Cumberland Council v See Win Holdings Pty Ltd

The Defendant's guilty plea

1. When the matter came before the List Judge on the first occasion on 7 September 2018, the Defendant entered a plea of guilty to the offence with which it had been charged. The Prosecutor accepts that this guilty plea was entered at the earliest available opportunity.
2. Consistent with the provisions of s 22 of the Crimes (Sentencing Procedure) Act 1999 (the Sentencing Procedure Act), the Defendant is entitled to a discount on any penalty which might otherwise be imposed. The discount reflects the utilitarian value to the system of justice of such a plea and the benefits obtained by avoiding the necessity for a contested trial. Conventionally, the maximum discount is 25% (R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309) and that discounting is to be applied to the penalty to be imposed on the Defendant.

The Defendant is to be convicted

1. The legal representatives of the Prosecutor and the Defendant settled a Statement of Agreed Facts. This document became Exhibit A. The matters I have earlier set out have been drawn from this document.
2. An examination of matters set out in it, when coupled with the other documents in evidence, clearly establish that the Defendant committed the breach of the EP&A Act with which it has been charged and to which it has pleaded guilty.
3. I am therefore satisfied that there is a proper basis upon which I might proceed to convict the Defendant.
4. The question of whether I ought to do so and proceed to impose a fine on the Defendant, or whether I should exercise the discretion with which I am vested, pursuant to ss 10 or 10A of the Sentencing Procedure Act, is a matter requiring later consideration.

The relevant statutory framework

1. I have earlier noted the provision of the EP&A Act breached by the Defendant by the construction of the on-site stormwater detention tank in a fashion contrary to the approved plans. It is not necessary to set out the terms of this statutory provision as nothing turns on it.
2. The maximum penalty set by the EP&A Act as applicable at the time of the Defendant's offending conduct was $1.1M. Although the Defendant's counsel, Mr O'Gorman-Hughes, took me through a series of extracts from differing operating periods of the provisions of the EP&A Act to demonstrate that this was the position (contrary to the assertion in the Prosecutor's written submissions as to what was the applicable penalty provisions), it is unnecessary to canvass this matter further, as the concession was made by the Prosecutor that there had been an inadvertent error in its written submissions on penalty.
3. There are five provisions in the Sentencing Procedure Act which are relevant for my consideration in these sentencing proceedings.
4. The first is s 3A, the provision which sets out the objects for which the sentencing process is undertaken. This provision is in the following terms: 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community.
5. The second and third provisions are ss 10 and 10A, ones which give me the discretion to deal with the Defendant's offending conduct in a fashion that varies from the conventionally expected outcome of the recording of a conviction and the requirement for the Defendant to pay a fine as a financial penalty to punish it for its breach of the law. These two provisions require subsequent consideration as a consequence of Mr O'Gorman-Hughes's submissions that the Defendant warrants being dealt with pursuant to one or other of them - his submission being, in the first instance, that no conviction should be recorded and no financial penalty imposed.
6. The fourth provision relevant to my consideration in these proceedings is s 21A. This provision first requires my consideration of whether or not there are any circumstances of aggravation arising to be considered in assessing the seriousness of the Defendant's breach of the EP&A Act. The factors requiring consideration in this regard are set out in s 21A(2). The Prosecutor expressly conceded during the course of the proceedings that no factors of aggravation arise to be considered.
7. However, s 21A(3) sets out a range of factors concerning the circumstances applicable to a Defendant and to which regard is to be had to the extent engaged. The relevant elements of s 21A(3) are noted in my consideration of the idiosyncratic features of the Defendant discussed below. It is not necessary to set out the entirety of the provisions at this point.
8. The fifth provision in s 22, earlier noted at [14], is the provision which gives the basis for the discount on sentence for the Defendant's early guilty plea.

No aggravating factors

1. The Prosecutor accepts that there are no aggravating factors (s 21A(2)) here arising. I agree with that assessment.

Environmental harm (s 21A(3)(a))

1. The change to the location of the on-site stormwater detention facility, the Prosecutor concedes, has not caused, and is not likely to cause, any environmental harm. Therefore, for the purposes of the statutory assessment, it is appropriate to make a positive finding in favour of the Defendant with respect to this factor in s 21A(3).

Prior convictions (s 21A(3)(e))

1. The Prosecutor accepts that the Defendant has no prior convictions for environmental or planning offences. This is a factor to be taken into account in the Defendant's favour in my sentencing consideration.

Corporate good character (s 21A(3)(f))

1. No evidence has been provided concerning whether or not the Defendant has undertaken community activities of any nature which might permit a positive finding of corporate good character. As a consequence, this factor is neutral in my sentencing evaluation.

Specific deterrence (s 21A(3)(g))

1. The Prosecutor has not submitted that there is any need for any penalty which I might consider imposing being imposed on the Defendant to deter it, specifically, from further offending conduct of the nature here charged. I accept that the material contained in the affidavit of Mr Wang, at (7), provides a proper basis upon which I can concur in the Prosecutor's submission that no specifically deterrent penalty is warranted.

Contrition and remorse (s 21A(3)(i))

1. In the affidavit of Mr Wang, at (6) and (7), he apologised on behalf of the Defendant and noted that, in his now assumed role with the Defendant, he would ensure that the offending conduct with which the Defendant has been charged, and that gave rise to these proceedings, would not be repeated. As that conduct has been regularised and no construction activities were required as a consequence of the relocation of the stormwater facility, the Prosecutor accepted (as do I) that that which was set out in this affidavit evidence was a proper and appropriate demonstration of contrition and remorse on the part of the Defendant.
2. Finally, the capacity of the Defendant to pay a financial penalty, although potentially arising as a consequence of s 6 of the Fines Act 1996, does not require consideration, as no material is in evidence concerning the financial capacity (or any lack thereof) of the Defendant to pay any fine which I might consider appropriate to impose.

Introduction

1. The Prosecutor accepted (Prosecutor's submissions on sentence at (6)) that the Defendant has cooperated with the Prosecutor and that this matter should be taken into account in my sentencing consideration (see later). The Prosecutor also noted that the Defendant has reached an agreement with the Prosecutor as to the Prosecutor's costs in these proceedings, with that agreement resulting in acceptance by the Defendant of the obligation to pay the Prosecutor's costs in the agreed sum of $40,000 (confirmed in (7) of the Defendant's submissions on sentence).

The agreement on costs

1. I have noted above the agreement by the Defendant to pay the Prosecutor's costs of these proceedings in the agreed sum of $40,000.
2. Although I am satisfied that the length of the hearing before me was protracted by an hour or so, as a consequence of the necessity for the Prosecutor to cure evidentiary defects in the Prosecutor's case (necessitating the granting of leave to reopen after the conclusion of the Prosecutor's evidence to cure the defect), I am satisfied that this additional time does not warrant me intervening to modify the agreement between the parties.
3. I have reached this conclusion, despite the modest additional cost to the Defendant of the necessity for addressing of the inadequacies in the Prosecutor's case, because I have no knowledge of what factors lay behind the agreement between the parties.
4. Although the necessity to prolong the hearing by a matter of an hour or so arose entirely from the inadequacy of the Prosecutor's case and the initial failure of the Prosecutor to prove each of the necessary mandatory elements to establish the commission of the offence, it is sufficient for the purposes of this decision that I note that inadequacy but do not take any step to disturb the costs agreement between the parties in the circumstances where, if I was to contemplate intervening on the question of costs, that would add unnecessary complexity and, likely, further costs to the parties, which costs would be disproportionate to the incompetence/inadequacy that had been necessary to be cured.

Consideration of costs on sentence

1. I have earlier noted the agreement between the parties as to the quantum of costs which the Defendant has agreed to pay to recompense the Prosecutor for bringing these proceedings. As the Prosecutor noted, at (30) of its submissions, the amount of costs can be taken into account as part of my consideration of the penalty to be imposed on the Defendant (Environment Protection Authority v Barnes 2006 NSWCCA 246 at [66] to [70]). However, the Prosecutor continued, in this paragraph of its written submissions, to say: Nevertheless, the purpose of costs and sentencing should not be confused. The Prosecutor should be compensated for the costs to which they have been put. It is the penalty that is the punishment for the commission of the offence and serves as a deterrent to others, not a costs order.
2. Whilst agreeing with the proposition concerning EPA v Barnes, the Defendant's written submissions also referred to this decision in support of the proposition that I should have regard to the question of costs as part of my sentencing consideration. This position is entirely orthodox and unexceptional.
3. However, the Defendant also submitted that I should have regard to the decision in Harris v Harrison 2014 NSWCCA 84, in particular, in support of the proposition later discussed, which is the fact that the offence could have been prosecuted in the Local Court due to its low objective gravity, should lead me to the conclusion that the Defendant should, in the alternative, be dealt with pursuant to s 10 or s 10A of the Sentencing Procedure Act. I turn, below, to that submission.

The no conviction and/or no penalty submissions

1. There are two provisions in the Sentencing Procedure Act which are capable of being invoked in circumstances where either no conviction is to be recorded and no penalty imposed (s 10) or a conviction is to be recorded but no penalty imposed (s 10A).
2. Mr O'Gorman-Hughes submitted that the circumstances that bring the Defendant before the Court to be sentenced in these proceedings are ones which should engage, in his primary submission, the first of these provisions but, if I was minded that a conviction should be recorded, I should not impose any penalty and do so in reliance on the second of the provisions. It is unnecessary to set out the terms of these elements of the Sentencing Procedure Act in full.
3. It is, however, appropriate to list the four elements in s 10(3) of the Sentencing Procedure Act. These are in the following terms: 10 Dismissal of charges and conditional discharge of offender … (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider.
4. As can be seen, the first three of the elements listed above call up specific matters for consideration, whilst the fourth of them is a broadly permissive and catch-all provision.
5. As can also be seen, the second of them calls up consideration of whether or not the offending conduct could be regarded as being trivial.
6. In this instance, in addition to relying on the various elements earlier set out that are particular to this Defendant arising from consideration of matters listed in s 21A(3) of the Sentencing Procedure Act (being matters Mr O'Gorman-Hughes submits engage positive consideration of the first of the matters in s 10(3) of that Act as listed above), he submitted that I should regard the Defendant's offending conduct as being "trivial". It is unnecessary to set out precisely the terms of his submissions on this point. It is sufficient that I indicated that I reject, as fanciful in the extreme, the proposition that the offending conduct in this case should be regarded as being "trivial".
7. My reasons for rejecting this proposition can be stated simply. They are:

• Although there is no environmental harm occasioned by the relocation of the stormwater detention facility, nonetheless, the relocation was of a sufficiently significant difference in both location and design that there can be no doubt that there was a deliberate determination on behalf of the Defendant that the design change be effected. Whilst there is no evidence in these proceedings as to what might have been the motivation for that change, that is irrelevant in the context of what is a strict liability offence;
• Although the change to the design was one of substance which warranted a modification application to regularise the change, no such application was made until after the offending conduct had been discovered during an inspection by council officers;
• The development being undertaken was of a large mixed use commercial and residential one, which necessitated, for environmental stormwater management, consideration at the development consent granting stage of the adequacy of the on-site stormwater detention facility. A unilateral change to these arrangements, without the Council having the opportunity to consider the adequacy of the significantly altered design prior to its implementation, was entirely inappropriate; and
• The guiding mind of the Defendant is a builder (Statement of Agreed Facts (Exhibit A at (5) and (6)).

1. The relocation of the stormwater detention facility, having regard to these factors, is so far removed from triviality that the submission that either s 10 or s 10A of the Sentencing Procedure Act might be appropriate to be applied is untenable.
2. Although I am satisfied that, for the purposes of characterising the Defendant's offending conduct, the Prosecutor's submission discussed below that it should be regarded as being "toward the low end of the range" (Prosecutor's written submissions at (5)(a) and (25)) is to be accepted, I am also satisfied that, in doing so, the Defendant should be convicted and a fine imposed.

Characterisation of the offending conduct

1. As noted above, the Prosecutor submitted that the objective seriousness of the offending conduct falls at the low end of the range (Prosecutor's submissions at (5)(a) and (25)). On this point, the Prosecutor expanded the submissions at (17) to (20) of the Prosecutor's submissions. These elements of the submissions were in the following terms (footnotes omitted). Objective Seriousness 17. The Prosecutor submits that the circumstances of this offence falls towards the lower range of objective seriousness: (a) The Defendant is the owner of the Property and the person who carried out the offence, and hence is the person in ultimate control and management of the development; (b) The works (the subject of the offence) pertained to the 'stormwater system' carried out as part of significant development, and the Defendant should have been vigilant with its control and management of the development; (c) By virtue of various applications to the Council, the Defendant was aware, or should have been aware of, what was authorised by the development consent. (d) The unlawful works (the subject of the offence) came to the attention of the Council during an inspection of the Property close to completion of the development, and not as a result of being volunteered by the Defendant; (e) The Defendant made its application to regularise the unlawful works (the subject of the offence) soon after it came to the attention of Council, and was approved by Council, subject to conditions; (f) The unlawful works are not visible from outside the building; 18. The offence was a flagrant breach of the development consent in circumstances where the Defendant was the person responsible for significant development. Accepting that the works (the subject of the breach) caused no environmental harm, the breach of the development consent is significant because of the types of works involved, that is, works attributed to the stormwater system. This Court needs no evidence to take notice that 'stormwater' is a fundamental element of any development, and a fundamental element that Council needs to be made aware of, and approve. The fundamental nature of the works is borne out by the grant of the modification application. 19. The scope and size of the works (OSD) is not known, and in my submission, that does not matter, because, again, the works pertained to a 'stormwater or drainage system', and needed the concurrence from the Council. That is enough for this Court to find that the breach of the development consent was to a fundamental aspect of the overall development, and hence, significant. 20. The defendant's actions, caused the need for an application to be made, and assessment of the works, and the exhausting of further costs and public time in the regularisation of the works.
2. In the context of my consideration of how the Defendant's offending conduct should be characterised, (17) to (19) set out above are relevant. For reasons later discussed, separately, (20) is irrelevant.
3. The submissions for the Defendant on the question of characterisation, relevantly, were set out at (12) to (14) of Mr O'Gorman-Hughes's written submissions. The submissions were in the following terms: 12. No harm arose from the defendant's conduct. Whilst the requirement for an OSD tank may be an important element of a development, the offence involved the relocation of an OSD tank - not the failure to construct one. There is no suggestion that the revised location of the tank caused or had the potential to cause any adverse impact. 13. The defendant submits that in the circumstances, the offence was objectively trivial. The prosecutor accepts the matter is at "the low end of the range". 14. The defendant accepts that offences that undermine the integrity of the regulatory system are capable of being objectively serious. However, the seriousness of an offence will turn on the nature of the breach. In Director-General of the Department of Environment and Climate Change and Rae [2009] NSWLEC 137 - the authority referred to in the prosecutor's submissions - the defendant had cleared over 155 ha of land without any approval at all contrary to the Native Vegetation Act 2003 (See [2] and [6] ). A design change involving the relocation of an OSD tank: - in a building for which consent had been sought and granted; and - which was not visible externally; and - had no adverse impact, is a different genus of offence.
4. The Defendant's submissions also addressed (20) of the Prosecutor's submissions noted above, and the Defendant's response was dealt with earlier in my consideration of that element of the Defendant's ss 10 and 10A submissions.
5. I am satisfied that the position advanced by the Prosecutor, namely, that I should regard the offending conduct as being at the low end of the range and more than merely trivial is to be preferred. Whilst the matters set out in (14) of Mr O'Gorman-Hughes's submissions concerning the design and relocation of the stormwater facility are undoubtedly correct, it is also the necessary conclusion that the relocation was not merely inadvertent but involved a conscious decision to change the location of the stormwater detention facility during the course of undertaking the development.
6. Whilst the consequences of the breach may be limited, the circumstances giving rise to the breach are not inherently trivial. What was said in Mr O'Gorman-Hughes's submissions, at (12): 12. No harm arose from the defendant's conduct. Whilst the requirement for an OSD tank may be an important element of a development, the offence involved the relocation of an OSD tank - not the failure to construct one. There is no suggestion that the revised location of the tank caused or had the potential to cause any adverse impact. is correct; however the offending conduct necessarily involved a conscious decision to depart from the approved plans, and such a departure cannot be dismissed as merely "trivial", given that the structure, as shown in Exhibit D was to be a substantial one and, as executed, as shown in the plans attached to Exhibit C, was, in fact, substantial, although in an entirely different location and of an entirely different nature. That, in itself, would have been sufficient to render the offending conduct more than trivial. The additional matters set out earlier at [48] merely reinforce the correctness of that conclusion.

Potential comparable sentencing information

1. Mr O'Gorman-Hughes readily acknowledged that he had not been able to find any sufficiently similar cases that might provide any explicit assistance with the sentencing process I am undertaking for this Defendant. However, he handed out copies of three sentencing decisions which he considered, as I understood him, to provide potentially some limited guidance in these circumstances. The decisions which he handed up were:

• Byres v Leichhardt Municipal Council [2006] NSWLEC 82
• Holroyd City Council v Ghannoum [2007] NSWLEC 351
• Hurstville City Council v Naumcevski [2011] NSWLEC 226

1. Each of them concerned sentencing for excavation without consent for that excavation in what could broadly be described as domestic scale development. I am satisfied that, given the nature of the facts concerning the breach giving rise to these proceedings, including the nature of the development, the nature of the developer, and the extent of the departure from the terms of the development proposal for which the Prosecutor had given consent, that these cases provide no assistance in the present circumstances.

The subsequent modification approval

1. As was earlier noted, after the Prosecutor's officers became aware of the Defendant's unapproved and significant alteration to the location of the on-site stormwater detention facility giving rise to the charge underlying these proceedings, the Defendant, as it was entitled to, lodged an application to modify the development consent for the project on the site in order to regularise the development as it has been constructed. Such a modification application necessarily entails the payment of the appropriate fee to the consent authority for the assessment and determination of such an application. In this instance, the Prosecutor has submitted (Prosecutor's submissions at (20)) that the time and cost of dealing with such a modification application is a matter to be taken into account by me in these sentencing proceedings.
2. I expressly reject that proposition. Modification applications, whether for the regularisation of works undertaken in breach of a development consent (as is here the case) or merely in anticipation of making a future change to an approved development (in circumstances where there is, therefore, no potentiality for a breach of the legislation) are widespread and, in a planning assessment context for a consent authority, unexceptional. This has been the uncontroversial and conventional position since the decision of Talbot J, in Windy Dropdown Pty Ltd v Warringah Council (2000) 111 LGERA 299; [2000] NSWLEC 240, made it clear that the power to modify a development consent encompassed modification to validate retrospectively otherwise unapproved changes to works constructed pursuant to a consent.
3. Such modification applications, including the one regularising the modification underpinning this prosecution of the Defendant, attract the appropriate fee fixed within the legislative framework. Those costs of assessment and determination are recompensed to the relevant consent authority (here the Prosecutor) by the fee set for such modification applications through the conventional development fee process.
4. There is no justification to have regard to the necessity for, and time and staff energy expended on, the assessment of such a modification application as part of the sentencing process for a prosecution for the unauthorised change to a development that had given rise to the necessity for a modification application to be lodged, assessed and, as is here the case, determined by change to the original development consent to regularise, retrospectively, the otherwise unauthorised works.

Preservation of the integrity of the planning system

1. Although the Prosecutor has conceded (and I accept) that there is no need for the sentence to be imposed on this Defendant to reflect an element of specific deterrence, nonetheless, it is appropriate that the sentence to be imposed does reflect an element of general deterrence. This is because it is also necessary to send a broader message of the importance of upholding the integrity of the planning system (per Lloyd J in Mosman Municipal Council v Menai Excavations Pty Limited (2002) 122 LGERA 89; [2002] NSWLEC 132 at [35]).
2. This general sentiment was also repeated in the decision of Preston CJ in Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242, at [104], where his Honour refers to the need for the upholding of the integrity of the system of planning and development control.
3. This position also applies in these circumstances. As a consequence, general deterrence is a factor to be taken into account in this sentencing process.
4. Such a lesson of general deterrence is, in the circumstances of these proceedings, to send the clear message that, for professional developers, it is not open to make a significant change to the design of a development approved by a consent authority even in circumstances where, subsequently, approval to modify the development consent to regularise the unauthorised change might arise. Such conduct is, as a matter of broad policy, antithetical to the integrity of the system and is to be denounced by the imposition of an appropriate penalty, as is here the case, to reflect such denunciation.
5. The earlier noted decision in Harris v Harrison can be distinguished on this point, as in that instance the Court found that the defendant's actions were not outside the relevant regulatory system, at [83]. This factor formed part of the reasoning in the Court's decision to treat the defendant's offence as suitable to be prosecuted in the Local Court, at [96], a proposition rejected in this matter because of reasoning above.

Determining the appropriate starting penalty

1. In undertaking my instinctive synthesis (Markarian v The Queen (2006) 228 CLR 357; [2005] HCA 25) of what would be the appropriate starting penalty for the Defendant in these circumstances, I am mindful that the maximum penalty applicable at the time of the Defendant's offending conduct reflects the legislature's view, at that time, of the seriousness of breaches of the EP&A Act (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698).
2. Whilst I am mindful that the Prosecutor suggests that this offending conduct should be regarded as being within the lower range, that range, properly understood, is defined by the upper penalty limit set by the legislature. As a consequence, in this context, even an offence within the lower element of the range of sentences available has the potentiality for the imposition of a very significant financial penalty.
3. Having regard to all the objective factors of the Defendant's offending conduct and all of the subjective factors peculiar to this Defendant, I am satisfied that the appropriate starting penalty in these circumstances is $40,000.

The discount for the early guilty plea

1. As I have earlier explained, the Defendant is entitled to the maximum conventional discount on the otherwise appropriate starting sentence, with this being 25%. This is to be given to reflect the utilitarian value to the justice system of the early entry of the Defendant's guilty plea. As a consequence of this discount, the starting sentence is to be reduced and the penalty to be imposed on the Defendant is $30,000.

Orders

1. The orders of the Court therefore are: 1. See Win Holdings Pty Ltd (the Defendant) is convicted of a breach of s 76A(1)(b) of the Environmental Planning and Assessment Act 1979 in that the Defendant carried out development otherwise than as required by the terms of a development consent; 2. The Defendant is fined the sum of $30,000; and 3. Pursuant to s 257G of the Criminal Procedure Act 1986, the Defendant is to pay the Prosecutor's costs in the agreed sum of $40,000.

Amendments 22 February 2019 - s 76(1)(a) amended to read s 76A(1)(b). 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: 22 February 2019