Georges River Council v Stojanovski

The contempt proceedings before Sheahan J

1. On 30 October 2018, the Applicant commenced contempt proceedings against the First Respondent. These proceedings were heard by Sheahan J on 15 April 2019. His Honour was satisfied that the First Respondent was guilty of contempt. His Honour made a series of orders, in the terms sought by the Applicant (a matter to which it will be necessary to return), and published short reasons for doing so (Georges River Council v Stojanovski (No 2) [2019] NSWLEC 53).
2. His Honour's orders were in the following terms: 1 The First Respondent having continued to use the two sheds (Sheds), which were erected on the land described as Part Lot 68 DP 2997 known as 47 Jersey Avenue, Mortdale (Property) without development consent, for the purpose of a habitable dwelling, in contravention of Order 2 as made by this Court in proceedings 2018/99739 on 21 August 2018, is guilty of contempt of Court. 2 The First Respondent having failed to demolish all unlawfully erected structures on the Property (including the concrete slab and the Sheds) within 28 days of the making of Order 3 as made by this Court in proceedings 2018/99739 on 21 August 2018, is guilty of contempt of Court. 3 That the First Respondent, within 28 days of the making of this order, must demolish all unlawfully erected structures on the Property including the Sheds and the concrete slab. 4 If all unlawfully erected structures on the Property have not been demolished by the end of the period specified in Order (3) above, the Applicant is directed, within 21 days of the end of that period, to enter the Property and, carry out the demolition of all unlawfully erected structures on the Property including the sheds and the concrete slabs and remove and lawfully dispose of the unlawfully erected structures. 5 The First Respondent is to pay the Applicant's costs incurred in complying with Order (4). 6 The First Respondent is to pay the Applicant's costs of this Notice of Motion on an indemnity basis. 7 The sentencing hearing in respect of the 1st Respondent is stood over to the List Judge list on Friday 10 May 2019 for directions.
3. It is to be noted that, as his Honour recorded in [14] to [17], the First Respondent was not present during the contempt hearing nor was he legally represented. However, his Honour was satisfied that the Applicant's legal representatives had taken appropriate and effective steps to ensure that that hearing had been brought to the First Respondent's attention.
4. In the orders made by Sheahan J (as can be seen from their terms set out above), his Honour provided further time for the First Respondent to satisfy the requirement to demolish the works and remove the materials from the site and deferred, to a further hearing, sentencing of the First Respondent for the contempt for which is Honour had made the necessary finding of guilt.

Introduction

1. The contempt sentencing hearing was subsequently set down for 6 August 2019 and the matter was allocated to me for hearing.

Partial performance by the First Respondent

1. Affidavit evidence on behalf of the Applicant at the commencement of the sentencing hearing showed that the First Respondent had significantly (but not completely) complied with the demolition and removal order made by Sheahan J.

The Applicant's failure to fulfil order (4) made by Sheahan J

1. In Sheahan J's reasons for decision in agreeing to make the orders noted above, his Honour commented that he was making a substituted performance order pursuant to r 40.8 of the Uniform Civil Procedure Rules 2005. His Honour noted that doing so was consistent with past practice of the Court in such circumstances. He noted, as an example, the relevant order of Pain J in Lismore City Council v Vivian [2016] NSWLEC 108.
2. However, in my pre-trial preparation for the hearing on 6 August 2019, it seemed to me that there was one anomalous and distinctly different element of the substituted performance order made by Sheahan J on 15 April 2019 when compared with other substituted performance orders that have been made by this Court (including the one in Lismore to which his Honour referred).
3. Each of the other substituted performance orders, of which I am aware, gave the relevant authority the option of entering into the relevant site and carrying out the works that were the subject of the Court's orders in each instance where the person burdened with responsibility for the carrying out of those requirements had failed to do so. In each and every instance, however, exercising the right for substituted performance was at the discretion of the relevant authority.
4. In these proceedings, for the purposes of understanding the following discussion, it is appropriate to repeat, with emphasis added, the terms of Sheahan J's order (4) made on 15 April 2019: 4 If all unlawfully erected structures on the Property have not been demolished by the end of the period specified in Order (3) above, the Applicant is directed, within 21 days of the end of that period, to enter the Property and, carry out the demolition of all unlawfully erected structures on the Property including the sheds and the concrete slabs and remove and lawfully dispose of the unlawfully erected structures.
5. As can be seen from the terms of this order, the Applicant was not given the option of electing to carry out substituted performance if the First Respondent did not carry out the mandated demolition and removal of the demolished material within 28 days of the date of his Honour's orders, but order (4) mandated that the Applicant carry out substituted performance and gave a further period of 21 days within which the Applicant was required to comply with that order.
6. The Applicant, itself, did not do so and had not done so when the matter came before me on 6 August 2019. It seems to me that, as a consequence, the Applicant itself was also in contempt by this failure.
7. At this point, I should repeat that I have carefully checked the terms of the orders sought by the Applicant in the Notice of Motion that initiated the contempt proceedings before Sheahan J. The orders made by his Honour faithfully replicated the orders that had been sought by the Applicant. The consequence of this is that the Applicant had no excuse for failing to undertake substituted performance, triggered by the First Respondent's failure, by 14 May 2019, to demolish all the works and remove the material. The Applicant was required to carry out the substituted performance by 5 June 2019 and did not do so.

The hearing on 6 August 2019

1. At the hearing before me on 6 August 2019, I raised the position of the Applicant's breach of Sheahan J's orders with Mr Eastman, counsel appearing for the Applicant.
2. I here interpolate that the First Respondent was not present at this hearing, but that I am satisfied, on the basis of the affidavit evidence before me on that occasion, that that hearing had been drawn to his attention. I had had the matter called outside the Court, with no appearance by the First Respondent or any legal representative on his behalf.
3. Mr Eastman sought an adjournment to enable the Applicant to consider how it might wish to respond to its own breach of Sheahan J's orders. I indicated, on that occasion, that I felt that the position that now arose, where the First Respondent and the Applicant were both in breach of Sheahan J's orders, that this would necessarily act to moderate any penalty which might be imposed on the First Respondent for his failure to demolish and remove materials by the expiry of the 28th day after the making of Sheahan J's orders.
4. I granted the Applicant an adjournment until 22 August 2019 to consider the position that now applied as a consequence of the unusual and mandatory nature contained in order (4) of the orders made by Sheahan J. I directed that the adjourned proceedings also be drawn to the attention of the First Respondent (including the date of the proposed resumed hearing).

The hearing on 22 August 2019

1. On 22 August 2019, Mr Eastman advised me that the Applicant proposed to seek that I make an amendment to order (4) made by Sheahan J to extend the time by which the Applicant was obliged to comply with its obligations. That extension was to be sought until 30 November 2019.
2. Affidavit evidence on behalf of the Applicant at this hearing established that the First Respondent had had appropriate information provided to him about the ongoing nature of the proceedings and of the date of this adjourned hearing.
3. At Mr Eastman's request, I adjourned the hearing for a further period of time to enable the filing and serving of the Notice of Motion seeking the extension of time for the Applicant for compliance. I directed that service be effected on the First Respondent in the fashion which had been the methods of communication with him in the past.

The hearing on 30 August 2019

1. When the further hearing took place on 30 August 2019, the First Respondent did not appear and was not legally represented. The matter was called outside the courtroom. Affidavit evidence on behalf of the Applicant established that all relevant documents, including the Notice of Motion and notice of this resumed hearing, had been served on the First Respondent.
2. It is to be observed that, although the First Respondent had (as earlier noted) partially performed what was required of him as a consequence of Sheahan J's order (3), no further progress appeared to have been made since the earlier observations of the state of the site set out in earlier affidavits on behalf the Applicant. This was established on this occasion by further affidavit evidence on behalf of the Applicant.
3. I was satisfied, under the circumstances, that it was appropriate to grant the Applicant the extension of time which it now sought for it to comply with order (4) made by Sheahan J.

Introduction

1. The granting of the extension to the Applicant did not have the effect of altering the fact that, between 6 June and the date of the making, on 30 August 2019, of the order for extension of time, the Applicant was, itself, in breach of order (4) made by Sheahan J.
2. It is to be observed that, although the position of the Applicant being in contempt by its breach of order (4) of Sheahan J's orders still remained to be addressed, it was appropriate that I reserved my decision on sentencing of the First Respondent for his contempt but that I not make any determination on what penalty (if any) might be appropriate to be imposed until after the Applicant's breaching position had been addressed. On 30 August 2019, I therefore stood the matter over for a further short hearing on 20 September 2019.

The hearing on 20 September 2019

1. When the matter came before me on 20 September 2019, Mr Eastman read an affidavit from his instructing solicitor that deposed as to the present state of the site. In short, the works which had been mandated by the orders made by Pepper and Sheahan JJ have now been completed. As a result, the First Respondent's obligations had been fulfilled, as all the unpermitted development had been removed from the site. This had the effect of the First Respondent having purged his contempt.
2. This outcome also had the effect of extinguishing the continuing obligation which had fallen on the Applicant as a consequence of order (4) of the orders made by Sheahan J in May 2019 and as extended by me.
3. On this occasion, Mr Eastman advised me that the Applicant no longer sought that the First Respondent be punished for his failure to meet the first timetable for removal of the unapproved structures, as had been imposed by Pepper J, nor for the First Respondent's failure to meet the further and extended timetable, which had been imposed by Sheahan J in May of this year.
4. As a consequence, the element of the Applicant's contempt motion seeking to have the First Respondent punished for contempt is appropriate to be dismissed.

Costs

1. Although not pursuing the question of punishment for the First Respondent for his contempt, Mr Eastman did indicate that the Applicant sought its costs of the proceedings, but that those costs were only sought on the ordinary basis.
2. Although the Applicant did seek the entirety its costs since the hearing before Sheahan J (as Sheahan J had made a costs order addressing the Applicant's costs up to and including the hearing before him, those earlier costs had been dealt with), Mr Eastman acknowledged that I might consider that some of the costs during the intervening period might not be appropriate to be ordered against the First Respondent because of the unusual nature of order (4) made by Sheahan J, at the Applicant's request, and the Applicant's subsequent failure to give effect to its mandated obligation arising under that order.
3. I indicated to Mr Eastman that I considered that it would be desirable to finalise the matter by making a gross sum costs order as is permitted by s 98(4)(c) of the Civil Procedure Act 2005, rather than making an as "agreed or assessed" order because an order in that form risked further prolonging disputation between the Applicant and the First Respondent.
4. I requested Mr Eastman to have instructions sought on this with a view to providing to me, if such a process was accepted by the Applicant as appropriate, gross sum alternatives. Both were to be provided on a conventionally discounted basis (with me indicating that 70% of actual costs would be acceptable as a basis to calculate any gross sum to be ordered).
5. The first gross sum amount was to encompass the entirety of the proceedings after the hearing before, and orders of, Sheahan J, whilst the second was to exclude those elements of subsequent hearings necessary to address and rectify the Applicant's own breach of order (4) made by Sheahan J.
6. I indicated that, once I had the indication as to whether or not the Applicant would agree to a gross sum order basis to dispose of the costs issue, I would deal with the question of quantum in this decision.
7. If the Applicant did not agree to a gross sum order, I would simply make an as agreed or assessed costs order after determining what should be the scope covered by such an order.
8. On 26 September 2019, the Applicant's solicitor advised my Associate that a gross sum costs order was acceptable to the Applicant and provided details of the alternative sums (discounted to 70% of the actual costs) that I had requested.
9. I am satisfied that it is appropriate to make a gross sum order for the lower amount - that being the amount which excludes those subsequent hearings necessary to address and rectify the Applicant's own breach of order (4) made by Sheahan J. The costs order will therefore be in the gross sum of $23,083.80.

Orders

1. The orders of the Court are: 1. Pursuant to s 98(4)(c) of the Civil Procedure Act 2005, Mr Steven Stojanovski (the First Respondent) is ordered to pay the Applicant's costs in the gross sum of $23,083.80; and 2. The Applicant's motion that the First Respondent be punished for contempt is otherwise dismissed.

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