Article by Nick Thomas and Kim Glassborow.
There are more successful prosecutions of contractors and consultants for breaches of environment or planning law. Contractors and consultants should check there are environment and planning approvals, and review their agreements
Some decisions from the NSW Land and Environment Court in the second half of 2010 demonstrate that contractors and consultants can be criminally liable for advisory services they provide, and cannot escape criminal liability by relying on the principal's word about whether their scope of work is properly authorised under environment and planning laws.
We have highlighted three examples in this article, two of which relate to prosecutions under biodiversity laws.
Contractor liable for carrying out clearing without approval
In October, the Court made it clear that a contractor who undertakes an activity such as the clearing of native vegetation without the requisite approval cannot safely rely on the word of its principal that the work is lawful.
In the decision of Director-General, Department of Environment Climate Change and Water v Vin Heffernan Pty Limited  NSWLEC 200, the Court held a tree clearing contractor was liable for the unauthorised clearing of native vegetation under the Native Vegetation Act 2003.
What did the contractor do?
The contractor (Vin Heffernan) had been engaged by a landowner/developer to clear areas of the land for a multi-lot subdivision development. The actual work involved undertaking clearing, stacking and burning of cleared vegetation, site preparation and earthworks at the request of the developer.
The developer had obtained an approval from the local council to clear the land, but it did not authorise the clearing of vegetation within a prescribed 22 hectare area on the land. On the instructions of the developer, a Vin Heffernan employee cleared some vegetation in that 22 hectare area. The developer told Vin Heffernan that the clearing was authorised, and Vin Heffernan took the developer at his word, given the longstanding relationship between them.
What did the Court say?
The Court rejected the prosecutor's submission that Vin Heffernan had shown reckless indifference to the law, but did find that it had been negligent in not making its own inquiries about the scope of the relevant approval. Here, the Court drew a distinction between an independent contractor and an employee. It said the contractor was better able to challenge and question the principal, and to refuse to carry out the clearing work if necessary, while an employee was not, because he/she might face dismissal for doing so.
The penalty for the breach
The Court convicted Vin Heffernan of the offence and fined it $30,000, and ordered to pay the Department's costs to the amount of $30,000.
This decision highlights the risks for engaged contractors who undertake works without first checking that the appropriate approvals are in place.
Consultants liable for providing incorrect advice
Earlier this year, we reported on Plath v Fish and Orogen  NSWLEC 144, in which the Court made it clear that a consultant can be criminally liable under environmental laws if its advice leads to unlawful clearing of vegetation by others.
The decision in that case was affirmed in a decision last month involving a breach of heritage controls - Willoughby City Council v Finlay (No. 2)  NSWLEC 233.
What did the consultant do?
A building and interior designer was engaged to advise, design, engage contractors for, and certify, a significant renovation of a house in a heritage conservation area. In many respects, the defendant acted as a contracted "project manager".
The council development consent for the renovation authorised the demolition and rebuilding of parts of the house, while conserving others. Ultimately, however, the whole house was demolished and rebuilt, but the defendant did not advise the builder to stop or inform the council of the additional demolition.
The evidence was unclear about whether the defendant actively misled the builder about whether the demolition was lawful. The defendant said she had told the builder that the relevant demolition work was not authorised and it would be necessary to modify the development consent after the works had been carried out, "to tidy things up".
It's worth noting that the builder was also successfully prosecuted. In a decision pre-dating the Vin Heffernan decision we discussed above, but reminiscent of that decision, the Court held that the builder had been misled by the defendant designer/project manager (ie. the defendant in the Finlay case) into thinking that the additional demolition was authorised, but was found guilty for not checking the approvals itself. Those factual findings were not accepted in the Finlay case, as noted above.
The prosecutor and defendant agreed that there was no environmental harm as a result of the offence.
What did the Court say?
The Court rejected the defendant's submission that her actions (eg. preparing plans) did not actually constitute the offence. Justice Sheahan cited the earlier decision of Plath v Fish and Orogen in finding that a "causal link between the expert's role and the charged environmental harm" need not be "direct" for an offence to be committed.
In comments again reminiscent of the decision of Plath v Fish and Orogen, the Court in this case stated that "a message needs to be sent to the industry and wider community that strict compliance with the planning regime is required".
The penalty for the breach
The Court decided that the defendant in this case and the builder were equally culpable, and so imposed on the defendant in this case the same fine as had been imposed on the builder in the earlier case – $30,000, plus the prosecutor's costs.
What the decisions mean
These decisions reveal a trend towards stricter enforcement of environment and planning laws, and an expansion of the reach of those laws to contractors and consultants. In the same way as legislative amendments are removing the "no knowledge" defence for directors and managers of corporations which commit offences, so the courts are making it clear that contractors and consultants are responsible for ensuring that what they do is lawful, despite what those engaging them might lead them to believe, and irrespective of whether their role is at the coalface of environmental compliance.
As a consequence contractors and consultants should:
- check whether the necessary environment and planning approvals for a project on which they are working are in place, and check the scope of those approvals, before carrying out works or advising others to carry out works on the project; and
- review their agreements, to ensure that the scope of their work is clear and unambiguous and that there is an appropriate allocation of responsibility for their work.
You might also be interested in ...
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- Accidental breach of section 77A notice leads to $40,000 fine
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.