Holroyd City Council v Khoury

EX TEMPORE Judgment 1In Holroyd City Council v Khoury (No 2) [2011] NSWLEC 158 ( Khoury No 2 ) I found the Defendant, Mr Khoury, guilty in his absence of failing to comply with an order issued under s 121B of the Environmental Planning and Assessment Act 1979 (the EPA Act) in relation to the demolition and removal of a building at his property at South Wentworthville. It is necessary to sentence Mr Khoury for this offence. 2The Defendant has appeared to represent himself today for the sentencing hearing, the first time he has appeared in these proceedings. He told the Court he went overseas on about 15 July 2011 for about two months, hence his non-appearance on the previous occasion on 6 September 2011. He departed overseas after the first return date of this matter before the Court on 1 July 2011 at which time he was required by the usual Court order in the summons to appear. 3I found previously in Holroyd City Council v Khoury [2011] NSWLEC 157 ( Khoury No 1 ) that Mr Khoury was served with the order and other documents commencing these proceedings in May 2011. Mr Khoury has not provided any documentary proof that he was overseas on the dates he has stated in his oral evidence today. He provided no notice to the Council or the Court that he was intending to go overseas or of his return date. The first time the Court and the Council was advised about the matter was today. 4I note this matter otherwise has a long history. The relevant development consent was granted by the Council to Mr Khoury on 22 October 2003 subject to conditions which included obtaining a construction certificate before the commencement of work. The order requiring demolition which gave rise to these proceedings was issued in July 2010. 5There does not appear to be any dispute that the order was not complied with and the Defendant has not sought to cavil with the finding of guilty on 6 September 2011 made in Khoury No 2 . 6In support of the sentence hearing the Council read the affidavit of Mr Guido, the Council's building surveyor, filed on 14 July 2011 but for certain paragraphs identified by the Council's counsel at the time of the tender. The Council also read the affidavit of Mr Walker, the Council's development compliance officer, filed on 13 May 2011 and an affidavit of Mr Brown, the Council's solicitor, filed on 22 July 2011. I will briefly summarise those affidavits. 7Mr Guido is an accredited building surveyor with the Building Professionals Board and has worked for the Council as a building surveyor since 2008. He inspected and took photographs of the building in question on 15 September 2009 pursuant to a search warrant. He observed the building differed from the approved plans in numerous ways, the approved plans being tendered as exhibit B. 8For example, the building as constructed was a partly two storey and partly three storey dwelling house instead of a partly one storey and partly two storey dual occupancy. Mr Guido was of the opinion that the two new storeys did not have adequate light and ventilation as is required by the Building Code of Australia. Paragraph 29 of his affidavit identifies further areas of non-compliance which Mr Guido considered had occurred as at September 2009. 9Mr Walker's affidavit identifies that development consent was granted for a deferred commencement consent on 22 October 2003 for an attached two storey and single storey dual occupancy. The deferred commencement conditions were complied with on 5 May 2004 and plans were approved as part of that process. 10On 16 July 2010 a notice of intention to issue an order pursuant to s 121H of the EPA Act was prepared, sent to Mr Khoury's post office box address and hand delivered to the property at South Wentworthville. The Council did not receive any representations in relation to the notice from Mr Khoury by 30 July 2010 as the notice provided. 11On 9 August 2010, an order pursuant to s 121B of the EPA Act was prepared. Copies of this order were sent to Mr Khoury's post office box address and hand delivered to the property. Mr Walker received a telephone call from Mr Khoury on 11 August 2010 during which the Defendant mentioned his issues with the Council. Mr Khoury told Mr Walker the Council had failed to recognise the development consent had not lapsed and that his private certifier was reluctant to continue because the Council did not issue a construction certificate. Mr Walker inspected the property on 11 October 2010 and 19 April 2010 and observed the terms of the order had not been complied with. 12In his affidavit, Mr Brown attests to calling Mr Khoury on 30 June 2011 to advise the proceedings were listed for mention on 1 July 2011. On 4 July 2011, Mr Brown received a call from Mr Khoury in which he told him the matter was adjourned because Mr Khoury was not present and read out the directions made by the Court on that date. 13In relation to the Defendant's evidence, he gave oral evidence before me today on oath and was cross-examined by the Council's counsel. The Defendant says that following the grant of development consent, he arranged for the work to commence with the demolition of the old building on the land and some drainage work and was told by his private certifier he should apply for a construction certificate from the Council. The private certifier prepared the documents needed for that purpose and Mr Khoury took these documents to Council chambers where staff told him that no construction certificate could be issued because the development consent had lapsed. The private certifier then told Mr Khoury he could not assist him any further. 14Mr Khoury proceeded to build the house, now completed, because he considered the Council was wrong in not issuing a construction certificate and he had finance from the bank which required him to finish the building. He said that he proceeded in good faith by which he meant that he did not wish to harm any of his neighbours, that he built safely and made improvements in the building beyond what was approved by the Council. 15The Court also asked Mr Khoury about his financial position and Mr Khoury stated that generally he had limited means to pay and could only afford a penalty of a few thousand dollars. 16I turn now to the matter of sentencing. I note by way of important background that the purposes of sentencing are identified in s 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) . Section 3A relevantly provides: The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, ... (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. 17General deterrence has been recognised in environmental matters in particular as an important sentencing consideration and I refer in that regard to Gittany Constructions Pty Limited v Sutherland Shire Council [ 2006] NSWLEC 242; ( 2006) 145 LGERA 189 at [103]. 18Turning firstly to the objective circumstances of this offence. The maximum penalty is $1.1 million in relation to breaches of the EPA Act, an indication of the intention of Parliament to identify these offences as serious. There are numerous cases before this Court and in the New South Wales Court of Criminal Appeal where this has been recognised. The Council's counsel accepted this matter was at the lower end of that spectrum but was nevertheless a serious matter. 19The important issue in terms of harm caused by the offence is the failure to comply with the planning system identified in the EPA Act . That system is directed to the orderly development of land through the planning approval process. The importance of upholding the planning system has been recognised in numerous contexts in this Court, for example, Hawkesbury City Council v Johnson; Hawkesbury City Council v Johnson Property Group Pty Limited (No 2) [2009] NSWLEC 6 at [103] referring in turn to Gittany Constructions Pty Limited and numerous other cases. 20As submitted by the Council, the Defendant proceeded to build the development without a construction certificate. When the Council refused to issue one, there is no evidence of any critical path inspections as would usually occur in such a process and the work has not been certified as satisfactory as required by the development consent and the processes under the EPA Act . 21The Defendant's state of mind at the time of the offence is another relevant consideration in relation to objective circumstances. As demonstrated in his oral evidence today, it appears that Mr Khoury simply did not accept Council's opinion that he could not be issued with a construction certificate. He proceeded with the building regardless. 22When asked why he did not lodge another development application which was an avenue then open to him, he said that it was too costly and would require him to refinance with his bank and that the zoning had changed and that it might be difficult to get approval. I do not have any evidence of those matters from him. 23The Defendant stated that he could not demolish the house as he considered it was well done, everyone liked it and it would be very costly to demolish it. When asked in cross-examination if he knew a construction certificate was required, Mr Khoury prevaricated in saying he thought it was desirable. I have to say, the conditions of the development consent state clearly that a construction certificate was required before work could commence. I consider Mr Khoury was aware a construction certificate was a legal requirement he had to satisfy before building work could proceed. 24Mr Khoury did not make representations about the notice of intention to issue an order dated July 2010, nor did he appeal the orders of the Court as he was entitled to do. There is no evidence before me that he has attempted since the commission of the offence to comply with the order or otherwise regularise the development in any formal way. 25The Defendant's actions in building the house without a construction certificate were clearly deliberate, not accidental or inadvertent. That has resulted in the Defendant also deliberately breaching the order for demolition of the house. Mr Khoury is entirely responsible for the circumstances of this offence. 26I consider in terms of the objective circumstances, while at the lower end of the possible spectrum of seriousness this matter is reasonably serious, meaning it is at the upper level of that lower end of the spectrum. 27Turning to subjective factors, as specified in s 21A of the CSP Act various factors can be considered in mitigation, although most of those identified do not apply in this matter. 28The Council accepts this is the Defendant's first environmental offence. There has been no plea of guilty so this cannot be a mitigating factor under s 22 of the CSP Act . 29Whether remorse has been demonstrated is a mitigating factor under s 21A(3)(i) of the CSP Act . In his oral evidence the Defendant said he was sorry that he did not comply with the order. He otherwise appears to believe he has acted appropriately. I do not consider he has displayed any relevant remorse for the actions he took in proceeding to build the house unsupervised by any certifying authority and in the absence of a construction certificate. This has resulted in the completed house, not built in accordance with the development consent, in which Mr Khoury now lives with tenants from whom he receives rent. He chose not to comply with the order for demolition or to otherwise regularise the building. 30There is also no evidence of cooperation with the Council, which can also be considered in mitigation under s 21A(3)(m) and s 23 of the CAP Act . 31Another matter I should consider is capacity to pay a fine. Section 6 of the Fines Act 1996 states: The defendant's means must be taken into account when determining a penalty. 32When the Court asked Mr Khoury about his capacity to pay, he provided a general response that he had limited capacity to pay a fine and provided little detail about his assets, income and outgoings. No documents have been provided to demonstrate these matters either. Mr Khoury indicated to the Court the amount above which he considered he would have trouble paying was a few thousand dollars. While Mr Khoury is representing himself and some latitude must be allowed in that circumstance, I do not consider I have any information before me which I can consider in relation to his capacity to pay a fine and it is difficult to take this factor into account. 33I should also consider whether there are any relevant cases for the purpose of consistency in sentencing. Consistency in sentencing is a relevant consideration where the Court can have regard to a sentence imposed in other similar cases to determine if a useful pattern exists and to ensure that like offences receive like penalties where this is appropriate. The individual circumstances of a particular case must be determinative, however, given the many factual differences between cases and to ensure that a judge's discretion is not limited. There are numerous examples of these statements of principle, see Axer Pty Limited v Environment Protection Authority (1993) 113 LGERA 357 , Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 and Hili v R; Jones v R [2010] HCA 45; (2010) 242 CLR 520 a recent matter in the High Court. 34There have been apparently few cases in this Court for this particular offence. The Council's counsel referred to Zhou v Auburn City Council; Chen v Auburn City Council [ 2009] NSWLEC 75 and a further matter of Bayley v Leichhardt Municipal Council [2005] NSWLEC 34 ; (2005) 138 LGERA 401 , which appear far less serious than this matter. Both were appeals from a Local Court on the question of sentence. 35In Zhou the defendants illegally converted apartments to create additional bedrooms. At [35] of the judgment in this Court, numerous mitigating factors are identified, few of which exist in this case. There was an early plea of guilty, there was a substantial degree of pre-trial disclosure in terms of co-operation with the council and expressions of remorse. Further, the defendants took steps to rectify the illegal building work, albeit after the date specified in the order. The penalties imposed by the Local Court were reduced taking into account the totality principle as there were numerous offences in that matter. The penalties imposed by this Court for one offence was $9,300 and $5,700 for another offence. 36In Bayley , the defendant failed to comply with a s 121B order. The defendant was fined $15,000. The terms of the order were complied with after the period specified in the order. The order in that case related to fire safety requirements needing to be met. 37I turn now to the question of costs. The Council seeks its costs which it has estimated to be approximately $45,000 to $50,000, a substantial amount for a matter of this kind. The Defendant submits he should not be liable for these because of the way the Council has behaved which submission I do not accept. There is nothing unorthodox or inappropriate about the way this matter has been pursued by the Council. 38In the matter of EPA v Barnes [2006] NSWCCA 246, the New South Wales Court of Criminal Appeal upheld reasoning in this Court in which the amount of costs was taken into account in relation to the defendant's ability to pay a fine. As I have noted, I do not have evidence before me which would allow me to take into account these costs in the context of Mr Khoury's means to pay. 39Turning now to the matter of penalty. A more than nominal fine is necessary in this matter. I consider the appropriate penalty for this matter should be $35,000 in light of the relatively serious circumstances, albeit at the lower end of the possible scale of seriousness, the need for general deterrence in matters of this kind and the lack of many mitigating factors which can be taken into account to reduce the penalty. 40The Council's costs as agreed or assessed must be paid by the Defendant. If the Defendant wishes to apply for time to pay the fine, an application can be made to the Registrar of the Court under s 10 of the Fines Act .