Baulkham Hills Shire Council v Naklicki

Baulkham Hills Shire Council v Naklicki [2008] NSWLEC 316 CASES CITED: Environment Protection Authority v Waight [2003] NSWLEC 124 Regina v Fahda [1999] NSWCCA 267

DATES OF HEARING: 26 and 28 November 2008

APPLICANT Mr D Miller with Mr T To SOLICITORS LEGAL REPRESENTATIVES: DLA Phillips Fox

RESPONDENT Mr C Gough, solicitor of Storey & Gough

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40870 of 2002 Baulkham Hills Shire Council v Naklicki (No.2)

EXTEMPORE JUDGMENT Background 1 His Honour: On 6 June 2008 I convicted Mr Naklicki of a contempt of court I found to be "wilful", bordering on "contumacious". This judgment deals with the issues of penalty and remediation. Second offence 2 In my extempore judgment delivered on 6 June, but only recently published ([2008] NSWLEC 316), I set out some of this matter's "interesting history", and I will not repeat it today. He unwisely appeared for himself on that occasion, but since 11 July 2008 he has been represented by Mr Christopher Gough, a solicitor who appears regularly in this court, and had represented Mr Naklicki at earlier stages of the matter. 3 On 15 March 2004 Bignold J convicted Mr Naklicki of a similar contempt in this matter, original interlocutory orders having been made against him by Cowdroy J on 7 November 2002 and 11 July 2003. Rather than proceed to impose a penalty on Mr Naklicki, Bignold J pronounced final orders, to which Mr Naklicki had agreed, on 30 April 2004, restraining the filling of the subject land (at 36 Pitt Town Road, Kenthurst), without development consent, and requiring Mr Naklicki to pay Council's costs. 4 It is those orders made by Bignold J on 30 April 2004 which are at the centre of the case run before me. The current contempt charge was laid on 28 March 2008, and Mr Naklicki entered a plea of Not Guilty before Jagot J on 11 April. He filed no evidence in his defence but gave oral evidence on the day. Site Investigation 5 On 6 June 2008 Mr Naklicki clearly undertook in open court (see T 70 ff) to comply with the series of orders I made on that day in addition to entering the conviction. Compliance with those orders would have taken him some way towards purging his contempt, so I stood the question of penalty over until 7 July to allow the Council an opportunity to investigate the offending fill, and fashion appropriate remediation orders for the court to consider. 6 The Council's site investigation report was prepared after an inspection on 24 June by Mr Daniel Saunders of Sydney Environmental and Soil Laboratory, and filed and served on 4 July. The Council's Mr Meader deposes that Mr Naklicki showed some lack of cooperation regarding access to his land for the inspection, despite what he had said to me on 6 June. 7 The Defendant later engaged Dr Martens as his expert, but his report was not served on Council until the beginning of this week's hearing. It has now been tendered before me (Exhibit D4) and I have perused it cursorily. I accept what has been said from the bar table this afternoon about the constructive role Dr Martens has played this week on the remediation issues.

Health Problems 8 On 22 June 2008 Mr Naklicki was involuntarily detained under the Mental Health Act at Westmead Hospital, when his estranged partner Flora Kortlepel had him admitted after he expressed suicidal thoughts. Ms Kortlepel also states that Mr Naklicki had "a breakdown" of some sort during a 1988 tax audit of his business, and renewed psychiatric problems in 1999. 9 The Westmead Discharge Summary annexed to Mr Naklicki's recent affidavit records his diagnosis on admission as "Bipolar Affective Disorder - Manic Episode". These proceedings were identified as a "current stressor". He reported that he had been diagnosed 15-20 years ago with "Bipolar Affective Disorder", but had not persevered with the prescribed medication. He reported also one earlier short hospital admission (to St John of God Hospital), but the actual year is not clear on the evidence (it was probably 1999). He described "episodes suggestive of milder depressive episodes and periods of mood elevation". He responded positively to a mood stabiliser and he was discharged on 30 July. He indicates in his affidavit that he now has more knowledge about his condition, its effects, and the need for treatment. 10 Mr Gough referred him to the Hills Clinic (Dr Ted Cassidy) for a forensic psychiatric assessment on 23 August 2008 (Exhibit D1). Dr Cassidy did not have the benefit of the Westmead discharge summary from which I have just quoted, but he diagnosed "Bipolar Disorder, currently presents (sic) with Hypomania on a background of recent mixed affective episode requiring an admission to hospital". He identified "Impulsive Personality Traits" and "Significant impairment and stress in relation to the matters before the court and also to his inability to manage his finances" or personal affairs. Dr Cassidy was concerned that Mr Naklicki was compliant with medication which was unsatisfactory for one with his problems, but non-compliant with other prescribed treatment which would have been beneficial. In summary, Dr Cassidy opines that Mr Naklicki has a mental illness that can be treated. I accept Dr Cassidy's evidence as indicative of Mr Naklicki's mental condition as at the date of his assessment, not beforehand. The current proceedings 11 As a result of his hospitalisation, these proceedings were adjourned on 7 July till 14 July, then 11 August, then 28 August, when they were fixed for hearing on Wednesday 26 November. 12 On Wednesday the parties presented their evidence relevant to sentencing considerations, and to the need for remediation works, and the proceedings were eventually adjourned until today to enable (1) the experts to confer and hopefully agree upon a regime for remediation of the land, including the lake, both of which are contaminated with asbestos and possibly other pollutants, (2) the Defendant to seek up to date medical advice prior to sentencing, and (3) the legal representatives to have further negotiations about possible outcomes in these proceedings. 13 Thorough checking and remediation of the lake is crucial as it spills ultimately into Cattai Creek. 14 The Prosecutor and Mr Gough (on the Defendant's behalf) agreed on Wednesday, and informed the court, that an appropriate fine for the court to impose for this contempt would, in their shared opinion, be $30,000. The Defendant has also agreed to pay a total of $65,000 by way of Council's costs, and to undertake appropriate remediation works at his own expense. 15 Having considered all the evidence tendered that day, I urged the parties to give some thought, during their further negotiations, to the sentencing approach adopted by the then Chief Judge, Pearlman J, in Environment Protection Authority v Waight [2003] NSWLEC 124, at pars [14]-[20]. Sentencing considerations 16 The normal sentencing principles apply to contempt proceedings and many considerations are set out among the many relevant provisions in the Crimes (Sentencing Procedure) Act 1999. The defendant himself 17 Mr Naklicki, now 62, was born in Germany or Poland. He came here at age 4. He is a man of sober, moderate habits, who had a good reputation in his chosen profession as a photographer, and he has no criminal or environmental record. He apparently had an unsuccessful marriage in his 20's, and a long term de facto relationship with Ms Kortlepel 1986-2001, with a reconciliation 2005-06. They were workmates and friends from 1980, and Ms Kortlepel and her family have stood by him during his recent health problems. 18 He has lived and worked in the Hills district since 1971. He sold his very successful photographic business in June 1998 (despite large taxation fines, apparently $80,000 in 1988 and $350,000 in 1992), apparently for about $4.5M, and has not worked in paid employment since. He had an unsuccessful art business venture (Inspiring Images Pty Ltd) for some time since 2000. He has lived off the capital from the 1998 business sale and some income from a small superannuation share portfolio, but his funds were exhausted by June 2008 and he has borrowed money from a relative. 19 Mr Naklicki bought the subject property for either $800,000 or $850,000 in 1998, and it is unencumbered, despite his spending $700,000-$1,000,000 on improvements since then. His vision for the property has been to develop it as "Kenthurst Inspiration Centre" to benefit the community, especially charities and children with life threatening diseases. 20 Dr Cassidy sees this Centre as a "grandiose" idea consistent with his condition, but Mr Naklicki received support and assistance in this endeavour from Mr Ralph Schubert, who has given him a character reference (Exhibit D3). Mr Naklicki has attached to his affidavit a vision statement, business plan and other documents regarding the proposed Centre, and the Foundation established to operate it, and Mr Schubert deposes that Inspiring Images Pty Ltd was intended to raise money for it. 21 Mr Schubert's reference attests to Mr Naklicki's enthusiasm, idealism, appreciation of fine art, and selfless concern for underprivileged and terminally ill children. 22 Mr Naklicki is resigned to having to dispose of the property to pay for the remediation works. He has obtained a market appraisal (cf a proper valuation) from L J Hooker Dural (Exhibit D2) indicating that in its present condition, and lacking appropriate consents, it might sell for about $800,000 but if "rectified" (as in remediated and enjoying the relevant approvals) it might sell for about $1.7M. 23 Section 21A(3)(j) requires the court to take into account as a mitigating factor the fact that the Defendant may not have been fully aware of the consequences of his actions by reason of age or disability. I accept the evidence of his history of mental problems since 1988 and of his refusal to take appropriate medication, but I have no basis upon which to find that he was not aware of the potential problems that could result from his use of uncertified fill on his land and in/near the lake. Nonetheless, I take into account the evidence before me of his current mental state and of the stress caused by these proceedings. See Regina v Fahda [1999] NSWCCA 267 (per Simpson J at [38]-[51]). His attitude would appear to have moved from defiance to contrition and compliance since his hospitalisation. It is to be hoped that Mr Naklicki takes better care of his mental health in the future.

Deterrence and other factors 24 It remains important, however, to signal to the community that orders of the court should be obeyed. It is of concern that in many cases of contempt in this court the orders breached were made with the consent of the party later charged with the contempt. Evidence of Mr Naklicki's good intentions to help his community gives the court some degree of confidence that personal deterrence is not a major factor to consider in determining sentence, but this is his second contempt of relevant orders. 25 Bignold J's leniency on the first occasion was betrayed, and a penalty must be imposed on this occasion. In all the circumstances I have now concluded that imprisonment is not appropriate, and that the amount of any fine must take into account the Defendant's agreement to pay the Prosecutor's substantial legal costs, and his acknowledgement that, at significant sacrifice (namely the forced sale of his beloved property), he will have to fund a substantial remediation programme. 26 Mr Miller assured the court that the Council is cognisant of the need to do "the bare minimum to remediate the site" and not burden him more than is necessary and appropriate. Substantial damage has been done to his own property and, if not rectified, substantial environmental harm will ensue downstream of the lake. The physical damage done to the land is well described in the evidence before me on 6 June and during this week, and need not be repeated here, but there is confidence among those involved that that damage can be undone. 27 Mr Naklicki does well on the application of the other considerations in the sentencing legislation, and there are neither major aggravating nor major mitigating factors to factor into the penalty. 28 Dr Cassidy has now reviewed Mr Naklicki (Exhibit B1), and I am satisfied of Mr Naklicki's "fitness to be tried". 29 In his written submissions filed prior to Wednesday's hearing, Mr Gough argued for the imposition of what he called a "nominal fine". Minds differ on what that term might mean, but I do not consider the fine suggested to the Court on Wednesday, namely $30,000 "nominal". However, after anxious consideration, afresh and in depth, since Wednesday, of all the material before me, I find that such a fine is appropriate and adequate punishment for this Defendant, provided that he pays also the agreed amount of costs ($65,000) and takes ultimate responsibility for the doing and/or funding of the necessary remediation works. Final disposition of the contempt matter 30 The parties have today asked the court to make comprehensive orders, upon which they have now agreed, and which incorporate the imposition of the suggested fine and costs order, together with stay provisions, plus remediation, funding, sale, and payment arrangements. 31 For the reasons I have just outlined in this judgment, these draft orders accord with my current thinking as to an appropriate and just outcome of this extraordinary litigation. 32 I, therefore, formally make those Orders, and I order also that the Exhibits be retained.

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