of the Ministerial Corporation to exercise its functions consistently with the principles of ecologically sustainable development.

Mr Bailey's dealings with a number of authorised officers of the second defendant concerning an application for approval under Part 8 of the Water Act to construct the proposed third water storage unit (water compliance officers) and officers of the Department responsible for the operation of relevant provisions of the Native Vegetation Conservation Act, in particular the investigation into the legality of clearing the Strip of native vegetation in the first and second clearing events (vegetation compliance officers), were relied upon by the plaintiffs in establishing the liability of the third defendant as their employer.

Four agronomists gave evidence concurrently. In the course of their evidence it was agreed that on the assumption that the proposed third storage unit was constructed on or before the cotton growing season of 2001/2002 (that is, no later than December 2000), and on the further assumption that the plaintiffs were legally entitled to harvest floodplain water to store in the proposed third storage unit for irrigation purposes, the loss of income from that loss of opportunity between 2000 and 2006 was estimated at $3.3 million.

The plaintiffs also made a claim for exemplary damages for what they contend was the defendants' "insolence" in preventing them from constructing the third water storage unit and the "arrogance" with which they were treated by various of the water compliance officers as servants and agents of the third defendant.

The defendants submitted there was no evidentiary foundation for a finding of either actionable misconduct, unlawful conduct or mala fides by any of the defendants (or their servants or agents) in their dealings with Mr Bailey between 2000 and 2004 over the construction of the proposed third water storage unit or the clearing of the land to facilitate its construction. In addition, it was submitted that to the extent that any claim is founded on any advice furnished, or anything done or omitted to be done by the second or third defendants (or their servants or agents) under the Water Act, s 182 of that Act precludes any liability in damages if those persons otherwise acted in good faith. Here, it was submitted they acted in accordance with all proper practices and procedures consistently with the proper administration of Part 8 of the Water Act.

Further, to the extent that any of the causes of action are based on the failure of the defendants to exercise, or to consider exercising, any function under the Water Act, the defendants rely upon ss 44 and 46 of the Civil Liability Act 2002 (NSW). Section 43A of Civil Liability Act is also relied upon as not giving rise to any liability for any act or omission involving an exercise, or failure to exercise power under Part 8 of the Water Act, the powers under that Part being the exercise of a special statutory power within the meaning of that section, which was not an unreasonable exercise of that power in the circumstances.

Finally, it was submitted that to the extent that anything said or done by the defendants (or their servants or agents) in their dealings with Mr Bailey concerning the construction of the proposed third water storage unit prior to 6 November 2000 is capable of being described as a misrepresentation, or to the extent that any act of the defendants on or before that date is susceptible to being viewed as an unauthorised or unlawful act giving rise to a cause of action in tort (including breach of any statutory duty), no cause of action is maintainable by reason of s 14 of the Limitation Act 1969 (NSW).

The plaintiffs advanced no submission to meet the limitations defence. It was not referred to in the Amended Reply.

Mr Bailey brings a separate action for malicious prosecution against the first defendant and/or the third defendant for what is alleged to be the institution and maintenance of the criminal proceedings against him in the Land and Environment Court maliciously and without reasonable and probable cause. He also contends that the proceedings were maintained maliciously without reasonable and probable cause by way of the case stated to the Court of Criminal Appeal.

Particulars of malice were pleaded to include a number of purposes ulterior to the imposition of criminal sanctions provided for under the Native Vegetation Conservation Act, namely to prevent or delay the construction of the proposed third water storage unit, to deliberately cause Mr Bailey economic harm, and/or out of pique or spite. Other motivations, also said to evidence malice, were identified by his counsel in final submissions.

Mr Bailey's case is that he was prosecuted without reasonable and probable cause because, on a proper reading of the Native Vegetation Conservation Act and related legislation, the prosecution for illegal clearing was doomed to fail. This is said to follow from Mr Bailey being entitled to rely upon both the "rural structures/farm dam exemption" and the exemption from the need to obtain development consent in s 12(f) of the Native Vegetation Conservation Act, such that neither the first defendant as the named prosecutor in the proceedings and other "prosecutors" for whom the third defendant is vicariously liable, could have had any genuine belief in his guilt and, if they did, it was based on legally insufficient grounds. It was his further contention that the first defendant knew or must have known the prosecution could not succeed at the time the proceedings were commenced on 18 July 2002 because the Allens' advice obtained in April 2000, a copy of which he provided to the Department in July 2000 in the course of the investigation into the legality of the clearing, and of which the first defendant was aware when he initiated the proceedings, advised that the "rural structures/farm dam exemption" applied and that this was a complete defence to the allegation of illegal clearing.

The Allens' advice was also considered by Ms Lindsey Paget-Cooke, the legal officer within the Legal and Compliance Branch of the Department, who recommended that Mr Bailey be prosecuted in a prosecution memorandum considered by the first defendant before he approved the prosecution on 1 July 2002. It was submitted that Ms Paget-Cooke's deliberate failure to afford the Allens' advice the weight it deserved or ignoring it completely, and the first defendant's determination to treat it in the same way in order to preserve the Department's preferred policy position in its dealings with large scale irrigation farmers in the Barwon Region, and Mr Bailey in particular, was eloquent evidence of malice.

In addition to a claim for special damages for malicious prosecution assessed referable to what was said to be the loss of opportunity to harvest and store water in the proposed third water storage unit, Mr Bailey also claims damages representing the difference between the costs he incurred in defending himself in the Land and Environment Court and the costs of the proceedings brought by the Director General by way of a stated case in the Court of Criminal Appeal, and the costs he recovered. In the event that Mr Bailey succeeds in his action for malicious prosecution, the quantum of that head of his damages claim is not in contest. He also seeks an award of exemplary damages for what he contends was the "conscious disregard of his rights as a citizen and his right to be free from unwarranted prosecution". He makes an ambit claim for damage to his reputation.

In summary, the first and third defendants submitted that the prosecution of Mr Bailey for illegal clearing commenced by the filing of the summons in the Land and Environment Court on 18 July 2002 and maintained thereafter, including the appeal by way of a case stated to the Court of Criminal Appeal, has not been established by the evidence to be malicious, that is for the ulterior or improper purpose of causing "economic harm" to Mr Bailey or out of "spite and/or pique" (as pleaded), or for any other ulterior or improper purpose relied upon in counsel's closing submissions and, for that reason alone, the action must fail. They also submitted that the evidence fails to establish that the prosecution was instituted or maintained without reasonable or probable cause. The defendants submitted that the first defendant and Ms Paget-Cooke had reasonable grounds for believing that there were real prospects of Mr Bailey being successfully prosecuted (or a genuine belief in Mr Bailey's guilt) and, further, that when viewed objectively, it has not been proved that the proceedings were instituted or maintained without sufficient evidence to support each of the essential elements of the offence of illegal clearing in accordance with the information available at that time, including an available view of the relevant law.

The evidence relied upon by Mr Bailey to support his action for malicious prosecution, and what were relied upon as the inferences of fact said to arise from that evidence to establish the constituent elements of that claim, dominated the proceedings.

Were there any finding of liability in the defendants, or any of them, under any of the causes of action relied upon by both plaintiffs, or any finding of liability in the first defendant or third defendant for malicious prosecution, the defendants submitted that the plaintiffs (and Mr Bailey on his own behalf) have not proved that they have suffered any compensable economic loss. That is said to follow from the fact that what is relied upon as the lost opportunity to fill the proposed third storage unit with water (and thereafter the lost opportunity to extend and improve the irrigation farming business on Hazeldene over the period 2000-2006) would have been an opportunity illegally obtained in circumstances where neither Mr Bailey nor his sister had any right, licence, authority or approval under the Water Act to extract river water to fill the third water storage unit for irrigation purposes, or to harvest the overflow of river water from the floodplain for the same purposes (or at all).

The plaintiffs submitted that the defence of illegality proceeds upon a misunderstanding of the facts and a misreading of the statutory water rights regime in operation as at July 2000 and that, in any event, the defence of illegality is neither properly pleaded nor available in this case as a matter of law.

The interpretation and the application of particular provisions of the Water Act, in particular Parts 2 and 8 of the Act, and to a lesser extent the operation of the Water Administration Act 1986 (NSW) and the Water Management Act, are central to the plaintiffs' case on both liability and damages and to the defence of illegality relied upon by the defendants.

Under s 12 of the Water Administration Act, the right to the control, use and flow of all water in rivers, lakes and aquifers, including all water occurring naturally on or below the surface of the ground, vested in the second defendant. These rights prevailed over any authority conferred by or under another Act (including a later Act). With the passage of the Water Management Act, effective from 1 January 2001, s 392 of that Act provides that these various rights (called "State's water rights") are now vested in the Crown, except to the extent to which they are divested from the Crown by that Act, or any other Act. Although the Water Management Act also repealed the Water Act, the operation of particular provisions of that Act, including provisions relating to "harvestable rights", only came into effect under progressive proclamations after the date of proclamation, they have no direct bearing on the issues in dispute in the proceedings.

The licensing scheme for the regulation of the use of river water is governed by Part 2 of the Water Act while Part 8, so far as is relevant to these proceedings, is concerned with regulating the construction of flood control works on a floodplain. Neither Part 2 nor Part 8 of the Water Act was affected by the passage of the Water Management Act.

So far as these proceedings are concerned, Part 2 and Part 8 of the Water Act were in force and remained in force between 2000 and 2006 (the closed period upon which the plaintiffs' case for damages is based) subject only to the passage of the Water Amendment (Flood Control Works) Act 1999 (NSW) ("the Amending Act") which came into force on 7 July 2000. The impact of the amendments to Part 8 under the Act are significant. Mr Williams SC, senior counsel for the defendants, submitted they were either ignored or overlooked in the way the plaintiffs have sought to make out their case.

Even assuming that a Part 8 application was lodged by Mr Bailey for processing on 19 July 2000 through Mr Gardner (a matter very much in dispute), on that date the Amending Act governed the granting of approval for the construction of the proposed third water storage unit on the Strip. Importantly, the Amending Act made further provision with respect to the approval of works that may affect or prevent the movement of floodwaters by requiring the second defendant to give consideration to the impact on the environment in determining whether approval for the construction of those works should be granted. In addition, other provisions within Part 8 of the Water Act were revised and new provisions introduced to deal with the approval of the construction of controlled works on a floodplain as defined in s 165A. It will be necessary to return and consider the operation of Part 8 under the Amending Act in detail.

At all relevant times so far as these proceedings are concerned, the plaintiffs were authorised under licence granted pursuant to Division 3A of Part 2 of the Water Act to extract a certain (volumetric) quantity of water from the Macintyre River utilising nominated authorised works ("the Macintyre River pumps") for the express purpose of servicing an irrigated area of no more than 972 hectares on Hazeldene. That authority, identified in the proceedings as 90SA011547 and renewed under s 20C of the Water Act, was subject to specified terms, limitations and conditions, one of which required the plaintiffs to meter and record the measurement of all water diverted or taken from the Macintyre River by means of the authorised works. In 2009 the water licences were converted to Access Licences under the Water Management Act and are now known as Regulated River (general security A) - 90AL812209 and Regulated River (general security B) - 90AL812210. These may be ignored for present purposes.

The defendants submitted that the authority 90SA011547 current throughout the closed period 2000 to 2006 upon which the plaintiffs' claim for damages is based, was to operate a joint water supply scheme as provided for in Div 4 of Part 2 of the Water Act.

A "joint water supply scheme" is defined in Division 1 of Part 2 of the Water Act to include any work which: (a) is used or proposed to be used for the purposes of supplying water to the lands of two or more occupiers who are jointly utilising the work or who propose to utilise the work jointly (whether any of those occupiers has occupation of the site of the work or not), (b) ... (c) ...

A "work" to which Part 2 extends is defined to mean a work: (a) which is connected with, or which affects the quantity or use of water in, a river or lake, (a1) ... (b) which affects the quantity of water flowing in, to or from, or contained in, any such river or lake, or (c) in or through which flows, or is contained or used, water taken from any such river or lake, being a work which is used, or is to be used: (d) for water conservation, irrigation, water supply or drainage, ... (g) a work declared under subsection (3) to be a work for urban drainage, or (h) a work (or class of work) declared by the Ministerial Corporation by order published in the Gazette as being a work to which this Part does not extend.

"River" is defined to include: (a) a stream of water, whether perennial or intermittent, flowing in a natural channel, or in a natural channel artificially improved, or in an artificial channel which has changed the course of the stream, (b) an affluent, confluent, branch or other stream of water into or from which a stream referred to in paragraph (a) flows, and (c) anything declared by the Ministerial Corporation by order published in the Gazette to be a river ... ...

The defendants submitted that the joint water supply scheme operated by the plaintiffs and the licensed works associated with it under the authority 90SA011547, including the Macintyre River pumps which were used to supply water to both Hazeldene and Rosewood West for irrigation farming, did not confer any right to take river water except through the licensed works and subject to the limitations and conditions of the licence.

Section 19 in Part 2 of the Water Act provides that: No water shall be taken from any river or lake for the purposes of any joint water supply scheme except under authority granted in pursuance of the provisions of this Division.

Section 21B, also in Part 2, provides: (1) Any person who: (a) constructs, erects or uses a work to which this Part extends otherwise than pursuant to a right conferred on the person by this Part or Part 10 or by a licence, group licence, irrigation corporation licence, authority or permit, ... is guilty of an offence...

The defence of illegality, pleaded by the defendants in answer to the entirety of the plaintiffs' claim for damages, proceeds upon the construction of the operating provisions of Part 2 of the Water Act as set out above to the extent that those provisions govern Mr Bailey's entitlement to extract river water (as defined) to fill the proposed third water storage unit. The competing submissions as to the construction of those provisions will be considered later in these reasons.

Guidelines for the Macintyre River and Whalan Creek Floodplain Development - Boggabilla to Mungindi were developed and released in 1981. The guidelines describe a system of floodways which were intended should remain unobstructed by earthworks, subject to designated areas where levee banks and other floodplain structures are able to be constructed with minimal impact on the flow of floodwater. The Macintyre River and Whalan Creek Floodplain covered by the published guidelines includes Hazeldene and the Strip.

On 3 July 1985 the lower Macintyre River, Whalan Creek, and Boomi River floodplain was declared as a "floodplain" pursuant to s 166(1) of the Water Act. It was not in issue that Hazeldene and the Strip are located within the floodplain as declared. The construction of flood control works on a floodplain is subject to the operation of Part 8 of the Water Act. The construction of the proposed third water storage unit is a "controlled work", as defined in Part 8, for which approval was required.

The capture of floodplain water flows for irrigation purposes is known as "floodplain harvesting". It was common ground that during a flood event floodwaters progressively extend across the lower Macintyre River, Whalan Creek, and Boomi River floodplain from the Macintyre River towards and ultimately along a watercourse or waterway known as Tarpaulin Creek which traverses Hazeldene generally from north-west to south-east. The expert agronomists agreed that most of the water that enters the Tarpaulin Creek watercourse at these times originates from the Macintyre River as floodwater and flows east into Boomi Creek and back into the Macintyre River, in effect merging at that point with the river water.

An issue in the concurrent evidence session and in the evidence of Mr Cowell (an expert who gave evidence in the concurrent session and who was also called by the plaintiffs as a lay witness) was whether it was appropriate to characterise Tarpaulin Creek as a "watercourse" or "waterway" when it only ran in flood events. As the defendants ultimately submitted, little turns on the resolution of that question, or for that matter the precise topographical location of Tarpaulin Creek, also the subject of contention in the proceedings. That is because the floodwaters which are disgorged from the Macintyre River and which pass over and across the floodplain upon which Hazeldene is located (inclusive of their passage along Tarpaulin Creek), flow progressively east into Boomi Creek and back into the Macintyre River and, accordingly, access to those (river) waters (as defined) are necessarily subject to the water licensing system provided for in Part 2 of the Water Act. As noted above, the defendants submitted that Mr Bailey had no licensed right to access that water. Mr King, counsel for the plaintiffs, submitted to the contrary.

Mr Bailey gave evidence that when the Macintyre River breaks its banks and floodwater either enters the below ground supply channel on Hazeldene, or when it collects and then flows along Tarpaulin Creek and into the supply channel where the channel intersects the creek, he turns off the authorised pumps at the Macintyre River and, using lift pumps installed on Hazeldene, he "harvests" the floodwater by pumping it into the two existing water storage units built in 1985 and 1991. On the defendants' case, the lift pumps were not authorised works under the Water Act. In addition, the licence (90SA011547) authorising the plaintiffs to extract water from the Macintyre River by use of the Macintyre river pumps does not, in its terms, permit or authorise the use of the supply channel on Hazeldene, or the use of lift pumps to harvest or store harvested floodwaters in the existing water storage units on Hazeldene. The only licensed works under the authority are the Macintyre River pumps. Mr Bailey also gave evidence that the proposed third water storage unit was to be utilised in the same way.

The relationship between the harvesting of floodplain waters and the authorised or licensed extraction of river waters under Part 2 the Water Act, remained a matter of considerable contention in the proceedings.

As noted in [50], the Amending Act was passed effective from 7 July 2000 and amended Part 8 in significant respects. The following provisions are material.

Division 1 of Part 8 provides for the definition of relevant terms, including: 165 Definitions (1) In this Part, except in so far as the context or subject-matter otherwise indicates or requires: approval means an approval under this Part. complying controlled work means a controlled work that is assessed as a complying controlled work under section 168B. controlled work-see section 165A. ... floodplain means any land which is so designated by an order in force under section 166 (1). ... floodplain management plan means a floodplain management plan adopted by the Ministerial Corporation under section 166A. [None has been made to date and none current at the time.] lake includes a lagoon, swamp or other collection of still water, whether permanent or temporary, not being water contained in an artificial work. ... river includes: (a) a stream of water, whether perennial or intermittent, flowing in a natural channel, or in a natural channel artificially improved, or in an artificial channel which has changed the course of the stream, (b) an affluent, confluent, branch or other stream of water into or from which a stream referred to in paragraph (a) flows, and (c) anything prescribed as being a river, but does not include anything prescribed as not being a river. ... 165A Controlled work-meaning (1) In this Part, a controlled work means: (a) an earthwork, embankment or levee that is situated, or proposed to be constructed, on land that: (i) is, or forms part of, the bank of a river or lake, or (ii) is within a floodplain, or (b) any work that is situated, or proposed to be constructed, on land that: (i) is, or forms part of, the bank of a river or lake, or (ii) is within a floodplain, and that is declared by order of the Ministerial Corporation published in the Gazette to be a controlled work, ...

Division 2 provides: 166 Designation of floodplains (1) The Ministerial Corporation may, by order published in: (a) the Gazette, and (b) at least one newspaper published and circulating generally in the locality of the land to which the order relates, designate any land specified in the order as a floodplain. (2) An order under subsection (1) takes effect: (a) on the date of its first publication in the Gazette and a newspaper pursuant to subsection (1) or, where it is first published in the Gazette and a newspaper on different dates, the later of those dates, or (b) a date specified in the order in that regard, whichever is the later. (3) While an order under subsection (1) is in force, the Ministerial Corporation shall cause a map depicting the floodplain to which the order relates to be made available for public inspection at each of its offices, free of charge, during the ordinary office hours of the Ministerial Corporation.

Division 3 provides: 166C Matters for general consideration (1) The Ministerial Corporation, in exercising its functions under this Division with respect to approvals, must have regard to the following matters, and any other matters that it considers relevant: (a) the contents of any relevant floodplain management plan or any other relevant Government policy, (b) the need to maintain the natural flood regimes in wetlands and related ecosystems and the preservation of any habitat, animals (including fish) or plants that benefit from periodic flooding, (c) the effect or likely effect on water flows in downstream river sections, (d) any geographical features, or other matters, of Aboriginal interest that may be affected by a controlled work, (e) the effect or likely effect of a controlled work on the passage, flow and distribution of any flood waters, (f) the effect or likely effect of a controlled work on existing dominant flood ways or exits from flood ways, rates of flow, flood water levels and the duration of inundation, (g) the protection of the environment, (h) any other matter relating to the desirability or otherwise of a controlled work. (2) The Ministerial Corporation is to ensure that the notice of its determination to grant or refuse to grant an approval, renew or refuse to renew an approval, impose conditions on an approval or vary or revoke the conditions of an approval includes a statement of the reasons for the determination and of the extent to which the Ministerial Corporation took into account the matters set out in subsection (1) in making that determination.

It was the passage of the Amending Act that saw the inclusion of the matters in s 166C which the Ministerial Corporation is obliged to take into account when exercising its approval functions. The defendants placed emphasis upon the mandatory consideration, being "protection of the environment" in s 166C(1)(g) and the residual matter in s 166C(1), "any other matters that the Ministerial Corporation considers relevant". It was submitted that an application for approval for the construction of a controlled work on a floodplain (the construction of the proposed third water storage unit on the Strip being a controlled work) without an assessment of the impact on the environment and, in particular, in this case, without completion of an investigation into the impact on the environment of the clearing of vast tracts of native vegetation on the Strip and an assessment of the environmental value of what remained at least before the second clearing event which effectively denuded the Strip of native vegetation, would preclude consideration of the environmental impact. For that reason, so it was submitted, water compliance officers of the Department (those concerned with applications for approval under Part 8 of the Water Act) were entitled to take a robust view of the plaintiff's apparent determination in both clearing events to clear the Strip of native vegetation prior to a Part 8 approval being granted to construct the water storage unit, independent of the different but related concerns of the vegetation compliance officers that a vast tract of native vegetation had been cleared which in 2000 they believed to have been cleared without consent under the Native Vegetation Conservation Act.

Mr Williams submitted that the way the plaintiffs case has been advanced, in particular the repeated submission that the operation of the Water Act and the Native Vegetation Conservation Act are distinct, such that the water compliance officers had no legitimate interest in whether consent under the Native Vegetation Conservation Act had been obtained, and the vegetation officers had no interest in whether a Part 8 approval had been granted, overlooks the interrelationship between the legislative objects in the Native Vegetation Conservation Act (reflected in the prohibition on illegal clearing under Part 2 of the Act without consent) and the obligation on the second defendant to consider the protection of the environment under s 166 of the Water Act when executing the powers to approve construction of controlled works under Part 8.

Section 167 provides that an application for an approval for the construction of controlled works shall: (a) be made, in or to the effect of the form approved by the Ministerial Corporation, by the occupier of the land, or the occupiers of the lands, upon which the controlled work the subject of the application is situated or proposed to be constructed, (b) be accompanied by: (i) the application fee approved by the Ministerial Corporation, and (ii) an assessment of the likely impact of the controlled work, and (iii) such other information as may be required by the application form, and (c) be lodged with the Ministerial Corporation.

Section 80 of the Interpretation Act 1987 (NSW) (as in force in July 2000 and currently) provides as follows: (1) If an Act or statutory rule prescribes a form, strict compliance with the form is not necessary but substantial compliance is sufficient. (2) If a form prescribed by an Act or instrument requires the form to be completed in a specified manner, or requires specified information to be included in, attached to or furnished with the form, the form is not duly completed unless it is completed in that manner and unless it includes, or has attached to or furnished with it, that information.

Upon receiving an application for approval of the construction of a controlled work the Ministerial Corporation (the second defendant) could refuse to determine an application if, inter alia, in its opinion the application did not comply with s 167.

In addition to the operating provisions set out above, ss 168A to 170B of the Water Act provide for a staged process pursuant to which a duly lodged Part 8 application will be considered. Under s 171, the second defendant is to determine an application by either granting or refusing to grant an approval in respect of the works the subject of the application. Under s 176A, the second defendant could, without limiting the operation of s 166C, impose conditions on an approval including "conditions relating to the protection of the environment". Under s 180, a person must not construct a controlled work otherwise than in accordance with an approval that is in force in respect of the work. Under s 180B if the second defendant formed the opinion that a person was engaging in, or was about to engage in, an activity that contravened s 180 it was empowered to order the person to desist from engaging in that activity by service of a notice in writing served on the person.

The plaintiffs tendered an affidavit by Mr Cameron, served by the defendants for the purposes of the proceedings, at a time when he held the position of Licensing Manager on secondment to the second defendant. In the affidavit he deposed to the process under which an application under the amended Part 8 of the Water Act would be dealt with pending the determination of the application in accordance with s 171 of the Act. In the affidavit he also noted that the Department published a guide for applications for consent to construct a controlled work under Part 8 of the Water Act after the passage of the Amending Act. That document was separately tendered by the plaintiffs as Exhibit HA 4 as current at least as at February 2001. It states: The purpose of this document is to set out the requirements for plans to accompany applications (under Section 167 of the Water Act, 1912) for the approval of irrigation developments. In many cases, the application will require the services of a Surveyor or other suitably qualified person to prepare the plan on their behalf. INTRODUCTION Over the years, the previous practice for obtaining approval for flood control works on the floodplain (Part 8 of the Water Act) drew a lot of complaints from the wider community. The complaints were generally related to the delays associated with obtaining a license approval and the appeals process that existed at that time. In response to those community concerns, DLWC developed a package of major changes to the method of obtaining approval for flood control works on the floodplain. The package involved revision of internal practices, development and updating of floodplain management plans through a community process, along with the associated necessary changes to Part 8 of the Act. The 1999 changes were gazetted on 7th July 2000. The changes to the Act were intended to: ● Expand the issues which should be considered in relation to applications for approvals; ● Streamline the procedures for dealing with applications; and ● Strengthen the DLWC's ability to take appropriate action in relation to unauthorised flood control works or proposed building of works and to achieve the timely removal or cessation of such activity. The main reasons for the amendments were: 1. There were repeated community requests to make management of flood control works more effective. 2. Changes would enable timely and practical action by the DLWC on unauthorised works. 3. The change was necessary in order to eliminate time consuming, costly and highly resource based analyses of the impacts associated with flood control works. It also set out s 166C in full.

Exhibit U (also tendered by the plaintiffs) is a letter forwarded to landholders in the Namoi Valley from Mr Cameron as licensing coordinator of the Healthy Floodplains Project. The letter is dated April 2013.

The stated objective of the project is to: ...bring floodplain harvesting within the licensing and approvals framework of the Water Management Act 2000 in order to protect the environment and provide equitable arrangements for sharing floodplain water.

"Floodplain harvesting" is defined in the letter as "the collection, extraction or impoundment of water flowing across floodplains" excluding where water is extracted under a water access licence that is not a floodplain harvesting access licence; taking of water under a landholder right, including the harvesting of rainwater runoff; taking of water under an applicable water access exemption under the Water Management Act; or runoff of irrigation water and stormwater which is subsequently captured in accordance with licence conditions. None of the exclusions apply for present purposes.

The project is concerned with assessing eligibility under three requirements: 1. The landowner is already floodplain harvesting; 2. The harvesting takes place on a designated floodplain; and 3. The works used for harvesting fall within the definition of "eligible works".

The definition of "eligible works" refers to existing works already constructed on floodplains in accordance with approval granted under Part 2 and Part 8 of the Water Act or the Water Management Act as of 3 July 2008. There are another series of definitions of eligibility in terms of existing works.

It would appear that Mr Bailey considered that he was eligible as he forwarded registration of interest forms by facsimile on 28 June 2013 - notably within a week of proceedings commencing in this Court.

In those forms he cited the irrigation storage unit by that time constructed on the Strip as having had "the works licensed/approved on 31 March 2006 referable to approval 90C W810925" - relevantly the date upon which the Part 8 approval lodged in January 2004 was granted.

In the registration of interest form Mr Bailey provided the following description of his floodplain harvesting activities and how the floodplain harvesting system works in respect of each of the three existing floodplain harvesting sites (again as he described them) on Hazeldene: ... overland flow will be taken by pipes and gates marked as site 3 on property map. This water will gravity feed through the tail water return channel shown in green hatching. It will be placed into storage 3 via lift pumps marked in blue.

Given the pendency of the commencement of the litigation at the time of forwarding the registration of interest, the information contained within it is not determinative of any issue arising in these proceedings.

The Native Vegetation Conservation Act came into operation in 1998. It replaced existing legislative controls relating to the clearance of native vegetation and protected land with a consolidated legislative framework providing for a single regime for clearing native vegetation throughout New South Wales. The statutory objects in Part 1 of the Act are as follows: (a) to provide for the conservation and management of native vegetation on a regional basis, and (b) to encourage and promote native vegetation management in the social, economic and environmental interests of the State, and (c) to protect native vegetation of high conservation value, and (d) to improve the condition of existing native vegetation, and (e) to encourage the revegetation of land, and the rehabilitation of land, with appropriate native vegetation, and (f) to prevent the inappropriate clearing of vegetation, and (g) to promote the significance of native vegetation, in accordance with the principles of ecologically sustainable development.

The attainment of the statutory objects are provided for in successive Parts of the Act. In the Land and Environment Court and in these proceedings only Part 2 was of direct relevance.

Part 2 imposes controls on the clearing of native vegetation and creates criminal offences where native vegetation is cleared without consent. Penalties are imposed in accordance with s 126 of the Environmental Planning and Assessment Act.

Sections 5(1) and 6(1) of the Native Vegetation Conservation Act define "clearing" and "native vegetation" for the purposes of the Act. Section 5(1) provides: In this Act, clearing native vegetation means any one or more of the following: (a) cutting down, felling, thinning, logging or removing native vegetation, (b) killing, destroying, poisoning, ringbarking, uprooting or burning native vegetation, (c) severing, topping or lopping branches, limbs, stems or trunks of native vegetation, (d) substantially damaging or injuring native vegetation in any other way. Section 6(1) provides: (1) In this Act, native vegetation means any of the following types of indigenous vegetation: (a) trees, (b) understorey plants, (c) groundcover, (d) plants occurring in a wetland.

The offence of illegal clearing of native vegetation is constituted by ss 17(1) and 21(2). Section 17 provides: (1) A person who contravenes this Part is guilty of an offence under this Act. (2) Section 126 (1) of the EPA Act (Penalties) applies to any such offence in the same way as it applies to an offence against that Act.

Section 21(2) of the Native Vegetation Conservation Act provides: A person must not clear native vegetation on any land except in accordance with: (a) a development consent that is in force, or (b) a native vegetation code of practice.

No development consent under ss 14 or 15 of the Act had been applied for in respect of the clearing carried out by Mr Bailey in either the first or second clearing events. It was common ground that there was no applicable native vegetation code of practice under Part 4 of the Act in force at the relevant time.

An application for consent to clear native vegetation under the Native Vegetation Conservation Act is granted by the Minister in accordance with Part 4 of the Environmental Planning and Assessment Act by the combined operation of ss 14 and 15 of the Native Vegetation Conservation Act.

Sections 14 and 15 are in the following terms: Consent authority for clearing For the purposes of the EPA Act, the Minister is the consent authority for any development application made under that Act for any clearing that requires development consent because of this Part. Granting of development consent (1) If development consent is, because of this Part, required to clear native vegetation or any protected land, that development consent may be obtained by the Minister making a determination, in accordance with Part 4 of the EPA Act, to grant development consent. (2) For the avoidance of doubt, Part 4 of the EPA Act applies to and in respect of that development consent in the same way as it applies to and in respect of development consent that may be required by an environmental planning instrument. (3) The Director-General must keep a register, in the form approved by the Minister, of the following: (a) development consents granted by the Minister under Part 4 of the EPA Act for any clearing that requires development consent because of this Part, (b) decisions on appeal pursuant to Part 4 of the EPA Act from any determination made by the Minister under that Part in relation to any such clearing. (4) The register is to be available for public inspection, without charge and during ordinary business hours, at the head office of the Department of Land and Water Conservation and at the relevant regional office of that Department. Any person is entitled to make copies of any entry in the register.

Sections 12(a)-(p) of the Native Vegetation Conservation Act provide for various exceptions and exclusions to the requirement in Part 2 that development consent be obtained prior to clearing of native vegetation in specified types of clearing. Although only s 12(f) was relied upon by Mr Bailey in defence of the charges of illegal clearing, in order to appreciate Bignold J's construction of that subsection in the context of s 12 generally (an approach with which Talbot J did not disagree), and the cross-examination of Ms Paget-Cooke as to her understanding of the subsection from the Department's perspective prior to the proceedings in the Land and Environment Court and the consideration she gave to it in recommending that Mr Bailey be prosecuted, s 12 should be set out in full: Clearing excluded from operation of Act This Act does not apply to the following types of clearing: (a) any clearing authorised under the Rural Fires Act 1997, or the State Emergency and Rescue Management Act 1989, in relation to an emergency within the meaning of the latter Act, (b) any clearing carried out in accordance with a bush fire management plan under the Rural Fires Act 1997, (c) any clearing authorised under the Noxious Weeds Act 1993, (d) any clearing carried out in accordance with a property management plan approved by the Director-General of National Parks and Wildlife for the purposes of the Threatened Species Conservation Act 1995, (e) any clearing authorised under a licence issued under Division 1 of Part 6 of the Threatened Species Conservation Act 1995, (f) any clearing that is, or that is part of, designated development within the meaning of the EPA Act, (g) any clearing authorised to be carried out under Division 3 or 4 of Part 7 of the Fisheries Management Act 1994, (h) any clearing authorised under a licence issued under Division 6 of Part 7A of the Fisheries Management Act 1994, (i) any clearing carried out in accordance with a licence issued under section 131 of the National Parks and Wildlife Act 1974, (j) any clearing authorised under the Mining Act 1992, (k) any clearing authorised under the Petroleum (Onshore) Act 1991, (l) any clearing that involves the carrying out of harvesting operations on an accredited timber plantation (within the meaning of the Timber Plantations (Harvest Guarantee) Act 1995) in accordance with a timber plantation (environment protection) harvesting code in force under that Act, (m) any clearing that involves the removal or lopping of any tree or other vegetation in accordance with section 88 of the Roads Act 1993, (n) any clearing carried out in accordance with a consent under Division 3 of Part 9 of the Roads Act 1993, (o) any clearing carried out in accordance with a permit under Part 3A of the Rivers and Foreshores Improvement Act 1948, (p) any clearing carried out in accordance with a licence, permit, authority or approval under the Water Act 1912. [Emphasis added.]

Both in the proceedings in the Land and Environment Court and in the Court of Criminal Appeal "development" (described in Schedule 3 to the Environmental Planning and Assessment Regulation) was "designated development" for the purposes of the Environmental Planning and Assessment Act. Part 1 of Schedule 3 contains an extensive list of activities or developments which are designated development, including artificial water bodies which are defined to include a water body with a maximum aggregate surface area of more than 20 hectares or a maximum total water volume of more than 800 megalitres. Part 3 of Schedule 3 describes an artificial water body to include any constructed dam, pond or lake. There is no declared purpose or type of designated development in Part 1 of Schedule 3 that simply involves the clearing of native vegetation.

Whether the construction of the proposed water storage unit on the Strip was part of designated development and, if so, whether the clearing the purpose of its construction was exempt under s 12(f) only if it is authorised by development consent, was the subject of argument in the Land and Environment Court proceedings. It was one of the two questions stated by Talbot J for the consideration of this Court pursuant to s 5AE of the Criminal Appeal Act.

The savings and transitional provisions in Clauses 3 and 5 of Schedule 4 to the Native Vegetation Conservation Act, enacted by s 68 of that Act, provide for an additional exemption from the requirement under Part 2 to obtain development consent. Clause 3 to the Schedule provides that despite the repeal of SEPP 46 by s 70 of the Native Vegetation Conservation Act, the clearing of native vegetation for a purpose described in Schedule 3 continues to be clearing that is exempt.

The exemption in paragraph (e) of Schedule 3 to SEPP 46 is as follows: (e) Rural Structures. The clearing to a minimum extent of native vegetation if it is necessary for the construction, operation and maintenance of farm structures (such as farm dams, tracks, bores, windmills, fences, fence lines, stockyards, loading ramps, sheds and the like). [Emphasis added.] (f) the removal of native vegetation where the seedlings all regrowth, of less than 10 years of age if the land has been previously cleared for cultivation, pastures or forestry plantation purposes.

SEPP 46 utilised the key concepts of "clearing" and "native vegetation" adopted and applied in ss 5 and 6 of the Native Vegetation Conservation Act.

The interpretation of the "rural structures/farm dam exemption" in SEPP 46 was also in contest in the Land and Environment Court proceedings. It was the second question stated by Talbot J for the consideration of this Court pursuant to s 5AE of the Criminal Appeal Act.

On 18 July 2002 the first defendant commenced proceedings against Mr Bailey in the Land and Environment Court by the filing of two Class 5 summons for what were alleged to be offences under s 17 of the Act by contraventions of s 21(2)(a) of the Act. The proceedings related to his clearing of 64 hectares of native vegetation in June 2000 from the Strip for the construction of the proposed third water storage unit without a development consent being in force (the first clearing episode), and the clearing of a further 20 hectares in January 2002 (the second clearing episode) to remove an island of vegetation which had been retained in the middle of the cleared area after the first clearing episode for the same purpose.

The Crown Solicitor's Office was retained to act on behalf of the Director General in both sets of proceedings.

Mr Bailey's malicious prosecution claim alleges an absence of reasonable and probable cause and malice in both the initiation and maintenance of proceedings. It is necessary therefore to detail the various dealings between the parties after proceedings commenced in July 2002 and before they resolved to finality upon publication of the decision of the Court of Criminal Appeal on 5 December 2003 (Director General Department of Land and Water Conservation v Bailey [2003] NSWCCA 361) when Talbot J dismissed the summonses on 17 December 2003.

On 20 August 2002, Pricewaterhouse Coopers solicitors ("PwC") wrote to the Crown Solicitor's Office inviting the Director General as prosecutor to either discontinue the proceedings or to meet with them to discuss the matters raised in the letter in order to explain Mr Bailey's version of events.

The letter was written under the hand of Liz Wild as "Partner Environment and Planning Group". Although Ms Wild made no reference in the letter to the Allens' advice issued under her name in April 2000, she asserted that there had been no breach of s 21 of the Native Vegetation Conservation Act by the clearing of the Strip in either the first or second episodes based upon what she nominated as two exemptions from the need to obtain development consent in the exemptions listed in SEPP 46, namely the "rural structures exemption" in Schedule 3(e) and the regrowth exemption in Schedule 3(f). She outlined the arguments in the following way: The rural structures exemption (a) Mr Bailey cleared native vegetation the purposes of constructing a dam on his property; (b) Mr Bailey cleared the minimum amount necessary to the construction of the dam covering an area of 80 hectares. A dam of that size was required to retain tailwater and to ensure that run-off is retained after a storm event; (c) The term "farm dam" is not defined in SEPP 46 in which case the rules of statutory interpretation would dictate that the common dictionary meaning of "farm dam" would apply, dam being defined in the Australian Oxford Dictionary as "an artificial pond with earth walls"; (d) The affidavit evidence from Departmental officers filed in the proceedings, to the effect that the storage of water for broad acre irrigation was not intended to be included in the definition of a farm dam, a term which should be limited to stock watering dams and dams for domestic farm use, whilst suggestive of an internal Departmental policy, is not contained in any legislative provision nor in any published Departmental policy including the Farm Dams Assessment Guide published by the Department.

She extracted the following from the affidavits served as part of the prosecution brief of evidence: The affidavit of Garry Gardner states at paragraph 16 that "storage was not meant to be included in the definition of farm dam, which was used for stock". The affidavit of Rodney Gordon O'Brien states, in paragraph 18, that " the majority of farms have stock and domestic dams which is what the exemption is aimed at". The affidavit of Robert Bradley Dines states at paragraph 46 that "DLWC's interpretation of this exemption is that while it would permit the construction of a farm dam for stock watering purposes, it was not intended to allow the construction of large water storage for broad acre irrigation...".

Her letter went on to outline the arguments relating to "the regrowth exemption" as follows: (a) A Target Flora Survey was obtained prior to any clearing activities being undertaken. In the report the vegetation that was described as follows: Old growth trees were mostly removed during historic clearing of this land. Coolabah and Bimble Box trees are generally young and with few hollows. Belah trees are mostly at the advanced sapling/young tree stage. The low biomass of groundcover gives it the appearance of having been subjected to intensive grazing for many years. The exotic weed Lippia is well established in the groundcover community. (b) Given that the vegetation cleared was less than ten years old on land that had been historically cleared Mr Bailey's actions satisfied the regrowth exemption.

The regrowth exemption was later abandoned. Ms Wild did not suggest that the exemption under s 12(f) of the Native Vegetation Conservation Act had any application.

As to the operation of Part 8 of the Water Act, Ms Wild expressly acknowledged that Mr Bailey did not have approval to construct the dam. She went on to note, however, that there was nothing in the Water Act that required approval to be granted or an application for approval to be lodged for the purposes of construction prior to the clearing of native vegetation, provided that the clearing was otherwise authorised or exempt under the Native Vegetation Conservation Act.

The Crown Solicitor did not respond to the matters raised in PwC's letter save only to agree to a meeting for the purpose of clarifying any confusion as to any issues of fact. The Crown Solicitor made it clear that they would not be agreeable to discussing legal issues, particularly questions concerning the interpretation of exemptions under the Native Vegetation Conservation Act. No meeting was convened.

By letter dated 5 September 2002 the Crown Solicitor requested that Mr Bailey's solicitor obtain instructions for specified admissions to be made to facilitate the conduct of the proceedings, including that no consent, authority or permit had been sought or applied for in respect of each of the sub provisions of s 12 of the Act. In respect of s 12(f) the admission sought was in the following terms: ...the subject clearing was not clearing that was, or that was part of, designated development within the meaning of the Environmental Planning and Assessment Act 1979.

By letter dated 3 September 2002 a detailed list of admissions were made as requested including, as regards the potential application of s 12(f), the following: We are instructed that the clearing was not the subject of an application for designated development under the Environmental Planning and Assessment Act 1979.

It would appear that a follow up letter from the Crown Solicitor seeking confirmation that in those circumstances the exemption under s 12(f) would not be relied upon at the hearing was not answered.

For the purposes of the proceedings in the Land and Environment Court a number of further facts were agreed. They included that the 64 hectares and 20.4 hectares of native vegetation cleared in the first and second clearing events were in fact cleared and, apart from a small area in the travelling stock route outside the boundaries of the Strip, that Mr Bailey was responsible for the clearing having engaged a contractor to undertake the clearing on his behalf. The concession that Mr Bailey cleared the native vegetation was obviously sought in accordance with the principles of "innocent agency" (see Pinkstone v R [2004] HCA 23; 219 CLR 444 at [8] per Gleeson CJ and Heydon J; at [59]-[66] per McHugh and Gummow JJ; at [102]-[106] per Kirby J). It was not the subject of any contest between the parties or examination by the trial judge.

The following additional facts were either admitted or ultimately proved: (a) the clearing the subject of both summons was of native vegetation; (b) the clearing occurred on a designated floodplain; (c) the construction of levees and a borrow pit for the water storage unit on the cleared area were "controlled works" to which Part 8 of Water Act applied.

Since the ambit of the evidence relied upon by the prosecutor in proof of guilt was substantially narrowed by this approach, only Mr O'Brien, Mr Gardener and Mr Dines (respectively Departmental vegetation and water officers) were required to attend for cross-examination. The remaining affidavits were read. Mr Bailey also gave evidence and was cross-examined.

The affidavits relied upon by the prosecution in the Land and Environment Court were also tendered by the defendants in the proceedings before me for the limited purpose of supporting the objective sufficiency of the prosecution case in defence of the action for malicious prosecution. It comprised the following affidavits to which were exhibited a considerable quantity of material collected during the investigation and collated for the purposes of the prosecution:

Mr King objected to the tender of the affidavits of Mr O'Brien and Mr Gardner. He submitted that because neither of the deponents were to be called as witnesses he would not have the opportunity of testing their evidence in cross-examination. Quite apart from the evidence not being relied upon to evidence any fact in dispute in the proceedings before me, Mr King's objection was overtaken by his subsequent tender of the entire transcript of the proceedings in the Land and Environment Court, including the cross-examination of Mr Gardner and Mr O'Brien. Mr Bailey's affidavit in the Land and Environment Court was tendered by the plaintiffs in the proceedings before me without objection.

Ms Kelly of counsel was briefed to advise and appear for the prosecution on the hearing. She had also appeared for the Director General in the Jackson matter. Mr Preston SC was retained by PwC to appear for Mr Bailey.

Before Ms Kelly opened the prosecution case, Mr Preston identified the two alternate bases upon which he submitted Mr Bailey was entitled to be acquitted. The first was the exemption in s 12(f) of the Native Vegetation Conservation Act. Mr Preston submitted that clearing of the native vegetation on the Strip for the construction of a dam, being "an artificial water body" as defined in the Environmental Planning and Assessment Regulation, was designated development within the meaning of ss 4 and 77A of the Environmental Planning and Assessment Act. Additionally, or in the alternative, he submitted that the clearing was for the purpose of the construction of a "rural structure", namely a "farm dam", being an exemption listed in SEPP 46.

As noted above, neither the Allens' advice in April 2000 nor the letter from PwC of 20 August 2002 claimed any reliance upon the exemption in s 12(f) and, on one view, at least impliedly, PwC disclaimed any reliance on it.

It was common ground in the proceedings in the Land and Environment Court that if the clearing was for the purposes of the construction of a proposed water storage unit having a maximum aggregate surface area of water of more than 20 hectares, or a maximum total water volume of more than 800 megalitres (the proposed third water storage unit had a capacity of 3000 megalitres), it would fall within the definition of an "artificial water body" as defined. It was also common ground that it would be "designated development" pursuant to s 4 and s 77A of the Environmental Planning and Assessment Act. The prosecutor did not accept however that the clearing was undertaken by Mr Bailey solely for the purpose of constructing an artificial water body as defined. On that approach the prosecutor assumed the burden of establishing, to the criminal standard, that the clearing for the construction of the proposed third water storage unit was not designated development within the meaning of the Environmental Planning and Assessment Act and, in that way, did not attract exemption under s 12(f) of the Native Vegetation Conservation Act. The prosecutor also submitted that, giving the words in Schedule 3 to SEPP 46 their ordinary meaning, the proposed third water storage unit for irrigation purposes was not a "rural structure" in the category of a "farm dam". This imposed on Mr Bailey the burden of establishing that the proposed water storage unit met the statutory definition of a "rural structure" on the balance of probabilities.

Both of these questions had been the subject of consideration in Director-General Department of Land and Water Conservation v Jackson and Ors [2003] NSWLEC 81. Those proceedings were heard on 14 March 2003 and determined on 31 March 2003 prior to the hearing of the Bailey matter.

It would appear that at the time that proceedings were commenced against Mr Bailey in July 2002 there was an ongoing investigation into the legality of the clearing of native vegetation during the construction of a large water storage unit on land near Carinda in the central west of New South Wales and the consequent inundation of the land with water to fill a large irrigation storage unit. That investigation had resulted in charges being laid against three defendants (Jackson being one of them) under the same provision as the charges laid against Mr Bailey. The defendants in the Jackson matter also used the land at Carinda for the growing of irrigated cotton subject to licenses granted pursuant to Part 2 of the Water Act. Further, as with the proposed third water storage on the Strip, the water storage unit in the Jackson matter was constructed on a designated floodplain which required that approval be granted under Part 8 of that Act. While the parties in Jackson disagreed as to whether or not such approval had ever been given - a matter not resolved by Bignold J - in the Bailey proceedings Talbot J found that no Part 8 approval had been sought by Mr Bailey and none granted.

It appears that both cases proceeded to hearing in tandem. However, the parties in Jackson agreed that the matter be listed to allow for the determination of what were identified as two preliminary questions of law. The first was whether any clearing of native vegetation that may have occurred as a result of the construction and/or inundation of water of or into the water storage unit at Carinda would be excluded from the operation of Native Vegetation Conservation Act pursuant to s 12(f). The second question was whether the water storage unit was a "rural structure" or a "farm structure" within the meaning of SEPP 46. It is not clear when the parties in Jackson resolved to approach the proceedings in that way. Nonetheless, in December 2002, after the prosecution of Mr Bailey was commenced, Ms Paget-Cooke knew when the Bailey matter was listed for hearing that the "rural structures exemption" would be an issue raised in the Jackson matter. In an email sent to all witnesses she expressed the view that "the outcome of the Jackson matter may impact on the Bailey matter".

The interlocutory hearing in the Jackson matter was heard on 14 March 2003. On 31 March 2003 Bignold J published judgment. His Honour applied a purposive, as distinct from a literal approach to the construction and interpretation of s 12(f) of the Native Vegetation Conservation Act. He held that the exclusion of clearing that was, or was part of, designated development within the meaning of the Environmental Planning and Assessment Act, was the carrying out of development that has been authorised by the grant of a relevant development consent under that Act. In coming to that view his Honour gave detailed consideration to the operation of the Native Vegetation Conservation Act including its statutory objects, together with controls on development under the Environmental Planning and Assessment Act (see his Honour's analysis at [66]-[85]). Since Mr Bailey had not obtained development consent from the Minister for the clearing of native vegetation on the Strip, on the approach favoured by Bignold J he could not avail himself of the exemption under s 12(f) in defence of the charges.

Insofar as the second question was concerned, in a relatively brief analysis at [110]-[117] Bignold J was persuaded that the meaning to be given to the word "rural structures" in the context of paragraph (e) of Schedule 3 to SEPP 46 was the ordinary and natural meaning of those words, including the illustrative meanings in the definition, namely "farm dams, tracks, bores, windmills, fences, fence lines, stockyards, loading ramps, sheds and the like". His Honour was not prepared to read down the provision so that the exemption applied only to small amounts of clearing for these purposes in the way urged by the prosecution. Bignold J found that on the facts as agreed before him, the water storage unit was a "rural structure" within the meaning of paragraph (e) of Schedule 3 to SEPP 46. On that interpretation Mr Bailey could also rely upon the "rural structures exemption" in defence of the charges brought against him for illegal clearing.

On 10 April 2003 each of the defendants in the Jackson matter filed a Notice of Application for leave to Appeal to the Court of Criminal Appeal against Bignold J's interpretation of the exemption in s 12(f) of the Native Vegetation Conservation Act. On 14 April 2003 the prosecutor filed a Notice of Application for leave to Appeal to the Court of Criminal Appeal against Bignold J's construction of the "rural structures exemption" in SEPP 46.

On 2 May 2003 Ms Aitken, a solicitor in the office of the Crown Solicitor who had carriage of both sets of proceedings, filed an affidavit in support of a notice of motion of the same date seeking orders that the hearing dates for the Bailey proceedings (fixed for 17 June to 30 June) be vacated pending the determination of the Jackson matter in the Court of Criminal Appeal. She annexed to the affidavit the correspondence between the Crown Solicitor's office and PwC referred to at [105] above observing that it was the understanding of the prosecutor that Mr Bailey would seek to rely upon the "rural structures" exemption in SEPP 46 but that his position in respect of the invocation of s 12(f) remained ambiguous. She went on to observe that the outcome of the appeals to the Court of Criminal Appeal would likely be significant, even to the extent that the need for a defended hearing may be obviated entirely. She suggested that at least the scope of any defended hearing would likely be narrowed and costs may be reduced depending on the outcome of the appeal and invited Mr Bailey to consent to vacating the hearing for that reason. Ms Aitken also brought to Mr Bailey's attention (by annexures to her affidavit) the following material:

On 9 May 2003 Anthony Whealy, a solicitor in the employ of PwC, swore an affidavit in which he opposed orders to vacate the hearing. He set out a chronology of events commencing with the first return of the summons on 29 August 2002, pointing out that on that occasion, on the application of the prosecutor, the matter was adjourned for a period of eight weeks to permit service of the brief of evidence and that the matter was further adjourned on 30 October and 5 December 2002 for the same purpose. He then noted that on 13 December 2002 Talbot J listed the matter for hearing in June 2003 to accommodate the need to find mutually suitable dates for both counsel. Mr Whealy claimed that the prosecutor had given no indication then or later that the contentious question of the construction of the rural structures exemption in SEPP 46 was to be determined as a preliminary question in the Jackson matter. He said that he only became aware of it after judgment in the Jackson matter had been delivered. He said that were he aware of the situation he would have advised Mr Bailey to also have the same issues determined as preliminary questions in advance of the scheduled hearing dates. In circumstances where it was not suggested that the prosecutor intended to seek to expedite the hearing of the appeal to the Court of Criminal Appeal, and where the application to vacate the hearing dates was served three weeks after the appeals were lodged, Mr Whealy advised that his client would not consent to the hearing dates being vacated.

At the commencement of the scheduled hearing before Talbot J his Honour was made aware of the decision in the Jackson matter and that both parties had filed proceedings in the Court of Criminal Appeal. This much is clear from the references in the judgment to that decision and the differing views of the parties as to the correctness of the approach taken by Bignold J to both the "rural structures/farm dam exemption" and the operation of the exemption under s 12(f).

The proceeding before Talbot J proceeded over three days from 16 to 18 June 2003. His Honour published judgment on 1 July 2003. In his Honour's reasons he recited the facts which were largely agreed. It is not necessary to set them out in detail here save only to note, to the extent that it bears upon the issues in the proceedings before me, that his Honour found at [25] that on 19 July 2000 Mr Bailey did not sign the Part 8 application brought to Hazeldene by Mr Gardner and that the application had never been formally submitted or processed. He also noted Mr Gardner's evidence that he was concerned after the meeting on that date that there had been a breach of the Native Vegetation Conservation Act by the clearing of the Strip and that he did not want the Part 8 application to be considered until that issue had been resolved.

His Honour made the following findings of fact: [33] The Court is satisfied beyond reasonable doubt that the evidence shows Mr Bailey caused clearing to be carried out on the Strip to the extent alleged between the dates particularised for the purpose of constructing a farm storage to enable water to be harvested from the Macintyre River in times of high flow and then stored for the purpose of irrigation of crops, principally cotton, grown on Hazeldene. The Court also finds beyond reasonable doubt that the farm storage is within the definition of an artificial water body in the Sch to the EP&A Regulation. [34] No development consent has been obtained for the clearing or the construction of the farm storage. Agriculture is a use that may be carried on without consent pursuant to the applicable Local Environmental Plan. No application has been lodged, processed or determined pursuant to Pt 8 of the Water Act. However, this Pt only appears to deal with specified works defined as "controlled works" such as earthworks, an embankment or levee. None of these structures have been built. [35] The Court is further satisfied beyond reasonable doubt that the use of any part of the cleared area for the purpose of crop growing was no more than an interim measure to protect the land pending the resolution of issues raised in respect of the applicability of the NVC Act.

His Honour dealt with the question whether Mr Bailey had discharged the onus of establishing, on the balance of probabilities, an entitlement to rely upon the "rural structures/farm dam exemption" in SEPP 46 as an excuse or justification for not complying with the obligation to obtain development consent. His Honour held as follows: [39] The dispute that arises for determination relates to the contextual meaning of the words "rural structures" and "farm structures". There is no statutory definition of either expression. The words used by way of illustration, for example in brackets, are not in themselves definitive or limiting. [40] I agree with the view expressed by Bignold J in Jackson that the terms are not used in any specialised or technical sense and that they are ordinary words of the English language and are to be understood as having their ordinary and natural meaning. The Court nevertheless needs to be satisfied that the subject clearing was to a minimum extent and necessary for the construction, operation and maintenance of the water storage. [41] In my opinion, the words "to a minimum extent, or necessary" where used in cl (e) are referable to the amount of clearing, not the rural structure itself. [42] There is no evidence to persuade the Court that the purpose of the clearing of the 84.4 hectares was for anything other than the construction of a water storage facility with a surface area of about 75.3 hectares. Moreover, there is no evidence that the extent of clearing was more than was necessary for the construction of the water storage. [43] The exemption contained in cl (e) is not qualified in any respect that requires an authorisation under Pt 8 of the Water Act or the EP&A Act. In respect of the latter, the construction of a farm water storage clearly is for the purpose of agriculture and therefore does not require development consent under the EP&A Act. [44] The evidence of the inspections and conversations that took place between the department officers and respective landowners from 17 February 2000 onwards is consistent with an intention to clear the land for the purpose of facilitating the construction of a storage structure capable of holding approximately 3000 mega litres of water for irrigation purposes. The proposed structure will be at a location that will allow it to conveniently link into the existing channels and pump systems on Hazeldene. The evidence is that farm dams of the size such as that proposed for this site are common in the area which is extensively used for the growing of cotton. [45] The prosecutor's argument is that while the construction of cl (e) to Sch 3 derived by Bignold J is "available" it is not a meaning that promotes the purpose or object underlying the NVC Act and therefore another meaning is to be preferred (Interpretation Act 1987 s 33). This argument relies on the purpose of the NVC Act as being to provide for a consistent state-wide regulation of clearing native vegetation rather than adhoc regulation by local government authorities. It is submitted that the consequence of adopting the reasoning of Bignold J is that the only "clearing" to which the NVC Act would relevantly apply would be clearing for the purposes of grazing or cultivation. This, it is said, would not promote the purpose of the NVC Act. [46] Mrs Kelly seeks to further argue, on behalf of the prosecutor, that the words in brackets in cl (e) suggests that the type of structures contemplated by the legislation are those that would not have a significant impact on native vegetation. That, she says, is to be compared to the impact on the activities of a farmer by having to apply for a development consent to carry out such construction in terms of time, cost and interference with running a farm. Mrs Kelly further suggests that a reference to a farm dam contemplates a small structure that is constructed across a stream in order to confine water. She goes on to argue that a dam is not designed to be filled by human intervention in contrast to the proposed water storage on Mr Baileys property which involves pumping from the Macintyre River or other parts of the property, Hazeldene, with little or no reliance upon runoff or natural feed from a stream or river. [47] Mrs Kelly quotes the following from the second reading speech by Minister Yeadon in the Legislative Assembly on 19 November 1997:- However, certain clearing associated with day-to-day farming activities will be exempt from the need to obtain development consent under the Act. [48] She says that the reference to day-to-day farming activities supports a construction that the exemption is intended to allow farmers to carry out minor construction that does not have a significant impact on native vegetation without the farmer having to go through the development consent procedure. [49] In the Courts opinion, the day-to-day activities on any farm depend upon the character, nature, location and purpose of the individual property. There is no warrant to read down the expression "rural structure" or "farm structure" in the context of sch 3 to SEPP 46. Furthermore, the type of water storage proposed by Mr Bailey is not inconsistent with the general understanding of a dam as an artificial pond or reservoir for the storage of water (The Australian Oxford Dictionary). [50] I hold therefore that the Court is satisfied on the balance of probabilities that the proposed water storage is relevantly a rural structure for the purposes of Sch 3 to SEPP 46, and that the clearing of native vegetation which took place as alleged in both summons was for that purpose, namely clearing to a minimum extent necessary for the construction of the water storage. [51] The defendant is entitled to be acquitted on that ground alone.

On the approach to the construction of the exemption in s 12(f) favoured by Bignold J (and urged upon Talbot J by the prosecutor as correct), because Mr Bailey had not obtained development consent from the Minister for the clearing of native vegetation on the Strip in either the first or second clearing event he could not avail himself of that exemption. Mr Preston submitted that his Honour's reasoning was flawed and that Talbot J should decline to follow the decision for that reason.

Although his Honour considered the competing arguments, he found it unnecessary to deal finally with what he described as the "robust but nevertheless arguably commendable approach to s 12(f) by Bignold J in Jackson", in large part, it would seem, because he was aware that the matter was on appeal to the Court of Criminal Appeal where the issues would be fully argued. He went on to say at [74]: ... I therefore propose to do no more in these proceedings except to formally follow the decision of Bignold J so that, in accordance with his construction of s 12(f), the NVC Act applies. Nevertheless, the defendant is entitled to be acquitted pursuant to the exemption raised by the transitional provisions of the Act.

Without setting out his Honour's consideration of the competing arguments in full he did observe as follows: [55] On its face therefore, the effect of s 12(f) is that the NVC Act does not apply to any clearing that is part of the development of the water storage on the Strip. [56] As I have already said, the clear evidence is that the clearing was done for the purpose of construction and operation of the artificial water body. Hence, according to Mr Preston, the clearing is in itself designated development. Alternatively, the clearing was part of designated development. [57] The section does not state expressly that the designated development the subject of s 12(f) be authorised by the grant of a development consent. It is noteworthy that the legislation does expressly state that an authorisation is required for some other clearing referred to in s 12 to which the NVC Act does not apply. For example, s 12(o) provides that the clearing must be carried out in accordance with a permit under Pt 3A of the Rivers and Foreshores Improvement Act 1948 and s 12(p) allows only for clearing carried out in accordance with a licence, permit, authority or approval under the Water Act. Other clauses in s 12, apart from (f), specifically refer to an authority of some sort in accordance with nominated legislation. [58] ... [59] A difficulty with simply adopting the approach taken by Bignold J can be illustrated by the observations made by Gleeson CJ, Gummow, Kirby and Callinan JJ in a joint judgment in Thompson v Judge Byrne and Ors (1999) 196 CLR 141 when they expressly considered the separate minority decisions delivered by Dawson J and McHugh J in Mills v Meeking and Another (1989-1990) 169 CLR 214. They found at 151-152 that the suggestion that Parliament's purpose could be achieved and the conflicting objectives of the Act, there in question, reconciled by reading words into a statutory provision was unpersuasive in circumstances where the language of the Act is clear and unambiguous. In that case, it was held that to add words as suggested by the minority in Mills would not be to fill an obvious gap in the statute but rather would change the structure of the Act. Gaudron J strongly supported the joint decision at p 159 as follows:- The legislative purpose of an enactment cannot be determined simply by having regard to its stated purpose or, where that is permitted, the relevant legislative debates. Neither is likely to be an exhaustive exposition of the legislation in question or of its purpose. Rather, where "the words of the statute are in themselves precise and unambiguous ... [they] best declare [its] intention" (Sussex Peerage Case (1844) 11 Cl & F 85 [ER 1034 at 1057] See also Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518, per Mason CJ, Wilson and Dawson JJ; at 532. per Deane J). Given the clear language of s 49(1)(f) and its context, there is, in my view, no basis for concluding that it was intended to apply only to those driving or in charge of a motor vehicle that was involved in an accident [60] In a minority judgment, McHugh J maintained his opinion that he and Dawson J were correct in Mills but did not support the case for re-examining the correctness of Mills. [61] The principle applied by Mason CJ and Toohey J in Mills, with whom Brennan J agreed, is stated at 223 as follows:- If the language of a statute is ambiguous or uncertain, a risk of injustice will bear upon the construction to be given to words used. But, if the language is not ambiguous or uncertain, a court will apply its ordinary and grammatical meaning unless to do so will give the statute an operation which obviously was not intended: see generally Cooper Brookes (Wollongong) Pty. Ltd. v. Federal Commissioner of Taxation (1981) 147 CLR 297 at pp 304-305, 320-321; also Catlow v. Accident Compensation Commission (1989) 167 CLR 543 at pp 549-552. This legislation is not relevantly ambiguous or uncertain. [62] The category of designated development, as defined by the EP&A Act and the EP&A Regulation, is the subject of specific provision in the EP&A Act that has particular regard to its potential for causing environmental harm. It may be reasonable to assume that the legislature when considering what should be excluded from the operation of the NVC Act decided that the safeguards provided in that statutory regime would adequately cover the field in respect of the clearing of native vegetation. If the relevant planning instrument allowed designated development to be carried out without development consent then it may have reasonably been expected that the consequences had been properly considered. [63] As the clearing by Mr Bailey was not carried out pursuant to a development consent that is in force or a native conservation code of practice as required by s 21(2) of the NVC Act, it is not clearing carried out in accordance with Pt 2 of the Act. Accordingly, s 16 of the NVC Act does not apply and accordingly, Pt 5 of the EP&A Act operates. [64] Part 5 of the EP&A Act applies, inter alia, to activity (as defined) for which development consent under Pt 4 is not required or has not been obtained (s 110 (1)(g)). Part 5 requires an environmental assessment of the activity to be carried out by a determining authority pursuant to s 111. An environmental impact statement is required in specified circumstances under s 112. [65] It is likely there will be other cases where types of clearing to which the Act does not apply per force of s 12 of NVC Act will be controlled by Pt 5 of the EP&A Act. [66] Although in the main, the statute based exemptions in s 12(a) to 12(p) anticipate the grant of a formal authority or licence, few of the relevant statutes are specifically directed to the conservation and management of native vegetation, or the other objects of the NVC Act stated in s 3. Moreover, the authority of the Noxious Weeds Act 1993, for example, is not limited to circumstances where a consent or direction is issued. There are blanket provisions in that Act such as s 12 and s 13 that place an unqualified obligation on parties to control specified noxious weeds. [67] Mr Preston makes a salient point that rather than the draftsperson overlooking the requirement for development consent to be obtained for the purposes of the exemption in s 12(f), the other clauses in s 12 demonstrate clearly that the draftsperson went through each of the provisions with "methodical consistency" and referred to the appropriate form of authorisation required under each statutory regime. Accordingly, he says it was not a casual drafting exercise. The draftsperson must have made a deliberate decision to follow a different course in the case of designated development. [68] Mrs Kelly raised an argument that the EP&A Act has no application in respect of designated development unless the development is permissible only with development consent. If that is right then she says there is no call to add the words to s 12(f) of the NVC Act as Bignold J did. The apparent fallacy in this argument is that the express words in s 12(f) refer to designated development within the "meaning of the EPA Act". The words of s 77A are plain and unambiguous. It also ignores the prospect that designated development could be a category of prohibited development and thus, still controlled by Pt 4 of the EP&A Act (s 76B). It would be absurd for s 12 to exclude clearing carried out for the purpose of a prohibited development. If the development for which the clearing is required is prohibited under the regime created pursuant to the EP&A Act, then the question of the clearing of native vegetation should not arise.

On 31 July 2003 Talbot J agreed to submit two questions of law for the determination of the Court of Criminal Appeal under s 5AE of the Criminal Appeal Act in the following terms and on the following grounds: Stated question by prosecutor Did I err in law in finding that the defendant is entitled to be acquitted by reason of the exemption in cl (e) of Sch 3 to SEPP 46, applied pursuant to the transitional provisions in Sch 4 to the NVC Act by dint of s 68? Contentions by the prosecutor The prosecutor contends that I have erred in law in finding that the defendant is entitled to be acquitted by reason of the exemption in cl (e) of Sch 3 to SEPP 46, applied pursuant to the transitional provisions in Sch 4 to the NVC Act by dint of s 68 on the following grounds: (1) That I erred in law in finding that the proposed water storage was relevantly a "rural structure" for the purposes of Sch 3 of SEPP 46 as continued in force by s 68 and Sch 4, cl 2 and cl 3 of the NVC Act. (2) That I erred in law in finding that the clearing of native vegetation for the proposed purpose for the construction of a water storage, that is, a water storage which was not and may never be constructed, entitled the defendant to be acquitted. (3) That I erred in law in finding that the exemption contained in cl (e) of Sch to SEPP 46 "is not qualified in any respect that requires an authorisation under Part 8 of the Water Act, 1912". (4) That I erred in law in finding that there was "no warrant to read down the expression "rural structure" or "farm structure" in the context of Schedule 3 to SEPP 46". (5) That I erred in law in finding that "the type of water storage proposed by Mr Bailey is not inconsistent with the general understanding of a dam as an artificial pond or reservoir for the storage of water". Stated question by the defendant I have exercised my discretion to submit the following question of law at the request of the defendant pursuant to s 5AE of the Criminal Appeal Act: (1) Did I err in law in finding that s 12(f) of the NVC Act applies? The defendant's contention The defendant contends that I would err in law if I were to follow Bignold J in Director-General Department of Land and Water Conservation v Jackson And Ors [2003] NSWLEC 81, unreported and find that clearing which is, or is part of, designated development is not exempt under s 12(f) of the NVC Act unless first authorised by a development consent. The defendant's contentions are as follows: (1) Section 12(f) of the NVC Act states in terms that, "any clearing that is, or that is part of, designated development within the meaning of the EP&A Act" is excluded from the operation of the NVC Act. That section does not expressly state that the said designated development need first be authorised by the grant of a development consent under the Environmental Planning and Assessment Act 1979 ("the EP&A Act"). (2) That position is to be contrasted with the express requirement for authorisation (ie consent) in the other 15 types of excluded clearing listed in s 12 of the NVC Act. (3) Bignold J considered that the said s 12(f) exemption applied only in respect of the carrying out of development, "that has been authorised by the grant of a relevant development consent under that Act", This interpretation involved the reading into the said section of words not expressly provided for by the legislature. (4) This approach by Bignold J in Jackson is at odds with the observations of Gleeson CJ, Gummow, Kirby and Callinan JJ in Thompson v Judge Byrne & Ors (1999) 196 CLR 141 at 151-152, and Gaudron J at 159. See also Dawson J and McHugh J in Mills v Meeking & Anor (1989-1990) 169 CLR 214. Their Honours considered that the suggestion that the legislature's purpose could be achieved, and the conflicting objectives of an Act there in question reconciled, by reading words into a statutory provision was unpersuasive in circumstances where the language of the Act is clear and unambiguous. In such a case, the addition of words to the subject provision would not fill an obvious gap in the statute, but rather would change the structure of the Act. (5) In instances, such as here, where the language in the statute is neither ambiguous nor uncertain, a court should apply its ordinary and grammatical meaning unless to do so would give the statute an operation which obviously was not intended: see Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 304-305, 320-321: Catlow v Accident Compensation Commission (1989) 167 CLR 543 at 549-552. The present legislation is not relevantly ambiguous or uncertain. (6) The category of designated development, as defined by the EP&A Act and the EP&A Regulation is the subject of specific provision in the EP&A Act. That Act has particular regard to the potential for causing environmental harm. It is reasonable to assume that the legislature when considering what should be excluded from the operation of the NVC Act decided that the safeguards provided in the EP&A Act and Regulation regime would adequately cover the field in respect of the clearing of native vegetation. Further, if the relevant planning instrument allowed designated development to be carried out without development consent then it may have been reasonably expected that the consequences had been properly considered. (7) The defendant's clearing was not carried out pursuant to a development consent. Nor was it carried out pursuant to a Native Conservation Code of Practice as required by s 21(2) of the NVC Act. It was not carried out in accordance with Part 2 of the NVC Act. Accordingly, s 16 of the NVC Act does not apply. However, Pt 5 of the EP&A Act operates. (8) Part 5 of the EP&A Act requires an environmental assessment of the activity to be carried out by a determining authority pursuant to s 111. An environmental impact statement is required in specified circumstances under s 112. (9) That the legislature intended clearing as part of designated development such as the present case to be controlled by Pt 5 of the EP&A Act is apparent when regard is had to the incorporation in s 12(f) of the NVC Act of a requirement that the exemption apply to designated development within the "meaning of the EP&A Act". The words of s 77A of the EP&A Act are plain and unambiguous.

On 13 August 2003 PwC wrote to the Crown Solicitor's Office noting the Crown Solicitor's advice that when the matter was called over in the Court of Criminal Appeal, application would be made to defer obtaining a hearing date for the stated case pending the outcome of the Jackson matter. PwC wrote as follows: As discussed, our client is eager for the proceedings against him to be finalized and would like to have the matter set down for hearing so as to obtain the earliest possible hearing date. We believe that this approach is consistent with that of the Court of Criminal Appeal. We refer you in this regard to the facsimile from the Registrar of the Court of Criminal Appeal dated 12 August 2003, which states that the Bailey matter will be listed for hearing at the callover on 25 August 2003. You comment that your client will seek costs for its Counsel's time in this regard is therefore entirely unjustified. Moreover, as you are aware, this matter has been brought to the Court of Criminal Appeal at the request of the Crown pursuant to section 5AE of the Criminal Appeal Act 1912 ("CCA"). We draw your attention to section 17(1) of the CCA which provides that no costs shall be allowed on either side. We therefore do not understand how you intend to make these submissions, but advise that any such application for costs against our client will be vigorously defended.

On 31 October 2003 the Crown Solicitor wrote to PwC and advised that although the Jackson appeals had been heard and the decision reserved, notices of abandonment had since been filed.

On 5 November 2003 PwC confirmed receipt of that updated information and wrote as follows: We note also that the sole reason why our client's matter was brought before the Court of Criminal Appeal was because of the prosecutor's decision to appeal the Budvalt proceedings. Now that the Budvalt appeal has been abandoned, we can see no reason why the Bailey proceedings should not also be discontinued. We remind you that, at no stage did the defendant in these proceedings desire the matter to be referred to the Court of Criminal Appeal, but was instead forced to become a party to the stated case in order to ensure his interests were protected. The defendant has suffered unnecessary costs as a result of the continuance of these proceedings and should not be put to any further expense in this regard. We therefore seek your urgent confirmation that you will abandon the stated case in these proceedings and consent to the entry of an acquittal in the Land and Environment Court proceedings.

By return letter (of the same date) the Crown Solicitor advised as follows: I am instructed by my client, the Department of Infrastructure, Planning and Natural Resources, that: ● Your assertion as to the reason this matter was brought before the Court of Criminal Appeal is incorrect, the present proceedings were commenced because my client wished to challenge the finding of Talbot J in the Land and Environment Court on the "rural structures" issue. ● My client's position has not changed. Accordingly, my client does not agree to discontinue the proceedings in the Court of Criminal Appeal on Friday 7 November 2003.

The appeal was heard in the Court of Criminal Appeal on 7 November 2003 and judgment published on 5 December 2003.

Shaw J (with whom Mason P and Hidden J agreed) considered that construction of the term "designated development", being a technical or legal term, was a question of law while the expression "rural structures" did not carry any technical or legal meaning. On that analysis the only question of law that could arise on the stated case was whether the facts as found by the primary judge fell within the ambit of the meaning of that phrase.

Although neither counsel advanced any submission directed to whether a penal statute should be read narrowly with ambiguity construed against the prosecution, Shaw J considered that the application of the principle as stated by the High Court in R v Adams [1935] HCA 62; 53 CLR 563 at 567-8 was unavoidable where the criminal law had been used to enforce the beneficial purpose identified in the objectives in the Native Vegetation Conservation Act, being the conservation of native vegetation. His Honour said: No doubt, in determining whether an offence has been created or enlarged, the Court must be guided, as in other questions of interpretation, by the fair meaning of the language of the enactment, but when that language is capable of more than one meaning, or is vague or cloudy so that its denotation is uncertain and no sure conclusion can be reached by a consideration of the provisions and subject matter of the legislation, then it ought not to be construed as extending any penal category.

Since the parties had agreed before Talbot J on what Shaw J described as a factual matrix, namely whether the water storage unit was a "farm dam" for the purposes of the "rural structures exemption", the question for the Court was whether the findings of the primary judge on that issue were not findings reasonably open to him in accordance with the approach in Hope v Bathurst City Council [1980] HCA 16; 144 CLR 1 (see the discussion at [33]). As to that matter, the Court resolved as follows: [35] The Director General submits that Talbot J committed such an error in finding that the water storage was capable of coming within the ambit of the term 'farm dam' for the purposes of characterising the storage as a 'rural structure' as that term appears in SEPP 46. Mrs Kelly, for the Director General, submits that the term 'dam' connotes a structure designed to impede and/or obstruct flowing water in contradistinction to a water storage that requires water to be pumped into the structure for the purposes of retention. [36] If that submission were to be upheld it would, in my opinion, constitute a Hope error that would require this Court to intervene. However, the meanings carried by the word 'dam' are not limited in the manner submitted by the Director General. Neither the ordinary meaning of the term, or more importantly, the context of the statutory scheme indicates that it should carry such a limited meaning. In its ordinary connotation, the word dam includes a structure which confines water. Farm dams are, in my view, structures for the purpose of storing water for use in the day-to-day activities on a farm. This need for 'day-to-day' farming operations to be exempt from the provisions of the NVC Act was recognised by the relevant Minister, Mr Yeadon, MP, in his second reading speech of the NVC Act on 19 November 1997 (See Hansard at 2076). Further, this was the finding of Talbot J and I can see no reason to disturb it. I am not satisfied that his Honour should have come to any different result in this respect. [37] The Director General also submits that the size of the structure was too large for it to come within the ambit of the term 'rural structure'. I think that, in accordance with Hope, this Court could only uphold such a submission if it were satisfied that the size of the structure did not permit a finding that the water storage was a rural structure. On the agreed facts it is difficult to see that such a finding was not open to Talbot J. In my opinion, the determination would only be beyond his Honour's competence if there were some factual basis for the suggestion that the water storage was unreasonably large, or beyond the day-to-day needs of Hazeldene, so that it was not capable of reference as a 'farm dam' and, accordingly, a 'rural structure'. Having regard to his Honour's conclusions to the contrary against the submission, I am not satisfied that this Court should intervene and I would propose that the first question on the stated case be answered 'No'.

On the second question in the stated case (the question stated by Mr Bailey) the Court held as follows: [38] On the second question in the stated case, the defendant submits that Talbot J erred in following Bignold J in Jackson to find that 'designated development' within the meaning of the EPA Act means that such development should have some superadded requirement of consent or lawfulness imputed to it. [39] The Director General submits that the construction of a water storage reservoir on a floodplain without the consent of the Water Administration Ministerial Corporation would be a breach of Pt 8 of the Water Act 1912. Since consent in accordance with Pt 8 of the Water Act is recognised as exempting clearing in accordance with the construction of such a water storage by s 12(p) of the NVC Act, the Director General submits that the activities of the defendant straddle the prohibitions of the two Acts in an impermissible sense. That is, if clearing for the purposes of s 12(f) of the NVC Act exempts a need for consent recognised by s 12(p) of the NVC Act the defendant escapes prosecution under the NVC Act and, since construction of the dam has not yet started, escapes prosecution under the Water Act. [40] The Director General submits that the purpose of the NVC Act, and indeed the general structure of the scheme of environmental regulation promoted through NSW, does not permit such a construction of the NVC Act. [41] A reading of the NVC Act according to its ordinary and natural meaning seems to produce what some may regard as aberrant results. However, in my opinion this is the result of the drafting of the legislation rather than a matter for this Court, or the Land and Environment Court to correct through the provisions of s 33 of the Interpretation Act. To search for the purpose of an Act of Parliament is not a warrant for courts to re-write such legislation, especially in the field of criminal law and even more hesitation should apply when such re-writing exposes a defendant to a greater possibility of conviction and penalty. [42] Talbot J did not err in being prepared, if necessary, to follow Bignold J's decision in Jackson as a matter of comity. However, that decision was, in my view, erroneous. Section 12(f) of the NVC Act should have been applied according to its ordinary meaning, reading the ambiguity raised against the prosecutor in accordance with the principle and policy underlying such methods of construction explained by the High Court in Adams. I would propose that the answer to the second question on the stated case be answered 'Yes, in the way that s 12(f) was construed'.

On 17 December 2003, the summonses were dismissed.

Between February 2000 (when Mr Bailey first made arrangements to purchase the Strip) and January 2004 (when the Part 8 application seeking approval for the construction of the third water storage unit was lodged with the second defendant by both plaintiffs and the accompanying fee paid), Mr Bailey dealt with a number of water compliance officers and vegetation compliance officers of the Department. For the purpose of these proceedings however it was Mr Bailey's dealings with the officers of the Department between February 2000 and May 2002 that were controversial. That was so for two reasons.

First, Mr Bailey was aware that the construction of the proposed water storage unit on the Strip required approval under Part 8 of the Water Act. He said as much to Mr Leader, the clearing contractor, in February 2000 before the first clearing event. He was also aware that regional Departmental water compliance officers were available for advice as to the preparation and lodging of a Part 8 application. The two on-site meetings at Hazeldene in July 2000 with Mr Gardner, a water compliance officer, were convened by Mr Bailey expressly for that purpose.

Secondly, he was also aware that because the construction of the water storage unit on the Strip necessitated the clearance of a vast tract of native vegetation, there was at least a question as to whether he would also require approval to clear the vegetation under the Native Vegetation Conservation Act. He was aware that regional vegetation compliance officers were available for information and advice on that question. At the on-site meeting at Hazeldene in February 2000 (before the first clearing event) with Mr O'Brien, a vegetation compliance officer, that matter was discussed.

An investigation into the unauthorised clearing of the Strip was initiated in July 2000 when Mr O'Brien learnt that the Strip had been cleared without notice to the Department in what became known as "the first clearing event". After that time Mr Bailey also dealt with a number of Departmental officers, both face to face and by telephone. Mr Dines, a vegetation compliance officer, and other Departmental officers first attended Hazeldene to investigate the alleged breach of the Native Vegetation Conservation Act in August 2000. The last site visit for that purpose was convened in May 2002. At that time data was also collected referable to what became known as "the second clearing event" which took place in April 2002.

Mr Bailey also dealt with other Departmental officers from May 2002, including Ms Savage, after the matter was referred to the Legal and Compliance Branch of the Department for consideration as to whether criminal proceedings for illegal clearing of native vegetation in the first and second clearing events should be initiated.

Of the Departmental officers Mr Bailey dealt with between February 2000 and May 2002, his dealings with Mr O'Brien, Mr Gardner and Mr Dines were controversial.

It was the plaintiffs' case that under the guise of investigating the legality of clearing the Strip, these officers, either individually or collectively, were intent on preventing or delaying his construction of the third water storage unit and that they did this deliberately, and without justification, by refusing to process an application for approval under Part 8 of the Water Act Mr Bailey claimed to have had lodged with Mr Gardner for processing on 19 July 2000.

The conduct of these officers is relied upon as evidencing wrongful conduct, misconduct or conduct evidencing malice, variously relied upon by the plaintiffs to ground the claim in damages for each of the three so-called "economic torts" and the tort of malicious prosecution brought by Mr Bailey. Mr Bailey's evidence of his dealings with these officers is relied upon in making out those claims. The second plaintiff had no dealings with any Departmental officers at any time. She did not give evidence in the proceedings.

Of the Departmental officers whose conduct was under challenge only Mr Dines was called as a witness in the defendants' case. A transcript of the cross-examination of Mr Gardner and Mr O'Brien in the Land and Environment Court was tendered in the plaintiffs' case without any restriction on its use in these proceedings. The plaintiffs also called Ms Savage. Mr Bailey placed particular reliance on her evidence in making out his claim for malicious prosecution.

Mr King submitted that in contrast to what he described as the duplicity of Mr O'Brien and Mr Gardner in their dealings with Mr Bailey (and Mr Dines' duplicity to a lesser extent), a finding which he submitted was well supported by the evidence, Mr Bailey's dealings with the Department and its regional compliance officers were at all times open and transparent. He submitted that where Mr Bailey's evidence was in conflict with the evidence relied upon by the defendants that I would prefer Mr Bailey's evidence as truthful and reliable.

Mr Williams submitted to the contrary. He submitted Mr Bailey's dealings with the Department were not as contended by his counsel and that when his conduct is scrutinised in the context of all the evidence (including the evidence of Mr O'Brien and Mr Gardner in the Land and Environment Court) adverse credit findings are open and should be made. The extent to which that is so is tempered by the principle of issue estoppel expressly pleaded by Mr Bailey in the amended reply, in particular in paragraph 4A(iii). Issue estoppel was also relied upon by Mr King to meet the argument mounted by Mr Williams in final submissions that the way Mr Bailey conducted himself in his dealings with the Department's compliance officers exposed him as a person who was prepared to be deliberately strategic to achieve his objectives. This was said to follow from the fact that by clearing the Strip of native vegetation in both the first and second clearing events without notification to the Department, Mr Bailey stymied any proper enquiry into the environmental value of the native vegetation on the Strip, clearing the way for him to make an application for Part 8 approval without any risk that environmental considerations might impact upon or result in the approval being refused.

I accept that the defendants are estopped from disputing or denying that Mr Bailey's purpose in clearing in both clearing events was to construct the proposed water storage unit and that he was entitled to clear to the minimum extent necessary for that purpose under the rural structures exemption in SEPP 46 and as designated development under s 12(f). I also accept that he was entitled to do so without notice to the Department since their consent was not required. That said, Mr Williams' submission that Mr Bailey "helped himself" once he had the Allens' advice, that is without informing the Department of his intentions to clear the Strip at that time, was only advanced to meet Mr King's submission that Mr Bailey's conduct was at all times exemplary. Discussing with the Department whether in their view the Allens' advice was sound was the approach urged by the Department in the "Definitions and Exemptions: Amendment No 2", a document which Mr Bailey volunteered in his evidence that he had read (see [265]).

In resolving any issues that require me to assess Mr Bailey's honesty and reliability it will not be necessary to make any judgment on his method of dealing with the Department or his purpose or motivation in not advising the Department of his intentions to clear in either the first or second clearing events. That does not mean, however, that the way the Department or Ms Paget-Cooke viewed his conduct at those times was not material to the consideration given whether he should be prosecuted. Although it is accepted that Mr Bailey was legally entitled to clear the land, that was a position only vindicated after he was acquitted.

Mr Williams also submitted that other evidence in the proceedings either directly contradicts Mr Bailey's version of relevant events or that it does so by necessary inference. In particular, Mr Williams submitted that I would reject as untrue Mr Bailey's evidence that Mr Gardner told him at a site visit at Hazeldene on 19 July 2000 that he would process a partially completed Part 8 application for approval to construct the third water storage unit, as I would his evidence that he held any genuine belief that Mr Gardner would do so. Mr Williams submitted that I would be satisfied that Mr Bailey's evidence on that issue was a recent invention, prompted by a finding by Talbot J in the Land and Environment Court proceedings in June 2003 that there was no Part 8 application under consideration by the second defendant, at any time material to those proceedings.

Mr Williams also submitted that I would make a further finding adverse to Mr Bailey by his repeated description of the proposed water storage unit as a "farm dam" when recounting his various dealings with Department officers in 2000 and 2002 in his affidavit sworn for these proceedings and in his oral evidence, in contrast with his consistent use of the term "dam" or "water storage unit" in his evidence in the Land and Environment Court. It was submitted that I would reject as untrue his claim to have an actual memory of using the precise term "farm dam" to describe the proposed water storage unit in his dealings with Departmental officers, and find that his use of the term was a dishonest attempt on his part to recast his dealings with them to better coincide with what was found by Talbot J to be his entitlement to legally clear the Strip in reliance on the "farm dam exemption" in SEPP 46 to advance his claim for damages in these proceedings.

The existence of a valid and complying Part 8 application lodged by Mr Bailey via Mr Gardner for processing on 19 July 2000 is crucial to the claim for damages brought by both plaintiffs. It is also a critical finding in the separate claim for damages for malicious prosecution brought by Mr Bailey. The agreed position of the experts as to the quantum of the loss was expressly modelled on the basis of the loss of the opportunity to profit from the improved irrigation system on Hazeldene occasioned by the delay in construction of the third water storage unit for a closed period of six years commencing in the 2000/2001 cotton growing season. It was the defendants' case that there was no valid or complying Part 8 application lodged until January 2004, six months after the Land and Environment Court proceedings were ultimately determined in Mr Bailey's favour, and that Mr Bailey's evidence that he believed he had lodged an application on 19 July 2000 at the on-site meeting with Mr Gardner, and that he persisted in that belief, should be rejected as untrue.

Mr Williams submitted that even assuming the plaintiffs were legally entitled to harvest floodwater to fill the third water storage unit (a matter put in issue in the amended defence and the subject of consideration by the experts in their joint report and direct evidence by Mr Cowell as a lay witness called by the plaintiffs), a critical assumption underpinning what was ultimately agreed between the experts as the formula for the calculation of loss, was that the third water storage unit (on the plaintiffs' case the subject of a Part 8 application lodged on 19 July 2000) would have been constructed and operating by December 2000. This, it was submitted, was contradicted by evidence in the plaintiffs' case. Mr Cameron, the Licensing Manager to the second defendant and whose affidavit was read by the plaintiffs, deposed to the fact that between February 2000 and October 2006 a large number of Part 8 applications were received by the Department. As at the date of swearing his affidavit in May 2011, Mr Cameron gave evidence that 56 applications had been granted with an average processing time of each application being 34.4 months and that a further 42 applications had not been finalised.

The defendants submitted that there was no evidence tendered in the proceedings to support the plaintiffs' case that Part 8 applications were informally approved by the second defendant, such as might have allowed construction to commence before approval was formally granted. Accordingly, since there was no valid or complying Part 8 application lodged by the plaintiffs for processing at any time prior to January 2004, the construction of the third water storage unit would not have been completed within the "closed period" and the plaintiffs' claim for damages must fail.

It was also the defendants' case that, even assuming that Mr Bailey was told by Mr Gardner on 19 July 2000 that he would process the Part 8 application, or that Mr Bailey genuinely believed that the application partially completed that day in pencil was able to be processed as a valid and complying application, in considering any application for Part 8 approval lodged after 7 July 2000 the second defendant was required by statute to have regard to protection of the environment as a mandatory consideration in consequence of the Amending Act having come into force on that date. Mr Williams submitted that consideration of the protection of the environment being a mandatory consideration under the Amending Act would necessarily have involved an assessment of the impact of the clearing of native vegetation on the Strip in the first clearing event, together with an assessment of the potential for the construction of the water storage unit to have an adverse environmental impact on the native vegetation that remained after the clearing.

Mr Williams further submitted that to construe the Water Act and the Native Vegetation Conservation Act as separate pieces of legislation, requiring Departmental officers who administered the compliance aspects of both statutory schemes to confine themselves to issues particular to "water" or "vegetation" - a construction central to the way the plaintiffs' seek to make their case - is to misstate or overlook entirely the effect of the Amending Act and ss 372(2) and (3) of the Water Management Act. Mr Williams submitted that it was entirely appropriate for Departmental water compliance officers to adopt the position in July 2000 and thereafter, that Mr Bailey would need to await the outcome of the investigation into what was at that time suspected to be the illegal clearing of native vegetation by vegetation compliance officers before the Part 8 application could be considered, and to have advised Mr Bailey accordingly. It was also appropriate for Mr Bailey to have been advised by Mr O'Brien in February 2000, before the first clearing event, that the Department had legitimate concerns that the construction of the water storage unit might impact adversely on the environment, notwithstanding that there was no provision in the Water Act at that time which required consideration be given to the protection of the environment before Part 8 approval was granted.

Mr Williams submitted that I would reject Mr Bailey's evidence that were it not for his genuine belief that the document he believed to be a valid and complying Part 8 application would be lodged and processed by Mr Gardner after 19 July 2000 (and that he would be contacted when the application needed to be signed and the fee paid), he would have taken immediate steps to lodge the application personally (and pay the fee) with a view to it being approved and the third water storage unit built by December 2000. Mr Williams submitted that the true position was that Mr Bailey knew at all relevant times that there were formal requirements for the making and lodging of applications for approval for the construction of controlled works under Part 8 of the Water Act, and that the document Mr Gardner left Hazeldene with on 19 July 2000 did not meet those requirements.

Mr Williams also submitted that before Mr Bailey cleared the land in the first clearing event he knew that it was the Department's view that clearing the Strip of native vegetation to build a water storage unit of the size he proposed required consent under the Native Vegetation Conservation Act, and that it was also the Department's view, after officers discovered that the Strip had been cleared without informing the Department that was to occur, that the Part 8 approval process would not proceed until the investigation into the suspected illegal clearing was complete. Mr Williams submitted that it is significant that on 17 October 2000, when Mr Gardner formally told Mr Bailey that was the defendants' position, that Mr Bailey gave evidence that he was "not surprised" and that the letter from Mr Cameron in May 2002 to the same effect simply confirmed what he already knew.

Mr Williams submitted that I would be satisfied that, well knowing by early August 2000 that an investigation into the legality of the first clearing event had been initiated, Mr Bailey must be taken to have decided not to lodge a Part 8 application (and not commence construction of the irrigation unit on the Strip without Part 8 approval) whilst the investigation was current and that he was even less inclined to do so after criminal proceedings had been initiated in July 2002. Mr Williams submitted that Mr Bailey's decision not to lodge a Part 8 application until January 2004 was most likely motivated by his concern to ensure that the prospects of Part 8 approval being eventually granted were not jeopardised by what he knew or believed to be the second defendant's legitimate focus on the environmental impact of the clearing of native vegetation from the Strip, and that he only lodged the Part 8 application for approval after his acquittal in December 2003 because that had the effect of sanctioning the legality of the clearing the subject of both clearing events.

It appears that because there was no native vegetation remaining on the Strip by January 2002 which might have attracted a negative environmental impact assessment under s 166 of the Water Act, the Department took the view that there was no legislative obstacle to the grant of approval to construct the third water storage unit, and that when the application was approved with the notation "Sanctioned in the Land and Environment Court", this was intended to convey the fact that the clearing had been found exempt under the Native Vegetation Conservation Act.

Mr Bailey swore three affidavits in proceedings before me. An affidavit sworn on 29 May 2003 in the Land and Environment Court was also relied upon in support of the plaintiffs' claim for damages. The same evidence was relied upon by Mr Bailey in support of his claim for special damages for malicious prosecution.

Mr Bailey's first affidavit, sworn 31 March 2010, was the primary source of his evidence. It extended over 200 paragraphs and annexed a large number of documents, including his diaries for 2000 to 2002.

His second affidavit, sworn 19 October 2011, was in reply to the report of Mr McDougall, one of the agronomists retained by the defendants, and in reply to the affidavits of Mr Gardner and Mr O'Brien served by the defendants but not read in the proceedings. The various matters Mr Bailey replied to in this affidavit concerning the approach taken by Mr McDougall in his expert report were dealt with in the reports of Mr Purcell and Mr Caldwell, the agronomists retained by Mr Bailey, and ultimately in the joint report of all the experts and in the evidence they gave in the concurrent evidence session.

Mr Bailey's third affidavit of 18 May 2012 was the subject of a number of sustained objections. What remained related to his asserted belief that the irrigation works constructed on Hazeldene following the issue of the water licences in 1985 were "authorised works" under Part 2 of the Water Act, including the below ground channel which traverses the eastern side of Hazeldene and across what Mr Bailey described as "the flood way known as Tarpaulin Creek". This evidence was said to be relevant to meeting the defence of illegality. Mr Bailey was not cross-examined as to his state of belief concerning the proper characterisation of those works, it being no part of the defendants' case in final submissions that the existing irrigation infrastructure on Hazeldene, whether they included authorised works or not, was relevant to proof the defence of illegality.

On 17 February 2000 Mr Bailey met with Mr Pitman (the then owner of the Strip) and Mr O'Brien, at that time a vegetation officer with the Department, by pre-arrangement on site. This has been described as a "pre-application" inspection. Express provision is made for such a procedure in the "Exclusions and Exemptions Guidelines for the Native Vegetation Conservation Act" issued by the Department and tendered in the proceedings by the plaintiffs as Exhibit N. The form filled out by Mr O'Brien was also tendered.

In his affidavit sworn in the Land and Environment Court proceedings Mr Bailey said the three men drove in Mr O'Brien's car along a track running the full length of the Strip, described by him in that affidavit and in the May 2010 affidavit "as far north as the Tarpaulin Creek" before turning south and stopping at a point "halfway between Tarpaulin Creek and power lines that crossed the Strip". At that location Mr Bailey said he pointed to an area north-east of the power lines and said to Mr O'Brien: What if we were to clear up the regrowth and cultivate this area [an area he identified as approximately 20 hectares]. Mr O'Brien said words to the effect: You could get in and push all the regrowth in this part but just leave the bigger trees.

They then proceeded in a southerly direction after which Mr Bailey asked Mr O'Brien what he thought his chances would be of obtaining approval to clear part of the Strip for "a dam". While he said it was Mr O'Brien's view that he would not get approval for that purpose because of the environmental value of the native vegetation, he also said Mr O'Brien said he could always lodge an application if he wished to pursue it. Although it is not entirely clear, it would appear that Mr O'Brien was there referring to an application to the Department under Part 8 of the Water Act. The "NVC - Pre-Application Form" earlier referred to includes the note under the heading "Advice Given": ...Not much of a chance but they will try anyway. Part 8 approval may be required for the storage.

I also note that if approval under Part 8 were granted it would have attracted the exemption under s 12(p) of the Native Vegetation Conservation Act from the need to obtain development consent and a complete defence to the charge of illegal clearing under s 21(1)(a). Section 12(p) provides that "any clearing carried out in accordance with a licence, permit, authority or approval under the Water Act 1912" is exempt from the need for development consent.)

Mr Bailey said they then returned to the car and headed to the southern gate of the Strip where he had a further conversation with Mr O'Brien at which point Mr O'Brien said: I'm going to recommend that National Parks and Wildlife buy the Strip.

In his May 2010 affidavit, Mr Bailey elaborated upon this meeting with Mr O'Brien by repeatedly referring to "the dam" under discussion as "the farm dam" and attributing to Mr O'Brien comments which were relied upon in final submissions as evidencing malice and animus towards Mr Bailey generally. Mr Bailey's elaborated account of this meeting was the subject of close testing in cross-examination. The paragraphs the subject of challenge are as follows: I said: "This is where I want to build the farm dam. What do you think are the chances of getting approval to clear this area for that purpose?" As I asked him this question I pointed to an area of the Strip adjacent to the "stage two" area of Hazeldene. I later produced a map showing "stage two"...". He said: "My own personal view is that I don't think you would get approval for that. You would have to put in an application to the Department for a dam." I also recall words to the effect: I said: "I will only be clearing the vegetation required to construct the walls of the farm dam. I want to leave a strip of vegetation in the middle of the dam as a refuge for wildlife." He said: "Well, leaving the vegetation in the middle of the dam would be pointless. It will be inundated with water and will die anyway. If you want to build a dam you will have to lodge an application under the Native Vegetation Conservation Act and a Part 8 application under the Water Act for approval. In my view I don't think you will get the approval but put in the application anyway." [Emphasis added.] [Mr Dines was cross-examined to confirm his understanding that what Mr O'Brien was intending to convey was that it was necessary for Mr Bailey to make two applications, one for development consent for the clearing and a separate application for approval to construct the dam.] To the best of my belief I then said words to the effect: "I think I will try my luck with an application." Mr O'Brien then said words to the effect: "That's okay. We can't stop you from putting in an application." 29. We got back into the vehicle and headed south to the southern gate of the Strip, where our vehicles were parked. 30. At this point, without any comment or introduction, Mr O'Brien, "out of the blue", said words to the following effect: "I am going to recommend that National Parks and Wildlife buy the Strip." 31. I was surprised at those words from Mr O'Brien.

Mr Bailey agreed in cross-examination that at the February meeting Mr O'Brien told him that the Strip was a local vegetation corridor linking Baronga Native Reserve to the Macintyre River. However, he said that he did not understand that Mr O'Brien was doing more than expressing a personal view that because of the environmental value of the native vegetation on the Strip he would not get approval to clear the land to build the dam. It is difficult to reconcile this with the fact that the visit was recorded by Mr O'Brien as a pre-application visit where the native vegetation was assessed and classified and advice given. It is also contradicted by Mr Bailey's evidence that he well knew what was expected of him in the event that he wanted to clear native vegetation from the Department's perspective, including what is described in a Departmental publication as a "pre-application interview". (This is set out in full later.) In cross-examination he also agreed that farmers were from time to time "stuck with a commercially sterile area of land" where particular land was not able to be cleared because of the operation the Native Vegetation Conservation Act.

Within days of the February 2000 site meeting with Mr O'Brien, Mr Bailey contacted Mr McCosker, a flora consultant with Landmax Pty Ltd, who had previously assisted him with the preparation of a clearing application for other land the previous year. (According to Mr Dines, Mr McCosker was known to the Department and well regarded.) Mr Bailey said he asked Mr McCosker to conduct a targeted flora survey of the vegetation on the Strip to determine whether there was any protected vegetation that would, or might, prevent the land being cleared. Mr McCosker was not retained to offer advice as to whether the land to be cleared met the definition of native vegetation under the Native Vegetation Conservation Act or to assess the environmental value or conservation value of the vegetation that was to be cleared.

Mr McCosker attended the Strip on 21 February 2000 after which he produced a "targeted flora survey" report. The report stated that it was required by the Department to assist in their deliberation regarding "an application" to clear native vegetation on the property. He concluded that the land surveyed comprised two main floral communities and that the woodland comprised mainly young trees and advanced saplings. He advised that the entire area had been historically cleared and concluded that no threatened species were evident.

Mr King urged me to find that engaging Mr McCosker after the meeting with Mr O'Brien and before the clearing was undertaken in the first clearing event, was consistent with a keenness on Mr Bailey's part to comply with what he knew or understood to be the legitimate concerns of the Department when the clearance of native vegetation was envisaged for farming purposes. What Mr King described as Mr Bailey's respect for Departmental concerns was also relied upon as support for the proposition that he was at all times concerned to comply with the law and not act in defiance of it, and that there was nothing in his conduct that suggested an attitude of brinkmanship. It is difficult to accept that submission in circumstances where he did not inform the Department of his intentions to clear the Strip at any time prior to the first or second clearing events.

Mr Williams submitted that even in his evidence Mr Bailey was being deliberately coy about his dealings with Mr O'Brien at the February meeting, initially only indicating his intention as a prospective purchaser of the Strip to clear regrowth of approximately 20 hectares (consistently with the regrowth exemption in Schedule 3 of SEPP 46 for purposes of cultivation if the regrowth was less than 10 years old), and only later in the conversation signalling an interest in clearing for "a dam". Mr Williams submitted that this was disingenuous given he engaged Mr McCosker to prepare the targeted floral survey to support an application to "clear the land" within days of the February meeting.

In early March 2000 Mr Bailey consulted Mr Heterick, an irrigation designer, to discuss plans for constructing the third water storage unit on the Strip with a carrying capacity of 4,000 megalitres. Mr Heterick advised that if the water storage unit was to have that capacity it would be necessary to clear a strip 150 metres wide around the perimeter with the sides measuring approximately 1.4 kilometres along the eastern side and 1.8 kilometres long on the western side.

On 14 April 2000 the plaintiffs signed the contract to purchase the Strip which settled on 31 May 2000.

In mid March Mr Bailey contacted Allen Allen & Hemsley Lawyers ("Allens") on referral from the New South Wales Farmers Association from whom Mr Bailey first sought advice as to whether the clearing of the Strip could be undertaken under the exemptions to the Native Vegetation Conservation Act. In an undated letter he sought advice from Allens on a proposal that contemplated clearing timber "sufficient to construct a reservoir".

The undated letter of instruction was in the following terms: After our phone conversation on Tuesday you suggested I outline my ideas and forward off to you to consider. Mr Rob Mr McCosker our consultant met with DLWC re - development proposal and their response wasn't all that favourable claiming they want a 500 metre corridor. He is hoping to see them again to see if they have any change in their line of thinking ... What I would propose is to leave approximately 100 metres of the western side adjoining the TSR then clear timber that would be sufficient to construct a reservoir leaving the other timber standing that would allow birdlife etc refuge from wildlife or predators. The distance to clear timber for the reservoir would amount to a maximum of 150 metres in width. In the Native Vegetation act it states for rural structures that minimum clearing is allowed for dam, fences etc. What is your view if I decided to clear this land and construct a reservoir.

Mr Bailey did not give evidence of any conversation over the telephone with Ms Wild to which he makes reference in the letter. Although he did not nominate in the letter the dimensions of the "reservoir", he did attach a line drawing (not to scale) showing a cleared area 150 metres in width around which provided for timber to be left after clearing to provide for a "birdlife refuge" inside the four-sided "reservoir". It also showed the 100-metre strip retained on the Travelling Stock Route. A photocopy of a topographic map was also attached which showed the hatched area to be cleared as being very substantial.

He did not refer to the February meeting with Mr O'Brien or Mr O'Brien's express views that, because of the environmental value of the native vegetation on the Strip, he would be unlikely to get approval to clear it for "a dam".

By letter dated 20 April 2000 under the signature of Ms Wild, Senior Associate, and over the blocked name of "Mr Noel Hemmings QC, Partner", Allens advised Mr Bailey that development consent was not required under the Native Vegetation Conservation Act for the clearing of native vegetation that met the description of either of the statutory exemptions set out in the letter of advice as follows: Clearing of Land under the Native Vegetation Conservation Act 1997 (NSW) The NVCA provides that a development consent is required to clear native vegetation from land to which no RVMP applies. However, there are certain exemptions under the NVCA from the requirement to obtain a development consent. A development consent is not required for the clearing of native vegetation in the following circumstances: (a) the clearing of up to 2 hectares per annum for any contiguous land holding in the same ownership; and (b) the clearing, to a minimum extent, of native vegetation if it is necessary for the construction, operation and maintenance of farm structures (such as farm dams, tracks, bores, windmills, fences, fence lines, stockyards, loading ramps, sheds and the like). Therefore, you will not require development consent to clear native vegetation from your land if: ● no more than 2 hectares of native vegetation needs to be cleared to construct the proposed dam; or ● you clear only enough native vegetation to enable the construction of the dam to occur. Any clearing of native vegetation in excess of the minimum amount required to construct the dam would be in breach of the NVCA.

The letter went on to confirm the advice that Ms Wild had apparently received from Mr McCosker that Mr Bailey was required to obtain approval to construct any levees for what she described as "the proposed dam" and that it would be necessary for him to make an application for such approval under Part 8 of the Water Act. She said: Mr McCosker has informed us that you are required under Part 8 of the Water Act 1912 (NSW) to obtain the approval of the Water Administration Ministerial Corporation (the WAMC) to construct any levies for the proposed dam. Therefore, despite the fact that clearing of native vegetation can take place in the circumstances described above, an application must still be lodged with the WAMC for approval to construct any levies for the proposed dam. Conclusion You will not be required to obtain development consent to clear native vegetation from your land for the purpose of constructing a dam in the circumstances outlined above. However, you will need to make an application to the WAMC for an approval to construct the levies for the proposed dam.

The quality of the advice in the relatively spare terms in which it was written and the views of those within the Department who gave consideration to it in 2000 and before the prosecution was initiated in July 2002, was the subject of detailed submissions as to what the content of the advice proved (or failed to prove) about the absence of reasonable and probable cause and malice in the decision to prosecute. It will be necessary to consider the competing arguments on that question in detail in the course of considering whether the plaintiff has established that he was prosecuted maliciously in the absence of reasonable and probable cause. The Allens' advice was also relied upon in proof of the tort of misfeasance in public office pleaded as a basis for the recovery of damages in the alternative.

On 20 April 2000 Mr Heterick's employees pegged out a clearing line on the Strip in preparation for construction of the proposed dam.

Between late April and June 2000, Mr Bailey engaged the services of an earthmoving company to undertake the clearing of vegetation on the Strip. This was the first of two stages of work the company was engaged to undertake on the Strip. The felled trees were raked up and burnt by the contractor in early June 2000. At about this time Mr Bailey noticed that the contractor had driven the earthmover across the Travelling Stock Route and had cleared about 0.5 hectares within it. He directed the contractor to stop that clearing.

In the course of discussing the second stage of the works (works which involved the construction of the levee banks for the dam and the digging of the borrow pit), Mr Bailey told the contractor that he needed to obtain a Part 8 approval from the Department. Mr Bailey agreed in cross-examination that he arranged for the clearing of the land without informing the Department of his intentions, despite the fact that he had not at that time lodged, or even prepared a Part 8 application, and despite Mr O'Brien having indicated that he did not think approval would be forthcoming given the environmental value of the native vegetation. Mr Bailey also agreed that he cleared the native vegetation in the belief that the clearing would not be an issue he would then have to contend with when seeking Part 8 approval to build the water storage unit because the land would already be cleared. He emphasised, however, that he took that approach because he had legal advice that the clearing was permitted under the Native Vegetation Conservation Act to construct a "farm dam" and that he did not need Part 8 approval before he cleared for that reason. He also gave evidence that Mr Heterick's design made provision for the maintenance of a wide strip of vegetation along the western boundary for environmental purposes as suggested to him by Mr McCosker.

On 19 July 2000 (after stage one of the clearing was complete), Mr Gardner attended Hazeldene at Mr Bailey's request for the purpose of discussing a Part 8 application for approval to construct the water storage unit. What was said and done at this meeting was the subject of very considerable contest in the proceedings. For the reasons discussed at [166]-[176] above, the resolution of that conflict is critical to the plaintiffs' case on liability for each of the three economic torts. On the defendants' case it is also a finding foundational to the plaintiffs' claim in damages. Mr Gardner's conduct both at the meeting and thereafter is also relied upon as proof of malice in Mr Bailey's claim for damages for malicious prosecution and various of the economic torts pleaded in the alternative. Mr Gardner did not give evidence in the proceedings before me.

Mr Bailey gave evidence in both the Land and Environment Court and in the proceedings before me that in July he arranged for a water compliance officer to come to Hazeldene to discuss the Part 8 application that he knew had to be lodged as a precondition to the grant of approval to construct the third water storage unit.

In his March 2010 affidavit, sworn for the purposes of these proceedings, Mr Bailey said in making arrangements by telephone for an officer to attend at Hazeldene he said, "I need to make arrangements to submit a Part 8 application to construct levees for my farm dam..." and, further, that when Mr Gardner telephoned to make arrangements to attend, Mr Gardner said, "I'll be out there on the 19th to do your farm dam application".

In his Land and Environment Court affidavit, Mr Bailey said Mr Gardner came to Hazeldene "to go through a Part 8 Water application" with him and that they sat down and went through the form with Mr Gardner filling in the application with answers he (Mr Bailey) gave. He said that before going out with Mr Gardner to inspect the Strip, he showed Mr Gardner the same line drawing he had sent to Allens when seeking their advice. In the Land and Environment Court proceedings he did not refer to the proposed "dam" as a "farm dam". In fact, he said that he was unable to recall the precise words that were said at the meeting. Mr Williams invited me to regard the reference to the "farm dam" in his March 2010 affidavit as another example of Mr Bailey's evidence being deliberately recast after the Land and Environment Court proceedings to advance his claim for damages in the proceedings before me, an attitude which Mr Williams submitted impacted adversely on his credit in all matters in dispute as to his dealings with the Department in 2000 and 2001.

In his March 2010 affidavit Mr Bailey said Mr Gardner produced a Part 8 application form he had brought with him, and that he said to Mr Gardner, "You're the expert, you fill it in". He said that Mr Gardner then filled in the form (in pencil) with the answers he (Mr Bailey) provided to the questions Mr Gardner asked of him. He said that before going out to the Strip Mr Gardner said, "You and your sister will have to lodge a Part 8 application with the Department before construction of the levees can begin".

Both in his evidence in the Land and Environment Court and in the proceedings before me he said he showed Mr Gardner the Allens' advice and that he saw him read it before going out to the Strip. He said that when they got to the Strip Mr Gardner said "You've already cleared. Why?", whereupon Mr Bailey claimed he said: I obtained legal advice from Sydney solicitors recommended by the NSW Farmers Association. I sent them a plan of the proposed clearing. They gave me advice that it was OK for me to clear for a "farm dam" so long as it was to the minimum extent necessary. That's how we've designed it. We are also leaving a strip of timber in the middle as a bird habitat and windbreak. They said that I also need a Part 8 approval for the levees. That's why I've rung up you. He said that Mr Gardner replied: Well at least you've got the advice so this should be okay.

I am unable to accept the words Mr Bailey attributes to Mr Gardner in this exchange if they are relied upon, as I understand they are, to prove Mr Gardner impliedly accepted the Allens' advice that the clearing was exempt under the Native Vegetation Conservation Act and that there was no obstacle to approval being granted under Part 8 even though the land had been cleared. It is in direct conflict with Mr Gardner's evidence in the Land and Environment Court proceedings where he said: Q. During the course of the conversation [referring to the conversation at the strip on 19 July 2000] did you say anything to Mr Bailey about speaking to some other officer from the department about what you'd seen in terms of the clearing of the vegetation? A. I did, I informed Mr Bailey that I thought there was a breach of the Native Vegetation Act, and then I would have to tell - or as I put it to him that day, I think I said I'd have to put him in to the vegetation officers. [Emphasis added.]

Mr Gardner was not cross-examined in the Land and Environment Court to put this account of his dealings with Mr Bailey in issue and, as I have noted, Mr Gardner's evidence in the Land and Environment Court was tendered by the plaintiffs in the proceedings before me without restriction.

In those circumstances no Jones v Dunkel (1959) 101 CLR 298 inference can legitimately be drawn adverse to the defendants because Mr Gardner was not called as a witness. Importantly, Mr Gardner's evidence that Mr Bailey was told that vegetation officers would be informed of what he (Mr Gardner) thought was a breach of the Native Vegetation Conservation Act, is also consistent with a handwritten notation on the Part 8 application filled out by Mr Gardner at Hazeldene at the 19 July 2000 meeting where, in answer to the question posed on the form at 5(d), "Have you applied for any other permits which are related to the proposed development?", Mr Gardner has written, "Native vegetation officer to be notified". Further, since it would appear from that notation, and his evidence in the Land and Environment Court, that Mr Gardner had formed the view that there were native vegetation issues that needed to be considered by vegetation officers, I consider that it is highly improbable that he would have told Mr Bailey at that meeting that he would lodge the unsigned Part 8 application and have it processed. It is for that reason, together with the reasons which follow, that I am unable to accept Mr Bailey's evidence that when Mr Gardner left Hazeldene after viewing the cleared Strip he said, "I'll take the application back with me. I will complete the application for you and have it processed". It also follows that I am unable to accept Mr Bailey's evidence that from anything said or done at the 19 July 2000 meeting he either understood or had any genuine belief that the Part 8 application had been properly lodged and that it would be processed by Mr Gardner. That part of the exchange with Mr Gardner set out in [207] is not referred to in Mr Bailey's affidavit sworn for the purposes of the Land and Environment Court proceedings at a time when it might reasonably have been considered to be an important conversation for the purposes of those proceedings. Rather, his evidence was simply to the effect that because Mr Gardner took the application form with him when he left Hazeldene, he (Mr Bailey) understood (which I interpret to mean he assumed) that the application would be processed and that it would be approved, not that Mr Gardner represented that it would be completed and lodged by him for processing. That distinction is critical.

In the letter from PwC forwarded to the Crown Solicitor in August 2002 before the hearing, the following was asserted, no doubt on instructions: Our client is aware of the requirement, under Part 8 of the Water Act 1912 (NSW) (the Water Act), to obtain the approval of the Water Administration Ministerial Corporation (the WAMC) to construct any levees for the proposed dam. Our client mistakenly believed he had lodged an application with the WAMC. It appears, however, that the form was never formally submitted. Whilst our client acknowledges that he does not yet have a Part 8 water licence, there is no provision in the Water Act or the Act which requires such a licence to be obtained prior to clearing being undertaken, provided that the clearing is authorised or exempt. In not obtaining a Part 8 licence prior to clearing, our client has not breached any legislative provisions which would justify the issuing of the orders or summonses.

An additional matter of importance in resolving what transpired at the 19 July meeting is that neither the conversation with Mr Gardner nor Mr Bailey's belief that the application had been properly lodged with him for processing feature in Mr Bailey's contemporaneous diary note. What is recorded as against that date is limited to the following: "Showed Gary Gardner the Strip and did application". That note is equally consistent with the defendants' case that the Part 8 application, unsigned and filled out in pencil at Hazeldene, was a notation of the information Mr Bailey provided in support of the application and a note of what Mr Gardner considered remained outstanding from the Department's perspective, including, in particular, a note to the effect that a vegetation officer was to be notified that the Strip had been cleared, as Mr Gardner saw it at that time, without approval. Although it may be that Mr Bailey assumed that the application would be processed (or hoped it would be), were he of the genuine belief that the Part 8 application had been received by Mr Gardner for processing, and that Mr Gardner represented that it would be lodged by him for processing, I would have expected that would have been noted by him in his diary. I would also have expected that he would have pursued the progress of the approval process with vigour after that date, given his evidence that he had contractors "at the ready" to undertake the second stage of the works and taken steps, if necessary, to take legal action if he thought consideration of the application was being deliberately and wrongfully delayed.

There was no dispute that Mr Gardner took the partially completed Part 8 application form when he left Hazeldene. It is also common ground that it was that very application form that was retrieved by Mr Gardner from Departmental files when Mr Bailey and his sister attended on 8 January 2004 to formally lodge an application to construct the third water storage unit, at which time they paid the requisite fee for the application to be processed and signed and dated it. (Some other minor amendments were made at that time.) That application was in evidence before me with Mr Gardner's pencilled notations he applied at Hazeldene still visible beneath the overwritten ink.

Mr Bailey's evidence that he genuinely believed that he had lodged a valid and complying Part 8 application from what Mr Gardner said and did at Hazeldene on 19 July 2000 was closely tested in cross-examination as was his repeated assertion that he genuinely believed from what other Departmental officers told him that the application would be able to proceed despite an investigation into the legality of the clearing. He also said that when Mr O'Brien told him on 31 July 2000 that the Department had the power to prevent "the application" being processed and that they intended to exercise that power (as to which see [222] following) the application that was being referred to was the one he had lodged with Mr Gardner.

In his affidavit sworn for the purposes of these proceedings Mr Dines affirmed the truth of an affidavit sworn for the purposes of the Land and Environment Court proceedings, the contents of which were read without objection. In that affidavit he offered his understanding of what had transpired at the 19 July meeting with Mr Gardner based upon what Mr Gardner told him had occurred. I also consider Mr Dines' understanding of the status of any application under Part 8 as at July 2000 as material to the question whether there was a valid and complying Part 8 application or Mr Bailey was led to believe that was the case: ... Mr Bailey had arranged to meet with Mr Garry Gardner for the purpose, as I understood it, of making an application under Part 8 of the Water Act to construct levee banks within a designated flood plain area that would form the wall of the dam for holding irrigation water. It was my understanding that Mr Bailey had allocations of water from the McIntyre River under Part 2 of the Water Act, but did not have approval for the construction of the levees that form the dam wall under Part 8 of the Water Act (construction on a designated flood plain). It is my understanding that Mr Bailey had had some contact with Mr Gardner in terms of an application under Part 8 of the Water Act but that the application had not been signed or lodged at that time. The planned water storage was to be situated within a regional vegetation corridor. The Part 8 Water Act application needed to consider the environmental impact of the proposed storage specifically the redistribution of floodwater on the flood plain. The building of levee walls can redistribute floodwater and potentially back up flow onto land not previously affected by a flood of the same magnitude or recurrence interval. By clearing the native vegetation, Mr Bailey pre-empted where he may have been given approval to place levee walls for the storage. The proposed dam was situated within a historic travelling stock route (TSR) that formed a regional vegetation corridor identified on the National Parks and Wildlife Service Northern Wheatbelt Vegetation Mapping prepared by Dominic Sivertson. The corridor ran from the Buronga Nature Reserve on the Boomi to Boggabilla Road and connected to remnant vegetation along the McIntyre River near the Buronga homestead and crossing. Until the Part 8 approval had been given the location and dimensions that would require clearing were still undetermined. Mr Bailey did not make an application under the NVC Act to clear the area he had chosen for the irrigation storage he wanted. The clearing meant that Mr Bailey pre-empted the Part 8 application, as that application would necessarily involve consideration of the clearing that would be needed in any approved water storage location; but the clearing had already occurred.

I am well satisfied from all the evidence bearing on the issue that Mr Bailey's evidence in these proceedings that his claim to having a genuine belief that the Part 8 application Mr Gardner took with him when he left Hazeldene on 19 July 2000 would be processed is not borne out. I am also not satisfied that Mr Bailey had any genuine expectation that Mr Gardner would do so based upon a policy or practice of informal lodgement, there being no evidence of it led by the plaintiffs through Ms Savage or by any other evidence (cf Mr Cowell's lay assertion that such a policy existed). I am also well satisfied that Mr Gardner did not represent that he would complete and then lodge the Part 8 application on the plaintiffs' behalf or retain the partially completed and unsigned application for that purpose.

In coming to that settled view I have also taken into account that Mr Bailey gave evidence that he knew that a Part 8 application for approval to construct the water storage unit had to be signed by both himself and his sister as the landowners, having had the experience of a Part 8 application being rejected on lodgement in the past because it was not co-signed by another of Mr Bailey's siblings. Ms Shafik-Bailey was not with Mr Bailey on 19 July 2000 when Mr Gardner partly completed the application and left Hazeldene with it.

The evidence also established that each time Mr Bailey had lodged an application prior to 2000 he paid the required fee at the time of lodgement. His assertion that he only paid the required fee when notified of the need to do so, together with the allied assertion that had he been aware that it would not be processed without payment of the fee he would have arranged for payment, is contradicted by the express terms of the pro forma application (with which he agreed he was familiar) and which provides, as Note 6, the following: This application MUST be accompanied by the prescribed fee. If you withdraw this application, prior to it having been determined (Approved or Refused) by the Commission, the Commission may retain part of the fee, as is deemed appropriate, to partly or wholly offset the expenses incurred in dealing with the application.

Mr O'Brien and Mr Gardner returned to Hazeldene on 31 July 2000 to carry out an inspection of the Strip, Mr Gardner having notified Mr Dines of the potential of a breach of the prohibition on clearing under the Native Vegetation Conservation Act without consent following his visit on 19 July. Mr Bailey's evidence as to what occurred on site in 31 July 2000 was also in contest and the subject of close testing in cross-examination.

For the reasons which follow, Mr Bailey's dealings with both officers on that occasion provide an additional basis for the conclusion I have reached that there was in fact no valid or complying Part 8 application lodged with Mr Gardner on 19 July. That reasoning also supports the conclusion I have reached that Mr Bailey had no genuine belief that it had been lodged, or that there was any valid or complying application in the possession of the second defendant at any time until 8 January 2004 when the application was finally completed, signed by both plaintiffs and lodged with the accompanying payment of the fee.

Were Mr Bailey to have genuinely held the belief or expectation that Mr Gardner would attend to processing his Part 8 application when he left Hazeldene on 19 July, I regard it as inconceivable that when Mr Gardner returned with Mr O'Brien two weeks later, he did not enquire about the progress of the application, or how long Mr Gardner expected the approval might take, or whether the investigation into the clearing he knew to be the purpose of the visit would impact on the processing of the application. Despite appreciating (as he acknowledged in his evidence) that there was a real potential for any investigation into the legality of the clearing to present a problem for the approval he needed before construction could commence, he did not enquire into the likely delay this would occasion to the construction of the dam which he told Mr Gardner (and which Mr Gardner recorded on the application form in answer to Question 4) he desired commencing "as soon as possible".

In his March 2010 affidavit Mr Bailey detailed the exchanges with Mr O'Brien at the 31 July meeting as follows: 78. On 31 July 2000, Mr Gardner and Mr O'Brien came out to Hazeldene to inspect the clearing works which had been carried out on the Strip. During that visit I recall Mr O'Brien said to me words to the effect of: Mr O'Brien said: "Why have you undertaken the clearing without an approval from the Department?" I said: "I have legal advice to say that I am exempt from the Native Vegetation Act." I then showed Mr O'Brien the legal advice from Allens but I did not give him a copy. Mr O'Brien said: "You have been given wrong legal advice. The Department doesn't interpret the exemptions in the same way that your lawyers do. We're going to have a good look into this clearing. If you fill the dam you'll kill the trees." I said: "Well, I went and got legal advice for what I was told by the NSW Farmers Association. They were the right people, and I've acted on it." Mr O'Brien said: "Well this is a DLWC booklet covering these types of applications. We don't normally hand it out. The one given out for your application is more condensed. Here's a copy." 79. Mr O'Brien then handed the booklet to me. This was the first time I'd seen a copy of this booklet. I have searched my records and cannot now find my copy of this booklet. I read the booklet Mr O'Brien provided to me but did not see in it anything that said or suggested to me that a farm dam of the kind I proposed would not be covered by the exemptions to the NVC Act. 80. I also recall that during that visit Mr O'Brien informed me in words to the following effect: "You have impermissibly cleared the Strip. We have the power to prevent you and your sister from constructing the farm dam. If you build it the department will not permit you to put water in your dam." This was the first time anybody from the DLWC had informed us that the DLWC had any problem with our building the proposed farm dam. I was surprised and shocked at those comments. I believed that I had followed all proper procedures and complied with the law. [Emphasis added.]

It is not entirely clear but it would appear that the booklet Mr Bailey was given was the Department's publication tendered by the defendants as Exhibit 16. Relevantly it provides as follows: (e) Rural Structures. The clearing to a minimum extent if it is necessary for the construction, operation and maintenance of farm structures (such as farm dams, tracks, bores, windmills, fences, fence lines, stockyards, loading ramps, sheds and the like). This exemption allows clearing for farm structures under the following conditions: ● the clearing is carried out to a minimum extent; and ● the clearing is necessary for the purpose of construction, operation or maintenance of existing or new farm structures. Comment This exemption allows land owners to carry out a minimal amount of clearing which is regarded as necessary for the construction, operation and maintenance of a range of everyday on-farm operational improvements. Typical examples include stock and domestic farm dams, tracks, bores, windmills, fences, fence lines, stockyards, loading ramps and sheds. This exemption does not include clearing for the construction of buildings for commercial operations, private accommodation or the establishment of new agricultural enterprises. Unacceptable clearing without development consent includes, but is not limited to: ● conversion of grassy woodland to orchards; ● the construction of on farm accommodation; ● the construction of buildings for commercial operations; and ● the construction of a long open channel to transfer water across a property to a watering point or dam. Clearly, the emphasis in the exemption is on the fact that any clearing undertaken should be "to a minimum extent" which means "the least quantity or amount possible" (Macquarie Dictionary 1991) of native vegetation that should be removed for the purpose of the construction, operation and maintenance of farm structures.

In his affidavit in the proceedings in the Land and Environment Court Mr Bailey set out an account of the conversation with Mr O'Brien to the same effect as set out above, save only for the fact that did not attribute to Mr O'Brien the assertion that the Department had "the power to prevent" him from constructing the dam or that if he went ahead and built it he would "not be permitted to fill it". It is these words that are relied upon as particulars of the false representation grounding the tort of negligent misrepresentation. It is also relied upon as evidence of malice for the tort of malicious prosecution and the tort of misfeasance in public office.

Mr Bailey's diary records the following against the entry for 31 July 2000: Met with DWLC Gary Gartner and Rodney O'Brien Showed letter to Rodney O'Brien reckons we were advised wrongly said if we built dam would not be able to put water in it would kill trees. Took letter for him to copy in Moree office.

Mr Williams submitted this diary entry fell well short of recording any assertion by Mr O'Brien that the Department had "a power" to stop Mr Bailey from constructing the dam, or any threat of the kind relied upon as constituting a basis for the recovery of damages. He also submitted that since the conversation was neither the subject of a contemporaneous note nor the subject of comment by Mr Bailey in his affidavit in the Land and Environment Court proceedings, I would have grave doubts that the conversation was had in the terms Mr Bailey claimed in his evidence in these proceedings. In short, Mr Williams submitted I would not accept Mr Bailey's evidence on this issue and, as with other aspects of his evidence in the proceedings before me, his memory has been constructed to advance his claim for damages.

There is considerable force in that submission. Again, I find it improbable that were Mr O'Brien to have said what is attributed to him by Mr Bailey, words which Mr Bailey says he was shocked to hear since he believed he had followed proper processes and which he regarded as a threat, he would not have sought legal advice as to the steps he should or might take to ensure that his intentions to build the water storage unit and fill it for irrigation purposes could be realised in accordance with the law. I regard it as even more improbable given that he had legal advice that he was entitled to clear the Strip for that express purpose.

Following his visit to Hazeldene on 31 July, Mr O'Brien reported to Mr Dines. I have already set out Mr Dines' evidence as to his understanding of the situation (at [215]). Mr Dines went on to say in his evidence: I received a report by telephone [that day] from Mr Rodney O'Brien (catchment manager, DLWC Moree) ... [who advised me of]... a possible breach of the NVC Act. [Mr O'Brien said] Garry Gardner and I went out to inspect "Hazeldene",at Boomi, owned by Bruce Bailey for a Part 8 licence for a storage [for irrigation water] and he has cleared the area already. I did a [pre-application inspection] with Bruce in March and one for the previous owner Mr Pitman before that.

Mr Dines agreed in cross-examination that Mr O'Brien also reported that he had told Mr Bailey that he would need to make an application for development consent under the Native Vegetation Conservation Act and an application for approval to construct the levees under Part 8 of the Water Act.

In his affidavit Mr Dines detailed his position as a vegetation compliance officer and as resource compliance manager (a position he assumed in May 2001 and which he held until he resigned from the Department in October 2001). Both roles were in contrast to the jurisdiction that water compliance officers exercised under the Water Act. He also described the relationship between the Native Vegetation Conservation Act and the Water Act as he saw it in his affidavit in the following way: Whilst I was in the same DLWC that had jurisdiction for assessing Part 8 applications, my duties did not include the assessment or determination of Water Act applications. I did however have discussions with Mr Gardner, and his Manager at the time, Mr Tony Hall, regarding how the retention of native vegetation protected by the NVC Act would be considered under the Water Act application. While I do not recall exact conversations I was of the view that it [the Strip] was an identified regional and local corridor and that the applications should have been considered at least concurrently or the NVC Act application be considered first to consider the appropriate width of any retained native vegetation corridor. To my recollection I never stated that the application under the Water Act could not proceed; however I did express my views to other officers as detailed above. Also I was of the view that any consideration for approval should be considered by the regional Director in balancing the DLWC's various obligations as contained within different Acts. It was my understanding that any application under the Water Act would need to consider the broader environmental implications including the protection of native vegetation as required under the Water Act and the Environmental Planning & Assessment Act 1979. ... 7. At the time of my contact with Mr Bailey, my understanding of the definition of farm dam as contained within the definition of exemptions of SEPP46 carried over to the NVC Act was that an irrigation storage was not a stock and domestic farm dam. My understanding is that the definition of a 'stock and domestic farm dam' was that a small dam could be constructed for domestic purposes including water to a house or homestead, watering a small garden for domestic consumption and for a house-cow. I was initially informed of this view by my then manager, Jim Thompson, and later reinforced upon reading the Departmental publication titled, "Definitions and Exemptions - State Environmental Planning Policy No. 46 - Protection and Management of Native Vegetation", page 15(e) Rural Structures and comment... 8. In terms of definition, to my knowledge no other property owner had ever previously cleared such a large area for what was clearly an irrigation storage without prior approval on the basis of it being described as a 'farm dam' under the rural structures exemption (e). That is to say, if any sized irrigation storage was allowed by the Court, then it was in conflict with the DLWC's view of the definition and the purpose and intent of the exemption which was directed to minor works such as farm dams for stock and domestic purposes.

Mr Dines agreed that he was provided with a copy of the Allens' advice by Mr O'Brien which he considered important. Having read the advice he referred back to the Department's exemptions publication and had a discussion with Mr Thompson, then forwarded the advice to Mr Hannam, the person who he understood was the head of Legal and Compliance at Parramatta. He was unable to recall whether anyone from head office followed up the matter with him.

Mr Dines went on to say that before he attended Hazeldene on both 2 and 3 August 2000 with Mr Morley to conduct the investigation into the suspected illegal clearing that Mr O'Brien had notified to him, he collected a range of materials, including maps and aerial photographs from the Moree office. In the course of the investigation he also took extensive photographs of the Strip, including satellite positioning indices and measurements before completing pro forma field data sheets used for recording vegetation information for survey and assessment purposes. The same field data sheets were used for the recording of cleared vegetation for analytical purposes. Mr Dines recorded the number, height and diameter of the felled trees, the width of the canopy and other features of the native vegetation that had been cleared.

Mr Bailey agreed in cross-examination that after Mr Dines' visit to the Strip on 2 and 3 August 2000 he was aware that the legality of the clearing of the Strip was being investigated by the Department. Mr Bailey did not accompany the officers to the Strip on either day.

In resolving to the view, for the reasons already given, that the partially completed Part 8 application Mr Gardner took with him when he left Hazeldene after the 19 July meeting was not a complying application for the purposes of Part 8 of the Water Act, and in rejecting Mr Bailey's evidence that Mr Gardner gave him an undertaking at that time that the application would be processed, I also take into account Mr Bailey's evidence (which I do not find persuasive) that after Mr Dines attended at Hazeldene on 2 and 3 August he made regular contact with the Department, purportedly to inquire as to the progress of the processing of the application.

It was not in dispute that Mr Bailey spoke with Mr Dines on 7 August 2000, within days of the comprehensive but incomplete inspection of the Strip on 2 and 3 August 2000. Although Mr Dines' account of that conversation in the affidavit sworn for the purposes of the Land and Environment Court proceedings, and read as part of his evidence in proceedings before me, differed as in some material respects from Mr Bailey's account of the same conversation detailed for the first time in his 2010 affidavit, it was not the subject of cross-examination by Mr King. It was, however, referred to in submissions to which I will shortly refer.

It was also not in dispute that Mr Bailey contacted or attempted to make contact with Mr Thompson, a vegetation officer, in September and October 2000 and that he spoke with Mr Gardner by telephone in October and November 2000. It was also not in dispute that he made enquiries of Mr Thompson in March and April 2001 and telephoned the Department in April and May of that year. What was in issue was his motivation in making contact, or attempting to make contact, with Departmental officers at these times.

Mr Bailey gave evidence that he was following up the processing of his Part 8 application with a view to commencing the earthworks essential for the construction of the dam. It was the defendants' case that, without pressing the issue, Mr Bailey was actually enquiring into the progress of the Department's investigation into the clearing of the Strip in the belief that if he took the step of formally lodging an application while the investigation was ongoing, approval would not be likely to be granted given that he knew or expected that environmental considerations would be involved in the approval process and that the Department had concerns about the adverse environmental impact of the native vegetation he had cleared.

Mr Williams submitted that Mr Bailey's real motives in making contact with the Department in the last quarter of 2000 and the first quarter of 2001 are informed by what Mr Dines told him on 7 August after enquiring whether Mr Bailey was intending to proceed with a Part 8 application. Even on Mr Bailey's account of that conversation he accepted Mr Dines said: ... Bruce, we need to go through your Part 8 application to assess the impact of clearing on vegetation. [Emphasis added.] Mr Bailey replied: I have left plenty of vegetation for the birds, including an island of vegetation within the dam. Mr Dines responded: That vegetation in the island will die anyway. It will be inundated as the dam is filled. It will not survive inside the dam.

Mr King sought to emphasis that when Mr Dines used the word "we" (which he accepted he probably did) he saw himself as having a role to play in the determination of the application that had been received. He said that the role he saw himself performing was to look at "vegetation issues", not to consider the application as part of the approval process and not to direct how or when that might occur. The issue was explored in cross-examination as is clear from the extracts which follow. It was part of Mr Bailey's case that Mr Dines' conduct was at all times motivated to enhance the position taken by the Department that the Part 8 application would not be processed and in this way to obstruct or prevent Mr Bailey constructing the water storage unit.

Mr Dines' account of the same conversation is as follows: I said: ...Are you still proceeding with the Part 8 application? Mr Bailey said: Yes. I had legal advice indicating that I can use the rural structures exemption. I said: Be aware that the Department interprets the exemption as allowing for the construction and maintenance of a farm dam for the stock and domestic dams, not for irrigation storages, because they can involve the clearing of a large area of native vegetation. ... I said: ...I have received the solicitor's advice that you faxed. The advice still says you will need a Part 8 [Water Act] application. That application will need to assess the environmental impact on the vegetation. Mr Bailey said: It will create a refuge for birds away from predators. I said: The vegetation will still die. The purpose of the Act is to protect native vegetation. You still have to determine the possible threatened species that would be affected by the clearing for the dam wall and the borrow pit.

Mr Dines agreed that he spoke with Mr Gardner on or about 7 August 2000 after he returned to the Tamworth office. He said one of the reasons he did that was to discuss the impact of "the Water Act issues" given Mr Bailey's stated intention to proceed with construction. He said that Mr Gardner provided him with a copy of the partly completed Part 8 application he had left Hazeldene with on 19 July. It was put to him that it was his understanding that the documents that had been given to Mr Gardner for lodging were a Part 8 application as to which he said: Q. Is that your understanding, Mr Dines, that what I will refer to as the Part 8 papers were given to Mr Gardner for the purposes of lodging a Part 8 Water Act application? A. Application at that stage. It was only an application. KING Q. That's what you understood? A. I understood it. Q. And you told Mr Gardner words to the effect that he shouldn't do anything about that application pending the investigation? A. I certainly discussed with Mr Gardner asked him what was the process for their application. My understanding is that the application hadn't been signed at that point. It had been received. Q. Did you tell him that he wasn't to do anything about those papers? Let's just consider that first. He had received the papers? A. Yes. Q. And you confirmed with him that no approval at that stage had been granted? A. Yes. Q. And you asked him not to process the papers further pending your investigation? A. No. I recall explaining talking to him about the investigation that was still under way, but his requirements, his approvals were under the water team for them to determine. ... Q. So you knew that you had no authority to direct him not to proceed to consider? A. That was my understanding, yes. Q. And you weren't an authorised office of the Water Administration Ministerial Corporation, were you? A. Correct. Q. You therefore knew that it would be wrong for you to direct him not to proceed to consider the papers that Mr Bailey had given him. You knew that would be wrong, didn't you? A. I guess, yes. Q. Did Mr Gardner tell you that he had taken away Mr Bailey's Water Act Part 8 papers so that it would prevent Mr Bailey from lodging an application? A. He explained to me that he took the papers with him once he saw the vegetation had been cleared and brought them back to the office. Q. And he put them in the bottom of his desk? A. I don't know where he put them. Q. Well, he copied them to you? A. Yes. Q. But you knew that as a result of Mr Gardner's actions no further steps were being taken in relation to the Part 8 Water Act application? A. That was my understanding.

When asked whether he directed Mr Gardner not to do anything to process the application he said: Q. Mr Dines, what's your position on that, please? A. I didn't direct him not to. I was of the understanding that the Water Act needed to consider environmental issues and certainly had strong discussions with him that any Water Act approval would need to consider vegetation that was on there or had been cleared on the site. Q. You had strong discussions with him, you've just said? A. Yes. Q. Those strong discussions made it clear what your position was? A. That he needed to consider other forms of environmental impacts of that application. This evidence is consistent with the extract from his affidavit set out at length above.

On 28 September 2000 Mr Bailey claimed he had a telephone conversation with Mr Thompson where he was given the "assurance" that the Part 8 application he gave to Mr Gardner in July "should be able to be proceeded with". It was the defendants' case that I would not accept that there was any conversation in those terms. It was not referred to in Mr Bailey's evidence in the Land and Environment Court and the note in his diary of that date records, "phoned Jim Thompson at DWLC re clearing application + the Strip". (He gave evidence that the reference to the clearing application was in connection with an unrelated area on Rosewood.)

In circumstances where, on Mr Bailey's account of events in this Court that he believed that Mr Gardner, Mr O'Brien and Mr Dines were placing every obstacle in the way of his construction of the third water storage unit (including a threatened prosecution for illegal clearing), and where he believed he had done nothing wrong in clearing the Strip and that the delay in progressing the investigation was deliberate and designed to frustrate his plans to construct the dam, it is difficult to understand why Mr Bailey would not, at the very least, have noted in his diary that Mr Thompson had given him the assurance that his application had been both received and "should be able to proceed". I have already expressed the view that I regard it as inconceivable that if Mr Bailey genuinely believed that the Department was wrongly deferring consideration of an application properly lodged under the Water Act, he would not have sought further advice from Allens as to what he should do to ensure his legal rights were respected. Mr Bailey was unable to account for his failure to take any step to enforce his rights save as to say, "In hindsight I could have done a lot of things".

For these reasons, together with the concerns I have already expressed about the reliability of Mr Bailey's evidence of his dealings with Mr O'Brien on 19 July 2000 and later dealings with Mr Gardner and Mr O'Brien on 31 July, I am unable to accept that he had a conversation with Mr Thompson on 28 September 2000 in the terms given in his evidence.

Mr Bailey accepted that he learnt from Mr Gardner in a telephone conversation less than a month later on 17 October 2000 that the Part 8 application would not be processed because he (Mr Gardner) had not submitted it and, further, that in Mr Gardner's opinion, Mr Bailey should expect to await the outcome of the investigation into the land clearing before the Part 8 application would be considered. While this conversation may suggest that Mr Gardner acknowledged that he was in possession of the Part 8 application he took with him from Hazeldene on 19 July for the purposes of submitting it for approval (despite it not being a complying application), to find that Mr Gardner undertook to do so and then later changed his mind, or was bullied into changing his mind by Mr Dines or because he was directed by Mr Dines not to process it (a proposition put to Mr Dines in cross-examination but rejected by him) is against the combined weight of all the evidence to which I have already referred and the extracts of the cross-examination of Mr Dines which follow.

Mr Dines agreed in cross-examination that he was aware that Mr Bailey had made various enquiries of Mr Gardner by telephone and throughout 2000 and 2001 leading up until the time Mr Dines left the Department in October 2001, as to which he gave the following evidence: Q. And on each occasion that Mr Gardner spoke to you about it, you told him that the prosecution investigations were still under way and he should do nothing regarding the Part 8 Water Act application papers? A. Well, investigations into vegetation, investigations were still being undertaken, yes. Q. And that he should do nothing while that was happening? A. That was his call whether to do anything with that or not. HER HONOUR: Again I need to understand, it's important, Mr King. Q. Mr King has dealt with your conversations with Mr Gardner on 7 August. He is now asking you to reflect on a period of time from August through to the balance of that calendar year and up until when you left in October 2001. Focusing on that time frame, you were aware, were you, that Mr Bailey was from time to time making inquiries of Mr Gardner as to the Part 8 Water Act issue? A. Yes. Q. And were you made aware of that because Mr Gardner told you that Mr Bailey was asking about the Water Act application, or did you come to hear of it incidentally or what? A. I'm sure Mr Gardner mentioned it to me. We were quite often in that Moree office there. Q. And on any or each of those occasions, and there may be four, there may be seven, it doesn't matter very much, did you at any time direct him that he ought do nothing to further process or deal with the Part 8 Water Act issue whilst ever the investigation that you were concerned with was continuing? I am focusing on the direction at this stage. A. Yes, I certainly made it clear that it should have been assessing the vegetation. I can't recall what I directly said to him. I don't think I did because I didn't feel I had the jurisdiction to do it, but certainly considering the [application] would rely to some degree on the completion of the vegetation investigation. Q. Am I right in understanding, you said in August you emphasised and in strong language the need for consideration to be given to the vegetation on site or that which was cleared from the site in accordance with environmental considerations which arose for the purposes of the Water Act. A. Yes. Q. And you said to me that you didn't direct him that he should do nothing but you emphasised the need for that consideration to be active? A. Yes. Q. And was that what you emphasised in your dealings with Mr Gardner until the time you left when he raised with you Mr Bailey's concern as to how things were progressing? A. Yes. Whenever we spoke, trying to get out there, there's other matters. We wanted to finish that investigation but just couldn't get out there.

Mr Bailey gave evidence that after the October conversation with Mr Gardner he had a further conversation with him on 15 November 2000 in words to the following effect: I said: What is happening with the Part 8 application? He said: We are not processing your Application... Dines will have my butt if I accept your application.

Mr Dines agreed in cross-examination that upon reading Mr Bailey's affidavit he was aware that these words were attributed to Mr Gardner and which he agreed were words he might have used. He was then cross-examined and gave the following evidence: Q. But that was the position, wasn't it? Had Gardner proceeded with the Part 8 application, your investigations, as you understood it, would have been fruitless, having regard to the Water Act exemption to which you drew attention earlier in your evidence today? A. Well, if the Water Act application had proceeded it would have required supporting information dealing with those other environmental impacts of that storage. Q. But just assuming that Mr Gardner had decided to approve without further ado, having regard to what he knew and saw and in his role as an officer of the Water Administration Ministerial Corporation within the department of which you formed part, that it should be approved, you knew that had that occurred that would be a problem for you breaching Mr Bailey in respect to the vegetation Act? A. It may provide the availability of that exclusion from the native veg. Q. And it was for that reason that you were very firm with Mr Gardner that he shouldn't process any of the papers that Mr Bailey had given him? A. I was of the view that the vegetation was worth was of value and should have been assessed either against the Native Vegetation Act or the Water Act, considering that vegetation prior to being cleared, and that clearing, if it had have been approved, would have defined where the footprint was and where the minimum clearing under a possible exemption could have been undertaken, that the clearing preempted that levee bank Part 8 approval, indicating whether levees could go for floodway implications, the implication of what vegetation could or couldn't be maintained. Q. And if he approved the Part 8 application that would have prevented your work, in effect? HER HONOUR: What do you mean by that? His work was ongoing. KING: That's exactly what I mean. Q. That would have affected your ongoing work and the investigation? A. It may have. It could put restrictions on any outcome of the vegetation work. The clearing preempted all of those applications. Q. You wanted to ensure, and you made this very clear to Mr Gardner, that he was not to process further the Part 8 papers until you gave him the goahead upon completion of your investigations. Isn't that fair? A. As I said, that was his decision to proceed. I strongly suggested that he needed to assess the vegetation and that may await would require us finishing the vegetation investigation. Q. Assuming that Mr Gardner had said to Mr Bailey in November of 2000 in response to one of his queries, "We are not processing your application, Dines will have my butt if I accepted your application", that would be a fair summary of your position, wouldn't it? A. No, because I had no jurisdiction to "have his butt", effectively.

In my view, the more likely explanation for Mr Bailey contacting the Department, or attempting to do so after 17 October 2000 (at least up until the resumption of the investigation by Mr Dines in May 2001), was his concern at the delay in the finalisation of the results of the investigation into the clearing of the Strip, and the impediment he knew that posed to having a Part 8 application approved, and not, as he claimed in his evidence, to pursue the progress of an application for approval he genuinely believed had been lodged at that time. I note that in Exhibit N, a "timeline" prepared by Ms Savage at the request of the defendants in March 2010, she records "25 October 2000 Diary note. Veg enquiry Bruce Bailey". She was not asked about this entry in her evidence. It provides some additional support for the conclusion I have reached as to the probable explanation for Mr Bailey's phone contact with the Department at this time.

Having regard to the detailed evidence in Mr Dines' affidavit, the lengthy cross-examination of him where Mr King sought to extract a concession that he had directed Mr Gardner not to process the Part 8 application in the form in which he retained it after 19 July 2000, and having had the opportunity to consider Mr Dines as a witness, I am not satisfied that he bullied or overbore Mr Gardner's judgment and authority as a water compliance officer, or that he misconducted himself in any way in his dealings with Mr Bailey over the course of the investigation.

The notes in Mr Bailey's diary for the nominated days upon which contact was made or attempted at this time do not advance Mr Bailey's claim that he was enquiring as to the progress of receiving a Part 8 approval referable to any application he believed had been lodged for processing. I also take into account Mr Dines' evidence in his affidavit sworn for the Land and Environment Court proceedings that following his contact with Mr Bailey in early August 2000, Mr Bailey telephoned him and, as he was made aware, other Departmental officers to enquire about the progress of the investigation, calls which Mr Dines returned in an attempt to make arrangements for a mutually convenient time to return to Hazeldene to continue the investigation.

On 16 May 2001, Mr Dines, Mr Graham and Mr Morley returned to a Hazeldene to resume their fieldwork in the ongoing inspection of the Strip. Mr Dines gave evidence that he apologised to Mr Bailey for the delay and indicated his eagerness to complete the investigation as soon as possible. Mr Bailey did not refer to that aspect of his conversation with Mr Dines in his affidavit. It was not put to Mr Dines in cross-examination that it was not said.

As concerns Mr Bailey's dealing with Messrs Dines, Morley and Graham at this time, in particular as to whether he might provide a statement explaining his reasons for clearing the Strip, Mr Bailey said: On 17 May 2001 Messrs Dines and Morley came to the homestead at Hazeldene in the morning. I had a conversation with Mr Dines to the following effect: I said: "Could anything I say be used in a court of law against me?" Dines said: "It could." I said: "Then I am not going to give a statement. You are dragging your feet and killing time on this issue. You were here on the second and third of August last year and I'm still waiting to be able to progress my Part 8 Application. I have had DLWC officers coming here a lot of times now, always to investigate further. I have had advice from Rob McCosker and I also have legal advice." (Mr Dines agreed this was said.)

It was put to Mr Dines in cross-examination that the reason he did nothing to progress the investigation after 3 August 2000 and before 15 May 2001 was not that the fieldwork was not finalised, nor anything to do with scarcity of Departmental resources, but because, in his view, the Department's position was preserved because Mr Gardner was not processing the Part 8 application and that delay was in the Department's interest. He denied that was the case.

In his affidavit sworn for the purposes of these proceedings Mr Bailey set out his dealings with various Departmental officers between October 2001 and May 2002.

Despite Mr King's submission that there was a deliberate delay in completing the investigation which was designed to obstruct Mr Bailey's construction of the third water storage unit, I accept Mr Dines' evidence that the delay in completing the investigation was a result of time pressures occasioned by other fieldwork in the region and not because of any determination on his part to frustrate or impede the construction of the water storage unit or to prevent any application for approval to construct it from being considered.

He also gave the following evidence: While I had no control of the investigation of the Hazeldene clearing after my departure [in October 2001] I can state that the subject investigation was conducted according to set protocols whilst under my control. Subsequent to my resignation I have no knowledge or reason to believe that the subject investigation and decision to prosecute was made other than in accordance with Departmental procedures.

On 25 October 2001 he said he telephoned Peter Christmas to chase up his Part 8 application and was given the assurance that it would be checked up on and either Mr Christmas or Mr Cameron would get back to him. The file note as against that date notes a telephone call to Mr Christmas "re the Strip" (cf the Part 8 application). It does however record Mr Christmas' assurance that either he or Mr Cameron would make contact.

Mr Bailey says that on 3 December 2001 he telephoned Mr Christmas again in the following terms: On or about 3 December 2001, I telephoned Peter Christmas again and had a conversation in words to the effect of: I said: What's happening with my Application? He said: We are waiting on the outcome of a court case against another person. We will get back to you with a time frame before we decide on you... I will provide you with written information in three days' time.

The file note as against that date records the following: "spoke to Peter Christmas. He informed me DLWC would be informing me of court case against another person and timeframe etc before they decide on me". This entry is capable of carrying the imputation that the Department was awaiting the outcome of another prosecution before deciding whether he would be prosecuted. As with the other file notes, there is no reference to a Part 8 application approval.

Mr Bailey gave evidence and was not cross-examined as to his belief at that time that the only reason his Part 8 application was not being processed was because of unrelated court proceedings. There was no evidence led as to whether the court proceedings to which Mr Christmas made reference were the Jackson proceedings or some other case. Mr Bailey said he asked no questions of Mr Christmas about it.

His affidavit then sets out his various dealings with the Department until he was formally notified by Mr Cameron on 15 May 2002 that no application for the construction of a water storage unit was being processed after the informal notification to the same effect by Mr Gardner in October 2000. I note, however, in paragraph 119 of his affidavit set out below, that he resolved to wait to hear back from the Department because he had been informed that there was a question as to whether he would be prosecuted. Although that remains somewhat ambiguous it does tend to suggest, as contended for by the defendants, that Mr Bailey's queries of the Department over the preceding months concerned the question of the legality of the clearing and not the processing of a Part 8 application. 119. Over the next four months I received no further telephone calls from the DLWC about the proposed farm dam and I did not call them. I decided to wait to hear back from the DLWC as by now various officers of the DLWC had told me the DLWC was deciding whether or not to prosecute me and I had already chased them numerous times.

Mr Bailey affidavit then deals with the second clearing event in the following paragraphs: 120. After the initial clearing in around June 2000 for the proposed farm dam, I became concerned after discussions with other farmers about whether a deep borrow pit, with an "island" would be the most appropriate design for the dam. In particular I was advised by John Beale, the manager of another property who had constructed a dam of similar configuration, of difficulties encountered with inferior soil/gravel when constructing a large farm dam with a deep borrow pit. John Beale had said to me words to the effect: "I am building a dam at the moment, and have encountered porous material and difficult ground conditions prior to commencing construction. To overcome the difficulty, we are going to make the borrow pit shallower and take the soil from across the floor of the dam to be used for walls." 121. To avoid such a problem I decided that it may be more sensible to clear the whole of the 80 hectare surface area and use a shallower borrow pit over a greater area from which to construct the five metre high levees that would be required. I had become concerned about the soil quality at depth after the earthmover had encountered sandy soil in the north-eastern area of the clearing of the proposed farm dam on the Strip. 122. In about April 2002 I employed Andrew Edwards to undertake clearing of the island within the Strip. I then ploughed the area on the Strip and planted oats in the cleared area for the purpose of controlling further weed growth, in particular Lippia, while the investigations by the DLWC continued. 123. The vegetation comprising the "island" was within the area that was necessary for the operation and maintenance of the farm dam. It was an area that was always going to be covered with water to get to the 4,000 megalitre capacity. My understanding was, and is, that it could also be cleared under the "rural structures" exemption to the NVC Act, i.e. as part of the proposed farm dam. 124. I am familiar with and (prior to the carrying out of any clearing of the Strip), had regard to the Guidelines and Fact Sheets published by the DLWC in relation to clearing under the NVC Act. In particular I read the DLWC Fact Sheet No. 5 "Exclusions and Exemptions". A copy of the Fact Sheet is annexed and marked "L". I relied on these documents in conjunction with the advice I had received from Allens. I did not read in any of those documents anything that said that the term "farm dams" (as it appears in the "Rural Structures" exemption to the NVC Act) would somehow exclude farm dams used for the purpose of irrigation farming.

Exhibit L recites the rural structures exemption in SEPP 46. It also refers to the Department's publication "Definitions and Exemptions: Amendment No 2" published in July 1997 and advises it is available from Departmental offices. That publication was tendered by the defendants as Exhibit 16 referred to earlier. It says: Making an application to clear native vegetation If the proposed clearing does not fall into any of the categories listed above, then an application to the Department of Land and Water Conservation for Development Consent to clear native vegetation will be required. The first and most important step in making such an application is to discuss the proposal with an officer of the Department. Pre-application interview In the first instance, contact the local office and speak to the District Catchment Manager. If necessary, the District catchment Manager will arrange for one of the Department's Vegetation management Officers to visit the property and discuss the proposal. If, on the basis of this visit, an application is still required, an application form will need to be completed. The form is available from any office of the Department. There is no application fee. The Department aims to assess applications as quickly as possible. The time required will vary with the size and nature of the clearing, and the quality of the information provided by the applicant. Applications with inadequate information may be referred back to the applicant which will delay the assessment process.

Mr Bailey was not cross-examined in the proceedings before me as to these matters. In closing submissions Mr Williams referred me to Mr Bailey's evidence in the Land and Environment Court where he denied under cross-examination that the actual reason he cleared the remaining vegetation from the Strip was to meet what Mr O'Brien told him would be the Department's attitude to a Part 8 approval if it involved inundating the trees left standing with water. Mr Williams submitted Mr Bailey was unlikely to give any different evidence in these proceedings.

Mr Bailey's affidavit evidence continues: 125. By about May 2002 I had not heard back from the DLWC, and it had been two years since clearing had occurred and it was approaching two years since I submitted the Part 8 Application to Garry Gardner. I decided to call the DLWC again. 126. On 13 May 2002 I telephoned Randall Hart. I recall having a conversation with words to the effect of: I said: "Peter [Christmas] gave me an undertaking that he would provide me with information in writing in relation to my Application. He has not honoured his word and it puts your credibility into question." He said: "I agree I'll talk to Peter and get back to you in two days' time." 127. By 15 May 2002 I had not heard back from Randall Hart. On that day I telephoned Geoff Cameron of the DLWC and had a conversation with him in words to the effect: I said: "The Application is dragging on. It started in July 2000 and it's been nearly two years and nothing has happened." He said: "I'll look into it and get back to you by Friday [17 March 2002]."

On 21 May 2002 Mr Bailey received a formal communication from Mr Cameron in the following terms: I refer to our recent telephone conversation during which you requested an update on your application and advice about other matters. After making inquiries with my staff, I am advised that no application under Part 8 of the Water Act 1912 is being processed for construction of a water storage. I am also advised that on 31 July 2000, DLWC officers Garry Gardner and Rodney O'Brien went to your property, "Hazeldene", to conduct an inspection in regard to the proposed water storage. During the course of that inspection, they noted that unauthorized clearing had occurred that may have been in breach of the Native Vegetation Conservation Act 1997 (NVCA). This alleged breach is still being investigated. If the department determines that a breach of the NVCA has occurred, several possible remedies are available including issuing of a direction for remediation of the site. In regard to the supply channel constructed by your neighbour, Mr Carrigan, this structure has been inspected by DLWC staff and he has been instructed to reduce the height of the channel. No specific time was given for this work to be done but it would be reasonable to expect it would be completed prior to the next irrigation season.

I note that at 4.27pm on 15 May 2002 Mr Cameron sent an email to Ms Paget-Cooke in which he said as follows: I understand that you are familiar with this case. I had a call from Bruce Bailey. He wants to know the current situation as he is apparently under the impression that he has a live application under Part 8 of the Water Act for construction of a water storage. In fact, DLWC officers refused to accept an application because of an alleged breach of the NVCA. Please see attached draft letter. I have tried to present the current position without tipping our hand as to where we might be going with regard to compliance action. Do you think this will suffice.

The draft letter to which reference was made was tendered by the plaintiffs. It did not correspond precisely with the letter sent by Mr Cameron a few days later, although nothing turns on that. A handwritten note from Ms Paget-Cooke on the document provides as follows: ? supporting docs s 167 Water Act - provides for fee and impact assessment. Dept never received your appl & supporting docs

This further reinforces my conclusion that there was no valid or complying Part 8 application lodged until January 2004.

It was not in dispute that the first defendant was properly named as a prosecutor in Mr Bailey's claim for malicious prosecution. In closing submissions Mr King sought to persuade me that it was also open on the evidence for me to find that each of Mr O'Brien, Mr Gardner, Mr Dines, Mr Cameron and Ms Paget-Cooke were also prosecutors, thereby exposing the third defendant to liability because of what was said to be the active role they each played in setting the prosecution of Mr Bailey in motion maliciously and without reasonable and probable cause.

Mr Williams submitted that to attribute the role of prosecutor to anyone other than the first defendant was neither open on the evidence nor a conclusion available as a matter of law.

Mr King submitted that a finding that each of the named individuals was liable as a prosecutor was crucial to Mr Bailey's claim for damages for malicious prosecution. This, it was said, would avoid the consequence of it being successfully put against him that because the first defendant relied upon information from others (and from Ms Paget-Cooke in particular) without having any personal knowledge of Mr Bailey or the circumstances in which he was alleged to have illegally cleared native vegetation, it could not be shown that he acted without reasonable and probable cause, in the sense that it could not be shown that he did not honestly believe in Mr Bailey's guilt. By contrast, the evidence established that neither Mr O'Brien, Mr Gardner, Mr Dines, Mr Cameron nor Ms Paget-Cooke had that state of conviction or belief.

Mr Williams submitted that for the category of prosecutors to be broadened in closing submissions to include Departmental compliance officers (Mr O'Brien, Mr Gardner, Mr Dines, and Mr Cameron) and a legal officer in the Legal and Compliance Branch (Ms Paget-Cooke) to deal with a deficiency, or perceived deficiency in the evidence in Mr Bailey's case, is to expose the fundamental weakness in the argument. He submitted that in the amended statement of claim, Mr Bailey assumed the forensic task of proving that the Director General (and only the Director General) initiated the proceedings on 1 July 2002 by adopting Ms Paget-Cooke's recommendation to prosecute, and that he did so maliciously and without reasonable and probable cause.

Even were the pleadings capable of encompassing a case where individuals other than the Director General might be regarded as a prosecutor, Mr Williams submitted that is there is no liability in the third defendant for anything Ms Paget-Cooke did, or failed to do, an employed solicitor in the Legal and Compliance Branch of the Department in drafting the prosecution memorandum and submitting it to the Director General for his consideration. Neither was there any liability for anything any of the named Departmental officers did, or failed to do, in the course of either reporting what they believed to be the unauthorised clearing of the Strip (in the case of Mr O'Brien and Mr Gardner) or in the conduct of the investigation by Mr Dines.

In summary, Mr Williams submitted that none of the individuals nominated as prosecutors by Mr King have been shown to have "instigated the proceedings" or "set them in motion" and none have assumed conduct of the proceedings in a way that imposed upon them any form of responsibility or accountability for the tort.

Before considering whether the evidence relied upon by Mr King supports a finding that all or any of the Departmental officers and/or Ms Paget-Cooke were prosecutors in this sense, it is clear that Mr King's attribution of what he submitted was their "active roles in setting the prosecution in motion" was drawn from a discrete passage in A v State of New South Wales [2007] HCA 10; 230 CLR 500 (citing Fleming, The Law of Torts, 9thed (1998) at p 676) when the Court was addressing the first of the four elements a plaintiff must establish to succeed in an action for damages for malicious prosecution.

At [1] in A's case the High Court identified those four elements as follows: (1) that proceedings of the kind to which the tort applies (generally, as in this case, criminal proceedings) were initiated against the plaintiff by the defendant; (2) that the proceedings terminated in favour of the plaintiff; (3) that the defendant, in initiating or maintaining the proceedings acted maliciously; and (4) that the defendant acted without reasonable and probable cause.

As to the identity of the defendant in A's case as prosecutor, the Court said at [34]: There was no argument in this Court, and it appears, from the absence of any discussion in the reasons of Cooper DCJ or Beazley JA, that there was no argument in the District Court or the Court of Appeal, about the first two elements of the tort of malicious prosecution. As to the second element, the position was obvious. As to the first, it is of some significance to note why the matter was not in dispute. The identification of the appropriate defendant in a case of malicious prosecution is not always straightforward. "To incur liability, the defendant must play an active role in the conduct of the proceedings, as by 'instigating' or setting them in motion" (Fleming footnoted)

In [35] the Court made it clear that the reason a person other than the police officer who actually commenced proceedings by the laying of an information or the bringing of a charge might, in some cases, be appropriately regarded as a prosecutor, is where that person (usually a person who claims to be the victim of the offence) makes an uncorroborated complaint, virtually compelling the police officer to commence proceedings without the officer being in a position to independently verify the matters the subject of the complaint.

The nomination of the police officer who brought the charges against Mr A as the prosecutor for the attribution of liability for the tort was not an issue in A's case. It had not been suggested, either at first instance or in the Court of Appeal, that the child complainants were or could be regarded as "prosecutors" (and therefore liable as defendants in the action brought for malicious prosecution by the appellant) despite the fact that it was their uncorroborated allegations that the police officer acted upon in laying the charges. As the High Court noted, this was because it was the police officer who had the responsibility for deciding whether to lay the charges. Mr Williams submitted that in this case that role and responsibility was exercised by the first defendant.

Mr King did not submit that the ultimate decision to prosecute Mr Bailey was made by anyone other than the first defendant in the exercise of his role and function as the Director General of the Department, or that anyone other than the first defendant was responsible for instituting the proceedings against Mr Bailey. Nonetheless, he maintained the submission that others were involved in setting the prosecution in motion.

In A's case the High Court was not concerned with a general enquiry into the identity of those to whom responsibility or accountability for the tort of malicious prosecution might be extended. This much is clear from what was said at [36]-[38]. What the Court did emphasise was that it is important to properly identify the prosecutor in proceedings brought to recover damages for the tort of malicious prosecution in order to ground and focus the critical enquiry into whether the plaintiff has proved that person (or, if more than one prosecutor, those people) acted maliciously and without reasonable and probable cause in initiating and maintaining the proceedings and, as the Court said at [38], in focusing attention upon those critical questions, whether those who "effectively set the proceedings in motion" acted tortiously.

At [38] the Court said: For the reasons explained by the House of Lords in Glinski v McIver [1962] AC 726, justice requires that the prosecutor, the person who effectively sets criminal proceedings in motion, accept the form of responsibility, or accountability, imposed by the tort of malicious prosecution. Insofar as one element of the tort concerns reasonable and probable cause, the question is not abstract or purely objective. The question is whether the prosecutor had reasonable and probable cause to do what he did; not whether, regardless of the prosecutor's knowledge or belief, there was reasonable and probable cause for a charge to be laid. The question involves both an objective and a subjective aspect.

It seems to me to follow in this case that if the evidence relied upon by Mr Bailey fails to establish that the first defendant probably did not have an honest belief in Mr Bailey's guilt on the information available when he authorised the prosecution, and for that reason could not have believed it was "a proper case for prosecution" (and assuming that I am satisfied that the evidence does not allow for finding the first defendant properly maintained the proceedings without that same level of persuasion), but the plaintiff can establish that the first defendant's subjective belief was formed on an insufficient basis, viewed objectively, then proof of the first element of the tort may be made out.

The issue of an absence of reasonable and probable cause viewed objectively was dealt with by the High Court in A's case as follows: [82] It is convenient to deal at this point with the objective aspect of an allegation of absence of reasonable and probable cause. As Dixon J said in Brain [1935] HCA 30; 53 CLR 343, if there is no dispute that a prosecutor "believed in the truth of the charge, or considered its truth so likely that a prosecution ought to take place" and no question arises as to the materials upon which the opinion was founded, there remains the question, for the Court to decide, "whether the grounds which actuated [the prosecutor] suffice to constitute reasonable and probable cause."

Although Ms Paget-Cooke's did not initiate proceedings, it was her interrogation of the available evidence and its sufficiency to support a case for prosecution and her consideration of the Director of Public Prosecutions prosecution guidelines and other matters noted by her as supporting the recommendation to prosecute, that was the material upon which the first defendant's decision was based. Although the appointment of Ms Paget-Cooke as a prosecutor for the purposes of the tort is not free from doubt, her authorship of the prosecution memorandum and in preparation of the matter for the proceedings generally could be viewed as her performing "an active role ...in the conduct of proceedings ... in setting the prosecution in motion". I am satisfied if Mr Bailey can establish that Ms Paget-Cooke acted maliciously and without reasonable and probable cause in recommending that proceedings be commenced the third defendant would be vicariously liable for her actions.

That is to not say that the case Mr Bailey seeks to make against both the first defendant and Ms Paget-Cooke is materially different. Save only for the fact that Ms Paget-Cooke was a witness in the proceedings and the first defendant was not, and Mr King's contention that the first defendant sought or was provided with legal advice bearing on the question whether the matter should be prosecuted, the evidence and the inferences said to be drawn from that evidence is identical. What is however clear beyond question is that Ms Paget-Cooke performed no role or function as "a prosecutor" in the maintenance of proceedings after they were initiated. Accordingly, to the extent that the action for damages is based upon the actions of the prosecutor in the maintenance phase of the proceedings (that is, after the decision in Jackson and by way of a case stated to the Court of Criminal Appeal) the first defendant is the only defendant.

Liability as a prosecutor was also sought to be attributed by Mr King to Mr Cameron (in his capacity as the Regional Compliance Manager) but for different reasons. Mr King submitted that I would be satisfied that although Mr Cameron did not swear an affidavit in the Land and Environment Court proceedings, he "set the proceedings in motion" by signing the final recommendation from the region, a document that Mr King submitted must be the document that accompanied the prosecution memorandum and referred to in 2.9 of the prosecution memorandum as attachment 1, and which he submitted wrongfully and without Ms Savage's authority also represented that she recommended prosecution when Mr Cameron well knew her attitude was the opposite. This conduct is also relied upon as supporting proof of malice on Mr Cameron's part because, without identifying with precision what his ulterior motive or purpose might be in acting in this way, Mr King submitted it could not possibly be for the proper purpose of the invocation of the criminal law. This is an insufficient basis for the attribution or potential attribution of liability for the tort to Mr Cameron as a prosecutor.

Mr King's submission that if I am not satisfied that the first defendant acted maliciously and without reasonable and probable cause in commencing or directing that criminal proceedings be commenced because he relied on information from others, Mr Bailey should nonetheless succeed in his action for malicious prosecution because each of Messrs O'Brien, Gardner and Dines swore affidavits that were filed in support of the proceedings in the Land and Environment Court, and that they should be regarded as prosecutors for that reason, is also rejected.

Mr Williams accepted that the involvement of the named Departmental officers at various stages in the investigation of the illegal clearing which culminated in the matter being referred to the legal and compliance branch for their consideration, and the involvement of Ms Paget-Cooke in preparing the prosecution memorandum upon which the decision of the Director General to prosecute the plaintiff was based, might inform the question whether Mr Bailey has proved the first defendant was actuated by malice. He also accepted that it might inform the question whether the proceedings were initiated and maintained without reasonable and probable cause in the objective sense without conceding that was so.

Mr King submitted that because the question whether the clearing of the Strip should be prosecuted criminally was not referred to the Director of Public Prosecutions, and therefore not subject to the professional consideration of a commissioned Crown prosecutor, the prosecution of Mr Bailey is properly characterised as a private prosecution and not a public prosecution. He also submitted that I would be satisfied that although the matter was ultimately referred to the Crown Solicitor's Office by August 2002, it was deliberately conducted "in house" within the Department as long as possible before that date in order to retain management and control of the prosecution and to curtail the time available to the Crown Solicitor or counsel retained by them. This, it was said, was designed to avoid the charges being scrutinised for their legal sufficiency by the Crown Solicitor, or counsel briefed by them, and to conceal the fact that the Department was motivated by malice in pursuing the prosecution.

This submission is tethered to the submission that the prosecution of Mr Bailey was a private prosecution by the Department, a submission which is misconceived, as is the submission that the proceedings were conducted "in-house" to avoid the independent scrutiny of the Director of Public Prosecutions. This was not a prosecution conducted in any private or "in-house" sense (see [41]-[42] of A's case). Independent legal counsel was retained by the Crown Solicitor to act on behalf of the first defendant in the proceedings initiated in the Land and Environment Court. There is no ground for suggesting she did so other than in accordance with her obligations as a barrister under the New South Wales Bar Association Rules.

In seeking to recover damages for the tort of malicious prosecution, the issue is whether Mr Bailey has established that either the first defendant or Ms Paget-Cooke or both instituted the proceedings without reasonable and probable cause and, if so, whether that was done maliciously. In respect of that part of his claim that after the proceedings were instituted in July 2002 but before they were heard and determined in the Land and Environment Court in June 2003 they were maintained (and maintained thereafter by way of a case stated to the Court of Criminal Appeal in July 2003) without reasonable and probable cause and maliciously, it is only the first defendant's decision that is under challenge.

At [57] of the judgment in A's case, the High Court emphasised that although a malicious prosecution claim can only be brought when the plaintiff has been acquitted, that alone does not entitle the plaintiff to a remedy against the prosecutor. At [61] the Court observed that because the absence of reasonable and probable cause is understood to contain both subjective and objective elements (the significance of which was explained in [58] of the judgment) in addition to the forensic difficulty the plaintiff has proving a negative - that is the absence of reasonable and probable cause - an additional difficulty the plaintiff is faced with is how to establish what the prosecutor had in his or her mind when instituting the prosecution. The Court observed that the "shape of the forensic contest" inevitably dictates the way in which a plaintiff seeks to prove the absence of reasonable and probable cause. In the case Mr Bailey seeks to make against the first defendant as the person who directed that proceedings be commenced and the case against Ms Paget-Cooke in her role as a prosecutor in setting the prosecution in motion are different principally because the first defendant did not give evidence and Ms Paget-Cooke did.

Paragraph 58 is in the following terms: ... the inquiry about reasonable and probable cause has two aspects. That is, to decide whether the prosecutor did not have reasonable and probable cause for commencing or maintaining the prosecution, the material available to the prosecutor must be assessed in two ways. What did the prosecutor make of it? What should the prosecutor have made of it? To ask only whether there was material available to the prosecutor which, assessed objectively, would have warranted commencement or maintenance of the prosecution would deny relief to the person acquitted of a crime prosecuted by a person who not only acted maliciously, but who is shown to have acted without forming the view that the material warranted prosecution of the offences. Conversely, to ask only what the prosecutor made of the material that he or she had available when deciding to commence or maintain the prosecution would favour the incompetent or careless prosecutor over the competent and careful.

Mr Bailey is confronted with the same forensic difficulty when the enquiry is into whether he has discharged the burden of establishing that the proceedings were probably maintained by the first defendant in the absence of reasonable and probable cause.

Where considerations at one time justifying the commencement of criminal proceedings can be shown to have materially altered, giving rise to a question whether a prosecution was maintained maliciously and without reasonable and probable cause, and where (as here) a prosecutor does not give evidence, proof of what was in his or her mind after the initial decision to prosecute was taken might only be capable of being established by inference including, perhaps, correspondence in which the prosecutor is urged to reconsider the decision to prosecute. The surrounding circumstances in a particular case might also include a change in the law or clarification of a question of law whether by subsequent judicial pronouncement or legislative amendment, such that the maintenance of proceedings, at one time properly commenced, can no longer be reasonably sustained.

At [71]-[87] the nature of the enquiry into what the prosecutor made of the material (the subjective inquiry) and what he or she should have made of it when instituting and maintaining proceedings (the objective inquiry) was considered. As to the prosecutor's subjective state of mind the Court said: [71] Those questions should be answered as follows. If the plaintiff alleges that the defendant prosecutor did not have the requisite subjective state of mind when instituting or maintaining the prosecution, that is an allegation about the defendant prosecutor's state of persuasion. The subject-matter of the relevant state of persuasion in the mind of the prosecutor is the sufficiency of the material then before the prosecutor to warrant setting the processes of the criminal law in motion. If the facts of the particular case are such that the prosecutor may be supposed to know where the truth lies (as was certainly the case in Sharp v Biggs) the relevant state of persuasion will necessarily entail a conclusion (a belief of the prosecutor) about guilt. If, however, the plaintiff alleges that the prosecutor knew or believed some fact that was inconsistent with guilt (as the plaintiff alleged in Mitchell v John Heine) the absence of reasonable and probable cause could also be described (in that kind of case) as the absence of a belief in the guilt of the plaintiff. ... [76] The absence of reasonable and probable cause will not in every case be shown by demonstrating that the prosecutor had no positive belief that the accused person was, or was probably, guilty. In particular, references to belief in guilt, or more properly, the absence of belief in guilt, will very likely prove distracting in any case where the prosecutor may not be supposed to know where the truth lies. A case where the prosecutor acts on the statements of others is one example of such a case.

At [77] the Court then identified what was described as "three critical points" material to the subjective inquiry: There are three critical points. First, it is the negative proposition that must be established: more probably than not the defendant prosecutor acted without reasonable and probable cause. Secondly, that proposition may be established in either or both of two ways: the defendant prosecutor did not "honestly believe" the case that was instituted or maintained, or the defendant prosecutor had no sufficient basis for such an honest belief. The third point is that the critical question presented by this element of the tort is: what does the plaintiff demonstrate about what the defendant prosecutor made of the material that he or she had available when deciding whether to prosecute or maintain the prosecution? That is, when the plaintiff asserts that the defendant acted without reasonable and probable cause, what exactly is the content of that assertion?

In this case, both Ms Paget-Cooke and the first defendant relied upon material from third parties. Ms Paget-Cooke relied upon the results of the investigation into the clearing of the Strip and information from regional Departmental officers concerning that question and other evidence gathered by them, while the first defendant relied upon Ms Paget-Cooke's analysis of that material and the affidavits of the principal prosecution witnesses. In those circumstances the High Court said in A's case: [80] In cases where the prosecutor acted on material provided by third parties, a relevant question in an action for malicious prosecution will be whether the prosecutor is shown not to have honestly concluded that the material was such as to warrant setting the processes of the criminal law in motion. (There may also be a real and lively question about the objective sufficiency of the material, but that may be left to one side for the moment.) In deciding the subjective question, the various checks and balances for which the processes of the criminal law provide are important. In particular, if the prosecutor was shown to be of the view that the charge would likely fail at committal, or would likely be abandoned by the Director of Public Prosecutions, if or when that officer became involved in the prosecution, absence of reasonable and probable cause would be demonstrated. But unless the prosecutor is shown either not to have honestly formed the view that there was a proper case for prosecution, or to have formed that view on an insufficient basis, the element of absence of reasonable and probable cause is not established. [81] The expression "proper case for prosecution" is not susceptible of exhaustive definition without obscuring the importance of the burden of proving the absence of reasonable and probable cause, and the variety of factual and forensic circumstances in which the questions may arise. For the reasons given earlier, it will require examination of the prosecutor's state of persuasion about the material considered by the prosecutor...

In considering the objective aspect of an absence of reasonable and probable cause it is clear that the focus is on the sufficiency of the information available at the time proceedings were commenced or maintained, in light of all the facts of the particular case assessed according to an objective standard. At [83]-[85] the Court said: [83] ... The objective element of the absence of reasonable and probable cause is thus sometimes couched in terms of the "ordinarily prudent and cautious man, placed in the position of the accuser" or explained by reference to "evidence that persons of reasonably sound judgment would regard as sufficient for launching a prosecution". Or, as Griffith CJ put it in Crowley v Glissan, the question can be said to be "whether a reasonable man might draw the inference, from the facts known to him, that the accused person was guilty". [84] None of these propositions (nor any other equivalent proposition which might be formulated to describe the objective aspect of absence of reasonable and probable cause) readily admits of further definition. It is plain that the appeal is to an objective standard of sufficiency. The references to "reasonable" and "reasonably", to "ordinarily prudent and cautious", make that clear. [85] Because the question in any particular case is ultimately one of fact, little useful guidance is to be had from decisions in other cases about other facts. Rather, the resolution of the question will most often depend upon identifying what it is that the plaintiff asserts to be deficient about the material upon which the defendant acted in instituting or maintaining the prosecution. That is an assertion which may, we do not say must, depend upon evidence demonstrating that further inquiry should have been made.

In the way that Mr Bailey has sought to make out his case against the first defendant in the instituting and the maintaining of the prosecution, separate consideration will need to be given to the information that was available at the time the proceedings were initiated in July 2002, and what the evidence reveals about the consideration given to that material at that time.

It will also be necessary to give separate consideration to the material available to Ms Paget-Cooke when she prepared the prosecution memorandum and the consideration she said she gave to that material when recommending that Mr Bailey be prosecuted, and the evidence bearing upon the approval the first defendant gave to that recommendation when he signed the prosecution memorandum on 1 July 2002 and whether a Jones v Dunkel inference should be drawn because he did not give evidence in the proceedings.

It will also be necessary to consider what additional information was available when the proceedings were maintained after March 2003, when construction of the "rural structures/farm dam exemption" was decided adverse to the Department in the Jackson matter, and after the proceedings concluded in Mr Bailey's favour, when the prosecution was maintained by way of a case stated to the Court of Criminal Appeal.

As the High Court emphasised in A's case at [59] the temporal dimension to an action for malicious prosecution is critical. It directs attention to the material the prosecutor had available at the time the decision was made to commence or maintain a prosecution, not what material came to light later.

Before turning to consider those issues, the fact that the first defendant made no assertion through senior counsel that his decision to prosecute was founded in whole or in part on any legal advice needs to be emphasised. Whether he sought or was given legal advice and, if so, the nature of any such advice was an issue in hot contention in interlocutory proceedings brought by Mr Bailey to gain access to the prosecution memorandum in its unredacted form. Access was also sought to the attachment to the prosecution memorandum identified as the Regional recommendation over which privilege was also claimed. The issue remained in contention in the proceedings before me.

During pre-trial discovery the unredacted prosecution memorandum prepared by Ms Paget-Cooke and signed by the first defendant on 1 July 2002, and a large number of other documents discovered at that time, were identified in a verified list of documents as the subject of a claim for "legal professional privilege". The claim was more accurately identified as a claim for client legal privilege under ss 118 and 119 of the Evidence Act in proceedings brought by Mr Bailey to challenge that claim. That privilege claim was first challenged in proceedings before James J (Bailey v Department of Land and Water Conservation, Supreme Court (NSW), 22 May 2008, unrep). Despite attempts by Mr King to recharacterise the nature of the privilege in final submissions before me, there was no apparent dissent from the claim being identified as of that kind before James J and later on appeal to the Court of Appeal.

In the proceedings before James J, all documents in respect of which privilege was claimed fell into one of five classes identified by his Honour as follows: 1. File notes by legal officers of the Department; 2. Communications between a Departmental legal officer and a solicitor in the Crown Solicitor's Office; 3. Communications between a Departmental legal officer and a Departmental regional officer for the purpose of acquiring evidence; 4. Communications between the barrister briefed by the Crown Solicitor and either a solicitor in the Crown Solicitor's Office or a Departmental legal officer; and 5. Communications between a Departmental legal officer and a witness or potential witness or a person who might provide information for the purpose of the proceedings.

It would appear that the unredacted prosecution memorandum would not fall within class 4 since as at 1 July 2002 there was no evidence that counsel had been briefed to prosecute. Any further refinement of whether it fell within classes 1-3 or 5 was not reflected in the judgment of James J or the judgment of the Court of Appeal although it would appear that it would be unlikely to fall within class 5.

James J did order production for inspection of all documents relating to the assessment of the offence according to the Director of Public Prosecution's Guidelines referred to in 3.8 of the prosecution memorandum. That document was tendered in these proceedings as Exhibit S. He upheld the Department's claim over the unredacted prosecution memorandum and over the entirety of the recommendation from the Region.

The plaintiffs sought leave to appeal. Ten grounds of appeal were relied upon. Although leave was granted, the appeal was dismissed (Bailey v Department of Land and Water Conservation [2009] NSWCA 100; 74 NSWLR 333).

In dismissing the ground of appeal that alleged a failure on the part of the defendants to identify "the client" for the purpose of ss 118 and 119 Tobias J said: [46] Section 118 of the Evidence Act is referred to as "legal advice privilege". Section 119 is referred to as "litigation privilege". Each are in the following terms: "118. Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer, or (b) a confidential communication made between 2 or more lawyers acting for the client, or (c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer, or another person, for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. 119. Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential document (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party." [47] It is to be noted that under s 118 the relevant communication must have been made or prepared for the dominant purpose of the lawyer providing legal advice to "the client". Under s 119 the relevant communication or document must have been made or prepared for the dominant purpose of "the client" being provided with professional legal services relating to proceedings existing, anticipated or pending, in which "the client" is or may be a party. The word "client" is defined in s 117(1)(b) of the Evidence Act to include, relevantly, "an employee or agent of a client".

His Honour went on to confirm the correctness of the finding of the primary judge that the first defendant was "the client" for the purposes of both sections and at [52], so far as concerned the operation of s 119, that those Departmental legal officers providing or receiving advice were the agents of the first defendant "for the purpose of providing him with such information as was appropriate to enable him to ultimately determine whether or not to proceed to prosecute". In making that particular observation I do not understand his Honour to be expressing any view as to the content of the communication redacted from the prosecution memorandum or that the "information" he was given was legal advice.

One of the arguments advanced concerned the first defendant's answer to interrogatories 13 and 14. Although it is unnecessary to refer to the argument in detail it is necessary to set out the interrogatories in full since they were relied upon in argument before me, not as constituting an implied waiver (the argument rejected by Tobias JA) but to support Mr King's submission that, contrary to what was put by Mr Williams, the first defendant did rely on legal advice before approving the prosecution. The interrogatories and their answers were as follows: 13. Was a decision memorandum prepared by or for the person whom made the decision to prosecute the First [Appellant]? 13A. A memorandum ('the decision memorandum') containing background matters, comment, legal advice and recommendations was provided to the Prosecutor. 14. What were the findings or material questions of fact made by the Prosecutor in deciding to prosecute the First [Appellant]? If the findings are recorded in a document/s provide copies of same with your answer. 14A. In substance the material findings of fact are contained in the decision memorandum a redacted version of which (excluding legal advice) is annexed hereto. [This is the prosecution memorandum.] [Emphasis added.]

Read carefully, the answer to interrogatory 14 does not support the submission Mr King contends for. The question posed invites the first defendant to identify the "findings or material questions of fact" made by him in deciding to prosecute and, if recorded in a document, to provide a copy of that document. The answer provided by the first defendant is twofold: first, that there are material findings of fact and, second, that they are in the "decision memorandum" (referred to in this judgment as the prosecution memorandum) which he annexes in a redacted form, that is, "excluding legal advice". Properly understood, he is not admitting that legal advice was part of the material he took into account, rather that the document which contains the material findings also contains legal advice.

Insofar as interrogatory 13 is relied upon by Mr King as constituting an admission that the first defendant relied upon legal advice before approving the prosecution, on a proper construction of the first defendant's answer to that interrogatory the submission also fails for the same reason.

Of the remaining grounds of appeal, four concerned the question of waiver and, in particular, the proposition that the respondents (the defendants in these proceedings) had impliedly waived client legal privilege such that the unredacted form of the prosecution memorandum should be produced. That argument was dealt with at length by Tobias JA and rejected.

At [137]-[138] Tobias JA did make clear that if in the conduct of the substantive proceedings the first defendant asserted that his decision was based upon or influenced by legal advice (or that it was otherwise advanced or suggested by counsel on his behalf) then the question of waiver of the claim for client legal privilege over the unredacted form of the prosecution memorandum might arise (see Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 411). (Observations to similar effect were noted by Garling J as having been made by Allsop P in the course of argument on the appeal (see Bailey v Director-General, Department of Natural Resources [2013] NSWSC 515).

Despite repeated attempts by Mr King in his conduct of the proceedings to access the privileged material, including by seeking access through the cross-examination of Ms Paget-Cooke to the content of the material over which privilege was claimed; by calling on repeated occasions for the prosecution memorandum in its unredacted form and by submitting at various intervals in the proceedings that privilege had been waived, he was unsuccessful. In final submissions he took a different approach. It was at that time that he sought to persuade me by necessary inference from all the evidence, that I would find the first defendant in fact relied upon legal advice before he initiated the prosecution and, further, that the privileged information redacted from the prosecution memorandum was that legal advice and that it confirmed the correctness of the Allens' advice (the independent legal advice referred to by Ms Paget-Cooke in the prosecution memorandum at 3.5) or was not inconsistent with it. He submitted that these findings lead inevitably to the conclusion that the proceedings were commenced by the first defendant and maintained by him without reasonable and probable cause according to both the subjective and objective aspects of that element of the malicious prosecution claim (and probably maliciously).

There was no direct evidence as to when, after the prosecution memorandum was forwarded by Ms Paget-Cooke and received by the Executive Services Branch of the Department on 26 June 2002, the privileged communication, or a notation of it, was applied to the document before it was signed by the first defendant on 1 July 2002. Neither was there any direct evidence as to the provenance of the privileged material or the extent of its connection with the question whether Mr Bailey should be prosecuted. Mr King submitted that I would be well satisfied by the fact of the claim itself and its inclusion on the prosecution memorandum that the privileged information was legal advice bearing directly on that question. He also submitted that the answer to interrogatory 14 says as much, a submission I have rejected. Further, he submitted that I could safely infer that it was legal advice concerning the construction of the "rural structures/farm dam exemption", and that it was not inconsistent with the Allens' advice, but that the first defendant approved the prosecution notwithstanding that advice in order to preserve or advance the Department's preferred policy position in its dealings with irrigation farmers. It will be necessary to give close consideration to that submission since it is relied upon to support Mr King's further submission that a Jones v Dunkel inference should be drawn against the first defendant because he did not give evidence justifying or explaining why, having received that legal advice, he approved the recommendation to prosecute.

Mr Williams submitted that the privilege claimed over the unredacted prosecution memorandum, first made in pre-trial discovery and maintained thereafter, does not allow for any inference to be drawn as to the content of the communication the subject of the claim and that the inferences for which Mr King contends are matters of pure speculation.

Mr King relied upon three different iterations of the prosecution memorandum produced by the defendants on discovery and tendered by him in the proceedings as support for the proposition that the redacted material was legal advice; that it addressed the viability of the prosecution; and that it was legal advice that accorded with the tenor of the Allens' advice. He submitted that because that is an inference that can and should be drawn, it operates as an exception to the principle that no adverse inference can be drawn against a party from the fact that privilege is claimed over a document or documents (see Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87 per Hodgson J at [94] and most recently considered and endorsed in Cooper v Hobbs [2013] NSWCA 70).

In Antico Hodgson J considered a claim for legal professional privilege in relation to parts of the minutes of a company's board meeting which recorded statements made by the director who was also a partner in the firm of the company's solicitors, and which summarised part of the legal advice he had given in his capacity as a solicitor. Although his Honour was primarily concerned with whether the privilege had been impliedly waived and whether fairness dictated that the document be produced in its entirety, he also had occasion to consider what his Honour regarded as the settled principle in Wentworth v Lloyd (1864) 10 HL Cas 589 at 590-592 that no adverse inference can be drawn from the fact that a claim of privilege has been made. His Honour continued at [94]: ... However, it seems to me clear that if there is other evidence from which the court may draw an inference as to the content of legal advice (or as to the commission of an offence in the case of the privilege against self-incrimination), the court may be able to draw that inference on the balance of probabilities in the absence of contrary evidence from the person claiming the privilege. What the court cannot do is to gain extra assistance in drawing that inference from the Armory v Delamirie or Jones v Dunkel principle. A fortiori, the court cannot draw an adverse conclusion if there is no other evidence supporting the conclusion. Most particularly, the court must not draw any adverse inference sub silentio without referring to it.

In Mr King's submission, the three iterations of the prosecution memorandum provide evidence from which I can draw the primary inference that the redacted material was legal advice confirming the correctness of the Allens' advice, and the further inference that after the first defendant signed and dated the document on 28 June 2002 signalling that the prosecution should not be commenced, he prevaricated and/or changed his mind. Mr King submitted this further undermines the integrity of the first defendant's decision to approve the prosecution memorandum when he signed the document a second time on I July 2002.

Were any of these submissions to have had any force (and I am satisfied for the reasons which follow that they do not) they might have supported the related submission that a Jones v Dunkel inference should be drawn adverse to the first defendant because after relying upon legal advice he elected not to give evidence about his actual state of persuasion that the case was a proper one for prosecution.

Mr King submitted that a number of inferences should be drawn from the production of three different versions of the prosecution memorandum in the course of discovery (tendered in the proceedings as Exhibits A/6/28, DD and EE) from which the further inference should be drawn that the content of the material redacted from Exhibit A/6/28 was legal advice concerning whether Mr Bailey should be prosecuted, that was at least consistent with the Allens' advice, if not confirmatory of it.

The exhibits were referred to in submissions as "different versions" not because there was any difference in their content. To the contrary. The information under various subject heads in the document prepared by Ms Paget-Cooke (as set out in full at [369]) was identical in each version. The "differences" relied upon by Mr King were as follows: (a) Exhibit DD was the form of the document when it was received by the Executive Services Branch on 26 June 2002. It was not in issue that the prosecution memorandum was received in the Executive Services Branch on that date after which it was directed to the first defendant as the Director General of the Department for his attention, probably passing through the hands of Chris Guest, the Deputy Director of the Department, and Paul Percival the General Manager of the Legal and Compliance Branch for their attention. It was also common ground that at that time it was unsigned and did not contain the privileged material. Ms Paget-Cooke did not sign Exhibit DD although nothing turns on that fact. (b) Exhibit EE was in the same form as Exhibit DD with the signature of the first defendant and the handwritten date "28 June 2002" against the block form of his designation as Director General. The signature or initials of other senior officers of the Department, including Mr Guest and Mr Percival, were also applied to the document on that date. Mr King submitted that it can be safely inferred that the redacted material was probably applied to Exhibit EE before Mr Guest initialled the document because it appears above his signature line whilst his initials appear on the right-hand side of the document, presumably because the privileged material left him insufficient room to sign the document in the space provided. It also bears a note (apparently in the handwriting of the first defendant) "Guest, Percival, can we please discuss". An email sent at 3.50pm on 28 June (a Friday) confirming that a meeting had been scheduled for the following working day (Monday 1 July 2002). (c) Exhibit A/6/28 was the document bearing all the marks on Exhibit EE but signed by the first defendant on 1 July 2002, and bearing his handwritten notation in the following terms: "Paul P Following discussion 1/7/02 agreement to proceed with the prosecution as recommended". This form of the document also contained the privileged material.

As I have noted, Mr King submitted that the fact that Exhibit EE was signed by the first defendant on 28 June 2002, but the decision to prosecute made by him on 1 July 2002 evidenced either prevarication on his part as to whether to prosecute or a reversal of his decision not to prosecute, a decision which I would be satisfied he made when he signed the document on 28 June after reading the legal advice appended to the document. He submitted that because neither the first defendant nor the other Departmental officers gave evidence about what happened on 28 June, I would draw the further inference that he (and they) had very considerable doubts as to the sufficiency of the case for prosecution, because of the weight of the Allens' advice and their own legal advice that it was probably correct and, accordingly, that the "rural structures/farm dam exemption" would provide Mr Bailey with an outright defence to the allegation of illegal clearing. Mr King submitted that despite what I would infer were the first defendant's obvious misgivings about whether to prosecute in these circumstances, the decision to prosecute was ultimately made by him the next working day (1 July) leading inevitably to a finding that it was done without reasonable and probable cause and probably maliciously. He submitted that this was an inference more readily drawn in the absence of the first defendant giving evidence explaining the timing of events, the persons he spoke to and what was discussed, and why he regarded the case as a proper case to be prosecuted.

Mr Williams submitted that the differing iterations of the prosecution memorandum do nothing to displace the settled principle in Antico that subject only to waiver, or where an issue is raised as to person's state of mind to which it is said that legal advice is likely to have contributed, no adverse inference can be drawn against a party from a claim of legal professional privilege. He submitted that it is contrary to authority that a Jones v Dunkel inference can arise from the failure of the person claiming the privilege to give evidence as to the contents of the material the subject of the privilege or the circumstances in which the advice was sought or given (or in this case the privileged communication was made). I accept that submission.

In addition, Mr Williams submitted that there is nothing capable of being inferred from the consideration given to the prosecution memorandum by the first defendant and other senior Departmental officers between 28 June and 1 July (as evidenced by the ultimate adoption of the recommendation by the first defendant on 1 July 2002 after discussion with them) which would entitle me to draw any of the other inferences contended for by Mr King. I accept that submission.

It seems to me that signing the prosecution memorandum on 28 June may signify nothing more than the first defendant's receipt of it on that date with the appointment of a meeting to discuss its contents then scheduled by him before making any decision approving the recommendation. In this way full consideration could be given to the various issues to which the prosecution memorandum refers, including but not limited to the "rural structures/farm dam exemption" in 3.4 which, as Mr Williams pointed out, appears from the original of Exhibit EE to be underlined in the same pen as the first defendant used to sign the document.

As Mr Williams submitted the first defendant's signature on the prosecution memorandum accompanying the words in his hand writing "following discussion on 1/7/02 agreement to proceed with prosecution as recommended" allows for no conclusion other than that after discussion with other Departmental officers as co-signatories to the document, he ultimately relied upon the content of the prosecution memorandum, and Ms Paget-Cooke's recommendation that Mr Bailey be prosecuted, in directing that proceedings be instituted. Mr Williams submitted that a decision made following discussion with senior officers, as reflected in the first defendant's endorsement on the document and his answers to interrogatories, is indicative of a disinterested and professional consideration of the question whether a prosecution should be initiated after an assessment of the matters bearing upon that question, including whether a prosecution for illegal clearing was justified to enforce the statutory objects in the Native Vegetation Conservation Act.

In short, Mr Williams submitted that none of the various iterations of the prosecution memorandum reveal anything about the consultative process in which the first defendant engaged with senior officers, including the Director General as the head of the Department, or the content of the privileged communication. He also submitted that the process of consultation between the first defendant and other Departmental officers is irrelevant to the question whether Mr Bailey has proved an absence of reasonable and probable cause in the decision to approve the recommendation to prosecute and, to the extent that there was any discussion about the content of the privileged communication, they could properly object to giving that evidence. He submitted, that being so, it also follows that because neither the first defendant nor the co-signatories to the prosecution memorandum could give relevant evidence about those matters, a primary premise for the invocation of the principle in Jones v Dunkel falls away.

The submission that the first defendant signed Exhibit DD on 28 June 2002 as evidencing a decision that the prosecution should not proceed and that he changed his mind later that day or over the intervening weekend because of the combined force of the Allens' advice and his own legal advice, are not inferences that can be safely drawn from the evidence whether the three iterations of the prosecution memorandum or otherwise. They are a matter of mere assertion.

As I have already observed, there is no direct evidence as to precisely when, or in what circumstances the privileged communication, or a notation of it, was applied to the document before it was signed by the first defendant on 1 July 2002. Neither was there any direct evidence concerning the provenance of the privileged material or the extent of its connection with the question whether Mr Bailey should be prosecuted. In short, save only for the assertion of the privilege claim by the defendants during pre-trial discovery over the unredacted prosecution memorandum, and the fact that the privileged material was applied to the document at some time after it was received in the Executive Services Branch of the Department on 26 June 2002, there was no evidence permitting any inference to be safely drawn as to the content of the communication or its materiality to the issues to which the claim for malicious prosecution gives rise.

Having rejected Mr King's submission that I would infer that the redacted material was legal advice that supported the Allens' advice, Mr Bailey must make his case as it concerns the first defendant's state of persuasion as to the sufficiency of the material to justify the initiation of proceedings largely, if not exclusively, by inference from the content of the prosecution memorandum and such other materials as the plaintiff can establish that the first defendant had access to when he signed it on 1 July 2002.

Mr King also submitted that an adverse inference should also be drawn against the first defendant not only because he did not give evidence about the legal advice he received before commencing the proceedings, but because he did not give evidence justifying or explaining the maintenance of the prosecution after March 2003 at a time when the Department's view of the limited operation of the "rural structures/farm dam exemption" had been rejected by Bignold J in the Jackson proceedings and when the first defendant must be taken to have appreciated that the prosecution of Mr Bailey, which raised precisely the same issue, was doomed to fail.

The question whether a Jones v Dunkel inference should be drawn at all will be considered after I have reviewed the evidence upon which Mr Bailey relies to prove the first defendant's decision to prosecute was without reasonable and probable cause. Whether I am ultimately persuaded that a Jones v Dunkel inference should be drawn against the first defendant, it bears restating that in neither the first defendant's conduct of the proceedings through his counsel nor in his final submissions was it asserted that his decision to initiate or maintain proceedings was based upon legal advice or, more particularly, that he sought or was provided with any advice as to the operation of the "rural structures/farm dam exemption" in light of the Allens' advice before proceedings were instituted. Neither was it asserted that he sought legal advice after the decision in Jackson as to whether they should be maintained.

Mr Williams submitted that the prosecution memorandum and the accompanying material provided a sufficient factual and legal foundation for the Director General to form the view that what was presented for his consideration was a proper case for prosecution. He emphasised, as he was entitled to, that it is for the plaintiffs to prove, by reference to the evidence and any inferences legitimately drawn from the evidence that the decision was made without reasonable and probable cause (and for a purpose ulterior to the proper processes of the criminal law) which he has failed to do.

Before turning to consider the content of the prosecution memorandum and Ms Paget-Cooke's evidence concerning its preparation, I pause to make the observation that the prosecution memorandum signed and dated by the first defendant on both 28 June and 1 July, and the other versions of the prosecution memorandum upon which reliance was placed, were all tendered by Mr King. Without presuming what might have been the attitude of the defendants were Mr King to have elected to approach proof of Mr Bailey's claim without the tender of the prosecution memorandum, and without venturing any concluded view as to the sufficiency of the evidence in his case without its tender, I simply observe that the Allens' advice and the correspondence between the Crown solicitors and PwC concerning it may have been sufficient for the defendants to have had a case to answer. If that were the case, and were the defendants to have sought to tender the prosecution memorandum in their case as evidencing the materials upon which the first defendant relied in deciding to prosecute without calling him or any one or more of the signatories to attest that fact, or to the circumstances in which the document was signed by them, an objection to its tender may have been sustained. I should make it clear I make no finding to that effect noting the potential application to proof of Part 3.2 of the Evidence Act 1995 (NSW).

In any event, that was not the approach that Mr King took on his client's behalf. He elected to tender the executed and notated prosecution memorandum and to attack its sufficiency to support a prosecution, in large part through his cross-examination of Ms Paget-Cooke. This approach allowed the defendants to take the position in defence of the malicious prosecution claim that the content of the prosecution memorandum, and the fact that it was executed by the first defendant with an accompanying notation in his handwriting, more than adequately counters the submission that the decision to prosecute was without reasonable and probable cause.

Mr King took a different approach to proving Ms Paget-Cooke's actual state of mind (or her state of persuasion) as to Mr Bailey's guilt. Although it is clear she also relied upon the information collected and collated by regional compliance officers in recommending that Mr Bailey be prosecuted, unlike the first defendant, she was a witness called in the defendants' case and her actual state of mind or belief in the sufficiency of the material to justify recommending that criminal proceedings be initiated was able to be tested in cross-examination.

In summary, she gave evidence that before recommending that Mr Bailey be prosecuted she personally assessed and considered whether a breach (or breaches) of s 21(1)(a) of the Native Vegetation Conservation Act had been committed; whether there was evidence available to establish each of the constituent elements of that offence referable to the criminal standard; whether any of the exemptions from the need to obtain development consent applied and, in addition, whether the various considerations outlined in the Director of Public Prosecutions Policy and Guidelines warranted the initiation of criminal proceedings.

Mr King submitted that in cross-examination Ms Paget-Cooke was revealed to be unable to satisfactorily account for what he contended was her flawed legal analysis of the matters material to proof of even a prima facie case against Mr Bailey for illegal clearing, and that her errors were so egregious I would be compelled to find that she could not have had any honest belief in Mr Bailey's guilt when she prepared the prosecution memorandum.

Quite apart from what Mr King submitted was the exposure of Ms Paget-Cooke's incompetence, he also submitted that she was a witness against whom adverse credit findings should be made including, but not limited to, her explanation for dismissing the Allens' advice as "unpersuasive". Mr King also invited me to conclude that she dishonestly attempted to claim that she gave consideration to the exemption in s 12(f) of the Native Vegetation Conservation Act when, on a fair reading of her evidence, she was shown not to have given any consideration to it at all. He also submitted that I would be satisfied that she lied when she denied having any memory of Ms Savage voicing her strong dissent from any regional recommendation that Mr Bailey be prosecuted, and that I would be satisfied from Ms Savage's evidence that Ms Paget-Cooke was well aware of the fact that the recommendation from the Region was that the prosecution should not proceed and that Ms Paget-Cooke either discounted that as a consideration or positively misrepresented the Region's view in the prosecution memorandum.

He also relied upon his cross-examination to support the submission that even if he failed to prove that either or both the first defendant and Ms Paget-Cooke did not have a subjective belief that the case was a proper case to be prosecuted, the case lacked objective legal sufficiency and that proof of the absence of reasonable and probable cause is established on that basis with a finding of malice made by necessary inference from that fact.

Whether the attack is upon Ms Paget-Cooke as author of the prosecution memorandum or because she is the source of the material upon which the first defendant relied in initiating the proceedings, the question whether Mr Bailey has made out the first of the two separate elements of a malicious prosecution claim is a stark one. It can be conveniently put this way. Has he discharged the burden of proving that the content of the prosecution memorandum and the related question of Ms Paget-Cooke's authorship of it, including the various matters she took into account as supporting her recommendation that he be prosecuted (and those she did not take into account) and the first defendant's reliance upon that recommendation in the separate consideration he gave to whether he would approve the recommendation to prosecute, establishes that the prosecution was probably initiated without reasonable and probable cause.

As concerns the first defendant's state of mind (or state of persuasion) in the maintenance phase of the proceedings, it seems to me that Mr Bailey must establish that the first defendant probably acted without reasonable and probable cause given both first instance decisions in the Land and Environment Court and, to the extent that it assists his case, to the correspondence between the parties at that time.

It is no part of the case the first defendant advances in defence of his maintenance of the prosecution after March 2003 that he sought or was provided with advice after the Jackson decision as to whether Bignold J's interpretation of the exemption was sustainable or, for that matter, whether his Honour's construction of the ambit and operation of the exemption of s 12(f) of the Native Vegetation Conservation Act might be successfully challenged by the defendants in that case.

Even if legal advice were not sought by the first defendant or provided before the proceedings were commenced, Mr King submitted that the first defendant's determination to maintain the proceedings in light of the obvious correctness of the Allens' advice in Bignold J's decision in Jackson, evidenced a stubborn refusal on his part to accept the fact that his decision to prosecute Mr Bailey was demonstrably unsustainable. Mr King submitted that the resolve of the first defendant to "bludgeon on" with a prosecution regardless of that fact, proves the proceedings were maintained after March 2003 maliciously and in the absence of reasonable and probable cause. Mr King submitted that there being no evidence that the Allens' advice was reviewed or reconsidered after the decision in Jackson (indeed no evidence that it was considered at all) despite repeated opportunities to do so, is also evidence in proof of both elements of the tort being in the maintenance phase of the proceedings. Mr King submitted that to maintain the proceedings in this Court by way of a case stated under s 5E of the Criminal Appeal Act after Talbot J adopted and followed Bignold J's broad construction of the "rural structures/farm dam exemption" in SEPP 46 is proof of the same attitude.

If Mr Bailey's malicious prosecution claim is made out referable only to the first defendant's maintenance of proceedings in the Land and Environment Court after the decision in Jackson in March 2003 and/or after those proceedings and the decision by Talbot J in June 2003 by bringing proceedings in this Court after that date, the damages that might flow from that limited finding was not separately addressed by Mr King is closing submissions.

In A's case at [40] the High Court emphasised that malice is a separate element in a malicious prosecution claim and that while absence of reasonable and probable cause, in a given case, may be some evidence of malice, they remain separate elements which the plaintiff bears the burden of proving on the balance of probabilities.

At [91] the Court held that malice is established where the prosecutor's sole or dominant purpose in initiating or maintaining proceedings is proved to be for an improper purpose, or because of an illegitimate or oblique motive, and not the proper invocation of the criminal law. The fact that there might be a purpose extraneous to carrying the law into effect, if that were proved to be the case, is insufficient to establish malice unless it can be shown that the extra curial purpose is (or probably was) the primary or dominant reason proceedings were commenced.

At [92] - [95] the following further observations were made: [92] Purposes held to be capable of constituting malice (other than spite or ill will) have included to punish the defendant and to stop a civil action brought by the accused against the prosecutor. But because there is no limit to the kinds of other purposes that may move one person to prosecute another, malice can be defined only by a negative proposition: a purpose other than a proper purpose. And as with absence of reasonable and probable cause, to attempt to identify exhaustively when the processes of the criminal law may properly be invoked (beyond the general proposition that they should be invoked with reasonable and probable cause) would direct attention away from what it is that the plaintiff has to prove in order to establish malice in an action for malicious prosecution - a purpose other than a proper purpose. [93] Two further observations should be made about the element of malice. First, its proof will often be a matter of inference. But it is proof that is required, not conjecture or suspicion. Secondly, the reference to "purposes other than a proper purpose" might be thought to bring into this realm of discourse principles applied in the law of defamation or in judicial review of administrative action. No doubt some parallels could be drawn with the principles applied in those areas. But drawing those parallels should not be permitted to obscure the distinctive character of the element of malice in this tort. It is an element that focuses upon the dominant purpose of the prosecutor and requires the identification of a purpose other than the proper invocation of the criminal law. [94] At a time before the development of what now is known as administrative law, significant questions of public law, and of abuse of power by public officials, were determined as issues in tort actions. What may be understood as echoes of the administrative law principles respecting improper purpose in the exercise of a statutory power may sometimes be heard in the reference in the tort of malicious prosecution to improper purposes of prosecutors. [95] However, this does not warrant any conclusion that a failure to take account of relevant considerations, or a taking account of irrelevant considerations, would necessarily constitute malice for the purposes of this tort. The tort of malicious prosecution is a private law remedy that is not available to all who have been prosecuted unsuccessfully. It is available only upon proof of absence of reasonable and probable cause and pursuit by the prosecutor of some illegitimate or oblique motive. Lord Goff of Chieveley and Lord Hope of Craighead said, of the related but distinct tort of malicious procurement of a search warrant: "The sole function of the tort is to enable the person to recover damages, and in regard to that private law remedy the guiding principle is that it is for the plaintiff to make out his case. It is for him to prove that the search warrant was obtained maliciously and that there was a want of reasonable and probable cause." A like statement may be made in respect of the tort of malicious prosecution.

Mr King submitted that in considering whether malice has been proved in this case I should apply what Isaacs J said in Varawa v Howard Smith Co Ltd (1911) 13 CLR 35 at 100 that "the want of reasonable and probable cause is always some, although not conclusive, evidence of malice". That approach is contrary to what the High Court has held to be the proper approach. In A's case, their Honours said (at [90]): No little difficulty arises, however, if attempts are made to relate what will suffice to prove malice to what will suffice to demonstrate absence of reasonable and probable cause. In particular, attempts to reduce that relationship to an aphorism - like, absence of reasonable cause is evidence of malice, but malice is never evidence of want of reasonable cause - may very well mislead. Proof of particular facts may supply evidence of both elements. For example, if the plaintiff demonstrates that a prosecution was launched on obviously insufficient material, the insufficiency of the material may support an inference of malice as well as demonstrate the absence of reasonable and probable cause. No universal rule relating proof of the separate elements can or should be stated.

Mr King submitted that this was a case where the insufficiency in the material grounding the prosecution was so patent that it supplied proof of both elements. He submitted that not only was the evidence relied upon to support the prosecution of Mr Bailey for illegal clearing objectively deficient, and the legal analysis by Ms Paget-Cooke of the essential elements of the offence fundamentally flawed, but the weight of the Allens' advice, to the simple effect that the clearing for the building of a farm dam was exempt from the need to obtain consent under the Native Vegetation Conservation Act, was such that the first defendant's apparent determination to ignore that advice evidenced both malice, and an absence of reasonable and probable cause.

Mr King further submitted that the failure of the first defendant and any of the senior officers who were signatories to the prosecution memorandum to give evidence, either generally in defence of the decision to prosecute, or as to the matters that were discussed and considered before the memorandum was signed on 1 July 2002, also supplies proof of malice by application of the principle in Jones v Dunkel.

In identifying the malice that actuated the prosecution of Mr Bailey, Mr King submitted that the evidence compels the conclusion that he was prosecuted, not to punish him for illegally clearing the Strip but for the ulterior purpose of "showing him up" (as I understand the submission, to make an example of him) for clearing in defiance of the Department's advice, as expressed through Mr O'Brien, that he should not clear the Strip before obtaining a Part 8 approval to build the third water storage unit. Further evidence of malice was said to be inherent in Mr O'Brien and Mr Gardner warning him in July 2000 that if he cleared the Strip without consent he would be prevented from building the dam. That approach was said to be consistent with Departmental policy, unsupported by legislation or any published guideline, that the clearing of large tracts of native vegetation for large scale irrigation farming in the Barwon Region should be discouraged, and that such exemptions as applied to clearing for farming purposes under SEPP 46 should not be interpreted as applying to farming on that scale. Mr King submitted that it was the Department's intransigence, and the stubborn refusal of the first defendant as the head of the Department to view the breadth of the rural structures exemption under SEPP 46 as including a farm dam of the scale and kind that Mr Bailey was proposing to construct, that was the sole motivation in his initiating the criminal proceedings against Mr Bailey and maintaining them thereafter, and this was contrary to the power to prosecute being exercised in proper invocation of the criminal law.

Mr King also submitted that the approach of Ms Paget-Cooke as the legal officer whose role and function was to consider whether a prosecution for illegal clearing under the Native Vegetation Conservation Act was justified (on any view, the legal officer the Director General relied upon and was entitled to rely upon for advice) and the role she played as a prosecutor for the purpose of the attribution of tortious liability was also replete with evidence of malice in the same sense. He submitted that the Department's fixed view of the limits of the exemption in SEPP 46 infected Ms Paget-Cooke's appraisal of the various matters that needed to be carefully and independently considered by her before a prosecution was recommended. He submitted that her evidence across a range of issues supports the conclusion that she acted maliciously in recommending that the prosecution proceed, being motivated to "do her best to help her employers at the expense of the truth".

Mr King submitted that Ms Paget-Cooke's determination to pursue the prosecution in order to defend the Department's policy position was amply illustrated by her ignoring the firm and express opinion of Ms Savage, the acting regional compliance manager, that Mr Bailey should not be prosecuted. Mr King submitted that I would be satisfied that Ms Paget-Cooke was not truthful when she claimed no recall of Ms Savage having recommended against Mr Bailey being prosecuted and that I would prefer the evidence of Ms Savage to the effect that she had communicated her views to Ms Paget-Cooke.

Mr King also submitted that I would also be satisfied that the written recommendation from the Region in the form of Exhibit O which had Ms Savage's name handwritten on it was placed on the document without her authority to suggest a uniformity of view when this was not the case.

Mr King submitted that that since Ms Paget-Cooke well knew that the views of the officers in the Region carried significant weight on the question of whether a prosecution should be initiated, for the prosecution memorandum to suggest the Region had approved the prosecution when she knew Ms Savage was of the contrary view should reflect adversely on her credit and undermine the weight of her evidence generally. Mr King accepted that that submission depends upon my being persuaded that the evidence of Ms Savage should be preferred over that of Ms Paget-Cooke and further that Exhibit O is material to that enquiry.

Mr King also submitted that because Ms Paget-Cooke acknowledged that there was a lack of clarity in the way the rural structures exemption under SEPP 46 operated, to use the prosecution of Mr Bailey as a "test case" (the approach Ms Savage attributes to those she described as her "superiors") was to use the prosecution for an improper purpose, thereby evidencing malice.

Mr King also submitted that the attitude of the Departmental officers to the Allens' advice is further evidence of malice, including, in particular, the attitude of Ms Paget-Cooke in dismissing it, and the attitude of the Director General by failing to obtain advice to address it or to review or reconsider it after the decisions of first Bignold J and then Talbot J upheld the correctness of the advice. In this regard he drew attention to Mr Dines' evidence that he realised the importance of the Allens' advice when he read it and that he sent it immediately to his superiors for their consideration but that he received no response before he retired in October 2001. Mr Dines agreed in his evidence in cross-examination that he felt "frustrated" that he had received no response. Mr King also submitted that Mr Bailey was never provided with any explanation as to why his reliance on the Allens' advice was misplaced, either before or after the prosecution was commenced, and none was referred to in any correspondence sent to the Crown Solicitor's Office by PwC solicitors protesting against the prosecution and seeking clarification of the prosecution case. This, he submitted, is also evidence of malice.

In summary, the defendants submitted that there is nothing in Ms Paget-Cooke's evidence that allows for a finding that she was actuated by any "improper" or "collateral" purpose in recommending that proceedings against Mr Bailey be instituted. The defendants submitted that elevating Ms Savage's views about the viability of the prosecution to the status attributed to it by Mr King, namely as evidencing a collegiate Regional view that Ms Paget-Cooke either ignored or egregiously misstated in the prosecution memorandum, was not supported by her evidence. The defendants submitted that there was nothing in the first defendant's decision to prosecute that gave rise to any suggestion that it was taken without reasonable and probable cause such as to provide any support for a finding of malice by inference and nothing elsewhere in the evidence to support that finding.

Mr King submitted that the failure of the first defendant on his own behalf and the third defendant by the failures of the Departmental officers, including the senior officers to whom the advice was referred by Mr Dines (Messrs Eade and Hannan), to obtain any considered advice in response to the Allens' advice, but simply to prosecute for what the advice said was allowed, evidences bad faith and malice being inconsistent with the legitimate enforcement of the law and consistent with some oblique motive.

In order to consider Mr King's submission that the terms of the prosecution memorandum evidences that the prosecution was initiated without reasonable and probable cause and maliciously, and to appreciate what Mr Williams submitted to the contrary, it is necessary to set the prosecution memorandum out in full: 1. ISSUE 1.1 Whether to prosecute Bruce Clyde Bailey, landholder, under the Native Vegetation Conservation Act 1997 (NVC Act) for illegally clearing native vegetation. 2. BACKGROUND 2.1 On 31 July 2000 Departmental officers attended the property "Hazeldene", Boomi (which includes Lot 23 DP 705422) to carry out a pre-application inspection for an approval under Part 8 of the Water Act 1912 (Water Act). 2.2 On arrival the officers found that clearing of native vegetation had occurred over an area which was subsequently measured and found to be approximately 107 hectares. 2.3 A more recent inspection of the property, on 10 January 2002 revealed that further clearing of native vegetation had occurred over an area of approximately 13 hectares adjacent to the original area of clearing. 2.4 Clearing of native vegetation has therefore occurred over a total area of approximately 120 hectares. 2.5 The property is owned jointly by Bruce Clyde Bailey and Janet Beatrice Shafik-Bailey. However, it appears that Ms Shafik-Bailey does not play any part in the management of the property. 2.6 Mr Bailey has been informally interviewed and admits to having authorised the clearing. He has further stated that the clearing was carried out in order to construct a reservoir, which would be used as a water supply for his proposed cultivation on the property. This would be a change in land use from grazing which was carried out previously. 2.7 Mr Bailey has refused to submit to a formal interview and has not identified the contractors who carried out the clearing. 2.8 It is proposed to issue a remedial direction under section 47 of the NVC Act in order to remediate the cleared area by fencing it off and allowing the vegetation to regenerate naturally. 2.9 Full details of the offences and relevant considerations are included in the Recommendation received from the Region, which is in the form of a Memo addressed to Legal and Compliance dated 28 May 2002. (Attachment 1) [NB This was the subject of a successful privilege claim.] 3. COMMENT 3.1 No development consent has been issued in respect of the clearing. The clearing is not excluded from the operation of the NVC Act under sections 9, 10 or 12 of the NVC Act. 3.2 No approval has been issued under Part 8 of the Water Act. 3.3 A total of 4 hectares of the clearing would be permitted under the Minimal Clearing exemption. 3.4 Mr Bailey claims that the clearing was permitted under the Rural Structures exemption. The Department's position is that this exemption was intended to permit the construction and maintenance of every day farm structures, which would include small scale farm dams, but that it does not permit the construction of a large reservoir intended to facilitate the establishment of a new agricultural enterprise. 3.5 Mr Bailey says that he based his decision to undertake the clearing on independent legal advice. The Department has seen this advice and does not find it persuasive. 3.6 Mr Bailey has also claimed that the native vegetation cleared falls within the Regrowth exemption, being regrowth less than 10 years of age. Field data obtained during the Department's investigation, and interpretation of aerial photographs, indicate that the majority of the cleared vegetation was over 10 years of age. 3.7 The Barwon Region has requested that Mr Bailey be prosecuted as the person who authorised the clearing. 3.8 An assessment of the offences according to the DPP Prosecution Policy and Guidelines confirms that the circumstances warrant prosecution. 3.9 Factors which may mitigate the penalty, should Mr Bailey be convicted, are: ● that he is a first time offender ● that he relied on independent legal advice ● that the scope of the Rural Structures exemption is not clearly expressed. 3.10 In view of the large area cleared and the legal question relating to the interpretation of the Rural Structures exemption, it would be appropriate for this prosecution to be brought in the Land and Environment Court rather than in the Local Court. 4. RECOMMENDATION 4.1 That the Director-General approves the commencement of a prosecution against Bruce Clyde Bailey in the Land and Environment Court for the clearing of native vegetation contrary to Part 2 of the NVC Act. (The document provided Ms Paget-Cooke's name as the contact officer, the Branch being Legal and Compliance, and her contact details. (She did not sign the document although nothing turns on this.) The document also makes provision for the signatures of the General Manager, Legal and Compliance; the Deputy Director General and the Director General.)

Mr King's cross-examination of Ms Paget-Cooke and his final submissions focused on the content of the prosecution memorandum and what he submitted were its obvious deficiencies. They included what were said to be both legal errors and omissions and wrongly weighted factual considerations material to the question whether a prosecution should have been recommended. In summary they are: (a) She failed to properly analyse or give independent consideration to the elements of the offences or the burden of proof; (b) Her cursory dismissal of the Allens' advice in 3.5 of the prosecution memorandum and her error in adopting the Department's position as to the interpretation that should be given to the "rural structures exemption" in SEPP 46 (and the subsequent failure on the part of the first defendant (as prosecutor) to interrogate the Allens' advice objectively); (c) Her failure in 3.1 to properly consider the application of the operative exemption under s 12(f) of the Native Vegetation Conservation Act and her disingenuous evidence as to the consideration she said she gave it; (d) Her failure to give appropriately focused consideration in 3.8 to the prosecution guidelines published by the Director of Public Prosecutions before recommending that the prosecution be commenced, in particular her failure to recommend against prosecution because of ambiguity in the operation of the "rural structures exemption" in breach of the prosecutor's overriding duty of fairness; and (e) Adverse credit findings arising from her evidence generally and, in particular, and in important respects, including where her evidence was in conflict with Ms Savage's evidence.

In summary, Mr Williams submitted that the content of the prosecution memorandum and Ms Paget-Cooke's evidence concerning its preparation allows for no conclusion other than that she made a considered and independent assessment of the information made available to her from the field officers in the Region and that, after reviewing the legal bases supporting the initiation of proceedings, that she prepared a detailed recommendation to senior Departmental officers to that effect. Further, he submitted that it is clear from 3.4 that Ms Paget-Cooke expressly took into account the Allens' advice and although she noted that the Department found the advice unpersuasive (a view she said she shared) she acknowledged that the exemption was not clearly expressed which may serve to mitigate penalty in the event of a conviction (see 3.9 of the memorandum). She also took into account the regrowth exemption initially advanced by Mr Bailey, although not ultimately argued in the Land and Environment Court proceedings (see 3.5) and considered the minimum clearing exemption (see 3.3) so as to accord Mr Bailey the benefit of the annual exemption of two hectares on the two occasions of his clearing of land in the assessment of the area cleared (see 2.9).

Mr Williams submitted that Ms Paget-Cooke's failure to appreciate the availability of the exemption under s 12(f) was understandable given the difficulties attending its interpretation as reflected in the differing views of the first instance decisions of Bignold and Talbot JJ in the Land and Environment Court in March-June 2003 and of the Court of Criminal Appeal in December 2003.

He also submitted that no adverse inference, whether going to proof of malice or the absence of reasonable or probable cause (in each case a burden imposed on the plaintiffs on the balance of probabilities) can or should be drawn by reason of the fact that Ms Paget-Cooke did not identify (in writing) the elements of the offence of illegal clearing under the Native Vegetation Conservation Act or address them individually. He further submitted that she gave appropriate consideration to the Director of Public Prosecution's Prosecution Guidelines referred to in 3.8 as reflected in a memorandum prepared by her on 20 June 2002 and tendered in the defendants' case as Exhibit 11.

He further submitted that in so far as Mr King suggested that Ms Paget-Cooke was obliged to resolve the "ambiguity" in the interpretation of the rural structures exemption in Mr Bailey's favour, and that this was an additional basis upon which her decision to recommend prosecution was indicative of malice, his submission should be rejected as unfounded in law.

At the time of affirming her affidavit in May 2011 Ms Paget-Cooke held the position of Acting Manager Legislation Co-ordination with the New South Wales Department of Trade and Investment, Regional Infrastructure and Services. At the time she gave evidence she held the position of Policy Manager, Policy and Co-ordination and Corporate Branch in the Department of Primary Industries.

Between 2000 and 2003 she held various positions within the then Department of Land and Water Conservation. She first held the position of Policy Legal Officer. From 7 August 2000 to 2 March 2003, she held the position of Legal Officer Grade 2 in the Legal and Compliance Branch of the Department and from 13 May 2002 to 28 February 2003 the position of Acting Legal Officer Grade 3.

The Department administered both the Water Act and the Native Vegetation Conservation Act, with nominated Departmental officers being access officers under the Water Act and compliance officers under the Native Vegetation Conservation Act, with some regional officers holding both roles. Ms Paget-Cooke's work in the Legal and Compliance Branch was almost exclusively concerned with issues relating to native vegetation. She had a working knowledge of Part 8 of the Water Act but had no involvement with the second defendant's role and function as the consent authority under that Act.

In the various positions Ms Paget-Cooke held within the Department, her duties included reviewing proposed legislative amendments, providing legal advice to Departmental officers on various matters, including issues of compliance with the legislation administered by the Department, and assisting officers of the Compliance Unit and in regional offices to interpret and apply compliance guidelines. She acknowledged that there were gradations of response to a suspected breach of the Native Vegetation Conservation Act. They included taking no action at all to where the statutory arrangements allowed issuing a warning letter and to issuing a remediation order. She acknowledged that the most punitive response was to recommend a prosecution. In cross-examination she was asked whether there were prosecution targets in 2001/2002. She was unable to recall but she did acknowledge that Legal and Compliance were encouraged to consider prosecutions within the range of compliance options.

She was also involved in both preparing recommendations to prosecute for breaches of the Native Vegetation Conservation Act for the consideration of the Director General and the preparation of cases for hearing for breaches which the Director decided should be prosecuted criminally.

Preparation of a recommendation to prosecute for breaches of the Native Vegetation Conservation Act would follow receipt of the investigation file from the Compliance Manager of the region in which the breach occurred. It would also involve her in discussions with that person and other regional officers involved in the investigation of the alleged breach to ensure that she had access to all relevant information including the environmental impact occasioned by the conduct under investigation. The matters she dealt with in this way were allocated to her by Mr Armstrong, the Manager of the Legal and Compliance Branch. She consulted with Janelle Pearson, a technical officer who had worked as a compliance officer and who had joined the Legal and Compliance team to provide lawyers in the Branch with technical support.

As the legal officer assigned the task of advising on the prosecution of Mr Bailey for illegal clearing of native vegetation on the Strip, and as the person who ultimately recommended that he be prosecuted, Ms Paget-Cooke agreed in cross-examination that she was "actively involved" in preparing the case for prosecution in the Land and Environment Court. Following the Director General's decision to initiate proceedings in July 2002, Ms Paget-Cooke was involved in the early preparation of the case for hearing. She was no longer in the Legal and Compliance Branch when the proceedings were heard in June 2003 or when the decision in Jackson was handed down in March 2003. She had little or no involvement in the conduct of the proceedings taken by way of a case stated in the Court of Criminal Appeal.

Ms Paget-Cooke gave evidence that in preparing the prosecution memorandum she took into account all relevant matters upon which the prosecution could properly be based and the issues that would, or might be raised, in the proceedings. She also gave evidence that she carefully considered the information that had been provided by the regional compliance officers involved in investigating Mr Bailey's clearing activities before she prepared the memorandum and that she assessed the alleged offences and the offending against the DPP Prosecution Policy Guidelines. She gave evidence that she also considered the operation of the exemption from the need to obtain development consent under the "rural structures/farm dam exemption" in SEPP 46 and the fact that Mr Bailey had been given legal advice that the clearing of the Strip for that purpose would not put him in breach of the Native Vegetation Conservation Act. She said that she appreciated that the interpretation of the "rural structures/farm dam exemption" in SEPP 46 would be an issue in the proceedings.

One of the critical issues raised in cross-examination was whether Ms Paget-Cooke had given any, or any sufficient consideration to whether clearing for the construction of the proposed third water storage unit was a designated development and therefore exempt from the operation of Part 2 of the Native Vegetation Conservation Act as was ultimately held to be the case in Director General Department of Land and Water Conservation v Bailey [2003] NSWCCA 361.

In cross-examination Ms Paget-Cooke agreed that after the Bailey matter was assigned to her in late 2001 she had a number of initial discussions with Mr Dines as the compliance manager for the Barwon Region and with Mr Morley, another compliance officer. She was unable to recall whether she became aware of the investigation into the illegal clearing through a phone conversation, email or by letter. She agreed that after Mr Dines resigned from the Department in October 2001 she also discussed various matters relating to the investigation with Mr Graham and Mr Hanks, the compliance officers who assumed conduct of the investigation.

She also gave evidence that in early 2002 she discussed various matters concerning the investigation with Ms Savage as acting Compliance Manager for the Barwon Region following Mr Dines' resignation and before Mr Cameron assumed the position in May 2002. Ms Paget-Cooke said as far as she could recall Ms Savage obtained and collated a number of documents relating to Hazeldene and the Strip at her request, including maps, aerial or satellite photos, threatened species impacts, fieldwork sheets and other information bearing upon the question of illegal clearing of the Strip. Ms Paget-Cooke also gave evidence that Ms Pearson assisted her in reviewing the technical information that had been collected by the regional officers and Ms Savage. She said that Ms Savage may also have been asked to contact Mr Bailey to see whether he would provide a formal statement about the clearing.

In cross-examination she said that she could not recall whether Ms Savage expressed any reservations about whether Mr Bailey should be prosecuted or whether she recommended that he should not. She said that she did not recall saying to Ms Savage that the prosecution should be brought as "a test case". Ms Savage did not give evidence that Ms Paget-Cooke ever suggested it should be treated that way. Rather, Ms Savage attributed that to the Department generally in describing her attempts to persuade those who she described as her "superiors" not to prosecute Mr Bailey.

Ms Paget-Cooke said that in her experience it would be very unusual for the Legal Branch to insist on a particular compliance option if the view of the Region was that a different approach should be taken. She said that were it the view of the Region that a person should not be prosecuted, then the Legal and Compliance Branch would not have pressed ahead with the prosecution to run a "test case" because it was not the role of Legal Branch to take a position on a question of policy. With the proviso that the pro forma document tendered as Exhibit O was not a document with which she was familiar (the recommendations she had from time to time received from the Region being in a different (text based) format), she said in cross-examination that she had no recollection of seeing a document in the form of Exhibit O, or a document similar to it, with Ms Savage's name in bold letters across the top, or whether the regional recommendation attached to the prosecution memorandum at 2.9 (the subject of a successful privilege claim) had Ms Savage's name in bold type on it. Ms Paget-Cooke also gave evidence that she did not believe that a final recommendation to prosecute had been prepared by the Region before Ms Savage completed acting in the position of Regional Compliance Manager. (This is borne out by Ms Savage's evidence.)

Ms Paget-Cooke gave evidence that the final recommendation from the Region was not issued by the Compliance Manager. In any event, as far as she could recall, "the Bailey matter" was always progressing in the direction of a prosecution, as distinct from a decision being made not to prosecute which was then revised and a recommendation to prosecute substituted. Again as best as she was able to recall, she said the consideration given to the recommendation to prosecute Mr Bailey was influenced by concerns that he had not only cleared a significant amount of native vegetation on the Strip in February 2000 but he had also cleared a further area in April 2002. In her thinking, that raised a real question as to whether the area was susceptible to remediation given the extent of native vegetation that had been cleared across both clearing events.

Ms Paget-Cooke was asked in cross-examination whether the reference in the notes of the meeting on 23 May 2002 (to which I will refer in a moment), "Region to finalise the recommendation and resubmit to Legal and Compliance", suggested to her that there was an earlier recommendation against prosecution lodged by Ms Savage. She said there could have been any number of matters that needed to be finalised in the recommendation before it was signed off by Mr Hart, the Regional Director, and for that reason that reference in the notes of the meeting did not convey to her what Mr King suggested it might.

It is appropriate at this stage to consider the evidence of Ms Savage generally and the role, if any, she played in recommending that the prosecution should proceed and the extent to which she recommended against that course. As I have noted, Mr Bailey placed considerable reliance upon her evidence to establish an absence of reasonable and probable cause and proof on the probabilities that the sole or dominant purpose in prosecuting Mr Bailey was malicious.

Ms Savage was called in the plaintiffs' case. Before she gave her evidence a voir dire was convened at the request of the defendants to ascertain whether her unsigned statement of 25 March 2010, served in accordance with a direction I gave at an interlocutory stage of the proceedings, was in compliance with r 31.4 of the Uniform Civil Procedure Rules 2005 (NSW) and, in addition, whether Mr King should be permitted to lead additional evidence.

Her evidence on the voir dire qualified some of what was attributed to her in the unsworn statement. She also identified an affidavit sworn by her on 11 June 2010 prepared at the request of the defendants, in which she commented upon various paragraphs in her unsigned statement with a view to identifying some inaccuracies and clarifying some of the views attributed to her by the plaintiffs' solicitors. She also identified a memorandum dated 17 March 2010 which she forwarded to the Crown Solicitor's Office setting out a "timeline" from 1990 to 2009 of her dealings with Mr Bailey and referring to notations on the database file where she and others dealt with the investigation into the illegal clearing. The timeline was tendered by the plaintiff (without objection) as Exhibit N.

At the conclusion of her evidence in the voir dire her unsworn affidavit dated 25 March 2010 was admitted, subject to some parts which she did not adopt in cross-examination and other parts she clarified. I granted leave on a limited basis for some additional evidence to be led. Ms Savage also confirmed that, subject to some qualifications, her statement of 11 June 2010 was an accurate account of her evidence. It was tendered by the plaintiffs as Exhibit G.

From the various forms in which Ms Savage's evidence was ultimately received a number of matters were not in dispute.

At the time of giving her evidence she had retired. Her last position within a successor to the DWLC was as the Catchment Coordinator with the Border Rivers - Gwydir Catchment Management Authority, a position to which she was appointed in May 2007. In her statement sworn on 11 June 2010 she said: Between 2001 and 2005 I held the substantive position of Natural Resource Project Officer with the then Department of Land and Water Conservation (and the Departments that evolved from that Department) (DLWC). Between 1997 and 2000 I held the position of Vegetation Management Officer, DLWC. In the departmental positions that I held from 1997 to 2005, my duties included providing advice to the NSW government on vegetation matters and assessing applications for the clearing of native vegetation in the Barwon region of DLWC made under the Native Vegetation Conservation Act 1997 (NVC Act). From 17th December 2001 to 10th May 2002 I performed some of the duties of Acting Compliance Manager, Barwon Region. In this position I was responsible for the management of the Compliance Unit of DLWC for the Barwon region to the extent that I allocated work to Moree-based compliance officers and supervised those officers. Officers of the Compliance Unit were involved in the preparation of cases for administrative action and in the investigation of alleged breaches of the NVC Act and the Water Act 2000. I was also involved in collating information for the purposes of cases under investigation.

In answer to a question asked in evidence in chief she said that she had a sound working knowledge of the practices and usage within the Department concerning the circumstances in which development consents were required under the Native Vegetation Conservation Act, as to which she said: Q. Could you tell her Honour what the extent of your working knowledge was? A. Yes. We were guided by a document called the definition and exemptions booklet and also by the act itself which there was a number of exclusions to the act, whether it was covered by other legislation, whether the activity fell under the exemptions and I did get quite a good knowledge of that with various landholders ringing me up and asking me the question about their fence lines and how far from the fence line and, you know, fire breaks and the construction of various rural structures. Q. In terms of exclusions, are you able to say whether or not the Water Act was one of the exclusions? A. Yes the Water Act was an exclusion so that if a permit, if a licence or an approval under the Water Act was given then the activity was excluded from the Native Vegetation Conservation Act.

She went on to say that in her experience and to her understanding the administration of the Water Act and the Native Vegetation Conservation Act operated separately.

Much of the evidence led by the plaintiffs relating to Ms Savage's dealings with Mr Bailey over the course of some years prior to the events with which this case is concerned was of no relevance to the issues in contest as they crystallised in final submissions. What remained in issue was the extent to which she had any role or responsibility in the formulation of the final recommendation from the Region concerning whether he should be prosecuted for clearing the Strip without development consent and whether her views that he should not be prosecuted were made known to Ms Paget-Cooke.

Ms Savage confirmed being aware of what the evidence otherwise established as a tension between what the Department considered was the proper reach of the rural structures exemption in SEPP 46 and the view of some landowners in the region. Her understanding of SEPP 46 is expressed in her affidavit of 11 June 2010 in the following way: At this time [in July 2000], the DLWC had issued various documents relating to the application of State Environmental Planning Policy No 46 - Protection and Management of Native Vegetation (SEPP 46). One of the exemptions contained under SEPP 46 concerned "Rural Structures" whereby clearing of native vegetation to the minimum extent necessary for the construction, operation and maintenance of existing or new "farm structures" was allowed. Whilst farm dams were included within this exemption, open water channels and irrigation storage were not viewed as covered by the exemption.

She also gave evidence that it was around July 2000 that she became aware that Mr Gardner and Mr O'Brien had concerns about the legality of the clearing of Strip and that it was in that context that she became aware of the Allens' advice. In her affidavit of 11 June 2010 she referred to the advice as follows: At some time during the year 2000, I do not know the exact date, I saw a copy of a letter addressed to Mr Bailey from the law firm Allens. I remember the letter as it had the name of Noel Hemmings on it and that was a name I associated with the Land and Environment Court. I do not now recall who it was that first showed me the letter; it could have been Mr Bailey, Rodney O'Brien or Brad Dines. Mr Bailey may have referred to the letter during a telephone conversation with me. My understanding of the letter was that Mr Bailey could proceed with his clearing for the dam provided he had a Part 8 - Application (Water Act) approval. Notwithstanding that, my view was that if the clearing occurred before he got the Part 8 approval, Mr Bailey was leaving himself open to prosecution under the Native Vegetation Conservation Act.

In cross-examination she agreed that she was drawn to the name "Noel Hemmings" on the advice because she knew him as a legal professional and through a more personal connection with a work colleague, as a former judge of the Land and Environment Court and someone who she understood to be "a trailblazer with law".

She had no active involvement in the investigation into the illegal clearing until she shared the role of acting compliance manager for the Barwon Region with Mr Cameron, a role she assumed in 2001. Part of her responsibilities at that time included taking any further action that may have been required to further the investigation. She was formally assigned the file in May 2001 at which time the investigation into the illegal clearing was continuing. The timeline against May 2001 records: DLWC BREACHES file states: "Fieldwork Done". High Priority. Assigned to LS [Ms Savage]. Investigation continuing.

I have already noted that Mr Dines gave evidence that entry was probably entered on the database by him and that it was noted as "High Priority" by that time given the delay in the finalisation of the investigation after the breach was reported in July 2000 and that Mr Bailey had expressed his concerns about that.

So far as Ms Savage was concerned, consideration as to whether the Region would ultimately recommend that Mr Bailey be prosecuted was focused in the period February to May 2002. A note on the timeline against the year 2002 records: 13 February. Diary note. Brett gave me Hazeldene to speak [to] legal 26 February. Diary note. Asked Bruce Bailey to consider giving a statement to DLWC. He is considering it. 4, 5, 8, 9, 10 & 30 April and 1, 9 15 & 16 May. Hazeldene noted in diary. I consider I was working on the background documents - maps, aerial photography, threatened species impacts and other information. 28 May. Diary note. Lindsay - Hazeldene to complete stuff.

In her unsworn statement she said that at some stage between February and 10 May 2002 she wrote to Ms Paget-Cooke strongly recommending against the prosecution of Mr Bailey and that she made further attempts to dissuade her and Ms Savage's "superiors" in the Department from launching a prosecution for breach of the Native Vegetation Conservation Act. Those people were not identified by name or position. No email or other correspondence with Ms Paget-Cooke was produced. The form in which she made that communication was clarified in her evidence. She said she "wrote" onto the database as distinct from writing to Ms Paget-Cooke personally.

Ms Savage said in cross-examination she was motivated to express herself in strong terms against prosecution as a compliance option because it was her view, albeit uninstructed by any legal training, that the Allens' advice would probably protect Mr Bailey from prosecution. She was also concerned that the operation of the "farm dams exemption" addressed in the Departmental Definition and Exemption booklet had not been fully settled by a court and that the Allens' advice, with Mr Hemmings' name attached to it, appeared to her to carry force. She said in her unsworn statement that she "pleaded" with her superiors in the Department because she considered the prosecution was "without foundation" (in her evidence she said that she meant to reflect her belief that it was without sufficient legal foundation). She went on to say: ...I was very surprised at the apparent determination of the DLWC to prosecute Mr Bailey for alleged breach of the Act as I considered there was no grounds for doing so. Indeed in my discussions with my superiors at that time I put it to them that they seemed to be determined to mount an illegitimate "test case" against Mr Bailey under the Act. I made it clear to them that I considered there were no grounds for prosecuting Mr Bailey and that he should not be victimised by being subject to a test case in these circumstances.

She did not identify those of her superiors with whom she used the words "test case". She did not suggest that they were words used by anyone in the Department other than herself. She asked for the opportunity in her evidence to explain what she meant by "pleading" with her superiors as to which she said: Q. That is that you thought that there was a determination to prosecute you considered from your own uninformed legal perspective but your informed departmental perspective that there was no good ground for taking that approach and you sought to persuade your supporters not to prosecute? You pleaded a little bit? A. Yes, I pleaded, mainly - can I explain? Because it was also myself when I deal with landholders and other applicants that is my word and I didn't want to see someone that I dealt with to come into a sticky situation, because that reflects back on the Department and in particular myself, if I've dealt with the person. So I did plead, I really did.

Exhibit O was tendered by the plaintiffs as an example of a "Recommendation Report" available on the defendant's database (in this case the Final Recommendation Report). It provides various fields including, "Alleged breach details; Alleged offender details; Location/Land information; Offence provision; and Evidence collected". It also provides over a two-page spread for information under the rubric of "Satisfaction of elements" and "Exclusion/exemptions/defences". It also makes provision for an assessment of "Environmental harm". Finally, it provides for a statement under the heading "Justification of proposed compliance action".

As noted above, the final recommendation from the Region, referred to at 2.9 of the prosecution memorandum, was subject to a claim for privilege. It would appear however that it was either shown to Ms Savage by Mr Harvey, counsel for the defendants in 2010 in the pre-trial phase of these proceedings or, as she said in evidence, she saw it briefly at that time and noticed her name "in bold type" on the face of the document and that it had been signed by three others, including Mr Cameron. She also noted that the content of the document was different from the document that she had seen when she first took over the file. She did not say (or was not permitted to say) in what respect it was different.

Mr King's submissions even went so far as to assert that the memorandum dated 28 May 2002 (attachment 1 to 2.9 of the prosecution memorandum and the subject of a claim for privilege) was in fact prepared by Ms Savage and that it recommended against prosecution. There was simply no basis in Ms Savage's evidence or elsewhere in the evidence to ground that submission. Ms Savage's evidence was to the settled effect that the recommendation from the Region was finalised after she completed her role as Acting Regional Compliance Manager and that she was not a signatory to the document. Furthermore, there was nothing in her evidence to support Mr King's submission that she ever saw the recommendation in its final form before it was forwarded on 28 May 2002.

Ms Savage ceased her role as Acting Compliance Manager on 10 May 2002. She said that she had no discussion with senior officers involved in progressing the recommendation to the Director General after 10 May 2002 although she was aware that it was worked on further after that date. As and from 10 May 2002 she had no further dealings with the file.

She also made it clear in her evidence that in the six months that she acted in the role of Regional Compliance Manager she was not fully aware of the practices and procedures for the collection of information in preparation for a prosecution although she did agree that she obtained statements and other evidence as requested by the Legal and Compliance Branch and that she added technical information to the pro forma recommendation to prosecute retained in a computer file which she understood was updated from time to time.

Mr King further submitted that contrary to Ms Paget-Cooke's evidence I would be satisfied that she well knew that Ms Savage had recommended against prosecution, or at least that she held the very strong view that a prosecution should not be pursued. In those circumstances he submitted that I would be satisfied that because Ms Savage's name was linked "in some way" to the final recommendation from the Region that Mr Bailey be prosecuted (based upon Ms Savage seeing her name on the document when it was shown to her in 2010) and because Ms Paget-Cooke knew Ms Savage was opposed to a prosecution, Ms Paget-Cooke knew or must have known that the recommendation to prosecute was sent without Ms Savage's authority, or without her approval, and that her name was applied to it against her wishes. In the alternative, he submitted that I would be satisfied that both Ms Savage's "recommendation" and the final recommendation from the Region were against prosecuting Mr Bailey and that Ms Paget-Cooke overrode those views by recommending a prosecution, providing proof of both elements of the tort of malicious prosecution in her role as a prosecutor and that the first defendant acted in the same way.

Neither submission is persuasive. They are contrary to the obvious implication in 2.9 of the prosecution memorandum and contrary to Ms Paget-Cooke's evidence that the final recommendation from the Region (signed by three Departmental officers) was in favour of a prosecution. I am unable to reach a positive finding that Ms Paget-Cooke was giving untruthful evidence when she said she could not remember Ms Savage's strong and express views that Mr Bailey should not be prosecuted, although I accept Ms Savage's evidence that she made her views known. Finally, I do not consider that there is any basis in the evidence to allow for the submission that Ms Savage's name was applied to the recommendation by somebody to falsely convey the impression that she supported the prosecution, when it may equally be that her name simply remained on the document because she had worked for several months on the pro forma before her resignation as she explained in her evidence.

I accept that Ms Savage was an honest witness who had a genuinely held opinion that the prosecution of Mr Bailey for illegal clearing was unjustified and that the Allens' advice, in her view, carried persuasive weight. I also accept that she had a concern that wherever possible relations between Departmental officers and landholders should be mutually respectful and productive and that informed her view that Mr Bailey ought not be prosecuted. However, I am not satisfied that Ms Savage's views provide a rational or sound basis upon which to infer proof of malice for the purpose of the attribution of tortious liability to the defendants. Mr King's submission that Ms Savage's view should have prevailed over that of senior officers from the Region and over legally qualified officers within the Department because, as a matter of history, her views were borne out by the fact that Mr Bailey was acquitted, or that the first defendant would even have been aware of her views when he approved the recommendation to prosecute, does not persuade me to any different conclusion.

On 23 May 2002 Ms Paget-Cooke participated in a meeting with legal officers (including the Legal and Compliance Manager, Mr Armstrong) to discuss various aspects of the evidence and some of the legal and other issues that might arise were a prosecution of Mr Bailey to be initiated. In her evidence she made it clear that the meeting was not to discuss whether there were grounds for bringing a prosecution or whether there was evidence sufficient to establish the elements of the offence of illegal clearing under Native Vegetation Conservation Act. She also said that those in attendance at the meeting would have been aware of the operation of the relevant legislation and that copies of both the Native Vegetation Conservation Act and the exemptions attached to SEPP 46 would have been available to those at the meeting. She was unsure whether the Environmental Planning and Assessment Act was also available. The notes of that meeting became Exhibit S.

The notes, and Ms Paget-Cooke's evidence concerning the matters raised in the notes, were relied upon by Mr King as part of the challenge he made to Ms Paget-Cooke's evidence generally as part of Mr Bailey's case that as a prosecutor she acted maliciously and without reasonable and probable cause.

These included: (a) the consideration she gave to the elements of an offence under s 21(2)(a); (b) the question of and consideration given to the application under Part 8 of the Water Act; and (c) the Allens' advice.

I will deal with each separately.

One of the criticisms implicit in the cross-examination of Ms Paget-Cooke and made explicit in Mr King's closing submissions as providing proof of malice was that because the notes of the meeting do not refer to the elements of the offence of illegal clearing under ss 17 and 21(2) of the Act she must not have given consideration to them in the preparation of the prosecution memorandum.

That submission is allied to the further submission that because the constituent elements of the offence are not set out in the prosecution memorandum, and no express reference is made in the prosecution memorandum to the fact that Ms Paget-Cooke had undertaken an analysis or consideration of them, she must have either been unaware of them through ineptitude, or if she was aware of them she acted maliciously in recommending the prosecution knowing that there was a deficit in the evidence in material respects to prove them.

For the reasons which follow that submission is rejected, a conclusion I have reached independent of considering whether the attack on Ms Paget-Cooke's credit generally raised doubts as to her reliability or honesty.

First, although the recommendation from the Region (identified as Attachment 1 to 2.9 of the prosecution memorandum and identified by Ms Paget-Cooke in the document itself as being "in the form of a memorandum addressed to Legal and Compliance dated 28 May 2002") was the subject of a privilege claim, the balance of 2.9 expressly states that "full details of the offences and relevant considerations are included in the recommendation". Mr King submitted that despite those express words I would not be satisfied that the elements of the offence were independently considered by her as the Legal Officer assigned the task of assessing the legal and factual sufficiency of the case against Mr Bailey. He also submitted that because the reference to the recommendation from the Region in 2.9 does not state that the Region was in favour of a prosecution, and because Mr Hart (as the Regional Director of the Barwon Region) was not called to give evidence that the Region supported a prosecution, I should infer that "someone or other in the Region simply requested that the prosecution be brought" while the genuinely held view of the Region, as expressed through Ms Savage, was firmly opposed to prosecution because of what the Region knew to be a deficit in proof of the essential elements of the offence.

Quite apart from Ms Savage's evidence not establishing what Mr King submitted it should about the actual position of the Region, in order to draw the inferences for which Mr King contends, it would be necessary for me to reject as untrue Ms Paget-Cooke's evidence that the Region not only recommended that Mr Bailey be prosecuted but that she reviewed the constituent elements of the offence when reviewing that recommendation. I am not satisfied that there is any basis for doing either.

The first submission depends largely, if not exclusively, on the analysis of Ms Savage's evidence contended for by Mr King, and that I should prefer her evidence over that of Ms Paget-Cooke. As I have made clear, I am not persuaded that Ms Savage's evidence carries the weight Mr King contends it should on the question whether her views that a prosecution should not be initiated reflected the views of the Region. The second submission requires me to reject as untrue Ms Paget-Cooke's evidence that she considered the elements of the offence before recommending that Mr Bailey be prosecuted. While there may be reasons to question whether she gave any focused consideration to the application of the exemption from the need to obtain development consent under s 12(f) of the Native Vegetation Conservation Act (a matter I will return to consider later), it does not follow that she did not review whether the elements of the offence, as she understood them to be, could be proved. The further submission that even if Ms Paget-Cooke reviewed the recommendation from the Region in favour of prosecution she did not exercise any independent judgment as a lawyer before she recommended that Mr Bailey be prosecuted, and that is a further indication of her lack of professionalism, is also rejected. There was nothing in Ms Paget-Cooke's evidence that leads me to have any doubt about her competence as a lawyer or her appreciation of the need to adhere to proper professional standards when rendering legal advice to the Department.

The submission that Ms Paget-Cooke failed to appreciate the need to prove elements of the offence of illegal clearing was also said to follow from the fact that Exhibit 11, a document prepared by her on 20 June 2002 reflecting her consideration of the DPP Prosecution Policy and Guidelines (an exercise to which she refers in the prosecution memorandum at 3.8 as confirmation that the circumstances warranted prosecution) did not set out the elements of the offence. Ms Paget-Cooke's failure to appreciate other fundamental principles of criminal law, including the burden and standard of proof, is also said to be revealed by her consideration of the Guidelines. I will return to consider that submission when reviewing Ms Paget-Cooke's evidence concerning the Guidelines in detail later.

I accept Ms Paget-Cooke's evidence that when she prepared the prosecution memorandum she both reviewed the constituent elements for an offence brought for a contravention of s 21(1)(a) of the Native Vegetation Conservation Act and saw no need to restate them in the memorandum forwarded to the Director General of the Department for his consideration, or any need to set them out seriatim in Exhibit 11. As I have already noted, a question warranting separate consideration is whether at the time of preparing both documents she gave consideration to the operation of the exemption in s 12(f) of the Native Vegetation Conservation Act and, if she did, how she viewed its application (or potential application) to the allegation of illegal clearing by Mr Bailey. It is also necessary to consider the related question whether she gave adequate consideration to the exemptions under s 12 generally when recommending that he be prosecuted.

Mr King's further submission, advanced both orally and in writing, that "in an act of some bravura" in cross-examination Ms Paget-Cooke sought to recite the elements of an offence under s 21(1)(a) but did so in a way that exposed her failure to appreciate what they were even at the time of giving her evidence, and that this provided further support for the submission that she either undertook no such analysis in 2002 or, if she did, she also got it egregiously wrong then, also needs to be addressed.

The submission that she gave her evidence in an "act of bravura" grossly overstates her cross-examination. The circumstances in which it arose in cross-examination bear reciting: Q. There is no document that you are able to produce to this Court in which you considered or analysed the elements of the offence? A. Well, I don't accept that. Q. Can you produce that document now? WILLIAMS: Your Honour, I apprehend HER HONOUR: The witness can't because of a claim for privilege. KING: I expect that is not correct, your Honour. HER HONOUR: I thought it was. What is wrong with that proposition? Hasn't the witness said that? She gave consideration to that very issue but it is a consideration, not unsurprisingly, embedded in a document over which she can't produce because the claim for privilege is asserted by others. Am I right, Mr Williams? WILLIAMS: Yes, your Honour. KING: In one moment the defendants could waive and we would know the real truth of the matter, if they wanted to. WITNESS: I can answer every element if you want me to do that now, but it is not written anywhere in any of the documents I can give you. KING Q. Have you seen a document that I provided to her Honour earlier in this case, last week, which refers to those elements? WILLIAMS: Perhaps the witness should be shown the document. HER HONOUR: What is the document? KING: Your Honour asked me to provide such a document. HER HONOUR: The legislative walkway? I can't imagine why Ms PagetCooke would have it when I asked for it. I have no doubt that this witness, referring to her in the impersonal sense, knows what the elements of the offence are. Do you want her to tell me? KING Q. Could you tell her Honour what they are? HER HONOUR: And don't think there is any waiver of a privilege because it happens to be reflected in a privileged document. Q. Would you tell me what the elements are of an offence are? A. All right, section 21 of the Native Vegetation Conservation Act says: "A person must not clear native vegetation on any land except in accordance with either a development consent that is in force or a native vegetation code of practice." Now, the first element of that is "person". That was Mr Bailey. He never denied that. The second element was "clear", and it is quite obvious that what happened to the vegetation does fit section 5 of the Native Vegetation Conservation Act which lists all the different ways you can clear. It was native vegetation. For that I relied on my field officers and their knowledge and expertise. There was no development consent in force because we checked through registers, and I think I said that in one of my documents. There was no native vegetation code of practice because there weren't any and there is an affidavit of Leigh Coghlan that deals with that. KING Q. At that time? A. At that time. There was then whether the land was excluded from the operation of the Act, which it wasn't. That section is 9 and 10, and that I did refer to in my recommendation, I think. Yes, I have said "no development consent", this is 3.1, "no development consent has been issued, the clearing is not excluded from the operation of the NVC Act under ss 9, 10 or 12. 12 is activities that were excluded and that is where the Water Act comes in. If there had been a Part 8 approval, that would have excluded it from the Native Vegetation Conservation Act, but there wasn't, so that wasn't excluded and that only leaves the exemptions under 46 which are referred to rather obscurely in section 21. That is where the argument Q. That's it, is it? A. Well, yes.

This evidence was said to be demonstrative of Ms Paget-Cooke's incompetence in a number of respects. The first error is that she focused solely on s 21 as the section in Part 2 of the Act which was allegedly contravened and failed to refer to s 17 of the Act as the offence creating provision. In this way, so it was submitted, she demonstrated a failure to appreciate the need to prove that the vegetation cleared was "native vegetation" and that Mr Bailey was "the person" who "personally" cleared it. In the evidence extracted above it is patently obvious that she was acutely aware of both elements. The fact that she did not refer to the interrelationship between ss 17 and 21 of the Native Vegetation Conservation Act, nor cite s 17, was neither necessary nor relevant.

Inherent in Mr King's submission that Ms Paget-Cooke did not know the elements of the offence is the submission that because Mr Bailey did not personally clear the Strip in either the first or the second clearing events (having engaged a contractor for the task) the offence could not be proved.

I have already noted, that was not a submission addressed by Mr Bailey's previous solicitors in their correspondence with the Crown Solicitor's Office upon issue of the summons. Neither was it relied upon by senior counsel who appeared for him in the Land and Environment Court. It is also an issue upon which Mr King himself approbated and reprobated in his submission in this Court. In fact, irrespective of the defences that were advanced and ultimately upheld in the Land and Environment Court proceedings, it has never been put or pleaded before Mr King's final submissions that Mr Bailey could never have been successfully prosecuted because he did not personally clear the native vegetation. The fact that there was no express provision in the Native Vegetation Conservation Act is not to the point. For it to be seriously advanced (as it was at least in Mr King's written final submissions) that either Ms Paget-Cooke was unaware of the principle of innocent agency at common law (a matter about which she was not cross-examined) or that the laying of the charges was fundamentally flawed because Mr Bailey did not personally clear the land of native vegetation, or for that matter that she was unaware that it was native vegetation that had to be shown to have been cleared, barely needs restatement for it to be rejected.

A further submission, bordering on the tendentious, was also advanced in writing to the effect that Ms Paget-Cooke made an "obvious error" in her evidence extracted at [429] above as regards the rural structures exemption in SEPP 46 because she described it as being "rather obscurely" referred to in s 21 when it is not referred to in that section. Again it is not to the point (indeed, as I see it, it is of no weight at all to whether Mr Bailey has established either or both of the elements of malicious prosecution) that the rural structures exemption in SEPP 46 was available to be considered (as Ms Paget-Cooke correctly assumed it was) because of the savings and transitional provisions in Schedule 4 to the Act and enacted by s 68, or by some other legislative pathway.

There is no support in the evidence for the submission that Ms Paget-Cooke failed to identify the constituent elements of the offence. The real question is whether her assessment of the fundamental requirement that the clearing be contrary to Part 2 of the Native Vegetation Conservation Act, viewed objectively and/or subjectively, was so fundamentally flawed that the prosecution was commenced without reasonable and probable cause for that reason and, if that is so, whether that provides a sufficient basis to infer malice.

The issue of a Part 8 application was the subject of discussion at the meeting on 23 May 2002. It was recorded in the notes in the following terms: Legal aspects Although Bailey hasn't given a formal interview there are probably enough implied admissions to pin liability for the clearing on him, despite not knowing who physically carried out the clearing. It is possible that a caution should have been administered by Garry and Rodney on 31 July 2000 when they refused to accept the Part 8 application - but we should be able to argue that they hadn't formed a belief, and also Bailey may not have made any admissions from that point on, except for those that he would be seeking to rely on anyway - eg the solicitor's correspondence.

Ms Paget-Cooke agreed in cross-examination that in the course of preparing the matter for hearing she asked for and was provided with the Part 8 application, which she described in her evidence as being "incomplete". She was shown and identified Exhibit D, the application prepared in draft by Mr Gardner at Hazeldene on 19 July 2000, as the document that she was given.

It would appear from other evidence she gave that prior to preparation of the prosecution memorandum she was not aware of the precise dimensions of the proposed third water storage unit the subject of the Part 8 application, despite the fact that it was specified with precision. Her evidence was also to the effect that although she was aware that what was proposed was a water storage unit which exceeded 20 hectares in size, she did not interpret s 12(f) of the Native Vegetation Conservation Act as providing an exemption from the need to obtain development consent to clear native vegetation to allow for its construction. Her understanding of the operation of s 12(f) (to which I will later refer) is, as I have emphasised, important given that exemption was one of the bases upon which the summons were ultimately dismissed.

Much of the cross-examination on the Part 8 application and its inclusion in the notes of the meeting of 23 May was directed to extracting a concession that Ms Paget-Cooke was aware that an application under Part 8 had been lodged but that the Department was refusing to process it and that this provided some evidence of malice in her motivation to recommend the prosecution. Mr King's cross-examination on an email from Mr Cameron was to the same effect. It was in the following terms: I understand that you are familiar with this case. I had a call from Bruce Bailey. He wants to know the current situation as he is apparently under the impression that he has a live application under Part 8 of the Water Act for construction of a water storage. In fact, DLWC officers refused to accept an application because of an alleged breach of the Native Vegetation Conservation Act. Please see attached draft letter. I have tried to present the current position without tipping our hand as to where we might be going with regard to compliance action. Do you think this will suffice.

The cross-examination was as follows: Q. What I am really suggesting to you is that the words "compliance action" was clearly referring to what you were doing in head office? A. Yes. Q. And Mr Cameron apparently was aware of that? A. Yes. ... Q. Have a look at the first paragraph. It refers to the impression that Mr Bailey was under, do you see that, he was under the impression he had a live application, do you see that? A. Well, that's yes, I mean that's what Geoff Cameron wrote. Q. You didn't want to tip your hand as to where you were going with the compliance action because you were concerned, that is you personally, were concerned that if Mr Cameron informed him as to the true position, Mr Bailey may take other action? WILLIAMS: I object. My friend has not established the premise that this witness was concerned at all. HER HONOUR: That is what he is asking her and I'm sure Ms PagetCooke can answer it. Q. Did you have any personal concern that that would be the outcome? A. No, I didn't. ... Q. Because if a mere remediation notice was issued, Mr Bailey had a right to object to that and take it to the Land and Environment Court; that's correct, isn't it? A. Well, he did, yes, but I don't think I would have been thinking about that. Q. On 28 days notice? A. Yes.

Ms Paget-Cooke gave evidence that it was her understanding that during the currency of the investigation (including the question being considered at one stage as to whether a remediation notice should issue) that an application under Part 8 (assuming its compliance with the statutory requirements - a matter which was in issue in the proceedings and now resolved against Mr Bailey) would not be received for processing because it would have been inconsistent for the Department to have been investigating a serious breach of the Native Vegetation Conservation Act on the other hand and to receive for processing an application for approval to construct a dam on the cleared land the purpose for which the clearing was undertaken in the first place.

She gave evidence that was the import of the discussion recorded in the notes of the meeting at [418]. When she was pressed to concede that, even were a complying application to have been lodged for processing, her personal view was that the application should be refused, she said she had no personal view as to that question. She also rejected the proposition that she knew the Department had resolved to take that approach. Finally she was asked the following questions: HER HONOUR Q. Assume that a Part 8 application was prepared in compliance with the Act, had been submitted in accordance with formal submitting procedures and was under consideration as part of the ordinary processes of the administration of the Act. The question then is did you, or to your knowledge anyone within the legal and compliance branch, resolve to the view that that application should be halted, stayed, delayed, not given consideration to because were it to be granted it would provide a defence to any prosecution under the Native Vegetation Act? Now, there's a whole series of assumptions there. A. I think the answer is no, if I've finally understood the question, because it was quite likely quite possible that the application, had it been progressed and processed, wouldn't have been granted anyway. KING Q. Do you know that in fact six years later it was granted and approved? A. I understand that was the case, but at the time I think there was certainly doubt about whether it would be granted or not. Q. If you have a look at your notes of the meeting of 23 May, the second dot point, there's what I will call a final statement by you recording that Gary and Rodney had refused the Part 8 application on 31 July 2000, isn't there? A. They'd refused to accept the application, yes. KING Q. And the reason that that had occurred, I suggest to you, was because they were under an apprehension that if it were accepted it would prejudice or hinder or in some way hamper a possible prosecution in respect of the vegetation matter? A. I can't speak for them. Q. What about yourself? That's what you thought, too, didn't you? A. No.

She was asked why she made reference in 3.2 of the prosecution memorandum to the fact that no Part 8 approval had been granted as to which she said as follows: Q. Why did you include that statement in the document? A. Well, because if there had been approval under Part 8 of the Water Act I think that is an exclusion under section 12 of the Native Vegetation Conservation Act, so that is why that was included. I think that's right. Q. It is correct then, isn't it, that you were concerned that nothing happened in relation to the Part 8 application pending your decision to prosecute, because if any approval, whether informal or otherwise, was granted it would prejudice a possible prosecution, for that reason. A. Well, the way I saw it at that time was that the clearing had happened before any such Part 8 approval, therefore the clearing was, as I saw it, illegal. That was my thinking. Q. But just focus on my question, if you wouldn't mind? A. But I can't give you the answer you want. ... Q. On the working assumption that a Part 8 application had been received by the department can you make that assumption? A. Yes. Q. It was your concern when you looked at the file to ensure that no such application should be addressed in any way prior to the commencement of the prosecution because you saw that as possibly prejudicing the prosecution, didn't you WILLIAMS: Well WITNESS: No, I didn't. I will give you a definite answer. You can't get more definite than that. KING Q. Why did you put 3.2 in the memorandum? What relevance does it have? A. Because the whole case started with Mr Bailey trying to put in an application under Part 8, so it was obviously a relevant point to consider.

Quite apart from the fact that I am not satisfied that a Part 8 application was lodged by Mr Bailey until January 2004, no concession of the kind sought by Mr King in respect of either the notes or the email was ever made.

In the result, subject only to being persuaded that I should take an adverse view of Ms Paget-Cooke's credit generally, the discussion in the notes of the meeting of 23 May concerning the Part 8 application was neither in its terms nor by implication suggestive of malice in the way contended for by Mr King, that is that the institution of proceedings were designed to block or frustrate Mr Bailey's plans to construct the proposed third water storage unit and not for the legitimate purpose of sanctioning what was believed to be criminal conduct. In my view, the notes of the meeting and Ms Paget-Cooke's evidence about them support the defendant's case that the Part 8 application, prepared in draft only in July 2000, "would not be accepted" until the investigation into the illegal clearing had been resolved. Her evidence on this issue was consistent with Mr Dines' evidence and consistent with the Department's position generally at that time. It is also consistent with the submissions put on its behalf in these proceedings that even after the proceedings in the Land and Environment Court were resolved in Mr Bailey's favour, the position under the Water Act as amended as and from 7 July 2000 obligated the second defendant to consider environmental matters before approving construction of a controlled work (as to which see [69]-[71]).

The notes of the meeting recorded: The impact of Bailey's legal advice from Allens It is quite guarded advice, and we don't know what other info Bailey gave them (eg did he or Rob McCosker tell them the dimensions of the 'reservoir'). Having been told twice by DLWC that he would need to apply for consent, after he got the advice he should have checked back with DLWC, which he didn't do. It's not clear whether he would be able to argue that he cleared the minimum necessary to construct the storage - it seems a lot, but he may have been intending to build the walls by pushing up some of the earth. On balance it should be possible for us to show that Bailey went ahead regardless of DLWC advice, when he had a knowledge of the consent process, and therefore we should not be at too great a risk of no conviction being entered.

Ms Paget-Cooke gave evidence that she recalled seeing a copy of the Allens' letter prior to preparation of the prosecution memorandum although she could not recall precisely when she first saw it. She said that she appreciated that the advice was from a reputable firm of solicitors, however the fact that it was signed under the hand of a solicitor of the firm and also bore the name (but not the signature) of a member of Queen's Counsel, was not a matter which she considered carried any particular weight or significance, because she did not find the content of the advice persuasive. Ms Paget-Cooke also emphasised that while it was her personal view that the Allens' advice was "unpersuasive", that view would not have prevailed over those senior to her in the Legal and Compliance Branch were they to have had a different view. As it happened, their views on the subject were coincident with hers. Those views were not of course ultimately vindicated given the construction of the "rural structures exemption" was contrary to the Department's position urged by the prosecutor in the Land and Environment Court in the Jackson matter, in Mr Bailey's prosecution and later in this Court.

As the High Court emphasised, an acquittal does not of itself entitle the plaintiff to a remedy against the prosecutor. The question I have to consider is whether the content of the Allens' advice was so patently correct that to institute proceedings against the recipient of the advice evidences an absence of reasonable and probable cause and/or malice.

The prosecution memorandum also addresses the Allens' advice as it does the "rural structures exemption" more generally. Mr King's cross-examination of Ms Paget-Cooke as to the consideration she gave to the Allens' advice at that time cannot sensibly be divorced from his submission generally that she prosecuted Mr Bailey without reasonable and probable cause because, on any analysis, the "rural structures/farm dam exemption" applied as an outright defence to the charge.

When asked in cross-examination why in the notes of the meeting on 23 May 2002 she described the advice as "guarded", she said that on her reading of it, it did not make clear what information Mr Bailey had provided to his solicitors concerning the size of the water storage unit and, for that reason, the solicitors may have been under the impression that an "ordinary farm dam" was proposed. She accepted that she became aware of the dimensions of the unit in March 2002. Ms Savage undertook an exercise in calculus from the line drawing that was attached to Mr Bailey's letter of instruction to Allens and a cadastral map with GPS points mapping the amount of vegetation cleared. Ms Savage advised that the dimensions of what she described in her fax as "the proposed storage" were approximately 600 metres wide and 1200 metres long, including walls. She also agreed that, having made enquiries of Mr Gardner, she also appreciated that the proposed third water storage unit would exceed 20 hectares in size although, as I noted above, this would appear to follow from her discussions with Mr Gardner only in the preparation preliminary to the hearing.

Despite Ms Paget-Cooke's evidence that she did not fully appreciate the holding capacity of the storage unit, I am satisfied when she forwarded the prosecution memorandum she appreciated that the Strip was cleared for the purpose of construction of a water storage unit of the general size and capacity for which Mr Bailey sought the Allens' advice.

She rejected the further proposition put in cross-examination that she had a fixed view as to the meaning of the "rural structures exemption" and that she was not open to persuasion that any other view had merit, as to which she responded: Q. Is it fair to say that you were proceeding upon a fixed view as to the meaning of "rural structures" and you were not open to persuasion that any other view had merit? A. Well, it wasn't me being open to persuasion, it was everybody in the department had that view. They believed that that was the purpose of that exemption. If you look at this document, which is the "Definitions and Exemptions" document, it says things, it says something here, typical examples of things that could be included in Q. I will take you to that in a moment. HER HONOUR Q. I don't know what you are reading from and I am interested to hear. A. This is a document called "Definitions and Exemptions" and it is the department explaining what each of these SEPP 46 exemptions were for. And it says: "This exemption allows land owners to carry out a minimal amount of clearing which is regarded as necessary for the construction, operation and maintenance for a range of everyday on farm operational improvements. Typical examples include stock and domestic farm dams, tracks" Et cetera. There are some other statements in there that also led me to believe that was how the exemption should be interpreted.

She was also pressed as to why she expressed the view in 3.4 of the prosecution memorandum that the farm dam exemption was "intended to permit the construction and maintenance of every day farm structures, which would include small scale farm dams" but not the construction of a large reservoir intended to facilitate the establishment of a new agricultural enterprise. She agreed that the use of the terms "every day farm structures" and "small scale farm dams" were words used by her to convey her interpretation of the intended operation of the farm dam exemption in SEPP 46, an interpretation she understood was shared by her Departmental colleagues and consistent with the Department's published guidelines, although she accepted that neither of the concepts derived from the legislation. She also conceded, as the prosecution memorandum makes clear at 3.9 (although as a matter that may mitigate penalty), that the farm dam exemption was "not clearly expressed". However, she rejected the proposition that there was ambiguity of a kind which should have augured against a prosecution.

The cross-examination continued with Ms Paget-Cooke's attention focused on the terms of the Department's Definitions and Exemption publication (Exhibit 16 in the proceedings). Ms Paget-Cooke confirmed her familiarity with the document and, in particular, the definition of rural structures and the fact that it would operate to exempt clearing to the minimal extent necessary for the "construction, maintenance or operation of the particular farm structure". (The document is set out at [223].) Mr King then asked the following questions: Q. If we just take, for example, a dam, you would appreciate, wouldn't you, that clearing may and normally would occur in two stages. Firstly, you would clear the land for the purpose of constructing the levees for the dam? A. And? Q. Then, whilst constructing the levees, you would further clear, that is, remove any remaining grasses that had not been cleared during the first process. That would be logically the normal way that it would occur, wouldn't it? A. I suppose so. I never considered that. ... Q. Then the clearing may be for the purpose not only of the construction of the structure but for its operation. Do you see that? A. Yes. Q. So, for example, if you've got a bore and you need to extend the bore because you've got to put in some bore drains or you have got to put in your pipes, all the usual things that happen on farms, that would all come within that, wouldn't it? A. Yes. ... Q. And, likewise, dams; do you see that referred to? A. Where, sorry? Are we back on page 13? Q. Yes. A. Yes, I see it says "farm dams". Q. Yes. It doesn't say small farm dams, does it? A. No, it doesn't. But that's the terms that the department and I took at the time. Q. It doesn't say large farm damages, does it? A. No, but farm dams, to us, meant something particular and we thought that was the correct interpretation. Q. It doesn't a medium farm dams, does it? A. No, it doesn't.

It was in that context that she was cross-examined about her failure (as contended for by Mr King) to construe criminal provisions narrowly as to which she gave the following evidence: Q. Now, when you prepared your prosecution memorandum, were you aware of the principle in relation to prosecutions in criminal offences involving statutes; that these statutes should generally be read narrowly? A. No, I wasn't. Q. And that they should be construed and that any ambiguity should be construed against the prosecution? A. No, I no, I wasn't. I thought if there was a legal ambiguity, it was up to the court to decide. Q. But are you suggesting that you knew that there was a legal ambiguity? A. No. You just asked me a couple of questions out of the blue about legal principles. Q. You had the benefit of the Allens' letter, didn't you? A. Yes. Q. An independent legal advice obtained by Mr Bailey? A. I did. Q. And you acknowledge, as I understand your evidence, that that took a different view from your personal independent view about what the word "dams" meant? A. What the word "farm dams" meant, and it was also different from the department's view of what "farm dams" meant. Q. Didn't it give rise to a caution in your mind that perhaps Mr Bailey might be right? A. Well, I didn't think he was. The people in the legal branch above me didn't think he was. The Director General obviously didn't think he was. Otherwise the prosecution wouldn't have been approved. So, all of us must have thought that our interpretation of the exemption was correct.

Ms Paget-Cooke was also cross-examined to suggest that she well knew that the land was cleared for the construction of a third water storage unit to extend Mr Bailey's existing irrigation cotton farming and that it was misleading, at best, to suggest in 3.4 of the prosecution memorandum that it was for the purpose of a "new agricultural enterprise". She explained that she used that term to convey the fact that the cleared land resulted in a change of land use for that land and, in that sense, it was a new agricultural enterprise on that land, the land having been cleared for irrigation storage purposes although she accepted that was to extend Mr Bailey's existing cotton growing enterprise. Mr King submitted that Ms Paget-Cooke's interpretation of the concept of a new agricultural enterprise is comprehending new land use (from dry farming to wet farming) are simply not tenable. I am unable to accept that submission. Her analysis, while not the only approach, was an approach open to her.

She also rejected the proposition as was put to her on repeated occasions that she was motivated to prosecute Mr Bailey to make an example of him or to promote the Department's position vis a vis farmers in the Region, maintaining her evidence that Mr Bailey was prosecuted because she was satisfied he had cleared a large tract of native vegetation of considerable conservation value without consent, thereby putting him in breach of the Native Vegetation Conservation Act.

She agreed that she was aware of the Jackson proceedings, and that they involved the clearing of five times more native vegetation than was cleared from the Strip but she remained firm that she was unaware of the outcome of those proceedings, or their impact on whether the prosecution of Mr Bailey should have been maintained, having left the Branch in February 2003.

The size or carrying capacity of the proposed third water storage unit is also relevant to whether Ms Paget-Cooke gave any, or any adequate consideration to the exemption in s 12(f) of the Native Vegetation Conservation Act.

It bears repeating that at the opening of proceedings in the Land and Environment Court in June 2003 the prosecution accepted that the proposed third water storage unit would fall within the definition of "a water body" and meet the description of "an artificial water body" in Schedule 3 to Environmental Planning and Assessment Regulation 1994 and, accordingly, was "designated development" pursuant to s 4 and s 77A of the Environmental Planning and Assessment Act thereby enlivening the operation of the exemption in s 12(f). This position was apparently prompted by the point having been taken by the defendants in the Jackson proceedings and the detailed consideration by Bignold J as to whether s 12(f) could be invoked as a defence to an allegation of illegal clearing. Although Bignold J held that s 12(f) did not apply in analogous circumstances to those under consideration in the prosecution of Mr Bailey (a view with which Talbot J did not disagree, without needing to decide the issue because he was satisfied the farm dam exemption operated as a complete answer to the charge), Bignold J's approach was overturned in this Court. Ms Kelly SC did not accept, however, that the clearing was undertaken by Mr Bailey solely for the purpose of constructing an artificial water body as defined.

Ms Paget-Cooke's evidence concerning the operation of the exemption under s 12(f) was given considerable emphasis in Mr King's closing submissions as one of a number of bases which proved that in her role as a prosecutor Ms Paget-Cooke acted maliciously and without reasonable and probable cause. This was said to follow inexorably from the fact that although in 3.1 of the prosecution memorandum she states categorically that the clearing was not excluded form the operation of the Act by s 12, she had no proper basis for making that statement, either because she failed to adequately interrogate the operation of the exemption or because she did not consider it at all.

It is necessary to set out her evidence on this issue in some detail. After accepting that the carrying capacity of the proposed third water storage unit was 3.5-4,000 megalitres she was asked: Q. You were aware that section 12(f) of the exclusions to which you referred included designated development? A. I would have been, yes. Q. And that designated development includes clearing for the purpose of construction of an artificial water body, being a dam of any size greater than 20 hectares or 800 megalitres capacity? A. Where are you? On 12(f)? Q. Yes? A. Yes, I can see 12(f). Q. Were you aware that the designated development there provided for referred you back to the EP&A regulations? A. I don't remember considering this. Q. You just didn't consider that at all? HER HONOUR: "I don't remember considering it". WITNESS: I don't remember considering it. KING Q. You don't refer to it anywhere in the documents, do you? A. No, I don't. Q. You didn't refer to it in your evidence a short while ago, did you? A. No. Q. Do you accept that one important, indeed crucial, element of the offence which you were proposing to bring against Mr Bailey is that the Act applies to the offence? A. Yes. Q. It is probably a fundamental observation but if Parliament provides that the Act doesn't have any application to a particular activity, then there is simply no offence at all, is there? A. No, and I don't remember any of us picking this up at the time. Q. You now acknowledge, do you, that you didn't pick it up at the time? A. Well, that's what I've just said.

The cross-examination then turned to another topic but was resumed the following day when the following evidence was given: A. ...I don't think I necessarily, or we necessarily, gave section (f) particular scrutiny because we knew that there wasn't a development consent which is what I say at the beginning of 3.1. And I do remember that, you know, we, at that time, interpreted that as meaning that there had to be a consent; in other words, there had to have been an assessment process gone through which was really the point of section 12. It was where there was some other environmental assessment process attached to whatever these things are itemised here. Then, it wouldn't be duplicated under the Native Vegetation Conservation Act. ... Q. You agreed that you acknowledged in your evidence yesterday that you didn't pick up the application of section 12(f) at the time you recommended the prosecution? A. Well, yes. But what I'm now saying is that I think we would have considered all of section 12, not have given particular emphasis to (f) because of the way we interpreted that; which was that because it was in that list of excluded clearing, it implied that there was some other process which implied that an actual consent or authority or licence or permit had actually been granted.

She was then cross-examined as to her knowledge of or interest in the decision in Director General Department of Land and Water Conservation v Bailey [2003] NSWCCA 361, when she repeated her earlier evidence: Q. Now, if you make the assumption that one of the grounds on which the Court of Criminal Appeal held that Mr Bailey was entitled to clear his land was that it was designated development within the meaning of section 12(f) of the Act, the 97 Act, then you would acknowledge, wouldn't you, that the prosecution was without foundation? A. Well, I I didn't know or think that at the time we brought the prosecution, which is surely what's the point here. Q. And the reason you didn't know or think that is because you just never considered section 12(f), did you? A. Well, what I said to you this morning, twice now, is that on my recollection now, we would have considered all those things in section 12. But we would have thought that the whole of section 12, the point of that, was whether there were other assessment processes, then those things are excluded. But there was no designated development application. There was no development consent. So, you know, that wouldn't have triggered alarm bells with us. Q. Let's just take it slowly. Firstly, you make no mention anywhere in the notes of 23 May, do you, of section 12(f)? A. No. And that's why I'm saying that I don't think we gave it special consideration, otherwise it would've been in those notes. But it didn't mean that we didn't consider section 12. You can't draw that conclusion.

She went on to explain that the operation of the exemption in s 12(f) was not, in her view, "clear cut", but because she and others had assumed that the exemptions in s 12 all operated in the same way, s 12(f) was "not picked up". Since it was her belief (correctly) that no development consent for the designated development to which s 12(f) refers had been granted, she concluded that none of the exclusions in s 12 had any application - the position stated by her in the prosecution memorandum at 3.1 (see [369]). Although she agreed that she knew the clearing related to the construction of what she described as "an irrigation dam" and that it was "an artificial water body", that did not trigger her to think that the exemption in s 12(f) might apply, s 12 in its entirety having been discounted as having any application on the basis of her assumption that each of the exemptions in s 12(a)-(p) required a consent, approval, or authority from some regulatory or legislative source and that designated development under s 12(f) was intended to be treated the same way.

Mr King submitted that irrespective of whether Ms Paget-Cooke thought about s 12(f) at all or whether she assumed it did not apply, she knew the proposed third water storage unit was an artificial water body and, on that basis alone, she must have appreciated that the application of the exemption in s 12(f) was of critical significance despite her evidence to the contrary. He submitted that her assumption that it did not apply was neither a reasonable nor appropriate approach of a prosecutor, in circumstances where she had not conducted any research into its application, as is borne out by the fact that there is no reference to it in any of the documentation prepared in support of the recommendation.

Mr Williams submitted that uninstructed by the decision of the Court of Criminal Appeal, the fact that Ms Paget-Cooke (who I would be satisfied in all respects to be diligent and competent) did not see s 12(f) as having any relevant application, was a view available to her. He submitted it may also serve to explain why the Department had the same mistaken view. After all, as he submitted, Allens "missed it" in April 2000, and two judges of the Land and Environment Court came to different views from the Court of Criminal Appeal as to the construction of the section.

I am satisfied that Ms Paget-Cooke's evidence concerning the s 12(f) exemption, and the extended cross-examination on the issue, is not that she ignored it but that, together with her colleagues in the Legal and Compliance Branch of the Department, she did not see it as bearing the construction ultimately held to be the proper construction by this Court. Applying the disciplined approach of focusing on the available evidence and the prevailing view of the law at the time the proceedings were commenced, in recommending the prosecution of Mr Bailey Ms Paget-Cooke is not revealed to be without reasonable and probable cause.

In 3.8 of the prosecution memorandum Ms Paget-Cooke confirmed her view that the prosecution was according to the DPP Guidelines. Mr King submitted that Ms Paget-Cooke failed to subject the question whether a prosecution should be initiated to the rigour of the three stage analysis in the Guidelines, including what he submitted were the critical integers of a viable criminal prosecution, namely burden of proof, onus of proof and the principle by which criminal statutes are interpreted in R v Adams [1935] HCA 62; 53 CLR 563 in that she failed to afford him the benefit of admitted ambiguity. There is nothing in the Guidelines that imposes any obligation on a prosecutor to resolve ambiguity in favour of a defendant.

It is a well-settled principle of statutory construction that where a statute affecting liberty is ambiguous, it will be construed in favour of liberty of the subject: Birch v Allen [1942] HCA 17, 65 CLR 621 at 626; Smith v Corrective Services Commn (NSW) [1980] HCA 39, 147 CLR 134 at 139; Williams v The Queen [1986] HCA 88, 161 CLR 278 at 297. I was taken to no authority to support the proposition contended for by Mr King that a prosecutor is required to resolve statutory ambiguity in favour of the accused when determining whether or not to institute criminal proceedings. The question for the prosecutor, as provided for in the published guidelines, is whether there are reasonable prospects of conviction, whether there is admissible evidence considered capable of establishing the elements of an offence and whether there are discretionary factors that, despite a positive view in favour of prosecuting, dictate that it should not proceed. Amongst those factors is included "the obsolescence or obscurity of the law". I do not see that as synonymous or analogous to ambiguity in the way contended for by Mr King.

In the ordinary course, it is then a question for the courts whether the statute creating the offence (or related legislation) admits of ambiguity, in accordance with the principle of statutory construction discussed in R v Adams, where the liability to penal sanctions must be clearly expressed to be the intention of the Parliament and ambiguity resolved in favour of an accused: ...No doubt, in determining whether an offence has been created or enlarged, the Court must be guided, as in other questions of interpretation, by the fair meaning of the language of the enactment, but when that language is capable of more than one meaning, or is vague or cloudy so that its denotation is uncertain and no sure conclusion can be reached by a consideration of the provisions and subject matter of the legislation, then it ought not to be construed as extending any penal category.

Mr King also submitted that the way Ms Paget-Cooke treated item 6 of the Guidelines, under the subheading "The prevalence of the alleged offence, and the need for deterrence, both personal and general", exposed her intention as being to punish Mr Bailey for a purpose unrelated to the imposition of criminal sanction for those who break the law, namely because the farm dam exemption was being abused by other landholders. Item 6 reads: It is likely that many members of the farming community take the view that the Rural Structures exemption should allow the clearing of native vegetation for the building of water storages of any size. Certainly Mr Bailey told a Departmental officer that he had been advised by NSW farmers that clearing for his proposed storage would be permitted under the exemption. Whilst the prevalence of the abuse of this exemption is not known, there is a general need for clarification of its scope and in order to deter those who might be considering inappropriate reliance on it.

Mr King's cross-examination on that item quite unfairly recasts Ms Paget-Cooke's views as the following extract makes clear: Q. Why do you say the exercise of the right that Mr Bailey exercised was an abuse of the exemption? A. Well, because my impression "water farm dam" was something small for watering stock on people's properties. If I say "farm dam", that is what comes to my mind. It isn't an enormous irrigation storage. Q. Had you been to the flood plains of Moree? A. No, but I had seen a lot of what were described as farm dams. Q. Would you accept that a farm dam in Dundas is different from a farm dam in the Moree Plains? A. That is obviously what the court found but my view of what was intended by the exemptions was something that was a stock water and domestic purpose dam, and they tend to be not anything like the size that Mr Bailey was clearing. Q. Can I suggest to you there was not one word of support in the legislation of the Parliament to support such a view? A. Well Q. Do you agree? A. No, I don't agree. I think the term was undefined and that was where the whole crux of the case came from. Q. It was all about rural structures, wasn't it? A. Yes, and rural structures in the sense of when this was drafted, I think, and colleagues told me, was always intended to be small farm dams. Q. Those words small farm dams don't appear in any law of this State, do they? A. No, they don't, and lawyers spend all their time trying to interpret what was and wasn't in legislation. This wasn't in legislation. Q. Do you agree you simply made up the words "small farm dams", haven't you? A. What? Just now? Q. No, to suit the prosecution case at the time you brought this prosecution? A. No, not at all.

Ms Paget-Cooke did not attribute to Mr Bailey any abuse of the exemption. Instead she made it clear that if it was being abused then the law needed to be clarified so that those who relied upon it inappropriately would be deterred along with others who might be inclined to follow suit.

Mr Williams submitted that the well settled principles in A's case according to which the success of an action for malicious prosecution fall to be considered, do not impose upon a prosecutor the obligation of assiduously trawling through the DPP Prosecution Guidelines with a view to adopting or distinguishing the significance of each of the considerations encompassed by the Guidelines before initiating criminal proceedings. He also submitted that even the failure to take into account one or more considerations, or to properly weigh competing considerations or perhaps even to overlook an important consideration, does not supply some prima facie proof of an absence of reasonable and probable cause. Mr King did not refer me to an authority which would support the proposition that either or both elements might be proved where a person in Ms Paget-Cooke's position failed to expressly refer to each of the guidelines that inform a decision of the Director of Public Prosecutions to prosecute for a breach of the criminal law. While I accept, as a general proposition, that the failure on the part of a prosecutor to give any consideration to the public policy considerations that underpin the Guidelines might, in some cases, be relied upon as some proof of either or both of the elements, I am satisfied that is not this case. I am well satisfied from the detailed consideration Ms Paget-Cooke gave to salient aspects of the Guidelines, as reflected in the list of factors that she referred to in Exhibit 11 and her detailed and careful consideration of them (a document which accompanied the prosecution memorandum and which is annexed to this judgment as Annexure 1), that what was said to be her failure to refer specifically to the elements of the offence under the Native Vegetation Conservation Act in Exhibit 11 is utterly unjustified, as is the submission that her consideration of the Guidelines was flawed.

In final submissions Mr King placed very considerable reliance on the Allens' advice, and the fact that the Department was aware of it at all relevant times, as evidencing both an absence of reasonable and probable cause and malice in the institution and maintenance of the prosecution. In his submission, the advice was in unqualified terms and persuasive and both Ms Paget-Cooke and the first defendant knew or should have appreciated that it would likely prove to be correct.

Consistent with what the High Court emphasised in A's case as the importance of focusing on the temporal dimension to the information available at the time proceedings are instituted or maintained, the Allens' advice must be assessed for what it addresses or as the defendants submitted, what it failed to address when it was rendered and not retrospectively. It must also be assessed in light of what was considered by the Department to be the proper construction of the "rural structures/farm dam exemption" as at July 2002 when the proceedings were commenced (and thereafter when they were maintained) and not retrospectively. As Mr Williams conceded, the effect of the advice was held to be correct in successive decisions in the Land and Environment Court in March and June 2003 and in the Court of Criminal Appeal in December 2003 and this must not be permitted to skew the analysis of what were competing views of the breadth or reach of SEPP 46 before the issue was settled by binding precent.

Mr Williams submitted that rather than the Allens' advice being compelling in its terms, it is significant that it does not refer to Mr Bailey's sketch as providing any indication of the dimensions of the proposed "reservoir" (as it was described by Mr Bailey) or to the potential size of it as a "farm dam", and nothing to indicate that Ms Wild appreciated its scale where it was cross-hatched on the topographic map. As Mr Williams pointed out, there was no reference in the advice to size, save as to note that development consent was not required if no more than two hectares was cleared for the purpose of construction. He submitted that was, on one view, entirely inconsistent with a structure of the size that was actually proposed.

In addition, in so far as the objective aspect of what constitutes an absence of reasonable and probable cause, Mr Williams submitted that it is telling that the advice makes no reference to SEPP 46 as the source of the exemption and makes no attempt to grapple with the meaning of the expression "rural structures" or "dam" or "farm dam" or how they might intersect with the "reservoir" Mr Bailey sought advice about. It is also telling, he submitted, that the advice does not refer to any principle of statutory construction that might be applied in ascertaining their meaning in the context of an exemption from the need to obtain development consent for the clearing of native vegetation under the Native Vegetation Conservation Act and in that way as a defence to any allegation of illegal clearing under that Act.

He also submitted that when applying the objective test to the sufficiency of the information available in July 2002 when the proceedings were commenced, it was at least open to a prosecutor to approach the question of construction of the terms in SEPP 46 by considering the ordinary meaning of those terms and, if necessary, to revert to a dictionary definition. In that connection he referred to the definition of a "dam" in the Macquarie dictionary where the closest analogy to an irrigation water storage unit is "an artificial water storage for farm use constructed by creating a barrier, either a wall or earthworks, to contain run-off from a slope" or "any barrier resembling a dam". Although Ms Paget-Cooke did not give evidence that she referred to a dictionary when considering whether the farm dams exemption could be invoked by Mr Bailey, and nothing expressly identified in the interrogatories answered by the first defendant that suggests he did, Ms Paget-Cooke did give evidence that the Department's view was that a farm dam was something different from an irrigation water storage unit and, as she and others in the Department read the words of SEPP 46 they allowed for that interpretation.

Mr Williams also submitted that the next step open to a prosecutor in July 2002 in considering whether the Allens' advice was so persuasive that the prosecution should not be initiated, would be to consider the operation of the "rural structures/farm dam exemption" in light of the scope, object and purpose of the Native Vegetation Conservation Act in order to determine whether, consistent with the approach of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355, it is possible to read the exception as being wide enough to permit clearance of a vast area of native vegetation.

Mr Williams also submitted that it was significant that although Ms Wild expressly confirmed the views of Mr McCosker (the native flora and fauna consultant engaged by Mr Bailey) that Mr Bailey will need to obtain approval under Part 8 of the Water Act to construct the "levees" for the proposed "reservoir", she makes no reference to the statutory expression "controlled work" in s 167 of the Water Act. Neither does she advise Mr Bailey that were he to obtain approval under Part 8 of the Water Act to construct the third water storage unit before clearing, the need to obtain development consent under the Native Vegetation Conservation Act would be obviated by the exemption in s 12(p).

Mr Williams submitted that rather than the advice providing cogent reasoning as to why the "rural structures/farm dam exemption" operated to include an irrigation water storage unit of very considerable size, the advice did little more than set out the unattributed words of two provisions within SEPP 46 and then proffer the advice that if Mr Bailey's activities satisfied the description of those words, he would not require development consent to clear native vegetation. At best, Mr Williams submitted the advice was highly qualified with heavy reliance upon unstated instructions and derivative views apparently proffered by Mr McCosker. He submitted that, viewed in this way, Ms Paget-Cooke was entitled to consider that the advice was "unpersuasive" insofar as it applied to the clearing undertaken by Mr Bailey and, further, that viewed objectively there were reasonably available cogent reasons why those senior to her in the Department did not come to any different view.

He submitted that it is an overstatement for Mr King to argue that the advice was so persuasive that the Department should have approached the Parliament to legislate to settle the issue. Mr King relied upon the release of a Draft Regional Vegetation Management Plan ("the Draft Plan") for the Moree region for public exhibition in May 2002, in which the first defendant, as the Director General of the Department, wrote the foreword. That document (extending over 80 pages) was relied upon to support the submission that the first defendant was well apprised of the proposal that the "rural structures exemption" be redefined and, in particular, that clearing for the construction of farm dams of no more than one hectare should be exempt, together with size specifications for other rural structures. Mr King submitted that the first defendant should not have prosecuted in those circumstances but await the gazetting of the plan after the process of public consultation had concluded.

It does not follow that because the first defendant as Director General of the Department supported a review of the optimum means of ensuring the future management of native vegetation in the region in accordance with the objectives and strategies a consultative committee had identified, that he believed that the existing rural structures exemption would necessarily, or even probably be interpreted in the way Ms Wild apparently interpreted it (that is, as not size specific). In my view, it is equally open to conclude that the first defendant saw a need to review the exemption in order to clarify a size limit on new rural structures for the future whilst maintaining a prosecution for what was considered to be a breach of the law as it then stood.

Mr King submitted that 3.4 of the prosecution memorandum ignores the fact that dams of the size Mr Bailey proposed building were in fact "everyday farm structures" in the Region as exemplified in the map at Tab 1 of Volume 7 of the Plaintiff's Tender Bundle (tendered by the prosecutor as Exhibit 7 in the proceedings in the Land and Environment Court). This is another matter Mr King relied upon as demonstrating that the first defendant knew that other irrigation farmers must have cleared similarly large tracts of native vegetation to build them and that to prosecute Mr Bailey for doing the same thing was unjustified and malicious. That is another conclusion which, in my view, does not necessarily follow from the evidence. I accept that the first defendant was likely to be aware that irrigation dams were located on the floodplain. However, the fact that there are apparently irrigation storage units of some considerable size on the floodplain is entirely neutral on the question whether Mr Bailey should be prosecuted for illegal clearing for the purpose of constructing a storage unit. There was no evidence as to when the existing units were constructed and whether native vegetation (as defined in the Native Vegetation Conservation Act) was cleared in the process. Perhaps importantly, as the commentary in Part A of the Draft Plan notes, only 9 per cent of native vegetation has been cleared for irrigation farming since European settlement.

Further, Mr King submitted while an irrigation storage unit may not be a typical example of a stock and domestic farm dam from the perspective of a lawyer, Ms Paget-Cooke apparently made no enquiries as to the way the "rural structures/farm dam exemption" was actually applied in the Barwon region. He asked her the following questions referrable to the map referred to above: Q. Do you agree that these dams that are depicted on this map indicate rural structures? A. Well, I don't know. I mean they're in the landscape and they are large water storages. Q. Isn't that a rural structure? A. Well, I don't know, because what you are trying to get me to say is they fall within the definition of farm dam in the rural structures exemption, and that's not what the department or I personally thought at the time. Q. Were you aware of the facts that are disclosed in this document [Exhibit 7] as at 2002? A. What facts? Q. The fact that there are large numbers of irrigation water storages of sizes approximately the same as proposed by Mr Bailey? A. I'm not sure. Q. Did you make any inquiries about that? A. I can't remember. Q. It was open to you to make that sort of inquiry, wasn't it? A. Well, it was open to me to ask anything I wanted, yes. Q. Did the Director General make any inquiry of you as to whether or not the proposed dam was an everyday farm structure? A. Not that I remember.

As the High Court said in A's case (at [85]) the assertion that the material upon which a prosecutor acted in instituting the prosecution was deficient may, not must, depend upon evidence demonstrating that further enquiry should have been made. Mr King did not identify what would or might have resulted from further enquiries of the Region that would or might have changed her mind.

The evidence establishes beyond doubt that in July 2002 (and it would seem, according to Ms Savage, for some time before that date) the construction of the "rural structures/farm dam exemption" and, in particular, what constituted a "farm dam" for that purpose, was contentious. The fact that the reach of the exemption was contentious is also reflected in 3.4 of the prosecution memorandum and items 6 and 10 of the document prepared by Ms Paget-Cooke according to the DPP Prosecution Policy and Guidelines. This is reflected in the treatment given to the competing views of the parties in the Land and Environment Court proceedings as to whether an irrigation water storage unit with a surface area of 80 hectares (or in the Jackson proceedings a unit with a surface area of 500 hectares) is a "farm dam" attracting the operation of the exemption in SEPP 46, and reflected in both first instance judgments in March and June 2003.

The fact that the issue was ultimately resolved in Mr Bailey's favour does not of itself compel the conclusion that the Allens' advice was so patently correct that the Department should have seen it as unarguable or that the prosecution of Mr Bailey for illegal clearing was doomed to fail because of it. There was nothing in either of the first instance decisions or in the consideration given to the question by the Court of Criminal Appeal that suggested that the arguments advanced by the Department that the exemption should be more narrowly construed were untenable. The highest that it was put was in the Court of Criminal Appeal where at [37] Shaw J considered that on the agreed facts it was difficult to find that Talbot J's construction was not reasonably open (extracted at [148]). Shaw J went on to say that were there some factual basis for a submission that the proposed water storage unit was unreasonably large, or beyond the day to day needs of Hazeldene, so that it was not capable of being seen as a "farm dam (and accordingly not a "rural structure" for the purposes of SEPP 46), then another conclusion might have resulted.

It is, of course, not unheard of for a criminal prosecution to proceed despite a submission from defence lawyers to the prosecuting authority that the prosecution will fail either due to a want of evidence or on legal grounds. Here, Ms Paget-Cooke gave consideration to the views of Ms Wild but did not accept them. I am also prepared to infer from the first defendant's signing of the prosecution memorandum that, as the Head of the Department administering the Native Vegetation Conservation Act, he did not regard the Allens' advice as compelling the conclusion that the prosecution for illegal clearing would probably fail, or even that it might fail. In short, I am not satisfied the Allens' advice has the evidential weight contended for by Mr King.

While I accept that in deciding the issue of an absence of reasonable and probable cause from a subjective perspective (that is the sufficiency of the material to warrant setting the process of criminal law in motion considered from Ms Paget-Cooke's subjective perspective) that the various checks and balances inherent in the process of considering whether to invoke the criminal law are important, it remains for Mr King to satisfy me that Ms Paget-Cooke probably did not honestly form the view that there was a proper case for prosecution or that she probably formed that view, an insufficient basis for the element of an absence of reasonable and probable cause to be made out.

As noted in [302] above, in [81] of A's case the expression "proper case for prosecution" is considered. There the Court recognised that the expression is not susceptible of exhaustive definition without obscuring the importance of the burden of proving the absence of reasonable and probable cause and a variety of factual and forensic circumstances in which the questions may arise. Importantly, the Court emphasised that to focus upon what is a reasonable and probable cause to prosecute in a particular case distracts attention from the fact that the plaintiff must establish the absence of reasonable and probable cause. Secondly, although perhaps of more relevance when considering whether the plaintiffs have established liability in the first defendant as prosecutor, to ask what will constitute reasonable and probable cause referable to a belief about probable guilt does not sufficiently encompass cases where the prosecutor acts upon information provided by others. Mr King submitted that it was the role and function of Ms Paget-Cooke as the legal officer charged with the task of considering whether a prosecution should be recommended to consider the legal sufficiency of the case and that in that sense she neither sought nor relied upon third parties. That submission ignores her evidence that what she assumed to be the way in which s 12(f) was intended to operate (that is that each of the exemptions in s 12 required consent approval or authority in order to operate as an exemption from the need to obtain consent under the Native Conservation Vegetation Act) was the shared view of others in the Department, and that it was not until s 12(f) was the subject of detailed argument in the Land and Environment Court and later the Court of Criminal Appeal, that any different view prevailed.

Mr King submitted that when the three critical questions referred to in [77] of A's case are applied to the present case Ms Paget-Cooke has been shown to have acted without reasonable and probable cause in setting the proceedings in motion, given what he submits she actually knew or believed about what constituted designated development for the purposes of the exemption in s 12(f) and her determination to ignore it. After considering Ms Paget-Cooke's evidence on this issue, Mr King's detailed cross-examination as set out at [461]-[462], and counsel's submissions on the question, for the reasons I give at [467] that submission is rejected.

Even if I am not persuaded that Ms Paget-Cooke probably did not have an honest belief in his guilt, Mr King submitted that it has been shown that she held that belief on an insufficient basis, it not being open to her to assume that the exemption from need to obtain consent under in s 12(f) did not apply without further enquiry and a proper interrogation of the law, equally as there was no sufficient basis, for the same reason, for her to conclude that the proposed third water storage unit was not comprehended by the rural structures/rural dam exemption in SEPP 46. As I have already noted above, the High Court said in A's case (at [85]) the assertion that the material upon which a prosecutor acted in instituting the prosecution was deficient may, not must, depend upon evidence demonstrating that further enquiry should have been made. There is no evidence in these proceedings that any enquiry by Ms Paget-Cooke, additional to her inquiries of the Region and senior officers in the Legal and Compliance Branch, would have yielded any different view as to the interpretation of the exemption in s 12(f) in the context generally of the exemptions in that section.

Mr King submitted that even if Ms Paget-Cooke might, on a generous view, be forgiven for not appreciating the operation of s 12(f), the first defendant, as head of the Department, could not and his failure to appreciate the application of the exemption in s 12(f) demonstrates that the prosecution could not succeed when viewed objectively. That submission must fail for the same reasons as set out above.

In conclusion, I am satisfied that the content and tenor of the prosecution memorandum and the comprehensive consideration given by Ms Paget-Cooke to the 17 separate factors in the Prosecution Guidelines, a copy of which accompanied her recommendation that Mr Bailey be prosecuted, and her evidence generally, leaves me in no doubt that she honestly believed the evidence was sufficient to warrant (from her perspective as a prosecutor) setting the criminal law in motion and that there was no legal impediment to a conviction. I am well satisfied Mr Bailey has failed to prove that more probably than not Ms Paget-Cooke acted without reasonable and probable cause in recommending that he be prosecuted.

For reasons already given, her various references to the Allens' advice as "guarded" (in the Notice of Meeting of 23 May) and "unpersuasive" in the prosecution memorandum I also accept were views genuinely held by her at the time. The consideration she gave to the way in which Mr Bailey might rely on the advice in mitigation bears that out (see item 10 in Annexure 1).

Even were I mistaken in that assessment, and that it is open to conclude that Ms Paget-Cooke's consideration of the "rural structures/farm dam exemption" was so fundamentally flawed that, viewed objectively, there was an insufficient basis for her to recommend a prosecution, I am not persuaded that there is any basis for finding that she was probably actuated by malice, in any of the various ways contended for by Mr King, or that any other ulterior purpose is to be inferred.

I do not repeat Mr King's submissions on the issue of malice. They are set out in detail at [358]-[366].

It is necessary to set out the answers to interrogatories administered by the plaintiff to the first defendant which were tendered by Mr King as evidence from which inferences should be drawn as to the material the first defendant had available to him when initiating the proceedings: 14. What were the findings or material questions of fact made by the Prosecutor in deciding to prosecute the First [Appellant]? If the findings are recorded in a document/s provide copies of same with your answer. 14A. In substance the material findings of fact are contained in the decision memorandum a redacted version of which (excluding legal advice) is annexed hereto. [This is the prosecution memorandum.] [Emphasis added.] 15. What was the specific evidence and other material on which the Prosecutor's findings were based in making the decision to prosecute? If the evidence and/or material are recorded in a document/s provide copies of the same with your answer. (a) What was the understanding of the Prosecutor in deciding to prosecute as to the applicable law? Provide a copy/copies of any material relied on by the prosecutor in deciding to prosecute on the applicable law. (b) What were the reasoning processes of the Prosecutor leading to the decision to prosecute? 15A. In substance the evidentiary material on which the Prosecutor's findings were based is referred to in the decision memorandum (see 14A above). Save as aforesaid the First [Respondent] objects to this interrogatory on the ground that any further answer to the interrogatory could disclose privileged information. (a) In substance, the applicable law was the Native Vegetation Conservation Act 1997 ('the NVC Act'). Save as aforesaid the First [Respondent] objects to this interrogatory on the ground that any further answer to the interrogatory could disclose privileged information. (b) In substance, the prosecutor considered all material placed before him, discussed the matter with senior officers of the Department and agreed to proceed with the prosecution as recommended. Save as aforesaid the First Defendant objects to this interrogatory on the ground that any further answer to the interrogatory could disclose privileged information.

It should be emphasised that the first defendant in the same filed answers to the interrogatories, admitted that he was a prosecutor. For reasons previously given I am also satisfied that Ms Paget-Cooke should properly be regarded as a prosecutor, although nothing turns on this for present purposes.

In each of the answers to the interrogatories set out above, and in particular the answer to interrogatory 15, the first defendant confirms what is otherwise obvious from the form of the prosecution memorandum when executed by him on 1 July 2002; namely, that he gave consideration to that document in the context of all of the material placed before him, including the consideration Ms Paget-Cooke gave to the Prosecution Guidelines and, after discussing the matter with senior officers, he approved Ms Paget-Cooke's recommendation to prosecute.

I have already dealt with the Allens' advice and concluded that it was not so persuasive in its terms as to compel a reasonable and prudent prosecutor, performing the role and function of the Director General as the head of the Department, to recommend against prosecution. In addition, there is nothing in the form or content of the prosecution memorandum to suggest any obvious deficiency in the evidence to support a prosecution (and on one view, much to commend it). I have already referred to the operation of the exemption in s 12(f) and the reasons why that might not have been seen by him as having any application to the case under consideration.

In the result, I am unable to come to any view other than that the material, when assessed objectively, was sufficient to support the first defendant's decision to prosecute. Moreover, there was nothing in Ms Paget-Cooke's commentary or her analysis of the issues as reflected in the prosecution memorandum to suggest that her recommendation was fundamentally flawed in any way. For those reasons, and there being nothing in Mr Bailey's case sufficient to raise any compelling inference to the contrary, I am satisfied that the first defendant has not been shown to have initiated the proceedings in the absence of reasonable or probable cause or maliciously.

The notice of motion and the disclosure of material in the supporting affidavit filed by the Crown Solicitor after the decision in Jackson had been published accord with the ethical responsibilities of a prosecutor upon whose instructions the Crown Solicitor acted.

Just as Mr Bailey was entitled to reject the proposal that the proceedings be adjourned pending the resolution of the appeal from the decision in Jackson, the first defendant was entitled, as a responsible prosecutor, to take the view that the prosecution of Mr Bailey should proceed in the absence of his consent. The only issue in contention at that time was the interpretation of the "rural structures/farm dams exemptions", it not being obvious that Mr Bailey would also rely on the s 12(f) exemption - an issue that had been resolved in the prosecutor's favour by Bignold J in any event. Although Bignold J interpreted the "rural structures/farm dams exemptions" adverse to the prosecutor, it does not necessarily follow that the first defendant's decision to commence proceedings should have been reversed for that reason. The consideration given by Bignold J to the interpretation of the exemption was by no means unconsidered. It was however, on a fair reading of the judgment, a secondary submission. His Honour gave primary focus to the operation of the exemption in s 12(f) of the Act. This left open the question of the statutory construction of SEPP 46 open to be reargued before another judge without offending the principle of stare decisis.

In any event, even if it might be open to view the legal and factual sufficiency of the case against Mr Bailey as diminished by the approach to the question of its construction by Bignold J, the conduct of the prosecutor in seeking Mr Bailey's consent to the adjournment until it had been resolved authoritatively on appeal is palpable evidence of a lack of malice and entirely inconsistent with any of the ulterior motives attributed to him in these proceedings.

Ultimately, it was unnecessary for both the Bailey and Jackson cases to proceed on appeal to the Court of Criminal Appeal. The fact that Mr Bailey's case proceeded by way of a stated case by Talbot J - with each side seeking to overturn one of the two bases upon which Bignold J decided Jackson at first instance - is not evidence of malice or demonstrative of an absence of reasonable and probable cause for the same reasons as expressed above.

On occasions Mr King's submissions verged on suggesting that because neither the first defendant nor the senior officers who co-signed the prosecution memorandum gave evidence in the proceedings, that proved the proceedings against Mr Bailey were commenced or maintained without reasonable or probable cause and maliciously. This is plainly wrong. Neither does application of the principle in Jones v Dunkel necessarily allow for proof of either element of the tort of malicious prosecution to be more readily inferred adverse to the first defendant, because he chose not to give evidence, any less than the operation of the principle relieved Mr Bailey of the burden of proving malice as a separate element. It is the sufficiency of the evidence in his case to prove both elements of the action for malicious prosecution, and any evidence called by the defendants upon which he might rely, that is the primary focus.

In ASIC v Hellicar [2012] HCA 17; 247 CLR 345 (at [165]-[166]), the plurality emphasised: Disputed questions of fact must be decided by a court according to the evidence that the parties adduce, not according to some speculation about what other evidence might possibly have been led. Principles governing the onus and standard of proof must faithfully be applied. And there are cases where demonstration that other evidence could have been, but was not, called may properly be taken to account in determining whether a party has proved its case to the requisite standard. But both the circumstances in which that may be done and the way in which the absence of evidence may be taken to account are confirmed by known and accepted principles ... Lord Mansfield's dictum in Blatch v Archer that "[i]t is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted" is not to be understood as countenancing any departure from any of these rules.

The Court went on to observe (at [167]): This court's decision in Jones v Dunkel is a particular and vivid example of the principles that govern how the demonstration that other evidence could have been called, but was not, may be used. The essential facts of the case, though well known, should be restated. The personal representative of a driver who had died in a collision with another vehicle brought an action for damages on her own behalf and on behalf of the deceased driver's dependants. The plaintiff's case depended upon demonstration that the other driver's negligence was a cause of the accident. The plaintiff sought to demonstrate negligence by having the tribunal of fact (in that case a jury) infer from facts concerning the road and the two vehicles involved that the collision had occurred when the defendant's vehicle was on the wrong side of the road. One of the defendants, the surviving driver, did not give evidence at the trial. The court divided about whether the inference which the plaintiff sought to have the jury draw about where the collision occurred was an inference that was open on the evidence. But the court held "that any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence".

The last cited passage is from the judgment of Kitto J in Jones v Dunkel (at 308). In determining whether the inference will be drawn in a given case, it must be drawn from other facts. That is the limit on the application of the principle that needs to be kept in mind (see RPS v R [2000] HCA 3; 199 CLR 620 at [23]). In the same judgment, their Honours Gaudron ACJ, Gummow, Kirby and Hayne JJ said, referring to Jones v Dunkel: In a civil trial there will very often be a reasonable expectation that a party would give or call relevant evidence. It will, therefore, be open in such a case to conclude that the failure of a party (or someone in that party's camp) to give evidence leads rationally to an inference that the evidence of that party or witness would not help the party's case (37) and that (38): "Where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference."

Footnote (37) cited Jones v Dunkel per Windeyer J at 321, and footnote (38) per Menzies J at 312. In the same passage from the judgment of Menzies J, his Honour said the drawing of the inference cannot be used to make up any deficiency in the evidence or as Kitto J described it at 308, it "could not properly be treated as supplying any gap which the evidence adduced by the plaintiff left untouched".

The question in this case is whether there are facts proved by the plaintiff, or legitimate inferences drawn from those facts, supporting proof of either element of the tort of malicious prosecution which inference may be more readily drawn because the first defendant did not give evidence. Put another way, it is only if evidence relied upon by the plaintiff allows for the legitimate drawing of the inference that any evidence from the first defendant and the co-signatories would not have assisted the defendant's case that proof of either or both of the elements of the tort can or might be supplied.

Having concluded that the material available to the first defendant, and the material considered by him does not provide a factual basis from which to infer he had no honest belief in Mr Bailey's guilt, and nothing from that material from which it can be said that it was probably insufficient viewed objectively, there is nothing upon which the principle in Jones v Dunkel can operate.

The elements of an action based on negligent misrepresentation obligate the plaintiffs to prove that the person making the representation has given information or advice on a serious or business matter, intending thereby to induce the person to whom it is made to act upon it, such that the person making the representation is under a duty of care in the giving of that advice or information.

The scope of the duty imposed must satisfy three conditions. First, that the person making the representation realises or ought to realise that the plaintiffs will trust in his/her special competence to give that information or advice; second, it would be reasonable for the plaintiffs to accept and rely on that information or advice; and third, it is reasonably foreseeable that those to whom the representation is made are likely to suffer loss should the information be incorrect or the advice unsound. Damage is an essential element of the cause of action.

In the pleadings, the plaintiffs allege that some nominated and other unnominated Departmental officers made material "misrepresentations" which induced the plaintiffs to rely on what was represented by them and they acted to their detriment in doing so, that is to say to prevent them from constructing the dam.

The pleadings identify the misrepresentations in paragraphs (b)-(ca) and (e)-(j) of the amended statement of claim as having been made between July and October 2000 and thereafter, each of which is said to have been made with the intention of inducing the plaintiffs to act to their detriment. It is further alleged that each of the misrepresentations was material, that it was relied upon by the plaintiffs and was productive of loss.

Two particulars were abandoned by Mr King in the course of the hearing (being 21(a) and (d)). Others were not supported by the evidence led in the plaintiffs' case. Particular 21(b) is in that category. It provides: That in relation to the application for the construction of the proposed farm dam Mr Gardner the servant or agent of the Defendants (and each of them) represented to the First Plaintiff that he had accurately transcribed the answers to questions given by the First Plaintiff to Mr Gardner onto the application form provided by Mr Gardner on behalf of the Defendants to the Plaintiffs under Part 8 of the Water Act 1912 for approval of the construction of the proposed farm dam in or about July 2000, which representation was erroneous in that the answers given by the First Plaintiff were not accurately transcribed by Mr Gardner onto the application form

A further two particulars, namely 21(i) and (j), can also be disregarded since there is no evidence to support the assertion, inherent in the misrepresentations as particularised, as the decision to prosecute was not made until 1 July 2002. The misrepresentations relied upon, namely that unnamed Departmental officers represented between July and October 2000, are as follows: (i) That the first Plaintiff had unlawfully cleared his land of native vegetation on the Strip under the Native Vegetation Conservation Act 1997 and on that basis the Department of Land and Water Conservation its servants or agents and/or the First Defendant were in the course of deciding whether or not to prosecute the First Plaintiff which was erroneous in that such decision had already been made by the defendants or one of them; and further (j) That between about July 2000 and July 2002 the Department of Land and Water Conservation its servants or agents including Messrs Garry Gardner, Rodney O'Brien and including other public officers Messrs Peter Christmas, Randal Hart, Ben Hanks and Brett Graham were checking on the status of the Department of Land and Water Conservation's decision to prosecute the First Plaintiff by the Department of Land and Water Conservation, which representation was erroneous as the Department of Land and Water Conservation had on the recommendation of each of Messrs Gardner, O'Brien, Christmas, Hart, Hanks and Graham made a decision to prosecute the First Plaintiff and to prevent the construction of the proposed dam.

The remaining particulars may be summarised as having the following import: (i) That between July 2000 (which I take to mean from 31 July 2000) and October 2000 and thereafter the defendants represented (through Mr Gardner and Mr O'Brien) that the first defendant had the power under the Water Act to defer consideration of the Part 8 application lodged by the plaintiffs in July 2000, when Mr Gardner left Hazeldene with a partially completed Part 8 application, whilst the clearing of the Strip was investigated. It is alleged that those representations were untrue because neither of the officers had the power to deal with the Part 8 application in that way, since they were not authorised by the second defendant to make any decision concerning the construction of the proposed farm dam. It is further alleged that in reliance on the representation(s) the plaintiffs deferred implementing their proposal to build a third water storage unit. (ii) That in July 2000 Mr Gardner said to Mr Bailey that he would treat the Part 8 application which he had filled in as a conforming or effective application for a Part 8 Water Act approval and, on behalf of the second defendant, would treat it as lodged for processing in accordance with the Act and that it had been lodged for that purpose.

For the reasons already referred to, I am satisfied that no valid or complying Part 8 application was lodged by the plaintiffs until 8 January 2004. Accordingly, until that time, none of the defendants was under a duty to exercise any power or function reposed in them under the Water Act. In any event, for the reasons I gave when considering what occurred at the meeting at Hazeldene on both 19 and 31 July 2000, I am not persuaded that the words Mr Bailey attributed to Mr Gardner on either occasion were said by him and, for that reason, the representation expressed in [521(ii)] and implied in [521(i)] above is not proved. Neither am I satisfied that the circumstances in which Mr Gardner came to attend upon Mr Bailey at Hazeldene on 19 or 31 July gave rise to any duty of care the second or third defendant owed to Mr Bailey (or any duty of care owed by them and discharged by Mr Gardner on their behalf) or that anything said on that occasion enlivened any duty of care which might be thought to exist.

I have also rejected Mr Bailey's evidence that he was told by Mr Thompson in a telephone call on 28 September 2000 that the application "should be able to be proceeded with".

Accordingly, since none of the misrepresentations pleaded in the plaintiffs' case is made out, the action must fail. In any event, the action is statute barred and, as I have noted, no submissions were advanced by Mr King to meet the Limitation Act defence pleaded in the amended defence.

Even were a conforming Part 8 application lodged before 8 January 2004 (which I am satisfied it was not), and if the action survived the Limitation Act (which it does not), the question arises whether any act or omission involving an exercise of a power under Part 8 of the Water Act (or a failure to exercise that power) is a special statutory power within the meaning of s 43A of the Civil Liability Act. That section provides: 43A Proceedings against public or other authorities for the exercise of special statutory powers (1) This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a public or other authority's exercise of, or failure to exercise, a special statutory power conferred on the authority. (2) A special statutory power is a power: (a) that is conferred by or under a statute, and (b) that is of a kind that persons generally are not authorised to exercise without specific statutory authority. (3) For the purposes of any such proceedings, any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power. (4) In the case of a special statutory power of a public or other authority to prohibit or regulate an activity, this section applies in addition to section 44.

Mr King directed no submission to whether the section was properly invoked as pleaded by the defendants. In those circumstances, I do not propose to do more than refer to recent authority in this Court where the limitation on liability in s 43A of the Civil Liability Act was considered. They were conveniently assembled by Rothman J in Grant v Roads and Traffic Authority of NSW [2014] NSWSC 379 at [114]-[155]. Given the terms of the Amending Act and that the investigation into the legality of Mr Bailey's clearing of a vast tract of native vegetation in the first clearing event current from the date that breach was notified in July 2000 and continuing until early 2002 (see Ms Savage's evidence), and having accepted Mr Dines as an honest witness who discharged his responsibilities without malice, I am of the view that no relevant unreasonableness could attend a decision or determination by the second defendant to defer consideration of a Part 8 application until the completion of that investigation, were a valid and complying application lodged.

I am also satisfied that the evidence establishes that due progress in the consideration of the application lodged by the plaintiffs on 8 January 2004 occurred. It was advertised within eight days of lodgement; appropriate environmental review was undertaken; communications were engaged in between Mr Bailey's agent, Mr Lawrence Sides, and the Department from early 2004 through to November 2004. The application was recommended for approval on 24 January 2004 following which there was some delay until approval was granted on 14 December 2005. Further discussions between Department officers and Mr Sides then took place regarding conditions imposed on the approval. The delay, which attracted an apology from Mr Cameron, does not provide any basis for an action at tort.

The intentional tort of misfeasance in public office is essentially a personal tort of a public officer. The plaintiffs rely on principles of vicarious liability to attribute liability to the second and third defendants for the conduct of various Departmental officers.

In Northern Territory v Mengel (1995) 185 CLR 307 at 370 Deane J identified five elements of the tort of misfeasance in public office, as follows: (1) an invalid or unauthorised act; (2) done maliciously; (3) by a public officer; (4) in the purported discharge of his or her public duties; (5) which causes loss to the plaintiffs.

Those public officers said to have misconducted themselves such as to attract vicarious liability to the third defendant include Mr Gardner, Mr O'Brien and the first defendant. (The pleadings also nominate the second defendant. A ministerial corporation cannot be a public officer on any view.)

In a complex pleading, which repeats much of what was alleged to be the actionable misrepresentations for the purposes of the attribution of liability for economic loss under that cause of action, the following appears to be the basis of the claim: In about 2000 (no further dates are provided) nominated officers and unnominated officers, without authority and with the intention of causing the plaintiffs loss, refused or failed to process the Part 8 application for the construction of the dam or to permit it to proceed, notwithstanding that the plaintiffs were lawfully entitled to construct it. It is further alleged that the named and unnamed officers knew that the plaintiffs had advice (namely, the Allens' advice) that the proposed construction was lawful but despite having that knowledge, they deliberately obstructed and delayed the construction of the dam by failing to give or refusing permission for it to proceed, indifferent to whether the Allens' advice was soundly based or reliable. It is also alleged that both express and implied threats were made that the construction would be "stopped" because it was "illegal" and that the officer or officers issuing the threats had the power to stop construction, knowing he or they had no such authority and no authority to make a threat of that kind.

The same issues that arose in the pleadings constituted by the cause of action that economic loss flowed from the making of false representations arise on this pleading. Many have been dealt with on the basis they are not established on the evidence or contrary to findings I have made on the evidence. In addition, were this cause of action to have any realistic prospects of success, it would be necessary to establish that the nominated and unnominated public officers knowingly acted in excess of their statutory power, and in the knowledge that their action would cause injury to the plaintiffs' business or would be likely to do so. To the extent that the claim relies upon the findings adverse to Mr Dines urged upon me by Mr King, the claim must fail. To the extent that it relies upon the actions of any other Departmental officer, it is not proved.

Misfeasance in public office is not established merely by showing that a public officer knowingly acted beyond power, and that damage ensued (see Mengel at 347). Rather, it is "a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm, or the officer concerned knowingly acts in excess of his or her power" (at 345).

Further, in Sanders v Snell (l995) 196 CLR 329 (at 345 [38]) the High Court observed that in deciding Mengel, the majority considered it sufficient to proceed on the basis that the tort requires an act which the public official knows is beyond power and which involves a foreseeable risk of harm.

In Mengel both Deane and Brennan JJ expressed a firmer view than the joint judgment about reckless indifference. Deane J said (at 370-371): In the context of misfeasance in public office, the focus of the requisite element of malice is injury to the plaintiff or injury to some other person through an act which injuriously affects the plaintiff. Such malice will exist if the act was done with an actual intention to cause such injury. The requirement of malice will also be satisfied if the act was done with knowledge of invalidity or lack of power and with knowledge that it would cause or be likely to cause such injury. Finally, malice will exist if the act is done with reckless indifference or deliberate blindness to that invalidity or lack of power and that likely injury. Absent such an intention, such knowledge and such reckless indifference or deliberate blindness, the requirement of malice will not be satisfied.

Brennan J said (at 357): Misfeasance in public office consists of a purported exercise of some power or authority by a public officer otherwise that in an honest attempt to perform the functions of his or her office whereby loss is caused to a plaintiff. Malice, knowledge and reckless indifference are states of mind that stamp on a purported but invalid exercise of power the character of abuse of or misfeasance in public office. If the impugned conduct then causes injury, then the cause of action is complete.

In Kable v State of New South Wales [2012] NSWCA 243, Basten JA said: Misfeasance also requires malice in the sense of deliberately unlawful conduct, or at least conduct as to the lawfulness of which the official is reckless. Causing harm by acting beyond the limits of power, even if negligent as to those limits, does not create a liability to pay compensation on the part of the official or the government: see M Aronson, "Misfeasance in Public Office: A Very Peculiar Tort", [2011] MelbULawRw 1; (2011) 35 Melb UL Rev 1 at 9-15. That is not to say that a public authority may not be liable for negligence (a tort of general application), but only that carelessness as to the limits of power is not in itself tortious.

In summary, the plaintiffs must establish one or more Departmental officer had actual knowledge that he was acting beyond power and that conduct would cause or be likely to cause injury to the plaintiffs or, in the alternative, that the officer acted with reckless indifference both to the possibility of his action being beyond power and to the possibility that it would cause or be likely to cause injury to the plaintiffs. They have failed to do so.

It is unnecessary for me to refer to the raft of defences relied upon by the defendants in these circumstances.

The plaintiffs also plead a cause of action based on what is identified as a tort of wrongfully interfering with trade or business interests by an unlawful act, constituted by what is asserted to be the insistence by Departmental officers that Mr Bailey take no steps to further the construction of the third water storage unit until resolution of the investigation into the illegal clearing, and their insistence that he obtain formal Part 8 approval for construction of the dam before the work was progressed.

The defendants pointed out that in Australia there are few authorities acknowledging the existence of this tort and none of them referred to by Mr King. In Sanders v Snell, the High Court expressly declined to decide whether a tort of intentional interference with trade or business interests by an unlawful act should be recognised in Australia. However, in noting that an essential element of any emerging tort is the undertaking of an unlawful act, the Court said: In Mengel the Court overruled Beaudesert Shire Council v Smith (1966) 120 CLR 145. It thus rejected the proposition for which Beaudesert stood: that "a person who suffers harm or loss as the inevitable consequence of the unlawful, intentional and positive acts of another is entitled to recover damages from that other." And it did so having first noted that the preferable view of Beaudesert (and the view favoured in later cases that had considered it) was that an "unlawful act" was intended to refer to an act forbidden by law rather than an unauthorised act in the sense of an act that is ultra vires and void. The majority judgment in Mengel noted that it seemed that the "embryonic or emerging tort" of interference with trade or business interests by an unlawful act does not extend to all unlawful acts and "at least in that regard, it is in need of further definition". Their rejection of Beaudesert is, however, consistent with confining what is an unlawful act for the purposes of this tort (if, that is, the tort is to be recognised in this country). It is also consistent with (or at least not inconsistent with) excluding from the definition of what is an unlawful act for this purpose acts whose only "unlawful" aspect is that they are unauthorised in the sense that they are ultra vires and void".

In Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126, Kenny J said (at [92]): There is no authority for the proposition that interference with trade or business interests by acting beyond statutory power gives rise to a cause of action. Moreover, a reading of the joint judgment in Sanders v Snell (1998) 196 CLR 329 ('Sanders v Snell) leads to the conclusion that, where a public authority and its officers are alleged to have wrongfully interfered with private business interests by alleged misuse of statutory power, any liability for damages is governed by the tort of misfeasance in public office, not by a tort of wrongful interference with trade or business interests.

Her Honour recognised that there had been some attempt in various cases to identify the elements of an "embryonic" tort of this kind, saying (at [97]): For the purposes of Australian common law, the elements of the tort of wrongful interference with a trade or business interest were recently stated by Refshauge J in Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd (2010) 173 ACTR 33 at 52 [139]-[141j ('Canberra Data'), where his Honour adopted the majority approach, as stated by Lord Hoffman, in OBG Ltd v Allan[2007] UKHL 21; [2008] 1 AC 1 ('OBG Ltd v Allan') at 31-33 [47]-[53]. This approach would require the applicants to plead: (1) a wrongful interference with the actions of a third party in which the applicants have an economic interest; (2) an intention on the respondents' part thereby to cause loss to the applicants; (3) the acts of interference being actionable by the third party as an interference with its freedom to deal with the applicants; and (4) loss or damage suffered by the applicants.

The pleading in this case does not conform to the elements identified in Canberra Data; in particular, the plaintiffs do not allege that any exercise of statutory power was wrongful because it constituted an interference with the freedom of a third party to deal with the plaintiffs. In Film Financial Consultants Ltd v Becker Group Ltd & Anor [2006] NSWSC 319, Rothman J at [75] referred to several cases where the cause of action was pleaded. In that case, his Honour observed that, "In each other case in Australia in which the emerging tort has been pleaded, it has never been successful, because one or more of the elements proposed in that tort was absent". This is one more case. In any event, the limitations issue is raised and was not addressed either in the amended reply or in submissions.

The defence of illegality is pleaded in the amended defence at paragraphs 41A-41F and was the subject of a response in paragraphs 9-13 of the amended reply.

The adequacy of the pleading of the defence was challenged by the plaintiff in interlocutory proceedings before me in 2011 (Bailey v Director General, Department of Natural Resources, Supreme Court (NSW), Fullerton J, 21 April 2013 unrep at [10]). Mr King appeared for the plaintiffs on that occasion. I resolved at that time that the pleadings were compliant with the Rules. There was no appeal from that ruling.

Mr Williams addressed the defence of illegality in brief in his oral submissions given that his primary submission, addressed at length in writing and orally, was that the plaintiff had not made any case of liability against any of the defendants in respect of any of the causes of action pleaded. In dealing with the defence Mr Williams addressed how it arose on the evidence and the way in which the defence was ultimately put referable to the evidence. In short, he submitted that by the plaintiffs taking and/or storing floodplain water from overflows of the Macintyre River, and from the Tarpaulin Creek watercourse into which those floodwaters emptied, they would be committing an offence under s 21B of the Water Act since they had no licence or authority under the existing Authority 90SA011547 to take river water other than according to the terms and conditions of that licence (see the discussion of the relevant provisions of the Water Act at [52]-[59]). He submitted that because the harvesting of floodwater was the method by which the proposed third water storage unit was to be filled, the loss of opportunity to promote and extend the existing cotton growing enterprise on Hazeldene was the loss of an illegally obtained opportunity and not recoverable. The defendants submitted that the statutory purpose in Part 2 of the Water Act is to protect and regulate water resources. An objective achieved, in part, by criminalising the unregulated use of "works" (as defined) to extract or use river water. It is that statutory purpose, it was submitted, that was incongruous with any liability of the loss of an opportunity which is dependent upon utilising works and the use of river water which is prohibited by law.

Mr Williams also developed the submission, referable to a series of gazetted orders signed by the first defendant for the Water Administration Ministerial Corporation tendered by the parties (in particular Exhibit 13 tendered by the defendants and exhibit AA tended by the plaintiffs) which he submitted was decisive of Tarpaulin Creek being a river for the purposes of the Water Act when the Strahler system (Schedule 4 to the order of 23 March 2001) was utilised for the purpose of determining the stream order of a watercourse on a topographic map.

In the course of what Mr King was clearly given to understand was an opportunity to reply to Mr Williams' submissions (both parties having furnished lengthy written submissions to which they both addressed oral submissions), in fact, after I had been intent on reminding him on repeated occasions his submissions were confined to a reply, Mr King produced an additional written submission of ten pages of single spaced typing confined to the defence of illegality. He submitted that the defence was wrongly pleaded and otherwise in breach of the Uniform Civil Procedure Rules. No reference was made to the fact that the matter had been argued and settled prior to the hearing or any explanation as to why the argument was being advanced in reply. The submissions also raised fresh issues concerning the interpretation of the terms and conditions of the Authority 90SA011547 in the context of operating provisions of the Water Act based upon a limited interpretation of the pleaded defence, namely the operation of s 20C of the Water Act only. Little attempt was made to grapple with the defendants' primary submission that the harvesting of river water from Tarpaulin Creek without licence was an offence. A significant body of case law was cited in support of the ultimate submission that the defence was not made out and other case law in support of what was described as the countervailing principle of legality and the presumption of innocence. Other rather more florid submissions were advanced concerning rights and freedoms of the common law and the need for Constitutional rights to be protected.

It was clear from what transpired when Mr King produced the document that Mr Williams was given no advance notice of Mr King's intention to re-agitate the question of the sufficiency of the pleading of the defence of illegality and that he had no advance notice of Mr King's intentions to file additional detailed submissions going to the principled question of its application in this case.

Given the stage at which proceedings had reached when the written submissions in reply were produced, I resolved to accept them but did not allow Mr King to address me orally as to their content. I also permitted Mr Williams to furnish a note in response to the written submissions if he wished after judgment was formerly reserved. I received a detailed written note, expressed succinctly, addressing each of the issues raised by Mr King in his written submissions and each of the authorities to which he had referred.

While the essential allegation in the pleading may be simply stated, the issue appeared to be recast as the evidence in the proceedings unfolded. In particular, the evidence was in a somewhat uncertain state in appointing with any precision the passage of floodwaters as they crossed Hazeldene in a flood event, how those waters dissipated and where they collected relative to the location of the Tarpaulin Creek watercourse or stream and the below ground irrigation chambers. That is not to say that the evidence was not in a settled state, or a reasonably settled state at the conclusion of the proceedings, or that Mr King could have been in any doubt after hearing Mr Williams' closing submissions as to how the defence was put. Despite that being the case in his written submissions in reply, he has raised a number of issues not developed by him in any meaningful way and in some respects in a way that contradicts aspects of his own clients' case.

As noted above, Mr King also referred me to a detailed body of case law which in his submission deprives the defendants of any reliance on the defence of illegality, even assuming that a question persists as to whether Mr Bailey had a formal legal entitlement to harvest floodwaters to fill the proposed third water storage unit in the way that he had apparently been harvesting floodwaters over many years. Mr Williams' submissions addressed each of the authorities relied upon by Mr King. In his submission, some were irrelevant, others distinguishable and others misstated the principles for which they were binding authority.

After giving detailed consideration to the complex of interrelated facts in issue underpinning liability for each of these successive courses of action relied upon by the plaintiffs and Mr Bailey on his own behalf, and resolving to the conclusion that no basis for liability is made out, I do not regard it as necessary to descend into the argument on the defence of illegality which was only relied upon by the defendants in the event that any basis for liability in one or more of the causes of action was made out.

I should make clear however that I have considered counsels' submissions, copies of which I will retain together with the material exhibits and a transcript of the evidence in the event that it is necessary to rule on the application of the defence at some later time.

On the plaintiffs' case judgment for the first, second and third defendants. ANNEXURE 1 Assessment of factors listed in the DPP prosecution Policy and Guidelines in relation to the proposed prosecution of Bruce Bailey for clearing native vegetation in contravention of Part 2 of the Native Vegetation Conservation Act 1997. (Prepared by Lindsey Paget-Cooke, 20 June 2002.) 1. The seriousness or triviality of the alleged offence, or that it is of a 'technical' nature only The offence involved the clearing of 120 hectares of native vegetation, including vegetation possessing habitat values. The cleared area formed part of a local vegetation corridor linking the McIntyre River riperial zone to the Boronga nature Reserve in the south. The clearing could therefore not be considered to be trivial or of a technical nature. 2. Whether or not the action would be perceived as counter-productive by bringing the law into disrepute, for example, where consent for the clearing would have been given if an application had been made Had an application been submitted, a Targeted Flora survey, a Fauna survey and Aboriginal sites survey would have been required. In view of the vegetation present it is almost certain that the application would ultimately have been refused. There do not appear to be any reasons why bringing this prosecution would result in the law being brought into disrepute. 3. Whether or not the alleged offence is of considerable public concern No specific public concerns have been noted. However, there is indirect public interest in the matter, in that clearing would not have been permitted under the terms of the draft Moree Regional Vegetation Management Plan, which has been prepared by the Moree Regional Vegetation Committee, the members of which include local stakeholders. Furthermore, the interpretation of the exemptions under the NVC Act is of interest to landholders across the State. 4. The necessity to maintain public confidence in such basic institutions as the Parliament and the courts There is a general obligation on the Department to use the legislation that Parliament has passed to achieve the objectives of that legislation. In this sense the prosecution of serious clearing offences will maintain the public confidence in these institutions. 5. The staleness of the alleged offence The offence was committed some time ago - probably more than 2 years ago - although the Department only became aware of the offence on 31 July 2000. Some delays did occur during the course of the investigation, due to staff shortages and the need to prioritise some other prosecutions in the same region. However, the offence is significant, and the NVC Act specifically provides that proceedings can be brought within 2 years of the date of knowledge of the offence in question. Therefore it is not regarded as inappropriate to commence proceedings at this stage. 6. The prevalence of the alleged offence, and the need for deterrence, both personal and general It is likely that many members of the farming community take the view that the Rural Structures exemption should allow the clearing of native vegetation for the building of water storages of any size. Certainly Mr Bailey told a Departmental officer that he had been advised by NSW farmers that clearing for his proposed storage would be permitted under the exemption. Whilst the prevalence of the abuse of this exemption is not known, there is a general need for clarification of its scope and in order to deter those who might be considering inappropriate reliance on it. 7. The availability and efficacy of the various options available to the Department to remedy the alleged breach In view of the extent of the clearing and the level of environmental harm, this is considered to be a serious breach. It is intended that remediation should be achieved through the issue of a s47 remedial notice. However, it is considered that the offence is deserving of a punitive response as well. 8. The likely length and expense of any legal proceedings, including the investigation to obtain the evidence The investigation is for the most part complete, and has only involved moderate Departmental resources in terms of staff time. As Mr Bailey has freely admitted, having authorised the clearing, the focus on the legal proceedings would be the legal interpretation of the Rural Structures and Regrowth exemptions. Therefore it is not expected that the final hearing would be particularly lengthy. It is therefore considered that the time and expense necessary to bring the proceedings will be worth it in terms of the clarification of the scope of the exemptions, and in terms of the future deterrence value assuming that the Department is successful. 9. Whether or not any resulting conviction would necessarily be regarded as unsafe and unsatisfactory, including the effect of any precedent which may be set No reason to suppose that this will be the case. 10. The likely outcome in the event of a finding of guilt, having regard to the sentencing options available to the court, including the size of the penalty It is possible that the court might be persuaded not to enter a conviction against Mr Bailey, on the basis that he relied on the advice he obtained from a reputable firm of solicitors. However, the Department would strongly argue against this, on the basis that - ● the advice should not have been read as allowing the extent of clearing which Mr Bailey carried out, and ● Mr Bailey had been advised by departmental officers that he would need to submit an application for consent to clear, because the proposed clearing was not permitted under the exemptions, and in view of this he should not just have relied on his solicitor's advice with out further consultation with the Department. Assuming that a conviction was recorded, then the penalty would reflect the court's view of the seriousness of the offence, and the fact that Mr Bailey would by then have incurred the expense of erecting fencing as required by the s 47 notice. It is expected that the penalty would be modest, but it is nonetheless felt that even if that is the case it is worth bringing the proceedings. 11. Whether the consequences of any conviction or penalty would be unduly harsh or oppressive The Department is not aware of Mr Bailey's financial circumstances, but these would be taken into account by the court in fixing the level of penalty. 12. The degree of culpability of the alleged offender in relation to the offence The Department regards Mr Bailey's degree of culpability as high, bearing in mind that he had received advice on 3 separate occasions from Departmental officers, but chose to ignore it and to proceed with his plans regardless. 13. Any mitigating or aggravating circumstances, including any previous advice given to the alleged offender The only mitigating factor, already referred to, is the advice Mr Bailey received from his solicitors. 14. Special circumstances that would prevent a fair trial from being conducted Not applicable. 15. Whether or not the alleged offender is willing to co-operate in the investigation or actions taken against others, or the extent to which the alleged offender has already done so. Mr Bailey has refused to be interviewed and/or to reveal the names of the contractors who undertook the clearing. However, this is not particularly significant, since the Department would not want to prosecute the contractors, who were clearly following Mr Bailey's instructions. 16. The action which is proposed to be taken against others arising out of the same incident Not applicable - see above. 17. Whether the alleged offender has been dealt with previously in regard to alleged breaches of the NVC Act and how, including whether the alleged breach is a continuing or further offence The Department has not had any previous actions against Mr Bailey. 23 September 2014 - Typographical error Amended paragraphs: Coversheet