Minister for Planning v Fancott Pty Ltd [2009] NSWLEC 170 | Case summary

Minister for Planning v Fancott Pty Ltd [2009] NSWLEC 170 | Case summary | Zoe

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Construction of concrete block walls. Factual Background to the Offences Agreed Statement of Facts 6 The facts in the three proceedings were almost wholly agreed and were contained in a comprehensive Agreed Statement of Facts. As a consequence, very limited evidence was required to be adduced by the parties thereby saving both Court time and considerable expense to the parties. This is to be commended. The contents of the Statement are summarised below. 7 The prosecutor, the Minister for Planning ("the Minister"), was the consent authority under the State Environmental Planning Policy No 73 - Kosciuszko Ski Resorts, which was in force until and including 20 December 2007 ("the former SEPP"). It is also the consent authority as of 21 December 2007 pursuant to the State Environmental Planning Policy (Kosciusko National Park - Alpine Resorts) 2007 ("the current SEPP"). 8 Fancott is a company that carries out development. In particular, it carried out the redevelopment of a tourist accommodation lodge at Thredbo called the New Kirk Lodge ("the lodge"). The Lodge was situated on Lot 801 of Deposited Plan 1119757, also known as Lot 53, Bobuck Lane, Thredbo ("the land"). Significantly, the land was located approximately 60 metres to the southwest of the site of the Thredbo landslide which occurred on 30 July 1997. The land is owned by the Crown and leased to Kosciuszko Thredbo Pty Limited ("KT"). 9 On 7 January 2007, KT entered into an agreement for development with a number of parties for the redevelopment of the lodge. 10 Both the current and former SEPP required development consent to be obtained pursuant to the Act for the carrying out of the redevelopment works. 11 On 15 March 2007, KT submitted a development application to the New South Wales Department of Planning ("the Department") seeking approval for the carrying out of alterations and additions to the existing building located on the land (DA No 16-3-2007). 12 On 30 March 2007, KT submitted a separate development application to the Department which sought approval for the demolition of a building at the rear of the lodge (DA No 20-4-2007). 13 On 22 May 2007, the Department granted consent in relation to DA No 20-4-2007 subject to conditions. 14 On 6 November 2007, the Department received a final set of amended plans that had been proposed in relation to DA No 16-3-2007. Their submission had been agreed to by KT as part of that DA. 15 On 9 November 2007, the Department granted consent to DA No 16-3-2007 subject to conditions ("the development consent"). Condition B2 of the DA provided: B2 Commencement of Works

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Demolition, excavation, clearing, construction, subdivision, or associated activities must no commence until a Construction Certificate has been issued for the proposed development pursuant to the Environmental Planning and Assessment Act 1979. 16 On 13 and 14 November 2007, officers of the Department conducted inspections of the lodge site. They observed that the concrete footings had been poured for a new addition that was proposed to be constructed at the rear of the existing building and that a new concrete extension to the slab on the second level had also been poured. Further, several concrete block walls had been erected. No construction certificate had been issued. 17 During the inspection on 13 November 2009, Mr James Corrigan spoke to several of the directors of Fancott and Mr John Taylor, a person who had been employed by Fancott to supervise the building works. Mr Corrigan stated that because no construction certificate had been issued, all building work should immediately cease. It did. Mr Corrigan also stated that it was possible that a building certificate might be issued by the Department for the building works that had been carried out. 18 On 19 November 2007, Mr Shane Brown, a director of Fancott, attended the Department's offices to file an application for a building certificate for the works that had been observed. In the process he informed Mr Corrigan that construction had been ongoing for a period of approximately two weeks prior to the inspection on 13 November 2007. 19 As a result of its investigations, the Department confirmed that the construction works had been ongoing since 30 October 2007. It also confirmed that prior to pouring the foundations, the pier holes were inspected by an appropriately qualified engineer. 20 On 7 December 2009, an application for a construction certificate was sent to Mr Nathan Halstead, the principal certifier for the development. It was received by him on 13 December 2009. 21 On 21 December 2007, KT's architects send final construction drawings for the development to Mr Halstead in support of the application for the construction certificate. These were, as it transpired, the wrong drawings and the correct drawings were subsequently sent on 7 January 2008. 22 On 24 December 2007, the Department issued a building certificate to Mr Brown and an entity called Jakesam Developments Pty Ltd for the building works that it had observed. 23 On the morning of 2 January 2008, Mr Reid drove past the lodge and observed workmen present on site. He proceeded to question Mr John Taylor, another director of Fancott, whether a construction certificate had been issued for the work. Mr Taylor stated that a certificate had been obtained. This was incorrect. No certificate had in fact been issued. Mr Reid spoke to Mr Brown who repeated the erroneous information to him. 24 On the afternoon of the same day, Mr Reid conducted an inspection of the lodge site. During this inspection he observed that two rows of block work had been constructed on the footings that had been built at the rear of the site in October or November 2007. He noticed that the cement was still wet. 25 Later that day, while Department employees were present, workers engaged by Fancott demolished the two rows of block work and then ceased work. 26 On 3 January 2008, KT submitted a further application for a construction certificate for the lodge to Mr Halstead. The application was for a subset of the whole of the proposed construction project at the lodge. It sought approval for the construction of the slabs and lower walls of the development. 27 On 7 January 2008, a construction certificate was issued in respect of the application made by KT on 3 January 2008 ("the first construction certificate"). 28 On 17 January 2008, a second construction certificate was issued in respect of all remaining works but excluding works approved under the first construction certificate ("the second construction certificate"). 29 Building work then resumed and was completed. Evidence of Fancott 30 Fancott relied on an affidavit of Mr Alastair Bailey sworn 28 September 2009. Mr Bailey is one of the directors and the secretary of Fancott. 31 In his affidavit, Mr Bailey deposed that: (a) Fancott will not carry out any further development;

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(e) the company "was extremely sorry for breaching the law and for the trouble it has caused to the Department". 32 Fancott also tendered a reference from Whitehill Constructions attesting to the good character of another of Fancott's directors, Mr Shane Brown. Purpose of Sentencing 33 Section 3A of the Crimes (Sentencing Procedure) Act 1999 ("CSPA") provides that the purposes of imposing a sentence on an offender include: 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community. 34 The sentence of the Court is a public denunciation of the conduct of the offender. It must ensure that the offender is held accountable for his or her actions and is adequately punished. 35 The sentence must also deter the offender from committing a similar offence in the future (Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137 at [8]). Moreover, the sentence of the Court needs to operate as a "powerful factor" in preventing the commission of similar offences by persons who may be tempted to do so (Rae at [9]). 36 In the present proceedings, I accept the submissions of the Minister that paragraphs (a), (b), (e), (f) and (g) of s 3A of the CSPA are of particular relevance. 37 In Pittwater Council v Scahill (2009) 165 LGERA 289 (at [46]-[47]) Preston CJ stated the purpose of sentencing pursuant to s 3A of the CSPA, in the context of an offence involving the failure to obtain the necessary regulatory approval for the development work undertaken, as follows: [46] There is a need for the upholding of the integrity of the system of planning and development control. This system depends on persons taking steps to obey the law by ascertaining when development consent is required and then obtaining development consent before carrying out development: Byron Shire Council v Fletcher (2005) 143 LGERA 155 at [60]-[61]; Cameron v Eurobodalla Shire Council at [72]-[80]; Byers v Leichhardt Municipal Council [2006] NSWLEC 82 at [83], [85]; Gittany Constructions Pty Ltd v Sutherland Shire Council at [104]; and Garrett v Freeman (No. 5) (2009) 164 NSWLEC 287 at [58]. Development must be carried out in accordance with the terms of the development consent obtained: Gittany Constructions Pty Ltd v Sutherland Shire Council at [105].

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[47] The sentencing purpose of general deterrence is particularly relevant where the offender is in a business or industry that undertakes development or action that is regulated by the system of planning and development control. Persons and corporations engaged in demolition, excavation, and building and development work need to be warned by the sentence imposed by courts in cases involving unlawful demolition, excavation, and building and development work that all necessary consents must be obtained and complied with: Mosman Municipal Council v Menai Excavations Pty Ltd at [31], [32], [35]; Sutherland Shire Council v Nustas [2004] NSWLEC 608 at [18]; Byron Shire Council v Fletcher at [62]; Kari & Ghossayn Pty Ltd v Sutherland Shire Council (2006) 150 LGERA 231 at 68. Approach to Sentencing 38 It is a basic principle of sentencing law that the sentence imposed by the Court for an offence must both reflect and be proportionate to the objective circumstances of the offence and the personal or subjective circumstances of the defendant: Veen v The Queen (1979) 143 CLR 458 at 490 and Veen v The Queen (No 2) (1988) 164 CLR 465 at 472. Objective Gravity of the Offence 39 The primary factor to consider in determining sentence is the objective gravity or seriousness of the offence. It fixes both the upper and lower limits of proportionate punishment. It fixes the upper limit insofar as the sentence must not exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances: Veen v The Queen (No 2) at 472, 485-486, 490-491 and 496; Hoare v The Queen (1989) 167 CLR 348 at 354. It fixes the lower limit because allowance for the subjective factors of the case ought not produce a sentence which fails to reflect the objective gravity or seriousness of the offence: R v Dodd (1991) 57 A Crim R 349 at 354; R v Nichols (1991) 57 A Crim R 391 at 395; Garrett v Freeman (No 5) (2009) 164 LGERA 287 at [51] and Pittwater Council v Scahill (2009) 165 LGERA 289 at [50]. 40 In determining the objective gravity or seriousness of the offences, the circumstances of the offences to which the Court may have regard include (see Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [163] and Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 at [110], both cited in Hawkesbury City Council v Johnson; Hawkesbury City Council v Johnson Property Group Pty Limited (No 2) [2009] NSWLEC 6 at [36]-[38]): (a) the maximum penalty for the offence;

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47 The prosecutor submitted that in these circumstances, in determining the appropriate penalty for the two offences involving a contravention of condition B2 of the development consent it was appropriate to have regard to the lower penalty (see Canterbury City Council v Daoud [2007] NSWLEC 135 at [44]). I agree. 48 Having said this, the corollary of this submission is that the offence of carrying out building works without development consent is objectively a much more serious offence. Harm to the Environment 49 The parties agreed that no harm was caused by the commission of the three offences. The redevelopment was constructed properly with all of the geotechnical and particular engineering requirements of this site having been met. Fancott's State of Mind 50 An offence against s 76A(1)(b) of the EPAA is a strict liability offence and therefore mens rea is not an element of the offence (Scahill at [69]). Nevertheless the state of mind of an offender at the time of the offence is relevant insofar as it can have the effect of increasing or decreasing the seriousness of the crime. Thus a strict liability offence that is committed intentionally or recklessly is objectively more serious than one which is committed unintentionally (Scahill at [69]). 51 The prosecutor submitted that Fancott committed the first two offences (from 30 October to 13 November 2007) deliberately or intentionally inasmuch as it knew that it did not have development consent and knew that it did not have a construction certificate. 52 Fancott did not dispute this characterisation of its conduct and nor could it. I therefore find that in respect of the first two offences, it committed these two offences intentionally, which is a matter in aggravation rendering their commission objectively more serious (Scahill at [69]). 53 In relation to the third offence, the prosecutor conceded that its commission was not deliberate insofar as Fancott genuinely believed that as at 2 January 2008 it had been issued a construction certificate at the time the work occurred. The prosecutor, though, stated that this belief was reckless because Fancott had been sanctioned by the Department for carrying out works without a construction certificate as recently as November and December 2007 and that it did not take steps to ascertain whether in fact it had been issued prior to commencing the work in January was irrational. 54 Fancott contends that in the absence of any contextual evidence surrounding the holding of this belief, the prosecution cannot prove beyond reasonable doubt that it was reckless. 55 I do not agree and I accept the submissions of the prosecutor in this regard. It simply beggars belief that in light of events approximately one month earlier Fancott did not take what would have been simple steps to sight the construction certificate prior to commencing work. Absent any other explanation, I readily infer that Fancott held the belief as at early January 2008 that it had been issued a valid construction certificate recklessly. Again this is a factor in aggravation and increases the objective seriousness of the offence. Fancott's Reasons for Committing the Offence 56 In Scahill Preston CJ stated that (at [80]-[81]): [80] The criminality involved in the commission of an offence is to be measured not only by the seriousness of what actually occurred, but also by reference to the reasons of its occurrence: Axer Pty Ltd v Environmental Protection Authority (1993) 113 LGERA 357 at 366; Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 at [237]; Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242 at [140] and Garrett v Williams [2006] NSWLEC 785; (2006) 160 LGERA 115 at [120].

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[81] The carrying out of the offence to make a profit, or to save incurring an expense, or to avoid the cost of obtaining and implementing a statutory permission such as a development consent or environment protection licence increases the seriousness of the crime. Offenders should not profit from crime: Garrett v Williams [2006] NSWLEC 785; (2006) 160 LGERA 115 at [121] and cases therein stated. 57 It was not seriously a matter of controversy that the offences were commercially motivated. The window for their completion was narrow due to the exigencies of the contract and the climatic restraints of the lodge's location in an alpine region (construction only being permitted from October through to May). Simply put, any delay would have had acute financial consequences and it was expedient for Fancott to commence the redevelopment rather than to wait for the necessary regulatory approvals. 58 Fancott's reason for committing the offences aggravates their objective seriousness. Practical Measures and Fancott's Control over the Activities 59 At all times Fancott had control over the work carried out on the site that gave rise to the offences and thus could have taken practical measures to avoid the harm to the environment. These measures were simply that Fancott should have refrained from commencing any building works until the appropriate consents and certificates had been obtained by it. Conclusion on Objective Circumstances 60 Having regard to the fact that the conduct was either deliberate or reckless and was committed by Fancott for reasons of financial expediency and gain, the offences are considered to be of medium objective gravity. 61 In reaching this conclusion I take comfort from the observations of McClellan J in Bankstown City Council v Taouk Constructions Pty Ltd [2004] NSWLEC 402 (at [18]-[21]): [18] I am satisfied that the offence should be considered to be serious. There are, of necessity, under the structure of the planning law provided by Parliament, steps which must be taken before work can lawfully be carried out on any land. Those steps will, by their nature, sometimes involve the preparation of complex documentation and consideration by a Council and other relevant authorities of whether or not approval should be granted.

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(e) the financial means of Fancott. No prior convictions 65 In Veen v R (No 2) the High Court stated (at 477): [477] The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. 66 Neither Fancott nor any of its directors have any prior convictions for any environmental offences or indeed any offences (see s 21A(3)(e) of the CSPA and Gittany at [146]). I accept the submission made on behalf of Fancott that the commission of these offences was "an uncharacteristic aberration" by Fancott. Prior good character 67 I accept that Fancott is, but for the commission of these offences, an entity of prior good character (see s 21A(3)(f) of the CSPA). Early Plea of Guilty 68 Fancott pleaded guilty to the offences on the second mention date before the Court after discussions between it and the prosecutor had concluded. In not pleading guilty on the first mention date the utilitarian value of the plea was not diminished (see Rae at [58]-[64] and the authorities cited at [61]). Accordingly, in my view Fancott is entitled to the full 25% discount for its early plea of guilty (see ss 21A(3)(k) and 22 of the CSPA). Contrition and Remorse and Likelihood of Reoffending 69 Fancott has expressed its immediate and genuine contrition and distress for the commission of the offences (s 21A(3)(i) of the CSPA). This remorse was expressed through its corporate executives by the sworn written evidence of Mr Bailey and by Mr Brown in a conversation with Mr Corrigan at the Department's offices on 19 November 2007, where Mr Brown apologised to Mr Corrigan for "all this trouble". The contrition was reinforced by Mr Bailey's outline of steps implemented to avoid a repetition of such offences in the future. 70 I therefore have no hesitation in finding that Fancott has genuinely indicated its corporate contrition (Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299 at [214]) 71 This factor also makes it less likely that Fancott will re-offend in the future (s 21A(3)(g) of the CSPA). Cooperation with the Regulatory Authority 72 In addition to the displays of contrition referred to above, the evidence also demonstrates that at all times Fancott fully cooperated and assisted the Department in its investigation and prosecution of the offences (ss 21A(3)(m) and 23(1) of the CSPA). This cooperation, commenced at the earliest possible point in time. It culminated with the filing in Court of the Agreed Statement of Facts (see generally Waste Recycling at [216]-[223]). Payment of the Prosecutor's Costs 73 Fancott has agreed to pay the costs of the Minister fixed in the sum of $26,600. The payment of these costs is an aspect of its punishment (Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78]). 74 Furthermore, as Fancott submitted and as I accept, this matter could have been prosecuted in the Local Court which would in all likelihood have been less costly and could have been dealt with locally. It is a relevant matter for consideration in determining an appropriate sentence (Eurobodalla Shire Council v Tip It Today Broulee Pty Ltd [2007] NSWLEC 274 at [34]). Capacity to Pay Fines 75 Turning to the financial position of Fancott, there is no suggestion that it will not have the capacity to pay any fine imposed on it by way of penalty (see s 6 of the Fines Act 1996). Conclusion as to Subjective Circumstances 76 The subjective circumstances of Fancott mitigate to a reasonable degree the sentence to be imposed. Appropriate Penalty for Each Individual Offence 77 In Gittany, the Court stated the following applicable principles in relation to deterrence as a component of an appropriate penalty for an environment and planning offence (at [188]-[190] and [192]): [188] In fixing the appropriate punishment for the offences, the Court needs to consider the purposes of sentences relevant to the offences in this case.

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[192] To achieve general deterrence, courts need to impose a penalty that not only acts as a warning to others but also makes it worthwhile that the cost of taking precautions to avoid committing the offence (such as by obtaining and complying with development consents be undertaken): Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359-360; Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [139]-[141], [148]-[157]. 78 One of the purposes of the Court in imposing a sentence is to prevent crime by deterring the offender and other persons from committing similar offences. This purpose is enshrined in s 3A(b) of the CSPA. 79 A person will not be deterred from committing environmental offences by the imposition of nominal fines (Bentley at [140]). Equally, the sentence imposed by the Court must show the denunciation of the crime committed and take into account the moral outrage of the community (Bentley at [143]). The community is entitled to expect that the Court will exercise its discretion to impose penalties commensurate with the community's views. 80 In the circumstances of the present case, the need to specifically deter Fancott from repeating the conduct that resulted in the commission of the offences in the future is, on the evidence outlined above, very limited. 81 There is, however, a need to ensure general deterrence in relation to other developers who may be tempted to commence construction works without having obtained the necessary approvals. As was recently stated by Preston CJ in Scahill (at [44]-[47]): [44] Most importantly, the sentence of the Court needs to operate as a powerful factor in preventing the commission of similar crimes by persons who might be tempted to do so by the prospect that, if they are caught, only light punishment will be imposed: R v Rushby [1977] 1 NSWLR 594 at 597. This is particularly so in the context of unlawful development, having regard to the policy considerations articulated in a number of cases including Mosman Municipal Council v Menai Excavations Pty Ltd (2002) 122 LGERA 89 at [32]-[35]; Sutherland Shire Council v Turner [2004] NSWLEC 774 at [24]; and Carlino v Leichhardt Municipal Council (2005) 144 LGERA 235 at [32]-[34].

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[47] The sentencing purpose of general deterrence is particularly relevant where the offender is in a business or industry that undertakes development or action that is regulated by the system of planning and development control. Persons and corporations engaged in demolition, excavation, and building and development work need to be warned by the sentence imposed by courts in cases involving unlawful demolition, excavation, and building and development work that all necessary consents must be obtained and complied with: Mosman Municipal Council v Menai Excavations Pty Ltd at [31], [32], [35]; Sutherland Shire Council v Nustas [2004] NSWLEC 608 at [18]; Byron Shire Council v Fletcher at [62]; Kari & Ghossayn Pty Ltd v Sutherland Shire Council (2006) 150 LGERA 231 at 68. Consistency in Sentencing 82 A relevant consideration in sentencing is the ascertainment of the existence of a general pattern of sentencing by the courts for offences such as the offence in question (Gittany at [179]-[183]). 83 The proper approach is for the Court to look at (Gittany at [182]): [182] … "whether the sentence is within the range appropriate to the gravity of the particular offence and to the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence (other than that of a co-offender) which merely forms part of that range": R v Morgan (1993) 70 A Crim R 368 at 371 and Capral Aluminium Ltd v Workcover Authority of NSW (2000) 49 NSWLR 610 at 641. 84 Of course care must be taken because each case is different and a sentence in one case does not demonstrate the limits of a sentencing judge's discretion (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 365 and Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 at 312). 85 Several cases involving the same or similar offences were put before the Court to demonstrate the available range of penalties that would be appropriate. Most are conveniently summarised in the judgment of Pain J in Council of the Municipality of Kiama v Furlong [2009] NSWLEC 139 (at [35]-[41]) which are reproduced for the sake of convenience: [35] A principle of sentencing is consistency of sentencing so that like cases should receive like penalties. Consideration of similar cases can be of assistance in informing the range of penalty which should be considered, subject always to the need to consider the individual circumstances of a particular case. The Council submitted that relevant cases for the purpose of considering an appropriate penalty were set out in The Council of the City of Ryde v Felici [2009] NSWLEC 27. In that case the defendant, a builder, completed an owner's consent form relating to a DA for extensions to his residential property. Before the DA was lodged the defendant commenced the works, being the extension of an existing bedroom and the addition of a new garage. The works were in accordance with the plans lodged with council as part of the DA. The defendant was aware that the DA required determination before works could be lawfully commenced. At the time of the sentence hearing a building certificate had been applied for but not yet determined by the Council. The works were not extensive and the offence was described as being at the lower end of seriousness although not trivial. A penalty of $16,000 was imposed after taking into account mitigating factors.

Minister for Planning v Fancott Pty Ltd

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Judgment (54 paragraphs)

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