In brief - Changes to legal personhood should be considered carefully and proclamations drafted clearly

When one council "marries" another council they are not for the purposes of the criminal law "one flesh". This issue was teased out in the recent judgment of Moore J in Environment Protection Authority v Wellington Council [2017] NSWLEC 5

Environment Protection Authority's prosecution of Wellington Council for water pollution struck out

The effect of the merger of Wellington Council with Dubbo City Council and the constitution of the Western Plains Regional Council meant that the prosecution of Wellington Council for the offence of causing water pollution was struck out despite Wellington Council pleading guilty (before the merger) to the charge laid.

The key events were:
  • The EPA commenced criminal proceedings against Wellington Council on 21 April, 2015.
  • Wellington Council was charged with an offence of “causing water pollution” in breach of section 120 of the Protection of the Environment Operations Act 1997 arising (allegedly) from three megalitres of untreated or partially untreated raw sewage being discharged from the STP into Bushrangers Creek, entering the Macquarie River.
  • On 21 August, 2015, the old Council entered a plea of “guilty” to the charge laid against it.
  • A sentencing hearing had not occurred before the Council amalgamations occurred.
  • On 12 May, 2016, a Proclamation dissolved Wellington Council and Dubbo City Council and constituted a new Council; the Western Plains Regional Council (first Proclamation).
  • The new Council sought to have the proceedings against Wellington Council struck out.
  • There was a second Proclamation on 9 September, 2016 amending the first Proclamation (second Proclamation). It transmitted, expressly, criminal liability from dissolved councils to reconstituted councils where that dissolution and reconstitution had been effected by the first Proclamation.

Criminal liability not effectively transferred by first Proclamation and not revived by amended Proclamation, Court accepts

Moore J appeared to accept the position of both parties that if the first Proclamation did not have the effect of maintaining the proceedings commenced against the old Council as being proceedings continued against the new Council, then the second Proclamation could achieve nothing substantive for the purposes of the proceedings before the Court. 

In respect of the first Proclamation, this was confined to transferring civil liabilities, relevantly, and not criminal ones.

His Honour held that the outcome of the first Proclamation was to abate the proceedings against the old Council. His Honour accepted the Council's submissions that "as the prosecution had abated, as a consequence of no effective transference by the first Proclamation, it was “gone” and was not revived by the second Proclamation."

Interestingly, this is not the first example of this occurring. Counsel for the Council referred in its submissions to a Workcover prosecution against Sydney Electricity which failed in the 90s when that body was dissolved and Energy Australia created (by statute).

In relation to costs, as the "new Council did not become (and never has been) the “accused person” for the purposes of the proceedings that were commenced against the old Council", the Prosecutor's argument for costs also failed.

Proclamations must be clear and unambiguous on transfer of criminal liability

The judgement highlights that Proclamations need to be drafted clearly and unambiguously to transfer criminal liability from one legal person to another legal person. The simple transfer of a former statutory body’s staff, assets, rights and liabilities (as most Proclamations are drafted and many government lawyers are familiar with in various empowering Acts) to a new body will not necessarily mean the two bodies become the same legal person. The clear intention to do so is required.

A broader point of application arises from one of the submissions of the Council, namely that "it is inconceivable that a legal person, not in existence at the time of an alleged offence, could be criminally responsible for that offence, an offence said to have been committed by the actions or defaults of another person." Changes to legal personhood, such as to a corporation, need to be carefully considered in the context of any criminal prosecution by a government agency, such as the EPA.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.

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