Australia: The Penalty Decision In Garrett V Freeman

Last Updated: 3 March 2009

Jacinta Studdert, Rebecca Pleming and Susan Rose

Liability of individuals, councils and corporations for environmental offences

The recent cases of Garrett v Freeman (No 5); Garrett v Port Macquarie Hastings Council; Carter v Port Macquarie Hastings Council [2009] NSWLEC 1 highlight the essential need to ensure that detailed procedural guidelines in relation to environmental planning and assessment are implemented by all Councils, government agencies and state owned corporations who make determinations under Part 5 of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act). Such guidelines will require regular review to ensure compliance and avoid costly litigation.

Last month, in Garrett v Freeman (No. 5), Justice Lloyd of the New South Wales Land and Environment Court (Court) delivered sentence against both the Port Macquarie Hastings Council (Council) and its Director of Infrastructure Services, Mr Freeman.

Mr Freeman had, in earlier proceedings, despite pleading not guilty, been found guilty of two offences under the National Parks and Wildlife Act 1974 (NSW) (NPW Act) in his capacity as a "person concerned in the management of the Council". This was the first time a senior council employee had been prosecuted for actions undertaken as part of his role as a council officer. Contrary to section 118D(1) of the NPW Act, Mr Freeman, as the Director of Infrastructure Services, caused damage to the habitat, not being critical habitat, of a threatened species by undertaking construction of road works on land at Partridge Creek. The Court found that Mr Freeman had failed to comply with the requirements for environmental assessment for the construction of a road on environmentally sensitive land with the effect that damage was caused to the habitat of threatened species including the Eastern Chestnut Mouse and the Grass Owl.

The Council, charged in its corporate capacity, pleaded guilty to three offences under s 118D(1), as above. The Council also pleaded guilty to one offence under section 200 of the Fisheries Management Act 1994 (NSW) (FM Act) in that, it carried out reclamation work without the authority of a permit issued by the Minister.

The fines and costs in the penalty judgment (against both Council and Mr Freeman) totalled $499,000.

This judgment highlights the importance of compliance with the requirements of environmental and planning legislative requirements, particularly requirements regarding the preservation and protection of certain flora and fauna species under the NPW Act and the Threatened Species Conservation Act 1995 (NSW).

The prosecution against Mr Freeman

In the penalty judgment, the Court ordered Mr Freeman to personally pay total fines of $57,000 plus the prosecutor's costs in the sum of $167,500.

Justice Lloyd made the following key findings for the purposes of the Court's sentencing considerations:

  • The conduct was deliberate – as a result of discussions with Council employees and reports submitted in 2003, Mr Freeman and the Council knew that the area was the habitat of the Grass Owl and the Eastern Chestnut Mouse before any of the road works commenced, that the construction of roads could damage the habitat and that there was possibly a need for an assessment of the impact. As such, the Court found that the commission of the offence was deliberate. This deliberate and intentional conduct was an aggravating factor in sentencing.
  • Knowledge of non-compliance with Part 5 – Mr Freeman did not comply with the requirements of Part 5 of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) and thereby caused Council to fail to comply. The checklist 'Review of Environmental Factors' prepared by Mr Freeman was described by Justice Lloyd as being "severely defective" as it had no determination date, was not signed, did not adequately identify the proposed activity, did not mention the location of the roads or the material to be used to construct them, nor was there mention of the particular threatened species or their habitat. The absence of training and process manuals was not sufficient to excuse Mr Freeman's conduct on failing to address relevant environmental legislative requirements.
  • Environmental harm – proper expert opinion on the threatened species of the Grass Owl and the Eastern Chestnut Mouse was required, and Mr Freeman's failure to do so amounted to a finding of environmental harm and influenced the objective gravity of the offence.
  • Lack of training – the absence of training on environmental impact assessment was not sufficient to be a mitigating factor on penalty, rather the Court stated "as a director and sometimes acting general manager of the council Mr Freeman ought to have made proper efforts to find out what was required for a proper assessment."

The Court was of the opinion that Mr Freeman was truly sorry for his actions and that it was highly unlikely that he would re-offend. The Court took into account that Mr Freeman had, subsequent to the offences, been involved in the remediation of the Partridge Creek area and the institution of reforms to the Council's environmental impact assessment process.

The prosecution against Council

The Court ordered the Council to pay:

  • total fines of $45,500 plus the prosecutor's costs in the sum of $114,000 for offences under the NPW Act; and
  • a fine of $35,000 plus the prosecutor's costs in the sum of $80,000 for offences under the FM Act.

The same sentencing considerations that applied in respect of Mr Freeman applied equally to Council. In addition, the Court also took into consideration that Council had commissioned, adopted and commenced to implement the Partridge Creek Ecological Restoration and Conservation Management Plan outlining a range of restoration actions as well as the Thrumster Animal Control Program.

A key finding of the judgment for the Court's sentencing considerations against the Council was that, given Council's status as a public body, greater weight is placed on the need for a sufficiently high penalty for deterrence of a future breach in failing to properly carry out a Part 5 assessment and determination under the EP&A Act.

Why this case is significant

This case demonstrates the Department of Environment and Climate Change's (DECC) ability and willingness to prosecute an individual for breaching environmental laws in addition to the punitive approach it takes against corporations.

Usually where an offence is committed by agents or individual employees, including directors and managers of a corporation, proceedings will only be commenced against the corporation (section 6.1, EPA Prosecution Guidelines, revised June 2004). In making its decision as to who to prosecute, the DECC will take into account who is primarily responsible for the alleged offence and the degree of culpability involved (section 5.2 and section 7.2, EPA Prosecution Guidelines). The EPA Prosecution Guidelines also state that an employee who acted in good faith and followed a specific environment management procedure would generally not be prosecuted for an offence occasioned by following that procedure (section 7.3 EPA Prosecution Guidelines).

In order to avoid liability on the part of council, as well as to avoid individual liability on the part of persons involved in the management of council, it is recommended that detailed procedural guidelines be implemented which address the requirements of environmental and planning assessment. Any such procedures must be regularly reviewed to ensure their accuracy and audited to ensure compliance.

Particularly, thorough procedures for Part 5 assessment should be developed which address the requirements outlined in the EP&A Act and serve as more than a "mere token attempt to comply" and amount to a more detailed assessment than simply a "tick-a-box checklist".

Training of all council employees in environmental and planning assessment regulatory requirements and compliance procedures should occur regularly with records kept of training sessions and questionnaires.

Importantly, not only councils and council employees are affected by this penalty decision. The recommendations outlined above apply with equal force to government agencies and state owned corporations who make determinations under Part 5 of the EP&A Act.

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.

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