[2006] NSWLEC 419
Hoare v The Queen (1989) 167 CLR 348
[1989] HCA 33
Markarian v R (2005) 229 CLR 357
[2005] HCA 25
Mohindra v R [2020] NSWCCA 340
Plath v Rawson (2009) 170 LGERA 253
[2009] NSWLEC 178
R v O'Neill (1979) 2 NSWLR 582
R v Olbrich (1999) 199 CLR 270
Source
Original judgment source is linked above.
Catchwords
[2006] NSWLEC 419
Hoare v The Queen (1989) 167 CLR 348[1989] HCA 33
Markarian v R (2005) 229 CLR 357[2005] HCA 25
Mohindra v R [2020] NSWCCA 340
Plath v Rawson (2009) 170 LGERA 253[2009] NSWLEC 178
R v O'Neill (1979) 2 NSWLR 582
R v Olbrich (1999) 199 CLR 270[1999] HCA 54
R v ThomsonR v Houlton (2000) 49 NSWLR 383[2000] NSWCCA 383
Secretary, Department of Planning, Industry and
Veen v The Queen (1979) 143 CLR 458[1979] HCA 7
Veen v The Queen (No 2) (1988) 164 CLR 465[1988] HCA 14
Walden v Hensler (1987)163 CLR 561
Judgment (57 paragraphs)
[1]
Introduction
Burwood Council (the Prosecutor), by summonses filed on 14 November 2022, has charged X-Sealant Pty Ltd (X-Sealant) and Portleigh Pty Ltd (Portleigh) - the Defendants when referred to collectively - with offences in breach of the Environmental Planning and Assessment Act 1979 (the EPA Act).
The X-Sealant Summons alleges that X-Sealant:
… between 6 August 2018 and 15 January 2021 contrary to section 4.2(1) of the Environmental Planning and Assessment Act 1979 ("the Act") the defendant carried out development, namely the construction of a four bedroom penthouse ("the penthouse") above the sixth storey of an approved six storey tower ("the Southern tower") located at the Southern end of 68-72 Railway Parade Burwood and 2-10 Oxford Street Burwood in the State of New South Wales ("the land"), the construction of the penthouse being specified development that an environmental planning instrument provides may not be carried out except with development consent, WHEREAS:
i. The development was undertaken without a development consent having first been obtained and being in force; and,
ii. the development was not carried out in accordance with the approved development consent (as modified), and in accordance with the instrument.
The pleaded particulars in the X-Sealant Summons are in the following terms:
(a) The defendant at all relevant times has been the principal contractor in respect of a development consisting of three mixed use towers on the land, one tower being the Southern tower.
(b) On 6 August 2018 development consent was granted for the construction and use of the Southern tower.
(c) At all relevant times the Southern tower was approved as a six storey building with a terrace and communal open space above the sixth storey (ie, on the roof of the Southern Tower).
(d) Between the determination to grant approval for the Southern tower (6 August 2018) and the defendant via its lawyer providing photographs of the penthouse to Burwood Council (15 January 2021) the defendant constructed the penthouse in the location above the sixth storey where the approved plans required the provision of a terrace and communal open space.
(e) At no relevant time was there a development consent in force to construct a four bedroom penthouse in the location where the approved plans required a terrace and communal open space.
(f) A reduced (two bedroom) penthouse was agreed to and was approved by the Court after a section 34 agreement. The defendant has not complied with the Court issued consent so as to reduce the penthouse to two bedrooms with consequential reduction of communal open space.
(g) The penthouse is development that has not been carried out in accordance with any existing consent or the instrument.
(h) No construction certificate has been issued in respect of the penthouse.
The Prosecutor proposed that X-Sealant be convicted and fined and that it pay the Prosecutor's costs. The Prosecutor also proposed that additional orders be made in the following terms:
4. The following Orders made pursuant to Part 8.3 of the Protection of the Environment Operations Act 1997 ("the POEO Act") (applicable by virtue of section 9.56 of the Act):
i. An Order pursuant to section 245 (c) of the POEO Act that the defendant within 28 days of the date of the Court Ordering it be done, do one of the following things:
(a) Remove the penthouse from the Southern Tower; or,
(b) bring the penthouse into compliance with the Court's approval and the approved plans forming part of development consent 124/217.4 (as modified)
ii. An Order pursuant to section 250 (a) of the POEO Act that the defendant take out an advertisement in the Sydney Morning Herald or other major Sydney Daily newspaper publicising the offence and all Orders made against the defendant by the Court.
The Portleigh Summons alleges that Portleigh:
… between 6 August 2018 and 15 January 2021 contrary to section 4.2(1) of the Environmental Planning and Assessment Act 1979 ("the Act") and section 9.50(3A) of the Act the defendant did aid, abet, counsel or procure X-Sealant Pty Ltd (ACN 087820862) in the commission of an offence, namely the carrying out of development consisting of the construction of a four bedroom penthouse ("the penthouse") above the sixth storey of an approved six storey tower ("the Southern tower") located at the Southern end of 68-72 Railway Parade Burwood and 2-10 Oxford Street Burwood in the State of New South Wales ("the land"), the development being specified development that an environmental planning instrument provides may not be carried out except with development consent, WHEREAS:
i. The development was undertaken without development consent having first been obtained and being in force; and,
ii. the development was not carried out in accordance with the approved development consent (as modified), and in accordance with the instrument.
The pleaded particulars in the Portleigh Summons are in the following terms:
(a) The defendant is and at all relevant times was the owner of the land.
(b) X-Sealant Pty Ltd is and at all relevant times was the principal contractor in respect of a development consisting of three mixed use towers on the land, one tower being the Southern tower.
(c) The defendant and X-Sealant share a common director, common Company secretary and common registered office.
(d) On 6 August 2018 development consent was granted for the construction and use of the Southern tower.
(e) At all relevant times the Southern tower was approved as a six storey building with a terrace and communal open space above the sixth storey (ie, on the roof of the Southern Tower).
(f) Between the determination to grant approval for the Southern tower (6 August 2018) and the defendant via its lawyer providing photographs of the penthouse to Burwood Council (15 January 2021) X-Sealant Pty Ltd constructed the penthouse in the location where the approved plans required the provision of a terrace and communal open space.
(g) At no relevant time was there a development consent in force to construct a four bedroom penthouse in the location where the approved plans required a terrace and communal open space.
(h) A reduced (two bedroom) penthouse was subsequently agreed to and was approved after a section 34 agreement. Contrary to the subsequent and agreed modification of the consent the defendant has failed to reduce the penthouse to two bedrooms with consequential reduction of communal open space.
(i) The penthouse is development that has not been carried out in accordance with any existing consent or the instrument.
(j) There is no consent in existence for the use of the penthouse.
(k) There is no construction certificate in respect of the penthouse.
(I) There is no occupation certificate for the penthouse.
(m) The penthouse is occupied.
The Prosecutor proposed that Portleigh be convicted and fined and that it pay the Prosecutor's costs. The Prosecutor also proposed that additional orders be made in the following terms:
4. The following Orders made pursuant to Part 8.3 of the Protection of the Environment Operations Act 1997 ("the POEO Act") (applicable by virtue of section 9.56 of the Act):
i. An Order pursuant to section 245 (c) of the POEO Act that the defendant within 28 days of the date of the Court making Orders, do one of the following things:
(a) Remove the penthouse from the Southern Tower; or,
(b) carryout such works as are required comply with the Court's approval in respect of development consent 124/217.4 (as modified)
ii. An Order pursuant to section 249 (1) of the POEO Act that the offender pay, as part of the penalty for committing the offence, an additional penalty of an amount the court is satisfied, on the balance of probabilities, represents the amount of any monetary benefits acquired by the offender, or accrued or accruing to the offender, as a result of the commission of the offence. Such monetary benefits being all income received from the renting or leasing the penthouse and, if applicable, from the sale of the penthouse.
iii. An Order pursuant to section 250 (a) of the POEO Act that the defendant take out an advertisement in the Sydney Morning Herald or other major Sydney Daily newspaper publicising the offence and all Orders made against the defendant by the Court.
[2]
The proposed monetary benefit orders
As can be seen from the sets of orders proposed by the Prosecutor for the Portleigh prosecution, the Prosecutor proposes that a monetary benefit order (one made pursuant to s 249(1) of the Protection of the Environment Operations Act 1997 - the POEO Act) be made against that Defendant.
During the course of the pre-trial mention on 13 June 2023, I had drawn the attention of the Prosecutor to the requirements contained in the Protocol for calculating monetary benefits published by the EPA and the statutory requirements that any proposal for a monetary benefit order must be based on, and calculated in compliance with, the terms of the Protocol.
At the commencement of the hearing on 26 June 2023, the Prosecutor handed up a set of proposed draft orders then sought by the Prosecutor. The Prosecutor advised me that there was no longer any application made for a monetary benefits order (Transcript 26 June 2023, page 1, lines 34 to 36). As a consequence, that possibility requires no consideration in this judgement.
[3]
The guilty pleas
On 3 February 2023, each Defendant pleaded guilty to the relevant charge. The charges are strict liability ones. Mens rea (intention) plays no part and guilt is established by proof of the objective ingredients of the offences (Caralis v Smyth (1988) 65 LGRA 303 at 308). The pleas of "guilty" constitute admission of all the essential elements of the relevant offence (R v O'Neill (1979) 2 NSWLR 582 at 588).
The extent to which the Company's guilty pleas will act to moderate the otherwise appropriate penalties to be imposed is later addressed (R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 383 (R v Thomson)).
[4]
The hearing
As a consequence, a hearing to sentence the Defendants was held on 26 June 2023.
[5]
Representation
The Prosecutor was represented by Mr P English and Mr J Cooper, barristers. The Defendants were represented by Mr J Young and Mr M Fozzard, barristers. The advocates provided written submissions for the sentencing hearing.
[6]
The Statement of Agreed Facts on Sentencing
The Prosecutor and the Defendants have settled a Statement of Agreed Facts on Sentencing (Exhibit A). It is appropriate to reproduce it in full:
1 Portleigh Pty Ltd ("Portleigh") at all relevant times was the owner of land located at 68-72 Railway Parade Burwood NSW and 2-10 Oxford Street Burwood NSW 2134 ("the Land").
2 On 22 September 2017, Portleigh lodged with Burwood Council ("Council") DA.10. 2017/124.1 seeking approval to construct a mixed development with residential units and a commercial component, including a basement, on the Land. The development was to consist of three towers being, respectively, 6 (Southern tower), 8 (Middle tower) and 10 (Northern tower) storeys in height.
3 X-Sealant Pty Ltd ("X-Sealant") was at all relevant times the builder/ Principal Contractor tasked with building the development.
4 X-Sealant holds builders licence 246856C.
5 Portleigh and X-Sealant have a common Director, Anthony Georges.
6 Anthony Georges holds a supervisor builders licence 76685S. He is prohibited from contracting directly with consumers.
7 The tower at the Southern end of the development site ("the Southern tower") was approved as a six storey building. As part of the approval, a terrace and communal open space was approved on top of the sixth storey such that this was to become a roof top garden and roof top open space.
8 The maximum permissible building height for the subject site was eight storeys. However, Council agreed to 10 storeys on the Norther Tower (corner of Railway Parade and Oxford Street Burwood) in exchange for the Southern tower being limited to six storeys.
9 Owner's consent in respect of DA 2017/124.1 was signed by Anthony Georges and John Georges each as the Directors and Secretaries of Portleigh and each stating an address of 66 Barker Road Strathfield NSW 2135.
10 Both Portleigh and X-Sealant list 66 Barker Road Strathfield with ASIC as their registered office.
11 On 28 August 2018, the Sydney Planning Panel approved DA.10.2017/124.1 (also known as DA 2017/124) resulting in Council's grant of consent for "Demolition of existing structures and construction of a six to ten storey mixed use development comprising 124 apartments, one retail premises at ground floor and three levels of basement parking".
12 On 5 February 2019, a modification application was received by Council seeking to modify DA 2017/124 by making changes to the basement. This modification was allocated number MOD.10.2017.124.2.
13 On 13 June 2019, modification application MOD.10. 2017.124.2 was approved by Council for ''modification of Development Consent No. 124/2017 dated 28 August 2018 for a Mixed Use Development to allow for deletion of part of Basement Level No.3 (carparking) and replacement of planter boxes by other treatments to achieve architectural relief
14 On 30 April 2020, DA 2017/124 was the subject of a further modification application. This further modification application sought to modify DA 2017/124 by construction of a roof area above the communal open space on the rooftop above Level 6. This modification application was allocated number MOD.10. 2017.124.3.
15 Ori 20 July 2020, Council's excutive planner, Robert Toohey, sent an email to Anthony Georges outlining a number of concerns with the proposed MOD.10. 2017.124.3, including that Council considered th.at th creation of a dort]in nt concret roof presented the perception of "another storey" which was one of the key design issues raised in public notification perfods,
16 On 24 July 2020, amended plans detailing a more sympathetic roof structure were submitted to Council in relation to modification application MOD 10. 2017.124.3.
17 On 15 September 2020, Council approved modification application MOD.2017.124.3, allowing for "modification of Development Consent No.124/2017 originally issued on 28 August, 2018 for a Mixed Use Development and last modified on 13 June, 2019, to allow construction of a roof area above parl of the Communal Open Space area on Level 6".
18 On 25 November 2020, X-Sealant (referred to as "X-Sealand" in the application) lodged with Council via the Plannin'g Portal a further modification application which stated ... Uthe proposed modification consists of the reconfiguration of the Level 6 rooftop to remove the approved communal open space area and provide a 4- bedroom penthouse apartment". This modification application was allocated number MOD.10.2017.124.4.
19 On 14 December 2020, Council received notification from the private certifier engaged in respect of DA 2017/124 that a written directions notice had been served by the private certifier in respect of unlawful works described as "commencement of construction and fitout of penthouse located on level 6 (formerly known as Roof terrace) prior to obtaining a construction certificate".
20 Contrary to the conditions of DA 2017/124, a four bedroom unit/ penthouse style dwelling was constructed in the space above Level 6 of the Southe_m Tower ("the penthouse"). At no time did Portleigh, X-Sealant or any other person or entity have a grant of approval for the construction or use of the penthouse in the place where the roof top communal open space was approved.
21 On 30 September 2021, MOD.10.2017.124.4 was refused. Reasons for refusal included inter alia that the proposed modification would produce a seventh storey above the component of the building that was restricted to six storeys due to bulk, scale and amenity concerns. Other reasons for refusal included that there would be an impermissible increase in floor space ratio, an increase in the number of approved units and a change in building profile.
22 On 12 October 2021, X-Sealant appealed Council's refusal of MOD.10.2017.124.4 to the Land and Environment Court (case 2021/289680). During these Land and Environment Court proceedings, the parties negotiated an agreement pursuant to s 34 of the Environmental Planning and Assessment Act 1979 (NSW) (X-Sealant Pty Ud v Bwwood Council [2022] NSWLEC 1316), resulting in "the reduction of the penthouse apartment on the roof top terrace above Level 6 to 2 bedrooms and a consequential reduction to the area of communal open space on the roof area above Level 6 ... "("section 34 agreement").
23 The approved plans the subject of the section 34 agreement that was ratified by the Court require the reduction of the size of the penthouse to two bedrooms and the retention or reinstatement communal open space in a size equal to the amount by which the dimensions of the penthouse were agreed to be reduced.
24 Despite the section 34 agreement, there has been no reduction of the size of the penthouse.
25 The penthouse is completed and occupied. There is no construction certificate for the penthouse and no occupation certificate in respect of it.
26 The land is zoned R1 General Residential pursuant to the provisions of the Burwood Local Environmental Plan 2012. Residential flat buildings are allowed in the zone with consent.
27 There is an interim Occupation Certificate ("IOC") in respect of stage two development on the land (which includes the Southern tower). The IOC specifically excludes any elements above level six. This includes elements above level six of the Southern tower.
28 The penthouse is occupied and is subject of a residential lease. Portleigh is deriving income from the penthouse.
[7]
Introduction
Provisions of the EPA Act, the POEO Act, the Crimes Sentencing Procedure Act 1999 (the Sentencing Procedure Act), the Criminal Procedure Act 1986 (the Criminal Procedure Act) and the Local Government Act 1993 (the Local Government Act) require consideration or noting in this decision. The relevant provisions of each of those statutes is set out below.
One clause of the Environmental Planning and Assessment Regulation 2021 (the EPA Regulation) is also relevant.
[8]
The EPA Act
A number of provisions of the EPA Act are here engaged. The first of them is setting out the relevant objects of the legislation. This provision is in the following terms:
1.3 Objects of Act
The objects of this Act are as follows -
(a)-(b) …,
(c) to promote the orderly and economic use and development of land,
(d)-(f) …,
(g) to promote good design and amenity of the built environment,
(h)-(i) …,
(j) to provide increased opportunity for community participation in environmental planning and assessment.
The second is the provision which creates the offence to which X-Sealant has pleaded guilty. This provision is in the following terms:
4.2 Development that needs consent
(1) General If an environmental planning instrument provides that specified development may not be carried out except with development consent, a person must not carry the development out on land to which the provision applies unless -
(a) such a consent has been obtained and is in force, and
(b) the development is carried out in accordance with the consent and the instrument.
Maximum penalty - Tier 1 monetary penalty.
(2) …
(3), (4) (Repealed)
(5) Complying development …
(6)-(9) (Repealed)
The third is the provision which creates the offence to which Portleigh has pleaded guilty as a consequence of its role in X-Sealant's offending conduct. This provision is in the following terms:
9.50 Offences against this Act and the regulations
(1)-(3) (Repealed)
(3A) A person who -
(a) aids, abets, counsels or procures another person to commit, or
(b) …,
an offence against this Act or the regulations arising under any other provision is guilty of an offence against this Act or the regulations arising under that provision and is liable, on conviction, to the same penalty applicable to an offence arising under that provision.
(4)-(5) …
Next to be set out are the provisions which create the penalties for the offences for which the Defendants will be convicted:
9.51 Maximum monetary penalty - Tier 1, Tier 2 or Tier 3
If Tier 1, Tier 2 or Tier 3 is specified as the maximum monetary penalty at the end of a provision (or a number of provisions) of this Act, a person who contravenes or fails to comply with that provision (or those provisions) is guilty of an offence and liable to a monetary penalty not exceeding the relevant penalty specified in the following sections. If a period of imprisonment is also specified, the person is also liable to imprisonment not exceeding the period so specified.
9.52 Maximum penalty - Tier 1
(1) If Tier 1 is specified as the maximum monetary penalty at the end of a provision (or a number of provisions) of this Act, a person who contravenes or fails to comply with that provision (or those provisions) is guilty of an offence and (subject to subsection (2)) liable to a penalty not exceeding -
(a) in the case of a corporation -
(i) $5 million, and
(ii) for a continuing offence - a further $50,000 for each day the offence continues, or
(b) …
(2) A Tier 1 maximum monetary penalty applies only if the prosecution establishes (to the criminal standard of proof) -
(a) that the offence was committed intentionally, and
(b) that the offence -
(i) caused or was likely to cause significant harm to the environment, or
(ii) ...
…
(3) If a Tier 1 maximum monetary penalty is specified in this Act but does not apply because of subsection (2), then a Tier 2 maximum penalty applies instead.
(4) …
9.53 Maximum penalty - Tier 2
(1) If Tier 2 is specified as the maximum penalty at the end of a provision (or a number of provisions) of this Act, a person who contravenes or fails to comply with that provision (or those provisions) is guilty of an offence and liable to a penalty not exceeding -
(a) in the case of a corporation -
(i) $2 million, and
(ii) for a continuing offence - a further $20,000 for each day the offence continues, or
(b) …
(2) …
The Prosecutor does not suggest that any daily penalty arises to be considered for present sentencing purposes.
The additional order making powers contained in Pt 8.3 of the POEO Act are imported to the EPA Act by the operation of s 9.56 of the EPA Act. This provision is in the following terms:
9.56 Additional provisions relating to penalties
(1), (2) (Repealed)
(2A) Part 8.3 of the Protection of the Environment Operations Act 1997 (Court orders in connection with offences) applies to an offence against this Act or the regulations in the same way as it applies to an offence against that Act or the regulations under that Act, but only in relation to proceedings before the Court and subject to any modifications prescribed by the regulations under this Act.
It is also appropriate to set out the definition of environment in s 4(1) of the EPA Act. It is in the following terms:
environment includes all aspects of the surroundings of humans, whether affecting any human as an individual or in his or her social groupings.
[9]
The POEO Act
The relevant provisions of the POEO Act set out the range of additional orders potentially available to be made in addition to any penalty imposed pursuant to the EPA Act. These provisions are set out below:
244 Orders generally
(1) Orders may be made One or more orders may be made under this Part against the offender.
(2) Orders are additional Orders may be made under this Part in addition to any penalty that may be imposed or any other action that may be taken in relation to the offence.
(3) Other action not required Orders may be made under this Part regardless of whether any penalty is imposed, or other action taken, in relation to the offence.
250 Additional orders
(1) Orders The court may do any one or more of the following -
(a) order the offender to take specified action to publicise the offence (including the circumstances of the offence) and its environmental and other consequences and any other orders made against the person,
(b) …,
(c) …,
(d) …,
(e) order the offender to pay a specified amount to the Environmental Trust established under the Environmental Trust Act 1998, or a specified organisation, for the purposes of a specified project for the restoration or enhancement of the environment or for general environmental purposes,
(f) …,
(g) …,
(h) …
The Local Court is not authorised to make an order referred to in paragraph (c), (d), (e) or (h).
(1A) …
(2) Machinery The court may, in an order under this section, fix a period for compliance and impose any other requirements the court considers necessary or expedient for enforcement of the order.
It is to be noted that any publication order is additional to any fine and does not warrant any discount on the overall financial penalty to be imposed (Budvalt Pty Ltd v Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator [2022] NSWCCA 9). It is also to be noted that any payment order made pursuant to s 250(1)(e) can effect the diversion of a portion of the total monetary penalty which would otherwise be imposed on a defendant.
[10]
The Sentencing Procedure Act
The Sentencing Procedure Act sets out, in s 3A, the purposes for which sentencing is to be undertaken. This provision is in the following terms:
3A Purposes of sentencing
The purposes for which a court may impose a sentence on an offender are as follows -
(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,
(c) to protect the community from the offender,
(d) to promote the rehabilitation of the offender,
(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 Sentencing Procedure Act also sets out, in s 21A(1), (2) and (3), matters required to be considered when sentencing for the offences to which the Defendants have pleaded guilty. Not all elements of these provisions are here relevant. The relevant elements of the provision are in the following terms:
21A Aggravating, mitigating and other factors in sentencing
(1) General In determining the appropriate sentence for an offence, the court is to take into account the following matters -
(a) the aggravating factors referred to in subsection (2) that are relevant and known to the court,
(b) the mitigating factors referred to in subsection (3) that are relevant and known to the court,
(c) any other objective or subjective factor that affects the relative seriousness of the offence.
The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law.
(2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows -
(a)-(f) …
(g) the injury, emotional harm, loss or damage caused by the offence was substantial,
(h)‑(m) …
o) the offence was committed for financial gain,
(p) …
The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence.
(3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows -
(a) the injury, emotional harm, loss or damage caused by the offence was not substantial,
(b)‑(d) …
(e) the offender does not have any record (or any significant record) of previous convictions,
(f) the offender was a person of good character,
(g) the offender is unlikely to reoffend,
(h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise,
(i) the remorse shown by the offender for the offence, but only 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),
(j) …
(k) a plea of guilty by the offender (as provided by section 22 or Division 1A)
(m) assistance by the offender to law enforcement authorities (as provided by section 23),
(n) …
(4)‑(5C)
Although ss 22 and 23 of the Sentencing Procedure Act are also engaged, it is not necessary to set out their terms as they are reflected in matters arising from s 21A(3)(k) and (m).
[11]
The Criminal Procedure Act
It is necessary to set out the two relevant provisions of the Criminal Procedure Act concerning the making of costs orders in a Prosecutor's favour. These provisions, ss 257B and 257G are set out below:
257B When costs may be awarded to prosecutor
A court may, in and by a conviction or order, order an accused person to pay to the registrar of the court, for payment to the prosecutor, such costs as the court specifies or, if the conviction or order directs, as may be determined under section 257G, if -
(a) the court convicts the accused person of an offence, or
(b) the court makes an order under section 10 of the Crimes (Sentencing Procedure) Act 1999 in respect of an offence.
257G Calculation of costs
The professional or other costs payable by a prosecutor or accused person in accordance with an order directing that the amount of costs is to be determined under this section are to be determined -
(a) by agreement between the prosecutor and accused person, or
(b) ….
[12]
The Local Government Act
It is necessary to set out the relevant provision of the Local Government Act that ensures that penalties imposed on the Defendants are to be paid to the Prosecutor.
694 Application of penalties
(1) Any penalty, fine or forfeiture imposed under any Act, or imposed for a contempt of a court order to remedy or restrain a breach of this Act or any other Act, and recovered in proceedings instituted by the council is -
(a) to be paid to the council, and
(b) to be allocated by the council to the council's consolidated fund.
(1A) In subsection (1) -
breach of this Act or any other Act means -
(a) a contravention of or failure to comply with this Act or any other Act, or
(b) a threatened or an apprehended contravention of or a threatened or apprehended failure to comply with this Act or any other Act.
this Act or any other Act includes a regulation or other instrument made under this Act or any other Act.
(2) - (4) ….
(5) In this section -
(a) a reference to proceedings instituted by the council includes -
(i) a reference to proceedings instituted under the direction or on behalf or for the benefit of the council, and
(ii) a reference to penalty notices issued by or under the direction or on behalf or for the benefit of the council, and
(b) a reference to a parking or related offence is a reference to an offence that is declared by the regulations to be a parking or related offence for the purposes of this section.
[13]
The EPA Regulation
The relevant clause of the EPA Regulation is in the following terms:
295 Modification of Protection of the Environment Operations Act 1997, Part 8.3
The Protection of the Environment Operations Act 1997, Part 8.3 applies to an offence under the Environmental Planning and Assessment Act 1979 or this Regulation, with the following modifications -
(a) a reference in that Part to preventing, controlling, abating or mitigating harm to the environment caused by the commission of the offence is taken to include a reference to reversing or rectifying any unlawful development or activity related to the commission of the offence,
(b) the terms environment and public authority, when used in that Part, have the same meaning as in the Environmental Planning and Assessment Act 1979,
(c) a reference in that Part to a regulatory authority or the EPA is to be read as a reference to a public authority,
(d) the reference in the Protection of the Environment Operations Act 1997, section 250(1)(e) to the Environment Trust established under the Environmental Trust Act 1998 is to be disregarded,
(e) the maximum penalty for an offence under the Protection of the Environment Operations Act 1997, section 251 of failing to comply with an order is $50,000 for a corporation and $10,000 for an individual.
[14]
The evidence
For the Prosecutor, an affidavit (deposed 25 May 2023) of Mr S Shneider, the Prosecutor's solicitor, was read (except for paragraph 5). The relevant (non-formal) parts of the affidavit are set out below:
3 On 5 April 2023 I filed a subpoena to produce (subpoena), addressed to Portleigh Pty Ltd (Portleigh).
4 On 18 May 2023, the following documents were produced in compliance with the subpoena:
i. Residential tenancy agreement between Portleigh and Hamish Blair for 601 of 6 to 10 Oxford Street Burwood NSW ("the penthouse") plus 2 x car spaces, dated 20 July 2022, to commence on 30 July 2022 and to conclude on 29 July 2023 (residential tenancy agreement); and,
ii. 11 pages of financial statements showing transactions in respect of the penthouse and other rental units at 6 to 1O Oxford Street Burwood NSW (financial statements).
5 ….
6 Annexed hereto and marked with the letter A is a true copy of the rental agreement produced in compliance with the subpoena.
7 Annexed hereto and marked with the letter B is a true copy of the 11 pages of financial statements produced in compliance with the subpoena.
8 Annexed hereto and marked with the letter C is a spreadsheet containing workings based on the financial statements.
It is not necessary to reproduce any portion of the annexures to Mr Shneider's affidavit.
For the Defendants, an affidavit (deposed on 22 June 2023) of Mr A Georges (Mr Georges), a director of each of the Defendants, was read. Mr Georges was required for cross-examination. Relevant portions of his written and oral evidence are later addressed.
Three character references for Mr Georges were tendered (together becoming Exhibit 1). These references were from:
1. Ms Joyce, Director/Board member of the Maronites on Mission Australia;
2. Mr Michael Limnos, a former employee of the Prosecutor; and
3. Fr Danny Nouh, Parish Priest of Saint Joseph's Maronite Catholic Church.
A letter to the Prosecutor from X-Sealant's former solicitor (together with a bundle of annexed e-mails) was tendered - becoming Exhibit 2.
[15]
The approach to Sentencing Procedure Act matters
The Sentencing Procedure Act sets out, in s 21A(2) and (3) various potential factors of aggravation (subsection 2) or subjective factors potentially favourable to a defendant (subsection 3) that may need to be considered.
For the purposes of establishing any potential factor of aggravation, I must conclude that such factor is proved beyond reasonable doubt against the relevant Defendant. On the other hand, for favourable subjective factors applicable to either Defendant (including those matters potentially arising from s 21A(3)), it is only necessary for the that Defendant to establish that factor on the balance of probabilities (R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at 281).
[16]
The objective factors of the Defendants' offending conduct
[17]
Introduction
The Sentencing Procedure Act sets out, in s 21A(2), potential factors of aggravation that might arise from the offending conduct.
[18]
Introduction
The first of the potential factors of aggravation requiring considering in these proceedings is that contained in s 21A(2)(g). This potential factor is in the following terms:
(g) the injury, emotional harm, loss or damage caused by the offence was substantial,
Although it is to be accepted that damage to a regulatory system can be of such significance to constitute a factor of aggravation for sentencing purposes, I am not satisfied beyond reasonable doubt that the matters advanced on behalf of the Prosecutor as constituting harm caused by the offending conduct of each of the Defendants reaches the threshold test of being substantial. In passing, I note that the description of the necessary impact to elevate offending conduct for breaches of the EPA Act into the potential scope of Tier 1 offences is set out in s 9.52(2)(b)(i) in the following terms:
(b) that the offence -
i) caused or was likely to cause significant harm to the environment, or
Although the Prosecutor dealt with the question of harm to the regulatory system in (25) to (28) of the Prosecutor's written sentencing submissions, the Prosecutor did not expressly submit that the harm to the regulatory system established by the EPA Act was of such a nature as to constitute harm satisfying s21A(2)(g) of the Sentencing Procedure Act so as to constitute a factor of aggravation.
The Prosecutor submitted that the conduct of the Defendants undermined the objects of the EPA Act and the community's interest in the orderly application of planning laws (Transcript 26 June 2023, page 28, lines 28 to 30). The Prosecutor's oral submissions on harm also did not give rise to any potential finding of the damage to the regulatory system to be substantial and, thus, a factor of aggravation.
Although there is a difference between the provision of the Sentencing Procedure Act currently being considered (substantial harm) and that cited immediately above from the EPA Act (significant harm), there is no basis upon which I could conclude (even on the presumption - one that would be erroneous, I consider - that the two descriptors were to be read as synonymous) that the damage to the regulatory framework established by the EPA Act could be regarded as "substantial".
In light of the fact that I have reached this conclusion, it has not been necessary to set out any submissions advanced on behalf of the Defendants on this issue.
[19]
Introduction
A further potential aggravating factor set out in s 22A(2)(o) is whether or not an offender obtained a financial benefit derived from the offending conduct.
Mr Shneider's affidavit discloses that, during the period between 12 August 2022 and 12 April 2023, Portleigh received gross income from leasing the unlawfully constructed penthouse. This income totalled $45,595.17.
In this regard, Mr Georges was questioned concerning the income derived from leasing out the penthouse. The exchange was in the following terms (Transcript 26 June 2023, page 17, lines 7 to 15):
PROSECUTOR: [T]he penthouse has been leased out, correct?
WITNESS GEORGES: The penthouse was leased out, correct.
PROSECUTOR: So that value includes potentially earning a return from its letting?
WITNESS GEORGES: Correct.
PROSECUTOR: In so far as there might have been value by the construction of that penthouse, that was a value that derived only to Portleigh, correct?
WITNESS GEORGES: To Portleigh, correct. Yep.
Mr Georges was also questioned about the profitability of the whole project to Portleigh. He indicated that the profitability to Portleigh of the whole project was somewhere in the ballpark of $45,000,000 to $50,000,000 (Transcript, 26 June 2023, page 18, line 49 to page 19, line 24):
PROSECUTOR: Have you worked out profitability of the whole project for Portleigh?
WITNESS GEORGES: Not entirely.
PROSECUTOR: You would have, wouldn't you? You've got taxation affairs to adhere to on behalf of Portleigh?
WITNESS GEORGES: Yeah, that's right. I do.
PROSECUTOR: Someone would have done it, wouldn't they?
WITNESS GEORGES: The accountant would have done it. He would have resolved what the profits were.
PROSECUTOR: You'd be interested to know what the total profitability was for Portleigh, wouldn't you?
WITNESS GEORGES: Of course.
PROSECUTOR: What was it? What was the total profitability for Portleigh in respect of both towers?
WITNESS GEORGES: Don't know the exact figure.
PROSECUTOR: Above 50 million?
WITNESS GEORGES: I would be - I would be guessing so.
PROSECUTOR: Closer to 70 million?
WITNESS GEORGES: No. It wouldn't be 70 million.
PROSECUTOR: Somewhere between 50 and 60 million?
WITNESS GEORGES: Probably be - it would be somewhere in the ballpark of that, 45 to 50.
This profit level was not broken down in detail. It is, however, for present purposes, pertinent to note that Portleigh made a substantial profit across the total of the development, including within that profit that which could have been the capital profit realised by the construction of the illegal penthouse level on the south tower if that which had been built was subsequently regularised.
The Prosecutor questioned Mr Georges further concerning financial motivation by Portleigh in constructing the penthouse level on the south tower. This exchange was in the following terms (Transcript 26 June 2023, page 21, line 47 to page 22, line 16):
PROSECUTOR: It may be submitted against you, Mr Georges, that the construction of the penthouse by Portleigh in circumstances where you've given evidence that it was done knowing that it was illegal to do so at the time and for the purposes of saving costs because builders were on site and also to add value for Portleigh, the construction of the penthouse was motivated by pure greed on Portleigh's behalf. What would you say?
WITNESS GEORGES: No I wouldn't say pure greed.
PROSECUTOR: What would you say then?
WITNESS GEORGES: Again, going back to looking at the advice and what we can potentially do for the entire development, we looked at it as possibly a better outcome.
PROSECUTOR: A better outcome for who?
WITNESS GEORGES: For us and for - for the whole building.
PROSECUTOR: Other than the person who resides in the penthouse, explain to his Honour how anyone would benefit from its existence?
WITNESS GEORGES: I wouldn't say it's - I wouldn't say it's pure greed. I just thought there's an opportunity there to put an additional apartment and that's it. That's sort of, I'll leave it at that.
Mr Georges was also questioned about whether or not Portleigh had paid X-Sealant to carry out the additional construction of the penthouse level. His questioning is relevant to my consideration of whether or not it is proved that X-Sealant, as opposed to Portleigh, derived, or intended to derive any financial benefit from X-Sealant's offending conduct. This questioning was in the following terms (Transcript 26 June 2023, page 13, lines 8 to 23):
PROSECUTOR: That was X-Sealant that was carrying out the construction and fitout of the penthouse at the time?
WITNESS GEORGES: Yep.
PROSECUTOR: Was X-Sealant being paid by Portleigh to carry out those works?
WITNESS GEORGES: X-Sealant had a no - it was directly funded by the bank straight to X-Sealant.
PROSECUTOR: So there wasn't any arrangement whereby those costs would be paid by the owner of the land being Portleigh?
WITNESS GEORGES: Not necessarily.
PROSECUTOR: What does "not necessarily" mean?
WITNESS GEORGES: Because X-Sealant, because it's the building arm, was getting - we approached the bank. That the bank would fund X-Sealant for the whole project, not just particularly this penthouse. It was the whole scheme of things.
[20]
The Prosecutor's position on financial gain
With respect to the issue of financial gain, the Prosecutor submitted that Portleigh obtained a financial benefit by the construction of the unapproved apartment, not only by the rental of the penthouse but also by an increased capital value of the development whilst, at the same time, there was a disadvantage to the residents of the southern tower by the denial to them of the only private open space in that building - space that was required to be constructed for their use (Transcript 26 June 2023, page 27, lines 14 to 29):
PROSECUTOR: It was a value in terms of an asset and in potential in terms of potential rent generation and he conceded that there was no one except Portleigh that would derive such value from that development. In his evidence, Mr Anthony Georges tried to suggest that he just asks on the advice of consultants. Your Honour wouldn't accept that. He's an experienced builder and developer. He's a sensible man, a successful businessperson. He's got his own mind and that was just an answer to minimise his role, in my respectful submission.
The profit that Portleigh earnt from the two towers was 45 to 50 million dollars. Then to the disadvantage of residents of the southern tower, the penthouse was constructed that only benefited Portleigh. Your Honour, in my submission that is naked greed. That's the only reason why that was built because as Mr Anthony Georges accepted, the only people that would benefit for that were Portleigh and the tenant, who's Mr Blair in this case, and it was let.
[21]
The Defendants' position on financial gain
For reasons later explained, I have paid no heed to admissions which were made in the Defendants' written sentencing submissions, but which were subject of exchanges between me and Mr Young during the course of the hearing as to whether those admonitions were or were not withdrawn. I later explain why I have concluded that I should not have any regard to any element of that nature in the Defendants' written submissions.
The question of whether or not a financial gain could be attributed to either of the Defendants was addressed by Mr Young in an exchange with me during the course of his oral submissions. It is appropriate to reproduce the terms of the exchange in full (Transcript 26 June 2023, page 49, line 11 to page 50, line 27):
YOUNG: Your Honour has raised the question of the potential benefit which is perhaps derived from the letting of the subject dwelling being a different entity to the principal offender. In other words, X-Sealant is charged here as the principal offender. The benefit derived not to X-Sealant but to Portleigh and I think your Honour has made comment in relation to that. In my submission, Portleigh can't be treated as if it has committed the acts for financial gain, because it is simply an aider and abetter.
HIS HONOUR: Or a procurer.
YOUNG: Well my submission--
HIS HONOUR: Your submission is it's not an aider or abetter.
YOUNG: Well--
HIS HONOUR: Without withdrawing the plea of guilty.
YOUNG: No, we don't withdraw the plea of guilty but it is an aider and abetter in that in the matters that are pleaded against it being that it shares a common director, common company secretary, common registered office, that it is the owner of the land and that it's aware of the fact that the southern tower was approved as a six-tower building, but in my submission one can't get, for two reasons, that it is a procurer. One is that procurer isn't alleged against it. The second is that the evidence of Mr Georges is in my submission, not consistent with the notion that it did in fact procure X-Sealant. His evidence was that they act effectively as in conjunction and he was making decisions at the relevant time in relation to both, but in consultation with his father.
So a procurer means exactly what it says and that is one can't normally procure a person who is so closely related. Even the concept of aiding and abetting is somewhat of a stretch but the fact of somebody being the owner of the land and knowing the issues in relation to the consent and having that closeness in relation to the directorship and the familial relationships is just enough to found a conviction of aiding and abetting in my submission, but it is not enough in my submission, to find that Portleigh has committed acts for financial gain. So that any finding in relation to financial gain has to be in relation to the conduct of X-Sealant and the financial gain - it isn't required that financial gain as an aggravating factor be for oneself. You can do an act of financial gain for another person. In other words, a father could commit an act for the benefit of his son or daughter. That would still be an act committed for financial gain even though it wasn't for personal financial gain but the responsibility can't be sheet at home to the son isn't responsible for the fact, charged in relation to the fact that that is the conduct of the father.
In the same way here, in my submission, the aspect of even though it might seem slightly strange in that the benefit in terms of the rent accrues to Portleigh, in my submission it cannot be said that the conduct of Portleigh in aiding and abetting is done for financial gain.
HIS HONOUR: Portleigh executed the lease, didn't it?
YOUNG: Sorry?
HIS HONOUR: Portleigh executed the lease with Mr Blair, I think his name is.
YOUNG: Yes, but--
HIS HONOUR: That directly, the act of execution of the lease, provides the ongoing financial benefit of the rental to Portleigh, does it not? That's an act.
YOUNG: But that is not the relevant act, with respect your Honour. That may well be a question about whether financial gain is being derived in 2022 and 2023 from the act which was charged, but it cannot be the commission of the act for the purpose of financial gain which is what the relevant exacerbating factor has to be.
[22]
Consideration
I reject the proposition advanced by Mr Young that the only financial benefit capable of being established in the present circumstances is that which accrued to X-Sealant. I explain, below, why it is to be concluded, beyond reasonable doubt from the evidence of Mr Georges and the nature of the benefits derived by both Portleigh and X-Sealant that the offending conduct of each of the Defendants has been demonstrated to have been carried out for financial gain.
The combination of the evidence of Mr Georges reproduced above, when coupled with that from Mr Shneider, clearly demonstrates that Portleigh, in the commission of its offence of aiding, abetting, procuring or counselling X-Sealant to construct the penthouse, did so for the purposes of financial gain - gain evidenced not only by the rental income derived by Portleigh from the tenancy of the penthouse apartment from its subsequent letting but also by the unquantifiable but increased capital benefit that could flow from the value of that additional development potential being realised for the southern tower of the overall development.
With respect to X-Sealant, Mr Georges' admission (Transcript 26 June 2023, page 15, lines 23 to 47) that there would be cost savings for X-Sealant in the building process arising from having continuity of work on the site, rather than seeking to wait until approval for the penthouse had been obtained from the Prosecutor (if such approval was capable of achievement), demonstrates, also, that X-Sealant was motivated by financial gain.
In both of these instances, I am satisfied, to the criminal standard, that the Prosecutor has established that each Defendant's offending activity was carried out for the purposes of financial gain - this constituting an aggravating factor by virtue of s 22A(2)(o) of the Sentencing Procedure Act.
Whatever savings may have accrued to X-Sealant as a consequence of being able to continue its work schedule by the construction of the penthouse on the south tower without interruption, that the financial benefit (although a factor of aggravation for that company's conduct) is obviously of lesser dimension than a financial benefit to Portleigh not only because of the rental income but also the capital profit that could have accrued to that company had it got away with the unlawful activity which it had caused X-Sealant to undertake. As a consequence, although s 21A(2)(o) is engaged for each of these corporate entities, it weighs more heavily as a sentencing factor in my consideration of the appropriate starting sentence to be imposed on Portleigh.
[23]
Wilfulness of the offending conduct
It is to be observed that s 21A(1) of the Sentencing Procedure Act makes it clear that the range of potential aggravating factors (here relevant for the purpose of that which follows in this section of my judgement) is not a closed class of potential factors. It does so by providing that:
The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law.
For present purposes, it is necessary for me to consider whether or not the conduct of either or both of the Defendants was wilful - that is, whether the offending conduct was undertaken intentionally. If I am satisfied (beyond reasonable doubt) that this is the case, this will constitute a second factor of aggravation to be taken into account in sentencing whichever of the Defendants (or both of the Defendants) where this has been established.
At the conclusion of the Prosecutor's primary cross‑examination of Mr Georges, Mr Young sought leave, as a consequence of brief re-examination, to tender correspondence from solicitors (then) acting for X-Sealant in late 2021 to the General Manager of the Prosecutor (Transcript 26 June 2023, page 22, lines 23 to 29):
YOUNG: In the period of late 2020, 2021 did you have on behalf of X-Sealant solicitors acting for you? Shaun [Shaw] Reynolds?
WITNESS GEORGES: Shaun [Shaw] Reynolds, correct. Yes, we engaged them, yep.
YOUNG: Did you on behalf of X-Sealant instruct them to contact the Burwood City Council?
WITNESS GEORGES: Correct.
Mr Young then tendered the correspondence adverted to above, doing so without objection from the Prosecutor. This correspondence and its attachments became Exhibit 2.
The Prosecutor's written sentencing submissions said, at (29):
29. It is submitted that the assessment of the objective seriousness of the offending conduct is then increased when the Court takes into account the wilfulness of the conduct, over which the Defendants had full control, committed in knowing contravention of the conditions of extant development consent.
The Prosecutor asked Mr Georges about the Shaw Reynolds' letter. The exchange was in the following terms (Transcript 26 June 2023, page 24, lines 12 to 41):
PROSECUTOR: Sorry, thank you. Sean [Shaw] Reynolds Lawyers on behalf of X-Sealant to the general manager at Burwood Council and it's dated 27 January 2021. Do you see that?
WITNESS GEORGES: Yep.
PROSECUTOR: At paragraph five it says, "Our client understands that the work has been carried out in breach of the Environmental Planning and Assessment Act 1979," and then it says, "Now with the benefit of our advice, our client is aware of the seriousness of this matter and the potential consequences that may result from their actions." Do you see that?
WITNESS GEORGES: Yep.
…
PROSECUTOR: Mr Georges, you didn't need the advice of Shaun [Shaw] Reynolds to know that the actions in constructing the penthouse were illegal, did you?
WITNESS GEORGES: That's correct.
It is in this context that I now turn to consider how the fact that the role of Portleigh in the construction of the illegal additional habitable level on the south tower was the result of an agreement between the (then) directors of the Portleigh, Mr Georges and his father, Mr John Georges (Transcript 26 June 2023, page 13, lines 25 to 34):
YOUNG: What did your father know of the commencement of those works to the penthouse?
WITNESS GEORGES: In sorry, what regards?
YOUNG: Did he know that before 14 December 2020 works had commenced to construct and fitout the penthouse?
WITNESS GEORGES: He was aware of that.
YOUNG: Something you discussed with him in detail, was it?
WITNESS GEORGES: Correct, yep.
As a consequence, I am satisfied that, for each Defendant, that Defendant's conduct was wilful in that it had been carried out intentionally. This establishes, beyond reasonable doubt, a second factor of aggravation to be taken into account in my sentencing determination for each Defendant.
[24]
The De Simoni principle is not engaged
It is clear from the decision of the plurality in The Queen v De Simoni (1981) 147 CLR 383; [1981] HCA 31 (De Simoni) that what was there considered was, for the reasons explained by Gibbs CJ at 387, the fact that the then defendant had been charged with an offence pursuant to one section of the Western Australian Criminal Code (s 391 of that Code). He had been sentenced for an offence pursuant to that provision on the basis of the primary judge having regard to a factor of aggravation arising from the defendant having wounded the person from whom he had stolen money. However, the provision of the Code pursuant to which the charge had been laid did not incorporate such a factor of aggravation, but s 393 of the Code did so.
The effect of the decision of the plurality, now known as the De Simoni principle, is that a defendant cannot be punished for a separate offence of greater seriousness than that which has been charged against that defendant.
The potential for a breach of the De Simoni principle in these prosecutions arises from the terms of s 9.52(2)(a) and (b)(i) of the EPA Act in combination.
Had I concluded that the aggravating factor in s 21A(2)(g) of the Sentencing Procedure Act had been established beyond reasonable doubt (which I did not, for reasons earlier set out), the risk of punishment of either of the Defendants for an offence which would otherwise have been one attracting a Tier 1 penalty would have been engaged. However, that is not the position as both the elements of s 9.52(2) required to be engaged to crystallise such potentiality were not so engaged.
[25]
Introduction
The Sentencing Procedure Act sets out, in s 21A(3), a range of subjective factors potentially requiring consideration in order to provide the idiosyncratic subjective factors for each of the Defendants to be taken into account as part of my instinctive synthesis in determining the appropriate penalty to be imposed on each of the Defendants for its offending conduct. Only a limited number of those factors are potentially engaged in the present circumstances. Each of these is discussed in the following sections of this decision.
[26]
The harm caused by the offence ‑ s 21A(3)(a)
I have earlier addressed, in my consideration of whether or not the harm to the system of development and planning regulation established by the EPA Act amounted to a factor of aggravation (concluding that it had not).
However, for the reasons earlier explaining why it was not appropriate to conclude that the offending conduct of either Defendant was appropriate to be considered a factor of aggravation for the purposes of s 21A(2)(g) of the Sentencing Procedure Act, it is sufficient to note that, because any aggravating factor must be proved to the criminal standard, the failure to prove that the harm was substantial to that standard does not mean that it is still possible to conclude that, on the lesser standard of proof - on the balance of probabilities - such harm might be substantial. That conclusion of substantial harm (on the civil standard), I am satisfied, is appropriate to be drawn in these proceedings. The consequence of that is that, for the purposes of s 21A(3)(a), neither Defendant is entitled to have me conclude that the harm was not substantial.
[27]
The Defendants' records of previous convictions ‑ s 21A(3)(e)
Neither Defendant has any prior convictions and this is a factor to be weighed in favour of each of them.
[28]
Are the Defendants entities of good character? ‑ s 21A(3)(f)
I have earlier noted that Mr Young had tendered three character references (these becoming Exhibit 1) providing attestations in support of Mr Georges. During the course of the hearing, I made the following observation to Mr Young concerning these documents (Transcript 26 June 2023, page 41, lines 3 to 47):
YOUNG: Your Honour, in terms of the testimonial material which has been put before the court. In my submission, it is significant and I particularly wanted to refer your Honour to the second of the testimonials which is the testimonial of Mr Linoss who was employed at Burwood Council for a period of a bit over nine years, and responsible for the management of civil construction activities. Now, I mean I take the point that my learned friend has made about the distinction between corporate identities and individual identities, but the real world knows people individually rather than by the corporate names and the Messrs. Georges have been known to Mr Linoss for that period and he, in my submission, this is quite an unusual reference from a person who has worked for a period of almost a decade for the relevant council, and he refers to, "Mr Georges working successfully to meet the public domain outcomes of his development approvals, providing community related outcomes to a number of his development sites."
Further down that, "He arranged for the transportation of suitable excavated material from his development site for the park for use in the capping." He says that he's been asked to provide a character reference regarding the matter before the courts and the reference is sole in my opinion of both the Mr Georges' character during the time and he says that he is a genuine character and the other character references talk of the professionalism and good works of both of the Messrs. Georges and the two companies have been in existence for a quite considerable period of time and with no convictions.
HIS HONOUR: I understand that, but that's a separate head to good character.
YOUNG: I accept that, your Honour, but it's the absence of a negative, but this is positive material in relation to the work of Mr--
HIS HONOUR: I understand that, but I think in a decision I gave once called Budvalt which was not overturned on appeal, I made a distinction between references given for a corporate offender and references given, in that case, for an individual offender and that the individual offenders references can't be incorporated in support of the Company.
YOUNG: Well--
HIS HONOUR: I mean, it's not as if, as I think Mr English put, it's not as if the Company has donated large amounts of money to any of the causes that are discussed in the other two references from the Priesthood Maronite Body at its - I'm not expressing at this stage a concluded view, it is at worst that there is no evidence to establish that the Company is of good corporate character, but that's a matter I'll need to consider in light of the references and what you're saying to me.
There is no evidence of any charitable donations made by, or societally beneficial activities undertaken by, either Company. Whatever might be Mr Georges personal attributes, they are not to be regarded as those of either Defendant. As a consequence, it is not possible to conclude that either Defendant is an entity of good character. This factor is, therefore, neutral in my assessment of the relevant subjective factors requiring consideration.
[29]
Is either Defendant likely to reoffend? ‑ s 21A(3)(g)
With respect to whether or not either defendant was likely to reoffend - a matter giving rise to consideration (as later addressed) of the need for specific deterrence, the Prosecutor made no specific submission that there was any identified probability that either Defendant was likely to reoffend. For the Defendants, at (26)(b) of the written submissions on penalty on behalf of the Defendants, it was submitted that:
(b) the Defendants is [sic] unlikely to reoffend, and have excellent prospects of rehabilitation;
In his oral submissions, Mr Young said (Transcript 26 June 2023, page 44, lines 25 to 32):
YOUNG: [I]n relation to specific deterrence, I would in my submission, given the period of time that they have been operating and the fact that this is a first offence and they engage in very large, obviously in quite large scale developments such as the one which is involved here, that there is not a particular need for specific deterrence. I do accept the point in relation to general deterrence and that they are commercial developers but again, the issue about the otherwise good record of both of the defendants is a matter, in my submission, which has to be given some considerable weight.
The above submissions are also apt to be considered later when addressing the sentencing consideration of whether or not an element of specific deterrence needed to be factored in to the sentences for each Defendant.
Although, perhaps, not of significant weight in the circumstances discussed in the next factor concerning contrition and remorse, I am satisfied that it is necessary to be somewhat guarded as to the likelihood of whether or not either Defendant would reoffend. As a consequence, I am satisfied that this factor should be regarded as neutral for present sentencing purposes.
[30]
Introduction
In his affidavit, Mr Georges said the following (at paragraphs 25 and 27):
25. I regret that my actions have caused the Council costs and resources to be spent on this matter. I agree to pay the Council's legal costs.
26. …
27. …
28. I sincerely and honestly apologise for my behaviour. I appreciate that I allowed building constructions work to exceed the approved plans and I take full responsibility.
The Prosecutor questioned Mr Georges about his attitude to the offending conduct. This questioning goes to the extent to which he can be regarded (or not regarded) as expressing genuine contrition and remorse on behalf of the Defendants. It is appropriate to set out a lengthy extract from the transcript of Mr Georges' cross‑examination, as it is significantly relevant on this point. That passage is in the following terms (Transcript 26 June 2023, page 16, line 3 to page 17, line 5):
PROSECUTOR: Do you say your actions in respect of the penthouse amount to ethical and lawful behaviour?
WITNESS GEORGES: I take full responsibility for this, for this kind of behaviour. We have a good normal track record with councils, generally speaking, and we don't have any other records. I suppose this was just a, maybe a one off. We regret our actions, I suppose, and we don't know obviously we intend not to do this again. At the time it was you know.
PROSECUTOR: What do you regret about your actions in this regard?
WITNESS GEORGES: The mere fact that we're here. It's costed - it's costed us dearly, it's a waste of you know of resources and yeah, we look back and it's just it's a regret it's - and we apologise for this kind of action.
PROSECUTOR: So you're upset to be here, it's cost you dearly and it's a waste of resources. Is it fair to say that you're upset then or regretful that you got caught?
WITNESS GEORGES: Look it's - it's not about [getting] caught. We did the wrong, we did the wrong thing. We're putting our hands up for that and that's it.
PROSECUTOR: Do you have any sympathy towards the residents of the southern tower who have been denied the opportunity of using the open communal space that was approved above that tower?
WITNESS GEORGES: Well, the residents of the lower tower still have the option to use other communal spaces and never in the two years has anyone raised any questions about if there's any communal space on the top. So they have - they've had access. If they ever used it, they have access through a building manager to use other communal space.
PROSECUTOR: But that's because on your evidence, there never was any communal space on top of level six because it was a penthouse as soon as the construction was finished, correct?
WITNESS GEORGES: I suppose so.
PROSECUTOR: Do you have any sympathy for the residents who haven't had the ability to use that open space for their own quiet enjoyment?
WITNESS GEORGES: Of course we have sympathy.
PROSECUTOR: Did that sympathy not factor in your decision to go ahead and construct the penthouse when you did?
WITNESS GEORGES: On the - on the basis that we were thinking we'd get the approval at the time, yeah. We - it never crossed my mind.
PROSECUTOR: Why did you want to have a penthouse on top of level six of the southern tower, as opposed to the communal open space?
WITNESS GEORGES: Well again, with the guidance and the discussions with our consultants at the time we thought, well you've got communal space on the northern tower, communal space between the southern and the northern tower and we thought it might be a way where we can at least add more value to the whole development, cause there's no - there's no penthouse on the northern tower.
PROSECUTOR: Adding more value, that's in terms of an asset base?
WITNESS GEORGES: More so a look, an appearance and aesthetics. You can look at both anyway. You look at its value, anything I suppose.
The Prosecutor's oral submissions, concerning Mr Georges' evidence and the intention to use the approved communal space on Level 6 of the southern tower as a location for a penthouse, submitted that this was contrary to paragraph 27 of his affidavit where Mr Georges had said:
27. I am personally a person of good character and have never been in trouble with the law I have always tried to behave ethically and lawfully that make [sic] my regret for my actions in this case even more profound.
With respect to whether or not any expression of contrition or remorse made by Mr Georges was genuinely evidencing of that for the purposes of this element of s 22A(3), the Prosecutor submitted (Transcript 26 June 2023, page 27, lines 2 to 10):
PROSECUTOR: Then there was some questions about a statement of contrition and remorse. Mr Anthony Georges said he was regretful for the mere fact we're here, the costs involved in dealing with all this and it's been a waste of resources, and it was put to him that he was only remorseful because he got caught, and that's the submission that's made, your Honour. That the expressions of remorse are limited in that respect and it never crossed Mr Anthony Georges' mind as he agreed at the end that the residents of the southern tower might be disadvantaged by having the approved open communal space on level six taken away from them.
On the other hand, it is to be noted that Mr Young made a specific oral submission concerning contrition and remorse. He said (Transcript 26 June 2023, page 50, line 38 to page 51, line 2):
YOUNG: …. Your Honour will recall that the prosecution had submitted that the remorse of Mr Georges on behalf of the two defendants is only because he got caught. In my submission, that is not an appropriate submission bearing in mind that it's clear on the charges themselves that the basis of the knowledge that's put forward of the prosecutor, and this is for example at 2F in relation to Portleigh is the provision of the photographs of 15 January 2021 by the lawyers, it's actually the lawyers for X-Sealant but they've put in relation to the particulars of both. So that it is simply not a case where it can be seriously put where the remorse of the defendant is just that they got caught nor para 40 of the outline of submissions of the prosecutor that the defendants didn't self-report their offending, because in this case the prosecution actually rely on the disclosure by the defendants as being the relevant particulars of the matter coming to the attention of the council and the council have been involved in the process ever since that time and are aware of the renting of the premises and indeed the fact that the premises are rated.
[31]
Consideration
In Chief Executive, Office of Environment and Heritage v Ausgrid (2013) 199 LGERA 1; [2013] NSWLEC 51, at [80], Pepper J summarised the four types of action set out by Preston CJ in Environment Protection Authority v Waste Recycling and Processing Company (2006) 148 LGERA 299; [2006] NSWLEC 419 as ones which may demonstrate genuine contrition and remorse in satisfaction of these requirements [citations excluded]:
(a) first, the speed and efficiency of action rectifying the harm caused or likely to continue to be caused by the commission of the offence;
(b) second, the voluntary reporting of the commission of the offence and any consequential environmental harm to the authorities;
(c) third, taking action to address the cause of the offence; and
(d) fourth, the personal appearance of corporate executives in court to give personal evidence of the Defendant's regret and a plan of action to avoid repetition of the offence.
Although Mr Georges put, in his affidavit, the expressions of contrition and remorse in the extract quoted above, those sentiments are to be contrasted with his oral evidence also extracted above. I carefully observed Mr Georges' demeanour during the course of his oral evidence. That which is set out above from the transcript accurately reflects his position as the guiding mind of both the Defendants rather than the smooth expressions of regret set out in his affidavit.
I am satisfied that it is appropriate to conclude that the true position on behalf of the Defendants can be summarised as regret that they didn't get away with it, rather than any genuine contrition and remorse at having deliberately chosen to disregard the clearly understood obligations to obey the rules set for orderly land‑use planning.
Therefore, neither Defendant is entitled to any credit for contrition and remorse to offset the findings earlier set out that the actions of the Defendants were wilful and motivated by seeking financial gain from the unlawful construction of this additional penthouse dwelling.
[32]
The Defendants' guilty pleas - s 21A(3)(k)
The next relevant factor is s 21A(3)(k). This provision requires that I have regard to the fact that Portleigh and X-Sealant have each pleaded guilty to the charge for which it is now to be sentenced.
For reasons later separately explained, the utility of this plea (including its timing) is a matter requiring specific consideration of its benefit to the administration of the system of justice. The extent to which this factor acts in the Defendants favour is later addressed.
[33]
The Defendants' assistance to the Prosecutor - s 21A(3)(m)
Mr Young submitted that I should have regard to the fact that the defendants have cooperated with the Prosecutor by the preparation of, and agreement to, the earlier set out Statement of Agreed Facts. This agreement has, I am satisfied, saved the Prosecutor from being put to strict proof of all the elements of the Defendants' offending conduct. It is, to that extent, of assistance to the Prosecutor and is a factor to be taken into account in favour of each of the Defendants.
[34]
Introduction
It is customary, when sentencing for environmental offences, to describe where the relevant offending conduct might fall within a range which might be defined as running from minor offending conduct through to that which could be characterised as being toward the worst type of conduct (noting, however, that it is not appropriate to characterise conduct as being the worst case as it is always possible to hypothesise something that is even less acceptable (Veen v The Queen (No 2) 164 CLR 465; [1988] HCA 14 at [478]) - Veen v The Queen (No 2).
It is also to be noted that such a process of characterisation is not one of mathematical precision warranting identification on some statistical basis (such an approach was expressly disapproved by the Court of Criminal Appeal in Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683).
In this context, it is convenient to use general descriptors of how such offending conduct might be characterised; these being as within the lower, middle, or upper range of such conduct. Having reached the determination in that very broad fashion, it is then appropriate to describe, again in a general context, whereabouts within the relevant range the specific conduct falls.
[35]
The Prosecutor's submissions
After setting out at (23) to (31) of the Prosecutor's written submissions under the heading nature of the offence - paragraphs which do not need to be set out in full at this point - the Prosecutor proposed the following conclusion as to how I should regard the objective seriousness of the Defendants offending conduct - noting that this was a common submission advanced with respect to each of the Defendants:
32. When the factors at [23]-[31] above are considered by the Court, it is submitted that it is open to find that the offending conduct lies in the upper end of the middle range of objective seriousness.
The Prosecutor orally submitted that, because Mr Georges was a director of Portleigh and the sole director of X-Sealant at the time of the offending conduct, I should use the evidence which Mr Georges gave in cross‑examination as evidence of the state of mind of each of the Defendants and that, as a consequence, each of the Defendants was fully aware that their actions were illegal, but they proceeded regardless (Transcript 26 June 2023, page 27, lines 41 and 45):
PROSECUTOR: In my submission, given that Mr Anthony Georges is a director of both companies, your Honour can use the evidence he gave today to infer state of mind across both corporate defendants, and in my submission each of them, on the basis of his evidence, was fully aware that their actions were illegal but they proceeded regardless.
The Prosecutor submitted that the offending conduct of both Defendants was wilful and that this proposition had been supported by Mr Georges' oral evidence. In this context, the Prosecutor submitted that I should conclude that the offending conduct was objectively serious.
The Prosecutor maintained the submission earlier set out from the Prosecutor's written submissions that I should conclude that the offending conduct for each of the Defendants was to be regarded as being at the upper end of the middle range of objective seriousness.
[36]
Submissions for the Defendants
In paragraph 22 of the written submissions on behalf of the Defendants, the following was said as to how the offending conduct should be characterised:
22. Fifth, it is submitted in relation to X-Sealant that the range in which the offending conduct falls, is in the upper end of the lower range or at the highest, the lower end of the mid-range.
During the course of the hearing, I enquired of Mr Young (several times) as to whether there was anything in the written submissions which was now sought to be withdrawn. Nothing was sought to be withdrawn with respect to the characterisation of the offending conduct of X-Sealant.
During the course of the hearing, when Mr Young was addressing other sentencing outcomes which were advanced on behalf of the Defendants as being comparable for my sentencing purposes, I had the following exchange with Mr Young concerning the above quoted element of the written submissions addressing characterisation of the offending conduct (Transcript 26 June 2023, page 53, line 11 to page 54, line 25):
YOUNG: This is not a correction to a submission, with respect, but it is perhaps that there is a something which is incomplete in the submissions, which is paragraph 22 at page 49, because what we put to your Honour, and still do, is that the conduct of X-Sealant falls at the upper end of the lower range or at the highest the lower end of the mid-range. What is not stated in that is where the conduct of Portleigh falls.
HIS HONOUR: I understand that.
YOUNG: Your Honour will understand that my submission is that the conduct of Portleigh is considerably less.
…..
YOUNG: … I don't want to labour the point, but I think your Honour is aware that the submission is that the conduct of Portleigh is considerably less than in relation to X-Sealant and that the court needs to be alive to - because of the connection between the two companies, where there are effectively two arms of a family operation that there isn't in fact de facto double punishment which is imposed simply by the fact that they do have the two arms of what is really a single operation. One which is the development arm and one which is the construction arm. In my submission, there's only one conduct which is involved in this whole case and that there is some artificiality in the treating the two entities, one aiding and abetting the other, notwithstanding the fact that there is sufficient at law for the plea of guilty by Portleigh.
[37]
Consideration
Having regard to all relevant matters in the unusual circumstances of this offending conduct, I have concluded that the Defendants' offending conduct should be considered as being at the lower end of the mid-range of the offending conduct. I am unable to accept the proposition that there should be some significant differences drawn between Portleigh and X-Sealant as to the degree of culpability. First, the driver of the commission of the offending conduct for each corporate entity was Mr Georges. Second, with respect to Portleigh's offending, Mr Georges' father was also a director of that corporate entity at the time the offending conduct was planned and, as admitted by Mr Georges, his father was completely involved in, and supportive of, the decision to go ahead and build the additional unapproved structure.
As a consequence, I am satisfied I should conclude that the two corporate entities have equal degrees of responsibility for the purposes of assessing where, in the range of offending conduct, the conduct of each corporate entity should be identified. The correct conclusion being, I consider that the conduct of both entities is at the lower end of the mid-range of the offending conduct.
[38]
Duality of punishment
Mr Young submitted, on behalf of the Defendants, that, because Mr Georges was the common guiding mind of each of them, this should be taken into account and that the overall punishment to be imposed should be, in some way, moderated as a consequence. Conventionally, totality and accumulation factors are taken into account in the sentencing of an individual or entity when multiple offences are charged arising out of the same event. That is not the circumstance here arising.
As Mr Georges explained in his oral evidence, there has been a conscious decision made, as part of his and his father's business activities, to separate the construction activities into X-Sealant and to keep the property ownership aspect of the business activities in Portleigh.
Doing so has meant that the nature of the offending conduct has been distinctly different and, as Mr Georges attested in his oral evidence, discussion of construction of the unlawful penthouse had taken place between him and his father over a period of time prior to, and as part of the planning for, undertaking that construction.
At the time that this occurred, Mr Georges' father, John Georges, was a director of Portleigh but was not a director of X-Sealant. This fact, and the joint planning of the unlawful activity, means, I am satisfied, that there is a distinct and separate liability of each of the Defendants - liabilities for the relevant criminal conduct to which each of the Defendants has pleaded guilty being conduct which warrants separate punishment. As a consequence, I therefore reject the proposition that there should be some moderation of the penalty to be imposed on Portleigh as a consequence of it being an allegedly more passive participant in the criminal activity to which each Defendant has, relevant to its roles, pleaded guilty.
[39]
Introduction
I am required to take into account the question of both specific and general deterrence. As the High Court put it, in Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 (Walden v Hensler), "the chief purpose of the criminal law is to deter those who are tempted to breach its provisions" (at 569 per Brennan J).
The penalty must involve an element for both general and specific deterrence: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357.
[40]
Specific deterrence
The Prosecutor said (written submissions at (36) - citations omitted):
36. In relation to specific deterrence, it is submitted that such is necessary by reason of the fact that X-Sealant continues to operate in the construction industry, and because Portleigh has been collecting rent in respect of an illegal dwelling, the safety and appropriateness of which for a residential use has not been assessed.
Given the matters that I have earlier set out in my consideration of whether or not there was any genuine contrition and remorse to be discerned for either Defendant (concluding that there was not), I am satisfied that a degree of specific deterrence (albeit not to a significant extent) should be incorporated in the penalties to be imposed on each of the Defendants. This is to act as a reminder to them of the unacceptability of their offending conduct.
[41]
General deterrence
It is also necessary to consider the extent to which sentencing the Defendants for their offending conduct conveys a measure of general deterrence.
As Brennan J also said in Walden v Hensler, at 570:
But when a law proscribes conduct which an ordinary person without special knowledge of the law might engage in in the honest belief that he is lawfully entitled to do so, the secondary deterrent purpose ‑ that is, the purpose of educating both the offender and the community in the law's proscriptions so that the law will come to be known and obeyed ‑ must be invoked to justify the imposition of a penalty for breach. In such a case, care must be taken in imposing a penalty lest the offender be made to shoulder an unfair burden of community education.
In Chief Executive, Office of Environment and Heritage v Clarence Valley Council [2018] NSWLEC 205, Preston CJ said, at [91] and [92]:
91. There is also a need for general deterrence. The sentence of the Court needs to operate as a powerful factor in preventing the commission of similar offences by other persons who might be tempted to do so by the prospect that, if they are caught, only light punishment will be imposed: R v Rushby [1977] 1 NSWLR 594 at 597-598. Courts have repeatedly stated, when sentencing for environmental offences, that the sentence of the Court needs to be of such magnitude as to change the economic calculus of persons in determining whether to comply with or to contravene environmental laws. It should not be cheaper to offend than to prevent the commission of the offence. Environmental crime will remain profitable until the financial cost to offenders outweighs the likely gains by offending.
92. Where a fine or other monetary penalty is determined to be appropriate, the amount needs to be such as will make it worthwhile to incur the cost of complying with the law and undertaking the necessary precautions. The amount of the monetary penalty must be substantial enough so as not to appear as a mere licence fee for illegal activity: Axer Pty Ltd v The Environment Protection Authority (1993) 113 LGERA 357 at 359-360. The sentence of the Court changes the economic calculus of persons who might be tempted not to comply with environmental laws or not to undertake the necessary precautions. Compliance with the law becomes cheaper than offending. Environmental crimes become economically irrational.
The matters outline above in the extract from the Chief Judge's decision are equally applicable in the proceedings against both of the Defendants.
In this context, it is to be observed that matters of general deterrence are ones, in circumstances such as these, not directed solely at an amorphous and unconfined, wide public audience. The element of general deterrence provides a message to other developers and their associated entities. In addition, it is also to be noted that a broader community educative function about the necessity to obey planning laws is also served by an element of general deterrence in sentencing.
Whilst it is, clearly, not appropriate to impose a disproportionate penalty on either Defendant for its offending conduct, I am satisfied that it is appropriate to have regard to the need for general deterrence in the penalties which I am to impose.
[42]
Introduction
Whilst my sentencing process must be undertaken in light of the specific facts and circumstances of the offending conduct of each of the Defendants, nonetheless, regard must be had to such guidance as may be obtained from such other cases as might have some degree of comparability with the offending conduct to be assessed (Chief Executive of the Office of Environment and Heritage v Bombala Investments Pty Ltd (2013) 199 LGERA 236; [2013] NSWLEC 185). This is to ensure any sentence imposed is not inconsistent with the general pattern of sentencing for offences of the kind here being considered where such comparable sentencing information is available.
[43]
The Prosecutor's submissions
The Prosecutor included in its written submissions a list setting out five sentencing instances where, it was submitted, these potentially provided examples of sentencing outcomes for prosecutions for offending conduct of the nature here charged. The list advanced by the Prosecutor incorporated, for each of the instances cited, a short summary of the circumstances involved, together with the sentencing outcome for the events giving rise to the prosecution. It is appropriate to set out the entirety of this element of the Prosecutor's written submissions. They were:
41. The following cases may be viewed as potentially comparable in certain respects with the instant case:
(a) In Snowy Monaro Regional Council v Tropic Asphalts Pty Ltd (No 4) [2022] NSWLEC 32, the offender was sentenced for two offences of carrying out development otherwise in accordance with the terms of development consent relating to production volume and truck movements in connection with the operation of an asphalt production plant. Pleas of guilty were entered late and Moore J found that significant financial and delay avoidance benefits accrued to the offender because of its operating in breach of the conditions of the consent. Moore J also found that the offender's conduct in deliberately flouting two conditions of its consent was not merely substantial, but significantly so. The Defendant was ordered to pay $600,000 by way of fine (the maximum penalty for each offence was $1.1 mil).
(b) In Secretary, Department of Planning and Environment v Leda Manorstead Pty Ltd (No 7) [2021] NSWLEC 26, the offender was sentenced for four offences relating to the development of a major residential development located in the Tweed Shire NSW. Three of these offences involved carrying out development, namely bulk earth works, contrary to a project approval, while the fourth offence concerned the commencement of subdivision work in the absence of a construction certificate. After applying a discount for an early plea of guilty in respect of one charge, and the application of the totality principle, the offender was fined a total amount of $170,000 (due to the timing of commission of the offences, the applicable maximum penalties were $1.1 mil and $2 mil).
(c) In Minister for Planning v Coalpac Pty Ltd [2008] NSWLEC 271, the offender operated a coal mine. It breached a condition of a project approval that obliged it to produce not more than 350,000 tonnes of saleable coal in a year. The defendant, in fact, produced over 635,277 tonnes of coal. The Court found that the offence was committed intentionally for financial gain. After the application of a discount for an early guilty plea, a fine of $200,000 was ordered (the maximum penalty for the offence was $1.1 mil).
(d) In Burwood Council v Doueihi [2013] NSWLEC 196; (2013) 200 LGERA 152, the individual offender constructed additional rooms contrary to development consent. The offender was an elected Councillor with good knowledge of development controls, which exacerbated the undermining of the integrity of the planning system. Pain J found that the offence caused environmental harm to the amenity of neighbours by creating greater demand for car spaces. The offender was fined $43,000 after a discount was applied for the defendant's guilty plea and the fact that he was of good character (the maximum penalty for the offence was $1.1 mil).
(e) In Cumberland Council v Habib [2017] NSWLEC 18, the individual offender was charged with two counts of unauthorised building works in relation to the construction of a dwelling and granny flat on two lots. The offences were found to be of moderate objective seriousness. Robson J held that the offences were committed intentionally. There was no environmental harm caused by the commission of the offence. The offender was fined $105,000 for both offences after a 25% discount was applied in respect of his guilty pleas (the maximum penalty for each offence was $500,000).
42. The inclusion of the above information is not intended to suggest that an appropriate range is discernible from any of these sentencing matters dealt with by the LEC: Barbaro v the Queen; Zirilli v The Queen (2014) 253 CLR 58 at [39].
[44]
The submissions for the Defendants
The written sentencing submissions for the Defendants responded, briefly, to the matters advanced by the Prosecutor on comparability of sentencing. In addition, short submissions were made concerning three other cases where, it was submitted for the Defendants, I would be provided better guidance for comparability purposes in deriving my sentences in these proceedings. It is appropriate to set out those submissions in full:
48 In relation to the cases at [41] PWS:
(a) Snowy Monaro, concerned the operation of a temporary mobile concrete batching plant, with movement of some 150 tonne of asphalt on a daily basis.;
(b) Leda Manorstead is not akin to the offending conduct here.;
(c) Coalpac Pty Limited is of no assistance. It was a case concerning an open cut mine that breached its mining capacity under an approval.
(d) Doueihi, is comparable although it is distinguishable on the basis that in that case environmental harm was caused by the offending conduct.
(e) Habib, is comparable, although that case involved the construction of two completed two story residential dwellings on separate lots and two granny flats, fully completed. In comparison, the penthouse here was two extra rooms, which was significantly less than the development involved in Habib.
49 The case of Burwood Council v Abdul Rahman [2021] NSWLEC 46, is comparable. The defendant was charged with three separate offences, that had removed seven trees, carried out demolition and constructed a dwelling house and swimming pool without development consent. A total fine of $40,000 was imposed in relation to three offences.
50 In Chahoud v Penrith City Council [2020] NSWLEC 167, the defendant was charged with an offence that involved the unauthorised construction of a shed. A fine of $51,000 was imposed.
51 It is submitted that the case in Port Macquarie-Hastings Council v Waite (No 2) [2020] NSWLEC 60 assists. In that case a temporary caravan park was carried out without development consent. The defendant was fined a total of $7,500 for three offences.
[45]
Consideration
I accept the proposition advanced by the Prosecutor as set out in (42) above that there is not a sufficiently consistent pattern in the sentencing instances to which the Prosecutor has referred me to draw any conclusion as to what might be a range of penalties within which the Defendants could be sentenced. This position is rendered more fluid by the fact that, in many of the instances cited, the maximum penalty was less than that which is the current maximum penalty for the offences to which the Defendants have here pleaded guilty.
However, it is to be observed from the cases to which the Prosecutor has drawn attention, that where conduct is found to be attended by one or more egregious elements, significant sentences are appropriate to be considered.
With respect to the submissions advanced on behalf of the Defendants at (48) reproduced above in the context of the cases cited by the Prosecutor, I am unable to accept the brief dismissive comments advanced concerning those cases.
With respect to the three cases cited on behalf of the Defendants at (49) to (51), it is to be observed that, in each of those instances, that defendant was an individual - unlike the circumstances here involved where Portleigh is a professional development company and X-Sealant is a professional construction enterprise.
Because the offenders here are corporate entities, the scale of penalties set by the Parliament are increased - reflecting the position recognised by the Parliament that this creates circumstances where differential and higher penalties are appropriate. As a consequence, these cases cited for the Defendants provide little assistance in my determining, using the necessary instinctive synthesis process having regard to the objective circumstances of the offending conduct and the specific characteristics of each of the Defendants, the appropriate starting sentence for each of them.
[46]
The appropriate starting penalties
In determining the appropriate starting penalties for each Defendant, I must undertake the mandated process of instinctive synthesis (Markarian v R (2005) 229 CLR 357; [2005] HCA 25), having regard to all the objective factors of the offending conduct (as earlier discussed) and the subjective factors peculiar to each Defendant that temper what might otherwise be the penalty to be imposed.
The sentence to be imposed must reflect all the relevant objective circumstances of the offence and subjective circumstances of the Defendant (Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7 and Veen v The Queen (No 2)). The sentence is not to exceed what is "justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances" (Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 at 354, citing Veen v The Queen (No 2)).
Having regard to my conclusion that the Defendants' offending conduct should be characterised as being toward, but not at, the lower end of the middle range of such potential offending conduct, it is next appropriate to determine what is to be the appropriate penalty.
[47]
The sentence submissions for the Defendants
There are two quite separate elements to the matters requiring to be considered in setting out matters arising for consideration in determining what should be the appropriate starting sentence for each of the Defendants. Some of the matters advanced in the written sentencing submissions for the Defendants, are ones which are advanced on behalf of the Defendants collectively. Whilst some of them, as can be seen from the terms of the extract from those written submissions are ones which only apply to the nominated Defendant in that instance. It is, therefore, appropriate to set out (although somewhat lengthy) (18) to (32) of the written sentencing submissions. These paragraphs are in the following terms:
SUBMISSIONS ON PENALTY
Principles to be applied
18. First, the building works the subject of the charge, are globally put. It is submitted that the Court would accept that the gist of the offending conduct lies in the actual building works, done without development consent.
19. Second, the Prosecutor does not elect between S4.2 (a) or 4.2(b) of the EPA Act. On the evidence, falls more closely to S4.2(1)(b) of the EPA Act. Further, the period of the offending conduct on the basis of the ASOF is not between "6 August 2018 and 15 January 2021", as is charged. In any event (a) the Prosecutor does not seek a daily penalty, and (b) the defendants have pleaded guilty to the offence.
20. Third, the prosecutor concedes that the offence was not committed intentionally and makes no submissions on the state of mind of the defendant. This is a proper concession made and relied upon for the purposes of these submissions.
21. Fourth, a submission about the nature of the offending harm follows below at [33] below.
22. Fifth, it is submitted in relation to X-Sealant that the range in which the offending conduct falls, is in the upper end of the lower range or at the highest, the lower end of the mid range.
23. Sixth, the Court would ensure against double punishment.
24. Seventh, it is accepted that both specific and general deterrence may be taken into account: Weribone v R [2018] NSWCCA 172 at [15]; s 3A(b) of the Sentencing Act. However the Court will be alive to the relationship between the defendants in this case.
25. Eight, submissions [49-52] follow below on even-handedness.
26. Ninth, it is submitted that the following mitigating factors ought to be taken into account:
a. There was no actual or environmental harm;
b. the defendants are unlikely to re-offend, and have excellent prospects of rehabilitation;
c. Discount for early guilty plea;
d. No prior record of convictions;
e. Co-operation with the Prosecutor in the preparation of ASOF: Hawkesbury City Council v Saed [2022] NSWLEC 34 at [78].
27. Tenth, the Defendant's demonstration of remorse and contrition and its good character beyond the factors in nine above.
28. Eleventh, in respect to the submission made at [37] of PWS in respect of aggravating factors against Portleigh, it is accepted that the offence can be categorized as being committed for financial gain (21A(2)(o) of the CSP Act), although on a very limited basis.
29. Twelve, there is no dispute as to legal costs or the submissions of the prosecutor at PWS [29], [30].
30. Thirteenth, the defendant agrees to a form of order under s 9.56 of the EPA Act, to demolish the works, but such order is stayed pending final resolution of the current class 1 proceedings before the Court (PWS at [50]), and an order to cease occupation within 60 days.
31. Fourteenth:
f. at [27] of PWS it is suggested that the absence of a construction certificate for the unlawful works, "further aggravate the degree to which the defendants impugned conduct offends against the statutory scheme". A lawful and valid construction certificate could never be obtained for unlawful works, so it, respectfully, adds nothing 'further' and never could. Further, these are matters which are consequential on the offence itself. They are not aggravating factors.
g. at [26] of PWS, it appears to be suggested that Portleigh constructed building works, however it is common ground that it did not do so.
h. at [27] of PWS it is put that there was fire safety and structural integrity non-compliance as well as Code infringements. There is no evidence of any of these.
i. at [28] of PWS it is put that the offence circumvented the role of Council in exercising its statutory functions under Division 4.3 (of Part 4). This is simply the nature of the offence itself.
j. The submission at [29] of PWS are inconsistent with the proper concession at [3] of PWS.
k. The submission at [30] of PWS is without foundation.
32. The Defendants accept that harm was reasonably foreseeable. However, so far as harm caused it is only in the avoidance of the statutory scheme and the planning system: Pittwater Council v Scahill (2009) 165 LGERA 289; [2009] NSWLEC 12 at [46]; and Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242 at [104]- [105]). There is no evidence that the penthouse could not be approved only that it was not. Indeed, it still may be regularised. The plain fact is that there was no harm or environmental harm.
In addition to setting out the above list, I have considered (and discussed as appropriate) all of the above matters.
During the course of the hearing, I had an exchange with Mr Young concerning how I should regard (22) and how I should take account of (28). In particular, I had a lengthy exchange (Transcript 26 June 2023, page 51, line 14 to page 54 line 25) with Mr Young concerning what was or was not to be drawn from my reading of various elements of the written sentencing submissions advanced on behalf of the Defendants concerning the extent to which those submissions offered any concession concerning whether or not either Defendant was to be regarded as having committed the offence with which it was charged for the purposes of financial gain.
I have concluded that, given the reasons I have earlier explained that I should conclude that the offences were, on the evidence, committed for financial gain (an aggravating factor pursuant to s 21A(2)(o) of the Sentencing Procedure Act), I have proceeded on the basis that no concession of any nature has been made on behalf of either of the Defendants in the written submissions that the offending conduct was carried out for financial gain. Concessions were unnecessary, given the evidence earlier discussed and the conclusion to be drawn from it, as to the existence of financial gain for each of the Defendants.
[48]
Consideration
For the purposes of determining what should be the appropriate starting sentences for each of the defendants, in my instinctive synthesis (as required by Markarian), I have had regard to the objective factors of each of the Defendants' offending conduct (including giving differential weight to the financial gain factor of aggravation engaged for each of them) and to the positive subjective factors common to the Defendants. I note that, in this synthesis, there is also a degree of differentiation to be made between the conduct of Portleigh in the harm caused by the offending conduct in that its actions were occasioned by agreement between its two directors (Mr Georges and his father) rather than simply being a unilateral frolic of Mr Georges alone.
Undertaking the mandated process of instinctive synthesis, having regard to the objective facts of each Defendant's offending conduct and the earlier identified subjective factors particular to each Defendant, I have concluded that the appropriate starting financial penalty to be imposed on Portleigh should be $120,000 and that to be imposed on X-Sealant should be $80,000.
[49]
The Defendants' guilty pleas
The maximum discount on the otherwise applicable starting penalty to be afforded to a defendant who has pleaded guilty is 25% (R v Thomson; R v Houlton). The full measure of this conventionally maximum discount is only afforded to those defendants who enter a guilty plea at the earliest opportunity.
In these proceedings, there is no contest between the parties as to what discount each of the Defendants should be entitled because the guilty pleas were entered at the earliest opportunity. The appropriate financial penalties therefore each require adjustment by the full 25%.
This means that, after applying these 25% discounts, the appropriate penalties to be imposed are, in total, $90,000 for Portleigh and $60,000 for X-Sealant. Given that $15,000 as discussed below is to be diverted from each of these sums by way of requiring payments to support the Women's and Girls' Emergency Centre, the fines to be ordered to be paid will be $75,000 (Portleigh) and $45,000 (X-Sealant). The basis for ordering the $15,000 payments and the method for effecting the transmission of that money to the Women's and Girls' Emergency Centre are discussed in the next portion of this judgement.
[50]
An additional order pursuant to s 250(1)(e) of the POEO Act
In light of the combined operation of s 9.56(2A) of the EPA Act, the definition of environment in that Act, and cl 295 of the EPA Regulation (all earlier set out), I raised with the legal representatives of the parties the question of whether, on an appropriate and expansive interpretation of the definition of environment applicable in these circumstances, I could consider exercising the discretion afforded by s 250(1)(e) of the POEO Act in combination with those earlier nominated provisions to order diversion of part of the penalty which would otherwise be appropriate to be imposed on each of the Defendants to an environmentally responsible social housing outcome - given that the offending conduct of both X-Sealant and Portleigh arose out of the construction of an unlawful additional apartment in what was, overall, a significantly sized housing development.
My first exchange with the legal representatives of the parties on this point was in the following terms (Transcript 26 July 2023, page 5, lines 3 to 48):
HIS HONOUR: Now there is one thing that I wish to observe before I invite you to get into matters of substance. Mr Young, it's addressed as much to Mr English as it is to you and perhaps more so. The importation, Mr English, of part 8.3 of the Protection of the Environment Operations Act to operate in the Environmental Planning and Assessment Act 1979 imports all of the provisions in that part. That includes the importation of s 250, the power to make additional orders. That power permits me to make an order pursuant to s 250 subs (1) sub subsection (e) to divert an amount of a penalty for the purposes that set out in that provision. Assuming, and I'm sure Mr Young will explain this to his clients if he needs to or to the Georges if he needs to. Usually my habit to give examples that are so clearly absurd that nobody will think I am being serious about it, that if both companies were each fined, let me say $40 million, that being well outside anything I could conceivably contemplate, I would have the power under s 251E to order that portion of that money be diverted for some purpose of an environmental nature.
I am satisfied that at least potentially that permits such diversion for anthropogenic environmental outcomes. So I will need you to address, at some stage in your closing submissions I think, giving you enough notice to contemplate it, what might conceivably fall within the scope of such an order and whether or not the prosecutor says, "I should make such an order for some portion of whatever penalty might be imposed on either or both of the companies." Do you follow me?
PROSECUTOR: Yes, your Honour, and for everyone's benefit, and your Honour might be well across this and I'm certainly not intending to address your Honour on the submissions at the moment. I just note, Reg or clause 295 of the EPA Reg refers to your Honour's s 250 subs (1) subs (E).
HIS HONOUR: Yes.
PROSECUTOR: And it says, "The reference and the POEO Act sec 251E to the Environmental Trust established under the Environmental Trust Act is to be disregarded."
HIS HONOUR: Yes, I understand that, but the remainder of the provision, that is the words "or a specified organisation," et cetera continue to apply and the question of what in an anthropocentric sense might be derived from that or a specialised project for the restoration or enhancement of the environment or for general environmental purposes as to what in an anthropocentric sense general environmental purposes might contemplate. For example, homelessness it strikes me, is in that context. Addressing homelessness is a potential environmental purpose. Now I'm giving you notice of that now. Neither you or Mr Young, as you would both understand, should take my observation in this regard as being any sort of concluded observation, merely a request that that matter be addressed.
Later, during the Prosecutor's submissions, the Prosecutor returned to the issue of my potential use of s 250(1)(e) of the POEO Act to make diversionary orders. The exchange was in the following terms (Transcript 26 July 2023, page 36, line 17 to page 37, line 26):
PROSECUTOR: … your Honour, in relation to the s 250 subs 1 subs E point, general environmental purposes.
HIS HONOUR: Yes.
PROSECUTOR: I just note the Local Government Act s 694.
HIS HONOUR: Yes.
PROSECUTOR: Which provides, "Any penalty, fine or forfeiture imposed under any Act or imposed for a contempt"--
HIS HONOUR: I've read it.
PROSECUTOR: It suggests that the money should be paid to the council and to be allocated by the council to the council's consolidated fund.
HIS HONOUR: I understand that, but if I make another order under the relevant provision of s 250 it converts something from being a fine to being an otherwise ordered payment. So if you assume for present purposes, to give another absurd example, that I order a fine of $4. Sorry if I consider that the total monetary penalty should be $4, and I order $1 of that be diverted pursuant to 250, then your client gets $3 under the Local Government Act.
PROSECUTOR: Can I tell your Honour then there's some examples of some works that are going on at the council. Would it assist if I told your Honour about those?
HIS HONOUR: Well you can, but that's not what I asked you about specifically. I asked you about anthropocentric.
PROSECUTOR: Your Honour did. In the absence of evidence it's difficult, in my respectful submission, to give your Honour an answer about an anthropocentric cause that might be suitable.
HIS HONOUR: Well assume for example, and I have no idea what the answer of this is, but it seems to me it's something that I could make an inquiry about without compromising my judicial independence, but assume there's a community housing association that operates within the Burwood Local Government Area. Then it would be open to me, if my proposition concerning anthropocentric allocation of monies is correct, then I'm not doing anything other than asking you to address it at the present time. Then it would seem to me that would be serving the people of the local government area in an environmentally friendly fashion and I might be minded, might be minded to order some portion of a penalty to be diverted for that cause, given that the applicant's conduct has increased housing of a type that would not be regarded as in any possibility, as affordable or social.
PROSECUTOR: Can I take an instruction on that, your Honour?
HIS HONOUR: Yes. Of course you can.
PROSECUTOR: Your Honour, there might have to be some more instructions taken on that point over the luncheon adjournment. Would your Honour permit me to finish my address and then, I know it's a little unorthodox, but come back at a later time and--
HIS HONOUR: Well if Mr Young has no objection.
YOUNG: I don't object at all. No, your Honour.
At the commencement of Mr Young's submissions on behalf of the Defendants, he addressed the matters concerning potential diversion pursuant to s 250(1)(e) of the POEO Act of portion of such penalties as might be imposed on the Defendants. He said (Transcript 26 July 2023, page 38, lines 28 to 39):
YOUNG: …. Your Honour, perhaps before I forget I should deal with the firstly the s 250 subs 1E point.
HIS HONOUR: Yes.
YOUNG: Your Honour, we don't seek to be heard on that. It's a matter for the court.
HIS HONOUR: Yes.
YOUNG: If it is the view of the court that that part or all of the fine should be diverted in that way, we have no objection to that course.
I was subsequently provided with information by the Prosecutor as to an organisation which the Prosecutor considered would be a worthy recipient of any funds which I might consider it was appropriate to be the subject of any diversion of portion of the otherwise monetary penalties necessary to reflect the objective circumstances of the each of the Defendants' offending conduct and after considering the relevant subjective circumstances of each of these Defendants. The Prosecutor said (Transcript 26 July 2023, page 54, lines 31 to 42):
PROSECUTOR: Your Honour, just in relation to those two remaining points. First being the s 250 subs 1 subs e and potential anthropocentric causes.
HIS HONOUR: Yes.
PROSECUTOR: I'm instructed from the general manager of Burwood Council that there is a centre called the Women's and Girls Emergency Centre which is WAGEC that provides specialist homelessness service for women's and families escaping domestic violence. Your Honour, it's not advertised for safety reasons. There's a phone number I've been given. Rather than put it on the record might I just hand that up and give it to your Honour's associate at some stage.
The Prosecutor subsequently sent an email to my then Associate on the same day as the hearing, the relevant portion of which was in the following terms:
The details of the anthropocentric cause also discussed are below:
Women and Girls Emergency Centre (WAGEC)
Specialist homelessness service for women and families escaping domestic violence.
The Women's and Girls' Emergency Centre (WAGEC) is a grassroots organisation that supports women and families in crisis. Every night, they support 200 women and children impacted by homelessness, domestic violence and systemic disadvantage. They do this by providing material aid, case management, biopsychosocial support, accommodation, and crisis responses.
The address of the Women's and Girls' Emergency Centre has not been revealed to me as it would be inappropriate to make it publicly available in open court given the genuine and legitimate fear that revealing the address of an organisation which provides shelter to women and girls who have been the subject of domestic or other abuse may potentially make that address available to abusers - with the risk of completely inappropriate and unacceptable antisocial behaviours resulting.
As a consequence, I enquired of the Prosecutor whether, if I was to make diversionary orders, the transfer of any funds encompassed by such orders could be effected by requiring the payment of any amount to the Prosecutor for the Prosecutor to effect on-payment to the Women's and Girls' Emergency Centre.
On 8 August 2023, the Prosecutor's solicitor advised me that the Prosecutor was amenable to giving effect to such an arrangement if I concluded that such a diversionary payment process was to be ordered.
I have considered all of this and concluded, in the particular context where neither the Prosecutor or the Defendants raised any concern about (let alone objection to) my adopting an expansive and anthropocentric interpretation of what might constitute the "environment" for the purpose of diversion of portion of the overall monetary penalty which was otherwise appropriate to be imposed on each of the Defendants, I am satisfied that it is appropriate to order that this occur - effecting the delivery of the amounts to be nominated in my orders using the mechanism which the Prosecutor has indicated was acceptable to it.
Given that there was no opposition expressed by the Prosecutor or for the Defendants to me contemplating whether there was a proper basis upon which I could make an order pursuant to s 250(1)(e) of the POEO Act to effect some diversion of a modest portion of the overall financial impost proposed to be set for each Defendant, I now turn to explain the reasoning process which leads me to conclude that it would be appropriate to do so.
In this context, it is first appropriate to set out how, in present contextual circumstances, s 250(1)(e) of the POEO Act is to be read in its form as modified by cl 295 of the EPA Regulation and removal of the reference to the potential for nominating an identified and specific environmental project. In this form, the provision is in the following terms:
e) order the offender to pay a specified amount to ……. a specified organisation ……. for general environmental purposes,
When the scope of the discretion thus revealed is considered for potential application, it is then necessary to turn to the scope of the definition of "environment" set out in s 4(1) of the EPA Act. Although earlier set out, it is appropriate here to repeat its terms:
environment includes all aspects of the surroundings of humans, whether affecting any human as an individual or in his or her social groupings.
in this context, it is to be noted that one of the major roles of both the planning and development assessment processes embodied in the terms of, and given effect within the framework established by, the EPA Act is the provision of human habitation in the multiplicity of potential forms capable of being designed and constructed to fit the societal context within which they are to be located. The framework for achieving this encompasses not only the detailed and fine-grained planning considerations set in local environmental plans and development control plans, but also the broader public interest context mandated by s 4.15(1)(e) of the EPA Act.
It is also to be noted that in the general requirements in s 4.15(1) of the EPA Act, one of the aspects required to be considered is:
(b) the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality.
In this context, the diversionary orders are responsive to the social and economic impacts in the locality of providing a further element of housing in a fashion which does not reflect social needs but permits me to make orders addressing the socio-environmental needs of the local community.
Here, the Defendants are prosecuted for constructing an unapproved and valuable additional unit of housing - one which will provide not only economic benefit to Portleigh (even if only in the modified form now regularised by the decision of Horton C) but also an apartment clearly not to be available for addressing socio-environmental consequences of the deprivation of shelter for women and girls requiring emergency residential protection as a result, primarily, of domestic violence.
Understood in that fashion, a modest offset for the financial benefits accruing to each of the Defendants (as earlier discussed in my addressing of s 21A(2)(o) of the Sentencing Procedure Act explaining why, for each defendant, financial benefit was an aggravating factor in their offending conduct) should lead to some limited support being applied to an appropriate socio-environmental benefit addressing that aspect of environmental damage to society.
I am therefore satisfied that it is appropriate to order each of the Defendants to pay to the Prosecutor an amount for this purpose, with those amounts being the same for each Defendant with the balance of the appropriate financial penalty on that Defendant to be by way of the imposition of a fine to be paid to the Prosecutor.
Given the overall penalties appropriate for punishing each Defendant's offending conduct (after striking the starting penalties in a fashion earlier discussed and allowing the necessary reduction of 25% for each Defendant's penalty to reflect the utility to the administration of justice of the early guilty plea from each Defendant), I am satisfied that $15,000 of each Defendant's otherwise total monetary penalty should be diverted through the making of an order in each matter pursuant to s 250(1)(e) of the POEO Act.
In each instance, the orders will also provide that the mechanism to be used to effect these transfers to the Women's and Girls' Emergency Centre will be that earlier described using the Prosecutor as the conduit for this purpose.
This outcome is rendered particularly apposite in light of the fact that, as a consequence of the giving effect to the s 34 agreement earlier noted, the retention of a two-bedroom apartment in lieu of the communal open space which had otherwise been required to be provided, and which has now been abandoned, potentially provides a significant capital benefit to Portleigh. These diversions reflect not only the addition of a unit of housing but also that potentially significant financial benefit to Portleigh is one to which it was not otherwise entitled and provide a socially beneficial environmental outcome as a consequence.
[51]
The Prosecutor's position
The position advanced on behalf of the Prosecutor concerning me making a publication order was both expected and conventional. The Defendants accept that the making of such an order is appropriate. Subject only to the change discussed above in the context of my proposed additional orders to require each Defendant to pay money to the Women's and Girls' Emergency Centre being included in the text to be published in the Sydney Morning Herald, the terms of the Prosecutor's proposed notice to be required be published pursuant to s 250(1)(a) of the POEO Act is adopted (as amended) and set out in Annexure A to this judgement.
[52]
Payment of the fines to the Prosecutor
I have earlier set out the terms of s 694 of the Local Government Act. This provision requires that the amounts identified in my orders as fines imposed on each of Portleigh and X-Sealant are to be paid to the Prosecutor.
[53]
Costs of the proceedings
There is no dispute between the Prosecutor and the Defendants about the quantum of the Prosecutor's costs to be ordered to be paid. That agreement is that the total costs are to be ordered to be $48,000. However, as I subsequently advised the legal representatives of the parties, it is not appropriate to make that order for payment of the Prosecutor's costs on a "joint and several liability" basis. As I indicated to the parties, it is appropriate to order that half of the agreed sum be paid by Portleigh and half by X-Sealant. No submission was made to me, in light of that communication, indicating any opposition to that form of costs orders. As a consequence, each of the Defendants will be ordered, separately, to pay the Prosecutor's costs in the sum of $24,000.
[54]
The potential for rectification orders
On 20 June 2022, Espinosa C published a decision (X-Sealant Pty Ltd v Burwood Council [2022] NSWLEC 1316) giving effect to an agreement approving aspects of what had been illegally erected.
However, on 25 August 2023, Horton C published a further decision (X-Sealant Pty Ltd v Burwood Council [2023] NSWLEC 1469) giving effect to a new agreement pursuant to s 34 of the Land and Environment Court Act 1979 - a decision which had the effect of granting further modification of the development consent applicable to the site, a modification which at the effect of regularising the use, as a two bedroom apartment, of the penthouse and removing the requirement for communal open space.
Although the terms of the Prosecutor's proposed orders to be made pursuant to s 245 of the POEO Act at the time I reserved my decision referenced the outcome of the conciliation conference process undertaken by Espinosa C, the necessity to take into account the further successful conciliation conference process undertaken by Horton C (and the orders arising from that) requires modification of the orders proposed by the Prosecutor (and orders accepted for the Defendants). In response to an enquiry made for me to the legal representatives the parties, I was provided with a revised form of the orders (and of the commentary for the notice which will be the subject of the publication order) by revising the relevant portion of the orders and the notice to reflect this new further modified status of the development consent concerning this aspect of the southern tower's additional level of built form. Those agreed revisions have been incorporated in the orders disposing of these proceedings and in the terms of the notice in Annexure A.
[55]
Orders
The orders of the Court in Matter No 342348 of 2022 are:
1. X-Sealant Pty Ltd is convicted of the offence against s 4.2(1) of the Environmental Planning and Assessment Act 1979 as charged;
2. X-Sealant Pty Ltd is fined $45,000;
3. Pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, X-Sealant Pty Ltd is also to pay the sum of $15,000 to Burwood Council (the Prosecutor) for the purpose of payment to the Women's and Girls' Emergency Centre; and
4. X-Sealant Pty Ltd is to pay the Prosecutor's professional costs of $24,000 pursuant to s 257B of the Criminal Procedure Act 1986.
The orders of the Court in Matter No 342315 of 2022 are:
1. Portleigh Pty Ltd is convicted of the offence against ss 4.2(1) and 9.50(3A) of the Environmental Planning and Assessment Act 1979 as charged;
2. Portleigh Pty Ltd is fined $75,000;
3. Pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, Portleigh Pty Ltd is also to pay the sum of $15,000 to Burwood Council (the Prosecutor) for the purpose of payment to the Women's and Girls' Emergency Centre; and
4. Portleigh Pty Ltd is to pay the Prosecutor's professional costs of $24,000 pursuant to s 257B of the Criminal Procedure Act 1986.
The orders of the Court in both matters are:
1. Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 (the POEO Act), X-Sealant Pty Ltd and Portleigh Pty Ltd (the Defendants), at their own expense, and within 23 days of the date of this order, are to cause a notice in the form of Annexure A to be placed in the Sydney Morning Herald, at a minimum of one quarter page on one of the first four right hand pages, and in the corresponding online edition.
2. Within 35 days of the date of this order, the Defendants must provide to the Prosecutor a complete copy of the page of the publication in which the notice has appeared, and a copy of the online listing, pursuant to Order 1 above.
3. Pursuant to s 245 of the POEO Act, until such time as consolidated consent 124/2017 modified by MOD.10.2017.124.5 determined by the Court on 25 August 2023 in X Sealant v Burwood Council [2023] NSWLEC 1469 (case 2023/25089) is complied with, or until further order of the Court, there is to be no use for any residential purpose of the four bedroom penthouse above the sixth storey of the approved six storey tower (Southern Tower) located at the southern end of 689-72 Railway Parade, Burwood and 2-10 Oxford Street, Burwood NSW.
4. Order (3) above is stayed until either any tenant in occupation of the said four bedroom penthouse vacates the premises or 45 days from the date of these orders, whichever occurs first.
5. Liberty for the parties to apply in respect of any issues arising in relation to orders (3) and (4) above.
[56]
Annexure A
Portleigh Pty Ltd and X-Sealant Pty Ltd convicted of offences relating to the unlawful construction of a four bedroom penthouse style unit at Burwood NSW
X-Sealant Pty Ltd (X-Sealant) has been convicted and ordered to pay a fine in the sum of $45,000 by the Land and Environment Court of NSW ('Court') for the construction of a four bedroom penthouse style unit at Burwood NSW (the four bedroom penthouse) on top of the sixth floor of a building located at Oxford Street and Railway Parade Burwood ( the land) without first obtaining the required development consent, contrary to s 4.2(1) of the Environmental Planning and Assessment Act 1979 (NSW) ('EPA Act').
Portleigh Pty Ltd (Portleigh) has been convicted and ordered to pay a fine in the sum of $60,000 by the Court for aiding, abetting, counselling or procuring X-Sealant to construct the four bedroom penthouse without first obtaining the required development consent, contrary to s 4.2(1) of the EPA Act.
X-Sealant Pty Ltd and Portleigh Pty Ltd have each also been ordered to pay $15,000 to support the activities of the Women's and Girls' Emergency Centre.
The Court has ordered that the use of the 4 bedroom penthouse be ceased until such time as the orders made by the Land and Environment Court on 25 August 2023 in proceedings X Sealant v Burwood Council are complied with, or until further order of the Land and Environment Court. This order takes effect from the date when any tenant in occupation vacates the penthouse, or 45 days from the date of these orders, whichever occurs first.
On 9 October 2023, the Court took the following action against Portleigh and X-Sealant:
i. convicted Portleigh for the offence and ordered it to pay the fine noted above;
ii. convicted X-Sealant for the offence and ordered it to pay the fine noted above;
iii. ordered that each pay $15,000 to support the activities of the Women's and Girls' Emergency Centre;
iv. ordered that each pay $24,000 as costs of Burwood Council as the prosecuting authority;
v. ordered that until such time as until such time as consolidated consent 124/2017modified by MOD.10.2017.124.5 determined by the Court on 25 August 2023 in X Sealant v Burwood Council [2023] NSWLEC 1469 (case 2023/25089) is complied with, or until further order of the Court, there is to be no use for any residential purpose of the four bedroom penthouse above the sixth storey of the approved six storey tower (Southern Tower) located at the southern end of 689-72 Railway Parade, Burwood on 2-10 Oxford Street, Burwood NSW; and
vi. ordered that Portleigh and X-Sealant at their own expense publish this notice in the Sydney Morning Herald.
[57]
Amendments
09 October 2023 - Paragraphs [170] and [171] amended to reflect correct case numbers.
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: 09 October 2023
Chief Executive, Office of Environment and Heritage v Ausgrid (2013) 199 LGERA 1; [2013] NSWLEC 51
Chief Executive, Office of Environment and Heritage v Clarence Valley Council [2018] NSWLEC 205
Chief Executive of the Office of Environment and Heritage v Bombala Investments Pty Ltd (2013) 199 LGERA 236; [2013] NSWLEC 185
Environment Protection Authority v Australian Waste Recyclers 1 Pty Ltd [2005] NSWLEC 739
Environment Protection Authority v Barnes (2006) NSWCCA 246
Environment Protection Authority v Cleanaway Equipment Services Pty Ltd [2022] NSWLEC 40
Environment Protection Authority v Forbes Shire Council [2014] NSWLEC 26
Environment Protection Authority v Hawkesbury City Council [2017] NSWLEC 39
Environment Protection Authority v Sydney Water [2022] NSWLEC 100
Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80
Environment Protection Authority v Sydney Water Corporation [2019] NSWLEC 100
Environment Protection Authority v Sydney Water Corporation [2020] NSWLEC 153
Environment Protection Authority v Sydney Water Corporation [2021] NSWLEC 4
Environment Protection Authority v Sydney Water Corporation [2021] NSWLEC 17
Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25
Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131
Environment Protection Authority v Waste Recycling and Processing Company (2006) 148 LGERA 299; [2006] NSWLEC 419
Hoare v The Queen (1989) 167 CLR 348; [1989] HCA 33
Markarian v R (2005) 229 CLR 357; [2005] HCA 25
Mohindra v R [2020] NSWCCA 340
Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178
R v O'Neill (1979) 2 NSWLR 582
R v Olbrich (1999) 199 CLR 270; [1999] HCA 54
R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 383
Secretary, Department of Planning, Industry and
Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7
Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14
Walden v Hensler (1987)163 CLR 561; [1987] HCA 54
X-Sealant Pty Ltd v Burwood Council [2022] NSWLEC 1316
X-Sealant Pty Ltd v Burwood Council [2023] NSWLEC 1469
Category: Sentence
Parties: Burwood Council (Prosecutor)
Portleigh Pty Ltd (Defendant in Matter No 342315 of 2022)
X-Sealant Pty Ltd (Defendant in Matter No 342348 of 2022)
Representation: Counsel:
P English and J Cooper, barristers (Prosecutor)
J Young and M Fozzard, barristers (Defendants)