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R v Dumble[2021] QCA 161

SUPREME COURT OF QUEENSLAND

CITATION:

R v Dumble & Ors [2021] QCA 161

PARTIES:

R

v

DUMBLE, Stephen Craig

(first respondent)

SCHOFIELD, Donald

(second respondent)

BOND, Peter Adam

(third respondent)

RATTAI, Daryl Owen

(fourth respondent)

FILE NO/S:

CA No 164 of 2021

DC No 1809 of 2020

DIVISION:

Court of Appeal

PROCEEDING:

Reference under s 668A Criminal Code

ORIGINATING COURT:

District Court at Brisbane – Unreported, 25 June 2021 (Clare SC DCJ)

DELIVERED ON:

6 August 2021

DELIVERED AT:

Brisbane

HEARING DATE:

28 July 2021

JUDGES:

Sofronoff P and Mullins and Bond JJA

ORDER:

Question: Is it necessary, pursuant to s 493(2) of the Environmental Protection Act 1994 (Qld) (the Act), that, for an executive officer of a corporation to be guilty of the offence of failing to ensure that the corporation complies with the Act (in circumstances where the corporation commits the offence of wilfully and unlawfully causing serious environmental harm), the serious environmental harm caused by the corporation must have come to fruition during the executive officer’s tenure as an executive officer?

Answer: For the purposes of s 493(2) of the Act, a corporation is taken to have committed an offence against s 437(1) of the Act when serious environmental harm results from the corporation’s causative wilful act.  A person who is an executive officer of the corporation when the harm was actually caused is guilty of an offence under s 493(2) of the Act – subject to the statutory defences.

CATCHWORDS:

CRIMINAL LAW – APPEAL AND NEW TRIAL – PROCEDURE – MISCELLANEOUS MATTERS – QUEENSLAND – REFERENCE OF QUESTION OF LAW – where, under s 493(2) of the Environmental Protection Act 1994 (Qld), if a corporation commits an offence against a provision of the Act, each of the executive officers of the corporation also commits an offence – where, under s 437 of the Act, a corporation commits an offence if it wilfully and unlawfully causes serious environmental harm – whether the corporation’s offence has been committed until serious environmental harm has actually resulted from the corporation’s act – where executive officers of a corporation are to be tried on indictment with having committed offences under s 493(2) in circumstances where the corporation is alleged to have committed an offence under s 437 – whether the serious environmental harm must have actually resulted during the executive officer’s tenure as an executive officer in order for criminal liability to be established

Criminal Code (Qld), s 590AA, s 668A

Environmental Protection Act 1994 (Qld), s 14, s 17, s 437(1), s 493

Hamilton v Whitehead (1988) 166 CLR 121; [1988] HCA 65, cited

COUNSEL:

S J Keim SC, with M J Woodford and P J Wilson, for the appellant

K A Mellifont QC, with A C Freeman, for the first respondent

S C Holt QC, with R M O'Gorman, for the second and fourth respondents

J A Greggery QC, with T P Pincus, for the third respondent

SOLICITORS:

Director of Public Prosecutions (Queensland) for the appellant

Ashurst Australia for the first respondent

Norton Rose Fulbright for the second and fourth respondents

Bartley Cohen for the third respondent

  1. [1]
    THE COURT:  The respondents were all charged on indictment with having committed an offence against s 493(2) of the Environmental Protection Act 1994 (Qld) (the Act)Each count is in materially identical terms and the following is one example:

“Between the first day of March 2007 and the first day of July 2008 near Chinchilla and elsewhere in the State of Queensland, Peter Adam Bond, being an executive officer of the corporation Linc Energy Limited ACN 076 157 045 did fail to ensure the corporation complied with the Environmental Protection Act 1994, when the said corporation did wilfully and unlawfully cause serious environmental harm contrary to section 437(1) of the Environmental Protection Act 1994.

  1. [2]
    Section 8 defines “environment” broadly to include “ecosystems and their constituent parts” and “all natural and physical resources”.  Section 9 relevantly defines the expression “environmental value” to mean “a quality or physical characteristic of the environment that is conducive to ecological health or public amenity or safety”.  Section 14 provides as follows:

14 Environmental harm

  1. (1)
    Environmental harm is any adverse effect, or potential adverse effect (whether temporary or permanent and of whatever magnitude, duration or frequency) on an environment value, and includes environmental nuisance.
  1. (2)
    Environmental harm may be caused by an activity—
  1. (a)
    whether the harm is a direct or indirect result of the activity; or
  1. (b)
    whether the harm results from the activity alone or from the combined effects of the activity and other activities or factors.”
  1. [3]
    The Act contemplates degrees of “environmental harm” beginning with environmental harm simpliciter, and extending to “material environmental harm”,[1] and ultimately to “serious environmental harm”.  It is the latter kind of harm that is material to this proceeding and the Act defines that expression in s 17 as follows:

17 Serious environmental harm

  1. (1)
    Serious environmental harm is environmental harm (other than environmental nuisance)—
  1. (a)
    that is irreversible, of a high impact or widespread; or
  1. (b)
    caused to—
  1. (i)
    an area of high conservation value; or
  1. (ii)
    an area of special significance, such as the Great Barrier Reef World Heritage Area; or
  1. (c)
    that causes actual or potential loss or damage to property of an amount of, or amounts totalling, more than the threshold amount; or
  1. (d)
    that results in costs of more than the threshold amount being incurred in taking appropriate action to—
  1. (i)
    prevent or minimise the harm; and
  1. (ii)
    rehabilitate or restore the environment to its condition before the harm.
  1. (2)
    In this section –

threshold amount means $50,000 or, if a greater amount is prescribed by regulation, the greater amount.”

  1. [4]
    Section 437(1) creates the following offence:

“A person must not wilfully and unlawfully cause serious environmental harm.”

  1. [5]
    Section 493 creates a further offence under which the respondents have been charged:

493 Executive officers must ensure corporation complies with Act

  1. (1)
    The executive officers of a corporation must ensure that the corporation complies with this Act.
  1. (2)
    If a corporation commits an offence against a provision of this Act, each of the executive officers of the corporation also commits an offence, namely, the offence of failing to ensure the corporation complies with this Act.

Maximum penalty—the penalty for the contravention of the provision by an individual.

  1. (3)
    Evidence that the corporation committed an offence against this Act is evidence that each of the executive officers committed the offence of failing to ensure that the corporation complies with this Act.
  1. (4)
    However, it is a defence for an executive officer to prove—
  1. (a)
    if the officer was in a position to influence the conduct of the corporation in relation to the offence—the officer took all reasonable steps to ensure the corporation complied with the provision; or
  1. (b)
    the officer was not in a position to influence the conduct of the corporation in relation to the offence.”
  1. [6]
    This case arises out of a project that Linc Energy Limited carried on near Chinchilla.  The company was undertaking “underground coal gasification” which involves injecting air or oxygen into a coal seam and then igniting the gases inside the seam.  The resulting chemical reaction creates a valuable gas product.  Each place at which this process is undertaken is called a “gasifier” and five gasifiers were established.  The prosecution case is that, by performing certain acts which formed part of this process, the corporation wilfully and unlawfully caused serious environmental harm.
  2. [7]
    The prosecution has particularised when it alleges that the corporation performed the acts which caused the serious environmental harm.  However, it has not identified when it could be said that serious environmental harm within the meaning of s 17 had resulted from those acts.  Indeed, the prosecution contends that it is unnecessary for it to prove that the company committed the offence at any particular time in relation to the period during which an accused person was an executive officer of the company.  Each of the respondents contends to the contrary.  The respondents assert that, in order to prove the commission of the charged offences, the prosecution must allege and prove that the company committed the alleged offence against s 437(1) during a period when the accused was one of its executive officers.
  3. [8]
    Pursuant to s 590AA of the Criminal Code (Qld) (the Code), the respondents sought a ruling to that effect and, on 25 June 2021, Clare DCJ ruled as follows:

“If the corporation commits the offence, section 493, subsection (2), provides that each of the executive officers of the – provides:

Each of the executive officers of the corporation also commits an offence.

On its face, the provision does not express a timeframe for occupying the position of executive officer.  But to make sense of it as a penal provision, it must be read as executive officers at the time the offence was committed, rather than merely executive officers having – merely people who had involvement as executive officers at some point.  Section 493 is not a party provision in the way that section 7 and 8 of the Criminal Code provide for the liability of accessories.  Section 493 is a specific offence in its own right, and, in my view, it does not apply to executive officers who have left before a form – before the offence was completed, and, in this case, relevantly, before serious environmental harm had resulted.”

  1. [9]
    The Director of Public Prosecutions (to whom we shall refer, for convenience, as the “appellant”) has referred this issue for the opinion of this Court pursuant to s 668A of the Code by a question framed in the following way:[2]

“Is it necessary, pursuant to s 493(2) of the [Act], that, for an executive officer of a corporation to be guilty of the offence of failing to ensure that the corporation complies with the [Act] (in circumstances where the corporation commits the offence of wilfully and unlawfully causing serious environmental harm), the serious environmental harm caused by the corporation must have come to fruition during the executive officer’s tenure as an executive officer?”

  1. [10]
    The appellant submitted that the ruling is wrong because “an executive officer would have failed to ensure compliance with the EPA in respect of actions of the corporation for which the executive officer had actively planned and taking of which (sic) the executive officer had approved, notwithstanding that the executive officer had moved on by the time that that planning and approval had been implemented in a practical sense”.[3]  The appellant argued that, otherwise, “an executive officer who has been grossly negligent can escape liability by simply resigning before the corporation’s servants put into effect the decisions to which the executive officer has contributed”.[4]  In oral submissions for the appellant, Mr Keim SC submitted that it was sufficient for an accused to have been an officer at a time when there was a sufficiently close connection between the person and the acts of the company to make it reasonable to hold the accused liable.
  2. [11]
    There are provisions in the criminal law which do require proof of actual involvement of that kind by a defendant in the commission of an offence by another offender.  Section 7 of the Code provides, inter alia, that, when an offence is committed, a person who enables or aids the offender to commit the offence or counsels or procures the offender to commit the offence, is “deemed to have taken part in committing the offence and to be guilty of the offence”.  Another example was s 54(1) of the Forest Act 1918 (WA)[5] which provided that a person who “is in any way directly or indirectly concerned in the commission of a forest offence” was “deemed to have committed that offence”.  Another expression that has frequently been used in order to implicate executive officers in offences committed by companies is “knowingly concerned”.  It has been held that in order to engage those words the prosecution must prove “a practical connection” between the accused and the commission of the offence. Provisions of that kind might result in criminal responsibility even in cases in which an accused person stood by and did nothing, such as a case in which a person deliberately failed to prevent the making of a fraudulent statement.[6]  There are also statutes which make it an offence for an accused to “permit” another person to do something.[7]
  3. [12]
    In the context of the liability of executive officers of corporations, there are provisions, such as s 256D(3) of the Corporations Act 2001, which render liable “any person who is involved in a company’s contravention” of a penal provision.  There are also provisions which make a director of a company guilty of an offence by failing “to take all reasonable steps to secure compliance” by a company with certain statutory duties.  Section 344 of the Corporations Act 2001 is such a provision.
  4. [13]
    A corporation may have committed an offence because a director, acting as the company itself, has done the act that constitutes the offence and, if relevant, also possessed the requisite state of mind.  In such a case the company is liable as a principal offender and not vicariously.[8]  The director who acted as the company in its commission of the offence may also be criminally liable.[9]
  5. [14]
    A provision like s 493(2), which imposes criminal liability based upon a person’s status, is not unique.  Sections 307B(3), 324BC(3) and 324CG(6) of the Corporations Act are examples.
  6. [15]
    Another is s 8Y of the Taxation Administration Act 1953 (Cth)[10] which provides:

8Y Liability of officers etc. of corporations

  1. (1)
    Where a corporation does or omits to do an act or thing the doing or omission of which constitutes a taxation offence, a person (by whatever name called and whether or not the person is an officer of the corporation) who is concerned in, or takes part in, the management of the corporation shall be deemed to have committed the taxation offence and is punishable accordingly.
  1. (2)
    In a prosecution of a person for a taxation offence by virtue of subsection (1), it is a defence if the person proves that the person:
  1. (a)
    did not aid, abet, counsel or procure the act or omission of the corporation concerned; and
  1. (b)
    was not in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the act or omission of the corporation.
  1. (3)
    For the purposes of subsection (1), an officer of a corporation shall be presumed, unless the contrary is proved, to be concerned in, and to take part in, the management of the corporation.
  1. (4)
    In this section, officer, in relation to a corporation, means:
  1. (a)
    a director or secretary of the corporation;
  1. (b)
    a receiver and manager of property of the corporation;

(ba) an administrator, within the meaning of the Corporations Act 2001, of the corporation;

(bb) an administrator of a deed of company arrangement executed by the corporation under Part 5.3A of that Act;

  1. (d)
    a liquidator of the corporation appointed in a voluntary winding up of the corporation; or
  1. (e)
    a trustee or other person administering a compromise or arrangement made between the corporation and another person or other persons.”
  1. [16]
    Section 8Y(1) requires proof by the prosecution only that a company committed a taxation offence and that the accused was concerned in, or took part in, the management of the corporation.
  2. [17]
    The purpose of this form of drafting can be seen in subsection (2).  It is to avoid requiring the prosecution to prove the accused’s actual involvement in the commission of the offence by the accused person.  Section 8Y of the Taxation Administration Act reverses the onus of proof on that issue so that, instead, it is the accused who has to prove that he or she was not an accomplice.
  3. [18]
    In this respect, it should be observed that s 8Y(1) posits that the offender “is” concerned in the management of the corporation “where a corporation does … an act … which constitutes a taxation offence”.  The commission of the offence by the corporation and the contemporaneous status of the offender as a manager lies at the heart of the offence and the provision would make no sense if the accused was not involved in the management of the corporation when the offence was committed.  It is the status of the alleged offender at the time when the offence was committed that supports the rebuttable presumption that the accused was an accessory.
  4. [19]
    Likewise, pursuant to s 493(2) of the Act, an executive officer commits an offence “[i]f [the] corporation commits an offence”.  Thus, at the moment when the offence is committed by the corporation, every executive officer of the corporation “also commits an offence” (emphasis added).  A person who was once an executive officer of the corporation, but who is not an executive officer at the moment the offence is committed by the corporation, can in no sense answer the description of an “executive officer” who “also” commits an offence.
  5. [20]
    We therefore respectfully agree with Clare DCJ’s ruling.
  6. [21]
    This conclusion raises a further question: when is the corporation taken to have committed an offence?
  1. [22]
    In this case, the criminal responsibility of Linc Energy Limited, which must be proved as one element of the offence created by s 493(2), arises by force of s 437(1).  The prosecution must prove that the corporation wilfully[11] and unlawfully[12] caused “serious environmental harm” as defined.  Three things must be proved: the corporation’s wilful act; the fact of the occurrence of serious environmental harm as defined; and that the relationship between the two is that of cause and effect.  But it is only upon the occurrence of the effect, namely the serious environmental harm, that the corporation becomes criminally liable under s 437(1) for its wilful act.  Until then, the corporation has not committed any offence under the section.
  2. [23]
    There is no difficulty of analysis when a corporation’s wilful act immediately causes an effect which must be regarded as falling within the definition of serious environmental harm.  In such circumstances, the corporation has committed the s 437 offence, and, by operation of s 493(2), the executive officers at that time have also committed the offence of failing to ensure the corporation complies with the Act.  By virtue of s 493(3), proof of the commission by the corporation of the s 437 offence becomes presumptive proof of the executive officers’ commission of the offence of failing to ensure that the corporation complies with the Act.
  3. [24]
    However, a corporation’s wilful act may have been done a long time before resulting harm ensues.  It may be difficult to determine with certainty when the causative act was actually done even though it is possible to prove that it was done, that it was done wilfully and that serious environmental harm has resulted.[13]  We do not consider that any different analysis would apply in such a case.  It is only upon the occurrence of an effect which must be regarded as falling within the definition of serious environmental harm that the corporation becomes criminally liable under s 437(1).  By operation of s 493(2), the executive officers at that time have also committed the offence of failing to ensure the corporation complies with the Act.  By virtue of s 493(3), proof of the commission of that offence becomes presumptive proof of a breach of statutory duty by the persons who were at that time its executive officers.
  1. [25]
    Section 493(2) does not render an executive officer vicariously liable for the corporation’s offence or liable as an accessory, as the appellant’s argument suggested.  That is why it is unnecessary for the prosecution to allege or to prove that an executive officer had any kind of “connection” with the corporation’s causative act.   Had the section contained such an element, it would have been necessary for the section to address an offender’s relationship with both the causative act and its result.  Instead, the question of the nature of the connection between the executive officer and the corporation’s causative act and the way in which the causative act operated to bring about the result become potentially matters for defence under s 493(4).
  2. [26]
    The statutory presumption afforded by s 493(3) is that the accused omitted to do something that could have been done by way of performance of the duty by an executive officer and which would have ensured that the corporation did not commit the offence.  That presumption can only be rebutted if the executive officer proves, on the balance of probabilities, that he or she sufficiently attempted to perform the statutory duty, albeit unsuccessfully, because the executive officer “took all reasonable steps to ensure the corporation” did not commit the offence.  The presumption of a failure to perform the duty can also be rebutted by proving that the duty was not capable of performance, because the “officer was not in a position to influence the conduct of the corporation in relation to the offence”.
  3. [27]
    No difficulty of analysis arises when a corporation’s wilful act immediately causes an effect which must be regarded as falling within the definition of serious environmental harm.  In such cases, the focus of the defence would be on the relationship in the way just discussed between the executive officer and the fact of the corporation having performed the causative act.  Relevant issues would include whether the executive officer could prove that he or she took all reasonable steps to ensure that the corporation did not perform the causative act, or that he or she was not in a position to influence the conduct of the corporation in relation to the causative act.
  4. [28]
    Nor would any difficulty of analysis arise if a corporation’s wilful act was done a long time before resulting harm ensued.  In such cases, the focus of the defence might well be the same as that mentioned in the previous paragraph.  But the executive officer might not have been an executive officer at the time the causative act was performed.  In such cases, the focus of the defence might then be on the relationship between the executive officer and the circumstances which resulted in harm resulting from the causative act.  Relevant issues would include whether the executive officer could prove that he or she took all reasonable steps to ensure that the causative act performed before his or her tenure did not cause serious environmental harm; or that he or she was not in a position to influence the conduct of the corporation in relation to the occurrence of serious environmental harm.
  5. [29]
    It follows that the answer to the question framed by the reference to the Court should be: For the purposes of s 493(2) of the Act, a corporation is taken to have committed an offence against s 437(1) of the Act when serious environmental harm results from the corporation’s causative wilful act.  A person who is an executive officer of the corporation when the harm was actually caused is guilty of an offence under s 493(2) of the Act – subject to the statutory defences.
  6. [30]
    The appellant’s arguments to the contrary must be rejected.  They do not accord with the text of the provision.  The submission that the section requires proof of a connection between an accused and the corporation’s causative act wrongly conflates accessorial liability with the elements of the distinct offence created by s 493(2).
  7. [31]
    It may be accepted that the policy behind s 493(2) is to create a penal incentive for executive officers of corporations to be astute to ensure that the corporation does not cause serious environmental harm.  It may also be accepted that a person who becomes aware of potential criminal liability for imminent environmental harm might resign office to avoid penal consequences.  That does not mean that the policy which the section supports will fail if a person could escape liability by resigning office before harm ensues.  It must be remembered that a director’s liability for offences committed in a corporate context is not limited to liability under s 493, which merely creates an easier path to conviction than reliance upon the accessory provisions of the Code.  As such, it is unsurprising that the provision might not render criminally culpable all those who manage corporations who are morally culpable.  Such a person may yet be criminally culpable as a principal offender under s 437(1) if he or she actually did the causative acts with the requisite knowledge.  Further, such a person might be criminally liable as an accomplice by virtue of s 7 of the Code.  Such a person might be also be civilly liable at the suit of the corporation.
  8. [32]
    The Court was also asked to give its opinion upon the question whether, for the purpose of ss 493(1) and (2) of the Act, the expression “environmental harm” as it appears in s 17(1) of the Act is to be construed by reference to ss 14(1) and (2) of the Act.  At the oral hearing of this reference, it emerged that no party disputes that the answer to that question is in the affirmative.  That is plainly right.
  9. [33]
    The real dispute between the parties in that respect is about whether the prosecution is entitled to rely upon s 14(2) of the Act in the way it proposes in order to make allegations about various acts of the corporation which are said to constitute a “combined” cause of the alleged harm.  The logic of the prosecution argument in that respect can be seen in the particulars that have been delivered.  However, that is a question of pleading that does not arise on this reference.  As there was no controversy in relation to the question which had been formulated, it is unnecessary to answer the question on this reference.

Footnotes

[1]  Defined in s 16 of the Act.

[2]  The respondents initially challenged the validity of the reference but no party now seeks to maintain that challenge.

[3]  Appellant’s outline [22].

[4]  Appellant’s outline [26].

[5]  Considered in Ashbury v Reid [1961] WAR 49 esp at 51.

[6]  See eg Collier v Electrum Acceptance Pty Ltd (1986) 66 ALR 613 at 651 per Woodward J.  See also R v Tannous (1987) 10 NSWLR 303 at 308-309 per Lee J (with whom Street CJ and Finlay J agreed); s 11 of the Drugs Misuse Act 1986 (Qld).

[7]  See the discussion in Criminal Law, The General Part, 2nd ed., Glanville Williams, at 360-362.

[8]Hamilton v Whitehead (1988) 166 CLR 121 at 126-127 per Mason CJ, Wilson and Toohey JJ.

[9]  See eg Mallan v Lee (1949) 80 CLR 198.

[10]  Discussed in Hookham v The Queen (1994) 181 CLR 450 esp. at 458-459 per Deane, Dawson and Gaudron JJ.

[11]  “Wilfully” is defined in Schedule 4 to the Act as intentionally; or recklessly; or with gross  negligence.

[12]  The element of unlawfulness is not relevant to this proceeding and will not be referred to further.

[13]  In referring to a causative “act” we do not exclude the possibility, in law and in fact, of a number of acts “causing” harm.

Close

Editorial Notes

  • Published Case Name:

    R v Dumble & Ors

  • Shortened Case Name:

    R v Dumble

  • MNC:

    [2021] QCA 161

  • Court:

    QCA

  • Judge(s):

    Sofronoff P, Mullins JA, Bond JA

  • Date:

    06 Aug 2021

  • Selected for Reporting:

    Editor's Note

Appeal Status

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