Inner West Council v Prilis

Inner West Council v Prilis - [2018] NSWLEC 72 - NSWLEC 2017 case summary — Zoe

[5]

The Offence

The amended summons filed on 28 October 2016 seeks the following relief (some emphasis added): 1. An order under s 246(1)(a) of the Criminal Procedure Act 1986 that the Defendant, Anastasios Prilis of 64 Prince Edward Avenue, Earlwood, in the State of New South Wales, appear before a Judge of the Court to answer the charge that from 19 December 2012 to 25 August 2014 at Petersham in the State of New South Wales, the Defendant committed an offence against section 125(1) of [the EPAA] in that he did offend against the prohibition in section 76A(1) of that Act by carrying out specified development: 1.1 that Marrickville Local Environmental Plan 2011 (the Instrument) provided may not be carried out except with development consent on land to which the provision applied; and 1.2 otherwise than in accordance with the Instrument and any development consent that had been obtained and was in force.
The significance of the nominated dates of the "charge period" needs to be noted: 1. On 19 December 2012, this Court (O'Neill C) granted to Mr Prilis a relevant "adaptive re-use" development consent ("DC") for his boarding house project (39 boarding rooms and 3 manager's rooms) - Prilis v Marrickville Council [2012] NSWLEC 1348 - and 2. On 25 August 2014, while the Defendant was absent in Greece (7 July to about 12 or 14 September, 2014 - SAF12), some of the existing improvements on his land were seriously damaged as a result of an arson attack, in respect of which there is absolutely no allegation against him or "anybody associated with him". (See SAF9, SAF13(a) to (c), Kirchen, Pars 7 and 9, and T30.10.17, p4. L38.)
The amended summons provides the following "particulars" of the charged offence (again some emphasis added): (a) The Defendant owned land described as Lot 1 DP 57514, Lot 1 DP 571836 and Lot 2 DP 955354, known as 2-4 Shaw Street, Petersham (the Land). (b) The Instrument applied to the Land from 12 December 2011. (c) The Land was within Zone R1 General Residential for the purposes of the Instrument. (d) Under the Land Use Table at the end of Part 2 of the Instrument, development for the purposes of "Boarding houses" may not be carried out on land within Zone R1 General Residential without first obtaining development consent. (e) From 19 December 2012 until 25 August 2014 the Defendant carried out development for the purpose of a boarding house on the Land (the Specified Use), namely the use of an existing single-storey building on Lot 1 DP 571836 and Lot 2 DP 955394 situated in proximity to the boundary of those lots with Shaw Street (the Building) for a purpose which involved the Building: (i) being wholly or partly let in lodgings; (ii) providing lodgers with a principal place of residence for 3 months or more; (iii) having shared facilities, such as a communal kitchen; (iv) having rooms, some of which had private bathroom facilities, that accommodated one or more lodgers; and (v) not being used for the purpose of backpackers' accommodation, a group home, hotel or motel accommodation, seniors housing or a serviced apartment for the purposes of the Instrument. (f) The Specified Use was carried out otherwise than in accordance with the Instrument and any development consent that had been obtained and was in force, in that: (i) the only development consent to carry out erection and/or use of the Building for the purposes of a boarding house as defined in the Instrument was the development consent granted by order of the Court dated 19 December 2012 (Consent): ... to development application No.201200172 lodged with the [Prosecutor] on 15 May 2012 for use of existing buildings at [the Land] as a boarding house with 39 boarding rooms and 3 Manager's rooms and alterations and additions to accommodate the use subject to the conditions at Annexure A. (ii) the Specified Use was carried out in contravention of a condition subject to which the Consent was granted, in that contrary to numbered condition 75, the Building was occupied for the Specified Use without: (1) an occupation certificate having been issued; (2) the Defendant having obtained a final fire safety certificate certifying that the fire safety measures had been installed in the Building and performed to the performance standards listed in the fire safety schedule; and (3) all preconditions to the issue of an occupation certificate specified in the Consent having been met, namely conditions 76 and 77.
Put in other words by the Prosecutor (in its subs, pars 1 and 2), Mr Prilis admits that he carried out on the Land the use of an existing building for the purpose of a boarding house, other than in accordance with his DC, the conditions of which required him to hold: (a) An occupation certificate [("OC")] of the nature referred to in section 109C(1)(i) of [the EPAA]; (b) A final fire safety certificate of the nature referred to in clause 170 of the Environmental Planning and Assessment Regulation 2000; and (c) A compliance certificate of the nature referred to in Division 9 of Part 6 of the Sydney Water Act 1994. (See also SAF11.)
The relevant conditions of the DC granted by Commissioner O'Neill of this Court on 19 December 2012 (SAF2 and annexure A), and referred to in the amended summons, were (SAF3): 75. Occupation of the building shall not be permitted until such time as: a) All preconditions to the issue of an Occupation Certificate specified in this development consent have been met; b) The building owner obtains a Final Fire Safety Certificate certifying that the fire safety measures have been installed in the building and perform to the performance standards listed in the Fire Safety Schedule; and c) An Occupation Certificate has been issued. Reason: To comply with the provisions of the [EPAA]. 76. The owner of the premises, as soon as practicable after the Final Fire Safety Certificate is issued, shall: a) Forward a copy of the Final Safety Certificate and the current Fire Safety Schedule to the Commissioner of the New South Wales Fire Brigades and the Council; and b) Display a copy of the Final Safety Certificate and Fire Safety Schedule in a prominent position in the building (i.e. adjacent the entry or any fire indicator panel). Every twelve (12) months after the Final Fire Safety Certificate is issued the owner shall obtain an Annual Fire Safety Certificate for each of the Fire Safety Measures listed in the Schedule. The Annual Fire Safety Certificate shall be forwarded to the Commissioner and the Council and displayed in a prominent position in the building. Reason: To ensure compliance with the relevant provisions of the Environmental Planning and Assessment Regulations and Building Legislation Amendment (Quality of Construction) Act. 77. A Section 73 Compliance Certificate from Sydney Water being submitted to Council before occupation of the premises. Reason: To comply with the requirements of that Act.
I accept the defence submissions (pars 4 to 8) that the "gravamen of the offence" with which Mr Prilis is charged is his alleged breach(es) of condition 75, including by his not fulfilling conditions 76 and 77 (see also T31.10.17, p23. LL1-32).

[6]

The property and the fire

Having bought the subject site with a brother-in-law (for $1.4M) in 1998, Mr Prilis later bought out that relative's interest, amicably, and became sole proprietor, from 2007, with a mortgage of approximately $2M. He eventually achieved a rezoning in 2010-11, and a DC in 2012.
In 1999, the property was leased (for a term of 10 years) to a boarding house operator, "Inner-West Accommodation" (par 25), and occupied by up to 100 people, until Mr Prilis terminated the lease in about 2002 (par 32).
Since then, it would appear that, apart from living there part-time himself (in the front building), occupation of the premises has not exceeded approximately ten persons.
For most of the time that he had owned and operated the subject property it had been occupied, mostly by poor or vulnerable (or "trouble") people (T30.10.17, p47, L7), who mainly had "no work, no bond, no credentials" (p54, LL14-15). He clearly established good rapport with most of his tenants.
He seems not to have known in the early years, despite many dealings with Council and the fire services - not to mention the normal inquiries one would expect to be made at the time of settling the purchase (T31.10.17, p24, LL43-48) - that it could not lawfully be operated as a boarding house.
However, Council was clearly in no hurry either to close down its occupation, or to facilitate its conversion to, and lawful operation as, a boarding house.
On the other hand (Exhibit C2), Council tolerated modest occupation (up to 10 out of 70 rooms), perhaps as a social measure, or as a means to minimise vandal and other damage to an important heritage item, or both.
Then, at about the time the whole Prilis family left for Greece, leaving some "tenants", who were trusted by the Defendant, effectively in charge, and in the wake of a major fire nearby in Alexandria, on 2 July 2014, which attracted great media attention, Council, after contact from the fire authorities on 16 July 2014, rather suddenly became quite concerned about Tresillian.
Mr Prilis had never considered the property a "fire risk" (ROI, Q839), and he felt "very devastated" by the fire (ROI, Q993).
In the absence of the Defendant's implementation of his DC, granted by the Court in late 2012, limited to 39 rooms and 52 lodgers, the Council contacted the Defendant in Greece, and, in his absence, issued him with an Emergency Order, seeking total cessation of the use, i.e. evacuation of the occupants, within 7 days (i.e. by 7 August 2014).
Without the Defendant being present to deal personally with his tenants, and secure their departure from the premises, the Council officers, plus one or more "responsible" tenants (especially "Dennis", with whom the Defendant spoke from Greece), and the Defendant's then rather "preoccupied" son, Nicholas (distracted by a flooding emergency at his own home), had limited success, and there were several occupants still on site when the arson attack occurred.
The damage to the property was estimated at $795,000, but "Zurich" denied liability on the grounds of an "incorrect disclosure" by Mr Prilis's insurance broker (pars 150-152, and tab 5).

[7]

The Prilis project

Council issued a construction certificate ("CC") in respect of Mr Prilis's 2012 DC, on 21 January 2016 (SAF5), and it relevantly included the following "approved reports": (a) Building Code of Australia report prepared by Anthony Protas, accredited certifier, dated 17 December 2012; and (b) Fire Safety Study prepared by Dr, Vitor Shestopal, Accredited Certifier in Mechanical and Fire Safety Engineering, dated April 2013.
Construction works commenced in February 2016, and were about 50% complete, as at the date of the sentencing hearing (30-31 October 2017). To that date, Mr Prilis has spent about $750,000 repairing fire damage, and making alterations, and he estimated (pars 161-164) that there was "about another $750,000 of work remaining".
Mr Prilis concedes, in his affidavit (pars 153-154), that he "had a poor appreciation" of the required fire safety measures, that he "had not read the reports to understand them", and that "the fire safety measures at the property were not enough to comply with the current rules and regulations".
Over the period from 10 November 2010 until the fire on 25 August 2014, Council officers made many inspections to assess fire safety aspects of the property.
On 1 August 2014, Council issued to Mr Prilis an Emergency Order, under ss 121D(b) and 121M(2) of the EPAA (SAF12, and Annexure F, and [48] below), directing him to "cease using the premises for residential accommodation" by 5pm Wednesday 7 August 2014, both dates falling during his absence in Greece.
Mr Prilis also deposes (pars 155-160): 155 I was responsible for having the people living at the Property and in hindsight should not have had people living there or should have at least put more thought into fire safety and bringing the Building up to current standards. 156 I am grateful that there were no injuries as a result of the fire. However I understand that but for the battery operated smoke detectors, the result of the fire could have been different. 157 I accept responsibility for not ensuring the smoke detection system was working or alternatively replacing it with a new one before people were living there. 158 I should have also ensured the exit lights were working and that there were working spitfire emergency lights. 159 I have since engaged a fire services contractor to upgrade the Property in accordance with the DA and reports. 160 I have even taken the step of amending the plans for the Property to remove windows which are within close proximity to the boundary, rebuild much of the existing plasterboard construction in the back wings out of full brick for better fire protection and also separate the buildings so that smoke cannot easily travel from one building to another in the event there is a fire. This is above and beyond what was required. I do not want another situation like the one that happened.

[8]

Heritage aspects

The subject site has on it a well-known heritage item, known as "Tresillian" (called by the Defendant "Tresilian"), and described as a: 2 storey Federation Queen Anne style mansion; 1920s nurse's home; garden, including interiors.
It is described in more detail in SAF tab G pars 8 to 14, but is effectively a mansion house, coupled with three other "joined" but separate buildings, hosting some seventy rooms potentially capable of occupation (T31.10.17, p24, LL19-24), only 10 of which, in the north eastern wing, appear to have been occupied at all relevant times, including during the charge period.
Counsel for Mr Prilis, Tom Howard SC, says of this heritage item, and Mr Prilis's association with it (subs 9 to 16): 9. The subject land was previously known as "Tresilian", which operated for many years as a facility for the care of mothers and babies. That use of the land ceased in the late 1990s, after which time, in about 1998, Mr Prilis purchased the property in partnership with his brother in law. 10. The buildings formerly comprising the Tresilian centre comprised about 70 rooms, most of which were bedrooms for mothers and babies. 11. Mr Prilis and his brother in law hoped to use the premises for the purposes of accommodation, such as a boarding house, but under the zoning that then applied to the land, the use of the land for a boarding house was permitted only for a maximum of 10 residents. 12. Soon after Mr Prilis and his brother in law purchased the land, it was leased by a business known as Inner West Accommodation, which submitted a development application in 1999 to the Council to use the land as a 70-room boarding house. This application was refused in about 2000, including because such a use was not permitted in the zone. 13. In 2000 or 2001, Inner West Accommodation made an application to re-zone the land to permit its use for a boarding house without the restriction of a maximum of 10 residents, but this application was refused by the Council. 14. Inner West Accommodation used the land for the purpose of a boarding house while awaiting the outcome of the re-zoning application. Inner West Accommodation ceased paying rent and effectively abandoned the site when the re-zoning application was refused. It was left to Mr Prilis to bring about the vacation of the property by the lodgers. ... 15. After many years of lobbying the land was eventually rezoned under the current Marrickville Local Environmental Plan 2011, following which Mr Prillis (sic) submitted a development application for a 60-room boarding house. This application was withdrawn in June 2011 after the Council indicated that it could not be supported. 16. Subsequently in May 2012, Mr Prilis submitted a new development application for a 39 room boarding house. This, too, was refused by the Council, but was approved by the Court on 19 December 2012.
Mr Prilis himself deposes (pars 6, and 15 to 24): 6 Over the last 46 years I have lived, worked and raised my children in Sydney's inner west. I have lived in St Peters, Petersham, Enmore, Stanmore and Earlwood over the years. ... Heritage Buildings 15 l have a particular love for heritage buildings. 16 Since the early 1980s, I have owned, refurbished and restored many heritage buildings in Sydney's inner west and other areas. 17 I like heritage properties because they are full of character and usually very well built. When I say they are usually very well built l mean they are usually solidly built with strong materials such as brick, timber and concrete. Most materials used in the old buildings were high quality such as copper and hard woods. Tradesman (sic) also took a lot of pride in building the old buildings. Shaw Street Petersham 18 In 1998 l purchased 2-4 Shaw Street in Petersham (Property) in partnership with my brother-in-law. 19 I was attracted to the Property because of its size, character and potential. I particularly liked the old Victorian house which is the main building on the Property. I liked that the old house had a beautiful timber staircase, marble fireplaces and these large wooden doors in the living room which retracted into the first floor wall cavity. 20 When we bought the Property, it had just ceased being used as the Tresillian Centre for mothers and babies. I call the Property 'Tresilian'. 21 The Property was made up of about 70 rooms, most of which were bedrooms for mothers and babies and it was very well built. Most of the rooms were about 10sqm and were purpose built bedrooms. Each room was big enough for a single bed, wardrobe and chair. Some bedrooms also had their own bathroom facilities. I believe mothers and their babies would stay for about a week at a time. 22 We bought the Property with the initial view to turn it into an accommodation business, like a boarding house, as I believed the existing layout lended itself to that use. 23 At the time we bought the property, I did not know that that the zoning permitted a boarding house but only for a maximum of 10 residents. 24 In 2007, I eventually bought my brother-in-law's share of the Property to become the only owner.

[11]

Financial matters

In respect of the financial aspects of running Tresillian in the period from prior to the charge period, until the fire, Mr Prilis deposed: 74 From 2003/2004 until 2014, at any one time there was between 5 and 10 people living at the Property. 75 I originally had verbal agreements with a couple of people to look after the property and I would let them have a room in the Building for free. 76 After I let the second or third person stay, I noticed that the utility bills for the Property were climbing, such as water, electricity and gas. 77 Also, as the years continued to go by with no rezoning, the Council Rates and other expenses for the property started to add up. I also had considerable interest payments to make to the bank for the loan. 78 As a result, I decided that I would start charging rent for the rooms to cover some of the property expenses. 79 I began charging about $150 per week for a room in or about 2008 or 2009 and this increased up to $250 per week by 2014. The rent was mostly set based on the ability of the individual to pay. If I knew that a person was out of work and could not afford the rent I would not charge it. 80 I did not ask for or receive any bonds from any of the people. These people were refused accommodation elsewhere in the area as they could not provide a bond or any rental references. 81 I would collect the rent whenever the people were able to pay it. 82 There were many occasions over the years where people were not able to pay the rent. I always gave them a chance to catch up if they could. 83 I rarely told people to leave because they could not pay the rent. If I felt that they were taking advantage of the situation I would ask them to leave. ... 89 Most of the residents were constantly behind in rent. They would say "I will pay you this week", then they would say "I will pay you next week". 90 Others would say, "please give me another week and I'll catch up". 91 I would often let people go for four, five, six or even seven weeks. 92 After letting them go for a number of weeks, I would wipe out the debt so they could start fresh. I knew there was no way they would be able to catch up so I wiped the debt and we started fresh. This would happen over and over again. 93 Some weeks no one would pay any rent. Some weeks I would be able to get most people to pay. 94 It was a good week if I could get 50% of the rents. In a bad week I would get nothing. 95 On average I would say that I received somewhere between $50,000 and $80,000 a year in rent in 2013/2014. The amount would also depend on how many of the 10 rooms were occupied. 96 I never occupied more than the 10 rooms. It was also rare for all 10 rooms to be occupied at any one time. ... 103 Total yearly expenses for the Property were approximately as follows: Interest Cost $141,364.50 Council Rates $ 5,302.76 Insurance $ 6,293.01 Water Rates $ 764.24 Water Usage $ 2,600.00 Electricity Usage $ 8,000.00 Gas Usage $ 2,400.00 TOTAL $166,724.51

[12]

EPAA

There was no issues regarding the legislative provisions to which the summons, particulars, and relevant consent conditions refer, so I will not set them out here, but there was some debate during the hearing about the provenance of some other particular sections of the EPAA, from which I will now quote.
Division 2A of the EPAA is entitled "Orders", and includes the following provisions relevant to the Council's Emergency Order: 121D Circumstances in which compliance with sections 121F-121K is required Before giving an order, the person who gives the order must comply with sections 121F-121K, except for: ... (b) an order given, and expressed to be given, in an emergency, or ... ... 121G Orders that make or are likely to make residents homeless (1) If an order will or is likely to have the effect of making a resident homeless, the person who gives the order must consider whether the resident is able to arrange satisfactory alternative accommodation in the locality. (2) If the resident is not able to arrange satisfactory alternative accommodation in the locality, the person who gives the order must provide the resident with: (a) information as to the availability of satisfactory alternative accommodation in the locality, and (b) any other assistance that the person considers appropriate. ... 121L Reasons for orders to be given (1) A person who gives an order must give the person to whom the order is directed the reasons for the order. (2) The reasons may be given in the order or in a separate instrument. (3) The reasons must be given when the order is given, except in an emergency. In an emergency, the reasons may be given the next working day. 121M Period for compliance with order (1) An order must specify a reasonable period within which the terms of the order are to be complied with, subject to this section. (2) An order may require immediate compliance with its terms in circumstances which the person who gives the order believes constitute a serious risk to health or safety or an emergency.

[13]

CSPA

Section 3A of the Crimes (Sentencing Procedure) Act 1999 ("CSPA") provides: 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.
Section 21A of the CSPA provides: 21A Aggravating, mitigating and other factors in sentencing ... (2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows: ... (d) the offender has a record of previous convictions ... ... (g) the injury, emotional harm, loss or damage caused by the offence was substantial, ... (i) the offence was committed without regard for public safety, ... (ib) the offence involved a grave risk of death to another person or persons, ... (o) the offence was committed for financial gain, ... The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence. (3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows: (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, (b) the offence was not part of a planned or organised criminal activity, ... (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, (h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise, (i) the remorse shown by the offender for the offence, but only if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), (j) the offender was not fully aware of the consequences of his or her actions because of the offender's age or any disability, (k) a plea of guilty by the offender (as provided by section 22 or Division 1A), ... (m) assistance by the offender to law enforcement authorities (as provided by section 23), ... (4) The court is not to have regard to any such aggravating or mitigating factor in sentencing if it would be contrary to any Act or rule of law to do so. (5) The fact that any such aggravating or mitigating factor is relevant and known to the court does not require the court to increase or reduce the sentence for the offence. ...

[15]

The Defendant himself

The Defendant was born in Greece on 3 November 1948. He migrated to Australia in 1971. He settled, and has remained, in or near the Marrickville/Earlwood area, and is the father of two sons (an architect and a solicitor) and one daughter.
For some time after his arrival, he worked (for 4-5 years) as a residential real estate agent in the Punchbowl area, and later (through the 1980s, for about 20 years) as a clothing manufacturer employing 5 to 10 people.
Since the 1980s, he has "dabbled" (my word) in property, mainly shops, but never more than 5 or 6 at a time. He is "not an experienced developer" (T31.10.17, p27, L12).
However, he has a particular affection for heritage buildings, and has had "high hopes" for Tresillian. He told Kirchen that he was "very attached" to it, that it was "beautiful", and that he "just want[ed] to bring it alive" (ROI, Q994-1005).
He regards himself (pars 49, 127 and 153) - and his son Nicholas agrees - as a "big picture" person, not strong on details, technology, or "technical" issues (T31.10.17, p27, LL12-18).
At the same time, the evidence shows him to be a "family man", and a good, generous and compassionate citizen, active in the community, and especially in "works for the poor".
He may have breached the planning law in operating Tresillian, but the Court accepts that he was trying to help disadvantaged citizens at the same time. Rarely does the Court see more glowing testimonials than Fr Kostoglou and Mr Markakis have provided in this case.
Shortly before the scheduled starting date for his sentencing hearing (set on 26 May 2017 for 30 October 2017), Mr Prilis was taken ill and required serious surgery, following which he had trouble thinking clearly (T31.10.17, p43, LL7-10). The Prosecutor agreed to postpone the hearing, but Mr Prilis insisted it proceed, as scheduled (T31.10.17, p21, LL12-28).
He told the Court (T30.10.17, p35, LL12-16) that he was able to understand both oral and written English, but I accept that his language limitations, and his then delicate state of health, prevented his adequately dealing with some of the unexpected questions he faced in cross-examination.
I have made allowances for him in that respect - as prosecuting counsel appeared to do, until he submitted (T31.10.17, p20, LL16-24) that there was some question about the Defendant's "insight into the seriousness" of his offence, and that he had "a tendency to obfuscate ... and minimize his culpability" (c.f. T31.10.17, p21, LL2-11). I agree with Mr Howard (T31.10.17, p31, LL1-2) that Mr Prilis "gave genuine, sincere evidence in cross-examination that he was not prepared for in relation to his history of business".
I am satisfied that, as a "property investor" (ROI, Q118), he had some experience of minor capital works, limited exposure to DC processes, and only minor experience of fire safety works.
Mr Prilis and his family went to Greece for the wedding of his son Peter on 18 July 2014. He himself left Australia on 7 July 2014, and was not due to return until 18 October 2014, at which time the family was hoping to commence redevelopment of the subject premises (ROI, Q289).
In terms of his stewardship of that property, that period of absence proved to be most unfortunate for him, and he returned from Greece early, on or about 12 September 2014.

[16]

Imaeda

Both parties' submissions rely on my decision in Imaeda, which concerned a property at Alexandria, at which a major fire occurred on 2 July 2014 ([45] above).
Arson was not alleged, but the owner pleaded guilty, as here, to planning offences - carrying out development (storage uses) without consent, and carrying out development prohibited by the applicable LEP (use for residential purposes).
The landowner had consent to use the site for a bus depot, but he was living onsite and leasing old buses, caravans, containers, and buildings largely to backpackers. It would appear that the fire resulted from his haphazard electricity system, and site seriously damaged the subject site and a neighbouring building.
Imaeda was, after the fire, like Mr Prilis has been at all times, very candid and co-operative with the authorities, and gave a frank recorded interview.
It is useful to repeat here, and to apply again in this case, some of the sentencing principles I applied in Imaeda, and will now quote ([58]-[69]): 58 The High Court has said that arriving at the appropriate sentence in a particular case requires an "instinctive synthesis" of all the relevant objective circumstances of the offence with the relevant subjective circumstances of the offender: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25, and Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39. ... 60 In Plath v Rawson ("Plath") (2009) 170 LGERA 253; [2009] NSWLEC 178, Preston ChJ set out (at [46] - [48]) various matters which may be taken into account when assessing the objective gravity or seriousness of an environmental offence. Although not an exhaustive list, these matters included: • The nature of the offence; • The maximum penalties for the offence; • The harm caused to the environment by commission of the offence; • The state of mind of the offender in committing the offence; • The offender's reasons for committing the offence; • The foreseeable risk of harm to the environment by commission of the offence; • The practical measures to avoid harm to the environment; and • The offender's control over the causes of harm to the environment. 61 Many older authorities had noted that the objective gravity of the offence fixes both the upper and lower limits of proportionate punishment. It fixes the upper limit insofar as the sentence must not exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances: Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14. It fixes the lower limit because allowance for the subjective factors of the case ought not produce a sentence which fails to reflect the objective gravity or seriousness of the offence: R v Dodd (1991) 57 A Crim R 349. 62 Further, in Plath (at [140]), Preston ChJ set out the "favourable" factors relevant to an offender, which may be taken into account within the limits set by reference to the objective gravity of the offence. This also was not intended to be an exhaustive list, but included: • Lack of prior criminality; • Prior good character; • Plea of guilty to the offences; • Contrition and remorse; and • Assistance to authorities. 63 Preston ChJ also noted (at [202]): A fine is the most common sentencing option and often the most appropriate penalty for environmental offences. The fine embodies the legislative view, based on community standards, of the seriousness of criminal conduct. A fine can achieve the purposes of sentencing of retribution, accountability, denunciation and deterrence. ... 64 Matters adverse to an offender must be established by the prosecutor beyond reasonable doubt, but the onus on the offender to establish matters favourable to him is on the balance of probabilities: R v Olbrich (1999) 199 CLR 270. 65 In Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority ("Camilleri") (1993) 32 NSWLR 683, at 698, Kirby P said (emphasis mine): While it is the function of the Court itself to assess the seriousness of the offence in question, the maximum penalty available for an offence reflects the "public expression" by parliament of the seriousness of the offence: ... The task of a court is to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalty set by the legislature from zero to the maximum. ... ... The Court must keep in mind not only the facts which establish the seriousness of the offence but also those which tend to mitigate that seriousness or exculpate the offender. In this process, where a relevant fact is the subject of conflicting evidence, and where that evidence is of like probability, the Court should resolve the conflict of fact in favour of the offender: ... 66 While the objective gravity of an offence establishes both an upper and a lower limit for the penalty, "the subjective mitigating features should never produce a sentence that fails to reflect the gravity of the incident, or the objectives of punishment, which include both retribution and deterrence": Environment Protection Authority v Waste Recycling and Processing Corp ("Waste") (2006) 148 LGERA 299; [2006] NSWLEC 419, at [140]. ... 69 As I observed, in Hunters Hill Council v Hakim & Anor [2010] NSWLEC 62, a contempt case, at [49] - [50]: 49 The laws governing development control serve an acknowledged and legitimate public purpose. The actions of Councils in restricting development are often not appreciated, but compliance is not optional, no matter what advice one receives, nor how much one likes or needs an offending structure. 50 ... the courts will not hesitate to act firmly to enforce "scrupulous obedience" of them, and so protect the courts' integrity in upholding the law and its valid application. ...
When I turned to the objective considerations for sentencing Mr Imaeda, I dealt with: 1. the "very heavy" maximum penalty ([72]); 2. actual, likely and potential harm, including the harm caused by undermining the statutory scheme, and also the risk of harm ([73]-[79]); 3. the offender's state of mind ([80]-[83]); and 4. the objective of financial gain ([84]).
On subjective considerations, I noted the defendant's personal and family circumstances ([85]-[89]), his early pleas but the lack of other evidence of remorse ([90]-[91]), his lack of any record of environmental offending ([92]), his high level of co-operation with the authorities ([93]), and his agreement to pay the Prosecutor's costs, estimated at $71,000 ([94]).
In consideration of those "subjective" matters, I settled on a "total discount ... in the order of one-third" ([95]).
I noted the presence of several aggravating and mitigating factors ([96]-[97]), and some other issues not presently relevant, before settling on the categorisation of the offence as of "moderate" seriousness, or approximately "25% of the worst case" for his accommodation offence (and "not more than 10%" for his storage offence) ([100]).
I then turned to the sentencing considerations, to which I have earlier adverted, and I concluded that: 1. specific deterrence was not necessary ([101]); 2. general deterrence was important ([102]); 3. the "totality" principle was engaged ([104]); 4. the Defendant's culpability was not reduced by any medical considerations ([105]-[127]); and 5. his offending conduct "was planned and prosecuted over a long period of time, and involved some complexity, and he has shown no contrition" ([128]).
The Court could find no case "perfectly comparable" ([129]-[132]), and I arrived at gross fines of $250,000 and $100,000, both reduced by one-third, but then "rounded" down by a further 10% for totality, resulting in the imposition of fines in the sums of $150,000 for the accommodation offence and $60,000 for the storage offence, plus costs of $71,000 ([134]-[136]).

[17]

Prosecutor's submissions

The Prosecutor strongly contends for a large component of general deterrence in the sentence imposed on Mr Prilis.
On that aspect, Lloyd J relevantly said, in Carlino v Leichhardt Municipal Council (2005) 144 LGERA 235; [2005] NSWLEC 198, at [31]: General deterrence is also a major consideration in the imposition of penalties for environmental offences: Axer Pty Limited v Environment Protection Authority (1993) 113 LGERA 357 at 359; Camilleri's Stock Feeds Pty Ltd at 701; Capral Aluminium Ltd v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay)(2000) 49 NSWLR 61[0]. Thus, the penalty imposed must deter not only the offender, but also those engaged in similar activities, from committing like offences and also to procure that they will take the precautions necessary to ensure that offences do not occur and the environment is not exposed to a risk of harm: Axer at 359. For strict liability offences, however, care must be taken to ensure that the penalty imposed does not cause the offender to shoulder an unfair burden of community education: Walden v Hensler (1987) 163 CLR 561 at 570.
I also note in this regard Mr Howard's submission (par 73): It is trite and uncontentious that sentencing for offences of this type must serve the objective of general deterrence... However, that principle is always subject to the equally uncontentious, but important, qualification that, in serving the objective of general deterrence, care must be taken to ensure that the penalty imposed does not cause a particular defendant to shoulder an unfair burden of community education: Waldon v Hensler (1987) 163 CLR 561 at [570]; EPA v Robinson [2004] NSWLEC 629 at [30]; EPA v Davis [2005] NSWLEC 643 at [27].
In terms of the objective harmfulness of the Defendant's actions, the Prosecutor submitted (at 11) that the offence: (a) caused substantial loss or damage; (b) was committed without regard for public safety; (c) involved a grave risk of serious injury and/or death arising from fire to residents living on the premises; and (d) on that basis, involved serious potential environmental harm.
If one puts aside the fire itself, and its serious impacts on the Defendant himself, it is hard to fully substantiate those elements in this case, but certainly Mr Prilis paid inadequate attention to becoming aware of, and dealing with, the risks posed by his operation, in terms of, particularly, potential for fire-related harm.
Those risks were put before him really, or at least squarely, for the first time on 31 July 2014 while he was overseas.
Prior to that warning call from Mr Norman, it is to be noted that Mr Prilis made no objection to the fire safety improvements required of him in the doing of his development.
In the event, everyone was fortunate that the deliberate arson attack did not harm any humans.
I accept that Mr Prilis's culpability was greater after 31 July 2014, than before, but I am not convinced beyond reasonable doubt that the Prosecutor's claim of recklessness (par 26, and T31.10.17, p19, LL37-40), on the Defendant's part, is made out, as an aggravating factor.
He told the Council officers to do what they considered had to be done, and he phoned "Dennis" to urge him to comply with Council, and also to install smoke detectors (as Dennis had suggested).
In terms of this Defendant's subjective circumstances, the Prosecutor submitted (footnotes omitted): 30. The subjective circumstances of a defendant must be considered in determining a proportionate sentence; however subjective features must not be allowed to produce a sentence which fails to reflect the seriousness of the crime. As noted above, the subjective factors cannot lower the penalty below the appropriate range fixed by the objective factors. [See Imaeda, at [61] and [66], quoted above] 31. The subjective circumstances for a court to consider include: (a) any prior criminal record; (b) any plea of guilty; (c) any contrition and remorse; (d) any co-operation with the regulatory authorities; (e) any extra-curial punishment of the defendant; and (f) the financial means of the defendant. 32. The subjective circumstances may be dealt with more thoroughly on behalf of the Defendant in submissions, to which the Prosecutor may reply. For now, the Prosecutor notes that it agrees that: (a) the maximum 25% discount for the early guilty plea would be appropriate; and (b) the Defendant has co-operated with the Prosecutor since the Fire, including throughout the course of these proceedings by (among other things) negotiating a Statement of Agreed Facts.
In reference to Imaeda, Mr Jordan's written submissions concluded with the following (footnotes omitted): 35. In dealing with the risk of fire in [lmaeda], this Court found that there was 'substantial' potential harm and that there was 'an element of recklessness on the defendant's part regarding public safety'. This finding was made in circumstances where the offence came to light as a result of the fire. That is, there was no direct warning or instruction given to that offender, before the fire, emphasising the risk of fire and the need for urgent remedial measures to minimise the associated risks. 36. These circumstances should be contrasted with what occurred in the present case, where the offender was directly warned by Council of a serious fire risk, and of the urgent need to relocate the residents, over three weeks before the fire occurred. 37. On this basis, the offender's recklessness as to the risk of fire and the safety of the residents was worse than the 'element of recklessness' found to apply in [lmaeda].
In his oral submissions, Mr Jordan acknowledged that the Defendant had suffered "most of the actual harm" (T31.10.17, p19, L8), noting the financial consequences for him from the fire.
At the same time, Mr Jordan fairly noted that "financial gain", as a motive for the offence, and as an "operative aggravating factor" in this case, is "not in the more serious category" (par 27, and T31.10.17, p19, L47).

[18]

Defence submissions

Counsel for the Defendant, Mr Howard, submitted (pars 18-20) that for some years prior to the grant of consent, and then for the period between the consent and the fire, Mr Prilis accommodated a small number of lodgers to prevent vandalism and theft (T31.10.17, p25, LL36-48).
After not charging rent in the early years, he moved to charging his disadvantaged tenants modest rents (affidavit par 79) to help him defray the expenses he faced in "holding" the property, pending development (>$166K pa - par 103), after he terminated the commercial tenancy (a period of some 15 years). Council knew of and tolerated some occupation, but perhaps did not know the extent of it (as Mr Howard conceded - T31.10.17, p41, LL3-4).
The Defendant admits having the business for financial gain, but not in the sense of profit. He testified that rental income was "modest" and "unreliable" (T31.10.17, p26, LL1-28), and that he was "forgiving" of rental defaults (affidavit par 92).
Fire safety deficiencies caused a threat to public safety, but really only when the emergency order was issued, at the very end of July 2014 (subs pars 34 and 46). The Defendant's failures constitute his offence, but the substantive actual harm and risk of injury were caused by the fire, not by his failures (subs pars 38-39).
In terms of the Defendant's state of mind, he admits (subs par 40) that he "consciously caused and permitted" the offending use of the north east wing by lodgers, but Council and the fire brigade were aware, and raised no concerns till 31 July 2014 (subs pars 40-45, and 50). Mr Howard submitted: Interactions with the Council 43. The defendant believed based on his previous interactions with the Council and a number of inspections carried out by Council officers at the premises before the fire that the Council would exercise its discretion and tolerate such occupation to limit the risks of vandalism and the like as long as the occupation was confined to the ten rooms in the north-eastern wing of the building. 44. lt is not suggested that this belief was unreasonable or capricious. Interactions with the NSW Fire Brigade 45. The defendant has also given evidence about attendances by the NSW Fire Brigade to the proper (sic) on a number of occasions. This included an occasion when the defendant walked through the property with fire brigade officers in 2013. He was provided some informal guidance during those attendances by the Fire Brigade, but was not told that there was any particular danger.
I also note the following submissions by Mr Howard (pars 51, 58, 59, and 63): 51. ... When you look at the substance of the conversation between Mr Norman and the defendant on 31 July 2014, it may be accepted that defendant was reluctant to accept that this was an emergency. His evidence (affidavit at [129]) was to the effect that he could not understand why it was an emergency when nothing had changed and nobody had previously raised the issue of fire safety with him despite numerous previous attendances by the Council and the Fire Brigade. [As Mr Prilis deposed (in par 129), he "was disappointed that after so many years Council was going to issue notices to everyone to vacate and they didn't want to give [him] the opportunity to do it when I got back".] ... 58. There was no attempt by the Council to contact the defendant between 31 July 2014 and 19 August 2017. 59. In any event, if looked at realistically, there is not much the defendant could have done from Greece to bring about a quicker cessation of the use. When Mr Simmons, the Council's Fire Safety Officer, was asked what more the defendant could have done, he suggested that he could ring the manager and ask the tenants to leave. It is accepted that the defendant spoke to Dennis, the person he described in his testimony in terms to the effect that he (Dennis) was the only normal guy that you could speak with and he told Dennis "You have to do what the Council wants. Tell the others as well." That is effectively the type of additional step that Mr Simmons had suggested the defendant might have been able to take. ... 63. The occurrence of the fire on 25 August 2014 should not be permitted to distort the analysis of the defendant's state of mind before it occurred.
In his oral submissions, Mr Howard emphasised the Defendant's co-operation with Council after the emergency order, despite the sudden dramatic change in Council's position after the offending use had continued for a significant period of time (T31.10.17, p32, L5).
As Mr Jordan pointed out in his oral reply (T31.10.17, p39, LL10-11), even if Mr Prilis and his sons did not have the actual emergency order, "the fact of the emergency situation, as far as Council was concerned, was conveyed to him".
Mr Howard noted that Mr Prilis did not resist, obstruct or seek to delay the Council after the order was notified to him - he said to Council officers words to the effect of "you can go there any time", or "you do what you have to do" (per Mr Howard, at T31.10.17, p33, L26 and p34, LL3 and 15) - even though he "couldn't understand" or was "reluctant to accept that [it] was an emergency situation" when speaking to Norman (T31.10.17, p32, LL15-36).
Mr Howard asked the Court to note that the Council then effectively remained silent until 19 August 2014, but he accepts that Council took into account its social responsibility under s 121G of the EPAA, and must have realised "there was never a realistic prospect of immediate evacuation" of the occupants (see T30.10.17, p27, LL14-17, and p29, LL20-22, and T31.10.17, p34, LL17-37).

[19]

Conclusion

Mr Howard concluded (subs par 64) that the Defendant's offending was of "moderate" objective seriousness, whereas Mr Jordan had submitted (at his par 18) that it was "high".
Both counsel relied on Imaeda, but came to different conclusions when comparing that case to the present, Mr Jordan submitting (T31.10.17, p20, LL42-47) that this case was more serious, and Mr Howard suggesting less serious (subs par 75).
Mr Jordan's submission in this regard is worth recording (LL42-47): ... unlike Mr Imaeda's case, the offender had been given a direct information, some three weeks or more before the offence, of the risk and had been apprised of council's view that it was such an emergency that people needed to be moved immediately and that additional fact, we respectfully submit, means that compared to Imaeda, the offender was more reckless by failing to do more and that's what we say.
On the question of "financial gain" as an aggravating factor, Mr Jordan relied, in part (subs par 27) on par [81] of Pittwater Council v Scahill (2009) 165 LGERA 289; [2009] NSWLEC 12, where Preston ChJ said: The carrying out of an offence to make a profit, or to save incurring an expense, or to avoid the cost of obtaining and implementing a statutory permission such as a development consent or environment protection licence increases the seriousness of the crime. Offenders should not profit from crime: ...
I am satisfied that Mr Prilis was charging modest rents to defray the recurrent costs of his holding the subject property, pending DC and its development, and, at the same time, helping needy citizens and "engaging" them to protect his investment and its heritage value. He certainly did not optimise his potential income from the use of the property, and the "financial gain" aggravating factor is not made out.
Having regard to the factors identified in Plath (at [60] and [62]), quoted from Imaeda, (at [70] above), and having regard also to my analysis of the relevant sentencing circumstances in Imaeda ([71]-[76] above), I note the following regarding the sentencing of Mr Prilis: 1. the very heavy maximum penalty fixed by the legislature; 2. the imperative of general deterrence in sentencing for offences such as the present; 3. that the principal victim of the "physical" harm caused was the Defendant himself ($800K worth of uninsured damage); 4. that the major harm for which the Defendant must be sentenced is that done to the regulatory regime (see Hunters Hill v Hakim, quoted in [70] at "69" above); 5. that, apart from such harm, none of the statutory aggravating factors ([50] above) have been made out; 6. that most of the statutory mitigating factors (about [50] above), identified as relevant here, have been largely agreed to apply to this Defendant (including his good record, his co-operation, his plea, his character, and the unlikelihood of further offending); 7. that, in view of the high unlikelihood of the Defendant's further offending, no addition to the appropriate sentence is needed to reflect specific deterrence; 8. that the Defendant has to meet the substantial legal costs incurred on both sides of the matter (see Environment Protection Authority v Barnes [2006] NSWLEC 2, at [52]-[53], and on appeal, Environment Protection Authority v Barnes [2006] NSWCCA 246, at [77], and [88]-[89]); and 9. that all the financial impositions I order for Mr Prilis's failure to obey the planning law will impact heavily on his capacity to fix and finish Tresillian.
I conclude, from the necessary instinctive synthesis ([70] above, at "58"), that the present case is not as objectively serious as Imaeda, and that an appropriate fine is 15% of the maximum, subject to discount and costs. The discount should be 30% in recognition of the Defendant's guilty plea, his well-documented remorse, and his assistance to the authorities.
That brings the Court to a fine of $115,500.

At a glance

Court

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Before

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Catchwords

Judgment (21 paragraphs)

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Cases Cited (28)