Leichhardt Council v Geitonia Pty Ltd

Background

1. The evidence that has been admitted thus far includes the following.
2. On 21 September 2011, on the application of Geitonia, an accredited certifier Vic Lilli and Partners per Paul Ladogna issued a construction certificate. The erection of a building in accordance with a development consent must not be commenced until a construction certificate for the building work has been issued by the consent authority or an accredited certifier: ss 81A(2)(a) and (5) and 109C(1)(b) Environmental Planning and Assessment Act 1979. One of the attached documents was a report of August 2010 by CAM Consulting Structural and Civil Engineers, which included a statement that: "The proposed development will require the demolition of the existing structure with the retention of the front and side Heritage facades…the existing Heritage Items will require the current internal walls to remain as a brace for the construction of the new building. The internal existing structure will only be demolished once the side and front walls have been tied into the new structure…generally the demolition will be carried out by both hand and small excavating equipment". The reference to "Heritage Items" was inaccurate although the building was in a heritage conservation area under the relevant local environment plan.
3. Before Thursday 13 October 2011, GRC orally agreed with Global for demolition of the whole building for $135,000. The contractual negotiations were initiated by Foong who told John Loukis that he was now working for GRC and for Bill Gertos. John Loukis already knew Foong and Mr Gertos. According to John Loukis, Mr Gertos came to be vitally involved in and concluded the contractual negotiations with Global. The price agreed of $135,000 took into account the hand demolition of the southern façade and two side walls, since demolition by hand was more expensive than demolition with machinery. A written demolition contract between GRC and Global for the price of $135,000 was signed by Foong for GRC and Sozo Loukis (John Loukis' brother) for Global on Wednesday 19 October 2011. Meanwhile, John and Sozo Loukis set up on site on Friday 14 October 2011, and demolition commenced on Monday 17 October 2011 and concluded on or about 11 November 2011.
4. On 20 October 2011 Mr Gertos wrote a letter on the letterhead of Geitonia to Mr Iain Betts, a Leichhardt Council senior assessment officer, enclosing a structural engineering report by CAM Consulting Structural and Civil Engineers per Mr Andro Cutuk dated 19 October 2011 and detailed demolition plans prepared by the latter. The letter stated: The above mentioned engineers have instructed us to hand demolish the façade to a level outlined in the attached plans. The engineers have advised that the facades are structurally failed, impose real danger to public safety. We have contacted our PCA Mr Paul Ladogna of Vick Lilli and Partners … and he has advised that he can not approve the removal of the facades with out prior advice from council. We note that contained within the approved documents council has inserted controls dealing with the treatment of the facades which permits replacement of structural elements hence the facades. Based on the existing controls we intend to commence to salvage the original bricks and all other fixtures and fittings along with documenting the facades proportions & details and undertake to reinstate the facades in accordance with the above mentioned control. Could you please contact the above mentioned PCA to discuss this matter. Should there be any other requirements by Council, we must for fill [sic] to ensure compliance please contact us immediately.
5. In fact, the enclosed structural engineering report did not say that the facades pose a "real danger to public safety". It said that the façade walls were deteriorated beyond repair and could be temporarily braced but were not capable of being maintained permanently and it recommended that the façade be removed and reinstated with its brickwork to be removed by hand for reuse. One of the enclosed plans was a basement demolition plan CSMP3 RevE. Stage 3 notes on the plan were titled: "Demolition and Bracing of the Existing Structure". Note 5 thereunder stated: "The walls that were to be retained will need to be demolished by hand with the bricks stored for reinstatement. Note machinery is not to be used in this area".
6. Mr Betts took no action on the letter, which it is likely that he read within a week of its receipt by Council on 20 October 2011. There is an issue as to whether it was hand delivered to him personally on that date.
7. On Monday 7 November 2011 the prosecutor Council commenced an investigation into a complaint that the front façade had been demolished - as it had - by interviewing Mr Gertos twice. A Council compliance officer Mr Paul Vogt was in charge of both interviews. Foong and Vince, a GRC site employee, were among those present. Foong indicated at the first interview that demolition was complete, they were just doing a clean-up which was slow because they were salvaging the original bricks but they would be finished today. Mr Gertos said the certifier had said he sent notification saying it was being demolished and that he had not authorised the demolition. In response to Mr Vogt's question whether Mr Gertos believed the demolition was authorised, Mr Gertos said: We are entitled to duplicate, restore or replace structural elements on the façade and side walls. No-one was aware of the state of the building. We are rebuilding it the same way in accordance with the consent. The structural details and demolition plans were sent to Council on 20 October 2011. It's costing triple the money to rebuild. The engineer said he couldn't retain it as it was structurally unstable. The parapet and brick had no mortar. There were cracks in the wall. The walls were pushing out, a s 96 was required to remove the mock roof. The structural engineer said that it was unsafe and could not be rebuilt. It will be totally replaced using the original bricks and windows. It is being restored if possible. The building was ready to fall over. The parapet had cracked away. There were four recorded fires and all structural beams had deviated. The main thing was that the façade had bowed out. Under the circumstances, we did not want to remove and rebuild the façade as it is more expensive and a time delay. We are hoping to finish in another five months the rebuild.

THE EVIDENCE TO WHICH OBJECTION IS TAKEN

1. Although at the request of the defendants Mr Gertos and Geitonia, the evidence of Mr John Loukis is being adduced orally, the content of his likely oral evidence to which objection is taken is set out in an affidavit that he swore some time ago at [45]-[50] and in a recent supplementary statement. It concerns his meeting with Foong, at the latter's request, in late November 2011. Mr Loukis said in his affidavit: 45. On the day we had agreed to meet, FOONG came to my office at Ingleburn. We met in my office. No-one else was present. FOONG said something to this effect- I came down so we can compare notes. 46. He also gave me a new contract to sign for the demolition job at 1-13 Parramatta Road. A copy of this new contract is annexed and marked Annexure J. I had never seen this document before. He explained to me- I've got problems with Council and if they ask for the contract you give them this new one. 47. I saw that there were differences between the new contract and the original contract. I told FOONG I wasn't going to sign the new contract. FOONG said - BILL's not going to be happy with that. 48. FOONG said he would leave the new contract with me to think about. 49. In the same meeting, FOONG also gave me a document entitled "Site instruction". A copy is annexed and marked Annexure K. I had never previously seen that site instruction. 50. FOONG asked me to give him some paper. I gave him a piece of Global Demolition's letterhead. FOONG said he would write down the details of the job which appeared in his diary. He then wrote down on both sides of the piece of paper a series of dates. A copy of that piece of paper is annexed and marked Annexure L. I have looked at these dates and the details of the job that FOONG has written against them. The description he has given for the job on 25 October 2011 is not true. There are other details that also may not be right.
2. In his recent supplementary statement, Mr Loukis said: 1. I refer to paragraphs 45 and 46 of my affidavit (sworn 7 November 2012). When FOONG gave me the new contract to sign, he said- Bill asked me to bring you this new contract 2. At the time when FOONG visited me at my office there was still an amount outstanding for my invoices for the demolition job at 1-13 Parramatta Road, Annandale. I had been ringing BILL GERTOS' office to try to get payment but I hadn't been successful.
3. As I have said, the documents produced by Foong on this occasion create the false impression that the demolition contract excluded demolition of the front façade, but that on 25 October 2011 demolition there was a site instruction for its demolition because of its then dangerous condition, and that its demolition occurred thereafter. In fact, the actual demolition contract entered into earlier provided for demolition of the whole building and the demolition was carried out between 17 October 2011 (prior to Mr Gertos' letter to Mr Betts of 20 October 2011) and 7 November 2011.
4. Foong's handwritten chronology given to John Loukis in late November 2011 includes an entry for 25 October 2011: "Still waiting engineer's instruction. Engineer came lunch time and said walls no good dangerous. Price up hand demo for GRC Projects".
5. The falsity of the new contract signed and produced by Foong to John Loukis in late November 2011 is apparent from the critical respects in which they differ. First, the new contract was for $102,000 and not $135,000 as in the actual contract. The difference is $33,000. Secondly, $33,000 is the amount referred to in the site instruction dated 25 October 2011 signed by Foong addressed to Global and commencing "Dear John", which John Loukis says he had never seen before. This site instruction says: As per our discussion today can you please proceed with hand demolition to the south-east and western façade. Agreed price is $33,000 plus GST (thirty three thousand dollars). You must ensure that all effort is made to salvage bricks, windows and doors for the purpose of rebuilding the façade.
6. This site instruction may be compared with documents produced at trial by Mr Gertos and Geitonia, in response to a call by the prosecutor, being Mr Cutuk's diary and, inter alia, a site instruction to GRC also dated 25 October 2011 purportedly signed by Mr Cutuk for CAM Consulting Structural and Civil Engineers. They have not (yet) been tendered as evidence in the case generally but are before me for the purpose of this application. The Cutuk site instruction states: Commence façade demolition by hand immediately - Reduce load on facad [sic] and remove immediately as further movement has been noted. - Slipage [sic] is eminent [sic] in our opinion and this is a safety issue for public Entries in Mr Cutuk's diary are said to be consistent with that site instruction. The prosecutor does not accept the authenticity of these Cutuk documents.
7. Thirdly, four of the five revised plans designating the scope of the works referred to in cl 1 of the actual demolition contract show demolition to external walls including the southern façade - although, according to John Loukis, he never saw any plans. The new contract referred to earlier revisions of those plans. Although the latter are not (yet) in evidence, it can be inferred from later revisions attached to the construction certificate in evidence, which excluded demolition of the front façade, that they also excluded demolition of the front façade. The following table shows the changes in revisions of plans incorporated in the actual contract, the new contract, the construction certificate and Mr Gertos' letter of 20 October 2011: Construction Actual Contract Gertos letter 20/10/11 New Contract Certificate 21/9/11 17/10/11 produced late 11/11 CSMP1 RevB 9/8/11 CSMP1 RevA 17/9/11 CSMP1 RevB 9/8/11 CSMP1 RevA 17/5/11 CSMP2 RevC 9/8/11 CSMP2 RevD 13/10/11 CSMP2 RevD 13/10/11 CSMP2 RevB 20/7/11 CSMP3 RevD 20/9/11 CSMP3 RevE 13/10/11 CSMP3 RevE 13/10/11 CSMP3 RevB 9/8/11 CSMP4 RevC 15/9/11 CSMP4 RevD 13/10/11 CSMP4 RevD 13/10/11 CSMP4 RevB 9/8/11 CSMP5 RevC 15/9/11 CSMP5 RevC 15/9/11 CSMP5 RevC 15/9/11 CSMP5 RevB 9/8/11

1. Fourthly, the new contract contains new clauses 4 and 5 which require Global to retain the southern façade along with six metres of party walls and side walls as per engineer's plan, and to ensure that vibration from demolition works does not transfer to the southern façade wall.
2. Fifthly, the actual contract includes reference to several structural drawings but they have been blacked out in the unsigned contract. Sixthly, in the actual contract next to the word "Program" there are no details but in the new contract next to "Program" appear the words "Four weeks from the date of commencement".
3. Paradoxically, the new contract includes cll 13 and 14 which appear in the actual contract as cll 10 and 11, requiring hand demolition of the front façade and side walls and salvage of bricks for the purpose of rebuilding. Prima facie, the retention of those provisions was a slip by the author of the new contract given their gross inconsistency with the new provisions in the new contract.

Section 87(1)(a) and (c)

1. The objection is on the ground that Mr Loukis' proposed evidence is hearsay. The prosecutor submits that it is an admission by the defendants and is admissible as an exception to the hearsay rule under s 87(1)(a) and/or (c) of the Evidence Act, and that in relation to s 87(1)(c), s 57(2) is relevant.
2. The defendants contest the admissibility of the evidence under s 87(1)(a) or (c). Underlying their objection is the fact that the prosecutor does not intend to call Foong and therefore the defendants are unable to cross-examine him.
3. Section 87 of the Evidence Act provides: 87 Admissions made with authority (1) For the purpose of determining whether a previous representation made by a person is also taken to be an admission by a party, the court is to admit the representation if it is reasonably open to find that: (a) when the representation was made, the person had authority to make statements on behalf of the party in relation to the matter with respect to which the representation was made, or (b) when the representation was made, the person was an employee of the party, or had authority otherwise to act for the party, and the representation related to a matter within the scope of the person's employment or authority, or (c) the representation was made by the person in furtherance of a common purpose (whether lawful or not) that the person had with the party or one or more persons including the party. (2) For the purposes of this section, the hearsay rule does not apply to a previous representation made by a person that tends to prove: (a) that the person had authority to make statements on behalf of another person in relation to a matter, or (b) that the person was an employee of another person or had authority otherwise to act for another person, or (c) the scope of the person's employment or authority.
4. Section 57 of the Evidence Act provides: 57 Provisional relevance (1) If the determination of the question whether evidence adduced by a party is relevant depends on the court making another finding (including a finding that the evidence is what the party claims it to be), the court may find that the evidence is relevant: (a) if it is reasonably open to make that finding, or (b) subject to further evidence being admitted at a later stage of the proceeding that will make it reasonably open to make that finding. (2) Without limiting subsection (1), if the relevance of evidence of an act done by a person depends on the court making a finding that the person and one or more other persons had, or were acting in furtherance of, a common purpose (whether to effect an unlawful conspiracy or otherwise), the court may use the evidence itself in determining whether the common purpose existed.
5. The prosecutor submits that: 1. The evidence is an admission to the effect that the demolition contract with Global had been for the demolition of the external walls including the southern façade, and it can be inferred that the defendants had a consciousness of guilt because they believed this to be in breach of the development consent. 2. As regards s 87(1)(a), the evidence set out in the "Prosecutor's Schedule of Evidence against Geitonia Pty Ltd, GRC Pty Ltd and Gertos", which includes the evidence that I have earlier outlined, establishes that it is reasonably open to find that when the representations were made Foong had authority otherwise to act for Mr Gertos and his company Geitonia as well as GRC and the representations related to a matter within the scope of that authority, namely the demolition contract. 3. As regards s 87(1)(c), the nature of the representations was such that it is reasonably open to find that they were made by Foong in furtherance of a common purpose that he had with the defendants to deceive Council as to the circumstances in which the front façade came to be demolished, and/or avoid successful prosecution of the offence of carrying out development contrary to a development consent.
6. Under s 87, for the purpose of determining if the representations made by Foong are also taken to be an admission by a defendant, it is mandatory for the Court to admit the representations if it is reasonably open to find that which is specified in (relevantly) s 87(1)(a) or (c).
7. The defendants Mr Gertos and Geitonia submit that a distinction has to be drawn between GRC and them, given that Foong was an employee of GRC. I accept that that should be kept in mind. Those defendants point out that each of the defendants is charged in a separate proceeding. I do not think that is of any particular significance for present purposes. Coming to the heart of the matter, they submit that they cannot test John Loukis' evidence through the cross-examination of Foong. They point out that apart from John Loukis' evidence of what Foong said there is no evidence that Mr Gertos or Geitonia authored or were involved in the authoring of the documents produced by Foong to John Loukis in later November 2011. They submit (although in my view the submission more appropriately belongs in the context of ss 135 and 137) that great damage and prejudice is being suffered by the defendants as a result of the prosecutor's decision not to call Foong. The prosecutor has fairly recently made inquiries concerning Foong's whereabouts and passed on to those defendants' solicitors what they believed were his residential address and phone number, and told them that their attempts to contact Foong there had been unsuccessful.
8. A complaint is made by the defendants about the absence as prosecution witnesses of George Loukis (John Loukis' father) and Mr Skintzis (said to have been the director of GRC in 2011). George Loukis was involved in the earlier negotiations for the demolition contract and I am told that he now lives overseas. It is not clear to me that the absence as a prosecution witness of either of these men is of any real significance for present purposes.
9. I have taken into account those and other submissions by the defendants. However, on the evidence to date, in the earlier contractual negotiations leading to the demolition contract Foong was the go-between between John Loukis and Mr Gertos and clearly was subject to Mr Gertos. Mr Gertos had again injected himself into the equation by the letter that he wrote to Mr Betts on 20 October 2011. Foong was present and participated in the interview of Mr Gertos by Council officers on 7 November 2011. In my view, on the basis of that evidence, the evidence to which I have earlier referred and further evidence set out in the "Prosecutor's Schedule of Evidence against Geitonia Pty Ltd, GRC Pty Ltd and Gertos", it is reasonably open to find that when Foong made these oral and documentary representations to John Loukis in late November 2011 he had authority to make them on behalf of Mr Gertos and his company Geitonia in relation to the matter of the demolition contract, with which the representations were concerned. As an employee of GRC in the position that he held, he also had authority to make them on behalf of GRC. Thus, in my opinion, the evidence is admissible under s 87(1)(a) against all the defendants. It is unnecessary to also address s 87(1)(c) but if it is necessary then, having found that the representations of Foong were made with the authority of all the defendants, on the existing state of the evidence I would be prepared to conclude that it is reasonably open to find that they were made by him in furtherance of a common purpose with all the defendants to deceive Council as to the circumstances in which the southern façade came to be demolished and to avoid prosecution.

Sections 135 and 137

1. The defendants Geitonia and Mr Gertos submit that the Court should nevertheless refuse to admit this evidence under s 135(a) and/or s 137 of the Evidence Act, which provide: 135 General discretion to exclude evidence The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party, or … 137 Exclusion of prejudicial evidence in criminal proceedings In a criminal proceeding, the court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant.
2. These two provisions are along the same lines but several differences may be observed. Section 137 is of course limited to a criminal proceeding, whereas s 135 applies both to criminal and civil proceedings. Section 135 gives the Court a discretion to refuse to admit the evidence if its probative value is "substantially outweighed" by the danger that the evidence "might" be unfairly prejudicial to the defendants Mr Gertos and Geitonia. Section 137 does not give the Court any discretion but obliges it to refuse to admit the evidence if its probative value "is" (not "might" as in s 135(a)) be outweighed by the danger (not "substantial" danger) of unfair prejudice to those defendants.
3. The Court may exclude evidence under ss 135(a) or 137 where the opposing party cannot cross-examine, depending upon the probative value of the evidence and its prejudicial effect in the particular case. In R v Suteski [2002] NSWCCA 509, (2002) 56 NSWLR 182, at [126]-[127] Wood CJ at CL (Sully and Howie JJ agreeing) said: 126. I see no reason why the inability…to cross-examine…should not have been relevant for s 135 and s 137 of the Evidence Act. However, the bare fact that a defendant cannot cross-examine a witness is not necessarily decisive of the issue which arises in relation to these provisions. See Ordukaya v Hicks [2000] NSWCA 180, Bakerland Pty Ltd v Coleridge [2002] NSWCA 30, and in particular the decision of Heydon JA in R v Clark [2001] NSWCCA 494 at [164]. 127. The decisions mentioned clearly depend upon their particular facts, that is, upon character of the evidence involved and upon the nature or strength of the potential prejudice to the defendant. Each case, in my view, needs to be examined individually by reference to the well understood balancing exercise.
4. Those propositions were endorsed in Galvin v The Queen [2006] NSWCCA 66, (2006) 161 A Crim R 449 at [40] per Howie J (McClellan CJ at CL and Latham J agreeing). See also Longhurst v Hunt [2004] NSWCA 91 at [46]-[49] per Stein JA; La Trobe Capital and Mortgage Corp Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4, (2011) 273 ALR 774; Odgers, Uniform Evidence Law (11th ed, 2014) at 829.
5. ALRC 102 states at paragraph 16.45: The Commissions acknowledge that there has been uncertainty as to whether unfair prejudice can arise from procedural considerations…one of the objects of these provisions is to prevent the tribunal of fact from being exposed to evidence that is likely to mislead it or play upon its emotions or prejudices. In the Interim Report for the previous Evidence Enquiry, the ALRC referred not only to unfair prejudice arising from evidence which might inflame emotions but also to unfair prejudice resulting from mis-estimation by the fact-finder of the weight to be given to particular evidence an inability to test the reliability of evidence may carry with it the danger of such a mis-estimation. It is therefore consistent with the policy basis for this discretion that the inability to test evidence may constitute a legitimate ground for its exclusion where this will affect the ability of the fact-finder to assess rationally the weight of the evidence.
6. Unfair prejudice on procedural grounds might arise if the opposing party may be unfairly prejudiced by evidence that prevents it from properly challenging its reliability, particularly if the evidence is important to the outcome of the proceedings: Odgers at 831. Of course, the balancing exercise required by ss 135(a) or 137 must be undertaken. In the present case, the evidence in issue is potentially important to the genuineness of the defence of necessity raised by Geitonia and GRC.
7. In my opinion, having regard to the character of the evidence and the nature and strength of the potential prejudice to Geitonia and Mr Gertos, its probative value is outweighed by the danger of unfair prejudice to them arising from the fact that Foong is not available for cross-examination. The absence of Foong founds my decision under s 137 to refuse to admit this evidence against those defendants. For the same reason, I am inclined to think that the probative value of the evidence is also substantially outweighed by the danger that the evidence might be unfairly prejudicial to them such that it should also be excluded under s 135(a). The evidence is admitted against GRC.
8. After I delivered the above reasons for judgment, the prosecutor tendered the three late November 2011 documents simply as documents that came into the possession of Mr Loukis at that time without reference to the circumstances and without suggesting at this stage that Mr Gertos and Geitonia authored or were involved in their production or that they had any common purpose in bringing them into existence. However, other evidence in the case shows that it is Foong's signature on the new contract and the site instruction and that the site instruction and chronology are in his hand. The hearsay rule is avoided because the tender of the documents on this simplified basis is not to show that the matters therein are true but to show that they are false. The defendants Mr Gertos and Geitonia object to their tender on this basis on the ground that they are not relevant.
9. The prosecutor submits that they are relevant to the defence of necessity raised by Mr Gertos and Geitonia to the effect that the front façade had to come down because of its condition. In that context, one of the relevant considerations, the prosecutor anticipates, is that those defendants are likely to rely on documents produced by them at trial in response to the prosecutor's call to which I have earlier referred, being the Cutuk site instruction dated 25 October 2011 and entries in Cutuk's diary said to be consistent with that site instruction. The prosecutor says that the November 2011 documents will call into question the genuineness of the Cutuk documents and, necessarily, any oral evidence that may be adduced in relation to them.
10. I am persuaded that the November 2011 documents coming into Mr Loukis' possession in late November 2011 are relevant to the defence of necessity and are therefore admissible.

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