Director-General, Department of Environment, Climate Change and Water v Source & Resources Pty Ltd; Alexander

Judgment 1In each of these two proceedings relating to premises at, respectively, Waverley and Bondi, the applicant, Waverley Council, obtained orders from the Court in early 2011 restraining the respondents, Tovir Investments Pty Ltd and Michael Rappaport, from using or permitting the use of the premises for the purpose of backpackers' accommodation or a boarding house without first obtaining a lawful consent to do so under the Environmental Planning and Assessment Act 1979. 2In April 2012 the Council filed separate notices of motion in each of the proceedings against each respondent seeking orders that each respondent be found guilty of contempt of court and punished by fine for disobeying the 2011 orders from the time they took effect. The primary purpose of the contempt proceedings is to enforce the injunctions. 3It is alleged that the corporate respondent is the owner of the premises and an investment vehicle for its directors and shareholders Thomas Rappaport and Vivian Rappaport (the parents of Michael Rappaport), that it has derived income from the use of the premises for the said unlawful purposes, and that its directors and shareholders have been present from time to time on the premises when they have been used for those unlawful purposes and have participated in the management or assisted in the maintenance of the premises. It is alleged against Michael Rappaport that he has actively managed the premises and been involved in the promotion of the premises. 4The corporate respondent has pleaded not guilty to the contempt charges. An estimate has been given that the trial may take up to 10 days. Mr Michael Rappaport has not yet pleaded to the charges. 5On 5 July 2012 Mr Michael Rappaport filed a notice of motion that the Court give directions for the conduct of a hearing into his fitness to plead to the contempt charges and that both proceedings be stood over until his fitness to plead had been determined. On 13 July, the List Judge directed that the matters be listed for a hearing on the question of Mr Rappaport's fitness to plead. 6When that question came on for hearing before me on 5 September 2012, counsel for the respondents indicated that it was not pursued and instead orally sought orders that the contempt proceedings against both respondents be adjourned for six months until March 2013, that Mr Rappaport submit to a further medical assessment by his psychiatrist Dr George Jacobs, and that Dr Jacobs file and serve a report in February 2013 as to his fitness to stand trial. 7This change in direction was not notified to the Council by the respondents until the eve of the hearing of the inquiry into Mr Rappaport's fitness to plead. 8The reason for this change in direction was that, in light of reports by Mr Rappaport's psychiatrist and psychologist and the Council's psychologist, the legal advisers for Mr Rappaport concluded that the so-called "Presser principles" for determining whether a person is fit to plead and stand trial could not be satisfied. These are the principles in the seminal decision of R v Presser [1958] VR 45 at 48 per Smith J concerning the circumstances in which a defendant is fit to be tried without unfairness or injustice, as follows: He needs, I think, to be able to understand what it is that he is charged with. He needs to be able to plead to the charge and to exercise his right of challenge. He needs to understand generally the nature of the proceeding, namely, that it is an inquiry as to whether he did what he is charged with. He needs to be able to follow the course of the proceedings so as to understand what is going on in court in a general sense, though he need not, of course, understand the purpose of all the various court formalities. He needs to be able to understand, I think, the substantial effect of any evidence that may be given against him; and he needs to be able to make his defence or answer to the charge. Where he has counsel he needs to be able to do this through his counsel by giving any necessary instructions and by letting his counsel know what his version of the facts is and, if necessary, telling the court what it is. He need not, of course, be conversant with court procedure and he need not have the mental capacity to make an able defence; but he must, I think, have sufficient capacity to be able to decide what defence he will rely upon and to make his defence and his version of the facts known to the court and to his counsel, if any. 9The Presser principles were approved in the High Court in Ngatayi v The Queen [1980] HCA 18, 147 CLR 1 at 8, Kesavarajah v The Queen [1994] HCA 41, 181 CLR 230 at 244 and Eastman v The Queen [2000] HCA 29, 203 CLR 1 at [58] and by other courts in cases surveyed in Director-General, Department of Environment, Climate Change and Water v Source & Resources Pty Ltd; Alexander (No 2) [2011] NSWLEC 87 per Pepper J. 10Notwithstanding his inability to satisfy the Presser principles, an adjournment of the proceedings for six months is now sought on the ground that Mr Rappaport is psychologically not in a fit condition to prepare for a hearing and undergo a hearing. 11The Council opposes the adjournment application. Alternatively, the Council submits that if a substantial adjournment is granted, it should be granted only to Mr Rappaport and not to the corporate respondent and should be on terms that Mr Rappaport also submits to a further medical assessment by a nominee of the Council. The respondents indicate that the latter term is acceptable. The Council also proposes that if a substantial adjournment is granted, it should be on condition that Mr Rappaport cease to manage the premises. Since the contempt charges have not yet been tried let alone proved, I do not think that condition would be appropriate. If a substantial adjournment were to be granted, I would only grant it to Mr Rappaport. I can see no sufficient reason to adjourn the proceedings against the corporate respondent which allegedly owns the subject premises, has shareholders and directors who do not include Mr Rappaport and has derived income from its unlawful use for well over a year in defiance of the 2011 injunctions. Apparently the Waverley premises are being renovated at the moment but the Council is concerned about ongoing use of the Bondi premises for backpacker accommodation allegedly in breach of the injunctions because the high season for such accommodation is approaching. It seeks to enforce the injunctions through the contempt proceedings and therefore is concerned about a lengthy adjournment of those proceedings. 12The Council submits, and I accept, that an "adjournment" of the proceedings for six months is in substance a stay of the proceedings for six months. The Council submits that where a respondent's psychological condition is the issue, such a stay can only be obtained under the Presser principles and that there is no middle ground such as the respondents advance. The possible range of circumstances pertaining to a party's mental ill-health is so large that I think it would be too inflexible to say that it must fit the Presser mould before a lengthy adjournment can ever be granted. Nevertheless, when the adjournment is of the entire proceedings for such a lengthy period as six months and the Presser principles are not satisfied, I think that the Court should proceed with particular caution in assessing whether the adjournment is justified. Reasons for caution in those circumstances include the Court's duty to facilitate the quick resolution of proceedings, consistently with justice; the potential for injustice to the other party; and in a case such as this, the public interest, if the Council's allegations are true, in bringing to an end through contempt proceedings an unlawful and remunerative use of residential premises without development consent over a long period of time in defiance of the Court's injunctions. 13The question as to Mr Rappaport's fitness to plead having been abandoned, I proceed on the basis that he is fit to plead. At the hearing of the adjournment application, his counsel indicated that he thought he could probably get instructions from Mr Rappaport as to a plea and I invited him to do so during the course of the hearing. However, nothing came of this. The decision whether to plead guilty or not guilty is likely, it seems to me, to have a substantial effect on the weight of his pre-hearing burden of preparation.