Kirzner, Alex v Manly Council; Kirzner, Natalia v Manly Council

Kirzner, Alex v Manly Council; Kirzner, Natalia v Manly Council - [2009] NSWLEC 13 - NSWLEC 2009 case summary — Zoe

[13]

3 According to the Statement of Facts relied on by the Council at the local court hearing the Appellants owned the property in 2004 when they lodged a development application with the Council for the construction of a residence. When built there were changes to the lower ground floor which resulted from greater excavation of this area than was provided for in the approved plans. A s 96 modification application was made to the Council by Mr Kirzner and refused. He appealed to the Court in Class 1 proceedings. The appeal was heard by Hussey C in February 2007 and a modified plan was approved. In November 2007 the Council became aware that the premises had been leased or offered for lease since July 2007 and the rental return was $850 per week. They issued a Notice of intention to Issue an order in relation to non compliance with conditions of development consent. On 20 February 2008 the Council's solicitors wrote to the Appellants and their tenants stating they were in breach of the EP&A Act and requested undertakings that the unauthorised use cease. As no satisfactory response had been received from either Appellant or the tenants the Council's solicitors forwarded a draft Class 4 application to the Appellants on 7 March 2008. The Council also wrote on 11 March 2008 requesting undertakings that they cease holding out to prospective purchasers that the premises had available a separate self-contained flat, and that there was no consent for such use under the EP&A Act. On 13 March 2008 the Appellants' solicitor wrote advising that the current tenants would leave on 8 April 2008, there would be no resumption of unauthorised use of the premises and no promotion of the sale of the property as including separate accommodation. A letter dated 25 March 2008 was sent from Ray White Real Estate Manly (Ray White) confirming changes in the advertising of the property to delete reference to separate accommodation. The Denhams vacated the premises on 31 March 2008. 4 I note that the plans approved by Hussey C did not enable all the excavated area to be used as habitable space and Mr Kirzner had to modify the dwelling accordingly. The plan approved by Hussey C shows a bedroom, bathroom, lounge area and laundry at lower ground level. This is the area that was rented to the Denhams.

[15]

6 The bundle of additional documents relied on by the Appellants consists of the following correspondence, inter alia: a) A Notice of Intention to Issue an Order for compliance with inter alia condition 15 of the development consent requiring modification of the ground floor level granted by Hussey C from Mark Pearson, Manager Compliance & Enforcement, Environmental Services Division, Manly Council to Mr and Mrs Kirzner dated 3 December 2007. b) A letter from the Council's solicitor to the Appellants dated 11 March 2008. The letter notes the advertising of 36 Gurney Crescent by Ray White contains reference to an executive apartment and requires the undertaking that such advertising material will be amended and that proceedings may be commenced without notice if it is not. c) A letter from the Council's solicitor to the Manager of Ray White dated 12 March 2008. The letter advises that if they continue to market 36 Gurney Crescent as containing a separate executive apartment they may be in breach of the criminal law and civil penalties may also be pursued. The letter states that Council requires amendment of the advertising material and an undertaking in writing that purchasers be informed as to the legality of the separate accommodation. d) A further letter from the Council's solicitor to Ray White dated 13 March 2008. The letter notes the amendments to the advertising of 36 Gurney Crescent on their website and requests the removal of the references to self-contained in-law accommodation. e) A letter from the Appellants' then solicitor acting on behalf of Mr Kirzner to the Council's solicitors dated 13 March 2008. The letter confirms the following undertakings of Mr Kirzner: (i) Termination of the occupation by tenants at 36 Gurney Crescent. (ii) Not to resume any unauthorised use of the premises. (iii) No promotion in relation to the sale of the property to refer to any form of separate accommodation at 36 Gurney Crescent. f) A letter from Ray White to the Council's solicitors dated 25 March 2008. The letter confirms the request of the solicitors to remove references in the Ray White advertising material to in law accommodation or home office. It notes that these references were removed in "99% of all marketing" but they could not be removed from two publications printing the advertisement. It further notes that Ray White sells a lot of houses that have room to include in laws or for use as a home office and that its intention was not to mislead. It states that Ray White Manly is "sorry that we missed this ad and could not stop it from being printed". g) A letter from the Council's solicitors to the Appellants' solicitors dated 4 November 2008. The letter is a response to a Notice to Produce and produces, inter alia: (i) The letter from Ray White Manly to the Council's solicitor dated 25 March 2008. (ii) The Notice of Intention to Issue an Order dated 3 December 2007. (iii) An email from Nicky Denham to the Council's solicitors dated 13 March 2008.

[16]

The Council's solicitor claims privilege in relation to two letters between himself and the Council. h) An email from Ms Denham to the Council's solicitors dated 13 March 2008 confirming that Ms Denham and Mr Denham had been given a Notice to Vacate 36 Gurney Crescent and would do so by 8 April 2008. i) A letter from Goran Serafinovski of Goral Pty Ltd to Mr and Mrs Kirzner dated 2 February 2006 certifying that inspection on the excavation for foundations of 36 Gurney Crescent had been carried out and approving the additional over-excavation of unstable weathered rock, clay and rock floaters in order to relieve uniform foundations bearing. j) A letter from Terry Grundmann, Director of Prime Tax Experts to the Land and Environment Court dated 14 October 2008. The letter is a character reference attesting to the Appellants' good character and expressing certainty that the leasing of 36 Gurney Crescent was based on "a plain misinterpretation or confusion with the council". 7 Mrs Kirzner's affidavit attests that while she was a co-owner of the property she had no involvement with the leasing arrangements for the downstairs area to tenants from early December 2007 to 31 March 2008. All such arrangements were managed entirely by her husband. She was unaware that this activity was unlawful and expresses her remorse for the offence. She attended two meetings at the Council with Mr Kirzner and the Council's enforcement officer at the end of December 2007 and early January 2008 and provided information to him. She had understood that provided the tenant left the premises by April 2008 the Council would not take any enforcement action. Mr Kirzner alone made the application to the Council for development consent for the house and organised all the building work. He was the applicant in the Class 1 appeal proceedings before Hussey C and made all the decisions on that matter. She was not asked to give any evidence by her solicitor in the local court proceedings. Mr Kirzner's affidavit attests that the contents of Mrs Kirzner's affidavit are correct.

[25]

22 The Council also seeks costs of this appeal even if the Appellants are successful. It was brought to the appeal by the Appellants and had no alternative but to attend. On the basis that costs are compensatory (Latoudis v Casey (1990) 170 CLR 534), its costs should be paid by the Appellants. Finding 23 The Appellants pleaded guilty in the local court. The purposes of sentencing are identified in s 3A of the CSP Act. When sentencing the objective and subjective circumstances of the offence must be considered to determine the seriousness of the offence (s 21A(1) CSP Act). Sentences imposed in relation to environmental offences must embrace powerful considerations of general deterrence; see Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 per Badgery-Parker J at [357], Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 per Kirby P at [698], Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 per Preston J at [215]. 24 I should first determine if the Council's submissions that there are aggravating circumstances in relation to premeditation, the receipt of rental income and inappropriate advertising of the property are substantiated on the evidence before me. Such matters must be proved beyond reasonable doubt by the prosecutor in sentence proceedings; R v Olbrich (1999) 199 CLR 270 at [27] - [28]. None of the aggravating factors identified in s 21A(2) of the CSP Act are relied on by the Council. 25 The evidence I have before me is the transcript and documents tendered before the local court. According to the transcript of the local court proceedings there was little evidence other than the Council's Statement of Facts and the documents tendered before the local court (see par 2). Mrs Kirzner gave no evidence. Mr Kirzner made an oral statement when not sworn in as a witness and sought to hand up documents but the magistrate did not allow these to be tendered. I also have the new evidence, including the affidavits of the Appellants, to consider. 26 I agree with the Appellants' submission that the Council has not established beyond reasonable doubt that there was premeditation on the part of the Appellants. The evidence did not establish that they intended to use the premises as rental accommodation being a separate flat without development consent as a result of actions since 2006 in building the lower ground floor. The area which has been lawfully built on the lower ground level had been occupied by their daughter and that is not an unlawful use of the area. R v Way [2004] 60 NSWLR 168 at [198] which the Council relied on to submit that broad circumstances surrounding the offence can be considered does not support the submissions made as to inferences which can be drawn about the Appellants' actions in building the lower ground level of the house. The building of the lower ground level is a separate matter from the offence arising from its unauthorised use. The fact that the house has been built in accordance with approved plans, which the Appellants are legally entitled to rely on, cannot demonstrate premeditation. I also note that the lower ground floor had to be modified to prevent parts being used for habitable space as a result of Hussey C's decision. There is no specific warning in the judgment of Hussey C concerning unauthorised use, contrary to the Council's submissions.

[28]

Mrs Kirzner (60014 of 2008) 30 I consider it is appropriate to apply s 10A of the CSP Act to Mrs Kirzner in light of her affidavit attesting to her lack of involvement in the events giving rise to the offence and reliance on her husband in all relevant matters relating to the building and management of the lower ground floor of their jointly owned property. I can do so under s 49(2) of the Review Act as that is also a function which the local court could have exercised. I also take into account the numerous mitigating factors identified by her counsel (par 12). She played no role in the events giving rise to the offence. The order I intend to make is that there be no penalty, so that I am setting aside the penalty order made in the local court. Mr Kirzner (60013 of 2008) 31 Mr Kirzner was actively involved in the circumstances giving rise to the offence. He was aware of the Council's concerns from when the Notice of Intention to Issue an Order dated 3 December 2007 was received. The tenants remained in the house until the end of March 2008. I note Mrs Kirzner's evidence is that following a meeting with the Council's enforcement officer in December 2007 the Appellants believed that was acceptable to the Council. Nevertheless the Council had to involve its solicitors in writing to the Appellants in March 2008 suggesting there was some delay in Mr Kirzner satisfying the Council about the cessation of the unauthorised use. Once the Council solicitor's letter was received there was prompt provision of an undertaking to stop the use provided to the Council by Mr Kirzner's solicitor. It is also a relevant consideration that Mr Kirzner received rental income and derived a financial benefit from it for the four month period of the offence. 32 Breaches of the EP&A Act are serious, as confirmed by the high maximum penalty provided for by the legislature of $1.1 million. While the circumstances of this offence suggest it is less serious it is nevertheless important that there be consideration of general deterrence for this kind of offence when setting a penalty. I intend to apply a lesser penalty than the local court but consider that the penalty should be more than a nominal amount.

[29]

33 There are a number of mitigating factors to consider as identified by Mr Kirzner's counsel. The early plea of guilty and a large discount for the utilitarian value of the plea should be allowed; R v Thomson; R v Houlton (2000) 49 NSWLR 383. Mr Kirzner's good character and lack of prior convictions all suggest that a substantial discount of any penalty is warranted. Taking into account the analysis of the JIRS cases submitted by the Appellants' counsel and the penalty imposed in Chin, which is a reasonably similar matter noting that I also took into account the liability for the prosecutor's costs in that matter, I consider that $16,000 is the appropriate penalty. I will therefore vary the local court order on penalty to that amount. Costs in local court 34 The magistrate ordered the Appellants to pay the costs of the Council as agreed or assessed. The Council raised in oral submissions at the hearing for the first time that it sought an order for a specific amount of costs. It argues that because an appeal has been lodged against sentence and that includes costs within the definition in s 3 of the Review Act this appeal is also in relation to costs. The Appellants argue to the contrary because they have only appealed against penalty and not costs. 35 While s 31(1) of the Review Act provides generally for appeals on sentence, that does not mean that an appellant must appeal or be deemed to have appealed against every aspect of the sentence made by the local court. While the Council argued that it was open in the appeal for the Court to review the costs order of the local court, there is no basis for me to do so in this appeal. As submitted by the Appellants' counsel the appeal is only in relation to penalty, not costs. Any time for appeal by the Council on costs has passed (s 42(3)). As the Council has not filed any separate appeal in relation to costs it cannot raise what is effectively an appeal in relation to the costs order in these proceedings. I agree with the Appellants' submission that the Court's powers on appeal are circumscribed by the specific limitations on its powers under the Review Act and it can only determine those matters the subject of appeal under s 50(3). It is not open to this Court to rectify errors it may perceive where these are not the subject of an appeal before it. 36 The circumstances raised by the Council in relation to the local court costs order were not raised in Franks and Nasser and those decisions do not support the Council's argument (par 21). I will not make an order to vary the local court order on costs.

At a glance

Court

Decision date

Before

Source

Judgment (35 paragraphs)

Cases Cited (18)

Cited By (5)