Posted on August 30, 2024 by Megan Hawley and James King 6

Update: Do special executive liability provisions extend to council officers?

The Court of Criminal Appeal has allowed an appeal against the Land and Environment Court’s decision in Environment Protection Authority v McMurray [2024] NSWLEC 6, finding that the special executive liability provisions in the Protection of the Environment Operations Act 1997 (POEO Act) do in fact apply to Council employees concerned in the management of the Council.

This decision is likely to have a wide-ranging application across a number of special executive liability provisions in relation to General Managers and other officers concerned in the management of local government.

Background

The Respondent in the proceedings was formerly the General Manager of a regional council. The Environment Protection Authority (EPA) alleged that while acting as General Manager the Respondent caused a sewage treatment plant to be used for the disposal of liquid waste, including leachate, without lawful authority.

The EPA charged the Respondent with using a place as a waste facility without lawful authority, which is an offence under s 144(1) of the POEO Act.

Special Executive Liability and the Legal Status of Councils

Section 169(1) of the POEO Act provides that if a corporation contravenes, whether by act or omission, a provision of that Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision.

An individual person may be proceeded against under s 169(1) whether or not the corporation has been separately proceeded against or convicted under the relevant offence provision: s 169(2) POEO Act.

An offence against s 144(1) of the POEO of unlawfully using a waste facility committed by a corporation is specified as an offence attracting special executive liability for a director or other person concerned in the management of the corporation.

A council’s legal status generally is as a body politic of the State and not as a corporation, see s 220(1) of the Local Government Act 1993 (LG Act).

However, section 220(4) of the LG Act provides that, although a council is not a body corporate (including a corporation), ‘a law of the State applies to and in respect of a council in the same way it applies to and in respect of a body corporate (including a corporation)’ (emphasis added).

Issues in the case

The Local Court had found that s 169 of the POEO Act was unavailable against the Respondent as an officer of a council as the LG Act provides that a council is not a corporation and s 220(4) does not apply.

In the Land and Environment Court (LEC) decision, the LEC rejected the appeal against the decision of the Local Court, taking a narrow view of the application of the special executive liability provision s 169(1) of the POEO Act with reference to s 220(4) of the LG Act.

The Court of Criminal Appeal overturned that finding, preferring a wider view of s 220(4) of the LG Act that a law such as s 169(1) of the POEO Act that provides for special executive liability of executives of a corporation is a law that applies to and in respect of a corporation. To apply that law in the same way to a council required that executives of a council be taken to have committed the same relevant offence unless one of the exceptions in s 169(1)(b) or (c) applies.

The Respondent, as the General Manager of the Council, was considered to be a person who is concerned in the management of the Council and so s 169(1) of the POEO Act could apply to him.

In the alternative, the Court of Criminal Appeal found that as s 144(1) of the POEO Act is an offence which can apply to a corporation as well as an individual, it is a law with respect to a corporation. As a result, that law is applied in the same way to a council under s 220(4) of the LG Act. Given that the Council contravened the offence provision, the special executive liability provisions apply to persons concerned in the management of the Council.

Implications

Similar provisions to s 169 of the POEO Act establishing executive liability offences for environmental offences exist in a number of other acts. Those include the National Parks and Wildlife Act 1974, Heritage Act 1977, Contaminated Land Management Act 1997 and Biodiversity Conservation Act 2016. The interpretation established by this decision will no doubt be carried across into those provisions, which are similarly drafted to the POEO Act provision.

As a result, council officers and executives concerned in the management of council can be charged individually for offences committed by the council under any of those Acts.

An important consideration, not specifically dealt with in the judgment, was at what level of a council would an officer or executive be considered to be ‘concerned in the management’ of the council? The decision is clear that a General Manager is such a person and that other executives of a council are likely included.

We consider it likely given the matters at stake in the proceedings that a special leave application to the High Court may be forthcoming and will provide further updates as they become available.

Should the findings in the judgment remain, there may also be consideration given by the State Government to legislative amendment in order to limit potential personal liability of any persons concerned in the management of councils for offences committed by the council.

The judgment in Environment Protection Authority v McMurray [2024] NSWCCA 160 can be accessed here.

Our earlier blog with respect to the LEC judgment is available here.

If you have any questions in relation to this decision, please leave a comment below or contact Megan Hawley on 02 8235 9703 or James King on 02 8235 9722.