Owners Strata Plan 37762 v Pham and Ors

Land and Environment Court (NSW)|2007-07-01|Before: Pain J, Mr P

CITATION : Owners Strata Plan 37762 v Pham and Ors (No 2) [2007] NSWLEC 306

APPLICANT Owners Strata Plan 37762 FIRST RESPONDENT Dinh Phuong Dung Pham PARTIES : SECOND RESPONDENT Kiet Luu THIRD RESPONDENT Liverpool City Council FOURTH RESPONDENT Dinh Ky Pham

KEY ISSUES: Contempt :- penalty for contempt where no purging of contempt - whether indemnity costs should be awarded - whether motion for extension of time to comply with orders ought be granted

Bourke Shire Council v Dwyer (1993) 79 LGERA 185; Campbelltown City Council v Toth [2005] NSWLEC 186; Colgate-Palmolive Company & Anor v Cussons Pty Ltd (1993) 46 FCR 225; EMI Records Ltd v Ian Cameron Wallace Ltd [1983] 1 Ch 59; Degmam Pty Ltd (in Liq) v Wright (No 2) [1983] 2 NSWLR 354; Environment Protection Authority v Thaler [2005] NSWLEC 109; Environment Protection Authority v Waight [2003] NSWLEC 124; X Ltd v Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1; KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; Manly Council v Arslan, M [2005] NSWLEC 646; CASES CITED: Newcastle City Council v Leaway Pty Ltd & Ors [2005] NSWLEC 305; Owners of Strata Plan 37762 v Pham and Ors [2005] NSWLEC 663 ; Owners Strata Plan 37762 v Pham and Ors [2007] NSWLEC 252; Parramatta City Council v Roy D R Services Pty Ltd, Ray Yong Xu & Ors [2005] NSWLEC 756; Pelechowski v The Registrar, Court of Appeal (1999) 198 CLR 435; Permewan Wright Consolidated Pty Ltd v Attorney General [1978] 35 NSWLR 365 ; Primelife Corporation Ltd v NewPark Pty Ltd & Andrejic [2003] VSC 106; Prior's Bus Service Pty Ltd v Eurobodalla Shire Council [2003] NSWLEC 98; Registrar of the Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309; Sutherland Shire Council v Sawyer [2000] NSWLEC 162; The Owners - Strata Plan No 37762 v Dinh Phuong Dung Pham and Anor [2006] NSWSC 1287; Young v Jackman (1986) 7 NSWLR 97

DATES OF HEARING: 21 May 2007 25 May 2007

APPLICANT Mr P Tomasetti SOLICITORS Andreones

LEGAL REPRESENTATIVES: FIRST, SECOND and FOURTH RESPONDENTS Mr Q Nguyen SOLICITORS Al Chi Hoang Solicitors and Barristers THIRD RESPONDENT N/A

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40358 of 2005 Owners Strata Plan 37762 v Pham and Ors (No 2)

JUDGMENT 1 Her Honour: In Owners Strata Plan 37762 v Pham and Ors [2007] NSWLEC 252 I found the First, Second and Fourth Respondents guilty of contempt. I must now sentence those Respondents. The circumstances of the contempt are set out in detail in my earlier judgment. The Third Respondent has no role in this matter.

2 Section 21A "Aggravating, mitigating and other factors in sentencing" of the Crimes (Sentencing Procedure) Act 1999 applies. No aggravating circumstances arise. Section 22 "Guilty plea to be taken into account" of that Act does not apply as no plea of guilty was entered in this case.

3 The Applicant's counsel argued that this was a serious matter and warranted a substantial penalty. A number of cases on sentencing for contempt in this Court were provided where penalties ranged from $50,000 in Parramatta City Council v Roy D R Services Pty Ltd, Ray Yong Xu & Ors [2005] NSWLEC 756 , Newcastle City Council v Leaway Pty Ltd & Ors [2005] NSWLEC 305, Environment Protection Authority v Thaler [2005] NSWLEC 109 to $15,000 in Environment Protection Authority v Waight [2003] NSWLEC 124, Prior's Bus Service Pty Ltd v Eurobodalla Shire Council [2003] NSWLEC 98, and $10,000 in Manly Council v Arslan, M [2005] NSWLEC 646. In Campbelltown City Council v Toth [2005] NSWLEC 186 $7,500 was imposed for failure to comply with Court orders preventing the use of premises. 4 The Respondents relied heavily on the fact that I did not find the contempt was contumacious, that is, done deliberately in defiance of the Court's authority, and relied on parts of my judgment. In my judgment finding contempt proven I set out extracts at [19] and [22] from the affidavits of the Second and Fourth Respondents filed in those proceedings in which they give their (erroneous) view of the effect of Court orders made by consent on 10 May 2006, and also state that had they known that the use of the spray booth and associated panel beating was unlawful and in breach of Court orders they would have ceased that activity. 5 The Respondent's counsel relied on cases referred to in my judgment on contempt at [47] as supporting his submission that there should be no or minimal penalty. The principal basis for this submission was that the contempt in those matters was more serious than in this matter. In Primelife Corporation Ltd v NewPark Pty Ltd & Andrejic [2003] VSC 106 Nettle J did not impose a penalty in circumstances where the contempt was found to be contumacious. He took into account that the defendant had already been arrested and brought before the court in relation to the contempt. In Windsurfing Inc v Sailboards Pty Ltd (1986) 19 FCR 110 the contempt found was serious and the necessity for serious disciplining of the defendant was held to be necessary by Burchett J. He fined the defendants $2,500 each and ordered them to pay costs. The Respondents counsel argued that was an indicative penalty for a more serious contempt than in this matter. I note that decision was in 1986. In Bourke Shire Council v Dwyer (1993) 79 LGERA 185 Talbot J imposed a fine of $1,500 the defendant having pleaded guilty to the charge of contempt. Numerous fines in this Court to which I refer above at par 3 have been far more substantial. 6 The Respondents have not filed any affidavit or other evidence in relation to matters relevant to sentencing. It was not clear that any reliance was placed on the provision for taking into account the Respondents' capacity to pay as provided under the Fines Act 1996 until questions were asked by me of the Respondents' counsel. Their counsel indicated that he wished to advise the Court about the Respondents' respective ages and family circumstances from the Bar table. When advised this was not evidence he called the Second Respondent to give oral evidence about his family circumstances and financial position. The Second Respondent is 31 years of age and married with one child. The Second Respondent stated that his sole income was from the smash repair business conducted on the First Respondent's premises and that the amount was $35,000 to $47,000. Rent of $1,200 per month was paid for the business. As there was no notice given that such financial evidence was to be relied on and no documentation supplied by the Second Respondent which could provide objective verification of that oral evidence the capacity of the Applicant's counsel to test that evidence was very limited. The usual financial documents commonly relied on were not tendered. It is therefore difficult to give the Second Respondent's oral evidence as to his financial means much weight. The Second Respondent did apologise on oath for his contempt and expressed contrition and remorse. 7 The Fourth Respondent also took the oath in the witness box but without the aid of an interpreter his truncated oral evidence was impossible to understand. He had an interpreter during the contempt proceedings but no explanation was forthcoming as to why there was no interpreter in Court for the sentence hearing, apart from a statement from the Respondents' counsel that he had asked his client to organise an interpreter. The First Respondent was not present in Court and nothing was said about her absence. Nothing else specifically on her behalf was presented by her counsel. Application for extension of time/purging of contempt 8 There is no recent evidence from the Respondents that the Court's orders have been complied with. The Respondents filed a Notice of Motion on 10 April 2007 seeking an extension of time for compliance with the orders of Cowdroy J in relation to which I have made findings of contempt. The orders sought are: 1. That the orders made by Justice Cowdroy in this Court on 6 December 2005 and on 13 September 2005, for the postponement of orders made on the same day, which orders were to: a. restrain the respondents from using the spray booth within Lot 5 without the consent being lawfully obtained from Liverpool Council and

b. require the respondents to reinstate those parts of the common property which were altered pursuant to a development consent to their condition prior to their alteration be extended for such time as to enable the Consumer Trader and Tenancy Tribunal to resolve the application currently before it. 9 I do not fully comprehend the Respondents' counsel's position on this aspect of this matter. According to his written submissions the Respondents' counsel agreed with the Applicant that the contempt motion ought be heard before the motion for extension of time (as has now occurred) and stated that the Respondents should be given an opportunity to purge their contempt prior to any extension of orders the subject of the contempt motion. Any application for an extension of Court orders was not, according to the Respondents' counsel's written submissions, an attempt to purge the Respondents of any alleged contempt. I frankly do not understand how that submission sits with the oral submissions that I should take into account the fact that the motion for extension of time had been filed on 10 April 2007. The further conundrum that arises is that if the extension of time for compliance with the Court's orders is granted, the Respondents arguably need not purge their contempt by complying with the orders as purging the contempt and being granted an extension of time to comply with the orders are mutually exclusive. The appropriate course therefore appears to be that I should consider the Notice of Motion for extension of time as the outcome of that will determine the attitude I should take to the failure to purge the contempt, an important matter in sentencing.

10 Reliance is placed on Pt 1 r 8 of the Land and Environment Court Rules 1996 (the Court Rules) which enables the Court to extend the period of compliance with orders. There is no specific date for the orders to be extended to. The Applicant opposes the order for extension of time being made.

11 A relevant chronology is: (i) Supreme Court decision of Rothman J in The Owners - Strata Plan No 37762 v Dinh Phuong Dung Pham and Anor [2006] NSWSC 1287 upholding the appeal of the Applicant against orders of the Consumer, Trade and Tenancy Tribunal (CTTT) handed down on 29 November 2007. (ii) Notices of Motion seeking contempt orders filed by the Applicant on 23 March 2007, served on 26 March 2007. (iii) An application to CTTT filed by one of the Respondents on 28 March 2007. (iv) Notice of Motion for extension of time to comply with orders dated 10 April 2007 filed by the Respondents. (v) Judgment of finding of contempt handed down on 9 May 2007. (i) Can Court hear the Notice of Motion? 12 The Applicant argued that I should not consider the Respondents' motion for an extension of time, relying on Young v Jackman (1986) 7 NSWLR 97. In that case Young J held that a court should not hear from a party who is held to be in contempt until such time as their contempt is purged as he considered he was bound to follow Permewan Wright Consolidated Pty Ltd v Attorney General [1978] 35 NSWLR 365 to that effect.

13 In Woollahra Municipal Council v Shahani (1990) 69 LGRA 435 Bignold J held that the Court did have discretion to hear from a party found to be in contempt. Neither decision is binding upon me. More recent cases than Permewan Wright such as KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189, Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (unreported, FCA, 1 July 1998) in the Federal Court suggest there is a discretion. That is also the conclusion in Nigel Lowe and Brenda Sufrin, Borrie & Lowe The Law of Contempt (3rd ed 1996) at 651-654 where numerous authorities such as X Ltd v Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1 are referred to. That there is judicial discretion appears to be the preferred view. However, it is unnecessary that I resolve this issue finally for the purposes of disposing of this motion. Assuming that I do have such discretion I consider I should refuse the orders sought for the reasons stated in part by the Applicant and for additional reasons. (ii) No grounds or evidence in support of motion 14 No grounds are advanced in the motion and it is not supported by any evidence. A copy of a document purporting to be a further CTTT application is attached to the written submissions of the Respondents' counsel. That is not evidence. There are also a number of submissions made in the Respondents' counsel's submissions which are not supported by any evidence. For example, it is submitted compliance with the orders of Cowdroy J on 13 September 2005 will require the Second Respondent to close his business. There is simply no evidence before the Court to support that submission. While I am prepared to accept that there will be an impact on the Second Respondent's business if the spray booth is unable to operate the extent of that impact is unknown. The impact, if any, on the First and Fourth Respondents is unknown. (iii) Cowdroy J's reasoning still applicable 15 On 6 December 2005 Cowdroy J extended time for compliance with the orders sought to be extended in this motion to 6 March 2006 for the Respondents to be restrained from using the spray booth and 3 April 2006 for the First Respondent to reinstate the common property altered pursuant to the invalid development consent. He considered that it was appropriate to do so given the application to the CTTT which was then pending. The Respondents' counsel argued that Cowdroy J's reasoning in its entirety still applies because another CTTT application has been filed and the findings of Rothman J in the Supreme Court appeal mean that it is very likely to succeed. Further, because Cowdroy J also held at [44] in Owners - Strata Plan 37762 v Pham and Ors [2005] NSWLEC 500 (13 September 2005) that: The applicant has submitted that on the basis of the evidence of complaints by owners of adjoining lots, the Court would not exercise its discretion in favour of the respondents. On the evidence before the Court, the Court cannot be satisfied that the complaints by the owners of adjoining lots in the strata plan are attributable to the operation of the spray booth. Although the Court accepts that problems have been experienced by the applicant's witnesses, the evidence as to the source of those complaints is inconclusive. The Court is not satisfied that such complaints necessarily result from activities carried out under the invalid consent.

That reasoning should also apply now, according to the Respondents' counsel.

(iv) Conclusion 16 Cowdroy J stated at [3] - [5] and [9] in his judgment Owners of Strata Plan 37762 v Pham and Ors [2005] NSWLEC 663 dated 6 December 2005: From before the date of judgment Ms Pham was actively seeking to obtain an order from the Consumer Tenancy and Trading Tribunal ("the CTTT"), requiring the applicant in these proceedings ("the body corporate") to give consent to the lodgement of a new development application in respect of the spray booth. The CTTT has now made its decision and has ordered the body corporate to grant its consent to the lodging of the development application for the spray booth. On 23 November 2005 Studdert J in the Supreme Court, Common Law Division, ordered the orders of the CTTT to be stayed pending further order. Such stay was granted in view of a challenge made by the body corporate against the decision of the tribunal. His Honour ordered the appeal to be expedited and has set the matter down for hearing on 20 February 2006. Resulting from that hearing it is possible that the decision of the CTTT may be set aside. However, if it is not set aside, and the orders are confirmed, it will entitle the first respondent to lodge a development application with Liverpool Council in respect of the spray booth. When this Court pronounced its orders on 13 September 2005 it was aware of the proceedings in the CTTT. It was for that reason that orders Nos 2 and 3 were postponed. … It is apparent that the environmental effects of the business in lot 5 are continuing. However, it is also apparent that there remains a possibility that a consent may be granted to the first respondent by Liverpool Council. It would be contrary to the Court's intention reflected in its judgment delivered on 13 September 2005 that the spray booth be dismantled and the premises be reinstated if, within a short time thereafter, a development consent is granted for that activity.

17 It is now June 2007 and the CTTT proceedings that Cowdroy J took into account in ordering an extension of time to comply with his orders are at an end. The orders made by the CTTT have been quashed by Rothman J in the Supreme Court on 29 November 2006. It is clear from the judgment of Cowdroy J dated 13 September 2005 that he was mindful at that stage that within a short time there was a possibility that development consent might be granted for that activity. That is no longer the case given the passage of time since his orders were made. Given that the extension of time to comply with the orders of Cowdroy J made by consent on 10 May 2006 was to 19 May and 18 June 2006 respectively and a further twelve months has now gone by, I do not consider the circumstances are the same as they were before Cowdroy J. It is not appropriate that I undertake my own assessment of how likely to succeed the current application before the CTTT is in light of Rothman J's decision, and I decline to do so. Nor do I take judicial notice as the Respondents' counsel urged upon me that a development application likely to be lodged with Liverpool Council in the future would be identical to the one approved on 13 October 2003 and therefore likely to be approved by Liverpool Council. If the Respondents are ultimately successful in their various applications and obtain development consent, the First Respondent's premises can be reinstated.

18 I do not consider I should exercise my discretion to grant the orders sought and accordingly the Notice of Motion for an extension of time is refused. It follows that the Respondents have not purged their contempt.

Level of penalty 19 I will now sentence the Respondents. The principles to be applied in sentencing in contempt matters were discussed in Registrar of the Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309. Kirby P stated at 314: A conviction of contempt of court is the conviction of an offence, criminal in nature. Punishment of the convicted contemnor must therefore take into account the considerations normally applicable to the punishment of crime and apt to uphold the purpose of this jurisdiction, viz, the undisturbed and orderly administration of justice in the courts according to law. Thus in determining the punishment which is apt to the circumstances which have led to a conviction of contempt, it is appropriate to bear in mind the purposes of punishing the contemnor; deterring the contemnor and others in the future from committing like contempts; and denouncing the conduct concerned in an approximately emphatic way. . . 20 Contempt of a court is a serious matter and general deterrence and denunciation of the conduct is a relevant sentencing consideration; see Pelechowski v The Registrar, Court of Appeal (1999) 198 CLR 435, Wood v Staunton (No 5) (1996) 86 A Crim R 183, amongst many other cases stating similarly. In Wood v Staunton (No 5) Dunford J set out ten matters to take into account in sentencing for contempt, not all of which are relevant in this case. Dunford J stated at 185: Those cases show that relevant matters for consideration in assessing the proper punishment for this type of contempt include:

the seriousness of the contempt proved;
whether the contemnor was aware of the consequences to himself of what he did;
the actual consequences of the contempt on the relevant trial or inquiry;
whether the contempt was committed in the context of serious crime;
the reason for the contempt;
whether the contemnor has received any benefit by indicating an intention to give evidence;
whether there has been any apology or public expression of contrition;
the character and antecedents of the contemnor;
general and personal deterrence; and
denunciation of the contempt. 21 In Wood v Staunton (No 5) Dunford J was considering contempt in the context of a witness refusing to answer questions in a Royal Commission, arguably a more serious contempt than that before me. His Honour was considering contempt in the context of whether a period of imprisonment should be ordered. While a more serious matter than that before me I consider some of the ten matters are relevant and useful to consider in this matter. Matters 3, 4 and 6 are not relevant. 22 In relation to matter 1, contempt is not of the most serious kind and I have accepted that the Respondents were not seeking to deliberately flout the Court's orders. In relation to matters 2 and 5, the evidence of the Second and Fourth Respondents in the contested contempt proceedings was that if they had known of the effect of the Court's orders they would have complied with the requirement to stop use of the spray booth (although the Fourth Respondent did not refer to the order requiring reinstatement of the common property). The failure to comply with the Court's orders has meant that the Second Respondent has been able to continue using the spray booth in his car smash repair business which he otherwise has development consent to operate. The First Respondent as owner has presumably continued to obtain benefit as a result. 23 I know nothing of the character and antecedents of the First and Fourth Respondents (matter 8).

24 There are few mitigating factors in terms of s 21A(3) before me because few were relied by the Respondents and their counsel in terms of evidence and submissions. The most relevant subsections potentially could be (a), (e), (f) (g) and (i) as follows: The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows: (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, … (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, … (i) the offender has shown remorse for the offence by making reparation for any injury, loss or damage or in any other manner, …

25 The only one of these addressed in any way was is s 21A(3)(i). Only the Second Respondent has provided a statement of contrition and remorse on oath which I accept (matter 7). I am able to take into account his financial means to a very limited extent as I do not have any objective evidence before me, such as taxation records, bank statements and information about assets and liabilities and general income, to enable a meaningful assessment of his financial means. 26 I consider the appropriate penalty in all the circumstances to the extent I have these before me, including the need for general deterrence and renunciation of the contempt, is $5,000 for the Second Respondent. 27 There is no evidence of contrition and remorse or an apology from the First Respondent or the Fourth Respondent. No mitigating factors are put forward for the First Respondent. I stated in my judgment on contempt that her evidence was simply that she had delegated her responsibilities to the Fourth Respondent. No explanation as to why she absented herself from Court at the sentence hearing was provided and no evidence was proffered on her behalf. An appropriate penalty for the Second Respondent is $10,000. A penalty of $8,000 is appropriate for the Fourth Respondent. 28 The Respondents were unsuccessful in the application for an extension of time to comply with the Court orders the subject of the contempt proceedings, a matter which they can only become aware of from this judgment. I will not fine the Respondents at this stage on a daily basis for the ongoing failure to purge their contempt as it open to me to do. I will give them the opportunity to purge their contempt before doing so. I will allow them a period of three weeks to purge their contempt, their counsel having requested seven days, as I have no specific evidence of how long will be required to reinstate the common property as required by order 3 of Cowdroy J of 13 September 2005. That is until 22 June 2007. Thereafter I will consider the imposition of a daily fine if it is necessary for the matter to be returned to me. 29 I note that under s 10 of the Fines Act 1996 application may be made to the Registrar of this Court for further time to pay a fine imposed.

Payment of share of fine to prosecutor 30 The Applicant has applied for an order under s 122 of the Fines Act which states: (1) This section applies where: (a) the Act imposing or authorising the imposition of a fine or other penalty does not make any provisions for its application when recovered, and (b) the prosecutor is not a police officer. (2) The court before which proceedings are taken to recover any such fine or other penalty may direct that such portion of it (not exceeding one-half) is to be paid to the prosecutor. (3) For the purposes of this section, fine does not include an amount of the kind referred to in section 4 (1) (e) or (f) . [this subsection is not applicable] 31 It is appropriate that the Applicant be paid half of the fines imposed by me given that it has had to take action to enforce the planning laws.

Costs of the contempt motion 32 The Court has broad discretion to award costs under s 69 of the Land and Environment Court Act 1979. The Applicant is seeking its costs of the contempt motion on an indemnity basis. The costs order sought by the Respondents' counsel is that each party should pay its own costs because the Applicant was not successful in obtaining a finding that the contempt was contumacious and in having a warrant for the arrest of the Respondents issue from the Court. It was therefore said the motion for contempt was unsuccessful.

33 The Applicant was successful in the sense that I made a finding of contempt against three of the Respondents in relation to the charges filed by the Applicant. The Applicant should not be deprived of its costs because it did not succeed on every point argued. The Applicant should have its costs of the contempt motion paid by the Respondents. 34 The issue then arises of whether costs ought be ordered on an indemnity basis. In Colgate-Palmolive Company & Anor v Cussons Pty Limited (1993) 46 FCR 225 Sheppard J at 233-4 identifies a number of circumstances where courts have held that a costs order ought be made on an indemnity basis. While not an exhaustive list of cases, which would be impossible to identify in any event, the award of costs on an indemnity basis against a contemnor is identified with the example of EMI Records Ltd v Ian Cameron Wallace Ltd [1983] 1 Ch 59 referred to. Similar observations were made in Degmam Pty Ltd v Wright (No 2) [1983] 2 NSWLR 354 at 358 (Holland J). One example of the award of indemnity costs in contempt proceedings in this Court is Sutherland Shire Council v Sawyer [2000] NSWLEC 162. I consider that indemnity costs should be awarded to the Applicant

Orders 35 The Court makes the following orders:

The First Respondent is found guilty and convicted of contempt of the Court's orders dated 10 May 2006.
The First Respondent is fined $10,000 payable within 28 days of today's date.
The Second Respondent is found guilty and convicted of contempt of the Court's orders dated 10 May 2006.
The Second Respondent is fined $5,000 payable within 28 days of today's date.
The Fourth Respondent is found guilty and convicted of contempt of the Court's orders dated 10 May 2006.
The Fourth Respondent is fined $8,000 payable within 28 days of today's date.
The Respondents are each ordered to pay 50% of the fine to the Prosecutor pursuant to the Fines Act 1996 s122(2).
The First, Second and Fourth Respondents must pay the Applicant's costs of the contempt motion on an indemnity basis.
The Respondents' Notice of Motion dated 10 April 2007 is dismissed.

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