Cumberland Council v Khoury [2016] NSWLEC 55 | Case summary

Cumberland Council v Khoury [2016] NSWLEC 55 | Case summary | Zoe

Introduction

HIS HONOUR: Mr Khoury is the owner of a property at 36 Frances Street, South Wentworthville. In 2003, Holroyd City Council (the Council) gave Mr Khoury development consent for the erection of a part one-storey, part two-storey duplex development on his property. That which is presently constructed is not, on the evidence of Mr Nathan Halstead, a Building Code of Australia (the now National Construction Code - the Construction Code) expert, within the classification under the Construction Code for dwellings of the type approved by the Council.
Mr Halstead gave evidence in these proceedings and has provided two expert reports (dated 25 June 2014 and 14 December 2015) that are in evidence before me. In 2015, two sets of orders were made by the Court (Holroyd City Council v Khoury [2015] NSWLEC 17 at [31]; Orders made on 7 April 2015 by Pain J - Affidavit of Bradley Ferguson, 22 December 2015, Exhibit HC-1, tab 5 at [11]). Those orders were in the following terms: 12 February 2015 THE COURT ORDERS THAT: 1. Within 14 days of the service of this order, the Respondent, by himself, his servants and agents cease the use of the building at 36 Frances Street, South Wentworthville as a boarding house. 2. The Applicant is to give notice to the occupants of the premises located at 36 Frances Street, South Wentworthville of the orders made in these proceedings. 3. The notice referred to in Order 2 must be given by 5:00pm on Monday 16 February 2015 either by being delivered personally to each occupant or left on or under the door of each occupancy at 36 Frances Street, South Wentworthville. 4. The Respondent is to not inhibit or restrain in anyway the Applicant executing Orders 2 and 3. 5. The Respondent must pay the Applicant's costs. 6. The Applicant is to provide the Court with Short Minutes giving effect to Orders 5 and 6 sought in the Summons by 6 March 2015. 7 April 2015 THE COURT ORDERS THAT: 1. The Respondent, by himself, his servants and agents, is restrained from using the building at 36 Frances Street, South Wentworthville as a boarding house without first obtaining development consent from the Applicant. 2. Within 6 months of the date of service of these Orders, the Respondent, by himself, his servants and agents demolish and remove all structures erected at 36 Frances Street, South Wentworthville as identified in the following documents: 2.1 As described in the "List of Works" being Annexure "A" to these Orders; and 2.2 As depicted in the attachments marked LW-1, LW-2 and LW-3 to Annexure "A", being Drawings ARC2001, ARC2002 and ARC2003 prepared by Fedele Design Pty Ltd dated 2 June 2014.
In these proceedings, the Council now charges Mr Khoury with three counts of contempt, they being: 1. Failure to abide by the order of 12 February 2015 to cease use of his premises as a boarding house; 2. Failure to abide by the further order to the same effect of 7 April 2015; and 3. Failure to abide by the order of 7 April 2015 requiring Mr Khoury to undertake a series of remedial works.
The difference between the "cease use as a boarding house" order of February 2015 and that of April 2015 is that the latter order was accompanied by a notice to Mr Khoury of the possible penalty consequences that he faced, including penal sanctions, potentially, if he failed to abide by the orders.
On 24 December 2015, the Council's solicitors commenced these proceedings, charging Mr Khoury with contempt for what was said to be his failure to satisfy the orders of February and April 2015.
On 10 March 2016, Pain J heard applications by the Council for Utility Service Cessation Orders proposed to be directed to the relevant water and electricity supply authorities. The proposed orders sought that each of those authorities be required to stop supplying the relevant service to Mr Khoury's property. On 10 March 2016, Pain J made those orders (Holroyd City Council v Khoury [2016] NSWLEC 18 at [48]).
Her Honour set out, in an ex tempore judgment, the evidentiary basis upon which she relied for the purposes of her satisfaction that those orders should be made.
However, the proceedings before her Honour were in Class 1 of the Court's jurisdiction; proceedings where strict rules of evidence do not apply (see s 38 of the Land and Environment Court Act 1979) and the standard of proof falling on the Council was that of the balance of probabilities (albeit with her Honour requiring sufficient degree of comfortable satisfaction to found the making of the orders given the consequences of doing so - see Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336).
The proceedings that are presently before me require to be dealt with on a different basis, given that Mr Fozzard, counsel for the Council, submits that I should not only find that Mr Khoury is in contempt but that that contempt should be regarded as contumacious.
In those circumstances, it is appropriate for me to approach this matter on the basis of me requiring to be satisfied that an appropriate factual basis beyond reasonable doubt exists for me to conclude that the premises were used as a boarding house in breach of the February 2015 order and the first of the April 2015 orders.
With respect to the second of the April 2015 orders, it is also necessary, before Mr Khoury could be convicted of contempt concerning that order, that there is a proper evidentiary basis, again beyond reasonable doubt, that he has breached the requirements of that order.

[5]

The evidence

The Council relied on the evidence contained in 11 affidavits of both a procedural and substantive basis. Those affidavits, the relevant date of their deposition and the nature of the material covered by them, were: 1. Affidavit of Mr Angelo Bilias, dated 6 April 2016 - instructing solicitor for the Council detailing issuance of subpoena on National Australia Bank Limited (the NAB); 2. Affidavit of Ms Amelia Jane Do, dated 15 April 2016 - evidence relating to NAB business records of Mr Robert Khoury; 3. Two affidavits of Mr Bradley Glenn Ferguson, dated 22 December 2015 and 7 April 2016, the former including a folder of documents marked Exhibit HC-1 - evidence of Council Development Compliance Officer's inspection and assessment of premises; 4. Two affidavits of service of Mr Malcom Colin Grace, dated 11 April 2016 and 22 April 2016 containing details of service of documents on Mr Robert Khoury; 5. Two expert reports of Mr Nathan Halstead, dated 25 June 2014 and 14 December 2015, a Construction Code expert, who assessed the premises in relation to the ongoing construction and use of the building - including fire safety issues; 6. Affidavit of service of Mr Peter Mecouris, dated 16 February 2016 containing details of service of documents on Mr Robert Khoury; 7. Affidavit of Dr Hardy Lim, dated 21 April 2016 - medical evidence related to Mr Bradley Ferguson's court attendance; and 8. Affidavit of Mr Ahmed Shah, dated 7 April 2016, a resident of the building.
Four witnesses gave oral evidence. Two of the witnesses doing so gave evidence that could be characterised as procedural: evidence that does not need to be dealt with at length. The remaining evidence is discussed in the merit considerations.
First, Mr Mercouris was required by Mr Khoury for cross-examination concerning the matters in his affidavit relating to the effecting of service of a range of documents on Mr Khoury. His oral evidence provided no foundation to question the accuracy of his affidavit evidence concerning service of the documents described in that affidavit.
Second, Mr Bilias, Mr Fozzard's instructing solicitor, also swore an affidavit concerning the reason why the Council's primary witness, Mr Bradley Ferguson, a Development Compliance Officer employed by the Council, was unable to be present to give evidence on 22 April 2016. The circumstances of this evidence are described by me above concerning the attempted use, by both sides, of insufficiently supported medical certificates.

[6]

Mr Halstead's evidence

Mr Halstead's written expert evidence dealt with, effectively, three matters. These were: 1. Confirmation that there remained, in Mr Halstead's opinion, fire safety risks in the premises as at the date of his November 2015 inspection if the building were to continue to be used as a boarding house (Mr Halstead also being qualified in fire safety assessment); 2. As at the date of the November 2015 inspection, the works required to be carried out by the second of the April 2015 orders had not been carried out; and 3. That the present layout of the building comprised a number of units, all of which were capable of separate occupation.
Mr Khoury cross-examined Mr Halstead on what might be described as two broad bases. The first basis concerned aspects of Mr Halstead's second report concerning additional fire safety equipment installed by Mr Khoury, whilst the second basis sought to attack Mr Halstead's credibility.
With respect to fire safety equipment, Mr Khoury elicited several concessions from Mr Halstead that some fire safety equipment had, in fact, been installed in the premises between the dates of Mr Halstead's two inspections. However, those concessions are not relevant to the question of whether or not Mr Khoury has carried out the works required by the second of the April 2015 orders, as those orders envisaged, effectively, the removal of the interior fitout of the premises that rendered them capable of being used as a boarding house.
The various Construction Code non-compliances and fire safety issues canvassed by Mr Halstead go to the basis for making the second April 2015 order in the first instance (a matter not within the scope of these proceedings) rather than the question of compliance with the order that was made.
Overall, Mr Khoury's cross-examination of Mr Halstead on matters of fact left his reports largely unchallenged.
To the extent that Mr Khoury generally cross-examined Mr Halstead on a basis seeking to attack his credit, this was, with the exception of the minor concessions concerning matters of detail relating to fire safety equipment now installed at the premises, unsuccessful.
It is unnecessary to detail the nature of the matters traversed by Mr Khoury in his cross-examination seeking to attack Mr Halstead's credibility, as I am satisfied that those matters did not provide any foundation whatsoever to question the impartiality and credibility of Mr Halstead's factual expert evidence.
I am satisfied that, to the extent relevant in these proceedings, Mr Halstead's evidence is to be accepted without reservation.

[7]

The November 2015 inspection and its filming

Two affidavits of Mr Bradley Ferguson were read in the Council's case. The first of them, dated 22 December 2015 dealt extensively with the state of the premises as at the 12 November 2015 inspection. This inspection was conducted pursuant to a search warrant and, in addition to Mr Ferguson and Mr Halstead, those attending the premises on that occasion included another employee of the Council who, Mr Ferguson deposed (Affidavit of Mr Bradley Glenn Ferguson, 22 December 2015 at [30]), had filmed the search. It is convenient, before turning to the substance of the Mr Ferguson's evidence, to deal with this filming.
Exhibited to Mr Ferguson's affidavit of December 2015 was a folder containing a range of supporting material. When Mr Fozzard proposed, on 22 April 2016, that those affidavits should be read in anticipation of Mr Ferguson giving evidence at the resumption of the hearing the following week, I examined the exhibited material and observed that it included a USB thumb-drive. This device was said to hold, electronically, a recording of that which had been filmed at Mr Khoury's premises during the course of the November 2015 inspection. I returned the thumb-drive to Mr Fozzard and indicated that I would deal with it when Mr Ferguson's affidavits were sought to be read.
When those affidavits were read on 26 April 2016, I enquired of Mr Fozzard whether any instructions had been provided to Mr Khoury explaining to him how he might access the material that was electronically stored on the USB device. Mr Fozzard informed me, on instructions, that no such information had been provided to Mr Khoury.
As Mr Khoury was self-represented and had also been self-represented, when he had appeared in earlier proceedings (although he had not appeared on all earlier occasions), I considered that, absent instructions on how the electronic material on the USB device might be accessed (as to format, software necessary and the like), on balance, as a matter of procedural fairness, it was not appropriate to allow the USB device to be tendered as part of the material exhibited to Mr Ferguson's December 2015 affidavit.

[8]

Mr Ferguson's evidence

However, Mr Fozzard tendered a bundle of photographs (Exhibit D) which Mr Ferguson confirmed had been extracted from the electronic recording of the November 2015 inspection of Mr Khoury's premises. Although Mr Khoury objected to the tender of these documents on the basis that they had not previously been served on him, I rejected that objection. I now record that I was satisfied that the probative value of that material significantly outweighed any prejudice that Mr Khoury might suffer as a consequence of the late provision of the photographs to him (s 135 of the Evidence Act 1995). I reached this conclusion as the photographs were of aspects of the exterior and interior of Mr Khoury's own premises, dealing with physical aspects of his premises with which he was, necessarily, familiar and he was also to have the opportunity to cross-examine Mr Ferguson about what Mr Ferguson said should be observed from those photographs relevant to the matters in contest in the proceedings.
I granted Mr Fozzard leave to elicit additional evidence-in-chief from Mr Ferguson in light of my ruling not to admit the USB device and the recording said to be stored on it.
Mr Fozzard took Mr Ferguson through the photographs, one-by-one, having him describe what was shown in the photograph and how it referred to items set out in the List of Works (the LOW).
Each of the photographs in Exhibit D was tagged with a number referable to the element of the LOW forming part of the second of the orders made in April 2015 (this schedule is reproduced as an annexure to this decision).
As a consequence of those items shown remaining on the premises at the date of the November inspection (being items identified in the LOW as required to be removed but not having been removed), the photographs demonstrated that, with respect to the item depicted in the relevant photograph, that aspect of the second of the April 2015 orders had not been satisfied.
There were 16 photographs in total and I am satisfied that all but one of those photographs showed that the relevant element of the LOW had not been carried out.
The exception was the photograph said to reflect non‑compliance with Annexure A, 3.2 of the orders, a requirement to: 3.2 Demolish existing kitchen facilities area on the first floor including SS tub.
This photograph (that Mr Ferguson said demonstrated non-compliance with 3.2 of the LOW of the orders) was, he conceded, of very poor quality. I am satisfied that the blurry elements of this image, said by Mr Ferguson to demonstrate that this aspect of the LOW has not been complied with by removal of the kitchen facilities and the stainless steel tub, does not so demonstrate. However, the effect of Mr Ferguson's oral evidence, without having regard to this photograph, was that this aspect of the required works had not been carried out.
Mr Khoury's cross-examination of Mr Ferguson was not directed to challenging the factual accuracy of the photographic evidence or of Mr Ferguson's oral commentary with respect to it. The cross-examination of Mr Ferguson was, in substance, virtually entirely directed to matters which Mr Khoury envisaged might undermine Mr Ferguson's credit as a witness. The cross-examination was entirely unsuccessful in this context (a matter requiring some comment in my later consideration of Mr Khoury's closing submissions).
I am satisfied, on the basis of Mr Ferguson's unchallenged oral evidence concerning the state of the premises as at November 2015, and a necessary inference to be drawn from Mr Shah's affidavit of 7 April 2016, that the works required to be carried out pursuant to the second of the April 2015 orders had not, in fact, been carried out as at the date of the inspection.

[10]

The Boarding Houses Act 2012

During the course of the proceedings and in his final submissions, Mr Khoury raised the question of whether or not the Boarding Houses Act 2012 (the Boarding Houses Act) acted as some sort of barrier to a conclusion that that which was operating from his premises could be regarded as a boarding house.
As I understood the position advanced by Mr Khoury, he considered that his premises did not satisfy the terms of s 5(1) of the Boarding Houses Act and could, therefore, not be regarded as being a "boarding house" in the sense requiring my consideration in these proceedings.
Although Mr Fozzard did not address the question of the applicability or otherwise of the Boarding Houses Act, it was not necessary for him to do so as the answers to Mr Khoury's submissions are contained in the legislation itself.
The answers are twofold. One is solely a matter of statutory interpretation from the clear terms of the Boarding Houses Act, whilst the other is a matter of fact arising from Mr Ferguson's evidence and the relevant provision of the Boarding Houses Act.
The statutory answer is contained in s 6 of the Boarding Houses Act, a section in the following terms: 6 Relationship of Act with other laws Nothing in this Act limits any requirement imposed by or under the Environmental Planning and Assessment Act 1979, the Food Act 2003, the Local Government Act 1993, the Public Health Act 2010 or any other Act or law with respect to the use, or the provision of services to residents, of boarding premises. Note. The Acts that are specifically referred to in this section also make provision with respect to building and accommodation standards or service standards (or both) in relation to boarding premises.
As can be seen, the requirements for compliance of the Environment Planning and Assessment Act 1979 (the EP&A Act) with respect to the use of boarding premises are preserved by this statutory provision.
As earlier discussed in my consideration of whether the activities carried out by Mr Khoury at his premises constituted a "boarding house" for the purposes of the Holroyd Local Environmental Plan 2013 (the LEP), that analysis is equally applicable to the definition of "boarding premises" contained in s 4(1) of the Boarding Houses Act, a provision in the following terms: 4 Definitions (1) In this Act: … boarding premises means premises (or a complex of premises) that: (a) are wholly or partly a boarding house, rooming or common lodgings house, hostel or let in lodgings, and (b) provide boarders or lodgers with a principal place of residence, and (c) may have shared facilities (such as a communal living room, bathroom, kitchen or laundry) or services that are provided to boarders or lodgers by or on behalf of the proprietor, or both, and (d) have rooms (some or all of which may have private kitchen and bathroom facilities) that accommodate one or more boarders or lodgers.
It is clear that the three mandatory provisions of the definition - those contained in (a), (b) and (d) - are satisfied and that, in addition, the non‑mandatory provision in (c) is also satisfied.
For premises to be brought within the scope of the Boarding Houses Act, a boarding house must be a "registrable boarding house" as defined in s 5 of that Act. A "registrable boarding house" can be either a "general boarding house" (s 5(1)(a)) or a "regulated assisted boarding house" (s 5(1)(b)). The relevant provision here applicable would be that of a "general boarding house", a term defined in s 5(2) in the following terms: 5 Meaning of "registrable boarding house" … (2) Boarding premises are a general boarding house if the premises provide beds, for a fee or reward, for use by 5 or more residents (not counting any residents who are proprietors or managers of the premises or relatives of the proprietors or managers).
None of the exceptions contained in s 5(3) are here relevant.
I have earlier set out Mr Ferguson's evidence concerning occupants of Mr Khoury's premises who had been in occupation for an extended period of time (certainly longer than three months). That evidence disclosed that Ms McDonald and her partner, Mr Banks and his brother, and Mr Shah had all been resident for an extended period and thus would satisfy, should it be in any sense relevant (which it is not), the definition of "general boarding house" in s 5(2) of the Boarding Houses Act.

[16]

Mr Khoury's bank records

Over Mr Khoury's objection, I read the affidavit of Ms Amelia Do, an officer of the National Australia Bank Limited (NAB). Ms Do's affidavit had been provided as part of the response to a subpoena issued to the bank seeking the production of business records held by NAB.
The business records produced were four pages of transaction details on a NAB home loan account in Mr Khoury's name. The period covered by the records was 9 May 2015 to 5 April 2016. I now record that I rejected Mr Khoury's objection because I was satisfied that the probative value of the affidavit, and the documents verified by it, significantly outweighed any prejudice to Mr Khoury that might be occasioned by their admission as evidence.
There are two aspects of these bank records that are relevant to, and inform me, about matters discussed above in the extracts from Mr Ferguson's December 2015 affidavit. There are two streams of credit entries that are relevant.
The first of these records deposits made by Dilpreet Bains, the first of them being noted as "bond" and deposited on 20 July 2015, with seven further deposits of varying amounts between 22 July 2015 and 2 November 2015, with those deposits being consistent with the payment of rent at the rate described by Mr Banks in the element of Mr Ferguson's conversation with him earlier set out. There has clearly been some confusion about the correct name of this individual but I am satisfied all the relevant evidence concerns the same individual.
The second matter arising from these bank records concerns a series of deposits, at weekly intervals, of $350 commencing on 29 May 2015 and concluding on 6 November 2015. The person making the deposit is recorded, in each instance, as being Craig Martin.
Mr Fozzard submitted that, in light of the conversation earlier set out between Mr Ferguson and Ms McDonald, that I should conclude that Craig Martin was the partner of Ms McDonald and that the weekly payments of $350 made by Mr Martin were the rental payments to which Ms McDonald referred as being made by direct transfer to the owner of the premises.
I am satisfied, on the basis of the conversation and the bank records of Mr Khoury's account, that this inference should be drawn.

[17]

Holroyd Local Environmental Plan 2013

The LEP is the relevant environmental planning instrument in effect as at the date of the February and April 2015 orders. Mr Khoury's premises are in the R2 Low Density Residential Zone under the LEP. The Land Use Table sets out the uses within the R2 zone that are permitted with development consent.
Amongst those permitted uses is that of boarding houses. Whilst the use is permissible within the zone, the Land Use Table makes it clear that development consent is required for such use.
I am satisfied, on the basis of [15] and [16] of Mr Ferguson's affidavit of 7 April 2016, that there has been no application by Mr Khoury or any other person for consent to use Mr Khoury's premises as a boarding house. Mr Ferguson's search (on 6 March 2016) discloses that the Council's records show Development Consent 2003/1068 for the construction of an attached two-storey and single-storey dual occupancy was active from 5 May 2004.
The LEP contains, as is customary in such documents, a dictionary that defines a range of terms. The definition in the LEP for "boarding house" is in the following terms: boarding house means a building that: (a) is wholly or partly let in lodgings, and (b) provides lodgers with a principal place of residence for 3 months or more, and (c) may have shared facilities, such as a communal living room, bathroom, kitchen or laundry, and (d) has rooms, some or all of which may have private kitchen and bathroom facilities, that accommodate one or more lodgers, but does not include backpackers' accommodation, a group home, hotel or motel accommodation, seniors housing or a serviced apartment. Note. Boarding houses are a type of residential accommodation - see the definition of that term in this Dictionary.
I have earlier set out the terms of the conversations that Mr Ferguson had with a number of persons who were residing at Mr Khoury's premises. It is in the context of those conversations that I turn to address the various elements of the definition of "boarding house" set out above.

[18]

Wholly or partly let in lodgings

Mr Fozzard submitted that I should follow the decision of Pearlman CJ in Ashfield Municipal Council v Australian College Of Physical Education Ltd (1992) 76 LGERA 151, where her Honour observed, at [153]: "When one considers the evidence that the premises are owned by the respondent, (which, of course, is not itself an occupant) whose students apply to it for an agreement to occupy a numbered room, for rent, with services provided, and with a sharing of common facilities in each house, it seems to me inescapable that what is more appropriately described here is letting the houses as lodgings and not using them in the same way as a family group in the ordinary way of life."
Perhaps of greater assistance, is the decision of Biscoe J in Warlam Pty Limited v Marrickville Council [2009] NSWLEC 23, 165 LGERA 184, where his Honour summarised, at [20] to [29], a line of authorities, including Ashfield Municipal Council, on indicia for a "boarding house".
Whilst the definition of "boarding house" in the then applicable Marrickville Local Environmental Plan was in terms that differ from the definition in the LEP engaged in these proceedings, his Honour's analysis assists in a broad understanding of the context within which Pearlman CJ's observations should be viewed.
In the present context, on the evidence earlier set out, I am satisfied that Mr Khoury's premises are "wholly or partly let in lodgings", as that term should properly be understood.
I now turn to the question of whether those who have resided at Mr Khoury's premises (or at least some of them) have done so with the premises providing them with a principal place of residence for three months or more. I am satisfied, on the basis of the uncontested evidence of the conversations that Mr Ferguson had with Mr Banks, Mr Shah and Ms McDonald that those three individuals, Mr Banks' brother and Ms McDonald's partner, have had Mr Khoury's premises as their principal place of residence for three months or more and that, therefore, this provision is satisfied.
The question of shared facilities is, from the terms of the definition of "boarding house", one of discretionary consideration but I am satisfied on the basis of the conversations which Mr Ferguson had with Ms Falzon and Mr Shah that each of them had access to the shared facilities of the laundry.
In addition, Mr Shah's evidence, in [5] of his affidavit, that "Robert supplied Internet access shared by all his lodgers", constitutes a shared electronic facility, "facilities" not being a defined term in the LEP.
It is also clear from the descriptions of the various units inspected by Mr Ferguson (excluding any references to the video on the USB stick), in [19], [20], [23], [25], [26] and [27], that the provisions of (d) of the definition of "boarding house" are satisfied.
Finally, I observe that there is no basis upon which the exceptions (backpackers accommodation, group home, hotel or motel accommodation, seniors' housing or serviced apartment) could apply to Mr Khoury's premises.
The consequence of this is that I am satisfied, on the basis of the evidence set out above, that: 1. Mr Khoury's premises operated as a boarding house, at least for the period between 29 May 2015 (the date of the first deposit by Mr Craig Martin into Mr Khoury's account) and Mr Shah moving out of the premises on approximately 24 March 2016 ([7] of Mr Shah's affidavit); 2. The operation by Mr Khoury of his premises as a boarding house during this period was in breach of the order of the Court made on 12 February 2015 that Mr Khoury cease the use of the building at 36 Frances Street, South Wentworthville, as a boarding house; 3. That these activities by Mr Khoury also constituted a breach of the first order made by the Court on 7 April 2015 whereby Mr Khoury was restrained from using the building at 36 Frances Street, South Wentworthville as a boarding house without first obtaining development consent from the Council for this use; and, 4. As a consequence, Mr Khoury is guilty of failing to comply with each of these Court orders.
When Mr Khoury was served with copies of the orders of the Court made on 7 April 2015, he was also served with a Penal Notice to him that explained that disobedience of the order rendered him liable to imprisonment or to sequestration of property in addition to liability for a fine.

[19]

Mr Fozzard's submissions

Mr Fozzard provided me with a written outline of submissions to which he spoke after the completion of the evidence in the proceedings. He acknowledged that there were aspects of his submissions that might, more properly, be regarded as relevant to sentencing and I have, for the purposes of this phase of the proceedings, not considered those elements.
Mr Fozzard undertook an analysis of the written and oral evidence and made submissions on the reasons why he said I should be satisfied that each of the three charges brought against Mr Khoury should be regarded as being established, to the criminal standard of proof, by the Council's evidence in these proceedings.
It is to be noted that Mr Fozzard also included in his written outline matters which went to laying a foundation for the basis of the orders that had been made in 2015. However, as I am dealing with only those matters that arise in considering whether or not Mr Khoury has failed to observe the terms of those orders during the period since their making to the time of this hearing, it is not necessary for me to consider the basis upon which the orders were made.
This arises as a necessary consequence of the orders having been made by Pain J and there having been no appeal by Mr Khoury against the terms of either the order made in February 2015 or the two orders made in April 2015, those three orders comprising the suite of orders said by the Council to be breached by Mr Khoury resulting in these contempt charges.
I therefore have, also, set aside any consideration of that foundational material, concentrating on that which Mr Fozzard has said that I should find based on the evidence and the legal conclusions that I should draw from those factual findings.
It is unnecessary to deal with these submissions in detail as my findings, in the analysis of the evidence earlier set out, and the conclusions that I should draw from that evidence are, effectively, in accord with the submissions made by Mr Fozzard.

[20]

Mr Khoury's submissions

I paid careful attention to the submissions made by Mr Khoury.
I had, early in the proceedings, explained to him the difference between submissions and evidence. Having elected not to give evidence in the proceedings (an election which cannot found any adverse inference), Mr Khoury's closing submissions amounted to a mixture of submissions; matters that might properly be regarded as evidence had they been given in the witness box (encompassing matters potentially relevant in the proceedings); allegations against individuals and the Council as an entity for which there is absolutely no evidentiary foundation whatsoever, let alone any proper or sufficient evidentiary basis; and matters that might properly be considered as matters in mitigation to be taken into account on sentencing when that arises.
Mr Khoury also made a number of statements that, had they been made in the witness box, would have constituted admissions by him - admissions that would have provided assistance to the Council's case.
With respect to these statements, I set them aside as they are not only not given in evidence and are given against interest, but because it is unnecessary for me to have any regard to them given that I am otherwise independently satisfied, on the basis of the evidence led on behalf of the Council from Mr Halstead and Mr Ferguson (evidence which was not challenged on any relevant factual basis during cross-examination of these witnesses by Mr Khoury) and the affidavit evidence of Mr Shah and the material contained in the records of NAB supported by and attached to the affidavit of Ms Do that Mr Khoury is using the premises for the purpose of a boarding house and that he has not undertaken the works required by the second of the April 2015 orders.
However, as I later set out in my consideration of how I should proceed after finding Mr Khoury guilty of each of the charges of contempt laid against him, it is appropriate to note that, during his submissions, he said, several times on my notes, either expressly or by inference, that he was motivated to provide affordable accommodation to those in the community who were unable to afford accommodation other than of the type that he was prepared to make available at the rental levels that he was charging.
Although this submission can find some support in the independent evidence from the tenants interviewed by Mr Ferguson, and from Mr Khoury's bank records, there is, at least, the reasonable inference available that the revenue stream to Mr Khoury from his activities (whether cash-in-hand or by bank transfer - both being the subject of evidence in Mr Ferguson's 22 December 2015 affidavit), might have been substantial.
However, that is not a matter to be taken into account in this phase of the proceedings; it may well potentially come into play at sentencing. At this time, I merely note it as being a likely element, coexisting with what Mr Khoury otherwise submitted I should regard as his motivation for these activities.
Finally, I note that Mr Khoury made submissions to me as to the level of his indebtedness to the bank and thus his capacity to fund any compliance orders that might arise. The submission as to his state of indebtedness to his mortgage lender, the NAB, finds proper evidentiary support in the bank's records appended to the affidavit of Ms Do. That evidence gives rise to two matters for my consideration.
The first arises in the context of this phase of the proceedings, whilst the second potentially comes into play in the sentencing proceedings that will take place at a later date. On that occasion, questions of capacity to pay a penalty may require consideration as required by s 6 of the Fines Act 1996 (assuming that a proper evidentiary basis for such consideration remains at that time).
However, the extent of Mr Khoury's indebtedness to his mortgage provider (even though I have no evidence as to Mr Khoury's income) is a matter that I consider, given that Mr Khoury is self-represented (giving rise to all of the difficulties for the litigant-in-person and the decision-maker in such circumstances), with respect to which it is prudent that I take a cautionary approach to the amount of time that I should allow between my determination that I should convict Mr Khoury on each count as the outcome of this phase of the proceedings and the setting of the date for the sentencing proceedings to follow.
I have taken this approach, as will be evident from my later discussion, because I am satisfied that there are two distinct avenues available to Mr Khoury to deal with and terminate his continuing breach of the second of the two orders made on 7 April 2015.
Remedying that ongoing breach is potentially a matter of some significance in my sentencing consideration. I have, therefore, as I later explain, allowed what I consider to be a sufficient period of time for Mr Khoury to embark on remedying the ongoing breach by: 1. seeking either to regularise the status of his premises and seek consent for their use as a boarding house; or 2. terminating his breach by carrying out the works required by the second order made in April 2015.
I have, therefore, also determined that I should, in my concluding orders, enable either party to seek to relist the matter before me on three days' notice if there is good reason to do so.
Given that Mr Khoury is a self-represented litigant, it is also prudent for me to observe that making an allowance to have the matter relisted provides Mr Khoury with the opportunity (should he elect to pursue the path of curing his breach of the ongoing contempt caused by his failure to carry out the works required by the second order of April 2015 by the process of making a building certificate application to regularise the structure and lodging a development application for the use of the building, when regularised by the granting of a building certificate, as a boarding house) to seek an extension of time to permit the completion of that process by exercising his right to relist. Equally, should he elect to carry out the ordered works but seeks more time to do so, he can relist for that purpose.
In explaining this, I do no more than set out, as is appropriate, what is potentially a procedural path that Mr Khoury may wish to follow depending on the stance he elects to take with respect to the ongoing breach of the second order of April 2015, an ongoing breach that founds my third finding that the Council has established he is in contempt of the orders of the Court made in early 2015.
In the course of his submissions, Mr Khoury also dealt with an aspect of Mr Ferguson's affidavit evidence of 22 December 2015 that I have not set out in my earlier discussion of his evidence where I considered the conversations he had had during the November 2015 inspection. The aspect of the evidence Mr Khoury addressed concerned those units within Mr Khoury's premises that Mr Ferguson accessed with the assistance of a locksmith because there was no response to his seeking of voluntary access. In each of those instances, the units entered were unoccupied at the time and Mr Ferguson's affidavit described what he observed inside each of those premises.
Mr Khoury submitted that: 1. the presence of personal effects; or 2. the existence of an unmade bed; or 3. the presence of a refrigerator should not be a basis for concluding that any of those unoccupied units was, in fact, occupied by a boarder.
Whilst it is possible that Mr Ferguson's affidavit evidence concerning the inspection of those unoccupied units might well have provided sufficient basis for me to conclude that they were occupied, such a conclusion is unnecessary to be drawn as the evidence from the conversations with Ms McDonald, Mr Banks and Mr Shah provides a sufficient basis for me to conclude that the premises were, as at the date of the inspection, occupied in a fashion providing sufficient foundation to satisfy the relevant element of the definition of "boarding house".
Mr Khoury also submitted that that which he was providing at his premises constituted not only a victimless crime but had the positive benefit of creating housing for those who would not otherwise be able to afford it. I observed a consistent thread recurring in his submissions that he regarded himself as socially responsible and providing affordable housing in circumstances where it might not ordinarily be available at the price he was charging if he did not supply it.

[22]

How should the contempt s be classified?

In Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92, 167 LGERA 91, Biscoe J identified the various classes of contempt, at [72], in the following terms: 72 There are three classes of contempt: technical, wilful and contumacious. Technical contempt is where disobedience of a court order (or undertaking to the court) is casual, accidental or unintentional. Wilful contempt is where the disobedience is more than that, but is not contumacious. Contumacious contempt is where there is a specific intention to disobey a court order or undertaking to the court, which evidences a conscious defiance of the court's authority. Although a contempt may be established, in the circumstances of the case the court may decide not to make any order. The element of intention is relevant to whether any order should be made and, if so, to punishment.
It seems to me that the contempt in these proceedings should be regarded as contempt where there has been demonstrated, by Mr Khoury, to be a deliberate and ongoing intention to disregard the orders of the Court that were made in February and April 2015.
Whilst the fact that there had been pre-existing orders of a similar nature to those requiring cessation of use as a boarding house made several years ago does not provide a basis for punishment in these proceedings; it does heighten, at least to some extent, the way the contempt for which Mr Khoury has been found guilty in these proceedings should be regarded.
In addition, sufficient in their own right, are the facts that: 1. the contempt concerning use of the premises as a boarding house continued for some 12 months after the first of the two orders requiring the cessation of the use (and the use only ceased as a result of Court intervention by issuing orders to electricity and water suppliers); and 2. the contempt evidenced by the failure to implement the LOW required in the second of the April 2015 orders is ongoing demonstrate the seriousness of these contempts.
Finally, I should observe that, in his submissions during the course the hearing, Mr Khoury did not indicate any preparedness to purge his ongoing contempt by offering a time within which he would, in fact, undertake the items set out on the LOW.
These various factors cause me to be satisfied that his contempts with respect to all three orders should be regarded as falling within the worst category and therefore be regarded as contumacious.

[26]

Remedying the ongoing contempt

I have earlier set out the summary of Mr Khoury's submissions made in reply to Mr Fozzard's submissions after the conclusion of the evidence in the proceedings. It is clear, as set out in that summary, that Mr Khoury says that he is motivated in his operation of the boarding house and its fitout in the fashion that resulted in the LOW being required pursuant to the second of the orders of April 2015 by a social response to the need to provide affordable housing to those who might not otherwise be able to afford their own dwelling.
For the purposes of this consideration, despite the fact that these statements were made by Mr Khoury as self-serving submissions rather than as evidence, I am prepared to accept that, at least in part, that might be Mr Khoury's motivation.
I have also carefully read the terms of Mr Halstead's reports of 25 June 2014 and 14 December 2015. Although Mr Halstead's first report, based on an inspection of the building on 30 May 2014, sets out in comprehensive detail Mr Halstead's expert opinion on a wide range of matters concerning the construction of the building, it is not necessary to set out those matters in detail. It is, however, appropriate to set out Mr Halstead's conclusion and recommendations in his second report, a report based on his initial report and his further inspection of the building on 12 November 2015. His conclusion and recommendations (Exhibit A page 12) are in the following terms: 6.0 CONCLUSION This report concludes the same conclusions as I previously made in my Initial Report, which are: 6.1 The use of the building in its current manner should be immediately stopped as the potential fire and life safety risks are very high. In addition the minimum health and amenity standards do not meet community expectations or the requirements of the BCA. 6.2 The building should be reconstructed internally to conform to the original development consent, or a new development application lodged to Council for use as a boarding house, with the internal construction complying with the requirements of the BCA, comprising complying fire safety as well as health and amenity compliance that will not represent undue risk to occupants as currently exists at the premises. Recommendations: 6.3 The use of the premises as a boarding house with 10 separate sole occupancy units, cease immediately due to the health, amenity and fire, life safety risks. 6.4 The building approvals basis is reviewed. If the building is to continue use as a boarding house, a new development application is to be lodged and if approved the building reconstructed to comply with the requirements of the BCA for the approved use and layout. 6.5 If the building is to be used as a dual occupancy, as currently approved, it is to be internally stripped and constructed in accordance with the approved development consent plans and to comply with the BCA (Housing Provisions of Volume 2) for two (2) attached class 1a dwellings. 6.6 The process for assessment and determination of approvals for any future use should be carried out in accordance with the requirements of the Environmental Planning and Assessment Act 1979, Regulations 2000, as well as the Building Code of Australia. 6.7 A structural engineer should immediately assess the building structure and provide recommendations where necessary to ensure the structural stability of the building.
It is clear from 6.4, 6.6 and 6.7 in his recommendations that Mr Halstead is not to be taken as saying that the premises are not capable of being adapted to be used as a boarding house.
It may well be that extensive work would be required to render it fit for that purpose and that is not a consideration that arises for my determination in these proceedings.
It is, however, sufficient that I can conclude that it might be possible for this to occur. In the ordinary course of events, consistent with the process described by Bignold J in Ireland v Cessnock City Council [1999] NSWLEC 250; 110 LGERA 311, if Mr Khoury were to seek to regularise his position, and obtain approval for the premises to be used as a boarding house he would need to: 1. Apply to the Council for a building certificate for the structure as it is presently constructed and, during the building certificate process (whether the Council or on appeal to the Court), to work out precisely what alterations need to be made to the premises to render it fit for the issuing of a building certificate pursuant to s 149A of the EP&A Act through that process and to undertake those works; and 2. Lodge a development application for permission to use the building as a boarding house after it has been determined to be appropriate to be granted a building certificate as fit for use for such a purpose.
If Mr Khoury were to proceed down that path, the issuing of a building certificate and the granting of development consent for the use as a boarding house would have the effect of purging Mr Khoury's ongoing contempt and confine the extent to which I need to have regard, for sentencing purposes, of his failure to comply with the second of the orders of April 2015.
The second option for Mr Khoury to constrain the extent to which I must have regard to his breach of the second of the orders of April 2015 would be if he were to carry out the works that were required to be undertaken as set out in the schedule to that order.

[30]

Orders

For the reasons earlier set out, I make the following orders: 1. Robert Khoury is convicted of the charge of contempt of court in that he has failed to obey the order made by this Court on 12 February 2015 that, within 14 days of the service of that order, Mr Khoury, by himself, his servants and agents, cease the use of the building at 36 Frances Street, South Wentworthville as a boarding house; 2. Robert Khoury is convicted of the charge of contempt of court in that he has failed to obey the order made by this Court on 7 April 2015 that Robert Khoury, by himself, his servants and agents, is restrained from using the building at 36 Frances Street, South Wentworthville as a boarding house without first obtaining development consent from Holroyd City Council for that use in circumstances where such consent has not been obtained; 3. Robert Khoury is convicted of the charge of contempt of court in that he has failed to obey the order made by this Court on 7 April 2015 that, within six months of the service of that order, Mr Khoury, by himself, his servants and agents, demolish and remove all structures erected at 36 Frances Street, South Wentworthville as identified in Annexure A - List of Works, attached to that order; 4. Robert Khoury is referred to the Probation and Parole Service for the purpose of preparing a presentence report as to the suitability of Mr Khoury to serve a full-time custodial sentence; 5. Mr Khoury is to permit those persons designated by the General Manager of the Council within whose local government area 36 Frances Street, South Wentworthville, is located as at 28 October 2016 to undertake an inspection on 28 October 2016 of the premises at 36 Frances Street, South Wentworthville, to ascertain the extent of compliance, as at that date, with the second of the orders made by this Court on 7 April 2015; 6. The matter is adjourned to a sentencing hearing on Monday 14 November 2016; and 7. Liberty to relist on three working days' notice.

[31]

Annexure A - List of Works

Ground Floor Level - Unit 1 (as shown in the attached Plan marked "LW-1" being Drawing ARC2001 prepared by Fedele Design Pty Ltd dated 2 June 2014) 1.1 Demolish existing timber boarding to the garage entry opening. 1.2 Demolish the existing timber stairway in the garage area. 1.3 Demolish internal wall currently between living and dining to provide a single open plan living / dining room.
Ground Floor Level - Unit 2 (as shown in the attached Plan marked "LW-1" being Drawing ARC2001 prepared by Fedele Design Pty Ltd dated 2 June 2014) 2.1 Demolish existing timber boarding to the garage entry opening. 2.2 Demolish the existing timber stairway in the entry foyer area. 2.1 Demolish internal walls currently between foyer and living / dining to provide a single open plan living /dining room.
First Floor Level - Unit 1 (as shown in the attached Plan marked "LW-2" being Drawing ARC2002 prepared by Fedeie Design Pty Ltd dated 2 June 2014) 3.1 Demolish the internal wall between the existing hallway and bedroom 2. 3.2 Demolish existing kitchen facilities areas on the first floor including SS tub. 3.3 Existing timber stair to be demolished.
First Floor Level - Unit 2 (as shown in the attached Plan marked "LW-2" being Drawing ARC2002 prepared by Fedele Design Pty Ltd dated 2 June 2014) 4.1 Demolish the internal wail between the existing hallway and bedroom 2. 4.2 Demolish the kitchen areas on the first floor. 4.3 Demolish all internal lightweight walls currently separating bedrooms and units. 4.4 Demolish bathrooms to first floor.
Second Floor Level - Unit 1 (as shown in the attached Plan marked "LW-3" being Drawing ARC2003 prepared by Fedele Design Pty Ltd dated 2 June 2014) 5.1 Demolish existing access stair and opening, kitchen, bathrooms, access doors and plywood clad partition wails to structural engineers details as 1684-Timber Framing Code.
Separating Wall (as shown in the attached Plans marked "LW-1" and "LW-2" being Drawings ARC 2001 and ARC2002 prepared by Fedele Design Pty Ltd dated 2 June 2014) 6.1 Demolish existing door and steps on the Ground Floor and First Floor Levels. 6.2 The main separating wall between Units 1 and 2, must be a fire rated 60/60/60 wall with sound transmission level of ctr ancf rw 50 min. 6.3 The openings in the separating wall at ground and first floor level must be filled in to comply as a 60 minute fire rated wall and rw ctr 50 sound rated wall. 6.4 The separating wall must extend to: 6.4.1 The underside of the roof on the Second Floor Level; 6.4.2 The underside of the existing floor slabs on the Ground Floor Level; and 6.4.3 The underside of the existing floor slabs on the First Floor Level.

Cumberland Council v Khoury

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (32 paragraphs)

Parties

Cases Cited (7)

Cited By (1)