Land and Environment Court of New South Wales CITATION : Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 9) [2008] NSWLEC 248 Wollongong City Council (Prosecutor) PARTIES : Ensile Pty Limited (Defendant) Robert Martin (aka Bob) Hogarth (Defendant) FILE NUMBER(S) : 50019 of 2007; 50021 of 2007; 50047 of 2007; 50048 of 2007 CORAM: Jagot J KEY ISSUES: Costs :- summons dismissed - application for professional costs under the Criminal Procedure Act 1986 - whether investigation into alleged offence was conducted in an unreasonable or improper manner - whether proceedings were initiated without reasonable cause - whether the prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested the accused might not be guilty - costs awarded to the defendants. Costs in Criminal Cases Act 1967 Crimes (Appeal and Review) Act 2001 Criminal Procedure Act 1986 LEGISLATION CITED: Environmental Planning and Assessment Act 1979 Heritage Act 1977 Legal Profession Act 2004 Justices Act 1902 Burns v Seagrave [2000] NSWSC 77 Canceri v Taylor (1994) 123 ALR 667 Cliftleigh Haulage Pty Ltd v Byron Shire Council [2007] NSWCCA 13 Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 Fosse v DPP [1999] NSWSC 367 Halpin v Department of Gaming and Racing [2007] NSWSC 815 House v The King (1936) 55 CLR 499 CASES CITED: JD v DPP [2000] NSWSC 1092 Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 Port Macquarie - Hastings Council v Lawlor Services Pty Limited; Port Macquarie - Hastings Council v Petro (No 7) [2008] NSWLEC 75 R v Moore; ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 4) [2008] NSWLEC 149 Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 6) [2008] NSWLEC 155 Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 7) [2008] NSWLEC 202 Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 8) [2008] NSWLEC 232 DATES OF HEARING: 25 August 2008 DATE OF JUDGMENT: 29 August 2008 PROSECUTOR Mr C W McEwen SC Mr M C Fraser SOLICITORS Kells the Lawyers LEGAL REPRESENTATIVES: DEFENDANTS Mr T F Robertson SC Mr T G Howard SOLICITORS Burrell Solicitors JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Jagot J 29 August 2008 50019 of 2007 50047 of 2007 WOLLONGONG CITY COUNCIL Prosecutor ENSILE PTY LIMITED Defendant 50021 of 2007 50048 of 2007 WOLLONGONG CITY COUNCIL Prosecutor ROBERT MARTIN (AKA BOB) HOGARTH Defendant JUDGMENT Jagot J: 1 On 18 August 2008 I dismissed the summons in each of proceedings 50019, 50021, 50047 and 50048 of 2007 (Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 8) [2008] NSWLEC 232). The defendants now seek costs under s 257C of the Criminal Procedure Act 1986 or, failing the making of a costs order, a certificate under s 2 of the Costs in Criminal Cases Act 1967. Statutory provisions relating to costs 2 Section 257C of the Criminal Procedure Act provides as follows: 257C (1) A court may at the end of proceedings under this Part order that the prosecutor pay professional costs to the registrar of the court, for payment to the accused person, if the matter is dismissed or withdrawn. (2) The amount of professional costs is to be such professional costs as the court specifies or, if the order directs, as may be determined under section 257G. (3) Without limiting the operation of subsection (1), a court may order that the prosecutor in proceedings under this Part pay professional costs if: (a) the accused person is discharged as to the offence the subject of the proceedings, or (b) the matter is dismissed because the prosecutor fails to appear, or (c) the matter is withdrawn or the proceedings are for any reason invalid. 3 The Court's discretion to award costs to the defendants under s 257C is subject to s 257D, which is in the following terms: 257D (1) Professional costs are not to be awarded in favour of an accused person in proceedings under this Part unless the court is satisfied as to one or more of the following: (a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner, (b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an improper manner, (c) that the prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought, (d) that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award professional costs. (2) This section: (a) does not apply to the awarding of costs against a prosecutor acting in a private capacity, and (b) does not apply in relation to proceedings for an offence against the Occupational Health and Safety Act 2000, the regulations under that Act or the associated occupational health and safety legislation within the meaning of that Act. (3) An officer of an approved charitable organisation under the Prevention of Cruelty to Animals Act 1979 is taken not to be acting in a private capacity if the officer acts as the prosecutor in any proceedings under that Act or section 9 (1) of the Veterinary Practice Act 2003. 4 The defendants accepted that the Council was not acting in a "private capacity" and s 257D thus applied. Principles 5 Provisions to the same or similar effect as s 257D have been considered on a number of occasions. 6 In Fosse v DPP [1999] NSWSC 367 Wood CJ at CL said that the equivalent provision in s 81(4) of the Justices Act 1902 placed the onus on defendants seeking a costs order to bring themselves within the statutory provisions. 7 JD v DPP [2000] NSWSC 1092 involved an appeal to the Supreme Court against the decision of a Magistrate not to award a defendant costs under s 41A(2A) of the Justices Act (a provision also in equivalent terms). The appellant relied principally on s 41A(2A)(a) (the investigation was conducted in an unreasonable or improper manner). The Magistrate decided that costs could not be ordered on the basis that the investigation was not conducted in an unreasonable or improper manner unless it fell "grossly below optimum standards". Hidden J held that this test involved error warranting appellate intervention on the basis of the principles in House v The King (1936) 55 CLR 499 at 504 – 505. The requirement for an investigation to be "grossly below optimum standards" placed "an unwarranted gloss" on the statutory provisions because no such words appeared in the statute (at [29] – [30]). In rejecting the test of requiring an investigation that fell "grossly below optimum standards" Hidden J observed as follows (at [31]): Obviously, an investigation which fails to meet optimum standards is not necessarily unreasonable. Equally, however, it might fairly be classed as unreasonable even though it does not fall grossly below those standards. In this case, his Worship did not have to characterise the undoubted shortcomings of the investigation in that way before determining that, in all the circumstances, its conduct was unreasonable. The test is purely objective. To find that the conduct of the investigation of a particular case was unreasonable does not necessarily impugn the general competence, far less the integrity, of those responsible for it. 8 Hidden J also said that the question whether proceedings have been initiated "without reasonable cause" (see s 257D(1)(b)) is to be answered by reference to the quality of the evidence gathered, "with an eye not only to the enquiries which had been made but also to those which should have been made" (at [28]). 9 Halpin v Department of Gaming and Racing [2007] NSWSC 815 involved an appeal to the Supreme Court under the Crimes (Appeal and Review) Act 2001 (including with respect to costs). Section 70 of the Crimes (Appeal and Review) Act is in the same (or substantially the same) terms as s 257D of the Criminal Procedure Act. Halpin provides a convenient summary of decisions about provisions equivalent to s 257D(1)(b) (proceedings initiated without reasonable cause) (at [57] – [60]). Circumstances satisfying that test have been variously expressed. In R v Moore; ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 Gibbs J (at 473) observed that a party cannot be said to have commenced proceedings "without reasonable cause" merely because the proceedings were unsuccessful. One way to test if proceedings were initiated without reasonable cause is to ask whether the proceedings, objectively assessed on the facts apparent at the time of instituting the proceedings, had no real prospect of success or were doomed to failure (Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275, Canceri v Taylor (1994) 123 ALR 667, Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 and the decisions cited therein). 10 Halpin also dealt with a provision equivalent to s 257D(1)(a) (the investigation was conducted in an unreasonable or improper manner). The statement in Halpin (at [49]) that the section "embraces" an investigation that falls grossly below the standard applicable to the relevant type of investigation is consistent with JD v DPP. However, the quote that follows in support of this proposition is the test formulated by the Magistrate set aside by Hidden J in JD v DPP. 11 Port Macquarie - Hastings Council v Lawlor Services Pty Limited; Port Macquarie - Hastings Council v Petro (No 7) [2008] NSWLEC 75 considered s 257D. Paragraph [60], concerning s 257D(1)(a), refers to the formula "an investigation grossly below optimum standards" citing JD v DPP and Halpin. As noted, in JD v DPP Hidden J held that this formula placed "an unwarranted gloss" on the statutory provisions so that the Magistrate's decision not to order costs had to be set aside. 12 In Cliftleigh Haulage Pty Ltd v Byron Shire Council [2007] NSWCCA 13 Hodgson JA (with whom Howie and Price JJ agreed) discussed the difference between provisions equivalent to ss 257D(1)(a) and (c). The latter requires both the unreasonable failure to investigate a matter and that the matter suggested either the defendant might not be guilty or the proceedings should not have been brought. The former requires only that the investigation was conducted in an unreasonable or improper manner. Hodgson JA considered this difference meant that the prosecutor's failure to interview an eye witness, when it was not known what that person's evidence might be, could not satisfy the test in (c) (because of the additional requirement) but could satisfy the test in (a). Facts 13 The defendants and the Council both relied on additional evidence in support of their competing submissions with respect to costs. I make the following factual findings in addition to those set out in my principal judgment in Ensile (No 8). 14 The land in Otford Valley Farm was subject to investigation for urban development potential from the early 1980's onwards. In particular, on 16 April 1981 the Department of Planning directed that the proposed environmental study for land in Helensburgh, Otford and Stanwell Park include an assessment of, amongst other things, existing land uses. 15 In December 1981 Ensile applied to the Council to erect a gate for the purpose of (amongst other things) controlling stock access on the land near Lilyvale Road. 16 In October 1985 the Council became aware of clearing activities on Otford Valley Farm. The clearing related to an area north of Area A and along Koornong Road. The Council alleged that the clearing was illegal development. On 21 October 1985 the Council resolved to initiate legal proceedings against the owner of the land (Ensile). Ensile's solicitor denied the allegations. The matter was sufficiently significant for the National Parks and Wildlife Service to become involved. The Council told the National Parks and Wildlife Service that the matter was being investigated. 17 In February 1986 the Minister for Planning issued a heritage order under s 136 of the Heritage Act 1977 over the land (excluding the paper lots near Helensburgh) to prevent clearing. This order was later withdrawn. 18 In March 1986 Ensile wrote to the Premier noting, amongst other things, that Otford Valley Farm was used for "horse raising and agistment and tourism". 19 In 1986 the Council prepared a land use survey on which lots 1 and 2 were identified as "Recreation (passive) – Undeveloped Land /Horse Riding Rural". 20 By September 1986, when no action had been taken by the Council about the clearing in 1985, a report to the Council recorded that the issue was complicated for a number of reasons including "the history of clearing and excavating the land". The report included a chronology which noted steps that had been taken including ordering aerial photography, inspecting the land, and the holding of a meeting on site with the Council's solicitor and Ensile's solicitor. The report also said that: 5 The Report to the Council meeting held on 8 September 1986 set out a number of matters still under investigation. These matters included the question of land ownership transfer following the release of blocks for sale; any existing use rights; and the state of the land prior to the clearing… … 7 In order to succeed in such actions [i.e. civil enforcement as the limitation period for a criminal prosecution had expired], it is still necessary to document that the clearing of land was in breach of planning control, the state of the land prior to clearing, the party responsible for clearing and the measures required to restore the land. This documentation is being prepared. 21 The Council did not pursue any person for this clearing activity thereafter. 22 In 1994 a Commission of Inquiry was held relating to appropriate land use zonings in the vicinity of Helensburgh. One of the parcels investigated during the Commission of Inquiry was Otford Valley Farm (referred to as Lady Carrington Estate South). The proposed developer of the land retained Queen's Counsel to make submissions on its behalf to the Commission of Inquiry. Those submissions (apart from one short extract) have not been located but part of their content is apparent from submissions in reply made by counsel on behalf of the Council. The submissions included an opinion to the effect that the land had the benefit of existing use rights for grazing and equestrian uses. The submission in response disputed this opinion on two grounds, first, that consent was required for agriculture since 1947 (which was incorrect) and, secondly, that the Council had not received any evidence supporting the claimed existing uses. 23 The Commission of Inquiry report identified development potential of certain cleared and disturbed areas on Otford Valley Farm, including that part of Area A within lot 1. This report referred to the order under the Heritage Act to prevent clearing. It also referred to existing land uses or practices on the land as a whole including horse riding, grazing and agistment. 24 During the period April to July 2006 (encompassing the two inspections Council officers made of the land and various telephone communications): (1) Mr Meusburger, Council officer, understood that Mr Hogarth informed him that the Blackwells had carried out the clearing but as they were just following his instructions Mr Hogarth thought they did not need to be bothered by the Council. Mr Meusburger had heard of the Blackwells and knew they came from the Helensburgh area. Mr Hogarth also told him that the clearing and mulching was good for the soil and it would be a nice area. Mr Burrell (solicitor) told Mr Meusburger that the log dump belonged to a tree surgeon permitted to use the land for storage. (2) Mr Hogarth told Ms Lemmon, Council officer, that the cut logs on the land belonged to Mr Dalner, a tree surgeon and gave her Mr Dalner's contact details. Ms Lemmon contacted Mr Dalner who confirmed this and informed her that he had been storing timber on the land for five to seven years. Ms Lemmon did not ask Mr Dalner any other questions about the land. (3) Mr Hogarth told Ms Lemmon that the clearing had been carried out using the "mulching machine" (that is, the tritterer) which was attached to another machine with rubber tracked wheels. He denied that trees had been removed and said he thought he had been "doing the right thing". Neither she nor Mr Meusburger (nor any other Council officer) asked Mr Hogarth what his instructions to the contractor carrying out the clearing had been. (4) Mr Hogarth also told Ms Lemmon that the property was used for horse trail riding, the cleared area would be a good place for horse jumps as it was flat and he wanted to spread out soil to promote growth of pasture grass. He mentioned purposes such as feed, regeneration, and farm management. Also that there was a problem with dumped cars as well as trees falling over that he called "widow-makers". Amongst many other things, he referred to the Commission of Inquiry as relevant. (5) Ms Lemmon knew that the property was called Otford Valley Farm but had not made inquiries about the history of the land. She looked at the aerials only. 25 The prosecutions were commenced by summons filed on 29 March 2007. Before the prosecutions were commenced, the Council did not request a formal interview with Mr Hogarth or attempt to make contact with any of the Blackwells. Inquiries of its own records, by this time, consisted of: - (i) the aerial photographs from March 2001, December 2005 and January 2006 used by Ms Lemmon to show the extent of the clearing, (ii) the title searches referred to by Ms Lemmon used to show that Ensile owned lots 1 and 2, and (iii) its electronic database of consents searched by Ms Lemmon to locate relevant consents and determine the zoning of the land. The Council did not, however, review the documents it held in respect of the Commission of Inquiry or Commission of Inquiry report or the records it held relating to the clearing activity in 1985 and subsequent investigations. The Council did not do so, I infer, because the possibility that the clearing might have been authorised as part of a lawful existing or continuing use under ss 107 or 109 of the Environmental Planning and Assessment Act 1979 (the EPA Act) was not considered before the prosecutions were commenced. Consideration of potential defences appears to have been limited to Ms Lemmon's inquiry of the Rural Fire Service on 17 May 2006 about any bushfire hazard reduction permit. 26 On 30 April 2007 the Council's solicitor, Mr Mantei, received an email from a resident who had heard about the commencement of the prosecutions. 27 On 14 May 2007, after the proceedings were commenced, the defendants' solicitor wrote to the Council's solicitor noting that the defendants had received advice from Senior Counsel and informing the Council that the land had been lawfully used for purposes including agriculture/grazing over many years and "the clearing of timber has at all relevant times been permissible as ancillary to the lawful use of the land for these purposes". The letter referred to these matters having previously been raised with the Council and drew attention to the Commission of Inquiry report. 28 The Council's solicitor responded by letter dated 29 May 2007 asking for documents on which the defendants proposed to rely to establish the date on which the uses commenced, their nature and physical extent, and details of any changes in the uses, as well as references to the pages specifically relied on in the Commission of Inquiry report. The Council's solicitor wrote again on 20 June 2007 stating that the claims of existing use rights were too vague and supported by insufficient information "to enable the [Council] to take any meaningful action". The Council's solicitor said to the defendants' solicitor "…the content of your letter does not give the [Council] sufficient information to conduct further investigation or seek to locate evidence supporting either guilt or innocence of your clients". 29 Mr Mantei requested further documents from the Council in about June 2007. The scope of this request is not known. 30 The Council attended a mention before the Court on 6 July 2007 (when the defendants were meant to enter a plea pursuant to earlier directions). The defendants did not enter a plea because, over their objection, the Council obtained leave to file and serve further evidence relating to the defendants' "foreshadowed defence of existing use rights by 20 July 2007". 31 On 9 July 2007 Mr Mantei emailed the local resident who had contacted him in April and requested information about the use of the land before Ensile's purchase in 1979 and whether the resident knew of anyone who might have knowledge of the land before that time. 32 Mr Carfield, Council planner, swore an affidavit on 11 July 2007. Mr Carfield (amongst other things) identified the history of planning instruments applying to the land and the consents granted with respect to the land from files held by the Council's solicitor. Mr Carfield also obtained and inspected copies of single image aerial photographs from 1948 onwards and described his observations of these images. Following objection the Council (properly) did not seek admission into evidence of Mr Carfield's observations from aerial photographs because the observations were opinions not based on any specialised knowledge of Mr Carfield. 33 The local resident responded to Mr Mantei's email on 15 July 2007. The email noted that Boral Mining used to own the land, which was zoned rural and undeveloped with only locals riding horses through it and no houses. The email said Ensile proposed the Lady Carrington Estate development in the late 1980s and the Department of Lands would have the relevant records. The email also said that on several occasions since 1979 Ensile had been accused of unauthorised clearing; the Council never went to Court over the clearing but should have the records. 34 Ms Murphy was admitted as a solicitor in July or August 2007. Ms Murphy took over day-to-day carriage of the prosecutions under Mr Mantei's supervision in September 2007. Between July and October 2007 Ms Murphy reviewed the further documents forwarded by the Council to its solicitors in response to Mr Mantei's request. These documents did not include the rate records referring to the rural use of the land after Ensile's purchase (which, apparently, had been destroyed) or the documents relating to clearing in late 1985. 35 Because the letter from the defendants' solicitor referred to the Commission of Inquiry report Ms Murphy read the report (starting in August 2007). She did not find detailed information in the report about past uses of the land or cattle grazing, but saw the references to horse riding and agistment. Ms Murphy also reviewed the related files with respect to the Commission of Inquiry, including the submissions on behalf of the Council disputing that the land had existing use rights for equestrian activities and agriculture/grazing. She liaised with the Council to find the submissions of Queen's Counsel to the effect that the land had existing use rights for agriculture/grazing and equestrian purposes, but the Council could not find those submissions and no further attempt was made to locate the submissions from any other source. 36 In addition to reading the Commission of Inquiry report and the files sent by the Council to its solicitors, Ms Murphy requested additional searches for the 1986 land use survey. Ms Murphy reviewed the survey but as she could not locate the author of the survey she was advised it would be inadmissible. 37 In September 2007 Ms Murphy obtained historical title searches to identify the owners of the land before Ensile. She then searched the website of Metropolitan Coal but found no information relating to the land. 38 Ms Murphy concluded that none of the documents supported the contention of existing use rights for agriculture/grazing as referred to in the letter of 14 May 2007. Rather, the documents supported the Council's position before the Commission of Inquiry that there were no existing use rights because, if the defendants had any supporting evidence, they would have produced it to the Commission of Inquiry. Ms Murphy was aware that the Council's submission contained a factual error about the operation of past instruments (in that consent was not required for agriculture between 1968 and 1979) but did not consider this undermined the reasoning. Ms Murphy thus considered the references to documents identified by the defendants' solicitor were a "dead end" and not probative of existing use rights. Ms Murphy agreed that, essentially, she had been the only person undertaking any inquiry about possible existing use rights after Mr Carfield's affidavit was filed and before the hearing. She did not at any time focus on the date 3 February 1986 as relevant to the operation of ss 107 and 109 of the EPA Act (this being the date on which ss 107(2) and 109(2), proscribing enlargement, expansion or intensification of existing and continuing uses commenced). 39 On 26 October 2007 the defendants entered pleas of not guilty to the charges. The proceedings were fixed for hearing on 14 to 18 April 2008. 40 On 16 January 2008 Ms McIlrath swore her first affidavit setting out her searches of the Council's records for any relevant development consent. Ms McIlrath is a Council customer service officer whose responsibilities include searching the Council's records system for past consents and approvals as part of preliminary investigations of unauthorised building and development works. Ms McIlrath searched the Council's electronic and DA cards system for any consents relating to the land in Otford Valley Farm. 41 On 20 March 2008 Mr Meusburger contacted Mr Adam Blackwell about the clearing. Mr Blackwell said that he had been involved in road maintenance not vegetation clearing. Mr Meusburger made no other inquiry about the person who carried out the clearing. 42 On 7 April 2008 Ms Lemmon served a notice to enter the land. The defendants objected to the notice. Ms Lemmon also interviewed some local residents on 9 April 2008 about their observations of the land and (amongst other things) whether it had been used for grazing. At about the same time Ms Murphy called an employee of Metropolitan Coal and asked about past land uses. 43 On the first morning of the hearing (14 April 2008) the defendants' counsel informed the Court that the defence would be existing or continuing use rights for agriculture/grazing purposes. On the second day of the hearing the defendants provided the Council with five witness statements relating to existing or continuing use rights (being the statements of Mr Collins, Mr Leslie Blackwell, Mr Alan Blackwell, Mr Buckley, and Ms Williams). In accordance with a request of the parties on 17 April 2008 I ruled on the issue of the party bearing the onus with respect to ss 107(1) and 109(1) of the EPA Act (Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 4) [2008] NSWLEC 149). 44 During the first week of the hearing Ms Murphy spoke to two local residents about their observations of the land. 45 On 22 April 2008 Ms McIlrath swore her second affidavit of searches of the Council's records for any relevant development consent. In this affidavit Ms McIlrath referred to searches of the Council minute books between 1945 and 1951 (assisted by Ms Hale and Mr Cottom). 46 The Council called Mr Buckley to give evidence in its case. Mr Buckley was the person who carried out the clearing as requested by Mr Hogarth. The Council closed its case on 22 April 2008. The defendants made a no case to answer submission based on the Council's failure to prove the lack of consent and to negative existing or continuing use rights beyond reasonable doubt. I ruled that there was a prima facie case on the basis that the defendants had the onus of proving the application of ss 107(1) or 109(1) of the EPA Act and the evidence of lack of consent had to be taken at its highest (Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 6) [2008] NSWLEC 155). 47 On 23 and 24 April 2008 the defendants went into evidence calling, amongst other witnesses, Mr Hogarth. The matter then had to be adjourned part heard until the week of 11 August 2008. 48 On 25 June 2008, during the adjournment, the Council filed a notice of motion seeking leave to call evidence in reply in the following categories: - (i) evidence from local residents, past and current Council officers (including rates inspectors, planners and rangers), and employees of other government departments who had seen the top country from the mid 1970s onwards, and (ii) expert evidence from a person analysing stereo pairs of aerial photographs. The top country is how most of the witnesses described the flatter ridge land near Helensburgh in which Area A is located. I dismissed the Council's notice of motion (Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 7) [2008] NSWLEC 202). Submissions 49 The defendants submitted that two circumstances satisfied s 257D(1)(a), (b) and (c) of the Criminal Procedure Act. The first circumstance relates to the issue of proof of the lack of consent for the clearing during the charge period (see Ensile (No 8) at [34] – [48]). The second circumstance relates to the issue of existing and continuing use rights (see Ensile (No 8) at [49] – [83]). 50 The defendants said that the failure to search the Council's minutes between 1951 and 1961 for a consent authorising the clearing during the charge period enlivened s 257D(1)(a), (b) and (c) because: - (i) the Council should have taken proper heed of the fact that it had no register or continuous record of consents for that period, in breach of its statutory duty to maintain a register, and (ii) had it taken proper heed of that fact the Council should have known that the prosecution was doomed to failure unless it could establish a reliable continuous record of consents or searched all of the original minutes within that period. 51 The defendants said that the second circumstance also enlivened s 257D(1)(a), (b) and (c) for the following reasons: (1) The Council was aware for many years that there was a live issue about the land having the benefit of the existing and/or continuing use provisions of the EPA Act by reason of agricultural and grazing activities (referring to the rating records, development application records, the environmental study process in the 1980s requiring the Council to report on existing land uses on this land, the documents relating to the clearing in 1985, and the Commission of Inquiry process and report between 1991 and 1994, particularly the submissions to the effect that the land had existing use rights for purposes including agriculture/grazing and horse riding). (2) Mr Hogarth told the Council officers in April 2006 that the clearing was carried out for farm management and pasture growth. However, the Council did not give Mr Hogarth any opportunity to make a formal statement or give a formal record of interview despite his candour about the clearing during the site inspection and in later telephone calls with Council officers. (3) Despite the information putting the Council on notice of the existing use rights issue, the Council made no inquiries of any person familiar with the land (in effect, until after the adjournment on 24 April 2008, when Mr Hogarth had already given evidence). For example, the Council did not attempt to interview its officers or former officers involved in the inspections of the land in the 1980s to confirm the rural use for rating purposes even though later events (the Council's application for leave to call evidence in reply in June 2008) established they were available for interview. (4) Council officers were understandably interested in a pile of cut logs found during the site inspection brought onto the land by Mr Dalner, a tree surgeon. Ms Lemmon did not ask Mr Dalner anything about his knowledge of the vegetation on the land even though he would have been well placed to give information confirming Mr Hogarth's account given on site that the clearing was of understorey vegetation only. The Council continued to press its allegations that the clearing involved removal of at least 48 trees (based on Ms Lemmon's evidence) until closing submissions when the allegation was withdrawn (see Ensile (No 8) at [10]). (5) The Council made no inquiries at all about what was cleared or how the clearing was carried out beyond Mr Meusburger's cursory question of Mr Hogarth on 17 July 2006. Mr Meusburger wrongly inferred that the Blackwells had carried out the clearing but due inquiry would have disclosed that Mr Buckley did so. In any event, the Council made no attempt to interview the Blackwells. The Council was content to proceed on the basis of Mr Hogarth's statement that he instructed a contractor to carry out the clearing without finding out what the contractor had been instructed to do, what the contractor did, the condition of the land before the contractor did the works, or who the contractor was. The Council ultimately accepted that it had to call Mr Buckley after his statement was provided. The Council could and should have made these inquiries itself. (6) Similarly the Council made no attempt to interview the manager of Otford Valley Farm, Mr Everingham. (7) The Council had relevant aerial photographs in its possession but made no attempt to have any proper analysis of those photographs carried out (such as that undertaken by Mr Elks). Instead, the Council filed an affidavit from Mr Carfield in which he attempted to draw adverse conclusions from examining copies of single images. Mr Carfield's method of analysis was so deficient that he incorrectly identified the relevant land and the Council accepted that his opinions could not be characterised as expert evidence at all and were thus inadmissible. Ms Lemmon's reliance on copies of single images from aerial photographs was similarly confounded for the reasons given in Ensile (No 8) at [78]. (8) Despite the letter dated 14 May 2007 and the leave granted to the Council at the directions hearing on 6 July 2007, the only evidence the Council filed and served relating to the issue of existing or continuing use rights was that of Mr Carfield referred to above. (9) On the second day of the trial, 15 April 2008, the defendants gave to the Council five witness statements. The Council could and should have made inquiries of these people about the history of use of the land. (10) This was not a case where witnesses failed to come up to proof, changed their evidence or the like. The Council simply failed to undertake the basic investigatory steps with respect to the possible existing or continuing use rights, being steps that were called for in the particular circumstances. The failures were repeated in that: -(i) there were no steps taken before the proceedings commenced, (ii) between 14 May and mid July 2007 the steps were wholly inadequate as they consisted only of Mr Carfield's affidavit, (iii) between August 2007 until just before the hearing Ms Murphy, a newly admitted solicitor, was left to carry out a review of incomplete documents that should have, but did not, prompt further inquires (such as the references to agistment as one of the land uses, the interim heritage order to prevent clearing in the mid 1980's which could not have emerged from nowhere, and the submissions from Queen's Counsel), and (iv) before the Council closed its case it had the five witness statements and could have interviewed those witnesses but did not (apart from Mr Buckley). 52 The Council submitted that the investigation of the alleged offence, initiation of the proceedings, and conduct of the trial were reasonable. Specifically: (1) The Council had established a prima facie case against the defendants ( Ensile (No 6) ). This was significant when considering the operation of s 257D of the Criminal Procedure Act ( Burns v Seagrave [2000] NSWSC 77). (2) With respect to the issue of lack of consent, the case might be different if the Council had not conducted any search of its records at all. But the Council did search its records except for the minute books or minutes for the period 1951 to 1961. At worst, the Council's searches were imperfect. Moreover, there is no evidence that, if the minute books or minutes between 1951 and 1961 had been searched, the Council would have located a consent authorising the clearing during the charge period. (3) With respect to existing use rights, the reasonableness of the Council's conduct must be assessed having regard to the fact that the defendants bore the onus of establishing any existing or continuing use. The defendants, through their own contacts and special knowledge, were able to adduce evidence establishing the use of Area A for grazing over an extensive period. But that fact does not prove that the Council could or should have done so. (4) Mr Hogarth was legally represented from at least July 2006 and under no disability. He could have requested an interview to put relevant information before the Council at any time but chose not to do so. He also did not indicate to any person that he had cleared Area A before (saying instead that he was conducting farm management and noting that he thought it was obvious that it had been previously cleared, which Ms Lemmon did not). Nothing Mr Hogarth said was sufficient to trigger any inquiry about existing or continuing use rights. (5) The letter of 14 May 2007 referred to existing uses in the most general of terms in circumstances where the land is a very large holding. In response to the letter from the defendants' solicitor of 14 May 2007 the Council, through its solicitors, made a detailed examination of its records to ascertain whether there was any evidence that the clearing could be authorised as part of an existing or continuing use. Moreover, the submission to the Commission of Inquiry referred to existing uses for grazing and not clearing. (6) By its letters of 29 May and 20 June 2007 the Council's solicitor advised the defendants of the Council's position that it could undertake no further investigations without more detailed information. The defendants said nothing further until the first day of the hearing. The defendants were entitled to say nothing but their lack of co-operation cannot be used against the Council to found a claim of unreasonable conduct or failure to investigate. It was not unreasonable in the circumstances for the Council to investigate the documents mentioned by the defendants' solicitor and then (on finding nothing to support the claims) to terminate any further investigation of this issue until after given the statements on the second day of the hearing. (7) The fact that the Council was not granted leave to call evidence in reply following its further investigations thereafter ( Ensile (No 7) ) also does not make its earlier conduct unreasonable. Discussion about lack of consent issue 53 A critical part of the investigation was whether or not consent had been granted authorising the clearing. The requirement for consent to carry out agriculture on the land between 1947 and 1968 (a matter the Council knew or should have known at all relevant times) made inquiries of the Council's records an essential part of the investigation. 54 The Council commenced the proceedings having searched its electronic database, which was an incomplete record of consents. Before April 2008 the Council did not search its minutes although Ms McIlrath believed that the secondary record of consents (the DA cards system) became continuous only in 1960 or 1961 and was aware that the Council did not maintain any consent register before that date. When the minutes were searched in April 2008, the search was limited to the period 1945 to 1951, even though the secondary record only became continuous in 1960 or 1961. The consequence was that the Council failed to prove beyond reasonable doubt that the clearing during the charge period was not authorised by any consent (see Ensile (No 8) at [34] to [48]). 55 I do not accept the Council's submission that the finding of a prima facie case negates the application of s 257D in these circumstances. The Council established a prima facie case because paragraph 2 of Ms McIlrath's second affidavit had to be taken at its highest. Lack of consent, however, was an element of the offence the Council had to prove beyond reasonable doubt. The Council alone knew what records it maintained, how it maintained them, and what officers were responsible for and had knowledge of those records systems. The Council was the sole repository of all relevant records of consents granted relating to the land the subject of the charges. The Council employed officers with special knowledge of its record keeping systems. Ms McIlrath was one such officer. She knew that the electronic record of consents was incomplete. Yet the evidence leads to the inference that the Council searched only its electronic record at the time it commenced the proceedings. 56 When Ms McIlrath became involved (noting that her affidavit is dated more than 9 months after the proceedings were commenced) she searched the electronic records and the DA cards system. During the hearing Ms McIlrath extended her search to the Council minutes (but only between 1945 and 1951) and prepared a further affidavit. Paragraph 11 of Ms McIlrath's first affidavit (where she recorded her belief that the DA cards system only became a continuous record of consents from 1960 or 1961) contained an obvious potential inconsistency with paragraph 2 of her second affidavit (where she recorded her belief that the DA cards system and electronic records held all consents since 1950), even without the benefit of her oral evidence (which made it clear that paragraph 2 was incorrect). To this must be added the additional inference, based on Ms McIlrath's evidence, that she normally would search the minutes when trying to locate any consent before 1961 or 1960. 57 In other words, the Council's investigation before commencement of the proceedings did not extend to eliciting relevant information about the nature, reliability and limits of the various components of its own records system from its own officers with the requisite knowledge. When the Council addressed these matters in January 2008 the investigation did not extend to what Ms McIlrath knew to be the only continuous record of consents between 1945 and 1961 (namely, the minutes). When the Council addressed this issue in April 2008 (during the hearing) the investigation did not extend over the whole period during which the minutes were the only continuous record of consents. 58 This was more than merely an imperfect search. I am satisfied that these circumstances mean that the investigation was conducted in an unreasonable manner within the meaning of s 257D(1)(a) of the Criminal Procedure Act. This conclusion does not "impugn the general competence, far less the integrity, of those responsible for" the investigation (JD v DPP at [31]). Based on the same reasoning process identified in Cliftleigh Haulage, I am not satisfied that the circumstances satisfy s 257D(1)(c) because the results of any search of the minutes between 1951 and 1961 remain unknown. However, that fact does not exclude the application of s 257D(1)(a). Given my conclusion about s 257D(1)(a), I do not need to address s 257D(1)(b). Discussion about existing/continuing use issue 59 At all times since 1985 or 1986 the Council was aware (and ought reasonably to have remained aware) that the land the subject of the charges might have the benefit of an existing or continuing use for the purposes of agriculture/grazing within the meaning of ss 107(1) and 109(1) of the EPA Act and that clearing might be an ancillary aspect of the use for those purposes. This must be so because senior officers of the Council had identified the issue of existing use rights as potentially relevant to any legal action against Ensile for clearing of land within Otford Valley Farm in 1985 and 1986. The officers specifically noted this issue as a complicating factor for any legal proceedings. The fact that the clearing episode about which these documents were created is to the north of Area A does not undermine the fact that the Council was on notice, as early as 1985, that there was a complication in taking legal action for clearing on Otford Valley Farm because of potential existing use rights. 60 The Council's knowledge of this potential was reinforced during the Commission of Inquiry in the early 1990s. Queen's Counsel made a submission on behalf of the developer interested in developing Otford Valley Farm for urban purposes to the effect that the land had the benefit of existing use rights for agriculture/grazing and equestrian activities. The fact that the Council obtained and submitted contrary advice to the Commission of Inquiry highlights that the issue of existing use rights was a matter of real debate at this time. Moreover, the Council knew that the debate had not been resolved. Similarly, the fact that the purpose of the rights asserted was (relevantly) agriculture/grazing does not exclude ancillary activities. Clearing is normally carried out for another purpose and is commonly associated with agricultural pursuits, particularly creating grazing areas. Back in 1985 and 1986 the Council officers recognised these matters by acknowledging that legal proceedings against Ensile for clearing would be complicated by potential existing use rights. 61 In these circumstances the question whether the clearing during the charge period might be authorised as part of the continuation of an existing or continuing use was a matter which suggested that the defendants might not be guilty of the offences charged. This matter was important because the statutory provisions ensure that no person carrying out development constituting the continuance of an existing or continuing use within the meaning of ss 107(1) and 109(1) of the EPA Act can be guilty of an offence against ss 76A or 76B (see, in particular, s 76C, which makes ss 76A and 76B subject to the other provisions of the EPA Act). It was obvious because of the previous dealings between the Council and the same land owner (Ensile) referred to above. 62 Further, the Council, or those advising it, knew or should have known that existing and continuing uses within the meaning of ss 107(1) and 109(1) of the EPA Act could be increased in area, enlarged, expanded or intensified before 3 February 1986 without necessarily altering the character of or abandoning the existing or continuing use. So too they knew or ought to have known that, if the defendants could adduce evidence establishing the type of existing or continuing use that officers of the Council thought might exist in 1985 and 1986, and that Queen's Counsel said existed in the early 1990s, then the Council could not succeed in any criminal prosecution unless it had proved beyond reasonable doubt that the clearing within the charge period involved one of the activities proscribed by ss 107(2) and 109(2). 63 Despite these circumstances the Council did not turn its mind to the issue of possible existing or continuing use rights at all before commencing the proceedings and thus did not make any investigation before that time of any fact potentially relevant to the issue. In consequence, before commencing the proceedings the Council did not: - (i) review its own records insofar as they might contain relevant information or trigger a line of inquiry, (ii) make inquiries of any of its current or former officers or any other person about either their observations of the land over time or knowledge of persons who might have made such observations, or (iii) obtain any expert analysis of aerial photographs that might be relevant to the historical uses made of the land. 64 When the defendants' solicitor put the Council on notice of the foreshadowed defence on 14 May 2007 (after the proceedings had been commenced), Mr Mantei requested additional documents from the Council. He made the inquiry by email of the local resident. Mr Mantei also responded to the defendants' solicitor, first, by asking for the documents on which the defendants relied including page references to the Commission of Inquiry report and, second, by asserting that the information provided was too vague for the Council to undertake any investigation. Despite the latter assertion the Council sought and obtained a direction from the Court permitting it to file and serve further evidence relating to existing use rights (as a result of which Mr Carfield's affidavit was filed and served). The Council did not, between May and July 2007 (when the further evidence was due), make any of the inquiries of the kind identified in [63] above or seek any additional time from the Court to do so. The documents Ms Murphy reviewed were not a "dead end" because they contained sufficient material to indicate that far more detailed inquiry about the potential for the clearing to have been authorised as part of an existing or continuing use was called for than occurred. 65 I do not accept the Council's submission that the defendants, through personal contacts and special knowledge, were able to obtain evidence that was not available to the Council. The main evidence establishing the continuing use came from Mr Collins, the Blackwells, Mr Lloyd and Mr Everingham (and Mr Hogarth but to a lesser extent). Mr Elks also analysed stereo pairs of aerial photographs which showed features consistent with the evidence of these witnesses. 66 Mr Collins was a long time resident of Helensburgh. His evidence was as readily obtainable by the Council as by the defendants had inquiries of the relevant kind been made. The same may be said of the Blackwells. In fact Mr Meusburger understood that the Blackwells had carried out the clearing. He knew they were long time residents of Helensburgh. When he eventually contacted Mr Adam Blackwell in March 2008 Mr Blackwell answered his questions fully and frankly. There is no reason to assume that the Council would not have been provided with the information Mr Leslie and Mr Alan Blackwell gave in their statements and in Court had the Council asked them relevant questions at any time. Mr Lloyd is in the same category as a long time resident of Helensburgh. Mr Elks is a consultant with expertise in the analysis of aerial photographs. The Council also could have availed itself of such expert assistance at any time. 67 Mr Everingham (the manager of Otford Valley Farm, employed by Ensile) and Mr Hogarth are in a different category. Nevertheless, the evidence shows that Mr Hogarth was never unwilling to talk with Council officers before the proceedings were commenced. However, the Council did not seek to interview Mr Hogarth or any other person about all matters relevant to the clearing including, for example, the nature and extent of vegetation on Area A before the clearing. The fact that Mr Hogarth had legal representation and was under no disability is not a weighty factor in support of the Council's arguments. The Council was the relevant investigating body. For the same reason the fact that Mr Hogarth did not assert that the clearing was lawful as an existing or continuing use when asked questions on site or during his telephone calls to Ms Lemmon is insufficient when weighed with the circumstances identified above. 68 It also follows from these observations that I do not accept the position set out in the letter from the Council's solicitor of 20 June 2007 that the Council could not investigate these issues because insufficient information had been provided. As I said in Ensile (No 7) at [17] – [18]: 17 Existing use rights over land depends on a statutory definition about the use of the land over time having regard to the provisions of environmental planning instruments regulating those uses and their continuation. 18 The defendants did not have to give the prosecutor the evidence in order to put the prosecutor on notice of the issue. The defendants told the prosecutor that the uses were agricultural, grazing and horse related. All of the evidence now foreshadowed by the prosecutor could have been obtained back in 2007. In other words, it is reasonably obvious that when the issue is existing use rights evidence about the historical use of the land will be relevant. It is also reasonably obvious that there are multiple potential sources of such evidence (including people who have seen the land in the past, aerial photographs, maps, as well as documents). 69 The Council could have obtained at any time the evidence the defendants called. The Council did not obtain such evidence because it did not interview any person who might have knowledge of historical uses of the land or retain a consultant with expertise in analysis of aerial photographs until just before or during the hearing. 70 Further, the onus on the defendants of establishing the existing or continuing use within the meaning of ss 107(1) and 109(1) did not relieve the Council of its obligation not to split its case and its onus to negative any increase, enlargement, expansion or intensification beyond reasonable doubt. Hence, it also did not relieve the Council of the need to carry out investigations of the kind referred to in [63]. In these circumstances the fact that the Council established a prima facie case also does not undermine the strength of the defendants' submissions, which I accept. 71 The Council's own records disclosed that there was a real issue about potential existing or continuing use rights for agricultural/grazing purposes on the land within Otford Valley Farm and their potential inclusion of ancillary activities such as clearing. Existing or continuing use rights were thus a relevant matter that suggested the defendants might not be guilty of an offence against ss 76A or 76B of the EPA Act. The Council was or ought reasonably to have been aware of this matter in the circumstances of this particular case. However: (1) before commencing the proceedings, the Council unreasonably failed to investigate this relevant matter by not making any inquiries with respect to the matter; and (2) after the defendants' notice of its defence on 14 May 2007 and before the Council closed its case, the Council unreasonably failed to investigate this relevant matter properly by not making any (or after the hearing commenced, sufficient) inquiries of current or former officers or any other person about either their observations of the land over time or knowledge of persons who might have made such observations and by not obtaining any expert analysis of aerial photographs that might be relevant to the historical uses made of the land. 72 For these reasons, I am satisfied with respect to s 257D(1)(c) of the Criminal Procedure Act. 73 I am also satisfied with respect to s 257D(1)(a). The same facts and conclusions recorded above establish that the investigation was conducted in an unreasonable manner. 74 Given these conclusions I do not need to deal with s 257D(1)(b). Conclusion and orders 75 The defendants have discharged their onus under s 257D(1). I consider that an order for costs should be made in the defendants' favour under s 257C consistent with the compensatory purpose of such orders. Given these findings it is not necessary to consider the alternative submissions for a certificate under the Costs in Criminal Cases Act. 76 Accordingly, I order as follows: (1) The prosecutor is to pay to the Registrar of the Court the defendants' professional costs of proceedings 50019, 50021, 50047, and 50048 of 2007 for payment to the defendants, the amount being either as agreed between the prosecutor and the defendants or if no such agreement can be reached, in accordance with Division 11 of Part 3.2 of the Legal Profession Act 2004 (with or without modifications prescribed by the regulations). (2) The exhibits may be returned. **************************** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.