Bond v Chief Executive, Department of Environment and Heritage Protection (No. 2) [2018] QPEC 31 [2018] QPELR 1016

PLANNING AND ENVIRONMENT COURT OF QUEENSLAND CITATION: Bond v Chief Executive, Department of Environment and Heritage Protection (No. 2) [2018] QPEC 31 PARTIES: Peter Bond (applicant/appellant) v Chief Executive, Department of Environment and Heritage Protection (respondent) FILE NO/S: 3070/16 DIVISION: Planning and Environment Court of Queensland, Brisbane PROCEEDING: Hearing of an application ORIGINATING COURT: Planning and Environment Court of Queensland, Brisbane DELIVERED ON: 12 June 2018 (ex tempore) DELIVERED AT: Brisbane HEARING DATE: 12 June 2018 JUDGE: RS Jones DCJ ORDER: 1. Leave is granted for the appellant to file an amended notice of appeal in accordance with the draft marked “A” to the application filed 30 May 2018. 2. The applications for a stay of the Environmental Protection Order the subject of the appeal and for a stay of the appeal are dismissed. 3. Insofar as there is an application for the hearing of part of the appeal by way of a preliminary hearing that is also dismissed. 4. I will hear from the parties as to any consequential directions and orders, including as to costs. COUNSEL: Mr N Loos with Mr B Rix of counsel for the applicant Mr J Horton QC with Ms E Hoiberg of counsel for the respondent SOLICITORS: Thompson Geer for the applicant Herbert Smith Freehills for the respondent -- 1 of 18 -- 2 [1] This proceeding is concerned with four fundamental matters: first, whether leave ought be granted to permit the Applicant to file an amended notice of appeal; second, whether fresh stays ought be granted concerning obligations imposed on the Applicant pursuant to an Environmental Protection Order issued by the Respondent; third, whether proceedings in this Court ought be stayed pending the determination of criminal proceedings against the Applicant; finally, whether the Applicant should pay all or some of the costs incurred in a number of steps associated with this proceedings, that is, the Applicant pay the Respondent’s costs. I propose to deal with the obligations under the Environmental Protection Order first, that is, the application for stays of the force and effect of those orders. [2] By way of some background, I consider it appropriate to repeat some of what I said in my earlier reasons for judgment in Bond v Chief Executive, Department of Environment and Heritage Protection.1 [3] It is alleged that the Applicant was the chairman, managing director and the holder of many thousands of shares in Linc Energy Limited, which I will refer to from here as Linc. On 11 April 2014, the Respondent filed criminal charges against Linc in the Chinchilla Magistrates Court. On 1 October 2014, the Applicant resigned as the chief executive officer and managing director of that company and commenced as the executive chairman between 4 March 2015 and 1 May 2015. The Respondent made a number of decisions, including requiring financial assurances from Linc which were the subject of proceedings in the 1 [2018] QPEC 15. -- 2 of 18 -- 3 Land Court and the Land Appeal Court. It is unnecessary to deal with that litigation. [4] In October or November 2015, committal proceedings were heard against Linc in the Magistrates Court at Dalby. On 11 December 2015, the Applicant ceased to act as Executive Chairman. On 11 May 2016, Linc was committed to stand trial on all of the five charges laid against it. On 15 April 2016, it entered into voluntary administration and on 23 May 2016 went into liquidation. Of particular relevance to this proceeding is that on 25 May 2016, the Respondent issued an Environmental Protection Order against the Applicant in person requiring, first, that by 25 August 2016 he lodge a bank guarantee to the value of $5,500,000 to secure compliance with the order; second, by 26 September 2016 he submit a report to the Respondent detailing works to be undertaken to achieve specified rehabilitation works referred to in the order; finally, by 1 November 2019 to carry out specified rehabilitation works to the land specified in the order. [5] The Applicant unsuccessfully sought to have the Environmental Protection Order set aside under an internal review process and on 4 August 2016 filed his appeal in this Court seeking to have the decision to issue that order set aside. At or about the same time, he sought a stay of his appeal pending the determination of preliminary matters, and on 12 August 2016 Judge Rackemann ordered a stay until final determination of those preliminary matters. [6] On 26 August 2016, Judge Everson dismissed the Applicant’s preliminary case. On 11 October 2017, he appealed that decision to the Court of Appeal. That appeal was unsuccessful, and on 13 December 2017, the High Court dismissed -- 3 of 18 -- 4 his application for special leave. In paragraphs 2 and 3 of the current application in pending proceedings, it is asserted, consistent with what was said on the previous occasion: Having regard to the requirements of the EPO, that the appellant provide a bank guarantee to a value of $5,500,000 by 25 August 2016 and also carry out significant rehabilitation works as specified by the EPO by 1 November 2019, the Court should grant a stay. The Court should grant a stay because (1) a stay pending the resolution of the appeal is necessary to ensure that the orders which might ultimately be made by the Court are fully effective; (2) it cannot be said that the appeal is frivolous or not arguable; (3) the appellant will be irreparably prejudiced if the stay is not granted; and (4) pursuant to section 535C of the Environmental Protection Act, the Court would be satisfied that the granting of a stay would not result in an unacceptable risk of serious or material environmental harm. [7] As I noted in paragraph 12 of my earlier reasons, the Applicant is already in breach of the Environmental Protection Order insofar as it is concerned with the bank guarantee and the reporting requirement liability, those obligations having crystallised after the refusal of the High Court to grant special leave. [8] The terms of the stay granted on 12 August 2016 were, as I observed in my earlier reasons, specific. The operation of the decision to issue the Environmental Protection Order was stayed only until the final determination, whether by appeal or otherwise, of the preliminary points agitated by the Applicant. As Mr Gore QC conceded on 2 March 2018, what was in reality being sought were fresh stays rather than the renewal or continuation of existing stays. [9] In my reasons for judgment dated 29 March 2018, after referring to a number of authorities, I then went on to identify the matters relied on by the Applicant. Then, they were (1) the Applicant had exercised his right to appeal; (2) the -- 4 of 18 -- 5 Applicant asserted no greater right than necessary to preserve the status quo pending the outcome of the appeal; (3) the appeal raised arguable points; (4) no special prejudice to the Respondent was alleged, and the Respondent had advanced no evidence about prejudice to it; (5) failure to grant relief would involve serious and irreversible damage to the Applicant. Those assertions are to similar, but not the same, effect as many of those now being agitated in paragraphs 2 and 3 of the current application. Those assertions or arguments were dealt with in paragraphs 51 to 56 of my previous reasons, and I do not intend to repeat them now. However, I will repeat the conclusions I reached in paragraph 57 of those reasons: The Court’s task is one of balancing justice between the parties, taking into account all relevant factors. As matters presently stand, I am not persuaded that the balance favours the Applicant. To the contrary, it falls in favour of refusal. Whatever injustice or prejudice the Applicant might suffer in having to prosecute his appeal is outweighed by the prejudice likely to be caused to the Respondent and the public by further uncertain but lengthy delay. For the reasons stated, I have reached the same conclusions in respect of the applications to stay the EPOs. [10] My earlier reasoning and conclusions reached still largely apply, in my view. Neither the conviction of Linc nor the matters raised in the proposed amended notice of appeal alter the facts that the balance still falls in favour of refusing to grant the stays sought. [11] I am not at all satisfied that fresh stays ought be granted concerning the obligations required in respect of the provision of the bank guarantee nor in respect of the obligation to submit a report detailing works to be undertaken to achieve specified rehabilitation works. As to the final obligation, the Applicant is not required to begin carrying out any rehabilitation works until 1 November -- 5 of 18 -- 6 2019. Notwithstanding the submissions made during oral argument today, concerning the need for preparatory work prior to the carrying out of those works, I remain of the view that there is no valid reason or purpose, at this stage at least, in granting a stay of something that is not required to be done until some time so far into the future. As I indicated to Mr Loos, counsel for the Applicant, if necessary, this is a matter that could be revisited on another occasion if appropriate. [12] Also, as I said in my reasons for judgment in paragraph 47, this is not a case of preserving the status quo pending the outcome of related proceedings. The date for compliance for two of the dates prescribed in the Environmental Protection Order have already passed. In effect, what is being asked for, at least in part, as was identified by me in my earlier judgments, an excusal of lack of performance from the date of determination of preliminary matters, or, to adopt the terminology of Mr Horton QC, senior counsel for the Respondent, to grant in effect what would be immunity from sanction for noncompliance. Accordingly, the application for stays of the operation of the Environmental Protection Order, or the issue thereof, is refused. [13] Turning then, to the issues of whether leave ought be granted to file an amended notice of appeal and how that proceeding ought be dealt with in the event that it were. The first thing to note is that the initial preliminary matters agitated unsuccessfully by the Applicant have been deleted. Not surprisingly, that amendment or those amendments are not in dispute. It is then intended to include what is described as another preliminary matter and otherwise plead matters that the Applicant says have only become apparent to him since these -- 6 of 18 -- 7 proceedings were commenced, including matters arising from the conduct of the criminal proceedings, newspaper articles, and arising from consideration of the Environmental Protection Order in the light of the related criminal proceedings. Not surprisingly, leave to allow the amended appeal to be filed is opposed. [14] Turning to the issue of whether leave ought be granted to file the amended notice of appeal, there are, in my view, persuasive grounds for refusing leave. First, I was taken to no probative evidence that would support the assertions that the facts and matters to be raised in paragraph 24 of the amended notice of appeal are new or fresh matters that either were not known or were not capable of being known by the Applicant or those advising him at the time of the preparation of the original notice of appeal. [15] The same can be said, in my view, in respect of the matters now raised in paragraphs 28A to 28E of the draft amended notice of appeal. Indeed, in respect of these paragraphs, no attempt was made, in either oral or written submissions, to try and explain why the so-called mandatory requirements point was not raised earlier. [16] As to the matters raised in paragraphs 28F and 28G, I am equally unpersuaded by the explanations advanced. [17] That said, at a stage where there have been no meaningful steps taken by either side to either prosecute or defend the proceedings, I am not sufficiently satisfied that I should refuse leave on the basis that it would impermissibly either interfere with appropriate case management or prejudice the Respondent in any substantive way. That, of course, would be subject to ensuring that the -- 7 of 18 -- 8 proceeding is prosecuted expeditiously and, perhaps, subject to further argument, the making of appropriate directions and/or orders, including those as to costs. I can also see some merit in Mr Horton’s submissions about the apparent weaknesses in the case for the Applicant, as articulated in the amendments. However, even accepting that, at this stage, I am not prepared to make a determination about prospects to the extent that I would refuse leave. Accordingly, I will grant leave to file the amended notice of appeal. [18] Turning then, to the so-called preliminary points, they are addressed in paragraphs 28A to 28E of the draft amended notice of appeal. Those paragraphs appear under the heading “failure to comply with mandatory requirements”. It is, in essence, asserted that the Respondent failed to satisfy a number of mandatory requirements which, it is alleged or asserted, constituted an error of law, making the issue of the order unlawful. As I have said, these matters were clearly ones that if not known were capable of being known with reasonable inquiry at the time the original notice of appeal was filed and there was no attempt to say otherwise in the submissions made on behalf of the Applicant. This, of course, should not prevent the Applicant from seeking to rely on those matters when prosecuting his appeal, but I can see no warrant at this stage for having yet another preliminary matter that would be required to be disposed of and which, on past performance, could take up to months to be finally determined. [19] Also it is of relevance that, without finally determining the matter, while I may not be comfortable in going so far as Mr Horton submitted, to the effect that there were no genuine prospects in respect of those amendments, it does not strike me that the proposed amendments raise particularly strong points and certainly not -- 8 of 18 -- 9 sufficiently strong to warrant yet another determination of another preliminary point or points. Also of relevance in this context is, as the Respondent points out, there are no other apparent good reasons why these matters have to be disposed of in a preliminary way. The merit or otherwise can be sensibly disposed of, together with the balance of appeal, in circumstances where the whole of the appeal is to be prosecuted in an expeditious manner, as contemplated by rule 5 of the Uniform Civil Procedure Rules 1999. Accordingly, insofar as there may be an application for orders for the determination of a preliminary matter or matters, that application is refused. [20] Turning, then, to the application to stay the hearing of the appeal in this Court. On 29 January of this year, criminal proceedings were commenced against Linc. After numerous weeks of sittings, the jury returned guilty verdicts in respect of all five charges, and the company was sentenced on 11 May 2018 where it was fined, in total, $4.5 million. [21] The five charges that Linc was found guilty of were that the company wilfully and unlawfully caused serious environmental harm. The particulars in respect of each of the five charges were essentially to the same effect, namely, that the company recklessly or grossly negligently conducted itself in the operation of gasifiers in such a way that it created and/or enhanced pathways in the landform or failed to effectively control underground coal gasification. The five charges laid against the Applicant here are concerned with the operation of the same five gasifiers that were involved in the case against Linc. It is alleged against the Applicant that: Between the 1st day of July 2007 and the 1st day of July 2008 at Chinchilla, Peter Adam Bond, being the executive officer of the -- 9 of 18 -- 10 corporation, Linc Energy Ltd (in liquidation), did fail to ensure that the corporation complied with the Environmental Protection Act 1994, contrary to section 493(2) of that Act when the said corporation did wilfully and unlawfully cause serious environmental harm, contrary to section 437(1). [22] The cause of the serious environmental harm alleged against the Applicant is to the same effect as the criminal charges against Linc, namely, that each of the gasifiers were operated in such a way that they created and/or enhanced pathways in the landform or failed to effectively contain underground coal gasification. [23] As I said in paragraph 18 of my earlier reasons for judgment, while there is clearly a high degree of overlap in the nature of the offences alleged against Linc and the Applicant, there are nonetheless material differences. The proceedings against Linc were concerned with it conducting itself in a reckless or grossly negligent way. In the proceedings against Linc, the focus was on the action and/or inaction of the company and the consequences thereof. On the other hand, the focus of the allegations against the Applicant is that he failed to ensure that the company did not, in respect of each of the relevant gasifiers, conduct its operations in a reckless or grossly negligent way. Clearly, a guilty verdict against the company does not necessarily mean that the Applicant would be found guilty of the charges laid against him. [24] It is asserted on behalf of the Applicant that the criminal proceedings are well advanced. That is not an entirely accurate description, in my view. Committal proceedings are listed for hearing for three weeks commencing 18 July 2018. There is still a long way to go in respect of the criminal proceedings. As I observed on a previous occasion, given the nature of the case and the -- 10 of 18 -- 11 complexity, as described by Mr Gore, those proceedings could take many months, if not years, to be finalised. [25] It is asserted in paragraphs 18 and 18.1 of the current application that: The manner in which the Appellant will be required to defend himself in the related proceedings and this appeal have changed as a result of the matters referred to in paragraph 17 as, among other things, it can be expected that the Respondent will seek to rely upon the recent findings against Linc Energy in both proceedings. [26] I will return to that last assertion in a moment. The Applicant’s case was stated in more particularity in his further submissions at paragraph 10 and 11 in the following terms: The findings of the jury (and Court by way of sentence) in the prosecution of Linc have meant that the legal and factual matrix in support of the propositions have materially changed. The manner in which the Appellant will be required to defend himself in the related criminal prosecution in this appeal have changed. It can be expected that the Respondent in this case will seek to rely upon the recent findings against Linc in both proceedings. [27] Reference is then made to the Appellant’s defence, particularly having regard to defences available pursuant to section 493 of the Environmental Protection Act 1994 (EPA), and the Appellant’s case in this appeal, including the matter set out in section 363ABA(b) of the EPA. It is then asserted that there is a real risk of prejudice to the Applicant’s defence in the criminal prosecution if these proceedings were not stayed. It is asserted that this is a rare occasion in which the significance of that risk outweighs this Court’s interest in having the appeal heard and determined expeditiously. It is then submitted that the wider public interest in having appeals determined expeditiously ought give way, having regard to the potential prejudice against the Applicant. -- 11 of 18 -- 12 [28] In paragraph 21 of the application for the grounds for staying the proceedings in this Court, it is said, first, that these proceedings and the criminal proceedings involve, in substance, the same parties. That can be accepted. Second, it is said that the outcome of the criminal proceedings is likely to have a material effect on these proceedings. That is a proposition that has already been referred to at least twice. That may well be so in the event that the Applicant is found guilty in the District Court of the charges against him. However, the reverse does not apply. That is, on my understanding, the outcome of the proceedings in this Court would be unlikely to have any effect, let alone a material effect, on the criminal proceedings. Further, the outcome of the criminal proceedings need not necessarily be determinative of the outcome of the appeal to this Court. In this context, it is relevant that while the convictions against Linc might be admissible pursuant to section 79 of the Evidence Act 1997 in the proceedings in this Court, that would not be the case in respect of the criminal proceedings against the Applicant. In that context, I consider that the submission made, that the convictions recorded against Linc might be of some material or persuasive effect in both proceedings, to be wrong. [29] It is next asserted that it is in the public interest that the criminal proceedings be determined first. I am unconvinced that that is, indeed, the case. The two matters are entirely separate and capable of being determined quite independently of the other, save for the evidentiary matters to which I have referred. I do not consider that there is any real public interest or benefit in having the criminal proceedings dealt with first. Indeed, as I found in my earlier reasons, the public interest favoured the refusal of the relief sought. My opinion remains the same despite the recent events alluded to on behalf of the Applicant. -- 12 of 18 -- 13 [30] Next, it is asserted that it would be undesirable for these proceedings and the criminal proceedings to progress concurrently, where the courts would be, it is said, asked to determine a number of mutually relevant facts. I am unpersuaded by that argument. There are material differences in the respect of issues involved, and it is unlikely that both the criminal trial and these proceedings would be occurring at or about the same time. That is, I can see no reason why this appeal could not be prosecuted and determined, at least insofar as this Court is concerned, well before any criminal trial against the Applicant were to commence in the District Court. [31] The next matter is that it is asserted that, having regard to the contents of the Environmental Protection Order, work undertaken to progress the proceedings in this Court might ultimately be wasted or, in the alternative, have to be substantially redone depending on the outcome of the criminal proceedings. I must say, I have some difficulty in understanding what is really contemplated by this contention, but, suffice it to say, I find it unconvincing. Next, it is asserted that the proceedings in this Court and the proceedings in the criminal matter: …involve a substantial overlap in terms of the facts and issues that the Court in each proceeding will ultimately be asked to determine. [32] Again, I do not find this a particularly convincing argument. A substantial number of the matters raised in the notice of appeal have nothing whatsoever to do with the personal conduct of the Applicant. The potential for overlap is limited, at least for today’s purpose, to those assertions made in paragraph 28F to 28G of the notice of appeal. I have already considered and dealt with paragraph 26, 27 and 28A of the notice of appeal when dealing with the earlier -- 13 of 18 -- 14 proceedings, and I do not intend to revisit the consideration of those paragraphs now. In respect of paragraphs 28F and 28G of the amended notice of appeal, emphasis or reliance is placed on the affidavit of Mr Marshall filed 25 May 2018 and, in particular, paragraphs 25, 26 and 27. [33] In paragraph 25 it is asserted that, based upon the relevant provisions of the Environmental Protection Act, a person charged with an offence under section 493(2) of that Act has a range of statutory defences open to them. Mr Marshall then goes on to identify what they are – in paragraph 25.1, that there was no environmental harm caused; in paragraph 25.2 that if there was environmental harm, it was harm that was authorised by an environmental authority; 25.3, in effect, that a person who took all reasonable steps to ensure the corporation complied with the Act might also have a defence available; 25.4, it is asserted that the person who was not in a position to influence the conduct of the corporation in relation to the offence might have a defence; 25.5, that the relevant act was done while carrying out an activity that is lawful apart from the Environmental Protection Act; and, in 25.6, that the corporation complied with its general environmental duty. [34] It may well be the case that a defence or defences exist in respect of those matters. However, I was not taken to any material which would indicate, let alone convince me that the Applicant himself would be required to give evidence in respect of those matters identified in paragraphs 25.1, 25.2, 25.5 and 25.6 in the appeal in this court. As to the matters raised in paragraphs 25.3 and 25.4, insofar as they might be referrable to the amended notice of appeal, they are likely to be referrable to and overlap with the issues likely to arise in the -- 14 of 18 -- 15 Applicant pursuing the allegations contained in paragraph 28F of the amended notice of appeal. That is the only amendment, in my view, that in reality raises some risk of an overlap between the two proceedings in the event that the Applicant intended to prosecute that element of his appeal. [35] Paragraph 26 of Mr Marshall’s affidavit provides: The EPO issued by the Respondent includes the following assertions: 26.1, that Linc has caused environmental harm; 26.2, that Linc has breached the requirements of its environmental authorities; 26.3, that Linc did not comply with its general environmental duty; and 26.4 (by implication) that the Appellant did not take all reasonable steps, having regard to the extent he was in a position to influence Linc’s conduct, to ensure that Linc complied with its obligations under the Act and made adequate provision to fund the rehabilitation and restoration of the Act. [36] It is not necessary, for the purpose of disposing of this proceeding, to repeat what is asserted in paragraph 27 of Mr Marshall’s affidavit. The issue of the risk of self-incrimination was dealt with in some detail and decided against the Applicant in my previous reasons for judgment. I do not intend to revisit those reasons now but will address new matters raised in Mr Marshall’s affidavit. As I have already indicated, I do not consider that any real risk has been revealed in respect of the matters raised in paragraphs 25.1, 25.2, 25.5 and 25.6. [37] Before proceeding to determine the relationship between paragraphs 25.3 and 25.4 of his affidavit and paragraph 28E of the amended notice of appeal, I would again observe that in respect of the matters raised in paragraph 26 of Mr Marshall’s affidavit the convictions against Linc are a matter of fact that may become relevant in the proceedings in this Court but would be unlikely to be able to be used against the Applicant in the criminal proceedings. -- 15 of 18 -- 16 [38] Second, the implication referred to by Mr Marshall has, to some extent, already come into force pursuant to the operation of section 493 of the EPA. It can be expected that there might be a real risk of some overlap in what is pleaded in paragraph 28 of the amended notice of appeal and, in particular, the operation of section 293(4) of the EPA. However, that risk, in my view, is a direct consequence of the Applicant’s conduct, first, to raise these matters in his amended notice of appeal nearly two years after filing the original notice; second, relying on facts and circumstances which, if not known, ought to have been known at the time of the filing of the original notice of appeal, and where there is no reasonable explanation that explains away this delay. This is of particular significance given the public interest in having these proceedings disposed of in an appropriate way. -- 16 of 18 -- [39] It is also relevant that in the event that this appeal were to proceed, the Applicant could elect not to answer any questions that might tend to incriminate him. That may very well have an impact on his prospects in respect of that particular element of his appeal, but that is a consequence primarily of his own action or inaction, and there is no suggestion that the other grounds relied on could not be prosecuted in a fulsome way. In this context, I am sure that steps could be taken to alleviate the concerns expressed by Mr Loos. Steps could be taken to ensure that the Applicant was not required to give evidence by way of statement or otherwise that would disclose any potential defence or require him to give potentially prejudicial evidence by way of witness statements prior to trial or otherwise. In this context, the observations made in paragraph 57 of my earlier reasons of judgment to which I have referred remain as pertinent now as they did then. [40] The final matters raised were that it is asserted that the criminal proceedings are well advanced. I have already dealt with that matter. The final matter was that it is asserted that it would be inappropriate for the proceedings in this Court to be substantially progressed at this time, as it would have the effect of seeing multiple proceedings being progressed in relation to similar issues. Again, this is an unconvincing argument. As I have already said, it is unlikely that this proceeding would occur at or about the same time as any criminal proceedings in the District Court, and, in any event, there are substantial differences between the issues involved in the respective proceedings. [41] For the reasons given, I will grant leave for the Appellant to file the amended notice of appeal but otherwise would dismiss the application for stays of the operation of the Environmental Protection Order issued by the Respondent. I would also dismiss the application for the stay of this proceeding pending the outcome of the criminal -- 17 of 18 -- 18 proceedings against the Applicant, and, as I have indicated, insofar as there might be an application for the determination of preliminary matters, that application is also dismissed. I will hear further from the parties in respect of orders and directions to ensure that this matter is dealt with in an expeditious but fair way and will also hear further from the parties as to costs. [42] HIS HONOUR: Now, as I have said, I reserve the right to tidy those reasons up. That is quite a mouthful. I trust you could at least follow the thrust of my reasons? [43] MR HORTON: Your Honour, we can. I can. [44] MR RIX: Yes, your Honour. -- 18 of 18 --