Botany Bay City Council v Ralansaab Pty Limited & 7 Ors

Land and Environment Court (NSW)|2010-07-01|Before: Sheahan J

The application is to be accompanied by a detailed streetscape/public domain landscape plan for the Church Avenue road verge. The public domain plan shall be prepared by a suitably qualified landscape architect with relevant qualifications in landscape architecture. …" 31 The deed entered on 15 March 2004 (Exhibit C1, tab 5), as required by condition 34(a) of the stage 1 consent, included the following requirements to be satisfied by the developer/owner prior to the issue of an Occupation Certificate in relation to the residential flat building (clause 2): (a) dedication of land for the widening of Church Avenue. (b) Satisfaction of condition 34(b) - the road widening works themselves. (c) "Replace the existing above ground electricity and telecommunications cables in Church Avenue adjoining the site and replace them, at the owners expense, with underground cables". (d) "Construct appropriate street lights, drainage and traffic signs to the relevant Australian Standards and Codes of Practice." 32 Clauses 3, 4 and 8 provided as follows: "3. All work required to be done by the Owner under Clause 2 hereof shall be at the Owner's expense. 4. Council will be entitled to refuse the issue of any Occupation Certificate for the subject premises until it is satisfied on reasonable grounds that all of the requite (sic) works required by Condition 34 of the consent (and Clause 2 of this Deed) have been completed to Council's reasonable satisfaction. … 8. The Owner covenants and agrees to, within 30 days of written request by Council, execute a Positive Covenant pursuant to Section 88E of the conveyancing Act 1919 wherein the obligations imposed by this Deed are incorporated into such Positive Covenant and shall do all such things and execute all such documents to have such Positive Covenant registered on the title to the subject premises. The Owner further agrees that the council shall, pending registration of such Positive Covenant, be entitled to register a caveat at the Land Titles Office against the title of the subject premises to protect is rights hereunder." (emphasis added) 33 The Positive Covenant, required by the above provision of the deed (cl 8), was provided to Council on or about 4 November 2003 (see Exhibit C1, tab 21). 34 Tim O'Connor, acting for the Council, put a caveat on the title on or by 30 March 2004 (dealing No. AA 531330 N - see Exhibit C1, tab 19, and Exhibit S1, tab 4). 35 The caveat was withdrawn in December 2005, and development consent for strata subdivision of the project was granted on 9 November 2005 (Exhibit S1, tab 7). 36 A second deed was entered between Council and Ralansaab Pty Ltd on 12 December 2005, pursuant to condition 34(a) (Exhibit C1, tab 24). That deed includes the following provisions: Recital G "[Whereas] the Owner has entered into arrangements with Energy Australia whereby Energy Australia will shortly install the street lighting and Saab Corp Pty Ltd has written to the Council accepting full responsibility for all reinstatement works to the road and footpath on Church Avenue and O'Riordan Street, Mascot after Energy Australia carry out the works of placing street lights on Church Avenue. In entering into this Deed the Owner gives the same undertaking." Clause 2: "In consideration of Council providing a Withdrawal of Caveat to the Owner, the Owner covenants and agrees with the Council as follows: (a) That it will reinstate the road and footpath on Church Avenue and O'Riordan Street after Energy Australia have carried out the works of placing street lights on Church Avenue with such work to be completed within 28 days of Energy Australia completing their works.

(b) That the Council is entitled to retain the sum of $10,000.00, being the builders security deposit held by it, to be retained pending completion by the Owner of the works required pursuant to subclause (a) hereof . … " (emphasis added)

37 I turn, next, to the important roles played in this matter by persons other than the parties to the litigation, namely the private certifier appointed and the relevant "energy provider". C. The Private Certifier and the Energy Provider Certification 38 A private certifier was appointed by two of the respondents (as owner and builder - see Exhibit C1, tab 16, par 1) in January 2004, namely Russell O'Brien, of Lorus Building Approvals and Certification ("Lorus"). 39 Lorus issued Construction Certificates on 24 January 2004 (2004/0003a for stage 1 - see Exhibit C1, tab 7) and 15 November 2005 (2004/0003d for stage 2 - see Exhibit C1, tab 20 and Exhibit C3, vol 1, tab 3(h)), and the Occupation Certificate (2004/0003) on 9 December 2005 (see Exhibit C1, tabs 25-26, Exhibit S2, tab 7, and Annexure 'A' to Michael Saab's affidavit). 40 The Occupation Certificate refers also to Construction Certificates on the project, numbered 2004/0003b (6 October 2004, see Exhibit C1, tab 16) and 2004/0003c (18 April 2005 - see Exhibit C3, vol 1, tab 30). 41 It is implicit in the Council's case that the private certifier wrongly certified that all conditions of consent had been satisfied. 42 The respondents rely upon that certification, but the court notes that the private certifier has not been joined in the proceedings, and did not give evidence. (There is evidence of some tension between Council and the certifier during the project over issues of stormwater drainage and landscaping - see Exhibit C3, vol 2, tab 12). Energy Australia 43 Condition 32 required compliance with the "energy provider's guidelines". 44 It is common ground that Energy Australia is the relevant provider. 45 No evidence was given in the proceedings on behalf of Energy Australia, other than the inclusion in some exhibits of some documents it produced on subpoena (see especially tabs 14 and 15 of vol 2 of Exhibit C3, but also annexures to various affidavits). 46 Those documents include a certificate of practical completion of the Energy Australia works, dated 20 February 2006 (see Exhibit S1, tab 10, and Exhibit S2, tab 8), and the respondents rely also on that certificate. 47 It is clear from perusing the documentation in that part of the evidence that a particular Energy Australia officer, Mr Jason Henniker, of the Customer Service section, was continuously involved in the project from March 2002. 48 Mr Henniker was in contact around that time with Frank Palermo from the Building Engineering section of Egis Consulting Australia Pty Ltd, which had been engaged by or on behalf of Moscat. 49 On 25 March 2002, Mr Palermo faxed to Mr Henniker a letter dated 22 March (Exhibit C3, vol 2, tab 14, fols 470-1), in which he outlined the specifications for the electrics in the project, including appliances in the apartments, and common facilities such as lifts, etc. He went on to estimate the electricity demand, and enclosed some documentation indicating the location of the main switch room in the basement next to an existing substation (fol 471). He asked if that substation could "accommodate the additional load". 50 The fax then continued (at fol 471): " Relocation of existing aerial lines In addition to the above, Botany Council has requested as part of our development that the existing aerial lines adjacent to our site along Church Avenue and O'Riodan (sic) Street be relocated underground. To assist us could you please advise what procedures are required for these existing cables to be relocated underground. Should you require any further information, please do not hesitate to contact this office." 51 Mr Henniker's response of 26 March 2002 (Exhibit C3, vol 2, tab 14, fols 468-9) concentrated on the question of "relocation of Energy Australia overhead assets at the above address underground". The early paragraphs of the letter say as follows: " To confirm your request, you have asked EnergyAustralia to underground the overhead mains in surrounding (sic) the proposed development in O'Riordan St and Church Ave. This may involve the following: Replacement of existing wood poles and street lights with steel standard street lighting structures in order to maintain or enhance current street lighting levels. Undergrounding of electricity mains on both sides of the street(s). Undergrounding the existing overhead services to affected customers and remove the respective overhead services. It is advisable that the relocation of overhead mains to underground be carried out in whole street block so as to minimise the visual anomalies, however other requests may be considered depending on the site conditions. (emphasis added) 52 The subject site is large, but does not occupy a "whole street block". 53 In a later letter to the sixth respondent, "Joe" Saab, (dated 17 June 2004 - see Exhibit C1, tab 10), Mr Henniker refers to a (different) letter of 26 March 2002 (not in evidence) in which he says Energy Australia advised the addressee (presumably Palermo, if not Moscat itself, or another consultant) that a (new) substation would be needed to supply the project. The later letter was said to supersede the earlier, as Energy Australia had found that an existing substation nearby in O'Riordan Street would be adequate. 54 On 23 August 2002, well before either the grant of development consent or the sale of the site to Ralansaab Pty Ltd in mid-late 2003, Energy Australia issued a quotation (No.CCZ011063, sometimes misprinted as CCZ011603) to Caverstock Group Pty Ltd, which was also consulting to Moscat. 55 The description of work in that quote (see Exhibit C3, vol 2, tab 14, fols 433ff, Exhibit S1, tab 2, and Exhibit S2, tab 2) was "undergrounding of overhead wires surrounding the proposed development at 109-123 O'Riordan Street Mascot" (emphasis added). The cost of the work was quoted as $235,609, said to be "an estimate only and on completion of work an account will be forwarded for the actual cost of the work". The quoted amount included GST. 56 In Schedule 3 of the quote there was a general description of works (firstly, works excluding "service work"), comprising: " Removal of 8 wood poles and associated overhead wires (including low voltage/street lighting & service wires) Installation of five steel street light standards Installation of two low voltage pillars Installation of one low voltage pillar standard Installation of one 4-way link box Installation of an additional low voltage panel in substation no.3379 Excavation and installation of low voltage cables on both sides of O'Riordan St & Church Ave in the footpath area. Excavation and installation of low voltage cables across the roadway in O'Riordan St, Church Ave & Hughes Ave. Permanent reinstatement of: - footpath area on the eastern side of O'Riordan St - footpath area on the western side of O'Riordan St, south of Church Ave - footpath area on the southern side of Church Ave - roadway in O'Riordan St - roadway in Church Ave - roadway in Hughes Ave" (emphasis added) 57 Schedule 3 then gave a general description of proposed "service work" affecting 124 and 128 O'Riordan Street, on the opposite side of O'Riordan Street from the subject site, and a Caltex Service Station (apparently No.125, but located on the south-western corner of Church Avenue and O'Riordan Street - the subject site being on the north-western corner). 58 The schedule then set out general work conditions, special service work conditions, and exclusions. The quotation was associated with some "plans" dated 13 August 2002 (see Exhibit C3, vol 2, tab 14, fols 447ff, and attachment 'A' to Phoebe Mikhiel's affidavit of 10 November 2009), which numbered the 8 relevant poles as B, C, D, E, G, J, K, and M. 59 As foreshadowed above ([10]), I now turn to summarise the identity, nature and role of each respondent, and the relevant inter-relationships among them. D. The eight Respondents and their roles 60 The first respondent is the company Ralansaab Pty Ltd ACN 105 378 354 ('Ralansaab'), to which reference has already been made. It was incorporated on 2 July 2003 to be the trustee of a unit trust which would buy the subject site and develop it in accordance with the development consent(s) granted to the vendor, Moscat. Ralansaab was a joint venture vehicle for the Saab family on one hand and the Ralan Property Group on the other, but went into voluntary liquidation on 18 February 2009, with a meeting of its creditors being held on 3 March 2009. The evidence suggests that the company's only creditors were various Saab family interests, all of which were represented at the winding up meeting by Michael Saab. As no Supreme Court approval has been granted for the applicant to proceed against it, Ralansaab took no part in these proceedings. 61 The second respondent is the company Saab Corp Pty Limited ACN 092 159 325 ('Saab Corp'), sometimes mistakenly referred to in various evidentiary materials, including by members of the Saab family themselves, as "Saab Corporation", "Saab Constructions", "Saab Corp Building and Construction", or the like. Saab Corp is a licensed building company (licence No.148387C), owned and operated by, and for the benefit of, members of the Saab family. It was incorporated on 24 March 2000, and was relevantly engaged by Ralansaab to develop the subject site and construct the residential project. 62 The undated "building contract" between these two respondent companies, Ralansaab and Saab Corp, (see Exhibit C3, vol 1, tab 3(a), at fol 116), was signed by two directors of Saab Corp (Joseph and Anthony Mark Saab) and by one director of Ralansaab (Anthony Saab Snr), and provides as follows: " RalanSaab (sic) Pty Limited being the 'owner' of the above mentioned property at Mascot, has proposed to develop 108 residential apartments on the property. As part of the development, the 'owner' has elected to employ the services of Saab Corp Pty Limited to act as the 'builder' of the project. As the builder, Saab Corp Pty Limited has agreed to take total responsibility in the building and construction of the project, and in doing so understands that it shall be responsible for all structural requirements on the project for a total of seven years after completion. The 'builder' also understands that it shall partake in all its activities following the guidelines set out by the Building Code of Australia (BCA). It has been agreed that the 'owner' be responsible for funding the project, and in doing so will constantly update the progress of the development by consultation with the 'builder'. The contract will exist as of the beginning of demolition works. From thereon, the contract will include a time period for building completion by the 'builder', which will be eighteen months from the commencement of the contract. Furthermore, dates and monetary amounts will be confirmed prior to commencement of any building works". 63 The third respondent is 'The Owners Strata Plan No.76317', being the Owners Corporation of the Ralansaab development on the subject site ('the Owners Corporation'). Its Strata Managing Agents, Strata Joyce Linders, signified to the court on 19 February 2009 that the Owners Corporation was/is prepared to consent to the relief claimed in par 4 of the original summons, essentially an order that it "allow all necessary access to the premises" in the event of relevant orders being made against other respondents. No formal appearance has been filed, and this respondent has taken no part in the proceedings. 64 The fourth respondent is William Peter O'Dwyer. Mr O'Dwyer is a principal and the managing director of Ralan Property Services Pty Ltd (ABN 59 087 265 834), a company that he formed in 1999. It specialises in the development, marketing and management of residential real estate principally in the Sydney metropolitan area. He has been continuously involved in the marketing and sale of real estate developments in New South Wales since about 1993. He was a director of Ralansaab from 28 October 2003 until 9 February 2009, with his primary roles being to negotiate the terms of sale from Moscat to Ralansaab, and to market the apartments for sale to the public. The Saab Family 65 The fifth, sixth, and seventh respondents are Michael Saab ('Michael' - born 1980), Joseph Saab ('Joe' - born 1976), and Anthony Mark Saab ('Anthony', sometimes referred to as Anthony Saab Junior - born 1974), respectively. They are three sons of the eighth respondent Anthony Saab (Snr), known as 'Tony', and his wife Theresa. 66 Theresa Saab became the Secretary of Ralansaab Pty Ltd on 10 February 2009, and signed various papers concerning the voluntary liquidation. She has taken no part in these proceedings. 67 Tony owned all 1,000 shares in Ralansaab, and was a Director and Secretary of that company from its incorporation on 2 July 2003 until 4 December 2007. He has had a lifetime in the building/development industry, and is the holder of a building contractor's licence (No. 633 - Exhibit C3, vol 1, tab 8), but he told the court that he is now retired from active work in his family's ventures, and spends long holidays overseas. 68 The applicant alleges in its FAPOC that Joe was the secretary of Ralansaab from 30 March 2006 to 4 December 2007, but never a director, and that Michael was a director of Ralansaab from 30 March 2006 to 10 February 2009, and its secretary from 4 December 2007 to 10 February 2009. 69 Joe has been the secretary and sole director of Saab Corp from 24 March 2000 to date and continuing, and Anthony was a director of that company from 20 March 2000 to 17 July 2007. Each of Joe and Anthony holds 12,600 shares in Saab Corp. Anthony is an engineering graduate from Sydney University, holds a contractor licence (No.113886C - par 7 of his affidavit 30 July 2009), and is a supervisor for Saab Corp's contractor licence (148387C). Joe was also secretary of Ralansaab from 30 March 2006 to 4 December 2007. Anthony certainly acted as a contact person for Ralansaab (see, eg, Exhibit C2, tabs 10-11). 70 The Council's case is that each of the five company director respondents (O'Dwyer and the four Saab men) gave instructions for the carrying out of the subject development, and are thereby to be regarded as having carried out the relevant development in breach of the conditions of consent. 71 I turn now to set out the respondents' defences and discretion arguments (section E) and then to summarise in more detail the evidence tendered by both sides (the Council in section F, and the respondents in section G). E. The Respondents' Defences, and claims for Discretion 72 The substantive defences advanced (in par 13 of the FAPOD) to par 10 of the FAPOC (see [28] above) may be summarised as follows: (a) that the Council, in imposing condition 32, specified an aspect of the development to be carried out to the satisfaction of a person also specified by the Council, namely the relevant " energy provider " (in this case Energy Australia), and that that aspect of the development has indeed been carried out to that specified person's satisfaction; (b) that the relevant respondents complied with condition 32 according to its terms, in that undergrounding of cables occurred and appropriate street light standards were installed within the O'Riordan Street road reserve adjacent to the property; (c) that condition 32 is invalid for uncertainty of meaning; (d) that condition 32 is invalid because: (i) it did not reasonably relate to the development; (ii) it was manifestly unreasonable; (e) (i) that (stage 1's) condition 34 and (stage 2's) condition 32 together, on their proper construction, related to the same subject matter; (ii) that the deeds of 15 March 2004 and 12 December 2005 recorded the agreement between Council and Ralansaab as to the terms of the works to be carried out to complete the subject matter of the conditions; (iii) that such subject matter (as reflected in condition 34 or the deeds) has been carried out, or the requirements of condition 32 merged with the terms of the deeds; and (iv) that the subject matter of the deeds has been carried out;

(f) that the relevant respondents were not required to carry out the development particularised in par 10(a) of the FAPOC, pursuant to condition 32. 73 The active respondents' case on discretion has been particularised as follows (FAPOD par 15): "(a) In procuring the carrying out of works pursuant to condition 32 of the consent works beyond the scope of the condition were effected to the benefit of the Council and/or the public generally. (b) In carrying out the development the subject of the consent the respondents or some of them agreed to the payment of contributions pursuant to s.94 of the EP&A Act in an amount significantly greater than they were required to pay pursuant to condition 59 of the consent. (c) The Council elected to not include the works the subject of condition 32 of the consent into Deeds entered into between it and the first respondent concerning undergrounding works in Church Avenue being the subject matter condition 34 of the Stage 1 consent and also the subject matter of condition 32 of the consent. (d) In procuring the carrying out of works pursuant to condition 32 of the consent officers of the council raised no issue with the respondents or any of them concerning compliance with condition 32. (e) In procuring the carrying out of works pursuant to condition 32 of the consent the council delayed in raising with the respondents or any of them the issue of non compliance with condition 32. (f) In procuring the carrying out of works pursuant to condition 32 of consent the respondents relied upon the satisfaction of the Energy Provider concerning compliance with condition 32."

F. The Council's Evidence 74 The Council relied upon numerous affidavits from its officers, especially Phoebe Mikhiel (Team Leader, Development Assessment) and Rodger Dowsett (Director of Planning and Development), and the affidavit dated 12 January 2009 from Council's solicitor, Tim O'Connor. All three, and one other Council officer, also gave oral evidence. The pre-litigation correspondence 75 The possibility that condition 32 had been breached, in respect of O'Riordan Street, was first raised by Council on 18 July 2007, in a letter from Rodger Dowsett to the certifier, Lorus (Exhibit C1, tab 27). 76 That letter was passed on to Ralansaab, and Patrick O'Brien replied to Council on behalf of that company on 31 July 2007, asserting a lack of clarity in condition 32 (Exhibit C1, tab 28), which Mr O'Brien says renders it invalid for uncertainty, relying on Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277. The letter notes: " The condition [32] does not identify or define the 'road reserves' referred to. Council seems to have assumed that the term 'road reserves' is a reference to O'Riordan Street, Mascot and to Church Avenue, Mascot. However, the condition does not refer to either of those public roads or to any particular section or part of them.

It also appears that Council has assumed that the condition imposes obligations in relation to the replacement of electricity and telecommunication cables within 'the Church Avenue frontage' and 'the O'Riordan Street frontage'. However, the term 'frontage' does not appear in the condition. Council is apparently reading that word into the condition in an attempt to cure one of the defects in the condition and to delineate whatever obligation exists to undertake work to 'road reserves'.

Council also appears to have assumed that the condition imposes some obligation 'in respect of undergrounding the overhead cables now in the air space of O'Riordan Street' (sic). Whatever that phrase means it does not form part of condition 32. More importantly, it emphasises the point that the condition has not been expressed in clear and unambiguous terms. " 77 There was subsequent correspondence between Lorus and Council (Exhibit C1, tabs 29-30), before a letter of demand was sent by Tim O'Connor to the Secretary of Ralansaab on 12 October 2007. 78 Mr O'Connor, in his affidavit sworn 12 January 2009, deposes to his exchange of correspondence with Patrick O'Brien, and copies of various letters are annexed to his affidavit. 79 On 19 October 2007, Patrick O'Brien responded to Tim O'Connor's letter of 12 October, and sought, on Ralansaab's behalf, particulars of Council's claim. 80 Mr O'Connor replied on 25 October 2007 (Annexure 'D') "that it is quite clear as to what the condition required in that it required the undergrounding of all aboveground electricity and telecommunication cables within the road reserves adjoining the site". He went on to assert that "your client clearly understood the meaning of that requirement in relation to the Church Avenue, Mascot Road frontage but failed to undertake that work in the O'Riordan Street frontage", and continued "we do not propose debating definitions of various words used in the condition. Conditions of consent are not interpreted in the same way as legislation and simple a (sic) reading of the consent and the condition makes it plain as to the requirements of the condition". 81 Patrick O'Brien responded at length on 5 November 2007 (Annexure 'E'), repeating the respondents' earlier contention that the requirements of the relevant condition were not clear. His letter also asserted that "Council has misconceived and misstated the nature and extent of the relevant works carried out by our client. Our client has placed power and telecommunication cables underground in Church Avenue, O'Riordan Street and Hughes Avenue, Mascot … Those works were carried out under the development consent as modified and in accordance with relevant construction certificates and also consents issued under section 138 of the Roads Act". The works in Hughes Avenue Mascot were never raised by Council, in either its letter to the principal certifying authority, and/or in its letter to Ralansaab on 12 October 2007. 82 Mr O'Brien enclosed the Energy Australia document dated 23 August 2002, and confirmed that Enerserve "A Business of Energy Australia" had been retained to carry out the cabling works. Also enclosed was a certificate of practical completion, dated 20 February 2006, which had been furnished to Council under cover of a fax from Saab Corp on 21 May 2006. Mr O'Brien indicated that any proceedings would be resisted and that the correspondence would be relied upon for an order that Council bear costs on an indemnity basis. 83 It is noted that many of the arguments now raised in the respondents' primary defence, and on discretionary issues, were raised by Mr O'Brien in his letter of 5 November 2007. Mr O'Connor replied on 5 December 2007 (Annexure 'F'), distinguishing the import of the respective conditions. 84 Mr O'Connor also deposed to having sent a letter of demand to Saab Corp on 9 July 2008 (Annexure 'G'), enclosing a copy of the letter to Ralansaab of 12 October 2007. On 17 July 2008, Patrick O'Brien sought particulars on behalf of Saab Corp (Annexure 'H'). Detailed particulars were not provided, but Mr O'Connor responded on 14 November 2008 (Annexure 'J') that both the owner and the builder were responsible for any failure to comply with condition 32, and/or condition 34. On 18 November 2008, Mr O'Brien sought copies of documents relied upon by Council (Annexure 'JJ'). The Owners' Corporation 85 Mr O'Connor had also sent a letter of demand to the Owners Corporation on 12 October 2007 (Annexure 'K'), raising the access question. The Strata Managers, Linders Property Group, sought particulars on 25 October 2007 (Annexure 'L'). On 14 November 2007, O'Connor replied to Linders (Annexure 'N'), indicating that Council thought it unlikely any work would be required on the common property. He sought confirmation that electricity into the subject site was already undergrounded. On 9 July 2008 (Annexure 'M'), O'Connor advised Linders that, as there had been no response to the letter of 14 November, Council would join the Owners Corporation in these proceedings, to ensure that any orders made could be complied with. The Council officers 86 Phoebe Mikhiel has been with the Council since May 2006 as a "team leader development assessment". She is qualified as a town planner and has been employed in that capacity with various councils in Sydney. 87 In her first affidavit, dated 12 March 2009, she traced the history of the DA 03/013 dated 5 July 2002, the consents, and the deeds. In her second affidavit, dated 20 August 2009, she dealt with the Energy Australia quote dated 23 August 2002, and the design plan issued on or about 6 April 2004. The quote refers to the removal of eight poles, and the plan to the removal of only three. The quote provides for the installation of five light standards while the design provides for the installation of only three. She inspected the subject premises and surrounding areas on 13 August 2009, and observed three new steel light poles located in the vicinity - one in Church Avenue approximately 32m from O'Riordan Street, one at the corner of Church and O'Riordan, and one opposite the subject site between Hughes Avenue and "Caryina" (sic) Avenue along O'Riordan Street. Three wooden poles remained on O'Riordan Street adjoining the development. 88 Ms Mikhiel also swore affidavits on 10 September 2009 and 2 November 2009, following the production of documents by Energy Australia. Of the 8 identified poles (see [58] above), those numbered B, C and D remain in the locations shown on the relevant plan at Annexure 'A' of her November affidavit. 89 Rodger Dowsett is the Council's Director, Planning and Development. In his affidavit of 13 November 2009 he responded to some evidence given by Joe Saab, and refuted some of the alleged conversations, but he acknowledged that the Saab interests have undertaken works and commitments to Council, that were not strictly their obligation, for example, the construction of the footpath in Church Avenue to the boundary line of the Sydney Water land, and the agreement reached in respect of under-assessed s 94 contributions. 90 Mr Dowsett became aware in late September 2006 of a possible undergrounding non-compliance on another property within sub-precinct 1 of Mascot Station precinct, 149-161 O'Riordan Street. It occurred to him that a similar non-compliance might have occurred on the subject site, but he did not inspect the environs of the subject premises until about 16 July 2007. He wrote to the certifier, Lorus, on 18 July 2007. He corroborates Mikhiel's evidence regarding the three wooden telegraph poles remaining on the footpath adjacent to the premises, and says that they had been in that position from at least 2002. 91 He asserts that, as a certifier had been engaged, "it was not the role of the council to check the accuracy or otherwise of the occupation certificate sent to the council by the PCA". 92 Mr Dowsett's second affidavit, dated 26 February 2010, mainly concerns the s 94 issue (pars 1 to 9). Mr O'Connor had advised the Council on 24 November 2003 that the "under-assessed" s 94 contributions could not be recovered, as the consent had been issued and the applicant had acted upon it in preparing the development of the site. Agreement was reached on a supplementary payment when a modification was approved in December 2003. The Saab interests agreed to make an additional payment of $100,000 on the basis that they may seek to add further apartments to the building. In the end, two payments of $100,000 were made, in addition to the original s 94 contribution, but the levy of $30,885.81 in respect of the additional apartments (an increase from 108 to 111) was not pressed. The overall payment is still approximately $165,000 less than the correctly calculated total s 94 contributions. 93 Dowsett denies (par 10) that, at the time of a conversation with Anthony Saab regarding timber edging to the landscaped areas on the O'Riordan Street frontage, he asked Anthony for a certificate certifying that the undergrounding work had been completed. 94 In the final paragraph of this affidavit (par 11) he says: " Based upon my knowledge of approvals granted for residential flat buildings in Council's area and in particular the Mascot Station Precinct, this was the first residential flat building approved in the Mascot Station Precinct and following this approval it then became Council's practice to: (a) Incorporate a condition which requires the applicant to enter into a Deed which is then supported by a caveat registered over the title to the property when the development requires road widening such as to ensure that the road widening is undertaken and dedicated as a road before the development is completed. Condition 34(a) was imposed in relation to the Stage 1 development approval and was the first of such conditions imposed upon a consent for a residential flat building in the Mascot Station Precinct where road widening was proposed. (b) Where undergrounding of electricity and telecommunications cables within the road reserve was required, that condition is not normally supported by requirement for the applicant to enter into a Deed with Council supported by a caveat registered over the title to the property. Condition 32 of the Stage 2 consent did not impose a requirement for a deed to be entered into in relation to the undergrounding works for O'Riordan Street. The deed prepared was only prepared in relation to Church Avenue in accordance with condition 34 of the Stage 1 Development Consent. Once the works covered by the deed were completed Council was then obliged to withdraw the caveat over the title to the property." 95 Two other Council officers, Peter Ward, an administrative planner, and Martyn Perry, the human resources manager at the Council, provided affidavits in February 2010, in response to evidence given by the Saabs, asserting that many Council officers made many visits to the site, but, relevantly, the Saabs say, those officers made no complaint regarding the cabling works being inadequate. 96 Mr Ward denies that he ever actually visited the site, although he is familiar with it, and Mr Perry deposed to the periods of service, and assigned duties, of various other officers mentioned in the Saab evidence, namely Phillip Cornish (8 December 2003-3 March 2006), Julie Gee (since 28 February 1994), William Marsh (29 July 1996-19 June 2009); Gary Wright (since 28 February 1977); Oman Wijayaratana (27 July 1998-11 April 2008), Michael Lee (13 December 1999-19 December 2003). Exhibit C5 is a copy of Michael Lee's letter of resignation dated 2 December 2003. G. The Respondents' Evidence 97 All five individual respondents swore affidavits and gave oral evidence at the hearing of these proceedings. 98 William O'Dwyer swore one affidavit before Tony Saab was joined in the proceedings and one after. In his role with Ralan Group he came to know and work with Tony as "a builder and real estate developer". In June 2003 he learned that Colliers was marketing the subject site with the benefit of the residential apartment consent and discussed with Tony Saab the formation of a joint venture to acquire and develop the site. (The Colliers materials are Annexure 'A' to his 30 July 2009 affidavit). 99 Ralansaab was incorporated, the contract of sale was exchanged, and O'Dwyer began marketing apartments "off the plan" with great success. Once 60% had been sold, the finance was secured and development commenced. O'Dwyer deposes (1) that he had little involvement in the actual development, other than signing occasional documents as a director of Ralansaab, and (2) that he knew no details of the conditions of consent until he learned from Tony that Council had written to the certifier in July 2007 about the undergrounding. He left it to Tony Saab to liaise on the owner's behalf with the contracted builder, Saab Corp, but Tony asked him to attend meetings with the Council, commencing December 2003, regarding the s 94 issue and various modifications of consent (see Exhibit C2, tab 2, re February 2005). It was O'Dwyer who put to Council the offer of $100,000 by way of extra s 94 contributions, which Dowsett accepted. As the building neared completion, the marketing continued until all apartment sales were finalised in mid 2006. 100 Tony Saab deposed that his involvement in the actual development was limited to signing documents as a director of Ralansaab, and attending a few meetings with Council, once the s 94 issue was raised at the time Council was considering modification of the consent in late 2003. 101 The three Saab sons' evidence indicates that Joe and Anthony jointly assessed the prospects for successful development on the subject site, when O'Dwyer and Tony Saab were deciding to buy it. Michael was not involved with Ralansaab at the time the site was acquired. Nor was Anthony directly involved in the acquisition, but he deposes to deciding, with Tony and Joe, at the time of acquisition, that some modifications of the Moscat consent would be desirable. 102 Joe and Anthony provided almost identical affidavit evidence on most matters. They say that, "with the help of other family members", they undertook, in about June 2003, a detailed review of the conditions of consent and approved plans, as contained in the Colliers material, and prepared a preliminary estimate of the project cost. They did not see the URBIS report, nor retain a consultant planner to review any documents, including the DCP. They were aware of conditions 34 and 32, and their inquiries of Colliers brought them the 23 August 2002 Energy Australia quote, provided to Caverstock on Moscat's behalf. Joe and Anthony both depose that they "also reviewed the design referred to in [that] quote". 103 In June or July 2003, Joe telephoned Jason Henniker of Energy Australia (see [47]ff above), had a conversation with him, and then met him, with Anthony, at the subject site. They walked the perimeter, and observed the poles and overhead lines in both streets. They "also looked at power lines adjacent to the property that crossed O'Riordan Street and that were (sic) connected to a wooden pole opposite the property in Hughes Avenue, Mascot" (Joe's par 15, 1 April 2009). 104 Both brothers gave the court clearly co-ordinated accounts of a rather controversial conversation they allege took place with Mr Henniker during that meeting in June or July 2003 (see Joe's par 16, and Anthony's par 19). 105 Joe says that, at that meeting, he showed Henniker a copy of the Energy Australia quote of August 2002, and, according to Joe's version, which is fully corroborated by Anthony's version, the following conversation took place: "[Joe] said to him: 'Can you tell us what the work set out in this quote generally involves?' He said: 'Energy Australia will remove the existing poles in Church Avenue and O'Riordan Street adjacent to the property as well as the pole on the other side of Church Avenue near the Caltex station and the pole in Hughes Avenue near the real estate agent's office. The footpath areas on both sides of Church Avenue and O'Riordan Street will be excavated and low voltage cables installed. The roadway in Church Avenue, O'Riordan Street and Hughes Avenue will also be excavated and cables installed underground across the roadway. High voltage underground mains will be relocated and electrical pillars and light standards will be installed in Church Avenue and O'Riordan Street. The footpaths and roads will be reinstated and other ancillary work undertaken". Anthony said: 'Have you seen the Council's conditions of consent for the development?' He said: Yes. They were provided to Energy Australia and we inspected them and also spoke to Council before we issued the quote?' Anthony said: 'So all of the undergrounding work that Council requires to be carried out has been detailed in the quote?' He said 'In relation to the relocation of aboveground electricity cables, Yes. You will still need to liaise with Optus and Telstra regarding the relocation of telecommunications cables. We don't do anything in relation to the Optus cable that is carried on our poles'." 106 Both Joe and Anthony say they formed the opinion that, if they did what the Energy Australia quote detailed, it would satisfy both conditions 32 and 34: "The plans forming part of the development consent did not contain any detail in relation to these matters and were of no assistance to me in identifying what work had to be undertaken in order to comply with that aspect of those conditions" (Joe's par 17). 107 They also reviewed documents obtained on Moscat's behalf from Optus and Telstra for the purpose of ascertaining costs to be incurred relocating telecommunication cables to satisfy the relevant parts of condition 32 and 34. Tony Saab and O'Dwyer, presumably after a favourable opinion from the brothers, then responded positively to the invitation from Moscat, and Ralansaab went on to retain Saab Corp to carry out the development. Saab Corp appointed Russell O'Brien of Lorus on or about 27 January 2004 to obtain a construction certificate (2004/0003a) for the stage 1 works. Construction of the development commenced following the issue of the stage 1 construction certificate. Saab Corp appointed Bill Gereige as its project manager. 108 In "about March 2004" Joe requested Energy Australia to issue an updated quote to carry out the works described in the Energy Australia quote. At around that same time the DA for the Church Avenue road widening and associated civil works was lodged with Council (No.04/395 - Exhibit C2, tab 6). 109 Jason Henniker contacted a colleague in Energy Australia on 19 March 2004 by email, saying (Exhibit C3, vol 2, tab 15, fol 541): " Back in 2002, Doug Chalker provided cost (sic) to carry out the UG of some services in O'Riordan St. The project is now back up and running however the number of services required to be UG has changed and it is now only two services. Is it possible to get an updated price on the UG of the services. The services are 128 O'Riordan St (100amp three phase) & Caltex Service Station cnr O'Riordan & Church Ave (200amp)." 110 On 5 April 2004, Henniker wrote to "Saab Constructions" (Exhibit C3, vol 2, tab 15, fol 540) referring to "our verbal conversations on site discussing the road widening in Church Avenue and how this will impact on Energy Australia's existing assets". No timeframe was put on those "conversations", but the court notes the use of the plural, c.f. the evidence of the Saabs that there was only one on-site conversation involving them, that being the one held in June/July 2003. 111 Henniker advised that Energy Australia had investigated, and had determined "that the overhead low voltage mains including street lighting will need to be removed and installed underground. The existing underground high voltage cables in Church Avenue will also need to be relocated to ensure correct cover is maintained over the cables". At law, only Energy Australia could carry out such works. 112 On the other hand, the removal of overhead low voltage mains was expected to result in the need to underground two low voltage services, namely 128 O'Riordan Street and the Caltex Service Station. That latter work is "contestable", so other accredited service providers could carry it out. 113 A customer initiating a request for undergrounding of overhead mains has to gain agreement and written approvals from parties affected by the proposal. It was also the obligation of the customer to negotiate and pay for the removal of any Optus or Telstra cables on Energy Australia poles (Exhibit C3, vol 2, fol 540 in tab 15). 114 In Exhibit S2, tab 4 (also Exhibit C4), is a plan numbered CCZ011063 and dated 6 April 2004, clearly referable to the works. The "scope of works" described on that plan is as follows: " Removal of four spans of LV open wire Removal of one 100amp three phase service & one 200amp three phase service. Removal of three LV wood poles. Replacement of two wood poles. Installation of three steel street light standards. Installation of two LV pillars. Installation of LV UG cable (incl two services) & associated conduits to replace the overhead wires. Diversion of two HV cables " (emphasis added) 115 In Exhibit C3, vol 2 (at tab 15, fols 526-536), there is a series of "plans" entitled "Underground LV Overhead Wires & Diversion of HV cables in O'Riordan St and Church Ave, Mascot", some of which (fols 528-535) appear to be partially annotated enlargements of parts of the 6 April 2004 plan. Two others (fols 527 and 536) are explanatory of the LV system (existing and proposed) and the location of poles, respectively. 116 The remaining page of the series (fol 526), again dated 6 April 2004, carries a "Detail (sic) Description of Work". It sets out lists of tasks under the headings "Overhead Work", "Jointing Work", and "Cable Laying work". 117 Under "Overhead Work" the following listed items are of interest regarding poles and light standards: "… B,C,F: Remove pole and associated equipment on poles. A: Replacement of existing pole … D: Replacement of existing pole … … G: Installation of steel street light standard … H: Installation of steel street light standard … F: Installation of steel street light standard … …" 118 On 27 May 2004, Enerserve wrote to Joe Saab (Exhibit C3, vol 2, tab 15, fols 509ff, Exhibit S1, tab 5 and Exhibit S2, tab 5) to thank him "for the opportunity to submit a proposal for the above project", summarised as "underground mains work in Church Ave and O'Riordan St Mascot". (It is to be noted that the reference on the top of the 27 May letter is CCZ011603, instead of CCZ011063). 119 The letter pointed out that Energy Australia "must carry out the works", as they are deemed "recoverable". "Enerserve carries out Recoverable works on behalf of EnergyAustralia". A contract/proposal was submitted, "based on the works being carried out in accordance with Energy Australia's design CCZ 011603 dated 6 April 2004", and Joe was invited to accept the proposal by signing Acceptance of Offer form. The price (on fol 517) is $238,777 including GST. The general terms and conditions are set out (at fols 520-523), and include a process for "changing the specifications" (Part C, clause 7, on p 12 of 17). The works were to be completed in ten weeks. 120 The "project brief" (Exhibit C3, vol 2, fol 513) is described as follows: " Relocate high voltage underground mains and underground the existing overhead low voltage mains in Church Avenue and O'Riordan Street, Mascot adjacent to the premises of SAAB Constructions, 109-123 O'Riordan Street Mascot as detailed in Energy Australia design CCZ011603 dated 6 April 2004." 121 Joe signed the acceptance form (at fol 508) on behalf of "Saab Constructions". 122 On 17 June 2004, Henniker wrote to Joe Saab (see Exhibit C1, tab 10, and Exhibit S2, tab 6) thanking him for his "new application for supply concerning the provision of electricity supply to the proposed development at 109-123 O'Riordan Street", and confirming Saab Corp's acceptance of the proposal. The letter confirmed that a new substation would not now be needed for the project, and explained that the work would involve "both non-contestable and contestable components". The letter indicated that Enerserve, "an accredited service provider", would provide "a complete design and construction package". Anthony faxed a copy of this letter to Dowsett (par 26 of Anthony's affidavit 30 July 2009). 123 On 18 October 2004 (Exhibit C3, vol 2, tab 15, fols 505-6), Energy Australia sent a letter to Council addressed to "Will Marsh" headed "Street Lighting - 109-123 O'Riordan Street, MASCOT". The letter outlined that certain work was to be done by Energy Australia - 2 wooden light poles in O'Riordan Street and one wooden light pole in Church Avenue were to be removed and replaced by steel columns, The Council was invited to accept the terms in the quotation (which also had the number CCZ011063). 124 The Council accepted (fol 506) all the terms of that quotation on 22 October 2004. 125 Council approved the widening of Church Avenue and other civil works required under condition 34(b). The apartment building "and other improvements" erected on the property were largely completed by late October to early November 2005. When the cranes were removed, Saab Corp began widening the road in Church Avenue in conjunction with (a) the cabling works the subject of the Enerserve proposal, (b) the relocation of telecommunication cables underground by both Optus and Telstra, and (c) associated kerbing, guttering, paving, and landscaping works. Those works were generally supervised by Phillip Cornish, a Council engineer, who the Saab brothers say regularly visited the site. He "made no comment regarding any inadequacy in the cabling works". Joe also deposes that Dowsett took a close interest in the project and visited it frequently, but at no time drew any attention to, or made a comment or complaint, regarding any alleged inadequacy in the cabling works. 126 The Strata subdivision of 111 residential units and one commercial unit received consent on 9 November 2005 (Exhibit S1, tab 7). 127 On 23 November 2005 (Exhibit C3, vol 2, tab 15, fol 504 and Exhibit C1, tab 22) Henniker faxed "Bill" (presumably the Saab Corp project manager, Bill Gereige) in the following terms: " In regards to the removal of overhead wires underground in Church Ave, Mascot, EnergyAustralia can confirm that final notice to pay outstanding money on the project has been received. EnergyAustralia still has some further works to be completed which will be programmed for completion in the coming weeks ". 128 Enerserve's Tony Gale faxed Bill on 12 December 2005 (fol 503) to confirm that all invoices had been issued to Saab Corp, and paid in full, regarding the work at 109 O'Riordan Street, namely: " The relocation of Underground High Voltage cables, Undergrounding of Overhead Low Voltage cables, Removal of all associated poles streetlights & Optus cables and the installation of 3 steel streetlight standards and underground cables. Also the transferring of supply to 2 premises from overhead to underground in the dedicated area. Other works that have been invoiced & paid in full is the installation of a 400 amp low voltage supply to the above premises ". 129 On about 23 November 2005, Cornish told Joe Saab that Enerserve/Energy Australia had not erected two light standards in the Church Avenue road reserve, but had agreed with Cornish to fix the omission before Christmas (Joe's affidavit 21 January 2010, par 7). This work would, however, require reinstatement of the footpath in Church Avenue, and Joe undertook that Saab Corp would do so (see written undertaking at Exhibit C1, tab 23, and Exhibit C2, tab 5). Dowsett asked Joe to extend the paving work along Church Street to the west past the adjoining Linear Park. Joe deposes that, although there was, indeed, no obligation on Saab Corp under the development consent to carry out any such paving work, the company willingly committed to doing it. 130 The Council's Julie Gee inspected the reinstatement work, and faxed Anthony on 21 December 2005 regarding some landscaping issues, and some concerns she had about trees. 131 Anthony deposes that, when the installation of the outstanding two light standards in Church Avenue had been completed, Enerserve certified that the cabling works were completed, and issued a certificate of practical completion on about 20 February 2006. 132 The certificate of practical completion of the Enerserve works, signed by Tony Gale, issued on 20 February 2006 (Exhibit C3, vol 2, tab 15, fol 502), and says: " This work was carried out in accordance with certified design drawing reference CCZ 011063 and EnergyAustralia's Network Standards ". 133 Saab Corp then reinstated the road reserve areas that had been disturbed by their work, and completed the footpath and landscaping in those areas, in accordance with approved plans for reinstatement, the letter Joe issued to the Council on 23 November 2005, and the deed of 12 December 2005. 134 Anthony applied, on behalf of Saab Corp, in early May 2006, for the return of the builders' security deposit of $10,000, securing, among other things, the reinstatement works after completion of the development. Anthony deposed he had to "chase Dowsett" to get this money back. Well after he inspected the site Dowsett rang requiring some timber edging along the O'Riordan Street footpath to "lock in" the paving. Anthony personally attended to the installation of the timber edging along the full length of the O'Riordan Street frontage immediately adjacent to the power poles remaining in O'Riordan Street. 135 Following completion of that work, he wrote to Dowsett on 21 May 2006 (Exhibit S1, tab 10 and Exhibit S2, tab 8), asking him to "please note that undergrounding of overhead low voltage mains, relocation of high voltage underground mains and installation of street lights at the above named property have been completed". He enclosed the Certificate of Practical Completion from Enerserve and confirmed that "upon your request, the timber edging along O'Riordan Street has been installed". He asked for the return of the builders' security deposit, which was subsequently released. 136 On 18 July 2007, Dowsett complained to Lorus about non-compliance with condition 32 and the correspondence between solicitors commenced (see pars [75]ff above). 137 On 22 November 2007, Anthony faxed to Julie Gee an expert report on the trees (see Exhibit C1, tab 31, and Exhibit C2, tab 12). She then asked for some more work to be done, and the expert updated his report in January 2008 (Exhibit C1, tab 32). Gee noted on it "Inspected 30/1/08. Satisfactory". The court assumes that any outstanding bonds were then refunded. 138 Joe and Anthony say that they have always believed that, once the cabling works were certified as completed, they would have satisfied condition 32. Joe says that he was "reassured" in that belief because none of the Council officers he named as site visitors made any complaint (his par 55(a)). 139 Joe also draws attention (in his par 51(i)) to the fact that existing above-ground electricity and telecommunication cables in O'Riordan Street adjacent to the Skyton property at 149-161, about 100m south of the subject land and also within the Mascot Station precinct, had not been replaced by underground cable and street light standards. Joe complains that Council's application of development control C98, and therefore of the DCP itself, has been inconsistent. 140 In his affidavit of 30 July 2009 Joe deposes to having by that date located a copy of the drawing by Energy Australia, dated 6 April 2004, which sets out the works that were subsequently carried out by Saab Corp "in accordance with Energy Australia's guidelines and requirements as evidenced by the certificate of practical completion". 141 All three of Tony Saab's sons deny that they "carried out the development" as alleged in the APOC filed on 9 June 2009. They admit signing various documents, but only as either directors of Saab Corp or as agents for Ralansaab. Joe relies upon a written authority given to him by Ralansaab on 18 May 2004 (see tabs 4 and 18 of Exhibit C2). Anthony mistakenly deposed (in par 3 of his affidavit) that he signed a document as a director of Ralansaab. In oral evidence he corrected that to Saab Corp. H. Consideration Liability of the non-corporate respondents 142 Liability of the non-corporate (or individual) respondents arises as an issue only if it can be shown that the company, of which any of them was a director, was "carrying out the development", and that a breach of the Act has occurred. 143 Mr Hale submits that the first and second respondents, being companies, cannot carry out the development without the direction and instruction of individuals. Reliance was placed on Performing Right Society Limited v Ciryl Theatrical Syndicate Limited [1924] 1 KB 1, at 14 and 15, where the relevant test was established by Atkin LJ in these terms (all emphasis added): " Prima facie a managing director is not liable for tortious acts done by servants of the company unless he himself is privy to the acts, that is to say unless he ordered or procured the acts to be done . … If the directors themselves directed or procured the commission of the act …" . 144 In Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231, Lindgren J (at 243-244) referred to "the 'procured or directed' test, sometimes referred to as the 'authorised, procured, or directed' test …". See also Thomas J in Kalamazoo (Aust) Pty Limited v Compact Business Systems Pty Limited (1985) 84 FLR 101, at 127. 145 In Foxtel Management Pty Limited & Anor v The Mod Shop Pty Limited [2007] FCA 463; (2007) 165 FCR 149, Siopsis J said (at [141], "I prefer to apply the 'direct or procure' test on the basis that it is supported by the weight of the (sic) authority". 146 The implication of the Council's submissions is that some influence was brought to bear by or on behalf of the Saab family or companies (in particular Joe or Anthony), on Energy Australia, to reduce the scope of the undergrounding works to be done, from removal of eight poles and erection of five to removal of three and erection of three. 147 In particular, Mr Hale (written submissions in reply, at par 24) asks the court to prefer this interpretation of the evidence: " On the Council's case, Joseph Saab (and perhaps also Anthony Saab Junior) contacted EnergyAustralia, and Mr Henniker, in March 2004 to reduce the scope of works compared with the 2002 quote. The Scope of Works was limited to what was necessary in relation to the Church Avenue road widening". 148 Mr Galasso sought to distinguish the cases referred to by Mr Hale as they deal with the tortious acts of a company, whereas the present case is "concerned with a breach of the [EPA] Act which is not in its nature or in its characterisation a tort" (T17.3.10, p13, LL5-7). Mr Galasso relies on Wilkie v Blacktown City Council ("Wilkie") [2002] NSWCA 284; (2002) 121 LGERA 444, where it was held (at [36]), that the EPA Act allows the court to make orders against only "persons who are in breach of or who have breached" the Act. It was also held in Wilkie (at [60]) that s 124 of the EPA Act did not contemplate common criminal activities such as "aiding or abetting" or "involvement in the contravention". 149 Mr Galasso also drew the court's attention to ss 168 & 169 of the Protection of Environment Operations Act 1979 (POEO Act) which provide: " 168 Ancillary offences A person who: (a) aids, abets, counsels or procures another person to commit, or (b) attempts to commit, or (c) conspires to commit, an offence under another provision of this Act or the regulations is guilty of an offence against that other provision and is liable, on conviction, to the same penalty applicable to an offence against that other provision.

169 Offences by corporations (1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that: (a) (Repealed) (b) the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (c) the person, if in such a position, used all due diligence to prevent the contravention by the corporation. (2) A person may be proceeded against and convicted under a provision pursuant to this section whether or not the corporation has been proceeded against or been convicted under that provision. (3) Nothing in this section affects any liability imposed on a corporation for an offence committed by the corporation against this Act or the regulations. (4) Without limiting any other law or practice regarding the admissibility of evidence, evidence that an officer, employee or agent of a corporation (while acting in his or her capacity as such) had, at any particular time, a particular state of mind, is evidence that the corporation had that state of mind. (5) In this section, the state of mind of a person includes: (a) the knowledge, intention, opinion, belief or purpose of the person, and (b) the person's reasons for the intention, opinion, belief or purpose." 150 Referring to Wilkie, and to the POEO Act, Mr Galasso submitted (T17.3.10, p16, LL5-8, & 16-22): " So in the body of the laws in this State, your Honour has a specific matter dealing with this extended notion of going beyond the corporate person who carries out development. … Now the words of Justice Davies that we saw in Wilkie about not extending matters by reference to general law principles in the circumstances of a statutory proceeding, in our respectful submission, bear even more importance when one acknowledges that the laws of this State specifically contemplate circumstances in which this notion of extended liability to directors can exist, could exist or even in a more broad sense might exist insofar as the aiding and abetting concept is concerned. We would submit that on those bases, if there be any doubt about it following our submissions concerning the role of the personal directors, if there be any doubt about it as a matter of principle, your Honour would not go beyond the person, namely the corporation that was the person that purported to carry out development ." 151 Later, Mr Galasso, referring to Energy Australia's internal correspondence dated 13 March 2004, and its letter to Saab Corp dated 5 April 2004 (folio 540-541 of Exhibit C3), submitted (T17.3.10, p27, LL23-34): "… nothing can be gleaned from this document that establishes any action or that any action on behalf of the respondents was an action responsible in the change between 2002 and the 2004 plan… there is no authorship or attribution of authorship on why there is change. Your Honour is entitled to find that that change was at the direction of Energy Australia ." 152 Earlier in his oral submissions, Mr Galasso put to the court that the non-corporate respondents, such as Joe and Anthony, did not carry out the development personally or other than via the corporate vehicle of the second respondent, noting (at T17.3.10, p17, L45-50): "… in none of the instances of the material before the court is there any instance in which any of the private or personal respondents have actually or purportedly assumed responsibility for any of the actions that they have undertaken independently of their office bearer's status for the corporation for whom they represent. " 153 In a 2008 prosecution for unlawful development, North Sydney Council v Moline ("Moline") [2008] NSWLEC 169, the Chief Judge said (at [21], [22] and [24]) relying on Wilkie, that civil enforcement orders can be made and criminal charges successfully brought only against persons "actually carrying out development on land in breach of the [EPA] Act"; "… some participation in or express authorisation of the acts constituting the carrying out of a development is required"; and "… positive acts are required; omission to act cannot suffice". His Honour acknowledged that the positive act can be taking responsibility for the conduct of others "who did the positive acts". 154 His Honour found (in Moline) that the prosecutor had not discharged its onus of proving the directors "carried out development" in breach of the EPA Act. 155 Ralansaab and Saab Corp had different roles in the present project, but the former contracted the latter to build the project, so both companies can be said to be carrying out the development. The submission put by Mr Hale, that the EPA Act extends beyond the normal "corporate veil" for breaching the Act should be rejected. The comparison with the POEO Act, as drawn by Mr Galasso, is important as an example of legislation that specifically contemplates the liability of officers of a corporation. I accept Mr Galasso's submissions that the EPA Act does not contemplate the notion of extending the liability beyond the corporation itself. 156 The "authorised, procured, or directed" test is concerned with the "tortious acts" of directors in cases where a defendant company is in breach of provisions of legislation which specifically extends the liability to directors in areas such as trade practices, copyright, and causing environmental harm, rather than some omission in respect of fulfilment of a condition of consent. 157 In so far as acts in relation to the development were carried out by the non-corporate respondents on behalf of the companies in which they held office, and in circumstances where Ralansaab is now beyond this court's reach, the only party that can be made liable to orders of this court to remedy any breach of the consent would be the second respondent, Saab Corp. 158 Michael Saab became a director of Ralansaab only after the Private Certifier had issued the Occupation Certificate, and he would, therefore, appear to have been inappropriately joined as a party to these enforcement proceedings. Also, the court should not lightly infer Joe or Anthony, or any other individual/non-corporate respondent, caused a "lesser" scope of undergrounding works to be undertaken, and there appears to be no evidence to support such an inference.

Stage 1's Condition 34 and Stage 2's Condition 32 159 The respondents submit (1) that the two relevant conditions deal with the same subject matter, (2) that the deeds created under condition 34 record the scope of works to be carried out to complete the subject matter of the conditions, and (3) that the works as required under those deeds are completed, but that there is inconsistency between them. 160 The inconsistency is apparent in that in condition 34 reference is specifically made to the Church Avenue frontage "adjoining the site", whereas the stage 2 consent merely refers to the "road reserves". This is despite the fact the two conditions are dealing with the same subject matter (undergrounding of services). 161 Read together, the two conditions may create an ambiguity that can be interpreted in favour of the undertaking of the specifically limited scope of works, being those under condition 34 in relation to the Church Avenue frontage only. 162 The fact that condition 34 was clarified through the entering of a Deed of Agreement, which repeated the obligations under that consent, whilst no such agreement came into being under condition 32, of the other consent, adds to this ambiguity. 163 However, the conditions should be read separately. They are imposed under different consents dealing with and/or requiring different works. Condition 32 should not be read as concerning the same subject matter as condition 34, as the Deed of Agreement is specifically limited to the scope of works involved with the road widening, land dedication, and the removal of poles on the Church Avenue frontage only. Condition 32 on the other hand deals with a scope of works (through the lack of specificity as to which frontage) that includes more than the works envisaged by condition 34. (Uncertainty regarding the actual scope of works on O'Riordan Street is discussed below.) 164 Accordingly, the fact that the subject matter of the deeds has been carried out does not absolve the respondents from their obligations to carry out works under condition 32 (assuming its validity, which is to be discussed). Certainty and Validity of Condition 32 165 The respondents submit that condition 32 is invalid on the grounds that its meaning is uncertain. As noted by Mr O'Brien, in his letter dated 31 July 2007 (see [76] above), the respondents relied on this defence from the very beginning of the dispute with the Council. 166 The Council submits that the condition must be "certain" if the SEE could point to its ability to be satisfied. On its face, this submission is persuasive. 167 As Biscoe J said in Andrews v Botany Bay City Council ("Andrews") [2008] NSWLEC 96; (2008) 158 LGERA 451 (at [22]), a case concerning the validity of a condition giving effect to Item C98 of the same DCP as is involved in the present proceedings, the DCP is detailed and allows a developer to "make investment decisions knowing what is required under the DCP." 168 The respondents, assuming that they had regard to the DCP, and to the SEE accompanying the DA lodged by Moscat, would have known, as Biscoe J further commented (at [22]), "… of the requirement to place underground the overhead cables… and that all other developers would have the same obligation to place underground any overhead service cables in front of their sites so that the Mascot Station Precinct would ultimately be free of overhead cables." 169 On the other hand, Mr Galasso submits that the condition in Andrews can be distinguished from the present condition 32. The condition in Andrews specifically referred to the "existing overhead cables in the street adjacent to and within the bounds of the public places that adjoin the development site" and to each "frontage" on which works are required, whereas condition 32 refers only to "road reserves". Condition 32 must be construed on its face, and not by reference to any extraneous documents, such as the DCP, unless their terms are expressly incorporated into the consent by clear reference. Conditions of consent may require more or less works than are envisaged by a DCP. 170 I am inclined to accept Mr Galasso's submission that the condition is uncertain because it contemplates the undergrounding of services on the opposite side of O'Riordan Street from the development site. 171 The three-part test laid down in Newbury District Council v Secretary of State for the Environment [1981] AC 578 has frequently been applied in this court when dealing with the validity of conditions of consent. The tests were stated by McHugh J in Planning Commission (WA) v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30, at [57], in the following terms: " A condition attached to a grant of planning permission will not be valid therefore unless: 1. The condition is for a planning purpose and not for any ulterior purpose. A planning purpose is one that implements a planning policy whose scope is ascertained by reference to the legislation that confers planning functions on the authority, not by reference to some preconceived general notion of what constitutes planning. 2. The condition reasonably and fairly relates to the development permitted. 3. The condition is not so unreasonable that no reasonable planning authority could have imposed it ." 172 In Andrews, Biscoe J held that conditions requiring a developer to fund the undergrounding of power poles along O'Riordan Street did not offend the three Newbury tests. His Honour introduced his thorough analysis and application of relevant authority by quoting (at [38]) the following comment made by Tamberlin J in Optus Networks Pty Ltd v Rockdale City Council ("Optus") (2005) 144 FCR 158, (2005) 138 LGERA 429, at [37]: "On its face, the undergrounding of cable and power lines as a condition of development consent, where those lines adjoin the subject development, is a requirement reasonably capable of being considered as a reasonable condition by reason of the visual impact of the cable and power lines." 173 In the present case, the respondents submit that the condition in Andrews is "materially different", and that the second Newbury test is offended by condition 32. Mr Galasso (in his written submissions at par 28) said that: " Whilst it may be said (and it has been) that the development "benefits aesthetically" by the undergrounding of cabling, it cannot seriously be suggested that that benefit is one that relates to the development. The benefit is a benefit derived irrespective of the development ." 174 In dealing with the second Newbury test in Andrews, Biscoe J (at [43]) referred to this court's decisions in Parramatta City Council v Peterson ("Petersen") (1987) 61 LGRA 286, McGregor v Bathurst City Council ("McGregor") [1995] NSWLEC 71, and the Court of Appeal's decision in Fairfield City Council v N & S Olivieri Pty Ltd ('Olivieri') [2003] NSWCA 41. 175 In Petersen, at 296, Stein J opined that: "… the second test of whether the condition fairly and reasonably relates to the permitted development is not answered simply by geographical proximity but rather whether the development is benefited by the public amenity provided ". 176 This statement was cited with approval by Pearlman J in McGregor, when she agreed (at 5) that "the Court's approach to this test should be a 'broad rather than a narrow approach' and that the test is whether the permitted development is benefited by the condition imposed". 177 These comments in Petersen and McGregor were approved by Tobias JA (with whom Mason P and Young CJEq agreed) in Lake Macquarie City Council v Hammersmith Management Pty Ltd [2003] NSWCA 313; (2003) 132 LGERA 225. 178 In Olivieri, the Court of Appeal upheld the validity of a condition of development consent that required the construction of kerb and gutter, footpath, and a carriageway, including drainage works, for the full public frontage of a development over a distance of 110m. 179 Relying specifically on Andrews, Mr Hale submits that in this case condition 32 is valid on two bases, namely (1) that it gives effect to the applicable DCP, and (2) that the subject development's compliance with Item C98 of this DCP was envisaged in the SEE. Section 79C of the EPA Act requires the Council to take the DCP into consideration. Therefore, in a situation where the DCP specifically identifies undergrounding on the subject land, and where the validity of the DCP is not challenged, the condition cannot be in breach of the second and third Newbury tests. 180 Mr Hale argued (T17.3.10, p7, LL25-43): " There has been no challenge to the validity of the DCP and accordingly, when it comes to the imposition of conditions, the condition clearly relates to this development. This particular land, as your Honour has seen from the DCP, is specifically referred to in the precinct. It's actually identified for consolidation and exactly what is to happen in the precinct and it requires the undergrounding of the cables . … this particular development in respect of which consent was sought specifically provided for the undergrounding of cables… Therefore in those circumstances where the development itself says that C98 is to be met and they will be underground, but (sic) how can it be said that this condition does not reasonably or fairly relate or that it is manifestly unreasonable ." 181 Undergrounding of cables and services is a common circumstance in the relevant authorities, and there are generally seen to be amenity benefits in undergrounding, as also flow from conditions dealing with landscaping, treatment of facades, and the imposition of screening. Although the amenity benefits are enjoyed by portions of the wider community other than those in the immediate area, it cannot be said that the condition in the present case was so "remote" that it did not reasonably and fairly relate to the development. 182 However, as Mr Galasso noted in his submissions, the condition does not specify, for example, that it is only to be the poles on the road reserve actually adjoining the subject site that are to be removed. Therefore, the condition has the effect of requiring the respondents to carry out work that does not "fairly relate to the development". Although Cripps AJA in Olivieri was satisfied that the rebuilding of a road had "a relevant nexus to the development", the developer in that case was not required to rebuild the road beyond a specified distance from the frontage of the land to the road. Similarly, the condition in Andrews did not require works beyond the "frontages of the site". 183 Section 79C(1) requires Council to consider the provisions of the DCP, but does not mandate its precise application. Councils may have very good grounds for departing from the policy in a DCP when dealing with particular development proposals. In any event, the relevant provision in the DCP involved here requires undergrounding to be undertaken on land "adjacent to and within the confines of any development site within the Mascot Station Precinct", and condition 32 has the effect of requiring work beyond the development site. It is this departure that renders the condition invalid under the second Newbury test. 184 Mr Galasso also submitted (par 30) that in this case the third Newbury test is also offended: "… whilst the threshold is high (it being one concerned with a Wednesbury test of unreasonableness), the overlap between the second and third tests demonstrates, self-evidently, that whilst a consent authority may wish private land owners to undertake what are in essence public infrastructure works, those works are, properly viewed, within the realm of a consent authority ." 185 In dealing with the third Newbury test in Andrews, Biscoe J (at [38]) referred to Tamberlin J's remarks in Optus (quoted at [172] above), in which Tamberlin J effectively presumed the reasonableness of a condition requiring, on visual impact grounds, "the undergrounding of cable and power lines … where those lines adjoin the subject development…". Biscoe J also noted (at [40]) that "the financial burden of a condition could be so utterly gross relative to the benefit that no reasonable planning authority could impose it". 186 While Mr Galasso is correct to point to some overlap between the second and third tests in Newbury, a finding as here, that a condition fails to satisfy the second test, does not necessarily dictate that the condition is incapable of satisfying the third test. I cannot conclude that condition 32 in the present case is so unreasonable as to infringe the third arm of Newbury. Satisfaction of Condition 32 187 Assuming the validity of condition 32, the respondents submit that the condition has been completed in any event as the condition required that the works undertaken be completed "in accordance with the Energy Provider's guidelines". This submission is reliant on the condition being imposed pursuant to s 80A(2) of the EPA Act which provides: " Ancillary aspects of development A consent may be granted subject to a condition that a specified aspect of the development that is ancillary to the core purpose of the development is to be carried out to the satisfaction, determined in accordance with the regulations, of the consent authority or a person specified by the consent authority. " 188 Mr Galasso submitted (at pars 13-16 of his written submissions) that: " In the factual circumstances of the present case, the Second Respondent contracted with the relevant energy provider (Energy Australia) to prepare a scope of works in satisfaction of Condition 32. That scope of works was as identified in a project proposal dated 27 May 2004 by Enerserve (a business of Energy Australia): affidavit of Joseph Saab, 1 April 2009, Tab 5. That scope of works, as determined, to use the words of Condition 32, in accordance with the Energy Provider's guidelines, provided for a scope of works relevant to a plan for the undergrounding of cabling prepared by Energy Australia itself: affidavit of Joseph Saab, 30 July 2009, annexure "A". The Second Respondent contracted for those works to be done, and Energy Australia completed those works. A Certificate of Practical Completion was issued: affidavit of Joseph Saab, 1 April 2009, Tab 10. By reason of the terms of Condition 32 (deferring to a third party the extent of satisfaction of its terms), and the circumstances in which that third party had determined the extent of those works, those works having been completed, Condition 32 is satisfied. The fact that Council complains that some elements of undergrounding have not been completed is beside the fact. The terms of Condition 32 dictate the manner in which its compliance is to be effected and, having deferred the matter to a third party, it is beyond power for the Council to complain as to the extent of the works undertaken ." 189 The respondents also rely on the construction of condition 32 to the effect that it required them to do works to the satisfaction of - quaere as distinct from "in accordance with … guidelines" stipulated by - "the energy provider". 190 However, it is uncertain as to whether either Enerserve or Energy Australia was provided with the conditions of consent when the undergrounding works were negotiated with the respondents. It is also uncertain as to whether the "certificate of completion" was merely an indication that the works were actually completed, as outlined in the second quote. 191 I believe that the words "in accordance with the Energy Provider's guidelines" connote compliance with technical specifications stipulated and required by Energy Australia, rather than its preferred definition of what undergrounding would be appropriate, for its purposes, rather than Council's, in the relevant area. 192 In the circumstances where power poles remain on land adjoining the subject site, despite the "certificate of completion", the court would find reliance on that certificate analogous to relying on an Occupation Certificate which was obviously issued on erroneous facts. 193 Accordingly, the respondents must fail on this ground of defence. Conclusion 194 The respondents have succeeded on their primary grounds of defence to the Council's claim, namely that condition 32 is invalid on the grounds of uncertainty, and fails the second Newbury test. However, in case I am found to be wrong in that conclusion, I should deal shortly with the respondents' case on discretion. I. Discretionary Issues 195 The respondents' case on discretion was particularised in FAPOD par 15, quoted in [73] above, and relies on several factors: The benefit afforded by the works done pursuant to the condition. The " significantly greater " s 94 contributions than were required, which were paid voluntarily, and represent what was described in argument as a significant windfall to Council. The non-inclusion of the condition 32 works in the Deeds entered into between the parties. The reliance of the respondents on plans produced by Energy Australia (the only entity authorised to do such works). The failure of Council and its officers to raise any issue of non-compliance with condition 32 during the procuring of the works. The delay in Council's raising any issue of non-compliance with condition 32, and its delay in then bringing these proceedings. The entitlement of the respondents to rely upon " the satisfaction of the energy Provider concerning compliance with condition 32 ". The significant cost of the condition 32 works undertaken ($238,000) - evidence that no benefit accrued to the respondents from any non-compliance with the condition. 196 The principles to be applied are well settled. They can be found in Warringah Shire Council v Sedevic (1987) 10 NSWLR 335, and ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67, and, applying those principles, I do not believe that all of the above factors militate against granting relief to Council, had it succeeded in its substantive case. 197 However, failure to underground all cables and remove all poles near the boundaries of the subject site should have been patently obvious to anyone paying any visual attention to the development. The street lighting work to be done by Energy Australia was quoted to Council in October 2004, and the quotation was accepted by Council (see pars [123] and [124] above), so Council was on notice that very few poles were involved. 198 The whole project was largely completed by November 2005, the certificate of practical completion of the electrical works issued in February 2006, and was sent by Saab Corp to the Council on May 2006. All the units were sold by "mid 2006". 199 Possible non-compliance with the condition(s) of consent came to notice on 29 September 2006, but no investigation was undertaken with the certifier, and no demand was made on the respondents, until July 2007. The respondents were entitled to rely upon the occupation certificate until it was challenged. These proceedings were not commenced until January 2009, but the certifier was not joined, and the validity of that certificate was not challenged (see Mr Galasso, T17.3.10, p40, LL10-19). 200 I found some of the respondents' arguments on discretion quite powerful, and the Council's case against them unconvincing, based, as it was, largely on Mr Hale's repeated contention that the Saabs in some way colluded with Energy Australia to subvert the requirements of the consent, a contention I have not accepted (see [158] above). 201 While I accept that some unsightly poles and cabling remain, it is not environmental harm caused by the respondents. I also accept that the dismissal of Council's claims in these proceedings may mean that it has to find other sources of funding for their removal, but those facts would not constitute good grounds for negating some of the discretionary arguments of the respondents. 202 Key factors which would lead the court to accept the respondents' case on discretion include: The reliance placed on Energy Australia to plan and undertake the work; The failure of Council and its officers to promptly raise the issue of non-compliance; The delay in bringing the proceedings; The substantial costs incurred by the respondents in procuring works to satisfy the condition and improve the amenity of the local area; and The burden that would be imposed on the lay respondents (in the absence of the development company) if the additional works were required of them at this late stage, given the history of the matter. J. Conclusion and Costs 203 The Council's class 4 application should be dismissed. 204 Costs would normally follow the event, but some of the pre-litigation correspondence indicates that a claim may be made for at least some costs of the respondents to be paid on an indemnity basis. In addition, there may be special factors surrounding costs in respect of some issues and some respondents. An order for "costs thrown away" was made in respect of the adjournment on 15 December 2009. Accordingly, I will reserve the question of costs, rather than make a self-executing order of some sort at this stage, in the absence of argument. 205 The orders of the court will, therefore, be: 1. The Council's further amended summons is dismissed. 2. Costs reserved. 3. The exhibits may be returned.

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CITATION : Botany Bay City Council v Ralansaab Pty Limited & 7 Ors [2010] NSWLEC 225

ACR Trading Pty Ltd v Fat-Sel Pty Ltd (1987) 11 NSWLR 67 Andrews v Botany Bay City Council [2008] NSWLEC 96; (2008) 158 LGERA 451 Fairfield City Council v N & S Olivieri Pty Ltd [2003] NSWCA 41 Foxtel Management Pty Limited & Anor v The Mod Shop Pty Limited [2007] FCA 463; (2007) 165 FCR 149 Kalamazoo (Aust) Pty Limited v Compact Business Systems Pty Limited (1985) 84 FLR 101 Kindimindi Investments Pty Ltd v Lane Cove Council [2006] NSWCA 23; (2006) 143 LGERA 277 Lake Macquarie City Council v Hammersmith Management Pty Ltd [2003] NSWCA 313; (2003) 132 LGERA 225 McGregor v Bathurst City Council [1995] NSWLEC 71 CASES CITED: Microsoft Corporation v Auschina Polaris Pty Ltd (1996) 71 FCR 231 Newbury District Council v Secretary of State for the Environment [1981] AC 578 North Sydney Council v Moline [2008] NSWLEC 169 Optus Networks Pty Ltd v Rockdale City Council (2005) 144 FCR 158, (2005) 138 LGERA 429 Parramatta City Council v Peterson (1987) 61 LGRA 286 Performing Right Society Limited v Ciryl Theatrical Syndicate Limited [1924] 1 KB 1 Planning Commission (WA) v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30 Warringah Shire Council v Sedevic (1987) 10 NSWLR 335 Wilkie v Blacktown City Council [2002] NSWCA 284; (2002) 121 LGERA 444

(2008) 158 LGERA 451

(2006) 143 LGERA 277

(2003) 132 LGERA 225

(2005) 138 LGERA 429

(2002) 121 LGERA 444

At a glance

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Cases Cited (22)

Cited By (4)