Council of the City of Sydney v Adams

The work was illegal

1. Mr Adams did not apply for or obtain development consent for the works that he undertook to the interiors of the house at 30 Argyle Place. Mr Adams' conduct of carrying out development on the heritage item without development consent was in breach of cl 5.10(2) of SLEP 2012.
2. Clause 5.10(2) provided, in part, that development consent was required for demolishing a heritage item (cl 5.10(2)(a)(i)) or altering a heritage item that is a building "by making changes to anything inside the item that is specified in Schedule 5 in relation to the item" (cl 5.10(2)(b)). Schedule 5 of SLEP 2012 specified the heritage item as "Terrace group including interiors." Demolition of a heritage item is defined in the Dictionary to SLEP 2012 to mean "wholly or partly destroy, dismantle or deface the heritage item." The removal of plaster walls, plaster and lath from ceilings, plaster chimney piece and chimney breast, and timber skirtings and other joinery, amongst other elements of the interiors of the listed heritage item of 30 Argyle Place, involved both partly demolishing the heritage item and altering the heritage item by making changes to the specified interiors of the heritage item.
3. Such demolition and alteration of the interiors of the heritage item without first obtaining development consent was in breach of cl 5.10(2) of SLEP 2012 and hence s 76A of the Environmental Planning and Assessment Act 1979 ('the EPA Act'). By doing a thing that was forbidden to be done by s 76A of the EPA Act, Mr Adams committed an offence against s 125(1) of the EPA Act.

The offence charged, the guilty plea and the sentence hearing

1. The Council has brought proceedings charging Mr Adams that, between about 1 December 2014 and 6 February 2015 at premises at 30 Argyle Place, Millers Point, he committed an offence against s 125(1) of the EPA Act in that he did the following thing which was forbidden by s 76A of the Act to be done without development consent first having been obtained: He carried out development on land, namely demolition (as defined in Sydney Local Environmental Plan 2012 ('SLEP 2012')) and carrying out works comprising the alteration of parts of the interior of The Premises being development which was only permissible with development consent under the provisions of an environmental planning instrument which applied to the land, namely SLEP 2012, contrary to s 76A of the Act without development consent first having been obtained.
2. Mr Adams has pleaded guilty to the charge.
3. A sentence hearing was held yesterday. The Court's task is to determine and impose an appropriate sentence for the offence.
4. In sentencing for the offence, the Court is to consider the objective and subjective circumstances of the offence committed by Mr Adams and of Mr Adams as the offender; the aggravating, mitigating and other factors in s 21A of the Crimes (Sentencing Procedure) Act 1999 ('CSP Act'); and the purposes of sentencing in s 3A of the CSP Act.

Objective circumstances

1. The objective circumstances of relevance in this case include the maximum penalty, the objective harmfulness of Mr Adams' conduct (the actual environmental harm caused and the undermining of the regulatory system of development control), Mr Adams' state of mind and reasons for committing the offence, the foreseeable risk of harm to the environment, the practical measures to avoid harm to the environment, and Mr Adams' control over the causes that gave rise to the offence.

Maximum penalty

1. Mr Adams was charged and has pleaded guilty to an offence against s 125(1) of the EPA Act. At the time Mr Adams committed that offence, the maximum penalty was $1.1 million.
2. Subsequently, a three tier offence regime has been introduced for offences against the EPA Act and the maximum penalties have been changed depending on the tier of the offence and whether the offender is a corporation or an individual: see ss 125A, 125B and 125C of the EPA Act. These legislative changes, made by the Environmental Planning and Assessment Amendment Act 2014, came into force on 31 July 2015.
3. The three tiered offence regime prescribes different maximum penalties for different tiers of offence, depending on the seriousness of the offence. For tier 1 offences, the maximum penalty for a corporation has been increased from the former maximum of $1.1 million to $5 million, but for an individual, the maximum penalty has been reduced slightly from the former maximum of $1.1 million to $1 million: s 125A(2). For tier 2 offences, the maximum penalty for a corporation has been increased to $2 million but for an individual it has been significantly reduced to $500,000: s 125B(2). For tier 3 offences, the maximum penalty for a corporation has been decreased slightly to $1 million and for an individual it has been reduced even further to $250,000: s 125C(2).
4. Ordinarily, later legislative changes to the maximum penalties are not relevant to an offence committed before the commencement of the legislative changes. However, s 19(2) of the CSP Act provides: If an Act or statutory rule reduces the penalty for an offence, the reduced penalty extends to offences committed before the commencement of the provision of the Act or statutory rule reducing the penalty, but the reduction does not affect any penalty imposed before that commencement.
5. The question to be answered in this case is whether this provision applies to the new three tiered offence regime in ss 125A, 125B, 125C of the EPA Act. I find that s 19(2) of the CSP Act does not operate to apply the reduced maximum penalties for individuals under ss 125A, 125B or 125C to the offence committed by Mr Adams before the commencement of ss 125A, 125B and 125C. The reason is that the offence committed by Mr Adams against s 125(1) of the EPA Act in December 2014 is not an offence to which any of ss 125A, 125B or 125C applies. Each of those sections only applies the maximum penalties prescribed in subs (2) of the sections to "an offence to which this section applies." Subsection (1) of each of ss 125A, 125B and 125C specifies the offence to which the section applies. Section 125A(1) provides: This section applies to an offence against this Act under section 125(1) 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) caused the death of or serious injury or illness to a person. For this section to apply, the court attendance notice or application commencing the proceedings must allege that those factors apply to the commission of the offence.
6. Section 125B(1) provides: This section applies to an offence against this Act under section 125 (1), other than an offence to which section 125A applies or an offence for which a tier 3 maximum penalty applies.
7. Section 125C(1) provides: This section applies to: (a) a certificate-related offence, or (b) any other offence against this Act under section 125 (1) for which a tier 3 maximum penalty is declared by this Act to apply.
8. It can be seen that there is an interrelationship between the sections. For example, a tier 2 offence to which s 125B applies is an offence other than an offence to which either s 125A applies (tier 1 offence) or s 125C applies (tier 3 offence).
9. In this case, at the time Mr Adams carried out development without consent in December 2014, he could not have committed an offence to which ss 125A, 125B or 125C applies as none of those sections had commenced at that time. If the offence committed by Mr Adams is not an offence to which any of ss 125A, 125B or 125C applies, then Mr Adams cannot be liable to any of the maximum penalties prescribed for offences to which those sections apply.
10. Hence, the reduced penalties for an individual committing an offence to which s 125A applies ($1 million for tier 1), s 125B applies ($500,000 for tier 2) and s 125C applies ($250,000 for tier 3), do not extend to an offence committed against the EPA Act under s 125(1) before the commencement of ss 125A, 125B and 125C. The offences to which each penalty regime applies are not the same.
11. The consequence is that the maximum penalty for the offence committed by Mr Adams in December 2014 remains at $1.1 million.

Actual environmental harm caused

1. The objective seriousness of the offence is affected by the objective harmfulness of Mr Adams' actions. The causing of substantial injury, loss or damage by commission of the offence is an aggravating factor: s 21A(2)(g) of the CSP Act.
2. I find, beyond reasonable doubt, that the commission of the offence caused actual objective harm. Numerous elements of the interiors of a highly significant, heritage listed house, which were identified as having "exceptional" significance, were removed. Removal of most of the original plaster on the internal ground and first floor walls, identified as being of exceptional significance in the CMP, has resulted in the irretrievable loss of significant fabric. This has been exacerbated by the large extent of removal.
3. Much of the original timber joinery, including skirtings, architraves and doors, and the timber chimney piece in the front bedroom, all identified as being of exceptional significance, have been removed and stored on site. No evidence was found of any numbering or cataloguing, as required by policy 7.5.5 of the CMP, to identify their origin and to help ensure that they can be reinstated to their original location. However, Mr Adams did make some chalk markings on joinery elements that might assist in reinstatement.
4. The adverse impact on the heritage significance of the interiors of the house has not yet been remedied or mitigated. Mr Adams belatedly applied for and obtained development consent on 1 September 2015 to carry out proposed works to the house. Part of these works would involve restoration that may partly mitigate the harm caused by the commission of the offence. However, Mr Adams has not yet commenced work under the development consent and has not committed to do so. The grant of the development consent does not oblige Mr Adams to carry out the works approved.
5. In any event, however, even if the works were to be carried out, they would not restore the interiors of the house or wholly compensate for the diminution in heritage significance caused by the loss of the original fabric and elements of the interiors.
6. I find the commission of the offence caused actual harm of medium seriousness. Such harm can be considered to be substantial and an aggravating factor in terms of s 21A(2)(g) of the CSP Act.

Undermining of the regulatory system of development control

1. The commission of the offence also undermines the objectives and integrity of the regulatory system of development control. Carrying out development without consent or not in accordance with a consent tends to undermine the objects of the EPA Act and the due processes prescribed for prior application, assessment and approval of the carrying out of development.
2. Offences which undermine the integrity of the regulatory system are objectively serious. Use of the criminal law ensures the credibility of the regulatory system.
3. The actions of Mr Adams in demolishing parts of the original fabric of the heritage listed house without first applying for and obtaining development consent offended against the legislative objective expressed in the statutory offence and also thwarted the attainment of the objects of the Act.
4. Mr Adams by his actions foreclosed the opportunity for prior assessment of the action of removal of the numerous elements of the interiors, most of which were of exceptional heritage significance, and the option of the Council refusing consent to this removal because of any unacceptable impacts on the heritage significance and character of the interiors of the house. The option of preserving and restoring any damaged or modified elements of the interiors was also foreclosed by Mr Adams' action of removing them.

State of mind and reasons for committing the offence

1. A factor to be taken into account in determining the objective seriousness of a strict liability offence is the state of mind of the offender. A strict liability offence that is committed intentionally, recklessly or negligently will be objectively more serious than one not so committed.
2. The offence against the EPA Act under s 125(1) committed by Mr Adams is a strict liability offence. At the time of commission of the offence, the three tiered offence regime under ss 125A, 125B and 125C of the EPA Act did not apply. As I have noted earlier, an offence to which s 125A applies is an offence under s 125(1) of the EPA Act where the prosecutor establishes that the offence was committed intentionally. However, Mr Adams could not have been charged with committing an offence to which s 125A applies. Hence, it is not necessary to consider the potential applicability of the principle in R v De Simoni [1981] HCA 31; (1981) 147 CLR 383 to an offence to which s 125A applies.
3. In the facts of this case, I find Mr Adams committed the offence recklessly but not intentionally. Mr Adams was made aware of the law and facts concerning the heritage significance and listing of the house and its interiors. Of importance to the commission of the offence, Mr Adams was made aware that the house and its interiors were listed as a heritage item under SLEP 2012 and that development consent was required before carrying out demolition or alteration of the interiors of the house. This was clearly stated in the CMP which was attached to the contract for the purchase of the house that Mr Adams signed.
4. However, Mr Adams seems not to have read the CMP in any detail and in particular the section explaining the need to obtain development consent for the works he proposed of removal of the original fabric in the interiors of the house. Mr Adams gave evidence that he engaged a heritage architect, Mr Dwyer, who met him at the house on 25 November 2014, which was after he had completed the purchase of the house and before he commenced work. Mr Dwyer advised Mr Adams to contact the NSW Heritage Council and he gave him a copy of the Standard Exemptions for Works Requiring Heritage Council Approval ('Standard Exemptions').
5. Mr Adams focused on the standard exemption from the requirements for approval under the Heritage Act for the repair or replacement of missing, damaged or deteriorated fabric (Standard Exemption 2: Repairs). Mr Adams said that he believed that the work that he had proposed to do, and that he in fact did, fell within that standard exemption.
6. Of course, this belief was misguided as the exemption was from obtaining approval under the Heritage Act from the Heritage Council, and not from obtaining development consent under the EPA Act from the Council of the City of Sydney. This was stated clearly in the Standard Exemptions (p 5). In any event, Mr Adams did not comply with the Standard Exemptions.
7. In the section headed "How to relate the standard exemption clauses to your heritage item", the document advised (on p 6) that "[b]efore you develop firm proposals for changes to the heritage item, take the following actions: ... [5] Check with the local council concerning other approvals that may be required."
8. In the section "General conditions", general condition 1 stated that "[t]hese general conditions apply to all of the following Exemptions." General condition 2 then stated: Anything done pursuant to the following Exemptions must be carried out in accordance with relevant Guidelines issued by the Heritage Branch including 'The Maintenance of Heritage Assets: A Practical Guide' 1998, 'Movable Heritage Principles' 2000 and 'The Heritage Council Policy on Managing Change to Heritage Items'.
9. Mr Adams agreed that he did not obtain or read any of the documents referred to in general condition 2 or carry out the works in accordance with those documents.
10. General condition 6 provided: Anything done pursuant to the following Exemptions must be specified, supervised and carried out by people with knowledge, skills and experience appropriate to the work.
11. Mr Adams agreed that he did not arrange for people with knowledge, skills and experience appropriate to the work to specify, supervise or carry out the work to the interiors of the house. Mr Adams agreed that he had no such knowledge, skills or experience.
12. Mr Adams also did not comply with the terms of Standard Exemption 2: Repairs. The repair and replacement of the fabric that Mr Adams undertook did involve damage to and removal of significant fabric, contrary to cl 1.1(b). The repair did not do as little as possible and only as much as is necessary to retain and protect the elements, contrary to note 1. The repair did not maximise the protection and retention of fabric and include the conservation of existing detailing, such as chimneys, contrary to note 3.
13. The works involved the replacement of large amounts of fabric, contrary to the Guidelines to Standard Exemption 2: Repairs, and therefore required submission of an application under s 60 of the Heritage Act. Moreover, significant fabric was damaged and removed. Significant fabric is that which contributes to the heritage significance of the item. The Guidelines specified that the damage or removal of significant fabric required the submission of an application under s 60 of the Heritage Act.
14. The repairs by Mr Adams did not have detailed specifications and were not carried out by licensed tradespeople with experience in the conservation of heritage buildings, contrary to the Guidelines.
15. When the Council heritage officer, Mr Fox, inspected the house on 1 December 2014, he told Mr Adams that the works he was carrying out did not fall within the standard exemptions. Mr Adams was therefore put on notice that his belief that the works were covered by the standard exemptions might be incorrect. Mr Adams nevertheless continued the works.
16. Mr Adams' actions in carrying out the works of demolishing and altering the interiors of the heritage listed house were reckless, with disregard to whether or not the works could lawfully be carried out without development consent under the EPA Act. This heightened state of mind increases the objective seriousness of the offence.
17. I do not find, however, that Mr Adams intentionally committed the offence. I accept Mr Adams did not actually know that development consent was required for the works he proposed to carry out but went ahead and did so regardless. He was alerted to the likelihood that his belief that the works were covered by the standard exemptions for approvals under the Heritage Act was incorrect. But an approval under the Heritage Act is different to a development consent under the EPA Act. Mr Adams did not have actual knowledge that development consent was required for the works he carried out and did not intentionally carry out the works without obtaining that consent. He nevertheless was reckless in doing so.
18. Another factor increasing the objective seriousness of an offence is if the reason for commission of the offence is to make a profit or to save incurring an expense, or to avoid the cost of obtaining and implementing a statutory permission such as a development consent. The committing of an offence for financial gain is an aggravating factor: s 21A(2)(o) of the CSP Act.
19. In this case, however, Mr Adams did not commit the offence for financial gain. Mr Adams purchased the house for the purpose of a family home. He carried out the works himself to make the house liveable so that he and his wife and his young child could move into the house as soon as possible. He was not trying to make a profit or to save incurring an expense by doing the works himself without obtaining development consent.

Foreseeability of risk of environmental harm

1. Mr Adams could reasonably have foreseen that his actions in demolishing and altering the interiors of the heritage listed house would be likely to cause harm to the house and its heritage significance.

Practical measures to avoid harm

1. There were practical measures Mr Adams could have taken to avoid that harm. Mr Adams should have read carefully the CMP attached to the contract for the purchase of the house, which disclosed the need to obtain development consent. He should have read carefully the standard exemptions given to him by his heritage architect, Mr Dwyer, which advised checking with the local council about what approvals might be required. Mr Adams should have asked Mr Dwyer directly what approvals might be required, and not just assumed that the standard exemptions for an approval under the Heritage Act were applicable and that no other approval might be required. Mr Adams should have independently checked with the Council what approvals might have been required to carry out the works that he proposed. If any of these measures had been taken, Mr Adams would have been alerted to the need to obtain development consent. He should then have applied for such development consent before undertaking the work. If he had taken these practical measures, the harm caused to the heritage significance of the interiors of the house would have been avoided.

Control over causes of offence

1. Mr Adams had control over the causes that gave rise to the offence. He performed all of the work himself.

Conclusion on objective seriousness

1. Considering all of these objective circumstances, I find the objective seriousness of the offence to be of medium seriousness, but at the lower end of that range.

Subjective circumstances of the offender

1. Within the limits set by the objective seriousness of the offence, the Court may take into account factors personal to Mr Adams. These include Mr Adams' lack of prior convictions, his early plea of guilty, his prior good character, his remorse for the offence, the unlikelihood of his re-offending, and his assistance to authorities.

No prior convictions

1. Mr Adams does not have any prior convictions for any environmental offence: s 21A(3)(e) of the CSP Act.

Early plea of guilty

1. Mr Adams pleaded guilty to the charge at the earliest available opportunity. This maximises the utilitarian value of the plea of guilty to the criminal justice system and the maximum discount of 25% should be afforded: s 21A(3)(k) and s 22(1) of the CSP Act.

Prior good character

1. Mr Adams is otherwise a person of good character. Four character references were tendered, two professional and two personal. Although the referees had been made aware of only the bare bones of the offence committed by Mr Adams and its consequences, their references spoke of his respect for the law and its enforcement, his personal attributes of honesty and integrity, and his remorse for committing the offence. I find Mr Adams to be of prior good character: s 21A(3)(f) of the CSP Act.

Remorse for the offence

1. Mr Adams gave evidence by affidavit and orally at the sentence hearing. He said he was "extremely sorry and remorseful" for his actions. He said he works in the healthcare industry and does not take lightly the criminal offence that he has committed. A conviction will be on his permanent record and he will have to make regular disclosure about it. He is required to undertake police checks for his work.
2. Mr Adams has engaged professionals with relevant expertise to assist him in undertaking any works at the house in the future. He says he will take all recommendations made by various heritage consultants and the Office of Environment and Heritage as to how to best maintain the house.
3. I accept that Mr Adams has accepted responsibility for his actions. He has acknowledged the harm to the heritage significance of the interiors of the house. He has not yet carried out works to mitigate the harm caused by commission of the offence. Mr Adams said he is waiting to see what penalty might be imposed for the offence to in order to assess his financial ability to carry out the works that have been approved by the development consent.
4. I find that Mr Adams is remorseful for the offence, which is a mitigating factor: s 21A(3)(i) of the CSP Act.

Unlikelihood of re-offending

1. Another mitigating factor to be taken into account is if the offender is unlikely to re-offend: s 21A(3)(g) of the CSP Act. I find that, by reason of Mr Adams' early plea of guilty, his remorse for the offence, and the steps he has taken to avoid carrying out development without consent in the future and to avoid further harm to the heritage significance of the house, Mr Adams is unlikely to re-offend.

Assistance to authorities

1. Mr Adams co-operated with the Council, including in the investigation of the offence and in the preparation for the sentence hearing. He has agreed a statement of facts and the documents to be tendered at the sentence hearing. This removed the need for the prosecutor to call any witnesses and thereby saved hearing time and expense. Such co-operation is a mitigating factor: s 21A(3)(m) and s 23 of the CSP Act.

Payment of prosecutor's costs

1. Mr Adams has agreed to pay the Prosecutor's costs in the agreed sum of $35,000.

Purposes of sentencing

1. I take into account in fixing the appropriate penalty the purposes of sentencing in s 3A of the CSP Act.
2. The sentence of the Court is a public denunciation of the conduct of Mr Adams. The sentence must ensure that Mr Adams is held accountable for his actions and is adequately punished.
3. The sentence needs to act as a deterrent. I have found that Mr Adams is unlikely to re-offend, so there is no great need for individual deterrence. However, there is a need for general deterrence. The sentence of the Court needs to deter others who might be tempted to commit like crimes of carrying out development without development consent by the prospect that, if they are caught, only light punishment will be imposed by the Court. There are other heritage listed buildings in Millers Point and The Rocks that have been sold by the government and that will be developed by private persons. Those persons need to be deterred from undertaking development without first obtaining development consent.

Appropriate penalty

1. In determining the appropriate penalty, the Court should be consistent with the pattern of sentencing for like offences. The Council and Mr Adams referred to the sentences imposed in other cases involving demolition of buildings or structures listed as heritage items, including Mosman Municipal Council v Menai Excavations Pty Ltd [2002] NSWLEC 132; (2002) 122 LGERA 89; City of Sydney Council v Schwartz [2003] NSWLEC 261; Carlino v Leichhardt Municipal Council [2005] NSWLEC 198; (2005) 144 LGERA 235; Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170; Council of the City of Sydney v Trico Constructions Pty Ltd [2015] NSWLEC 56; Leichhardt Council v Geitonia Pty Ltd (No 7) [2015] NSWLEC 79; and Cowra Shire Council v Fuller [2015] NSWLEC 13.
2. I have considered the penalties imposed in these decisions and the objective and subjective circumstances that led the judges concerned to impose those penalties. I consider the penalty that I propose to impose in this case not to be inconsistent with those decisions.
3. Mr Adams submitted that this was a case where it was appropriate for the Court to make an order pursuant to s 10(1)(b) of the CSP Act, namely that without proceeding to conviction, the Court make an order discharging Mr Adams on condition that he enter into a good behaviour bond for a term not exceeding 2 years. I do not agree. The evidence I have summarised above and my findings about the objective circumstances of the offence, including its consequences and the manner in which it was committed, do not support making an order under s 10(1) of the CSP Act.
4. Considering the purposes of sentencing, balancing the objective and subjective circumstances, and having regard to the pattern of sentencing in other cases, I consider the appropriate penalty to be a fine of $80,000, which should be discounted by 25% for the utilitarian value of the plea of guilty. This amounts to a fine of $60,000.
5. In finding that a fine of this amount is appropriate, I recognise that the fine is only part of the penalty imposed on Mr Adams. I recognise that I will impose a conviction for the offence, which itself is a penalty with which Mr Adams will have to continue to deal.
6. I will also make an order that Mr Adams pay the Prosecutor's costs in the agreed sum of $35,000. I have taken these other aspects of the penalty into account in fixing the amount of the fine.

Orders

1. I make the following orders. 1. The defendant is convicted of the offence as charged in the summons. 2. The defendant is fined $60,000. 3. The defendant is to pay the prosecutor's costs in the sum of $35,000.

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: 24 December 2015