St Regis Paper Company Ltd v R.

For a corporate offence requiring proof of intention, attribution depends on the construction of the creating statute. The distinction in Pollution Prevention and Control (England and Wales) Regulations 2000 between strict-liability offences and offences requiring mens rea meant that an employee’s dishonest intention could be attributed to the company only if the employee was its directing mind and will under the ordinary identification rule.

A technical manager who was subject to a reporting chain and company policy did not meet that test. Licensing cases on delegation did not justify vicarious liability for intentionally false environmental records under this regulatory scheme.

The appellant operated a paper mill under an environmental permit requiring records of suspended solids discharged into a river. Its technical and environmental manager falsified readings and reports. He was convicted, and the company was convicted under Regulation 32(1)(g) of the Pollution Prevention and Control (England and Wales) Regulations 2000.

Before trial, HHJ Wassall ruled that the manager’s intention could be attributed to the company. The Recorder treated that ruling as binding and left attribution to the jury. The company appealed against its convictions. The central issue was whether the manager’s dishonest intention was legally attributable to the company, either under the identification doctrine or vicarious liability based on delegation.

1. Appeal allowed. The convictions on counts 2, 4 and 6 were quashed.

2. Regulation 32(1)(g) created an offence requiring proof that the defendant intentionally made a false entry. Construing the Pollution Prevention and Control (England and Wales) Regulations 2000 as a whole, the court held that Parliament had deliberately distinguished strict-liability offences from offences requiring mens rea. The environmental purpose of the Regulations could not justify treating the dishonest intention of any employee with management functions as the company’s intention.

3. The statutory-construction approach in Meridian Global Funds Management Asia Ltd v The Securities Commission [1995] 2 AC 500 did not displace the ordinary identification rule on these facts. For Regulation 32(1)(g), the applicable rule was that in Tesco Supermarkets Ltd v Nattrass [1972] AC 153: the relevant individual had to be the company’s directing mind and will.

4. It was not open to a jury to find that the technical manager met that description. He reported to the mill operations manager, who reported through the company’s senior management structure. The company’s environmental policy and his job responsibilities gave him no independent authority to falsify records. The pre-trial ruling and the Recorder’s direction were therefore wrong.

5. The court also rejected the prosecution’s alternative reliance on vicarious liability through delegation. The limited licensing authorities concerning delegation of management could not be extended to this statutory regime, and delegation was not clearly left to the jury in any event.

• Court of Appeal (Criminal Division): Allowed the company’s appeal and quashed its convictions under Regulation 32(1)(g) of the Pollution Prevention and Control (England and Wales) Regulations 2000.
• Exeter Crown Court: HHJ Wassall made a binding pre-trial attribution ruling. The Recorder followed it, and the jury convicted the company.