Lenjade Pty Ltd v Randwick City Council

Discovery of the dog washing/grooming equipment and what followed

1. On 17 March, 2015, Mr Donellan, an employee of the Prosecutor, inspected the premises and discovered that the dog washing/grooming equipment had been installed.
2. On 10 April 2015, Mr Donellan served a notice on the Appellant requiring that the dog washing/grooming equipment be demolished. On 15 April 2015, Mr Anthony Sahade contacted Mr Donellan to indicate that he had initiated the necessary process to seek to regularise the dog washing/grooming equipment. The appropriate application was made to the Prosecutor and an approval subsequently granted for the equipment.
3. However, on 16 November 2015, the Prosecutor also issued an infringement penalty notice for $1,500 to the Appellant for the installation of the equipment. The Appellant elected not to pay the penalty. As a consequence, the Prosecutor caused a Court Attendance Notice (the CAN) to be issued to the Appellant. The precise nature of the alleged offence is discussed below.

The alleged offence

1. The requirement to obtain consent arises from the terms of s 76A(1)(a) of the Environmental Planning and Assessment Act 1979 (the EP&A Act). As there is no dispute that the installation and use of the equipment constituted development requiring consent pursuant to that provision and, as at the date of the alleged offence, no such consent had been obtained from the Prosecutor, it is unnecessary to reproduce the terms of the provision.

The legislative provisions

1. The offence, inter alia, of carrying out development requiring consent without having obtained such consent is created by s 125(1) of the EP&A Act.
2. It is also to be noted that, as at the date of the hearing in the Local Court, from which the appeal in these proceedings arises (and, also, as at the date of the hearing of this appeal), s 125(3A) was in effect.
3. These two elements of s 125 require consideration in this appeal. They are in the following terms: 125 Offences against this Act and the regulations 1 Where any matter or thing is by or under this Act, other than by or under the regulations, directed or forbidden to be done, or where the Minister, the Secretary, a council or any other person is authorised by or under this Act, other than by or under the regulations, to direct any matter or thing to be done, or to forbid any matter or thing to be done, and that matter or thing if so directed to be done remains undone, or if so forbidden to be done is done, a person offending against that direction or prohibition shall be guilty of an offence against this Act. 2 ... 3 … (3A) A person who: (a) aids, abets, counsels or procures another person to commit, or (b) conspires to commit, an offence against this Act or the regulations arising under any other provision is guilty of an offence against this Act or the regulations arising under that provision and is liable, on conviction, to the same penalty applicable to an offence arising under that provision. (4) ... (5) ...

The proceedings in the Local Court

1. The CAN required that the Appellant initially to face Waverley Local Court on 22 March 2016 to answer the charge in the CAN. The "Description of Offence" on the face of the CAN is in the following terms: Development without development consent - class 1/10 building
2. The "Statutory Provision Describing Offence" set out on the CAN is: Environmental Planning and Assessment Act 1979 Section 76A(1)(a)

The Local Court hearing

1. On 4 August 2016, the matter was heard by her Honour Viney LCM. A transcript of the proceedings of that day was before me, as were the exhibits tendered to her Honour.
2. The Prosecutor was represented before the Local Court by Mr O'Gorman‑Hughes of counsel, whilst the Appellant was represented by Mr M Sahade of counsel.
3. During the course of the hearing, evidence was given by Mr Donellan, for the Prosecutor, and Mr Anthony Sahade, for Appellant. Each of them was also cross-examined at some length.
4. At the conclusion of the hearing, her Honour set a timetable for submissions to be made to her, and her Honour reserved her decision.
5. Her Honour delivered an oral decision on 15 September 2016, at the conclusion of which she convicted the Appellant. The Appellant was fined $12,000 and ordered to pay costs of $8,000. It will be necessary, later, to analyse her Honour's decision in order to provide a proper basis to understand the statutory provision upon which her Honour proceeded to conviction.

The appeal to this Court

1. The Appellant has appealed to this Court against both its conviction and the sentence imposed upon it. The appeal is made pursuant to s 31 of the Crimes (Appeal and Review) Act 2001 (the Appeal and Review Act). This provision is in the following terms: 31 Appeals as of right 1 Any person who has been convicted or sentenced by the Local Court with respect to an environmental offence may appeal to the Land and Environment Court against the conviction or sentence.
2. The conduct of such an appeal is provided for in s 37 of the Appeal and Review Act. This provision is in the following terms: 37 Appeals to be by way of rehearing on the evidence 1 An appeal against conviction is to be by way of rehearing on the basis of evidence given in the original Local Court proceedings, except as provided by section 38. 2 Fresh evidence may be given, but only by leave of the Land and Environment Court which may be granted only if the Court is satisfied that it is in the interests of justice that the fresh evidence be given. 3 ...
3. The terms of s 38 of the Appeal and Review Act are not presently applicable.
4. As can be seen, the appeal is by way of the redetermination on the basis of the evidence before the Local Court, rather than being an examination of the correctness of the reasoning process of her Honour in reaching her decision to convict (relevantly for this phase of that with which I am dealing). Although, as can also be seen, there is provision for fresh evidence to be adduced in these proceedings before me, no such leave was sought by either party.
5. As a consequence, that which was before me for the purposes of the appeal comprised the entirety of the Local Court file (including, as earlier noted, the exhibits that were before her Honour), together with the transcripts of 4 August and 15 September 2016.

Introduction

1. I have earlier set out the terms of s 125(3A) of the EP&A Act. This provision was inserted into the EP&A Act by Sch 1[7] of the Environmental Planning and Assessment Amendment Act 2014 (the 2014 Amendment Act). The provision became operative on 31 July 2015. No provision of the 2014 Amendment Act purports to give s 125(3A) any retrospective effect.
2. In this context, it is to be noted that the development for which the Appellant was brought before the Local Court, as a consequence of the issuing of the CAN, was first observed by Mr Donellan on 17 March 2015.

The Prosecutor's case

1. The Prosecutor's case that the Appellant carried out the development in breach of s 125(1) is said to be founded on the inference that this was the position. There is no direct evidence that the Appellant physically caused the work to be carried out; however, it is the position that the prosecution says that the Appellant directly authorised its carrying out.

The Magistrate's basis for conviction

1. I have earlier set out the terms of subss 125(1) and (3A) of the EP&A Act. It can be seen from the terms of the second of these provisions that it provides an alternative pathway to conviction for an offence pursuant to s 125(1) rather than providing a separate offence in itself.
2. It is clear from her Honour's decision, that, in her reasoning, she had regard to the provisions of s 125(3A). This can be seen by her reference to it at two separate points during her reasons for decision (Transcript 15 September 2016, page 2, lines 23 and 43).
3. More importantly, in the context of these proceedings, it is clear that the basis for her Honour determining to convict the Appellant was that s 125(3A) provided the pathway via which she concluded that the Appellant was guilty of the offence charged under s 125(1). This is evident from the final sentence of her Honour's reasons for decision, a passage in the following terms (Transcript 15 September 2016, page 5, lines 19 to 22): Based on the evidence before this Court I am satisfied that Lenjade Pty Limited was aware of the construction, was aware that council consent was required and that it permitted and encouraged the installation of the dog wash without such consent relying of course on s 125.3A.
4. Having set out this material, it is now appropriate to explain why s 125(3A) was not an available pathway for her Honour to utilise to conclude that the Appellant had committed an offence pursuant to s 125(1). This arises because, as I earlier noted: 1. The alleged offence occurred on 17 March 2015; 2. The pathway provided by s 125(3A) to establish a basis for convicting for an offence pursuant to s 125(1) only came into effect on 31 July 2015; and 3. There was no statutory provision that purported to make the operation of s 125(3A) retrospective. It therefore follows that the basis upon which her Honour convicted the Appellant was not available to her Honour for that purpose.
5. It is to be observed, lest this decision be taken as a criticism of her Honour, that it would appear that the Prosecutor conducted its case before her Honour on the basis that s 125(3A) applied at the time of the alleged offence.
6. This position is clear from the Prosecutor's written submissions to her Honour dated 18 August 2016, which, at (4), quotes s 125(1) and (3A). Although there is no subsequent express reference to this latter provision, the written submissions, when read in their entirety, support the inference that s 125(3A) was relied upon to provide a statutory foundation for the conviction of the Appellant. In addition, (13) of the Prosecutor's submissions in reply, dated 1 September 2016, makes it clear that the Prosecutor was relying on what was referred to as the "current section 125(3A) of the EPA Act". Both the Prosecutor's submissions, and the Prosecutor's submissions in reply, are included in the Local Court file transmitted to this Court for the purposes of these proceedings.
7. There does not seem to have been any submission to the contrary to her Honour, on behalf of the Appellant. The Appellant's submissions to her Honour (also forming part of the Local Court's file transmitted this Court) make no mention of s 125(3A) of the EP&A Act.
8. In this context, it is appropriate to note that s 37 of the Appeal and Review Act refers to my rehearing to be on the basis of evidence given in the original Local Court proceedings. I do not refer to the Prosecutor's submissions to her Honour as being matters relevant to me in any fashion other than for the limited purpose of explaining why her Honour reached the conclusion that she did, having been led to do so on the basis of the Prosecutor's submissions concerning a statutory provision that was not available to be relied upon by her Honour to support a conviction.
9. The position before me is to the contrary, with the unavailability of s 125(3A), being an element of submissions by Mr M Einfeld QC (now leading Mr M Sahade) for the Appellant, to me in these proceedings.
10. However, as that which is technically before me is the conviction of the Appellant of an offence pursuant to s 125(1) of the EP&A Act, and I am dealing with it by rehearing on the basis of the evidence in the Local Court, it seems to me that the statutory provision in the Appeal and Review Act earlier set out mandate me to consider whether the conviction can stand, on the basis of the evidence before her Honour, but doing so in a fashion where, for the purposes of my consideration, I pay no heed to the terms of s 125(3A), as it is not available for the purposes of my consideration of whether the Appellant is guilty of an offence pursuant to s 125(1) of the EP&A Act.

Introduction

1. The Prosecutor's case on appeal was based on the proposition that the evidence, both documentary and oral, that was before her Honour provided a proper foundation for me to conclude that Mr Anthony Sahade, as the guiding mind of the Appellant, had directly authorised the carrying out of the development for which consent was required and for which consent had not been obtained.
2. The Prosecutor submitted that this path to conviction of an offence pursuant to s 125(1) of the EP&A Act arises, by analogy, for the reasons given by Preston CJ in North Sydney Council v Moline; North Sydney Council v Tomkinson (No 2) [2008] NSWLEC 169 at [114], where his Honour explained why a principal may be vicariously liable for the conduct of an independent contractor when the principal directly authorised the activity carried out by that contractor. The consequence of direct authorisation of such offending conduct provides a basis for conviction of the principal for carrying out the offending conduct. The relevant passage reads: An accused may be vicariously liable where the accused has directly authorised the doing of the actus reus by the independent contractor. An accused may be vicariously liable where the work done by the independent contractor is subject to the control and direction of the accused in the actual execution of the work (citations omitted).
3. At this point, it is appropriate to observe that it was Mr Anthony Sahade's evidence before her Honour that, as at the relevant date (17 March 2015), the premises were in the control of a company, Roy International Pty Ltd, as a franchisee holding-over under the terms of an expired lease, with the lease terms continuing to apply during that holding-over period. It was not put directly to Mr Anthony Sahade, in cross-examination, that this position was not correct. It is not suggested, in these proceedings, that there is anything before me that would lead me to conclude to the contrary.

The Prosecutor's case is a circumstantial one

1. The Prosecutor submits that, from a number of passages in the evidence given by Mr Anthony Sahade before her Honour, and from a number of provisions of the lease pursuant to which Roy International Pty Ltd was the holding-over occupier of the premises, there was a sufficient basis for me to draw the necessary inference, beyond reasonable doubt, that Mr Anthony Sahade and, hence, the Appellant, had directly authorised the carrying out of the development for which consent was required.

The "doctored" tax receipt

1. The Prosecutor submitted to me that, with respect to Mr Anthony Sahade's evidence disclosed on the transcript of what took place before her Honour, her Honour did not find Mr Anthony Sahade to be a credible witness. This finding, in circumstances where her Honour had the benefit of seeing Mr Anthony Sahade, and hearing his evidence (in circumstances where I had neither of those advantages), should lead me to conclude, the Prosecutor further submitted, that I should also not accept Mr Anthony Sahade's evidence unquestioningly, particularly with respect to those aspects of his evidence that were exculpatory.
2. The foundation for what was said to be the basis of her Honour's conclusions about Mr Anthony Sahade's evidence was the fact that a pair of tax receipts had been tendered before her Honour by the Prosecutor (Exhibits 3 and 6) which concerned the same transaction but which had differing identifying elements, including different Australian Business Numbers.
3. However, as was pointed out by Mr Einfeld, there are lengthy passages in her Honour's reasons for decision where her Honour relies on Mr Anthony Sahade's evidence for setting out matters of the framework within which her Honour was giving her decision. There is nothing in those comments, whatsoever, that would indicate that her Honour was rejecting Mr Anthony Sahade's evidence (either specifically or generally) or regarding that evidence as having been, in any way, unreliable.

The transcript of Mr Anthony Sahade's evidence

1. The Prosecutor took me to a series of passages in the transcript of Mr Anthony Sahade's evidence before her Honour which, it was submitted, supported the proposition that Mr Anthony Sahade had directly authorised Roy International Pty Ltd to install the dog washing/grooming facility at the premises.
2. To understand what was submitted, it is necessary to set out the various questions and answers from the transcript to which I was taken. These are from the Prosecutor's cross-examination (first to ninth passages); Defendant's concession (tenth passage); Defendant's re-examination (eleventh and twelfth passages); and Prosecutor's further cross-examination (thirteenth and fourteenth passages).
3. The first passage from Mr Anthony Sahade's evidence (Transcript 4 August 2016, page 25, lines 29 to 48) reads: Q. Is there anything in the lease that you're aware of that supports the belief that you said you had that the lessee of the site can construct a dog wash facility without approval of the owner? A. I don't know the - I'm not familiar with the, the legalities of the lease and I would assume that provided they're doing so legally there wouldn't be a problem with it if it was - if they thought it would benefit their business. Q. When you say provided they're doing so legally, on what basis do you say that the lessee can construct not just a dog wash facility but the enclosing structure without the approval of the owner of the site? A. See, this is where we're splitting hairs. You see, some councils a dog wash is exempt development and it's, it's a grey area so what you're trying to say is what the franchisee quickly did was construct a roof over his dog wash and is that what's illegal; he should have got consent for that? Q. Listen to the question. It doesn't relate to the need for council consent. It's on what basis did you say that the lessee was able to install the dog wash facility and associated structures without the approval of the owner of the site? A. I don't know how to answer that. All I know is it was done and I didn't consider it a serious breach of the lease.
4. The second passage (Transcript 4 August 2016, page 32, lines 26 to 35) reads: Q. I'm asking you questions about what you were told. The answer you gave, you knew franchisees were considering them before they were put in, so when you said you knew franchisees were considering them before they were put in, what were you told? A. One of the franchisees saw the dog washes at an opposition car wash and he thought it would be a good idea and he asked consent to put one in at his site and he did and I liked the idea and all the other franchisees talked to each other and they thought it was a good idea and if they chose to follow suit I was not objecting to the, you call it, an introduction to the new business but I don't see it that way.
5. The third passage (Transcript 4 August 2016, page 33, lines 37 to 50) reads: Q. Who was responsible for organising the consistent signage amongst those five sites? A. One of the franchisees came up with the idea of a roof and then put a sign up and another franchisee who put one in came up with the idea of the play fencing around it to hold the dog in place so it wouldn't run away. Q. The question was who was responsible for organising the consistent signage amongst those five sites? A. No, they do it. They get the artwork or they use the same sign, I don't know. They organise their own sign people; it's not hard. Q. You say that the signage for each of those five dog wash facilities was organised by the franchisees independently at Crystal Car Wash Café Pty Ltd? A. That's right.
6. The fourth passage (Transcript 4 August 2016, page 34, lines 29 to 34) reads: Q. Who made the signs for the dog wash facilities? A. I don't know. Q. Who made the dog wash facilities? A. Each operator was responsible for their own erection of the fencing and the, and the - there was a cover.
7. The fifth passage (Transcript 4 August 2016, page 36, line 39 to page 37, line 15) reads: Q. Did Crystal Car Wash Café Pty Ltd get invoiced for the dog wash facility that was installed at Coogee in March 2015? A. I don't know how to answer it because it's possible it did and the franchisee ‑ we did a special deal that all the franchisees could buy them under the Crystal Car Wash pricing arrangement, whether he invoiced Crystal Car Wash and we were reimbursed by the franchisees at some stage or the franchisee bought it direct I don't know off the top of my head. The office has those records. Q. When you say they could purchase under the Crystal Car Wash pricing arrangement can you explain what that pricing arrangement was? A. The manufacturer or the distributor in Melbourne who sells this particular product because we have the number of outlets and we intend - when we started - when I bought the first two I said, "There's more to come and I want a special price arrangement because it's not a one‑off." Q. What did the manufacturer offer you in response to that request? A. A discount. Q. You accept then that the dog wash facility that was installed in Coogee in March 2015 was purchased pursuant to a discount that you negotiated with that Melbourne company? A. Yes. Q. Did you authorise the installation of the dog wash facility and associated structure at Coogee? A. No, I didn't.
8. The sixth passage (Transcript 4 August 2016, page 38, line 31 to page 39, line 2) reads: Q. You gave evidence this morning about the first dog wash facility that was installed in Brookvale and you said that an owner saw one from the opposition? A. Yes. Q. He asked for consent to put it in? A. Yes. Q. "I like the idea" you said? A. Yes. Q. You said, "If they followed suit I was not objecting"? A. Yes. Q. Can you indicate what you meant by "I was not objecting"? A. I wasn't objecting to the, the idea of Crystal Car Washes incorporating these self‑serve dog wash units on the sites. Q. You authorised their installation? A. See, that's a vague question. I certainly didn't authorise installation without council consent if it was required and when I found out I did everything I could to regularise it. I didn't ignore it.
9. The seventh passage (Transcript 4 August 2016, page 51, lines 15 to 32) reads: Q. You see there's a definition for Crystal Car Wash Café system? A. "Means any and all business operations of the lessee in, on or about the premises from time to time." Yes. Q. There's a definition below that Crystal Car Wash Café system which means "The business described in the operations manual as may be updated from time to time by the lessor and any related company." A. Yes. Q. The lessor in this case is Lenjade? A. Yes. Q. As sole director of Lenjade can you indicate what the business described in that operations manual was? A. I think the very truth there's never been an operations manual written yet. Its system evolved so fast that as soon as we put pen to paper it's obsolete, so that's why they've put the words in there, "It may be updated from time to time" so there still isn't one to date.
10. The eighth passage (Transcript 4 August 2016, page 52, lines 20 to 43) reads: Q. As at that time of about March 2013 how regular were the inspections that were carried out of the Coogee Crystal Car Wash site? A. Look, I can't recall but there are times when there's six, eight, ten weeks can go past and I don't get a chance to visit a site. For example, I haven't been to the Kingsford site for six months. Q. As at that time of about March 2013 how regular were the inspections that were carried out of the Coogee Crystal Car Wash site? A. Look, I can't recall but there are times when there's six, eight, ten weeks can go past and I don't get a chance to visit a site. For example, I haven't been to the Kingsford site for six months. Q. The question was how regular were the inspections of the Coogee Crystal Car Wash site? A. They're not regular. Q. How regular is the-- A. It can be months. Months sometimes before seeing a site. Q. Okay. A. And then, you know, you might have a period where you're going more regularly.
11. The ninth passage (Transcript 4 August 2016, page 55, lines 4 to 41) reads: Q. That operations manual is defined as a booklet entitled "Operations Manual' and then goes on to say: "If no such booklet has been provided to the lessee by the commencing date of this lease such booklet shall be deemed to have been provided as saying initially the business of vacuuming, washing by hand or machine, drying by hand, polishing by hand and buffing by hand the vehicles of customers of the lessee and the making available of cafe services such as coffee, tea, cakes and light refreshments to customers in the cafe and/or outdoor seating arrangements in accordance with the business operations of the lessor." A. Yes. Q. There's no reference in that to the use of the premises for a different purpose such as a dog wash facility, is there? A. No. Q. You knew that the lease restricted the use of the premises to basically washing cars and providing cafe-type services to the customers? A. Not specifically but I do believe that I have the ability to, if it's done by agreement, to modify the lease. Q. You said there was no correspondence after-­ A. There's verbal correspondence. Q. I'm sorry, just let me finish the question. You said that there was no written correspondence after March 2013 concerning the continuing occupation of the premises by the lessee. A. There wasn't any need for written correspondence but there was a good relationship, the tenant was doing - the franchisee was doing the right thing and we just kept rolling it on a month to month basis and that's how all the leases are set up. They're designed for that so that we can have control. So if there is a dispute with a franchisee who's not going to abide by the system instead of getting into an argument about, you know, "You're not following the system," or, "You're not doing something right" it's even more simpler to say that, "Your lease is now terminated."
12. The tenth passage (Transcript 4 August 2016, page 59, lines 42 to 45) records a concession by Mr M Sahade on behalf of the Appellant. The relevant extract reads: SAHADE: I think that that's precisely what we're asserting, that Lenjade, exactly as your Honour stipulated, it builds them and puts them together and it applies for the original consent. I don't think there's any issue that Lenjade is the franchisor.
13. The eleventh passage (Transcript 4 August 2016, page 65, lines 34 to 46) reads: Q. Because my whole issue why did you go to the cost of putting this whole development application together for a business that you're not, in terms of, you know, revenue, it's not your income. A. Yes, I accept what you're saying because it's in my interest to assist the franchisee because he's gone to the expense of putting it in there and we want the dog wash to stay because whatever income he derives from the site we benefit from it, so - and whatever cost was involved I, I could, you know, chase him for the costs involved in-- Q. Did you do that? A. Well, that franchisee is no longer there and it came to an end and I didn't recover the costs. I lost too and lease repayments from him as well at the end of the day.
14. The twelfth passage (Transcript 4 August 2016, page 66, lines 6 to 44) reads: Q. Did you form an opinion as to the competence or ability of the lessee to apply for a development consent himself in respect of the dog wash? A. Yes. They're simple people and they're good- they're managers who - they used to be managers at the car wash and because they were good managers it was an opportunity to give them ownership in the business and take more responsibility, but if you take them out of the system and say, "You go and get a town planner and get an architect and go down this path and incur the expense" it would cripple them, they wouldn't know where to start. Q. If the real situation was - and this is a hypothetical - that you said to the tenant, "This isn't my problem" and you said to the council, "This isn't my problem, chase the tenant" did you form an opinion as to what would have happened as to whether the tenant could have applied for a DA and get approved? A. I don't really understand the question other than that I needed to fix the situation, the problem. Q. When I say the tenant, I mean the actual tenant at Coogee car wash, the director is Manarj Roy, would you form an opinion as to whether he was competent or capable? A. Not capable. Q. Why do you say that? A. He never had any experience with a development application or an architect or a town planner. This is what - I did what I could to help him and I didn't - because he's a good tenant and he's been loyal over the years I didn't pursue him for the expenses involved. Q. You got it approved within quite a reasonable time. The infringement notice relates to March and it seems to be approved in June. How were you able to get it done so quickly? A. We just acted immediately when it was brought to our attention. Q. You used a planner called Mike George. Is he on hand to you and your companies? A. Yes. Q. Does the tenant have any access to that town planner? A. No.
15. The thirteenth passage (Transcript 4 August 2016, page 67, line 28 to page 68, line 10) reads: Q. You thought at the time that it didn't need a DA; is that what you're saying? A. No, I never said that. Q. I'm asking you the question now. Did you think at the time as at March 2013 that this did not need a development application? A. No, I don't know. Some councils consider it as exempt development. You know, it was easier to not argue the point with the council and come to Court and say, "It's exempt development, it didn't require consent. It's an ancillary use to the main use," but it was easier to comply an engage a town planner and an architect and regularise the use. Q. When you say some councils considered it to be exempt development-- A. Yes. Q. --which councils were those that you're referring to? A. Woollahra, Mosman and the two sites in Melbourne. Q. Did you speak to those councils before the installation of those facilities? SAHADE: I object. Really-- HER HONOUR: Yes. O'GORMAN-HUGHES: The answer he gave was "Some councils considered it to be exempt development," so the question is how does he know, did he speak to those councils? HER HONOUR Q. I suppose, yes, about how he sourced that information I'll allow that, yes. A. I spoke to someone from Woollahra Council. I believe some of the franchisees spoke to the council about other locations. The town planner gave advice.
16. The fourteenth and final passage (Transcript 4 August 2016, page 68, line 35 to page 69, line 9) reads: Q. Who did you speak to from Woollahra Council? A. I'll recall seeing when I leave the Court for sure. Q. I'm sorry? A. I just can't recall right now. Q. Can you remember what you were told? A. They didn't seek the required council consent if it was a, a machine that was purchased and it was ancillary to the business and it was not the main ‑ it's, it's not the dominant use. If it's just ancillary to the business and I gave the example of an ice machine or a vending machine those references from the council man that I spoke to. Q. Why did you seek that advice from Woollahra Council? A. So that when I installed the dog washes at Rose Bay if I needed to lodge a DA prior to doing it I would of. Q. When did you install those dog washes? A. Probably 14. Q. Who owns the Rose Bay site? A. I did at the time. Q. You personally owned the Rose Bay site? A. Yes.
17. The extent to which these passages, and the material from the Roy International Pty Ltd lease set out below, could (or, as I have found, could not) support the necessary inferences required to lead to conviction of the Appellant of the offence charged is later discussed.

The Roy International Pty Ltd lease

1. The Prosecutor also relied on the terms of the lease pursuant to which Roy International Pty Ltd was holding-over as the tenant of the premises as at the date of the alleged offence. The provisions upon which the Prosecutor relied fall into two categories. The first relates to the rights which the Appellant had pursuant to the lease, whilst the second related to the obligations which Roy International Pty Ltd had to the Appellant pursuant to the lease. It is not necessary, for the purposes of this analysis, to set out in full all of the various lease provisions relied upon by the Prosecutor; it is sufficient to indicate the nature of the particular term and what is said to arise from it.
2. Before doing so, it is appropriate to note that, during the course of his oral evidence in the Local Court, it was never put to Mr Anthony Sahade that Roy International Pty Ltd had, at all times to his knowledge, strictly adhered to, and acted entirely in compliance with, the terms of the lease.
3. The provisions of the lease which the Prosecutor relied upon as supporting the inference that the dog washing/grooming facility had been directly authorised by the Appellant to be installed was said to be drawn from the following elements of the lease.
4. The Definitions section of the lease, in cl 1(a), contains two definitions potentially relevant. These are: "Crystal Car Wash Café System" means the business described in the Operations Manual, as may be updated from time to time by the Lessor and or any Related Company. … "Operations Manual" means the booklet entitled "Operations Manual" containing a complete description of the business activities as may be updated from time to time by the Lessor any Related Company, and if no such booklet has been provided to the Lessee by the Commencing Date of this Lease, such booklet shall be deemed to have been provided as saying initially, "the business of vacuuming, washing by hand or machine, drying by hand, polishing by hand, and buffing by hand the vehicles of customers of the Lessee, the making available of café services such as coffee, tea, cakes and light refreshments to customers in the café and or outdoor seating arrangements, in accordance with, or substantial accordance with the business operations of the Lessor. [The remainder of the definition is unnecessary to be repeated.]
5. Clause 8 of the lease is under the heading "Lessor's Right to Inspect". It is not necessary to set out the full terms of this provision. Its effect is that the lessor, its representatives, servants and agents might inspect the premises that were the subject of the lease, without notice, at any time the business is operating or the premises were open to the public. It is to be noted, however, that there is no obligation to inspect contained in this provision.
6. The Prosecutor relies on the fact that the lease authorised inspections without notice to be made of the premises on behalf of the Appellant. In this context, the Prosecutor's proposition seemed to be that, as the right to inspect was exercised from time to time (as noted in Mr Anthony Sahade's oral evidence), Roy International Pty Ltd would not have undertaken the unapproved development without seeking the consent of the Appellant for this to occur. Such a proposition is to be considered in the context of Mr Anthony Sahade's uncontradicted evidence that, although he did undertake inspections of the premises from time to time, he was unaware of the unapproved development until it was drawn to his attention by the Prosecutor.
7. Clause 18 of the lease is headed "Permitted Use". There are three matters to be observed concerning this provision. First, cl 18(a) restricted the lessee to using the premises for the purposes of the Crystal Car Wash Café System. Second, cl 18(b) imposed the obligation on the lessee to keep current all licences and permits required for the permitted use. Finally, cl 18(d), separately from cl 8, also provided the lessor with a right of inspection similar to that contained in cl 8. As with cl 8, however, there was no obligation imposed on the lessor to inspect for any reason. The comment above, concerning Mr Anthony Sahade's evidence concerning inspections, similarly applies to this provision.
8. The lease contained a provision under the heading "Licence of Crystal Car Wash Café System and Name". In cl 19 there was a licence granted to the lessee to use the name Crystal Car Wash Café and to operate a business in accordance with the permitted use at the site. It is to be noted that cl 19(d) specified the requirement for the lessee to display a sign which gave clear notice of matters set out in that provision. In this context, it is to be observed that cl 30 of the lease was entitled "Further Use Requirements and Restrictions". Clause 30(b)(iv) prohibited the lessee from utilising any sign, advertisement or notice (other than the notice specified in cl 19(d) noted above) without the lessor's prior written consent.
9. In this regard, it is appropriate to reproduce a further extract from the transcript concerning signage and Mr Anthony Sahade's attitude to lessees' installation of what might be regarded as "ad hoc" signage. The relevant transcript portion from the Prosecutor's cross-examination reads (Transcript 8 August 2016, page 56, lines 10 to 49): Q. Roman numeral (iv): "Put on the outside of premises or anywhere within the premises that is visible from the outside any sign, advertisement or notice without the lessor's prior written consent other than those required by subclause 19(d); (vii) Keep any animal in the premises." A. Yes, that's what it says. Q. Having regard to those provisions why wouldn't her Honour form the conclusion that, in fact, that the lessee in this case did obtain your consent before installation of the dog wash facility? SAHADE: I object to the phrasing of that question; asking this witness why your Honour wouldn't find something. O'GORMAN-HUGHES: I'll reframe the question. Q. Having regard to those provisions what facts or matters are you aware of to indicate why the lessee would have gone ahead and done that without first seeking your approval? A. The best way to answer it is with an analogy. I tell my son, "You have to be home by 10 o'clock" but he comes home at 11 o'clock and he uses his discretion and he's sensible then it's not a punishable sin. It's no different to the franchisee having a go at putting a dog wash in to enhance his business. Even though it's prohibited within the lease it's not something that's worth punishing him because he's doing what's best for his business and what's best for his business ultimately profits the whole Crystal Car Wash chain. Q. When you say what's best for his best ultimately profits the entire Crystal Car Wash chain what do you mean by that? A. If he's genuinely working hard and doing something that's going to enhance the business then it's in the interests of Crystal Car Wash, but if he's not doing anything and not coming up with new ideas and he's not even showing up to work on a Saturday/Sunday and he's always having holidays and his place is being run badly, then he's a bad operator. Q. You think what's best for the business is best for the profit of Crystal Car Wash Cafe Pty Ltd? A. Well, I don't know if profit is what it's about. It's about repeat business.
10. Finally, cl 24 of the lease, under the heading "Essential Terms of the Lease", provided, at the end of a list of essential terms, the following applicable deeming provision concerning items in that list: and the breach, non-observance or non-performance of any one or more of such covenants, terms and agreements shall be deemed to be a breach of a fundamental term of this Lease on the part of the Lessee to be observed and performed.
11. In this context, it is to be observed that cl 30 was not nominated (either in whole or in part) as one of the essential terms set out in cl 24(a)(vi), the provision that nominated a range of clauses that are said to be essential terms. The requirement in cl 18(a) described earlier was, however, identified in that provision.

Consideration

1. For the reasons earlier set out, the basis of my consideration of whether the Appellant is guilty of the alleged offence is confined to a rehearing of the matter on the basis of the evidence before the Local Court. In undertaking that process, the statute does not authorise me to exercise any form of supervisory jurisdiction to examine whether or not there was any defect in the process below. The exercise of such a supervisory jurisdiction, if defect were to be disclosed, would potentially involve remitting the proceedings to the Local Court to be dealt with in light of such procedural findings of defect as might have been made. I have no such power.
2. As I have earlier explained, at the time of the alleged offence, s 125(3A) of the EP&A Act was not in force and could not provide a pathway for the conviction of the Appellant. It therefore is unnecessary for me to consider whether or not, had that provision been available, the Appellant would have been able to be convicted of a breach of s 125(1) of the EP&A Act by virtue of the application of the "aid and abet" provisions in s 125(3A) of that Act.
3. The basic proposition advanced by the Prosecutor was that, taken together, all of the matters from Mr Anthony Sahade's evidence before the Local Court and the terms said to be relevant of the lease to Roy International Pty Ltd (pursuant to which that company was in occupation of the premises where the unapproved development took place) were threads which, when woven together, provided an appropriate basis upon which a conviction of the Appellant could be supported.
4. It is appropriate, at this point, to remind myself that to convict the Appellant of the offence with which it has been charged on this basis put by the Prosecutor, it is necessary for me to be satisfied, beyond reasonable doubt, that the Appellant directly authorised the installation of the dog washing/grooming facility.
5. I now address the matters relied upon by the Prosecutor to support conviction on the statutory bases now pressed (rather than the unavailable basis upon which the Local Court conviction was founded).
6. First, at the highest, the Prosecutor's case demonstrates that the installed equipment may have been paid for by the Appellant (or some other entity of which Mr Anthony Sahade was the controlling mind - the precise position not mattering for these purposes), with that cost being reimbursed by Roy International Pty Ltd.
7. Second, there is the consistency of the signage used with the unapproved facility being the same as that for such facilities at other Crystal Car Wash Café locations.
8. If these factors were added to the Appellant's right to inspect, together with the restrictions in the lease constraining Roy International Pty Ltd from undertaking such development without approval, the Prosecutor submits that I should conclude there is a proper basis to convict.
9. The fact that there was a common supplier of such equipment to a number of Crystal Car Wash Cafés (some of which were directly operated by Mr Anthony Sahade) cannot be relied upon to support a conviction. There are two reasons for this. The first (and more important) is that there is no evidence that any of these facilities at other sites were installed without development consent, if required in the relevant local government area, and, second, Mr Anthony Sahade's uncontested evidence was that there was a degree of informal discussion between Crystal Car Wash Café franchisees about opportunities for additional attractions at their sites that would bring further business to them. There was nothing in the lease that prohibited such additional attractions, provided that they are consistent with the prescribed Crystal Car Wash Café business "Operations Manual" or any document, absent a document so titled, being taken to be such a Manual.
10. The evidence given by Mr Anthony Sahade, specifically concerning signage (at [45] above), shows what can be regarded as a commercially based, flexible and permissive approach to what were otherwise legally binding lease terms (without the need for formal variation of the legal provisions of the lease document when there is a beneficial outcome). Such an approach, driven by acceptance of positive economic business outcomes only, risks having occur what Mr Sahade says has here arisen - an operator undertaking an added business practice without his knowledge or authorisation.
11. The relevant portions of the transcript earlier reproduced when coupled with the fact that there is no evidence that could exclude the reasonably available possibility of the installation of the dog washing/grooming having been undertaken by Roy International Pty Ltd at its own initiative and without authorisation by or at the direction of Mr Anthony Sahade means that, taken overall, I am unable to conclude, based on the evidence before the Local Court and the submissions made to me on how I should interpret that evidence, that the Appellant had, beyond reasonable doubt, directly authorised the installation of the dog washing/grooming facility at the premises without the obtaining of the necessary development consent for that purpose.
12. It follows that this basis to permit the conviction of the Appellant fails.

A possible common law alternative pathway?

1. During the course of the hearing on 2 June 2017, when the unavailability of s 125(3A) was clear, the Prosecutor sought leave to reserve the position as to whether the Prosecutor would wish to make further submissions proposing that there was a common law basis akin to the "aid and abet" statutory pathway under the inapplicable provision. Leave was granted for this purpose, provided I was notified by the close of business on the following Tuesday that the Prosecutor wished to make such further submissions.
2. On Monday 5 June 2017, supplementary written submissions were provided by the Prosecutor. These submissions did not seek to rely on the common law but sought to rely on the provisions of s 351B of the Crimes Act 1900 (the Crimes Act). This provision was inserted by the Justices Legislation Repeal and Amendment Act 2001 and was operative at the relevant date of the alleged offence. The provision is in the following terms: 351B Aiders and abettors punishable as principals (1) Every person who aids, abets, counsels or procures the commission of any offence punishable on summary conviction may be proceeded against and convicted together with or before or after the conviction of the principal offender. (2) On conviction any such person is liable to the penalty and punishment to which the person would have been liable had the person been the principal offender. (3) This section applies to offences committed before or after the commencement of this section. (4) This section applies to an indictable offence that is being dealt with summarily.
3. As a consequence, I arranged for a short supplementary hearing to be held to enable counsel to address the matters raised in the Prosecutor's supplementary submissions.
4. Although the language used in s 351B, in its totality, is not identical with the language of s 351 of the Crimes Act, the differences are functionally immaterial for the purposes of my analysis as can be seen from the terms of s 351: 351 Trial and punishment of abettors of minor indictable offences Any person who aids, abets, counsels, or procures, the commission of a minor indictable offence, whether the same is an offence at Common Law or by any statute, may be proceeded against and convicted together with or before or after the conviction of the principal offender and may be indicted, convicted, and punished as a principal offender.
5. This latter provision was considered by the High Court in Giorgianni v R (1985) 156 CLR 473; [1985] HCA 29 (Georgianni) where, at page 500, Wilson, Deane and Dawson JJ made it clear that s 351 effected the statutory incorporation of the common law offence of aiding, abetting, procuring or counselling of the commission of the principal offence by the principal offender. The relevant passage from Giorgianni reads: The requirement of intention on the part of an aider, abettor, counsellor or procurer or, if we may use the term, a secondary participant in a crime, is a requirement at common law and it is a requirement which is not affected by s.351 of the Crimes Act. That section merely restates the common law by providing, in effect, that in proceeding against a secondary participant in a misdemeanour, no distinction is to be drawn between the principal offender and the secondary participant.
6. It is on this basis that the Prosecutor submits that Mr Anthony Sahade may also correctly be convicted.
7. Mr Einfeld's submissions, both orally and in writing, in response to this further material were concise. For the purpose of the analysis which follows, it is sufficient to reproduce one short extract from his written submissions. The extract reads: (4) However, perhaps more importantly for present purposes, Giorgianni itself recognised (at 500) that "(t)he requirement of intention on the part of an aider, abettor, counsellor or procurer... is a requirement at common law" (emphasis added) [Respondent's Submissions 5.6.17 para 5]. The Respondent's submissions have persistently overlooked this requirement. There is simply NO evidence that Lenjade, through its director Mr Anthony Sahade, intended- let alone counselled or procured - any employee, sub-contractor, or lessee/franchisee to construct the dog-wash facility.
8. During the course of this further hearing, the following exchange took place between me and the Prosecutor, after the Prosecutor had given a general outline of the basis upon which this further basis for conviction could be founded (Transcript 8 June 2016, page 3, line 24 to page 4, line 41): HIS HONOUR: I understand that but in both cases was there not knowledge? O'GORMAN-HUGHES: There has to be knowledge and so we will come to that aspect when I deal further with the submissions. HIS HONOUR: So if on the facts of these proceedings I was to be satisfied that the prosecutor had not proved beyond reasonable doubt knowledge by Mr Anthony Sahade and therefore as the guiding mind of the company knowledge by the company, the charge must fail must it not. O'GORMAN-HUGHES: There must be knowledge and by knowledge, perhaps knowledge puts it a little too highly. The latest case referred to in Ross on Crime is that the person either intended that the offence be committed or knowingly counselled the commission of the offence while aware of the unjustified risk that the offence was in fact likely to be committed as a result of the accused's conduct. I will take your Honour specifically to that test. It will be important, a critical issue in terms of your Honour's finding. HIS HONOUR: So to that extent, at least if I understood what you were saying to me last week, I am to found that point on the passages of the cross‑examination and re-examination and I think it is further cross‑examination of Mr Anthony Sahade in the Local Court together with the various elements of the lease document in evidence before her Honour that you took me to, is that correct? O'GORMAN-HUGHES: Yes and amongst that, not only admissions made but evidence from which inferences can be drawn that there are five other car washes that have identical signage for dog wash facilities in circumstances where it is highly unlikely - they use the name of the franchisor and-- HIS HONOUR: I understand that but they are the points. There were some ten or 11 places from memory in the transcript to which you took me and then there were a number of places in the lease document to which you took me and you say that I find the foundation for concluding that there was knowledge on behalf of Mr Anthony Sahade from the accumulation of those factors? O'GORMAN-HUGHES: Yes. HIS HONOUR: And if I'm not satisfied on that, acquittal must follow must it not? O'GORMAN-HUGHES: Knowledge is required to establish guilt as an accessory and in relation to vicarious liability, what is necessary is that someone directly authorise the carrying out of the act. HIS HONOUR: I understand that. If I am not satisfied beyond reasonable doubt on those elements of the transcript and the lease, acquittal must follow must it not? O'GORMAN-HUGHES: Knowledge is not required for vicarious liability, it is a different test. HIS HONOUR: Directly authorising. O'GORMAN-HUGHES: Directly authorising. HIS HONOUR: Yes, I understand that. O'GORMAN-HUGHES: So the answer to your Honour's question is no, it does not follow. HIS HONOUR: If I conclude on the basis of what you say that that does not support a factual finding of direct authorisation and I find on the same material that it does not support a finding of knowledge, acquittal must follow must it not? O'GORMAN-HUGHES: Yes and based on knowledge in the terms set out in the extract of Hamilton.
9. In light of this exchange, it is appropriate to return to the relevant extracts from the transcript of Mr Sahade's cross-examination in the Local Court on 4 August 2016. As they were earlier extracted as part of the broader range of material from that transcript relied upon by the Prosecutor in his submissions in support of the first basis proposed as supporting conviction, it is unnecessary to repeat them for the purposes of my analysis arising from the above extract from the transcript of the second day of the hearing. It is sufficient to identify the passage element form the sequencing earlier set out.
10. Taking the Prosecutor's submissions as to the proper chain of legal reasoning to support conviction on this alternative basis as being correct, it remains necessary for me to be satisfied, beyond reasonable doubt, that the proper interpretation of the evidence given orally or tendered before her Honour in the Local Court could enable me to conclude that the Appellant should be convicted of the offence with which it has been charged.
11. I have earlier set out my conclusion rejecting the first basis advanced by the Prosecutor as supporting conviction.
12. I therefore turn to consider two aspects of the transcript to which the Prosecutor particularly drew my attention on the second day of the hearing. These are said, the Prosecutor submits, to establish that Mr Anthony Sahade had prior knowledge of and/or facilitated the installation of the dog washing/grooming facility at the premises.
13. The first aspect is the combination of Mr Anthony Sahade knowing that some franchisees were proposing to install such facilities and that, to assist in this occurring, he arranged, through the Crystal Car Wash Café structure, a discount for such franchisees on the costs of purchase of the equipment to be installed.
14. Mr O'Gorman-Hughes submitted, inter alia (Transcript 8 June 2017, page 10, lines 4 to 8): So, in this case the original submissions set out what the relevant facts were which suggest that there was encouragement but amongst other things I've noted in the short summary today that he knew that the franchisee were putting them in before they were put in and said "if they chose to follow suit I was not objecting" and he set up a special price arrangement.
15. In his evidence-in-chief in the Local Court, Mr Anthony Sahade expressly disavowed any prior knowledge of the installation of the dog washing/grooming facility prior to its installation. The transcript records (4 August 2016, page 15, lines 47 to 49): Q. Did you know that the tenant was going to install a dog wash? A. Specifically I don't know. I knew that a lot of the tenants were putting them in and thinking about installing them and talking.
16. Correctly understood, the proposition advanced for the Prosecutor concerning the second aspect (derived from the twelfth extract) - being the fact that Mr Anthony Sahade knew that those in occupation of the premises at the time of installation of the dog washing/grooming facility were "simple people" and incapable of undertaking the necessary processes to apply for and obtain development consent for the installation, coupled with Mr Anthony Sahade's actions subsequent to being advised by Mr Donellan that such consent was required, clearly supported the proposition that Mr Sahade had prior knowledge of the intention to install the dog washing/grooming facility.
17. The Prosecutor submitted (Transcript 8 June 2017, page 10, lines 21 to 25): … we say that Mr Sahade's comment that he knew the lessees were simple people who would not know where to start the process of applying for development consent was demonstration of the fact that he was aware of the unjustified risk that the [the offence] was in fact likely to be committed as a result of his conduct.
18. It is only if I am satisfied that the putative conclusion advanced by the Prosecutor is correct (by excluding all reasonably available, alternative hypotheses) that this evidence could go to supporting a conviction of the Appellant on either of the legal bases of these said by the Prosecutor to be available to convict the Appellant as a principal offender.
19. With respect to this aspect of the evidence, I cannot achieve the necessary degree of satisfaction from the face of the words in the transcript. "Simple people", at having discovered the potential commercial utility of installing such a facility through the informal network of Crystal Car Wash Café franchisees (the existence of which informal network was the subject of uncontradicted evidence from Mr Anthony Sahade - evidence not challenged by the Prosecutor), is equally consistent with those "simple people" deciding to take advantage of the discovered business opportunity and, in their ignorance of the necessity for development consent, simply installing the facility because of what was perceived to be its positive economic benefit.
20. If the then operators at the premises were so unsophisticated as to the operation of land use planning that they were incapable, in the fashion disclosed by Mr Anthony Sahade's evidence as relied upon by the Prosecutor, it is not possible to exclude the conclusion that they simply went ahead with what they considered to be a "good thing" without Mr Anthony Sahade's knowledge and, therefore, without direct authorisation from the Appellant or being aided or abetted in doing so by the Appellant in any fashion.
21. The Prosecutor's submission supporting the alternative path to sustain the conviction finds its foundation in the twelfth of the earlier transcript extracts from the Local Court hearing. This submission lacks any logical foundation. Its only path to validity would require proof of or the necessary inferences that:

• First, the lessees of the premises knew an approval was required; AND
• Second, the lessees of the premises didn't know how to achieve an approval; AND
• Third, the lessees of the premises discussed the proposal with Mr Anthony Sahade or otherwise brought it to his knowledge; AND
• Finally, he acquiesced in the installation without such an approval.

1. The final point, if derived by establishment of all three of the preceding propositions, would found conviction of the offence as charged. Mr Anthony Sahade's own evidence establishes the second proposition. There is no evidence whatsoever that establishes the first or third of these propositions.
2. As a consequence, this basis for conviction also fails.

Conclusion

1. As I have concluded that the evidence cannot support the conclusion, beyond reasonable doubt, that the Appellant directly authorised the carrying out of the unapproved development at the premises, the Appellant cannot be found guilty, as a principal offender, of an offence against s 125(1) of the EP&A Act.
2. Second, I have also concluded that the evidence cannot support the conclusion, beyond reasonable doubt, that there is a proper basis for the Appellant to be convicted of a breach of s 125(1) of the EP&A Act (as if it was a principal offender) by virtue of any conduct by Mr Anthony Sahade which might be regarded as aiding and abetting the actual principal offender (Roy International Pty Ltd - as alleged by Mr Anthony Sahade in his evidence) in the installation of the dog washing/grooming facility without development consent.
3. It therefore follows that the appeal must be upheld and the Appellant acquitted.

Orders

1. The orders of the Court are: 1. The appeal is upheld; 2. Lenjade Pty Ltd is acquitted of the charge of carrying out development for which consent was required without such development consent being obtained; 3. The conviction, penalty and costs orders imposed by the Local Court are set aside; and 4. Costs are reserved.

Amendments 04 August 2017 - Unnecessary citation deleted. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 August 2017