The Native Vegetation Act 2003 (NV Act) commenced in 2005 to regulate the clearing of native vegetation in NSW. Under s 12(1) of the NV Act, all land clearing is prohibited unless approved under a Property Vegetation Plan (PVP) or development consent subject to certain specified exceptions.
In 2007, as a priority of the NSW Government's State Plan, the Department of Environment, Climate Change and Water (DECCW) was charged with enforcing the NV Act to achieve improved outcomes for native vegetation.
In 2009, the DECCW released the Native Vegetation: Compliance and Enforcement Strategy which outlines the DECCW principles and approaches for compliance and enforcement under the NV Act.
Recently, enforcement of the NV Act has become much more rigorous and several prosecutions have been successful in the Land and Environment Court (LEC). In 2009, the LEC determined several prosecutions and handed down orders ranging from fines of $22,000 to be paid by four defendants individually for clearing more than 21 hectares of native vegetation1, a sizeable fine of $160 000 as well as a rehabilitation order for clearing approximately 215 hectares of native vegetation2, to most significantly, a fine of $408 000 for clearing 486 hectares of native vegetation3.
Importantly, in the cases of Jack & Bill Issa Pty Ltd (No 5)4 and Olwood Pty Limited5 , the LEC has also clarified the circumstances in which criminal liability under the NV Act may be attributed to a company for the conduct of a person.
Jack & Bill Issa Pty Ltd (No 5)
This case involved the illegal clearing of approximately 12 of 40 hectares of understorey and groundcover vegetation as well as some canopy trees on land owned by Jack and Bill Issa Pty Ltd (JB).
The land was purchased through JB as an investment vehicle with Mr Mura and Jack Issa as equal shareholders and directors with joint decision making for the investment.
The purpose of the purchase was to sell the land for capital gain while Mr Mura also used the land to build a house and for grazing to generate income. Mr Mura solely managed the grazing business. Mr Mura engaged contractors to clear the land and paid the contractors with cheques from Mr Mura's service company which stated that the payments were loans to JB.
Mr Mura was the director and secretary of JB at the time of the clearing and, in separate proceedings, pleaded guilty to illegally clearing the land in contravention of s 12(1) of the NV Act (Mura 6).
In sentencing Mr Mura, the Court recognised that the offence was at the lower end of the scale of seriousness. However, although the majority of the canopy trees were retained, the environmental harm was found to be substantial.
Since Mr Mura was the directing mind behind the clearing, the Court held that Mr Mura should have more precisely inquired with the relevant authorities as to the consent requirements for the clearing.
Biscoe J stated that, although there was no need for specific deterrence given Mr Mura's age and financial position, specific deterrence remained important but was complicated due to Mr Mura's financial capacity and poor health.
The Court ordered Mr Mura to pay a $5000 fine which was substantially reduced from $20,000 as a result of his financial incapacity.
Jack & Bill Issa Pty Ltd
JB pleaded not guilty to committing the offence of carrying out and authorising the illegal clearing by the contractors against s 12(1) of the NV Act. JB claimed that the conduct of Mr Mura in instructing the contractor to carry out the clearing could not be attributed to JB under s 44 of the NV Act. JB argued that, although JB was the landholder, JB could not be taken to have carried out the clearing under s 44 because JB did not cause or permit the contractor to carry out the clearing.
In determining that JB was guilty of the offence as the conduct of Mr Mura could be attributed to JB, the LEC recognised that the clearing furthered JB's interests as it was not only for grazing but also improved the capital land value and the payments for the clearing were made on behalf of and were loans to JB (although made by Mr Mura's service company).
On this basis, Biscoe J held that the conduct of Mr Mura in instructing the contractor to clear the land could be attributed to JB:
- under a special attribution rule derived by his Honour. His Honour noted that the objective of the NV Act is to protect native vegetation, an offence against s 12 is a strict liability offence and the maximum penalty for breaching this offence is $1.1million and the conduct of Mr Mura, as a director of JB, a landholder private company in causing or permitting the contractor to carry out clearing could be attributed to JB under s 44 of the NV Act as the conduct was in furtherance of JB's interests and not against them;
- as Mr Mura was also relevantly JB's "directing mind and will" in relation to management operations including the clearing; and
- as the principles of vicarious liability apply to an offence against s 12 of the NV Act and JB was vicariously liable for Mr Mura's conduct as the clearing was within Mr Mura's implied or apparent authority despite not being expressly authorised.
At the time of writing the Court is yet to list the matter for sentencing.
Olmwood Pty Limited
In this case, Olmwood Pty Limited (Olmwood) pleaded not guilty to illegally clearing approximately 10 hectares of native vegetation near Old Bar on the mid-north coast of NSW contrary to s 12(1) of the NV Act.
Mr Elias, claimed on behalf of Olmwood that he engaged and paid a contractor to "clean up the site" between 1 and 31 December 2006 using an excavator. In 2000 consent was obtained to develop a golf course on the site.
Pain J held that Olmwood was guilty of illegally clearing the native vegetation as the prosecution proved, beyond reasonable doubt, all the essential elements of the offence against s12 (1) of the NV Act including that:
- clearing of native vegetation occurred on the site and was not re-growth as defined under the NV Act;
- there was no development consent or PVP authorising the clearing; and
- Olmwood "caused or permitted" the clearing by the contractor and therefore was deemed to have carried out the clearing under s 44 of the NV Act.
In determining that Olmwood "caused or permitted" the clearing, her honour confirmed Biscoe J's findings in Jack & Bill Issa (No 5) (outlined above) regarding when criminal liability may attach to a company for the conduct of a person.
Relevantly, her Honour adopted and applied the reasoning in Multiplex7 regarding the meaning of "cause" and held that in s 44(b), to "cause" clearing does not require the landholder to exercise particular control over the person who carried out the clearing, rather it is sufficient that the clearing by the person arises as a natural, and not extraordinary, consequence of the landholder's conduct.
On this basis, Pain J held that, by virtue of the instructions provided by Mr Elias on behalf of Olmwood to the contractor, Olmwood "caused" the contractor to carry out the clearing as the clearing was a natural, and not extraordinary, consequence of those instructions.
At the time of writing, the Court has yet to list the matter for sentencing for breach of the NV Act.
When can the criminal conduct of individuals be attributed to a landholder corporation?
These cases establish that criminal liability under the NV Act may be attributed to a company for the conduct of a person where:
- the person, being either high-level (e.g. directors and managers) or low-level employee, is the embodiment of the company because it is the company's relevant "directing mind and will". Further, a company's "directing mind and will" may be constituted by the minds and wills of several persons; or
- the person is an agent or servant of the company for whom the company is vicariously liable, noting that to establish such liability, the company must have exercised "direction and control" over the person8 ; or
- the person is liable under the special attribution rule under s 44 of the NV Act. The Court has recognised that to determine whether a landholder is liable for clearing under s 44, the provision must be interpreted taking into account the purpose of the NV Act is to protect native vegetation in the public interest and an offence against the NV Act is a strict liability offence with a maximum penalty of $1.1 million. Importantly, these cases have established that a landholder private company will be attributed with the conduct of its directors in causing or permitting a contractor to carry out clearing and will be deemed to have carried out the clearing under s 44 where the clearing furthers the company's interests.
These recent prosecutions indicate a clear trend is emerging in the LEC that favours the imposition of significant monetary penalties for proven contraventions of the NV Act, particularly for those more serious offences as penalties are considered an important deterrent.
The Jack & Bill Issa and Olmwood cases clarify the circumstances in which criminal liability under the NV Act may be attributed to companies for the conduct of other people, including high and low level employees and contractors.
It is essential for individuals or companies to be aware of the importance of complying with legal requirements prior to the clearing of vegetation. If you are not sure of your obligations, obtaining legal advice may be appropriate. If you have any particular queries regarding the obligations relating to the clearing of vegetation under the NV Act, please contact Jacinta Studdert, partner, or Kate Harvey, associate.
1 Director-General, Department of Environment and
Climate Change (DG, DECC) v Calman and Ors 
2 DG, DECC v Rae (2009) 168 LGERA 121.
3 DG, DECC v Hudson (2009) 165 LGERA 256.
4 DG, DECC v Jack & Bill Issa Pty Ltd (No 5)  NSWLEC 232.
5 DG, DECC v Olmwood Pty Limited  NSWLEC 15.
6 DG, DECC v Mura  NSWLEC 223.
7 EPA v Multiplex Constructions Pty Ltd (2000) 112 LGERA 1.
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.