Council of the Municipality of Kiama v Furlong

Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 Blue Mountains City Council v Carlon [2008] NSWLEC 296 Byres v Leichhardt Municipal Council [2006] NSWLEC 82 The Council of the Municipality of Kiama v Gerringong Developments Pty Limited [2007] NSWLEC 257 The Council of the City of Ryde v Felici [2009] NSWLEC 27 CASES CITED: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 Hunter's Hill Council v Touma [2008] NSWLEC 227 Maitland City Council v Link Building Services Pty Limited [2008] NSWLEC 71 Markarian v The Queen (2005) 228 CLR 357 Mosman Municipal Council v Menai Excavations Pty Ltd (2002) 122 LGERA 89 Willoughby City Council v P and V Masonry Pty Limited [2003] NSWLEC 312 Woollahra Municipal Council v Byrnes and Consolidated Byrnes Holdings Pty Ltd [2002] NSWLEC 125

PROSECUTOR Mr P Moggach (solicitor) SOLICITORS LEGAL REPRESENTATIVES: RMB Lawyers with Kearns & Garside DEFENDANT Mr T Pickup (solicitor) SOLICITORS Storey & Gough Lawyers

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

50032 of 2009 The Council of the Municipality of Kiama v Furlong

EX TEMPORE JUDGMENT 1 Her Honour: The Defendant has pleaded guilty to the charge that he committed an offence under s 125(1) of the Environmental Planning and Assessment Act 1979 (the EP&A Act) of carrying out development without consent contrary to s 76A(1) of the Act. The Defendant carried out unauthorised building works in conjunction with approved renovations to an existing dwelling house in Gerringong. The renovations had been approved under a Complying Development Certificate issued 22 August 2008.

2 The unauthorised works have since been regularised by the lodgement and approval of a development application for the use of the constructed alteration and additions and the lodgement and approval of an application for the issue of a building certificate for the alterations and additions to the dwelling-house.

3 The maximum penalty applicable for such an offence is $1.1 million. As the Defendant has pleaded guilty the Council can be considered to have proved the essential elements of the offence. It is now necessary to sentence the Defendant. The offence is one of strict liability so that no mental element forms part of the elements of the offence. Facts 4 The parties have agreed a Statement of Agreed Facts (SOAF) as follows:

1. …("the property") is situated in the Council area of The Council of the Municipality of Kiama ("Council").
2. Kye Matthew Furlong ("the Defendant") owns the property with his wife Jodie Lee Furlong.
3. The property is zoned 2(a) Residential under Kiama Local Environmental Plan 1996.
4. The use of the property for a dwelling-house is permissible with development consent under the land use table for the zone.
5. When the Defendant and his wife purchased the property in the middle of 2008, there was an existing dwelling-house erected on it.
6. On 22 August 2008, Accredited Specialist Services Pty Limited issued complying development certificate No. 251/08 ("the CDC") for building works at the property encompassing: s a building extension at the front of the existing dwelling; s a garage attached to the existing dwelling on its northern side; s a pergola at the rear of the existing dwelling; and s new metal roofing. At tab 5 in the folder of exhibits "GAH-1" of the affidavit of Gregory Augustus Herbert ("Mr Herbert") sworn on 14 May 2009 and filed in these proceedings ("the folder") is a copy of the CDC and the accompanying plans [tendered as exhibit 1] .
7. On 18 September 2008, the Defendant and Jodie Furlong lodged development application No. DA.2008.268 ("the development application") seeking consent for an extension to the existing dwelling-house on the property comprising a new entry, use of an existing deck, extension of that existing deck, new metal roof and an extension to the lounge room at the rear of the existing dwelling, which were not covered by the CDC.
8. On 25 September 2008 Council's building surveyor Mr Herbert attended at the property to carry out a preliminary assessment for the purposes of the development application. During the course of that inspection, Mr Herbert discovered the following works in the course of construction which were not approved under the CDC: s concrete pad footings for a rear deck; s a new roof (including trusses); s a new front entry to the existing dwelling; and s a lounge room extension within the existing dwelling. At tab 7 of the folder are copies of photographs taken at the time of the inspection.
9. On 26 September 2008, Mr Herbert caused a letter to be written to the Defendant and Mrs Furlong. That letter: s asked for an explanation in writing as to why works had been carried out and how those works differed from the plans approved under the CDC; and s directed the Defendant and Mrs Furlong to stop work immediately until such time as relevant approvals were in place.
10. Following a reminder letter written to the Defendant and Mrs Furlong by Mr Herbert dated 16 October 2008, Council received a facsimile from the Defendant and Mrs Furlong dated 20 October 2008 by way of explanation of their actions. At tab 10 of the folder is a copy of that facsimile.
11. On 24 October 2008, Mr Herbert and Mr Gregory Moore of Council inspected the property to determine the current state of works. Further works had occurred since Mr Herbert's previous inspection on 25 September 2008. The Defendant swears that these works only incorporated gyprocking.
12. On 17 November 2008, Council refused the development application because the works had been substantially completed. At tab 13 of the folder is the notice of refusal and the plans the subject of the development application.
13. On 8 January 2009 Mr Herbert again attended at the property with Mr Moore of Council. Since the last inspection by Mr Herbert on 24 October 2008, the following further works had occurred which were not approved by the CDC: s the new front entry to the dwelling-house had been completed by the hanging of the front door and installation of the new built-in cupboards; and s the lounge room had been completed by the installation of skirting, architraves and internal painting. At tab 14 of the folder are copies of photographs taken at the time of the inspection.
14. The Defendant and his family were living in the dwelling-house on the property.
15. During the course of a meeting at Council chambers on 20 January 2009 attended by the Defendant and Mrs Furlong, the Defendant produced a letter setting out his explanation for the work at the property. At tab 16 of the folder is a copy of that letter.
16. The Defendant has taken steps to regularise the building works which have occurred at the property by: s lodgment and approval of a development application for the use of the constructed alterations and additions; and s the lodgment and approval of an application for the issue of a building certificate for the alterations and additions to the dwelling-house. At tabs 18 - 25 of the folder are copies of the relevant applications, notices of determination and certificates.
17. The Defendant is a licensed builder.
18. The Defendant is not known to Council to have been convicted of any environmental offences.
19. The Defendant has cooperated with the Prosecutor during the investigation of the matter.
20. The Defendant has agreed to pay the Prosecutor's reasonable costs in these proceedings.

5 There is one area of dispute concerning what was said at a meeting on 6 November 2008 between the Defendant, and Mr Herbert, a building surveyor employed by the Council. The Defendant states in his affidavit affirmed 20 July 2009 and read in the proceedings that on 6 November 2008 he had a meeting with Mr Herbert at the Council chambers to discuss the matter and had a conversation with Mr Herbert to the effect that "everything needs to be tidied up before you will be issued with a building certificate". He understood this to mean that in order for a building certificate to be issued the works would have to be completed. He finalised the works before 9 December 2008 when he and his family moved into the house the subject of these proceedings (the property). The work was the installation of skirting, architraves and internal doors, and internal painting.

6 An affidavit of Mr Herbert, sworn 31 July 2009, was relied on by the Council. He states that he recalls the conversation with the Defendant on 6 November 2008 very well and that he considers the Defendant was mistaken in his recollection. He did not say any words that would imply or indicate that the work should have continued without obtaining the necessary approvals. The conversation was directed to what was required by the Council in the letter from the Council dated 28 October 2008 which concerned the development application lodged by the Defendant for the extension of the existing dwelling in relation to the unauthorised works undertaken (annexed to Mr Herbert's affidavit). He recalls that in a conversation on 8 January 2009 with the Defendant at the property he said words to the effect that "everything needs to be tidied up before you will be issued with a building certificate" by which time the works had been substantially completed.

Relevant sentencing considerations 7 Section 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) sets out the purposes of sentencing. Section 3A provides: 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. 8 The CSP Act (in particular, Pt 3 Div 1) contains provisions relevant to sentencing procedures. Section 21A of the CSP Act sets out aggravating, mitigating and other factors to be taken into account in sentencing. The objective and subjective circumstances of the offence must be considered in determining the level of penalty (Markarian v The Queen (2005) 228 CLR 357 at [73]). Objective circumstances of commission of the offence 9 In Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [163] and Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 at [110] relevant factors to determine the objective gravity of an offence were identified in the context of the EP&A Act. These include the maximum penalty, the objective harmfulness of the defendant's actions, the reasons for the commission of the offence and the state of mind of the offender. Other relevant factors can be consideration of the statutory scheme in which the offence provision occurs and the need to uphold the integrity of the planning and development control system under the EP&A Act; see Blue Mountains City Council v Carlon [2008] NSWLEC 296 at [48], Mosman Municipal Council v Menai Excavations Pty Ltd (2002) 122 LGERA 89 at [35]. The EP&A Act's objectives include the promotion and orderly and economic use and development of land: s 5(a)(ii). Council's submissions 10 The Council submits that the offence committed calls for the imposition of a penalty but one towards the lower end of the range. The carrying out of the development without the requisite consent was contrary to the objects of the EP&A Act although the Council accepts that the unauthorised works did not result in environmental harm.

11 The Council submits that the offence was committed for financial gain which is an aggravating factor under the CSP Act.

12 Relying on Bentley v BGP Properties Pty Ltd the Council considers that the offender's state of mind and reasons for committing the offence are relevant to penalty. The Defendant is a licensed builder and should have been aware of the requirements to obtain development consent for the works which were beyond the ambit of the complying development certificate. The Defendant ought to have been aware that unauthorised works should not be carried out without the necessary consent particularly as he is a licensed builder. The Defendant continued building the unauthorised works after the certifier told him in a letter dated 17 September 2008 that he should stop work. Further, he was told by the Council officer Mr Herbert to cease work by letter dated 26 September 2008 received on or about 1 or 2 October 2008. 13 The scope of the works undertaken includes the alteration of the roofline to a noticeable degree with a greater bulk being introduced by the changes on the northern elevation in particular. This can be seen if the approved plans attached to the complying development certificate issued on 22 August 2008 are compared to a plan, tendered by the Defendant's solicitor, in which the works carried out which were not the subject of the certificate are identified. Defendant's submissions 14 The Defendant's evidence is that the letter of 17 September 2008 was not received at that time and he was unaware of it until recently, it having been addressed to the property which at that time was a construction site where he did not expect to receive mail. The Defendant also states that he did stop work when the letter of 26 September 2008 was received until after the meeting on 6 November 2008 when he believed he was told he should finish the work, an issue in dispute between the parties. 15 The Defendant submits that no environmental harm has occurred as a result of the offence (which the Council accepts). The Council has subsequently issued a building certificate in relation to the works and granted a development consent for use of the works. The unauthorised works represented only 9m2 of additional floor space.

16 The offence was committed at a time when the Defendant was experiencing financial stress due to mortgage debts on two properties. The unauthorised works were undertaken when the Defendant had a family dwelling which was uninhabitable. Once the Defendant was aware that a new development application was required the Defendant acted immediately. The Defendant maintains that he did not act contrary to the Council's instructions to stop work.

17 The Defendant denies that the offence was committed for the purposes of financial gain but that he was seeking to provide a home for his family in stressful emotional and financial circumstances. These are identified in the affidavit of the Defendant and relate to the decision to purchase the property before their previous home had been sold, delay in selling their previous home and finally doing so at a reduced price, the need to obtain bridging finance and service two loans at great cost and the decision to change the nature of the renovations at the property from those approved because these would have to be permanent rather than temporary. 18 The Defendant submits that an appropriate penalty after applying a discount for mitigating factors is between $5,000 and $7,000. The Defendant requests that the Court have regard to the fact that the Defendant has agreed to pay the Council's costs in the sum of $9,500.

Finding on objective circumstances 19 While an offence of strict liability, the Defendant's state of mind is relevant to determining the gravity of the offence. In relation to the state of mind of the Defendant at the time of the commission of the offence, and the reasons for the offence, I find that the Defendant did act deliberately albeit erroneously to change his building plans from those for which he had approval in the course of undertaking the approved works. He should have sought approval for those works before he commenced them and failed to do so. He should have been aware from the moment that the building certifier, Mr Lewis, told him he could not approve the changed works on 15 September 2008 that he should stop work and he did not do so. That he did not receive the letter from the certifier dated 17 September 2008 telling him that he should stop work is not material in my view. It is to his credit that he complied with the stop work requirement of the Council notified by letter received by him on or about 1 or 2 October 2008. As to the conversation on 6 November 2008 about which the evidence of the Defendant and Mr Herbert differs as detailed above in par 5 and 6, it is inherently unlikely in my view that Mr Herbert would have told him that work should be completed at that time. The Council had identified in its letter of 28 October 2008 that he should lodge a building certificate for the unauthorised work. 20 In relation to the reasons for the offence, the Defendant has outlined in his affidavit the substantial pressures that he was under which caused him to act as he did. While I do not consider these excuse his conduct I accept that he acted as he did due to the stress he was experiencing as a result of the difficult financial and emotional circumstances in which he found himself. 21 In terms of the aggravating factor of financial gain (s 21A(2)(o) of the CSP Act) relied on by the Council, I accept the evidence of the Defendant that the offence was not committed in the course of his income generating work as a builder but was done to provide a home for his family in difficult financial circumstances when he could not afford rent while the work at the property was being completed. From the Defendant's perspective he was acting to secure a home for his young family. 22 The objective seriousness based on the Defendant's culpability is low.

Maximum penalty 23 The Court is to have regard to the maximum penalty applicable, as this is an expression of the seriousness Parliament attributes to the offence: see Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 and 701 respectively that: The task of a court is to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided… ..the more serious the lasting environmental harm involved the more serious the offence and, ordinarily, the higher the penalty. 24 As recognised by Bignold J in Willoughby City Council v P and V Masonry Pty Limited [2003] NSWLEC 312 there is a broad spectrum of matters which can give rise to an offence under s 125 of the EP&A Act. This is clearly at the less serious end of that spectrum. General deterrence 25 Sentences made in relation to environmental offences must embrace powerful considerations of general deterrence: see Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357, per Badgery-Parker J at 367. In Axer, Mahoney J stated at 359: The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur. The Council has submitted that this is an important consideration in this matter given that the Defendant is a builder and therefore engaged in activities which require awareness of the requirements of the EP&A Act in relation to development control. I agree that is a relevant factor in sentencing given the scope and objects of the Act.

26 I accept the Defendant's evidence that he is unlikely to reoffend given his position in a small community where he is seeking to make a living as a builder. This is his first conviction. I do not consider that specific deterrence is a relevant factor in this case. 27 The Council has submitted that there are no other factors such as environmental harm and that all the building work the subject of the offence has now been authorised. Mitigating factors 28 There are a number of mitigating factors that should be taken into account to reduce any penalty, as referred to in s 21A(3) of the CSP Act.

Guilty plea (s 21A(3)(k) and s 22 of the CSP Act) 29 The Defendant pleaded guilty at the earliest opportunity. A plea of guilty entitles the Defendant to a discount in penalty under s 22 of the CSP Act in the range of 10-25 per cent: R v Thomson; R v Houlton (2000) 49 NSWLR 383; R v Sharma (2002) 54 NSWLR 300. I consider he should have the full discount referred to in that case. Contrition and remorse (s 21A(3)(i) of the CSP Act) 30 The Defendant attests to his remorse and contrition more than once in his affidavit affirmed on 20 July 2009 and admits that he made a grave error in undertaking the unauthorised building works. I accept that the Defendant has shown contrition and remorse in his affidavit and take this into account as a mitigating circumstance. Cooperation with the Council (s 21A(3)(m) and s 23 of the CSP Act) 31 The Council submitted, and I accept, that the Defendant cooperated with the Council.

Lack of prior record (s 21A(3)(e) of the CSP Act) 32 The Defendant has no prior convictions. Good character (s 21A(3)(f) 33 The Defendant's solicitor has tendered two personal references of Dr Leoni Degenhardt, a client of the Defendant, and Mr Daniel Fielding, a long time friend of the Defendant and colleague in the building industry. Both references were made in the knowledge of these proceedings and attest to his excellent character. I accept that the Defendant is of good character.

34 The Defendant has agreed to pay the Council's costs of $9,500, which are reasonably substantial although I add not necessarily excessive.

Evenhandedness 35 A principle of sentencing is consistency of sentencing so that like cases should receive like penalties. Consideration of similar cases can be of assistance in informing the range of penalty which should be considered, subject always to the need to consider the individual circumstances of a particular case. The Council submitted that relevant cases for the purpose of considering an appropriate penalty were set out in The Council of the City of Ryde v Felici [2009] NSWLEC 27. In that case the defendant, a builder, completed an owner's consent form relating to a DA for extensions to his residential property. Before the DA was lodged the defendant commenced the works, being the extension of an existing bedroom and the addition of a new garage. The works were in accordance with the plans lodged with council as part of the DA. The defendant was aware that the DA required determination before works could be lawfully commenced. At the time of the sentence hearing a building certificate had been applied for but not yet determined by the Council. The works were not extensive and the offence was described as being at the lower end of seriousness although not trivial. A penalty of $16,000 was imposed after taking into account mitigating factors.

36 In Woollahra Municipal Council v Byrnes and Consolidated Byrnes Holdings Pty Ltd [2002] NSWLEC 125 a swimming pool was constructed without development consent. Consent had been sought after construction began but was refused. It was found that the defendants deliberately broke the law for their convenience. The individual defendant had a prior conviction. A plea of guilty was entered on the day of the hearing and the defendant expressed contrition and remorse. A penalty of $10,000 was imposed for the individual and $2,000 for the company.

37 Byres v Leichhardt Municipal Council [2006] NSWLEC 82 was an appeal to the Court against a penalty of $12,000 imposed by a local court for carrying out excavation and alteration of a subfloor area without development consent. The maximum penalty a local court can impose is $110,000. The development was extensive and may have compromised the integrity and stability of the house and its foundations. The work was undertaken negligently as it was carried out without regard to the health and safety of entrants to the house by someone with no building or engineering expertise. The council issued a stop work order. The appellant pleaded not guilty until three days before the local court hearing, there was little evidence of contrition and remorse and the appellant's cooperation was described as patchy. The appeal was dismissed and the penalty of $12,000 confirmed.

38 In The Council of the Municipality of Kiama v Gerringong Developments Pty Limited [2007] NSWLEC 257 alteration of a motel and restaurant was carried out without the necessary development consent. The changes included an increase in the number of units, three new terraces, ten new courtyards and construction of a new lap pool. A development application for the work had been lodged but not determined at the offence date. A stop work order was issued but not complied with. The defendant was aware the works were unauthorised. It was an aggravating circumstance that work continued after the stop work order. The company's director expressed contrition and remorse. Other mitigating factors included the early guilty plea, the defendant's good character and the cooperation with the prosecutor. A penalty of $20,000 was imposed.

39 In Maitland City Council v Link Building Services Pty Limited [2008] NSWLEC 71 45 items of building work on a hotel were carried out in a way inconsistent with a consent granted by the council. The sole director of the defendant stated he had no concern about non-compliance and it was held that the action was a deliberate and wilful contravention of the EP&A Act for commercial gain. Lloyd J described the breach as serious. No contrition or remorse was expressed. A penalty of $17,500 was imposed taking into account the very large amount of prosecutor's costs the defendant agreed to pay (approximately $80,000).

40 In Hunter's Hill Council v Touma [2008] NSWLEC 227 the defendant carried out development including the construction of office space, a kitchen and a bathroom prior to obtaining consent for the work. A development application had been lodged during the carrying out of the building work. The defendant expressed regret in not complying with the law but believed at the time consent would be forthcoming. The defendant had no previous convictions, had pleaded guilty at the earliest opportunity and had cooperated with authorities. A penalty of $15,000 was imposed. 41 The Defendant's solicitor referred to a number of local court cases which have concerned the offence of development without consent by licensed builders in relation to their own properties. Those cases suggest that generally the local court would impose a fine of $5000 to $7000.

Appropriate penalty 42 I consider the level of culpability of the Defendant is similar to that in Felici and Touma. There are significant mitigating factors which I consider should be applied to reduce the penalty below that imposed in those cases and also in light of the amount of legal costs the Defendant has agreed to pay. The appropriate penalty in light of the objective and subjective matters referred to above is $11,000. Application for time to pay a penalty can be made to the Registrar of this Court under s 10 of the Fines Act 1996. Orders 43 The Court orders that:

1. The Defendant is convicted of the offence with which he is charged.
2. The Defendant is fined the sum of $11,000 to be paid to the Registrar of the Court within 28 days of today's date.
3. The Defendant must pay the Council's costs of the proceedings of $9,500.
4. The exhibits may be returned.

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