knowledge 31 May 2018 |

Corporate “Managers” Beware

TN was charged with offences under the Waste Management Act 1996 (“1996 Act”) but acquitted by direction of the trial judge. On the subsequent application of the DPP, the Court of Appeal had to consider whether the trial judge was correct to direct this verdict of not guilty.¹ 

The charges related to dumping by NT Ltd which occupied a waste facility on foot of a licence. TN was prosecuted in his capacity as “manager” of NT Ltd under s9(1) of the 1996 Act. It provides that:

“Where an offence ... has been committed by a body corporate and is proved to have been committed with the consent or connivance of or to be attributable to any neglect on the part of a person being a director, manager, secretary or other similar officer of the body corporate ... that person as well as the body corporate shall be guilty of an offence and shall be liable to be proceeded against and punished as if he or she were guilty of the first-mentioned offence.” (emphasis added)

At trial, the successful application for a direction was on the basis that the prosecution had not established that TN was a director, manager, secretary or other similar officer of NT Ltd.

The evidence before the Circuit Court included the following facts:

• The licence required that the facility be under the control of a suitably qualified facility manager whose identity and qualifications should be communicated to the regulator. TN’s details were provided with his knowledge;
• Annual environmental reports referred to TN as the facility manager at the top of the management pyramid;
• TN corresponded frequently with the regulator in relation to the facility;
• TN was a director of NT Ltd’s parent company.

In response, TN argued that he was neither a director nor a “manager” of NT Ltd but a paid consultant.

Before the Court of Appeal, the DPP submitted that in directing the acquittal, the trial judge concluded that the prosecution had not established that TN was a decision maker within the company “with power to direct the whole of the affairs of the company” and who had the “power and responsibility to decide corporate strategy” so TN was not the sort of manager contemplated by the legislation. The DPP criticised this approach saying that it ignored the business realities and the fact that TN was and acted as manager of the facility and held himself out as such.

The Court of Appeal agreed. While some of the older case law might support this approach, the court was hesitant about its continuing relevance. The 1996 Act was a modern statute. The phrase “director, manager, secretary or other similar officer of a body corporate or a person who is purporting to act in any such a capacity” must be seen in a modern context. 

The section dealt with officers of a body corporate. It was clear therefore that the individuals must hold responsibility at a corporate level. However, nowadays it was not unusual to find finance directors, human resource directors and IT directors (or others with varying titles) in large corporations.  Responsibilities might be distributed in such a way that it would be difficult to say that any one individual was responsible for the management of the whole affairs of the company. Nonetheless, if the individual’s role was a significant one then the fact that there might be some particular areas of the company activity with which that individual did not have an involvement did not mean that they were not to be regarded as a manager of the corporation. Very significant responsibilities could be entrusted to various types of managers. Such individuals might properly be regarded as “other similar officers" within the terms of s9(1) of the 1996 Act and comparable statutes where the same formula was used. The phrase “other officer” as distinct from “director” or “secretary” of the company must refer to individuals having a similar stature and exercising similar responsibility to what might be expected of a company director or company secretary.

On one view of the evidence, TN was managing the facility which was NT Ltd’s core activity. It might not overstate matters to say that the facility was NT Ltd.

The court concluded that the trial judge erred in focusing his attention on whether there was evidence that TN had the capacity to direct the whole of the affairs of the company and the power and responsibility to decide corporate strategy. The question really was whether TN was functioning as a senior manager, having functional responsibility for a significant part of the company’s activities and having direct responsibility for the area in controversy.