Hossein Yamini v The Council of the City of Sydney

Land and Environment Court (NSW)|2020-03-11|Before: Duggan J

Judgment

The Appellant appeals pursuant to s 31 of the Crimes (Appeal and Review) Act 2001 (CAR Act) against his conviction in the Local Court on 11 July 2019 on the charge of failing to comply with a prevention notice issued by the Respondent (the Council) on 12 October 2018 (the Prevention Notice) in contravention of s 97 of the Protection of the Environment Operations Act 1997 (POEO Act).
The Appellant was convicted and ordered to pay a fine of $4,000 and costs of $4,000. The Appellant only appeals against the conviction and does not appeal against the quantum of the fine or the order for costs. Therefore, unless the Appellant is successful in this appeal the fine and cost order (in addition to any other relevant orders in this Appeal) will remain in force.

Grounds of Appeal

By Amended Summons Commencing an Appeal for which leave was granted by Order of the Court on 14 February 2020 the Appellant appeals from his conviction on the following three Grounds: The Court below erred in convicting the Appellant of an offence under s 97 of the Protection of the Environment Operations Act 1997 (POEO Act) in circumstances where there was no basis on which the Respondent could have reasonably suspected that an activity had been or was being carried on in an environmentally unsatisfactory manner at the Appellant's premises or by the Appellant. The Court below erred by not finding that the Respondent's power to issue to the Appellant a notice under s 96 of the POEO Act was not enlivened in circumstances where the Appellant was not the occupant of the relevant premises (this Ground was amended to this wording with leave and by consent on 10 March 2020). The Court below further erred in convicting the Appellant of an offence under s 97 of the POEO Act in circumstances where, for the reasons given above, the Respondent had no power to issue to the Appellant a notice under s 96 of the POEO Act.

Facts

The Appellant is and was the registered proprietor of the premises at 315-317 Glebe Point Road, Glebe (the Building).
The Building consists of three commercial tenancies (known as Shops 1, 2, and 3) and 11 residential units.
At the time of the alleged offence, the Appellant had leased Shop 3 for use as a restaurant (the Lease). The Lease provided a description of the demised premises merely as "Shop 3".
On 28 August 2018 Ms Nina Chan, an Authorised Officer from the City of Sydney Council, inspected the Building's neighbouring property, 319 Glebe Point Road, due to a complaint that contaminated liquid waste was seeping through a common boundary wall or floor of the two buildings and discharging into the basement of the Building's neighbouring property. The Council further observed that the contaminated liquid waste was subsequently migrating into the Council's stormwater drainage system at Lombard Lane (the Leak).
On 30 August 2018 the Appellant located the source of the Leak as originating from a broken drainage pipe under the floor of Shop 3.
The Council issued the Appellant with a Clean-up Notice on 4 September 2018, ordering cessation of the discharge of liquid waste. The Clean-up Notice related to the entirety of the Building, not limited to just Shop 3.
Following a reinspection by Council on 19 September 2018, the Council was not satisfied that the Clean-up Notice had been complied with in full. The Council revoked the Clean-up Notice and issued the Appellant with a Prevention Notice on 12 October 2018. The Prevention Notice also related to the entirety of the Building, not limited to just Shop 3.
On 8 January 2019 the Council issued a "show cause" letter stating that the Prevention Notice had not been complied with.
Following a review of circumstances, the Council issued the Appellant with a Penalty Infringement Notice (PIN) on 18 January for failure to comply with the Prevention Notice as per s 97 of the POEO Act.
The Appellant elected to have the PIN determined by the Court. After a hearing on 11 July 2019 the Appellant was found guilty of the offence and a fine was imposed.

Agreed Legislative Submissions

The parties agreed that the legislative submissions in the Appellant's submissions at [8], [9], [11], [12] and [14] accurately set out the legislative provisions that are relevant to the determination of this Appeal. Those paragraphs provide: 8. Section 37 of the Appeal Act relevantly provides: 37 Appeals to be by way of rehearing on the evidence (1) An appeal against conviction is to be by way of rehearing on the basis of evidence given in the original Local Court proceedings, except as provided by section 38. (2) Fresh evidence may be given, but only by leave of the Land and Environment Court which may be granted only if the Court is satisfied that it is in the interests of justice that the fresh evidence be given. … 9. The Prevention Notice was issued under s 96 of the POEO Act. That section relevantly provides: 96 Preventive action (1) Application of section This section applies when the appropriate regulatory authority reasonably suspects that an activity has been or is being carried on in an environmentally unsatisfactory manner at any premises or by any person (otherwise than at premises). (2) Prevention notices The appropriate regulatory authority may, by notice in writing, do either or both of the following - (a) direct the occupier of the premises, (b) direct the person carrying on the activity (whether or not at premises), to take such action, as is specified in the notice and within such period (if any) as is specified in the notice, to ensure that the activity is carried on in future in an environmentally satisfactory manner. … 11. Section 95 of the POEO Act provides: 95 Meaning of environmentally unsatisfactory manner For the purposes of this Part an activity is carried on in an environmentally unsatisfactory manner if - (a) it is carried on in contravention of, or in a manner that is likely to lead to a contravention of, this Act, the regulations or a condition attached to an environment protection licence (including a condition of a surrender of a licence) or an exemption given under this Act or the regulations, or (b) it causes, or is likely to cause, a pollution incident, or (c) it is not carried on by such practicable means as may be necessary to prevent, control or minimise pollution, the emission of any noise or the generation of waste, or (d) it is not carried on in accordance with good environmental practice. 12. The Dictionary to the POEO Act defines 'occupier' as follows: occupier of premises means the person who has the management or control of the premises. 14. Section 258 of the POEO Act relevantly provides: 258 Evidence relating to occupier of premises (1) In any proceedings under this Act, no proof is required (until evidence is given to the contrary) of the fact that a person is, or at any relevant time was, the occupier of any premises to which the proceedings relate. …

Further Agreed Matters

Both parties agreed that to the extent that the Grounds of Appeal constitute a collateral challenge to the validity of the Prevention Notice, the Appellant is, by this Appeal, entitled to bring such a challenge. It was further agreed that on all elements of the offence, including establishing that the Prevention Notice was within power, the Council bore the onus, on the criminal standard, to establish, on the evidence, the essential elements of the offence.
The Appellant sought leave to adduce further evidence of Mr Ross Brown, licensed plumber and practising hydraulic services engineer. By consent leave was granted and the report became Exhibit 1.
Together with the evidence in Exhibit 1, each of the exhibits before the Local Court and the transcript of those proceedings have been tendered in this Appeal as the evidence upon which this Appeal will be determined by way of rehearing: s 37 of the CAR Act.
The parties also agreed that the premises to which the Prevention Notice related was that part in which the Leak was located (generally described as the area under Shop 3) and not the Building as a whole.

Appellant's Submissions

The Appellant contends that in order for the Prevention Notice to be validly issued (or for him to be convicted of the offence of failing to comply with the Prevention Notice) the Council must establish, to the criminal standard, that he is the "occupier" of the relevant premises. Proof of this characterisation is an essential element of the charge. The Appellant submits that the proper approach to characterisation of an occupier requires a consideration of the following matters: 1. The definition of occupier in the POEO Act refers to a person having "the management or control" of the relevant premises. The Council only submitted at trial that the Appellant had control of the premises and not the management of them. Accordingly, as the Council was bound by the way it formulated its case, and the Appellant was only required to respond to the case as formulated, the only relevant question in the trial below and in this Appeal is whether the Appellant was the person in control of the relevant premises; 2. "Control' is not a term defined in the POEO Act. As such it should be given its ordinary meaning which the Macquarie Dictionary defines as: "domination" or "command". Further, the text and context of the POEO Act indicate: 1. There is a distinction made in the POEO Act between an "owner" and an "occupier", such that the terms cannot be used interchangeably; 2. The use of the term control by reference to "the premises" in s 96 must refer to a person who has the actual and physical control of the whole of the relevant premises at all times and in all respects. Further, the reference to the definite article "the" in reference to the person must indicate that that person has control both in fact and in law at the time the Prevention Notice was issued; and 3. With the distinction between ownership and control in the POEO Act it is necessary that there be more than a legal or contractual right to control the premises. For example, it must mean more than a right for an owner under a lease to enter the premises upon the giving of notice. There must, in fact, be some element of control over the premises being exercised, rather than a contingent prospective right to exercise such control.
Applying this approach the Appellant contends that the evidence cannot establish that he was relevantly the occupier, namely the person with control of the premises, as: 1. He had entered into a Lease with a tenant for what was referred to as "Shop 3" in the Lease Agreement, which conferred exclusive possession upon the tenant; 2. The Leak was in the area below Shop 3, which formed part of the demised premises. Accordingly, the tenant had control and was the occupier over that part of the premises where the Leak was located. Alternatively, the Council had not adduced any evidence to refute the sworn oral evidence of the Appellant that the location of the Leak formed part of the demised premises; 3. Whilst the Appellant did participate in the repair of the Leak by undertaking physical works in the sub-floor area of Shop 3 and the adjoining premises and assisting the tenant with dealings with the Council he did so as a "helpful and co-operative landlord" and not in the exercise of any power under the Lease to enter the demised premises or in any manner consistent with domination or command; and 4. The Appellant gave oral evidence that he was undertaking the work in the basement of the adjoining property "…out of good faith and to be a good neighbour" (Affidavit of Mr Yamini at [14]). Further, he had advised the Council on numerous occasions that the Leak was coming from the plumbing in Shop 3 which was held by "Leo from Wok Express", the tenant under the registered Lease. He also attested that where there is a commercial lease, as there is for Shop 3, he does not go in to the premises or carry out maintenance or repair works; those are matters for the tenant.

Council's Submissions

The Council submitted that the evidence established, to the relevant criminal standard, that the Appellant was the occupier having regard to the following factors (as examples of control): 1. The Appellant worked to locate the Leak and gave directions to the tenant regarding fixing the Leak; 2. The Appellant carried out cleaning of the leaked liquid using a pressure washer indicated he would be take steps to carry out works to fix a hole and clean up any mess; The Appellant would also cap the sewer line; 3. The Appellant, after receiving a "show cause" letter from the Council, advised that he had thoroughly investigated the Leak; 4. The Appellant acknowledged that he can give a notice to inspect tenanted units and that he did so in this case to look under one of the shops and could do so again; 5. The Appellant acknowledged that he would "interfere" when there are issues with the building of the kind that are the subject of these proceedings to investigate and possibly organise tradespeople; 6. The Appellant acknowledged that when it comes to issues relating to the exterior of the building, it is his problem; 7. Evidence was given that the Appellant initially indicated a concern that the Leak may be coming from a residential unit and that if there was an issue with a residential unit, he would "interfere"; and 8. Emails sent by Ms Chan to "Leo from Wok Express", one of the Appellant's tenants, confirm that the obligation to satisfy the Council's requirements rest with Mr Yamini.
The Council accepted that there was no evidence in this matter that the Appellant had exercised his rights under the Lease to enter Shop 3.
The Council contended that the area below Shop 3 was not part of the demised premises but instead was part of the premises held by the Appellant as Landowner. However, the Council also accepted that there was no evidence (apart from the evidence of Mr Yamini) as to whether the sub-floor area comprised part of the demised premises.
The Council rejected the Appellant's characterisation of control as requiring the Appellant to have the actual and physical control of the whole of the premises at all times and in all respects. The Council contended that: control may be held by more than one person at any given time: Maund v Shoalhaven City Council [2019] NSWLEC 89 at [23]; that the Appellant's conduct may indicate control: Shannon v The Council of the City of Greater Lithgow [1995] NSWLEC 156. Ultimately, the Council submitted that each case must turn on its own facts: Central Coast Council v 40 Gindurra Road Somersby Pty Ltd (No 2) [2019] NSWLEC 171 at [184].

Findings as to Grounds of Appeal 2 and 3

These Grounds of Appeal turn on the meaning of the term "occupier" and whether the Council has established to the relevant standard that the Appellant falls within that term.
I accept the submission of the Appellant that the Council only contended in the proceedings that the Appellant had control of the premises and not that he had the management of those premises. Therefore, having regard to the manner in which the Council formulated its case, the characterisation of control is the only matter to which regard should be had.
The notion of control, not having been defined, is to be given its ordinary meaning. In order to determine its ordinary meaning it is appropriate to have regard to the whole of the legislative context in which the term is used and giving it a meaning (where more than one is available) consistent with the object and purpose of the legislation in which it is found. Resort to a dictionary definition is also able to assist in determining such meaning. In this case reliance was placed on the definition from the Macquarie Dictionary that includes the concepts of "dominate, command".
The use of concepts such as "control" also indicates that each case will turn on its own facts. It is necessary in each case to consider the extent to which a person has the capacity to "dominate, command" and to consider the source of such capacity. The source of the capacity is an important consideration as the notion of "control" is distinguished from "management". Management is a concept that suggests a lesser involvement than control. In light of the manner in which this case was formulated by the Council a distinction must be drawn between these two concepts.
Having regard to the Dictionary definition and the legislative context, the notion of control must mean more than mere ownership. This fact is evidenced by the distinction in the POEO Act of those two concepts. The fact that a person owns the land and may have a residual dominion over it is therefore insufficient on its own to constitute control as used in s 96 of the POEO Act.
Control envisages that the person is able, without requiring permission, to take action with respect to the asserted activity. That means, in cases such as the present, where a person has a contractual or contingent right that would allow them to command the activity, that such right has been exercised. Further, a person is either in command or dominates with respect to the premises, as a question of fact, or they are not. A person who has not exercised that contractual or contingent right cannot become a voluntary occupier, as the fact of their participation in the control of the activity must be inherently undertaken with the submission of the person to which exclusive possession resides.
The actions undertaken by Mr Yamini in the investigation of the Leak were clearly exercised by him as the person with control of the residential parts of the Building and those parts not otherwise occupied by commercial tenancies. The relevant Council officer in fact accepted in cross examination that she was unable to identify the person in control of the premises from where the Leak derived as at that time she did not know the location of the Leak. Mr Yamini was the owner of the whole Building and therefore he was assumed to be able to identify the source.
Once the Leak was identified Mr Yamini required the tenant of Shop 3 to take steps to repair the Leak. This was a direction, but one that was founded in the obligations under the Lease with the tenant. This action was consistent with his recognition of the tenant's right of exclusive possession and the obligations of the tenant under the Lease. The parties agreed that there was no evidence that the Appellant had exercised his rights under the Lease, therefore the work undertaken by him on Shop 3 (absent any evidence to the contrary) is to be inferred as undertaken either with permission, sufferance or submission by the tenant.
Further, the work undertaken on the adjoining premises and his communication with the Council is also consistent with him not being in control of the relevant premises. First, the undertaking of work next door was not evidence of control over the premises from which the Leak was emanating. Secondly, his uncontested evidence was that he was being neighbourly, not exercising responsibility for the Leak. Thirdly, communication with the Council was explicable as the Council had selected the Appellant as the recipient of the Clean-up Notice. The Appellant conveyed to the Council that the Leak was from Shop 3 and that the tenant was arranging the plumbing and compliance with the terms. Notwithstanding these communications the Council continued to assert to the tenant that, in its view, the Appellant was responsible for the Clean-up Notice and this opinion appeared to have carried through to the Prevention Notice.
In addition, I also accept that the Council, on the evidence, is unable to rely upon the presumption in s 258 of the POEO Act. The Appellant has through: his uncontested oral evidence; his affidavit; Lease documents; and assertions to the Council, given evidence to the contrary of him being the occupier of the premises. The Council has not adduced evidence either at all or sufficient to discharge the burden of establishing that the Appellant was the occupier of the premises being Shop 3 or that the area of the building in which the Leak was located did not relevantly form part of the demised premises of Shop 3.
There being no challenge to the evidence of the Appellant that the Leak pipe was within Shop 3 and no other evidence to the contrary, the evidence is compelling. The Council has failed to satisfy its burden of establishing that the Appellant was relevantly the occupier of the premises to which the Prevention Notice related, namely the area containing the Leak.
The authorities that the Council relies upon are authority for the proposition that: there may be more than one person in control of premises; and, that each case will turn on its own facts. These cases must otherwise be distinguished upon their facts and also because in those cases the Council asserted both control and management, unlike in these proceedings.
Accordingly, I find that the Council has failed to establish to the necessary standard that the Appellant was the occupier of the premises, this fact being an essential element of the relevant offence, and that the Appeal should be upheld on Grounds 2 and 3 and the conviction set aside.

Appeal Ground 1

This Appeal Ground turns on whether the Council established on the criminal standard that it has a "reasonable suspicion" that an activity was being carried out on the relevant premises.

Appellant's Submissions

The Applicant accepted that the legislative provisions permit the giving of a prevention notice where the Council has a reasonable suspicion that an activity "has been or is being" carried on in an environmentally unsatisfactory manner. It was submitted in this case that the reasonable suspicion the Council was required to have related to current and not future actions. It was contended that the sole suspicion relied upon by the Council was to be determined by reference to the words used in a heading in the Prevention Notice in which the following words were used: Activity suspected of being carried out in an environmentally unsatisfactory manner:…
The Appellant submitted that those words indicated, by the use of the present tense, a reliance by the Council on an activity actually existing at the date of the Prevention Notice. The Appellant then submitted that the Council could not have formed the relevant "reasonable suspicion" that an activity was (in the present tense) being carried on as: 1. At the date of the issue of the Prevention Notice, the Council had been advised by the Appellant that the Leak had been "fixed"; 2. Prior to the issue of the Prevention Notice the Council acknowledged at that time that there was no further material leaving the premises and had on 12 October 2018 revoked the Clean-up Notice issued to the Defendant by the Council on 4 September 2018; and 3. The Council undertook no further inspections of the premises after the revocation of the Clean-up Notice and the making of the Prevention Notice.
On this basis it was submitted that the Council could have no reasonable suspicion that an activity was occurring at the date of the Prevention Notice and therefore it was issued beyond power.
The Appellant accepted that if the Prevention Notice was construed as not relating to a presently occurring activity, the reasonable suspicion as to future activities was reasonably held and the Prevention Notice would be within power.

Council's Submissions

The Council submitted that the Prevention Notice relied on past events to give rise to the suspicion that the Leak may, in the future, re-occur and that in light of those past events such a suspicion was reasonable. The Prevention Notice sought to ensure that the source of the Leak had been appropriately treated so that the same event did not occur in the future. These factors are identified within the terms of the Prevention Notice.
It is inappropriate to isolate words in the Prevention Notice from the totality. The Prevention Notice should be construed as a whole and undue focus should not be given to a single heading in the absence of a reading of the balance of the Prevention Notice in its context.
The reasonable suspicion as to potential future failure of the repairs to the waste water facilities on the premises was one within power. The Prevention Notice was issued within power.

Findings on Appeal Ground 1

The relevant test for determining a reasonable suspicion has been summarised in Kempsey Shire Council v Slade [2015] NSWLEC 135 at [22], for the purposes of the POEO Act, as: [22] In my opinion, adapting the authorities in other contexts on "reasonable suspicion", the following principles of interpretation relevantly emerge in relation to s 104(2)(b) of the POEO Act: (1) The public authority must have formed a genuine suspicion that a particular person (or persons) caused the pollution incident. (2) A reasonable suspicion involves less than a reasonable belief but more than a possibility. (3) The public authority's suspicion must be reasonable in that there is some objective and factual basis for the suspicion, which would create in the mind of a reasonable person in the position of the public authority an apprehension that that person caused the pollution incident to which the s 92 clean-up order relates. A reasonable suspicion may be based on hearsay material or material that is inadmissible in evidence but it must have some probative value. (4) The objective circumstances do not have to establish on the balance of probabilities that that person in fact caused the pollution incident nor that there has in fact been a pollution incident.
As noted above, the sole basis for this matter being raised is said to turn on the use of the present tense in the heading to the section dealing with the suspicion contained in the Prevention Notice. The Prevention Notice, however, must be construed according to its terms having regard to the totality of the document. It is, therefore, inappropriate to isolate the heading from the totality of the document.
When the Prevention Notice is considered as a whole, in accordance with its terms, it is plain that it is directed to a future risk and not a current continuing activity. This is made plain by the words preceding and following the heading referred to by the Appellant. In fact, apart from the use of the present tense in the words of the heading there is no reference (either express or implied) to a reasonable suspicion that an activity is presently occurring.
The Prevention Notice recites the past events comprising the escape of waste water from the premises and that the rectification of that Leak was, contrary to the requirements of the Clean-up Notice, not undertaken by a licensed plumber, but by a combination of clean up works by the Appellant and plumbing work by a licensed air conditioning plumber. In the circumstances those past actions are sufficient to give rise to a reasonable suspicion that the escape of waste water may occur again if the repairs were not appropriately carried out. The belief that the event may happen in light of the manner of repair is, on the evidence, more than a possibility. I consider this suspicion reasonable in the circumstances as it is based upon an objective factual basis which would create in the mind of a reasonable person an apprehension that the Leak may re-occur and waste water may leave the premises by the same route as had previously occurred.
For those reasons I do not accept that the Prevention Notice was issued in circumstances where the Council could not have held a reasonable suspicion sufficient to justify the giving of the Prevention Notice. I dismiss Ground 1 of the Appeal.

Costs

The Appellant indicated that depending upon the basis on which the Appeal is upheld a finding may permit him to make an application of costs pursuant to s 70 of the CAR Act, and in that event requests costs should be reserved.

Conclusions and Orders

For the foregoing reasons I find that the offence has not been proved. Accordingly, the Court orders that: 1. The Appeal is allowed; 2. The conviction is set aside; 3. The Appellant's costs of the Appeal are reserved; and 4. The exhibits are returned.

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: 09 April 2020

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