1 HIS HONOUR: The defendant, Gerroa Boat Fisherman's Club Ltd pleads guilty to an offence that between 1 October 2009 and 20 November 2009, it committed an offence against s 125 of the Environmental Planning and Assessment Act 1979.
2 That offence involved the circumstance that on three occasions in October and November of 2009, it carried out development of its premises in Gerroa by using part of those premises for the purpose of conducting functions without a consent which was, at that time, in force, contrary to the provisions of s 76A(1)(a) of the Environmental Planning and Assessment Act.
3 The facts surrounding the commission of this offence and those relevant to the plea which has been entered may shortly be stated. They are taken from a statement of agreed facts which the parties prepared for the purpose of the hearing of this matter.
4 Gerroa Boat Fisherman's Club Ltd (the club), is the owner of premises at 68 Crooked River Road, Gerroa (the site). The site is located within a Rural Environmental Protection zone under the relevant planning instrument. In respect of land so zoned development for the purpose of a club is prohibited. However, the club has for many years operated on that site and enjoys the benefit of existing use rights under the provisions of the Environmental Planning and Assessment Act.
5 Over the years, the club has sought and obtained development consent for a number of additions and alterations to its premises. Part of the premises that were the subject of development consent included an area that was described as an outdoor barbecue area.
6 On 20 June 2008, the club lodged a development application with the Kiama Municipal Council (the Council), seeking consent to alter the club premises so that the barbecue area, as it then existed, was to be extended by the enclosure of that area, enabling it to be used as a function area. There were, as described in the report upon the development application by the Council staff, three essential elements of that development application. The first of those elements was described as "the regularisation of construction carried out on the site and not yet approved", said in the report, to include use of an illegally constructed part of the building.
7 The second element was "the construction of alterations and additions to the club building", being work related to what is first described, but not yet commenced, and thirdly, and importantly "the use of that part of the additions as a function room to midnight seven days a week."
8 Notwithstanding the lodgement of that application in 2008, it was not the subject of a report to the Council until April of 2009. In the interim, so it seems, information had been sought by the Council from the club in support of the application.
9 When the matter came to be considered by the Council on 20 April 2009, its resolution was to delegate the determination of the application to its general manager.
10 On 16 June 2009, no doubt acting under the delegation to him, the general manager granted development consent to the club's application (the consent). However, that consent was expressed to be a deferred commencement development consent in accordance with the provisions entitling the issue of such a consent as found in s 80(3) of the Environmental Planning and Assessment Act.
11 As is often the case, the development which was the subject of that consent is very cryptically described in the notice of determination which was issued to Mr Grogan on behalf of the club. It simply describes the development as being "use of additions to club building".
12 Relevantly, the consent indicated that the date upon which and from which it was to operate, was the date upon which the deferred commencement conditions in Schedule A were satisfied.
13 Schedule A then sets out two conditions which were the subject of the deferred commencement provision. Without reciting the detail, those conditions required two things to be done. First, the preparation and submission to the Council of a management plan, secondly provision of concept plans dealing with the location, design layout, landscaping and access to the car parking area.
14 On the day on which that consent was dated, and I presume notified, the Council wrote to the club, directing attention to the fact that it had issued that same day, a deferred commencement consent. The letter drew the attention of the club to the fact that until such time as the conditions expressed as the deferred commencement conditions had been fulfilled, the consent was not an operative consent. It included the following paragraph:
"Accordingly, any use of this area as a function room or bar or any other use not approved by an earlier development consent, will constitute illegal development and a breach of this and the previous development consents. Council will be monitoring the use of the area to ensure that no such use occurs."
15 There was then an indication that any use contrary to what was there set out, would constitute a breach of the consents for which the Council would take action.
16 In October and again in November of 2009, the Council received complaints from local residents in respect of functions which apparently were carried out on three occasions. The complaints generally related to noise emanating from the premises by the large number of persons who were gathered in the area at the function room. By that time, if not for some time before, that function room had come to be known as the Panorama Room.
17 It was not until 11 January 2010 that the Council received and notified its satisfaction with fulfilment of the deferred commencement conditions. It notified the club on that date that it was so satisfied. It was only then that the consent became an operative consent.
18 Section 76A of the Environmental Planning and Assessment Act subsection (1) paragraph (a) provides that:
"(1) If an environmental planning instrument provides that specified development may not be carried out except with development consent, a person must not carry the development out on land to which the provision applies;
(a) unless such a consent has been obtained and is in force … " (Emphasis added.)
19 By its plea, the defendant accepts that at the time at which the three functions, the subject of complaint, were held in October and in November of 2009, the consent was not in force. In consequence, the section was breached. That breach founded the institution of these proceedings, pursuant to s 125 of the EPA Act.
20 The club has provided evidence from two of its officers. In an affidavit sworn by Douglas McCallum on 3 March 2010, an affidavit read without objection on the part of the prosecutor, he deposed to a number of matters of present relevance. He identifies the fact that following the issue of the deferred commencement consent in June of 2009, the club retained the services of architects to design and construct the works necessary to comply with the consent and the conditions upon which it was imposed. The club also retained a project manager to assist in the project, particularly as it related to the carrying out of acoustic works and car park extension.
21 I should add, that apart from the deferred commencement conditions contained in the development consent, condition 3 of that consent required that the use of the function centre, or the Panorama Room, was not to commence until there had been acoustic testing and certification provided to the Council that the acoustic treatment met the standards identified in the condition. Secondly, the condition required that there be a twenty-one space car parking area constructed. It also required that a building certificate be issued for those works that had already been carried out but which were unauthorised. Finally, it required that the Council be provided with written confirmation as to the fulfilment of those conditions. As I have said, all of those requirements were conditions precedent to the use of the additions authorised by the June 2009 development consent.
22 Thus it was that Mr McCallum referred to the retention of the project consultant in particular to address matters of construction of a car park and acoustic treatment of the area to be enclosed so as to provide appropriate facilities within the Panorama Room.
23 Mr McCallum also identifies the circumstance that having retained those consultants, the club was assured that those works which were required to be carried out would be completed so that the conditions of consent could be complied with by the long weekend in October of 2009, apparently that being the weekend of 10 October. The agreed statement of facts identifies the circumstance that there had at least been an Internet promotion of the Panorama Room as being available for the conduct of functions, a promotion that had been displayed on the Internet since February of 2009. No doubt with the responses that had been received to the club's promotion of the Panorama Room, and the expectation that renovations and alterations would be completed by the October long weekend, a number of bookings for functions had been taken.
24 According to the evidence, the decision was made, given the timing estimates provided by the consultants, that those bookings which contemplated functions being held in the Panorama Room after the long weekend in October of 2009 would be held and thus the obligations cast upon the club to those who had made bookings would be fulfilled. The evidence also reveals that it was not until about three or four weeks prior to the October long weekend that the club came to the realisation that building works would not be completed as had been promised. Notwithstanding that realisation, the evidence from Mr McCallum is that the club felt obliged to fulfil the booking commitments that had been made and thus those functions which had been booked for October and November were held. This decision was made knowing that the development consent was not an operative development consent.
25 It is said by Mr McCallum that there was no intention to breach the planning law and he tenders his apology. He also deposes to the fact that the club is a small club which has served the community for forty-three years; that it serves an important community function and provides a deal of support to local community organisations. A list of those organisations is provided in his affidavit, and I do not recite them all. It is sufficient to record that they are organisations either of a charitable nature or provide services in the local community and the facilities the club makes available to them is clearly an important contribution to the local community.
26 The evidence led on behalf of the defendant was also received from Mr Peter Grogan, who is the chief executive officer of the club. Mr Grogan swore an affidavit on 3 March 2010 in which he set out a number of facts which repeated several of those to which I have already adverted and which were contained in the affidavit evidence of Mr McCallum. Mr Grogan also deposed to the fact that the functions that were held in October and November of 2009 were functions which were the subject of longstanding commitment by the club and that notwithstanding the absence of an operative development consent he and/or the club felt morally obligated to fulfil the commitment that had been made to those who had booked.
27 He also identified the fact that the acoustic structures and testing that were required as part of the development consent had been completed by December and were subject at that time to the testing by the acoustic consultant, who had been nominated in the conditions of development consent to carry out that testing. He also identified the fact that the car park work was at least under way. Like Mr McCallum, Mr Grogan also tendered his apology identified as being an apology to the court, the Council and to local residents for the breaches of the Environmental Planning and Assessment Act which he acknowledged. Unsurprisingly, he repeated the observation that the club was a small local club and also identified that it was a club of limited means, at least in terms of its income, identifying the fact that in 2008 it had incurred a loss of almost $69,000 while in the financial year ended 30 June 2009 it had enjoyed a profit of $24,263.
28 The affidavit evidence of Mr Grogan was supplemented by oral evidence. He further explained the position that had arisen in relation to functions that had been booked long prior to October of 2009. He indicated that functions had been booked well in advance and that all those functions which the club in fact provided or allowed to continue following the long weekend in October were weddings that had long since been booked. He indicated that enquiries had been made for the allocation of alternate venues for those functions, but no such venues were discovered. He also indicated that he had communicated with the parties who had made bookings, but had been told by them that they were, to use his words, "devastated", by the suggestion that the wedding celebrations that had been booked might not proceed. Thus, the source of what he described as the moral obligation felt on behalf of the club to allow those functions to proceed, notwithstanding the understanding that to do so involved a breach of the Environmental Planning and Assessment Act.
29 Of some relevance to the penalty that ultimately should be considered was the evidence that he gave that there was, in any real sense, only a very small profit that was obtained from the holding of those functions. While he did not eschew the fact that there was some financial benefit to the club, that financial benefit was described as being somewhere between $1,000 and $1,500 for each of the functions, a sum which he said in evidence was not significant in the scheme of the club's operations. He stated in clear terms that it was not the prospect of profits at that level which motivated the agreement to allow the functions to be held, rather, he was motivated by what was said to be the moral obligation to which I have already referred to allow those functions to continue. Perhaps in a smaller community such as would exist in that area, that is not an entirely unsurprising response.
30 It should also be noticed that the evidence that Mr Grogan gave in that regard, as to the moral obligation and the absence of financial gain as being his motivation, were not propositions that were challenged in cross-examination of him.
31 The agreed statement of facts identifies the circumstance that although the summons commencing this prosecution was filed on 11 December 2009, and a plea of guilty was entered on behalf of the club at the second callover of the matter on 12 February 2010, on three subsequent occasions, including 13 February 2010, the club allowed functions to be conducted in the Panorama Room. Mr Grogan sought to explain this circumstance. His explanation was really twofold.
32 First he explained that the bookings had been received well in advance of those dates and that in respect of two of them guests were attending from overseas, one group of guests from Ireland and another group of guests from Poland. Because of the long-term commitments that had been made by persons intending to attend those functions, again, the moral obligation was referred to as being the basis upon which they were allowed to continue.
33 In respect of the third function, he indicated that there had been an attempt to cancel it, but upon that attempt being communicated to those who had made the booking, the club was threatened with legal action. Not wishing to endure all of the consequences of the threatened legal action, again, the function was allowed to be held.
34 The second broad basis on which he explains what had happened, really by way of an exculpation, was that, notwithstanding a number of bookings, only the three that I have identified were fulfilled. There were bookings for other functions during that period which were not permitted to be held at the club's premises. In each of those other cases, so his evidence revealed, there had been an alternate arrangement made with the function holders for which the club had borne significant cost.
35 Alternate venues had been arranged on at least two other occasions which had involved the club incurring an expenditure in one case of $6,000 and in the other of about $4,000. Again, his evidence in that regard was unchallenged.
36 Finally, in terms of the evidence that was given in relation to works, it was said and seemed to be accepted that the acoustic report required by the consent has indeed been provided, as has a landscaping plan, and that car parking construction has been completed, albeit that the certifying authority has yet to provide the necessary certificate so that it in turn would be given to the Council.
37 Mr Grogan also indicated that a direction had been given that no further functions be booked at the club until all of the conditions of development consent that operate as a precondition to use of the Panorama Room have been fulfilled.
38 The final piece of evidence given by Mr Grogan was directed to the club's profitability, or perhaps, some would say, lack of profitability. Mr Grogan indicated that he had been the chief executive officer of the club for the past fourteen years so was generally well acquainted with the manner in which the club needed to operate financially in order to break even.
39 He indicated that there was a need for some $35,000 of gross revenue required each week in order to cover outgoings. As would be expected, there are times of the year when that sum is exceeded and other times when the revenue runs pretty close to that figure.
40 In short, he indicated that the club was, while keeping its head above water, not a highly profitable enterprise, particularly as revenue from poker machines was not very high. He acknowledged that in the context of the club's assets and liabilities, its assets exceeded its liabilities by what appeared to be a substantial sum but that those assets were entirely reflected in the premises which the club has, and no doubt the fixtures and fittings which are contained within the club premises. In other words, the evidence that he gave, as I understood it, was that the club does not have surplus assets, or more importantly, assets extraneous to the facility that it provides at Gerroa.
41 Those facts having been recited, it is necessary that I now turn to the question of penalty. The primary consideration in imposing any penalty is the objective gravity or seriousness of the offence. That objective gravity or seriousness is reflected in the maximum penalty prescribed by the legislature, which in this case is $1.1 million. As would be obvious, that penalty covers a great range of offences that may occur under the legislation but it does nonetheless indicate the seriousness with which the legislature regards offences against the Environmental Planning and Assessment Act.
42 Undoubtedly, the facts as I have recited them, reveal what I might call in a general way the existence of some aggravating circumstances. Those aggravating circumstances which I take into account were that the club, faced with the prospect of, and understanding the prospect of, breach of the Act, nonetheless proceeded to allow the three functions, which are subject of the charge, to take place, understanding, as it must, and indeed acknowledging as it has, that to do so would involve a breach of the Act. Having been told in very clear terms in the letter that accompanied the grant of development consent in June 2009, that the consent was a deferred commencement consent which did not permit at all the use of the Panorama Room as a function room, nonetheless the three functions that I have identified were allowed to proceed.
43 There can be no doubt that the need to obtain consent was well understood by the club. The need to observe the law would be set at nought if persons or entities such as the club, understanding as it did, not only from June 2009 but from its experience over previous years with alterations and additions to its premises, that such a consent was required, were allowed to carry out development contrary to the provisions of the consent that it had obtained with impunity. The consent that had been granted in June 2009 clearly required that it was not entitled to carry out work until preconditions had been met.
44 Against that I am required to take into account a number of mitigating factors. So much is required by s 21A of the Crimes (Sentencing Procedure) Act 1999. In taking those matters into account I point to the absence of any prior record on the part of the club for commission of offences of any kind, including very obviously offences against the Environmental Planning and Assessment Act. I also take into account the significant good works or charitable works that the club facilitates in its operations. The prosecutor fairly described the position which the club has in the Gerroa area as a "valuable community asset". That attribute of the club, as described through the mouth of the Council's advocate, no doubt bespeaks the important role that it is seen to play in that area in serving the interests of a large number of members of the community.
45 I also take into account the fact that there has been an early plea of guilty for which the defendant is entitled to a discount, said by the authorities to equate to twenty-five per cent. I do have to acknowledge, as was argued by the prosecutor, that the actions of the club in allowing the functions to be held in February and March of this year, even after its plea of guilty had been entered, require some consideration in the context of the overall penalty that I should impose. While they are not matters which go to the commission of the offence for which the club is charged, they are nonetheless matters that I must take into account when considering the worth of the club's statement of contrition and its offer of apology.
46 That said, I think that an explanation, albeit not an excuse for it, can be found in what was advanced on behalf of the club by Mr Djemal, who appeared for it, that it surrendered in a practical sense, to the impossible position in which it found itself. Having accepted the bookings that it did, with the exigencies attaching to those bookings, it faced the prospect of either legal action or, at the very least, the outrage of those who had entered into a commitment with it to hold their functions at the club's venue. All of those factors to my mind militate somewhat against the discount that the club would otherwise be entitled to expect, having regard to the subjective characteristics which it otherwise has demonstrated to exist and which are favourable to it.
47 I take account also of the fact that there is a need to impose a penalty that reflects the general deterrence required for persons who had otherwise committed offences against the Environmental Planning and Assessment Act and believe that they could do so by escaping with only nominal penalties.
48 I accept, in the context of specific deterrence, the fact that the club, having regard to its primary and ordinary functions, is not likely to be an entity that will, in the future, be one to commit offences of the kind with which it is presently charged. No doubt what has here occurred provides a serious object lesson to it.
49 Taking into account all of those factors, I have formed the opinion, based upon the cases to which I have been referred, that the appropriate penalty to be imposed is a penalty of $20,000. To that penalty, I apply a discount of thirty per cent for the mitigating factors that I have identified. The consequence is that the fine which the club will be required to pay is $14,000.
50 I impose that penalty taking into account the submissions put to me in relation to the application of the Fines Act 1996, considering the evidence that has been given as to the club's financial position. The penalty that I have imposed takes account of those factors.
51 I am also conscious of the fact that the club has agreed to pay the prosecutor's costs in the sum of $15,000.
52 The orders of the court therefore are: