Burwood Council v Erector Group Pty Ltd; Burwood Council v Liverpool Developing Pty Ltd

Land and Environment Court (NSW)|2017-02-07|Before: Preston CJ, Mr P

Solicitors: Houston Dearn O'Connor (Prosecutor) Landerer & Company (Defendants) File Number(s): 2016/00175841; 2016/00175842; 2016/00175925 and 2016/00175926 Publication restriction: Nil

Building work is commenced contrary to law

Liverpool Developing Pty Ltd ('Liverpool Developing') owns land at 248-252 Liverpool Road, Enfield ('the land').
On 18 December 2014, Burwood Council ('the Council') granted development consent to a development application made by Liverpool Developing to demolish existing buildings and construct a six storey, mixed use development comprising 16 residential apartments, commercial floor space and two basement levels of car parking ('the development'). Condition 26 of the development consent required, prior to the commencement of building work: 1. the submission to the Council of "a 'Notice of Intention to Commence Building Work and Appointment of a Principal Certifying Authority' form"; and 2. ensuring that "detailed plans and specifications of the building are endorsed with a Construction Certificate by Council or an Accredited Certifier."
Erector Group Pty Ltd ('Erector Group') was appointed by Liverpool Developing as the builder and head contractor to carry out the development in accordance with the development consent.
Mr Wang is the sole director and shareholder of Erector Group. Mr Wang and his wife are the only directors and shareholders of Liverpool Developing.
In late January 2016 or early February 2016, Erector Group engaged ADN Investments Pty Ltd ('ADN') to undertake "demolition, bulk excavation, piling, capping beam, shotcrete and ground anchor".
By 15 February 2016, ADN had demolished the existing buildings on the land and then undertook bulk excavation and levelling of the land. On 29 February 2016, ADN carried out additional excavation of the land to a level that was beyond what was required for demolition and levelling out the site so as to prepare it for the placement of piers. That excavation was "building work", being work associated with the erection of a building.
Prior to commencement of that building work, Liverpool Developing and Erector Group were required by law to do certain things. Liverpool Developing, as the person having the benefit of the development consent, was required, prior to commencement of the building work, to appoint a principal certifying authority for the building work, under s 81A(2)(b) of the Environmental Planning and Assessment Act 1979 ('EPA Act') and, under condition 26(b) of the development consent, to ensure that detailed plans and specifications of the building were endorsed with a construction certificate by the Council or an accredited certifier. Erector Group, as the builder, was not to commence the building work until a construction certificate for the building work had been issued by the Council or an accredited certifier, under s 81A(2)(a) of the EPA Act, and a form giving notice of intention to commence building work and the appointment of a principal certifying authority had been submitted to the Council, under condition 26(a) of the development consent.
However, Liverpool Developing and Erector Group each commenced the building work without doing what they were required to do under s 81A(2) of the EPA Act and condition 26 of the development consent. They therefore each breached s 81A(2) and s 76A(1) of the EPA Act, and thereby committed offences against s 125(1) of the EPA Act.
Liverpool Developing and Erector Group have each pleaded guilty to two offences against s 125(1) of the EPA Act, one for the breach of s 81A(2) of the EPA Act and the other for the breach of s 76A(1) of the EPA Act by breaching condition 26 of the development consent.
A sentence hearing has been held. The Court's task is to determine and impose the appropriate sentences on Liverpool Developing and Erector Group for the offences they have each committed.

The objective seriousness of the offences

In sentencing for the offences, the Court is to consider the objective and subjective circumstances of the offences and each offender, and the aggravating, mitigating and other factors in s 21A of the Crimes (Sentencing Procedure) Act 1999 ('the Sentencing Act').
The objective circumstances of relevance to these offences include: the maximum penalty; the objective harmfulness of the offenders' conduct; the foreseeability of the risk of environmental damage; the practical measures to avoid environmental damage; the control over the causes of the offences; the offenders' reasons for committing the offences; and whether the offences were part of a planned or organised activity.

The maximum penalty for the offences

The maximum penalty for the offences committed by Liverpool Developing and Erector Group is the Tier 2 maximum penalty under s 125B(2) of the EPA Act. For corporations, the maximum penalty is $2 million and, for a continuing offence, a further $20,000 for each day the offence continues. Liverpool Developing and Erector Group were not charged with committing continuing offences.
The maximum penalty was increased by legislative amendment, effective from 31 July 2015, from the previous maximum of $1.1 million. The increased maximum penalty for the offences reflects the increased seriousness with which the Parliament views the offences. This increased level of concern about the offences, as reflected in the increase in the maximum penalty, is to be reflected in the sentences which the courts impose: R v Howland (1999) 104 A Crim R 273; [1999] NSWCCA 10 at [17].

The objective harmfulness of the offences

The relative seriousness of the offence is affected by the objective harmfulness of the offender's actions: s 21A(1)(c) of the Sentencing Act. The causing of "substantial" injury, loss or damage by the commission of the offence is an aggravating factor: s 21A(2)(g) of the Sentencing Act.
The Council submitted that the commission of the offences caused substantial environmental harm because, following the undertaking of bulk excavation on the land, part of the buildings on the immediately adjoining land, at 254 Liverpool Road Enfield, collapsed. Other buildings were also damaged. The Council issued orders in respect of a number of buildings. It also issued orders requiring the defendants to engage structural engineers and carry out work necessary to restore stability to adjoining land. The defendants complied with those orders.
The Council submitted that the respective failures of Liverpool Developing and Erector Group to comply with the requirements of s 81A(2) of the EPA Act and condition 26 of the development consent, prior to commencing the building work (which involved the additional excavation), caused this harm to the environment.
The Council submitted that the requirements of s 81A(2) of the EPA Act and condition 26 of the development consent ensure that proper construction documents are issued to regulate the safe and proper carrying out of building work (the construction certificate and endorsement of the detailed plans and specifications for the building work with the construction certificate) and properly qualified people inspect and certify the carrying out of the building work (the principal certifying authority). Section 81A(2) provides for the appointment of a suitably qualified person (the principal certifying authority) for the building work (s 81A(2)(b)), the issue of a construction certificate for the building work (s 81A(2)(a)) and the giving of at least two days' notice to the Council and the principal certifying authority of the intention to commence building work (s 81A(2)(c)). Condition 26 of the development consent also required notice to be given, prior to the commencement of the building work, of the appointment of the principal certifying authority and of the intention to carry out building work, by way of submission to the Council of the required form (condition 26(a)) and required the endorsement of the detailed plans and specifications of the building with the construction certificate that had been issued (condition 26(b)).
These requirements enable a person with the requisite qualifications and expertise (the principal certifying authority) to carry out inspections before building work commences and at critical stages of the building work. One of the key responsibilities of the principal certifying authority for building work is to undertake all of the critical stage inspections before issuing an occupation certificate (see s 109E(3)(d) of the EPA Act). The first critical stage inspection is "after excavation for, and prior to the placement of, any footings" (clause 162A(4)(b) of the Environmental Planning and Assessment Regulation 2000 ('EPA Regulation')).
The Council submitted that if a construction certificate had been issued for the building work (including the additional excavation) and if a principal certifying authority had been appointed, there would have been a critical stage inspection by a suitably qualified certifier after the completion of the excavation. Such an inspection would have checked the excavation against the construction certificate and the development consent and would have resulted in the identification by that person of the undermining of the adjoining buildings. In turn, this would have given rise to recommendations and remedial action to shore up the excavation so as to prevent a collapse of the adjoining buildings.
The Council noted that a prescribed condition of the development consent was that, if the development involves excavation, the person having the benefit of the development consent must protect and support any building on adjoining land from possible damage from the excavation and, where necessary, underpin the building to prevent any such damage (cl 98E(1) of the EPA Regulation). The Council submitted that a critical stage inspection after excavation by the principal certifying authority would have enabled the checking of compliance with this prescribed condition and the taking of any necessary remedial action to support or underpin the buildings on the adjoining land.
The Council submitted, therefore, that there was a causal connection between the commission of the offences by the defendants and the environmental harm of the damage to and partial collapse of the buildings on the adjoining land. This environmental harm was sufficiently significant to be "substantial" and an aggravating factor.
Liverpool Developing and Erector Group submitted that the Council has not established the necessary causal connection between the commission of the offences and the damage to the adjoining buildings. Critical to the Council's argument is that undertaking the first critical stage inspection after excavation and before placement of the footings would have avoided the damage to the adjoining buildings. The defendants submitted that the Court could not be satisfied that such an inspection would have avoided the damage. First, no inspection was required during the undertaking of the building work on the site, only after the excavation had been completed. By this time, the additional excavation had already been done. Second, the statutory requirements for a construction certificate (see cl 139(1) and Part 3 of Schedule 1 of the EPA Regulation) do not demand that designs for the retaining or shoring up of excavated land accompany an application for a construction certificate. Hence, any construction certificate that might have been issued would not have necessarily required the retaining or shoring up of the adjoining land. The defendants submitted, therefore, that there was no evidence that the damage to adjoining buildings was actually caused by the commission of the offences, and not for other reasons.
The defendants also submitted that the evidence does not establish that the damage to the adjoining buildings was intended or could reasonably have been foreseen by the defendants. The defendants further submitted that the evidence does not establish that the commission of the offences was "quite likely" or "in all probability" the cause of the damage to the adjoining buildings.
The defendants finally submitted that they should not be punished for the offence of not complying with the prescribed condition of the development consent imposed by cl 98E(1) of the EPA Regulation of not protecting and supporting the adjoining buildings from possible damage from the excavation. The defendants have not been charged or convicted of that offence.
I find that there is a sufficient causal connection between the defendants' commission of the offences and the damage to the adjoining buildings so that it can be said that the damage was caused by the commission of the offences. I also find that the damage was sufficiently great so as to be "substantial" and an aggravating factor under s 21A(2)(g) of the Sentencing Act.
As the Council has submitted, the requirements of s 81A(2) of the EPA Act and condition 26 of the development consent serve a purpose in ensuring the issue of proper construction documents to regulate, and the appointment of a qualified certifier to inspect and certify, the carrying out of the building work in accordance with the development consent (including the express and the prescribed conditions of the development consent) and in a manner and to an extent that minimises the risk of damage to the land and adjoining land.
If the defendants had ensured, prior to the commencement of building work, the issue of the construction certificate for the building work (including the additional excavation) and the endorsement of the detailed plans and specifications of the building work with the construction certificate; the appointment of a principal certifying authority; the notification of the appointment of the principal certifying authority to the Council; and the notification of the intention to commence building work to the Council and to the principal certifying authority, in all probability, the additional excavation would have been carried out differently (in accordance with the construction certificate, the detailed plans and specifications for the building work endorsed with the construction certificate and the development consent, including the prescribed condition in cl 98E(1) of the EPA Regulation) and any undermining of or risk of damage to the buildings on adjoining land would have been observed by the principal certifying authority in the first critical stage inspection after the additional excavation had been carried out and directions would have been given to protect and support and, if necessary, underpin the adjoining buildings. The damage to the adjoining buildings that actually occurred was the likely consequence of the defendants failing to do the things that were required to be done by s 81A(2) of the EPA Act and condition 26 of the development consent.
The damage to the adjoining buildings was significant, including the partial collapse of the adjoining line of terrace buildings. Subsequently, one of the more damaged of the adjoining buildings had to be demolished. This damage, which I find to be of medium seriousness, amounts to being "substantial" within s 21A(2)(g) of the Sentencing Act.
In so finding that the offences committed by the defendants caused damage that was substantial, the defendants are not being punished for an offence for which they are not charged of breaching the prescribed condition in cl 98E(1) of the EPA Regulation. The causal link is between the offences in which the defendants are charged, concerning the breaches of s 81A(2) of the EPA Act and condition 26 of the development consent, and the damage to the adjoining buildings that occurred. The causal link is established because compliance with the requirements of s 81A(2) and condition 26 would, in all probability, have led to the defendants carrying out the additional excavation differently (and thereby not creating the risk of damage to the adjoining buildings) or have led to an inspection of the additional excavation by a suitably qualified person, being the principal certifying authority, who would have observed and directed the remedying of the risk of damage to the adjoining buildings. The causal link is not between a breach of the prescribed condition in cl 98E(1) of the EPA Regulation, by failing to protect and support the adjoining buildings, and the damage that occurred to those buildings.

Foreseeability of risk of environmental damage

The defendants could reasonably have foreseen that their failures to comply with the requirements of s 81A(2) of the EPA Act and condition 26 of the development consent before commencing the building work (including the additional excavation), would be likely to cause damage to the buildings on the adjoining land, for the reasons I have given earlier.

Practical measures to avoid environmental damage

There were practical measures that the defendants could have taken to avoid that damage, namely complying with the requirements of s 81A(2) of the EPA Act and condition 26 of the development consent.

Control over causes of offences

The defendants had control over the causes that gave rise to the offences. They had the legal responsibility to comply with the requirements of s 81A(2) and condition 26 of the development consent. They had control over commencing the building work. They engaged and instructed the contractor as to the excavation to be undertaken on the site. They had the responsibility to obtain and to provide to the contractor the development consent, the construction certificate and the detailed plans and specifications for the building work to be undertaken.

The offenders' reasons for committing the offences

The reason for committing an offence is an objective circumstance relevant to the evaluation of the criminality involved in the commission of the offence: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366.
The Council submitted that the defendants, who through exchanges with a private certifier were clearly aware of their obligations and the steps to be taken to ensure compliance, took deliberate steps to circumvent or ignore their obligations, in a misguided attempt to save time and money.
The Council noted that Mr Wang (a director of both Liverpool Developing and Erector Group) had exchanges with a private certifier, Certified Building Specialists Pty Ltd ('Certified'), about it acting as an accredited certifier and the principal certifying authority in respect of the development. There was an exchange of correspondence, including, on 29 July 2015, Certified sending a fee proposal to act as the principal certifying authority; on 7 September 2015, Liverpool Developing returning the signed fee proposal, but including an extra three conditions; on 15 September 2015, Certified writing to Mr Wang referring to "your recent engagement of this office to provide a construction certificate" for the development; and on 29 February 2016, Certified emailing Mr Wang thanking him "for selecting Certified Building Specialists to complete your specified project" and attaching an invoice which included services for stages 1-3 of the development, including services as a principal certifying authority. Yet, in the end, no formal contract was agreed between the defendants and Certified before building work was commenced. Certified did not issue a construction certificate or carry out any inspections before, during or after building work was carried out.
The defendants disputed that their failure to appoint Certified as the principal certifying authority for the building work and to arrange for it to issue the construction certificate and to carry out inspections was intended to circumvent the defendants' obligations or to save time and money. The defendants submitted that they had mistakenly believed that, through the exchange of correspondence, they had appointed Certified as the principal certifying authority. The defendants believed that they had notified the Council of the appointment of Certified as the principal certifying authority. Mr Wang lodged an Application for Works on Council Property Form on two occasions with the Council, on 18 December 2015 and again on 22 January 2016, in which he advised that Certified was the private certifier. The defendants submitted, therefore, that they did not commit the offences to avoid their obligations to appoint a principal certifying authority, obtain a construction certificate or notify the Council or to save time or money.
I find that the Council has not established that the defendants committed the offences to avoid their legal responsibilities. A mistake was made by commencing the building work before the defendants had complied with the requirements of s 81A(2) of the EPA Act and condition 26 of the development consent, but it was not done with the intention to avoid their obligations or to save time or money.

Whether part of planned or organised activity

The Council submitted that the offences were "part of a planned or organised criminal activity", which is an aggravating factor: s 21A(2)(n) of the Sentencing Act. The Council submitted that the Court should draw the inference that the conditions of consent were not inadvertently or accidentally breached and that the appointment of a principal certifying authority and the exercise of its functions were not inadvertently or accidentally overlooked.
The defendants disputed the Council's contention, essentially for the reasons they gave earlier. The defendants made a mistake in not satisfying the requirements of s 81A(2) and condition 26 of the development consent before commencing building work, but there was no planning or organisation to avoid their legal responsibilities.
I find that the Council has not established that the defendants' commission of the offences was part of any planned or organised criminal activity, for the reasons given by the defendants.

Conclusion on objective seriousness

In conclusion, considering all of these objective circumstances, I find that the overall objective seriousness of the offences is at the low end of the range for this type of offence.

Subjective circumstances of the offenders

Within the limits set by the objective seriousness of the offences, the Court may take into account factors personal to Liverpool Developing and Erector Group. These include, in this case: the lack of prior convictions, the pleas of guilty, the remorse shown by the defendants, the unlikelihood of re-offending and the assistance to law enforcement authorities.

No prior convictions

Liverpool Developing and Erector Group do not have any prior convictions for any environmental offence: see s 21A(3)(e) of the Sentencing Act.

Pleas of guilty

Liverpool Developing and Erector Group have each pleaded guilty to the offences they committed, a fact that the Court is required to take into account: s 21A(3)(k) and s 22(1)(a) of the Sentencing Act. A plea of guilty has utilitarian value to the criminal justice system. The Court takes account of the utilitarian value of the plea of guilty by imposing a lesser penalty than it would otherwise have imposed: s 22(1) of the Sentencing Act. However, a lesser penalty must not be unreasonably disproportionate to the nature and circumstances of the offence: s 22(1A) of the Sentencing Act.
In determining the extent of any discount that should be given for a plea of guilty, the court is required to consider when the offender pleaded guilty or indicated an intention to plead guilty: s 22(1)(b) of the Sentencing Act. As a general rule, the earlier the plea, the greater the discount, while the later the plea, the lesser the discount: R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 at [160].
In this case, there was a delay in Liverpool Developing and Erector Group entering their pleas of guilty. The proceedings were initially filed with different return dates, one set of proceedings returning on 15 July 2016 and the other set of proceedings returning on 22 July 2016. By consent both sets of proceedings were dealt with together and made returnable on 29 July 2016. On that occasion, the defendants did not enter pleas of guilty or formally indicate to the court that they would be entering pleas of guilty. The directions made by consent provided for the parties to endeavour to agree on a set of facts and for the prosecutor to serve its evidence, limited to any facts which remained in dispute. At the next directions hearing on 16 September 2016, agreement on facts had yet to be finalised and further provision was made for the defendants to advise which facts were agreed before the prosecutor was required to serve its evidence, limited to any facts which remained in dispute. The defendants did not enter or indicate formally that they would enter pleas of guilty to the offences.
On the next occasion the proceedings were before the Court, on 14 October 2016, the defendants entered pleas of guilty to the offences.
The Council submitted that this delay in entering pleas of guilty lessened the utilitarian value of the pleas of guilty to the criminal justice system. The Council was required to continue to prepare its evidence, not knowing whether, after the process of the parties endeavouring to agree facts had been completed, the defendants would or would not be entering pleas of guilty to the offences.
The defendants submitted that the utilitarian value of the pleas of guilty when entered remained high because of the very specific directions made by consent which required the defendants to identify which facts were in dispute before the prosecutor was required to serve its evidence. This should have saved time and expense.
I find that the utilitarian value of the defendants' pleas of guilty is reduced by the delay in the defendants entering the pleas of guilty. Effectively three months elapsed between when the defendants were first required to appear before the Court to answer the charges (mid-July 2016) and when the defendants entered their pleas of guilty (mid-October 2016). In the intervening period, the prosecutor and defendants were engaged in trying to agree on facts. However, the defendants did not indicate that they would plead guilty to the offences. Instead, the defendants were waiting to see what facts about the offences and the consequences of the offences would be able to be agreed before they decided whether or not they would plead guilty to the offences.
The defendants submitted that a reason for the delay was that the defendants were seeking better particulars of the charges and cases brought against them but they were rebuffed by the Council. However, generally the reason for a delay in entering a guilty plea is irrelevant because if a guilty plea is not forthcoming, the utilitarian value to the criminal justice system of the guilty plea when ultimately made is reduced: R v Borkowski (2009) 195 A Crim R 1; [2009] NSWCCA 102 at [32]; Morton v R [2014] NSWCCA 8 at [32], [33]; Council of the City of Sydney v Trico Constructions Pty Ltd [2015] NSWLEC 56 at [88]-[90].
I find that this delay reduced the utilitarian value of the pleas of guilty and the discount should be reduced from the maximum of 25 per cent to 22 per cent.

Remorse for the offences

Apart from the utilitarian value of a plea of guilty, genuine remorse of an offender is a further mitigating factor. However, s 21A(3)(i) of the Sentencing Act states that remorse by an offender for the offence will only be a mitigating factor if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both).
I find Liverpool Developing and Erector Group are remorseful for committing the offences. They have taken responsibility for their actions and acknowledged the damage caused to the adjoining buildings. Mr Wang, a director of Liverpool Developing and Erector Group, gave evidence by affidavit and attended the sentence hearing. He said: On behalf of the defendants I would like to apologise for the defendants' conduct in committing the offences which are the subject of these proceedings. I realise that the appointment of a principal certifying authority is important because it ensures that certain legal requirements (for example, obtaining insurance) have been satisfied before work can be carried out. I realise that the issuing of a construction certificate is important because it requires the submission of further information before building work starts - for example details of how fire safety requirements will be met. I also realise that submitting to Council a notice of intention to commence building work is important because it puts the Council on notice that building work is about to commence and provides the Council with the opportunity to inspect a site and/or carry out random checks to ensure that work is being carried out properly. I am sorry that these things were not properly addressed.
The defendants have taken some steps to make reparation for the damage caused by the offences. The damage has been remedied partially by the defendants engaging structural engineers and carrying out work necessary to restore stability to adjoining land, pursuant to orders issued by the Council. However, further work needs to be done. On 6 July 2016, the Council advised the defendants that it was not prepared to issue a construction certificate or allow work to commence on the land until it was established that the structural integrity of adjoining properties was stabilised and the Council advised that documentation prepared by a suitably qualified person detailing a concrete methodology of how the proposed excavation and shoring work would not impact on the adjoining properties was to be submitted.
Mr Wang said that the owners of the neighbouring property at 254 Liverpool Road, which was damaged, subsequently granted access to the defendants' engineer. The engineer prepared a report for submission to the Council on the structural integrity of those properties in support of the construction certificate application. The report was submitted to the Council on 18 November 2016. The Council has yet to determine the construction certificate application. Mr Wang said that he was not aware of anything further that the Council requires in order to determine that application.

Unlikelihood of re-offending

Another mitigating factor to be taken into account in determining the appropriate sentence is if the offender is unlikely to re-offend: s 21A(3)(g) of the Sentencing Act.
I find that Liverpool Developing and Erector Group are unlikely to re-offend. Mr Wang noted that the delay in carrying out the development, as a result of the damage to the adjoining buildings caused by the commission of the offences, has caused and it still causing the defendants to suffer significant financial losses. The defendants have learnt a financially painful lesson about the need to comply with the legal requirements of the EPA Act when carrying out development.
A character reference was tendered for Mr Wang, who is the directing mind and will of the defendants. Mr Li spoke of the generosity of Mr Wang with other people, particularly students and immigrants from China who have needed assistance.
I find that by reason of the defendants' genuine remorse for the offences, the financial costs being incurred by the defendants, and the good character of the director of the defendants, the defendants are unlikely to re-offend.

Assistance to law enforcement authorities

The defendants have provided some assistance to the Council: see s 21A(3)(m) and s 23 of the Sentencing Act. The defendants have agreed a statement of facts and did not require any witness for cross examination. The defendants have offered to pay around half of the Council's legal costs of the proceedings, in the sum of $15,000.

Purposes of sentencing

Section 3A of the Sentencing Act provides that the purposes of imposing a sentence on an offender include, of relevance to the offences committed by Liverpool Developing and Erector Group: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, … (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community.
The sentence of the court is a public denunciation of the conduct of the offender. The sentence must ensure that the offender is held accountable for his or her actions and is adequately punished or given his or her just desserts.
The sentence needs to deter the offender from committing similar crimes in the future. This is important for offenders which are in the business of carrying out development. The sentence of the court needs to deter offenders from taking such action other than in accordance with lawful authority. Although I have found that Liverpool Developing and Erector Group are unlikely to re-offend, this does not mean that there is no need for the sentence to include any component for specific deterrence.
Most importantly, the sentence of the court needs to operate as a powerful factor in preventing the commission of similar crimes by persons who might be tempted to do so by the prospect that, if they are caught, only light punishment will be imposed. This is particularly so in the context of unlawful development, having regard to the policy considerations articulated in a number of cases, including Mosman Municipal Council v Menai Excavations Pty Ltd (2002) 122 LGERA 89; [2002] NSWLEC 132 at [32]-[35] and Carlino v Leichhardt Municipal Council (2005) 144 LGERA 235; [2005] NSWLEC 198 at [32]-[34].
For environmental offences, the purpose of sentencing of general deterrence is of central importance. Many of the cases in which courts have so stated are set out in the judgments of Cameron v Eurobodalla Shire Council (2006) 146 LGERA 349; [2006] NSWLEC 47 at [71]-[80] and Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242 at [103]-[106]. Persons will not be deterred from committing an environmental offence by only nominal fines: Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234; [2006] NSWLEC 34 at [139]-[141], [150]-[151].
There is the need for the upholding of the integrity of the system of planning and development control. This system depends on persons taking steps to obey the law by ascertaining when a development consent and construction certificate are required and then obtaining a development consent and construction certificate before carrying out development. Development must be carried out in accordance with the terms of any development consent and construction certificate obtained: Gittany Constructions Pty Ltd v Sutherland Shire Council at [104]-[105].
The sentencing purpose of general deterrence is particularly relevant where the offender is in a business or industry that undertakes development or action that is regulated by the system of planning and development control. Persons and corporations engaged in demolition, excavation, and building and development work need to be warned by the sentences imposed by courts in cases involving unlawful demolition, excavation, and building and development work that all necessary consents must be obtained and complied with: Kari & Ghossayn Pty Ltd v Sutherland Shire Council (2006) 150 LGERA 231; [2006] NSWLEC 532 at [68(e)] and Pittwater Council v Scahill (2009) 165 LGERA 289; [2009] NSWLEC 12 at [47].

Appropriate penalties

In determining the appropriate penalties, the court should be consistent with the pattern of sentencing for like offences. The parties were unable to find any sentences imposed by this court for breaches of the requirements of s 81A(2)(b) of the EPA Act or of a condition of consent comparable to condition 26 of the development consent requiring the appointment of a principal certifying authority and the notification of that appointment and of the intention to commence building work. The parties referred to sentencing decisions of this court for breaches of s 81A(2)(a) of the EPA Act by commencing the erection of a building without a construction certificate. The fines imposed ranged between $3,000 to $20,000. These sentencing decisions all predated the approximately twofold increase in the maximum penalty to be, for a corporation, $2 million (the Tier 2 maximum penalty).
I have considered the penalties imposed in these decisions and the objective and subjective circumstances that led the judge concerned to impose these penalties. I consider that the penalties I propose to impose in this case are not inconsistent with those decisions.
Considering the purposes of sentencing, balancing the objective and subjective circumstances and having regard to the pattern of sentencing in other cases involving similar offences against the EPA Act, I consider the appropriate penalty is $60,000 for each offence. This amount should be discount by 22 per cent for the utilitarian value of the pleas of guilty. This amounts to $46,800.
The defendants submitted that the totality principle should be applied to adjust the sentences imposed on each defendant. The effect of the totality principle is to require the court in passing a series of sentences, each properly calculated in relation to the offence for which it is imposed, to review the aggregate sentence and consider whether the aggregate is "just and appropriate" and reflects the total criminality before the court. In the case of a sentence of a fine, if the court believes that the totality principle requires an adjustment of the individual fines that would otherwise be appropriate, the amount of each fine can be altered.
Care must be taken to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the offender's conduct or the sentence for any individual offence to become disproportionate to the objective seriousness of the offence.
In determining an appropriate sentence, the court must consider the need to uphold confidence in the administration of justice. If sentences are reduced substantially, offenders may be of the view that they can escape punishment for a deliberate series of discrete offences.
In this case, I consider that the totality principle does require some adjustment of the fines to be imposed for the offences committed by those persons that overlap. The first area of overlap concerns the construction certificate. Erector Group committed the offence of commencing the building work without first obtaining a construction certificate (a breach of s 81A(2)(a) of the EPA Act) while Liverpool Developing committed the offence of commencing the building work without ensuring that the detailed plans and specifications of the building were endorsed with the construction certificate (a breach of condition 26(b) of the development consent).
The second area of overlap concerns the appointment of the principal certifying authority. Liverpool Developing committed the offence of commencing the building work prior to the appointment of a principal certifying authority (a breach of s 81A(2)(b) of the EPA Act) while Erector Group committed the offence of commencing building work without first submitting to the Council a form notifying it of the appointment of the principal certifying authority (a breach of condition 26(a) of the development consent).
Liverpool Developing and Erector Group are the alter egos of Mr Wang. He is the sole director and shareholder of Erector Group and, with his wife, the only directors and shareholders of Liverpool Developing. Mr Wang is the effective mind of both companies. Mr Wang used one company (Liverpool Developing) as the vehicle to own the land and to hold the benefit of the development consent and used the other company (Erector Group) as the vehicle to be the builder to carry out the development in accordance with the development consent.
It is important to bear in mind that the multiplicity of offenders is, in reality, accidental and unrelated to the merits of the case. Such a position was commented upon by Gleeson CJ in Tiger Nominees Pty Ltd v State Pollution Control Commission (1992) 25 NSWLR 715 at 722 and by McClellan CJ in Keir v Sutherland Shire Council [2004] NSWLEC 754 at [16].
In these circumstances, I consider it is just and appropriate to reduce the aggregate of the fines that would otherwise be appropriate for the two offences committed by Liverpool Developing and for the two offences committed by Erector Group. The aggregate of the fines should be reduced to lesson, but not eliminate, the effect of the overlap. Each defendant still committed two offences and the fines imposed need to reflect that criminality. It would not be appropriate to, in effect, eliminate the fine for one of the offences that each defendant committed. The aggregate of these otherwise appropriate fines for the two offences committed by each of Liverpool Developing and Erector Group is $93,600. This aggregate should be adjusted to be $80,000 for each defendant, which should be apportioned evenly between the two offences.

Costs

The Council sought an order under s 257B of the Criminal Procedure Act 1986 that the defendants pay its legal costs of the proceedings, estimated to be around $28,000. The defendants are agreeable to paying some costs but submitted that they should pay only $15,000, around half of the Council's legal costs. The defendants submitted that the Council's costs were greater than they would have been had the Council provided adequate particulars of the charges and responded promptly and fully to the defendants' requests for particulars and information about the charges. The defendants tendered correspondence between the parties' solicitors containing these requests and responses. The Council disputed that it had not adequately particularised the charges or properly responded to the defendants' requests. The Council submitted that the defendants had adequate information to be able to decide whether to plead guilty or not guilty to the charges. The Council submitted that its costs were not increased by any unreasonable conduct on the Council's part.
I agree with the Council's submissions. There was no conduct of the Council that should disentitle it to receiving all of its costs. Although it was not unreasonable for the defendants to request the particulars and the information that they did, the Council did not act unreasonably in its particularisation of the charges or its responses to the defendants' requests. Whatever extra costs were incurred during the period of exchange of correspondence between the parties' solicitors were not unreasonable.
I find that it is appropriate to order the defendants to pay the full amount of the Council's costs. The Council has estimated the costs to be around $28,000. The defendants submitted that the Court should not leave the amount to be determined under s 257G but should specify an amount under s 257B. I agree. Costs should be awarded in the amount of $28,000. The defendants should pay half each.

Orders

The Court makes the following orders: In proceedings 2016/175841: (1) Liverpool Developing Pty Ltd (ACN 153414683) is convicted of the offence against s 125(1) of the Environmental Planning and Assessment Act 1979 as charged. (2) Liverpool Developing Pty Ltd (ACN 153414683) is fined $40,000. In proceedings 2016/175842: (1) Liverpool Developing Pty Ltd (ACN 153414683) is convicted of the offence against s 125(1) of the Environmental Planning and Assessment Act 1979 as charged. (2) Liverpool Developing Pty Ltd (ACN 153414683) is fined $40,000. In proceedings 2016/175925: (1) Erector Group Pty Ltd (ACN 095922357) is convicted of the offence against s 125(1) of the Environmental Planning and Assessment Act 1979 as charged. (2) Erector Group Pty Ltd (ACN 095922357) is fined $40,000. In proceedings 2016/175926: (1) Erector Group Pty Ltd (ACN 095922357) is convicted of the offence against s 125(1) of the Environmental Planning and Assessment Act 1979 as charged. (2) Erector Group Pty Ltd (ACN 095922357) is fined $40,000. In proceedings 2016/175841, 2016/175842, 2016/175925 and 2016/175926: (1) Liverpool Developing Pty Ltd (ACN 153414683) and Erector Group Pty Ltd (ACN 095922357) are each to pay $14,000 for the Council's legal costs of all of the proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 March 2017

(1993) 113 LGERA 357

(2006) 145 LGERA 234

(2006) 146 LGERA 349

(2005) 144 LGERA 235

(2006) 145 LGERA 189

(2006) 150 LGERA 231

(2009) 165 LGERA 289

At a glance

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Judgment (22 paragraphs)

Cases Cited (23)

Cited By (9)