HKSAR v. SUNLEY ENGINEERING & CONSTRUCTION CO. LTD.

HCMA 1026/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MAGISTRACY APPEAL NO. 1026 OF 2000

(ON APPEAL FROM SPS 3973/2000)

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J U D G M E N T

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1. The Appellant company was convicted for the following offence, "On 6 December at the construction site at KIL11076, Hung Hom Bay Reclamation Area, Kowloon, contravened the provision of the licence, numbered EP482/213/0030/1 granted on 18 November 1999 under the Water Pollution Control Ordinance, Cap. 358, namely Standard Condition 1.1 by making a discharge of which the suspended solids exceeded the maximum standard stated in the table in Standard Condition 1.1 of the said licence, the purpose of which was as specified in Regulation 17B(2)(a) of the Water Pollution Control (General) Regulations, Cap. 358." The company was convicted and fined $40,000.00 and now appeals against the conviction only.

2. The first ground of appeal was that the Magistrate wrongly construed Regulation 17B(1) of the Water Pollution Control (General) Regulations as creating an obligation on the Appellant to take all reasonable steps to prevent a discharge of sub-standard effluent from the site. It was submitted that the wording in Regulation 17B(1) was not capable of bearing the construction the Magistrate put on it and that provisions in other Ordinances or Regulations, which are capable of bearing the said construction, are clearly worded differently from Regulation 17B(1).

3. The second ground was that the Magistrate having considered the submission that a person could not be held criminally liable by virtue merely of his position and that there was no principle of vicarious liability, nevertheless held, wrongly, that the Appellant had a positive duty or obligation, because of his position, to take all reasonable steps to prevent a discharge of sub-standard effluent from the site. This was submitted as being contrary to the ratio in Jiang Enzhu v. Lau Wai Hing Emily (1999) 3 HKC 8. These were not new grounds; they had been argued before the Magistrate at trial.

Facts

4. Environmental Protection Department inspectors examined discharged effluent from a construction site of which the Appellant was the registered general building contractor. Muddy effluent was seen flowing into a sedimentation tank from which it was discharged to a surface channel outside the site.

5. Ma Kwai Cheung, the first prosecution witness, collected 3 litre-sized samples of the effluent. The samples were separated into 3 parts in plastic bottles; one was given to a Mr Au, who, allegedly, identified himself to the inspector as the Appellant's site agent; the other samples were produced in court as exhibits 10 and 11. Exhibit 10 was analysed in the Government Laboratory.

6. The Appellant disputed that Mr Au was the site agent, but the Magistrate found that Mr Au had been present at the site office on the construction site; he had had possession of and had used the chop of the Appellant and he used the letterhead of the Appellant. There was no attempt by the Appellant to show that Mr Au was not the agent.

7. The Magistrate considered that Mr Au's status as site agent was such that he had authority to speak, sign documents and apply the Appellant's chop on behalf of the Appellant and that it could be presumed, unless there was evidence to the contrary, that he was the site agent. There was no evidence to the contrary and the Magistrate ruled that the admissions made by Mr Au were admissible evidence.

8. The site was being developed as a housing project by Five Star Development Limited. The developer instructed Ngo Kee Construction Limited to develop the site, as the managing contractor. Ngo Kee Construction Limited sub-contracted the main foundation works to the Appellant. The Appellant was the registered general building contractor at the site, as set out in a Notice pursuant to regulation 20 of the Building (Administration) Regulations made under the Buildings Ordinance, Cap. 123 (Exhibited P. 5).

9. The Appellant applied for, and was granted, a discharge licence, pursuant to Section 20 of the Water Pollution Control Ordinance, which related to discharge originating from the construction site at Hung Hom Bay Reclamation Area (Exhibit P. 6). Part B of the licence set out standard conditions. There were detailed limitations on the quantity and composition of the discharge. Section 2 set out general prohibitions and requirements as to monitoring, flow measurement, reporting flow rates, notification of changes and entry and inspection provisions.

10. Part C set out special conditions relating to treatment and disposal. It also set out the requirements of waste sedimentation and prevention, as well as additional monitoring and reporting requirements to be carried out by the licensee. The licence was valid up to 30 November 2004. The terms and conditions of the licence imposed mandatory duties on the licensee.

11. The relevant part of Section 17B provides, at 17B(1), "A person who contravenes any of the provisions of a licence granted under the Ordinance as are specified in sub-regulation (2) commits an offence and is liable to a fine of $200,000.00 and to imprisonment for 6 months."

12. Section 17B(2) sets out provisions specified for the purpose of 17B(1); the relevant provision being 17B(2)(a), stipulating a limit of a characteristic or constituent of a discharge or deposit.

13. The Appellant argued that if anyone should take responsibility for the discharge it should be the main contractor because there was no evidence to show that it was the Appellant who was actively responsible for the discharge of the effluent. Counsel submitted that Appellant could not be held liable simply because it held a licence and because the discharge in question contravened the conditions of that licence. On the basis of Lau (supra) counsel submitted that a person could not be held criminally liable by virtue simply of his position and nothing more and a person can only be criminally liable in respect of his own act or omission.

14. The Magistrate was satisfied beyond reasonable doubt that the prosecution had proved a contravention of the provision of the licence and went on to consider whether the prosecution had proved that it was the Appellant who contravened it. He acknowledged that there was no direct evidence that the Appellant, or its workers, had caused the discharge. He regarded the Appellant as being under an obligation both as the registered general building contractor at the site and, in particular, as the licensee, to take all reasonable steps to prevent a discharge of sub-standard effluent from the site. He was satisfied that the burden of proving that all reasonable steps had been taken to ensure that there was no discharge of sub-standard effluent rested on the Appellant, on the civil standard of a balance of probabilities. There was no evidence before him that the Appellant had taken all, or even any, reasonable steps to prevent the discharge of the effluent.

15. Mr Wong for the Appellant argued that the only purpose for the Appellant's having a licence was to provide a defence against a prosecution for discharging sub-standard effluent. In fact the licence while allowing the Appellant to do what would otherwise be unlawful i.e. discharge effluent into a communal waterway, imposes mandatory duties on the licensee.

16. It is helpful to look at the framework of the legislation in which Reg.17B exists and to look at the overall aim and purpose of the legislation to decide what obligations lie on a licensee.

17. Under Reg 17B(1) a person who contravenes any of the provisions of a licence granted under the Ordinance commits an offence. One of the 12 relevant provisions stipulates a limit for a characteristic or constituent of a discharge or deposit.

18. The empowering provision is s.9 of the Water Pollution Control Ordinance Cap. 358 which states that any person who discharges any matter into a communal sewer, or drain, in a water control zone, commits an offence, except in certain specified circumstances.

19. The occupier of premises from which the discharge occurs may, subject to section 12, be guilty of an offence in addition to any other person who may be guilty of an offence. Section 12 sets out circumstances which, where they exist, mean that a particular discharge or deposit is not an offence.

20. Section 12 sets out various defences. A person does not commit an offence under s. 8 or s.9 in respect of a discharge that is licensed in accordance with section 20 (s.12(1)(b)). Nor is a deposit or discharge an offence if made in an emergency to protect life or property, if appropriate notice is given to the authority in writing as soon as practicable (s. 12(1)(e)). An employee acting under instructions from his employer has a defence if he took steps that the court thinks reasonable in the circumstances to avoid the occurrence of the prohibited deposit or discharge (s.12(1)(f)). Other defences relate to the obtaining of specific approval for a deposit or discharge, or holding a licence under the Waste Disposal Ordinance, Cap. 354.

21. Section 10 of the Water Pollution Control Ordinance, Cap. 358 provides that in any proceedings for an offence under inter alia s.9(1)

"... it shall not be necessary for the prosecution to prove that the acts or omissions in question were accompanied by any intention knowledge or negligence on the part of the defendant as to any part of the offence."

22. Sections 19 and 20 relate to the application for and the grant of licences for discharges and deposits. The grant of the licence may be made on such terms and conditions as the licensing Authority thinks fit (s.20(4)). The effect of a licence, as described in s.22 and s.22(4), is that a licence shall not be limited to a discharge or deposit by a particular person, but shall extend to the discharge or deposit made when made by any person.

23. In the circumstances of this case the legislative framework makes it clear that there was an obligation on the Appellant to ensure that the provisions of the licence were not breached. The prosecution was not required to establish precisely who had caused the discharge. That would be to place an impossible burden on the prosecution and would also render nugatory the purpose for which the licence was issued.

24. The facts of this case were analogous to, and brought it within the ambit of, the decision of the Court of Appeal in HKSAR v. Paul Y - ITC Construction Ltd 2 HKLRD 35 CA. That case concerned noise pollution offences under the Noise Control Ordinance, Cap. 400 and set out the appropriate test for determining whether an offence was one of strict liability. Adopting that test, the instant breach of the licence condition create an offence of strict liability in terms of s.17B. The offence was not one which could be regarded as truly criminal in character. It was 'clearly or by necessary implication the effect of the statute' that the presumption of mens rea could be displaced. The licensing provisions existed to deal with an issue of social concern, to prevent contractors who were carrying out development or construction work from uncontrolledly discharging from construction sites effluent containing solids which might damage the drainage system; affect the water table; or pollute streams, rivers and harbours.

25. It could be shown in such circumstances that the creation of strict liability was effective to promote the object of the legislation, by encouraging greater vigilance to prevent the commission of the prohibited act or acts. The legislature, by setting up the licensing system, intended to control the discharge of effluent and to that end intended that proof of knowledge of breaches of the licence was not necessary.

26. There was no point in having a licensing system, unless the licensee could be made to bear the responsibility for breaches of it. If all the licensee needed to do to escape liability for breaches was to point the finger at unknown persons as having caused the discharge, no one could ever be held responsible for breaches of the licence.

27. The Magistrate was correct in holding that there was a positive duty on the licensee to take all possible steps to ensure that breaches did not occur. It was not sufficient to hold the appropriate licence; it was necessary also that any deposit or discharge was made in accordance with its provisions. The licensee would have a defence by establishing on the balance of probabilities that it had taken all reasonable steps to prevent a discharge of sub-standard effluent, or that it had a reasonable, if mistaken, belief that proper preventative steps had been taken to comply with the conditions of the licence.

28. That was not done and the Appellant was properly convicted by the Magistrate. The appeal against conviction is dismissed.