Willoughby City Council v BCPD Pty Limited

Keir v Sutherland Shire Council [2004] NSWLEC 754 CASES CITED: Mosman Municipal Council v Menai Excavations Pty Ltd [2002] NSWLEC 132, 122 LGERA 89 Mosman Municipal Council v Waratah Village Partners Pty Ltd [2003] NSWLEC 101

PROSECUTOR: Mr T Howard, barrister SOLICITORS Mallesons LEGAL REPRESENTATIVES: DEFENDANT: Mr D Wilson, barrister SOLICITORS Andrew A Torok

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

JUDGMENT INTRODUCTION 1 HIS HONOUR: The defendant BCPD Pty Limited has pleaded guilty to the charge that between about 23 February 2009 and about 4 March 2009, at Willoughby, it committed an offence against s 125(1) of the Environmental Planning and Assessment Act 1979 (EPA Act) in that it did the following thing which was forbidden to be done by s 76A(1)(a) of the Act: "carried out development on land, being development which required development consent under the provisions of an environmental planning instrument which applied to the land, where a development consent had not been obtained and was not in force with respect to the development"

2 The defendant is now before the Court for sentencing. 3 The land on which the development was carried out was at 12 Second Avenue, East Willoughby. The forbidden development was demolition of a 1920's Californian bungalow, except for the sandstone foundations, front steps and part of the front landing. The environmental planning instrument which required development consent for the development was the Willoughby Local Environmental Plan 1993 (WLEP). The land was located within the Willoughby Park Conservation Area, being a conservation area as defined in the WLEP.

4 The defendant was engaged to carry out demolition and building works on the land. The demolition the subject of the offence was carried out on its behalf by its sole director and shareholder, Mr Michael Mayhew, and persons acting under his authority and direction. Mr Mayhew was a licensed builder of some 20 years experience.

THE EVIDENCE 5 The bungalow on the land was in a bad state and could not be lived in comfortably. Alterations and additions to the bungalow were designed by Catherine Findlay, a building designer retained by the owners.

6 On 16 October 2008 Ms Finlay lodged a development application with the prosecutor council for proposed alterations and additions to the bungalow. The accompanying drawing depicted demolition of the rear part of the bungalow but the retention of the front part, including retention of the front façade, external side walls, roof frame and various internal walls and floors in the front part.

7 In an email of 7 November 2008, Ms Finlay invited Mr Mayhew to tender and said that other than the street façade, the building was to be demolished and rebuilt. In November 2008 Ms Finlay gave Mr Mayhew a set of plans drawn by structural engineers dated November 2008 and marked "Preliminary" which reflected what she said.

8 At a meeting shortly afterwards, Ms Finlay told Mr Mayhew that the clients wanted the front façade replaced as well and that they were going to do that by way of a modification application to the council after the building work started, and that he should tender on the basis that the façade was also to be demolished. He agreed to do so. 9 In December 2008 Mr Mayhew submitted a tender on the basis the whole building was to be demolished (except for the sandstone foundation). After discussions with the designer, Mr Mayhew submitted a revised tender. 10 On 23 January 2009 the council granted development consent 2008/754 (D) to the application which had been lodged by Ms Finlay. The approved plans depicted demolition of the rear part of the bungalow but the retention of the front part including retention of the front façade external side walls, roof frame and various internal walls and floors in the front part. The plans also showed replacement of tiles on the roof. It was this proposed development which was earlier notified to the occupants of neighbouring properties.

11 On 16 February 2009 a contract between the defendant and the owners was signed at a meeting between Mr Mayhew, the designer and the owners. The contract plans showed that the building was to be demolished, except for the front façade.

12 Thus, the contract plans were very different from the plans approved by the council. There were discussions at this meeting about the designer making a modification application for the front façade, the defendant starting work as soon as possible and other matters.

13 On 23 February 2009 a construction certificate was issued for the approved work. The construction certificate plans were the same as the council approved plans.

14 Mr Mayhew proceeded with the works. By 3 March the bungalow was demolished except for the front façade which was propped up. Mr Mayhew's reasons for the props were, first, that he had not been told that the modification application was through and, secondly, to ensure safety in the demolition. In Mr Mayhew's view, the removal of the roof and the rest of the demolition made the front façade unstable and dangerous. It was bowing and cracks appeared in the wall and lintels. He did not mention this to WorkCover officers who inspected the work on 3 March 2009.

15 On 3 March 2009 Mr Mayhew informed the designer that the front façade was unsafe. She said "The wall is coming down anyway so safety is the main issue". She did not say that council approval had been obtained to demolish the front façade.

16 On 3 March 2009 the designer sent an email to the owners stating that (a) Mr Mayhew had informed her that day that there was structural damage to the side and front walls as well as to the overhead lintels of the front door and window, which had been exposed in the normal course of the demolition; (b) Mr Mayhew requested a site meeting with the engineer because the walls were unsafe and structurally unsound to retain; (c) the engineer was on vacation and not able to assist; (d) the situation needed to be dealt with quickly and "It is to our best interests for safety and structural stability to move forward and replace and repair the damaged walls. The construction will replicate the period of your home and reproduce all the detail that you love about the house".

17 On 4 March 2009 Mr Mayhew demolished the front façade. All that remained of the bungalow were the sandstone foundations, front steps and part of the front landing.

18 On 4 March 2009, in response to complaints concerning demolition of the façade from nearby residents, a council officer visited the land and questioned Mr Mayhew. Mr Mayhew told him that the plans he was working off were given to him by the designer and showed that only the front façade was to be retained; that they tried to retain it by shoring and propping but found cracks in the lintels, a substantial bow in a side wall and its general condition was poor; and his plans indicated that the rest of the dwelling walls were to be demolished. Mr Mayhew showed the council officer the contract plans. The officer showed him the council approved plans which were different.

19 Mr Mayhew produced a camera. He told the officer he took photos of the front façade when it was propped and discovered the lintels above the windows were cracked and the entrance wall had a 40-50 mm bow in it. The officer viewed the photos. Due to the size of the photos, the officer could not see the details except for cracked lintels. Mr Mayhew said that after he inspected the façade and found the cracks he telephoned the designer to discuss its condition and they decided, based on the structural defects he had observed, that the front façade should be demolished.

20 On 5 March 2009 the council issued a stop work order.

21 On 5 March 2009 Mr Mayhew wrote a letter to the owners. Among other things, he wrote that the front façade wall was potentially in danger of collapse; that the decision was made to remove and rebuild it as per the original design; and that he was unaware the contract drawings altered greatly from the council approved drawings.

22 On 24 April 2009 the designer lodged development application D090218 with the council for the construction of a single storey dwelling-house to replace the one which previously stood on the land, as approved to be altered by the January 2009 development consent.

23 A council report of 5 August 2009 recommended that the April 2009 development application be approved. It stated that the proposed new dwelling is almost exactly the same as the front portion of the former dwelling, required to be retained under the earlier consent and the approved rear additions and alterations approved under the earlier consent. The report noted the conditions and recommendations of the council's heritage architect (Ms Elizabeth Fink) to reduce the heritage impact of the dwelling upon the heritage character of the conservation area, and that in response to her comments amended drawings were submitted. The report's conclusion was as follows: "The proposal, as amended and as supported by the more detailed schedule of materials and finishes, is generally satisfactory. Subject to further detailing set out in conditions 4 and 8 in the Recommendation, the proposal represents both a faithful reproduction of the dwelling which stood on the site and the alterations and additions approved by way of Consent 2008/754. Council's heritage architect, as indicated in this report, is generally satisfied with the proposed development, including its architectural details and external materials and finishes. Where additional detailing is required in a number of areas, such as the underside of the verandah awning, these matters are required in conditions 4 and 8.

The areas of departure from the plans of Consent 2008/754 have been documented in this report and all represent reasonable departures which are minor and will not affect the reinstatement of a dwelling which will contribute to the conservation area's streetscape and associated amenity."

24 On 28 August 2009 the council granted development consent. Subsequently, a construction certificate issued, and the defendant commenced works pursuant to those approvals. SENTENCING PRINCIPLES 25 The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (CSP Act): " 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." 26 In determining the appropriate sentence the Court must consider the aggravating, mitigating and other matters specified in s 21A. The sentence must reflect the objective seriousness of the offence as well as the personal or subjective circumstances of the offender.

27 In passing sentence on an offender who has pleaded guilty, the court must take into account the fact that the offender has pleaded guilty and the timing of the plea and accordingly may impose a lower sentence than it would otherwise have imposed: s 22 CSP Act. The Court may impose a lesser penalty than otherwise, having regard to the degree to which the offender has assisted, or undertaken to assist, law enforcement authorities in the prevention, detection or investigation of, or in proceedings relating to, the offence: s 23 CSP Act. OBJECTIVE SERIOUSNESS 28 In determining the objective seriousness of the offence, the circumstances of the offence to which the Court may have regard include: the nature of the offence; the maximum penalty for the offence; the harm caused to the environment by commission of the offence; the state of mind of the offender for committing the offence; the offender's reason for committing the offence; the foreseeable risk of harm to the environment by commission of the offence; and the practical measures to avoid harm to the environment.

29 The maximum penalty for this offence is $1.1 million.

30 Carrying out development without consent in contravention of s 76A(1)(a) of the EPA Act tends to undermine several of the objects of the Act expressed in s 5: namely, to encourage the proper, development and conservation of cities for the purpose of promoting the social and economic welfare of the community and a better environment; to encourage the promotion and co-ordination of the orderly and economic use and development of land; and to provide increased opportunity for public involvement and participation in environmental planning and assessment.

31 The demolition of virtually the entire house, in the absence of an assessment of the heritage impact, also tended to undermine one of the express aims and objectives of the WLEP "to retain the character of the urban conservation areas" (cl 2(n)) because it eroded the significance of the Willoughby Conservation Area, albeit it was only one of the houses in that area.

ENVIRONMENTAL HARM 32 Elizabeth Fink, a heritage architect employed by the prosecutor council, gave evidence that:

(a) the loss of the dwelling eroded the significance of the conservation area which had a predominant uniformity of 1920's bungalow type housing; (b) if the contract drawings had been submitted to her for assessment, she would have required from the applicants a structural report justifying the extent of demolition and a detailed heritage impact statement. An independent structural engineer would have been commissioned to ratify the reports. If there was agreement, then she would have put forward a number of heritage conditions and recommendations including retention of the existing timber windows in the new front façade. 33 Robert Staas, a heritage consultant and architect, gave evidence for the defendant. I do not see much difference between him and Ms Fink except for his conclusion that there has been minimal heritage harm in relation to the significance of the area. That conclusion is substantially based on his assessment and that of the council's report, referred to at [23] above, of the acceptability of the new dwelling to contribute to the streetscape and amenity of the conservation area. 34 I accept Mr Mayhew's evidence that there were structural defects in the front façade which, in his view, justified demolition of the front façade. I am unable to say whether the council would have agreed with that assessment because there was no process of seeking council approval. I am satisfied that if that process had been followed and the council had agreed, it is likely that conditions would have been attached to the approval which would have mitigated the heritage impact of the demolition along the lines deposed to by Ms Fink. To that extent I consider that there was some environmental damage caused by the unauthorised demolition. I agree that the damage has been mitigated by the heritage acceptability of the new building. I conclude that the environmental harm was relatively minor.

STATE OF MIND 35 On the evidence, Mr Mayhew was misled by the designer into believing that the contract drawings had been approved by the council. Therefore he thought that the council had approved demolition of virtually everything except the front façade. He believed that the designer intended to seek approval of the demolition of the front façade after works started. After everything else was demolished, he propped up the front façade because he knew no consent had yet been obtained to demolish it and to ensure safety in its demolition. On 3 March 2009 he formed the view that the removal of the side walls and roof made the front façade dangerous and unstable. For that reason he and the designer decided to demolish the front façade. 36 Two criticisms should be made as to his state of mind. First, although he was misled, as an experienced builder he should have been careful to work only off plans which bore the council's approval certificate. Secondly, while I accept that he considered the front façade had become unstable and dangerous, nevertheless he demolished it knowing that council approval to demolish it had not been obtained, without taking any steps to ensure that an application to demolish it had been lodged and approved, and without prior notice to the council. OTHER CONSIDERATIONS 37 It is apparent that the defendant did not commit the offence for financial reasons; that the risk of harm to the environment from doing unapproved works was foreseeable; that practical measures to avoid harm to the environment could have been taken if Mr Mayhew had ensured that he only worked off council approved drawings and that, for the same reason, the defendant had control over the causes of the offence.

CONCLUSION AS TO OBJECTIVE SERIOUSNESS 38 The prosecutor submits that in all of the circumstances, the matter is objectively serious, but having regard to the moderate contribution this particular bungalow made to the overall significance of the Willoughby Park Conservation Area and to the defendant's particular role and state of mind, the matter falls at the lower end of the mid-range of cases that have been decided by this Court for this type of offence in terms of its objective seriousness. I accept the submission.

DETERRENCE 39 Mr Mayhew has expressed contrition, has said he has learnt his lesson, and has adopted a practice of only working off council approved plans. I do not believe that he or his company are likely to re-offend. In the circumstances, I do not think that there is a need for specific deterrence.

40 There is a need for general deterrence. General deterrence has a central role in sentencing for an offence involving unlawful building works. As McClellan J said in Keir v Sutherland Shire Council [2004] NSWLEC 754: "13 Offences, such as the present, require a penalty which reflects the serious nature of the breach of the law which has occurred. The resources of the community are not sufficient, and never could be, to allow for councils to constantly supervise the work which licensed builders carry out on a daily basis. By enacting the Environmental Planning and Assessment Act and similar legislation, the legislature has provided a frame work of regulation which is in the interests of the whole community, although its effectiveness depends upon individuals observing its provisions. Builders and others who have been granted licences by the relevant bodies to carry out building work carry a particular responsibility to ensure the work that they do is carried out in accordance with the law. Accordingly, when such a person breaches the law the penalty imposed must be sufficient, not only to provide adequately to punish the breach, but to ensure that others with licences to carry out similar work are reminded of their responsibilities under the law.

15 The resources of Councils are simply not sufficient to enable every building site to be adequately supervised and, accordingly, to impose a different penalty where the council has happened upon illegal work than where a builder has carried out work without being detected, would send an inappropriate message to the building community." SUBJECTIVE FACTORS 41 The defendant has no record of prior convictions. 42 The defendant appears to be of good character, a responsible corporate member of the community, and enjoys a good reputation in business. 43 I think that the defendant is unlikely to re-offend.

44 The defendant through Mr Mayhew has shown remorse for the offence and has provided evidence that it has accepted responsibility for its actions. 45 It appears that the defendant through Mr Mayhew has given assistance to the council as the law enforcement authority.

46 There is no suggestion that the defendant is entitled to other than the full discount of 25 per cent for the utilitarian value of the plea of guilty. CONSISTENCY IN SENTENCING 47 I have been unable to derive much assistance in this case from the sentencing statistics on the JIRS database provided by the prosecution. 48 Some assistance is derived from a similar case, Mosman Municipal Council v Menai Excavations Pty Ltd [2002] NSWLEC 132, 122 LGERA 89 (Lloyd J). There the defendant pleaded guilty to an offence against s 125(1) of the Environmental Planning and Assessment Act by of causing to be carried out development, namely demolition of a private hospital building, without prior development consent. The building was a heritage item (unlike the present case) in a heritage conservation area. A development consent was granted to convert the hospital to a retirement village which required a portion of the fabric of the building to be retained. The defendant contracted to demolish the whole building and did demolish it. The defendant was an experienced demolition contractor who would have been well aware of the need to obtain development consent before carrying out demolition work. The defendant believed that the developer had obtained all necessary consents. It was held that as the offence was one of strict liability, there is an onus on those who carry out development to ensure that any necessary development consent had been obtained. Reliance placed on others to obtain the necessary consent did not operate to exculpate the defendant. As a consequence of the defendant's means to pay a fine, the penalty imposed was less than otherwise. The resultant penalty of $40,000 was discounted by a further 25 per cent to $30,000 to reflect the defendant's early plea of guilty and other mitigating factors. The defendant was convicted, fined $30,000 and ordered to pay the prosecutor's costs. 49 In proceedings against the developer relating to the same unauthorised development, the developer was fined $28,000 and ordered to pay the prosecutor's costs: Mosman Municipal Council v Waratah Village Partners Pty Ltd [2003] NSWLEC 101 (Pain J).

COSTS 50 The defendant has agreed to pay the prosecutor's costs agreed in the sum of $45,000. CONCLUSION 51 Synthesising all the circumstances, I consider that a fine of $40,000 is appropriate which I discount by 25 per cent for the utilitarian value of the plea of guilty to $30,000. ORDERS 52 The orders of the Court are:

1. The defendant is convicted of the offence as charged. 2. The defendant is to pay a fine of $30,000. 3. The defendant is to pay the prosecutor's costs in the sum of $45,000. 4. The exhibits may be returned.

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