Willoughby City Council v Livbuild Pty Ltd

R v Wickham [2004] NSWCCA 193 SZ v R [2007] NSWCCA 19; (2007) 168 A Crim R 249 Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 Category: Sentence Parties: Willoughby City Council (Prosecutor) Livbuild Pty Ltd (Defendant) Representation: Counsel: Mr J Johnson (Prosecutor) Ms A Berglund (Defendant)

Solicitors: King & Wood Mallesons (Prosecutor) Adams & Partners (Defendant) File Number(s): 50764 and 50767 of 2014

Livbuild Undertakes Unauthorised Building Works

1. The defendant, Livbuild Pty Ltd ("Livbuild"), is charged with two offences pursuant to s 125(1) of the Environmental Planning and Assessment Act 1979 ("the EPAA") for unauthorised building works contrary to s 76A(1) of that Act between 2009 and December 2012.
2. Mr Michael Rimac is the sole director of Livbuild. According to an affidavit sworn by him in the proceedings on 5 February 2015, the contents of which were unchallenged, Mr Rimac has held a building contractors licence since April 1990 and has operated Livbuild since 2002. He has been in the building industry since 1982.
3. The unlawful works, described in greater detail below, consisted of both internal and external works on a property located at 57 Minimbah Road, Northbridge (Lot 29 in DP 12633) ("the site").
4. Livbuild pleaded guilty to both offences on 21 November 2014.
5. Having regard to the objective seriousness of the offence and the subjective circumstances of Livbuild, a total fine of $67,000 is imposed on Livbuild with respect to both offences. Livbuild must also pay the council's costs of both prosecutions.

Circumstances Giving Rise to the Commission of the Offences

1. Most of the underlying facts giving rise to the commission of the offences were contained in two overlapping statements of agreed facts and the unchallenged affidavit evidence of Mr Rimac sworn 5 February 2015.
2. Photos were also tendered depicting the unlawful works on the site the subject of the two offences, and the impact of those works on the environment and the amenity of the neighbouring properties.
3. The site is zoned E4 Environmental Living under Willoughby Local Environmental Plan 2012 ("the 2012 LEP"). Prior to the gazettal of the 2012 LEP on 21 December 2012, the site was zoned 2(a2) Residential - Scenic Protection Zone in Willoughby Local Environmental Plan 1995 ("the 1995 LEP"). Under both the 1995 and the 2012 LEP, development of the type carried out on the site required consent. The development was neither complying nor exempt development.
4. It was not in dispute that development consent was not granted in respect of the external and internal works the subject of the two offences.
5. The site is owned by Mr Joseph Screnci and Ms Paula Screnci ("the owners").
6. On 12 March 1998 the prosecutor, Willoughby City Council ("the council"), granted development consent no 1997/0765 ("the first consent") for a "swimming pool".
7. On 9 March 1998 the council granted building approval no 971071 associated with the consent for a "swimming pool".
8. On 28 October 2003, Chapman Design Group, acting on behalf of the owners, lodged a development application to "reshape existing pool and construct new spa and surround", which was approved on 9 January 2004 ("the second consent"). Conditions 30, 31, 32, 33, 42, 43, 44 and 46 of the second consent concerned landscape and environmental protection.
9. On 1 April 2004 the Court made orders, by consent, amending condition 10 of the second consent.
10. On 11 June 2004 the council issued construction certificate no CC-2004/388 for the development subject to the second consent ("the first construction certificate").
11. On 1 December 2008 the council received a Notice to Commence Building or Subdivision Work and an Appointment of a Principal Certifying Authority from accredited private certifier Mr Barry Johnson, for the development the subject of the second consent and the construction certificate. The Notice indicated that work was to commence on 1 December 2008.

The Foreshore Works Offence (50764/14)

1. In March 2010, after Livbuild had started the works the subject of the contract, Mr Screnci asked Mr Rimac, on behalf of Livbuild, to do other work in the foreshore area of the property. This work included building retaining walls and staircases ("the foreshore works"). The foreshore works were not covered by the building contract and were done on a 'do and charge basis' under the instructions of Mr Screnci. Mr Screnci instructed Livbuild on what to do and Livbuild carried out the work. The work was done at a reduced rate because Mr Screnci supervised the work.
2. When Livbuild commenced the foreshore works, some work had already been completed on the site. For example, the seawall had already been constructed; the retaining walls on the bottom two levels of the foreshore had been built; the sandstone walls on the north east boundary had been completed adjoining the bottom two tiers; and the slab below the spa and the piers supporting the slab had been constructed
3. Mr Screnci provided Livbuild with a copy of geotechnical details from Geoff Hopkins & Associates Pty Ltd dated 22 October 2008.
4. One of the walls which had been constructed before Livbuild commenced work had shifted towards the water and Livbuild was directed by Mr Screnci to remove the wall and rebuild it, which it did.
5. Livbuild built the walls and opening to the room under the spa while a plumber working as a subcontractor for Livbuild completed the drainage fittings. This was noted under a variation to the contract.
6. The fill for the terraces came from the site, apart from the top four inches which was garden mix and mulch.
7. Livbuild observed Mr Screnci at the site most days that it was working on it. Livbuild acted under the direction of Mr Screnci and it was he who directed the progress and details of the works
8. Mr Rimac engaged employees of Livbuild for the purpose of fulfilling the contract. Livbuild was also assisted by subcontractors who were provided by a labour hire company known as "Prime Workforce", a labour hire company managed and owned Mr Screnci.
9. Livbuild stopped works at the site on 29 March 2012.
10. Livbuild was aware that the works in the foreshore area required council approval and Mr Rimac verbally advised Mr Screnci of this. Thus Livbuild knew that the work required consent and that the consent was absent but nevertheless carried out the works because it was trying to build its portfolio of work and was afraid of losing the building contract.

The Home Theatre Works Offence (50767/14)

1. The internal unauthorised works to the residential dwelling on the site consisted of the following ("the home theatre works"): 1. on the lower ground floor, a home theatre room, powder room and pantry/store room were constructed within areas nominated as 'subfloor' on the approved plans of the third consent; 2. on the lower ground floor, the kitchen and laundry were widened and expanded to accommodate the relocation of the powder room to the subfloor area; 3. on the ground floor, the approved guestroom was relocated to the front of the dwelling in the place of an approved bathroom and part of an approved study; 4. on the ground floor, a pantry/store room associated with the formal dining room had been constructed; 5. on the ground floor, the approved bathroom had been moved next to the lift; 6. on the ground floor, the study had been increased in length to accommodate the relocation of the guest bathroom; 7. on the first floor, the ensuite to the fourth bedroom was reduced in size to accommodate the increase in size of that bedroom; and 8. on the first floor, a garage had been partially erected over the boundary with Minimbah Road.
2. Mr Rimac again engaged employees of Livbuild for the purpose of fulfilling the building contract. Livbuild was also assisted by subcontractors who were provided by Prime Workforce.
3. Livbuild liaised with Mr Screnci throughout the home theatre works construction period. Mr Rimac observed Mr Screnci at the site most days. Livbuild acted under the direction of Mr Screnci and Mr Screnci directed the progress and details of the works.
4. Livbuild carried out the home theatre works at the instruction of Mr Screnci. Livbuild worked with plans given to it by Mr Screnci. Mr Screnci gave Livbuild instructions to carry out these works, which were not in accordance with the second construction certificate.
5. Livbuild stopped works at the site on 29 March 2012.
6. The home theatre room and bathroom within the subfloor area on the lower ground floor level of the dwelling on the site were not depicted on any of the approved plans of the third consent or any of the second construction certificate plans approved by the private certifier.
7. Again, Livbuild knew that the home theatre work required consent but proceeded to carry out the development because it was trying to build its portfolio of work and was afraid of losing the building contract.

Action Taken by the Council

1. On 15 November 2012 the council received correspondence from Environet Consultancy Pty Ltd on behalf of Mr and Mrs Parras, the owners of the adjacent property at 59 Minimbah Road, regarding the construction works at the site.
2. On 27 February 2013 Mr Steven Balafas, an officer of the council, inspected the site and observed that works had been carried out in the rear yard of the site, adjacent and below the pool and spa terrace, and adjacent to the foreshore.
3. On 12 June 2013 the council issued a Notice of Proposal to Issue Order to the owners.
4. On 15 November 2013, the council issued the Order foreshadowed in the Notice.
5. On 13 December 2013, Mr Screnci commenced Class 1 proceedings challenging the Order ("the Order appeal").
6. On 24 February 2014 Mr Rimac, on behalf of Livbuild, attended the council for the purpose of an interview. During the interview, he marked up a copy of a plan of the foreshore area showing the unlawful works Livbuild carried out under the direction of Mr Screnci.

Evidence of Mr Rimac

1. In his affidavit Mr Rimac deposed to the following: (a) in mid 2009 he was approached by Mr Screnci to price an extension and renovation of an existing home on the site. Mr Screnci was referred to him by a person who carried out construction services for Livbuild. During the initial discussions between himself and Mr Screnci, there was no mention of Livbuild carrying out any landscaping works to the rear yard on the site or modifications to any architectural plans; (b) subsequently, during negotiations, prior to signing the building contract, an agreement was reached between Livbuild and Mr Screnci to the following effect: (i) Mr Screnci would continue with landscaping works in the rear yard; and (ii) Livbuild would allow access to Mr Screnci and his workers to carry out those works; (c) after commencement of the construction works at the property in October 2009, there was a discussion between himself and Mr Screnci about modifications to the lower ground floor of the dwelling on the site. The following was said: Mr Rimac: "All changes will need to be drawn and submitted to Council for approval. Any internal changes that don't effect external windows and doors will not have any problems in passing Council. I suggest you employ an Interior Designer. I can refer you to one, his name is Danny Glavan". Mr Screnci: "Ok I will contact Danny about this"; (d) after this conversation Mr Rimac received revised plans for the internal floor layout from Mr Screnci. A further discussion then took place with Mr Screnci wherein the following was said: Mr Rimac: "You will need to submit a Section 96 application to Council". Mr Screnci: "Yes I will submit a Section 96 once we finalise all the modifications to the building"; (e) in respect of the landscaping works to the rear yard of the site, Livbuild had indicated at an early stage that it would not undertake any landscaping works as part of the negotiated building contracts. However, in September 2009 Mr Rimac had a conversation with Mr Screnci about these works. As a consequence of that conversation Livbuild agreed to assist Mr Screnci in rear yard by providing use of the crane for materials handling. Livbuild agreed to do this on a do-and-charge basis. Livbuild agreed to assist Mr Screnci so that it could be awarded the building contract; (f) the opportunity to enter into a building contract with Mr Screnci was extremely important to Livbuild. This was because he had made a decision that he wanted to concentrate on the construction of luxury homes. Prior to entering into the building contract, Livbuild had completed only one luxury home in 2008 and had concentrated on smaller homes and commercial projects; (g) in March 2010, the stonemason retained by Mr Screnci for the retaining walls and the rear yard left the site. Mr Screnci requested that Livbuild assist him in completing the works in the rear yard. Mr Rimac agreed that Livbuild would do so provided that Mr Screnci furnished him with landscaping and structural drawings, and council's consent for the works. Again, this work was not part of the building contract. Rather, it was negotiated on a do-and-charge basis with Mr Screnci supervising; (h) Mr Rimac knew that he should not have agreed to assist Mr Screnci with the rear landscaping works, or the modification of the dwelling on site, prior to council's consent having been obtained; (i) since 1993 Mr Rimac has conducted his own business and has not, but for the commission of these offences, carried out any building work that required council approval absent that approval; (j) he has never been prosecuted for anything resulting from his building work; and (k) the investigation and subsequent prosecution by the council has been extremely stressful on himself and his family and that he is "sorry for my actions and apologise to the Council and the Court. It will not happen again".

Modification Applications and Class 1 Appeals

1. The following applications were lodged in respect of the site with the council: 1. development application 2014/197 was lodged on 15 May 2014, seeking "modification to the existing foreshore landscape, including new timber stairs, pergola, planting new native trees, shrubs and ground covers and associated works"; 2. building certificate application 2014/26 was lodged on 15 May 2014 for "ancillary landscape works - landscape area between existing dwelling and northern site boundary"; 3. development application 2014/252 was lodged on 26 June 2014 and seeks "alterations and additions to the existing dwelling for the purposes of a secondary dwelling and ancillary outdoor terraces"; 4. development application 2014/324 was lodged on 31 July 2014, seeking approval for "internal alterations of subfloor for the purposes of a pantry, home theatre and corridor and relocation of a powder room"; and 5. building certificate application 2014/52 was lodged on 31 July 2014 for "internal alterations of subfloor for the purpose of a pantry, home theatre and corridor and relocation of a powder room".
2. Each of the applications described above are presently the subject of Class 1 proceedings in the Court.

Applicable Sentencing Principles

1. A basic principle of sentencing law is that the sentence imposed for an offence must reflect, and be proportionate to, the objective circumstances of the offence and the personal or subjective circumstances of the offender (Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 at 490 and Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472).
2. The instinctive synthesis method is the correct method of sentencing an offender. The Court identifies all the factors relevant to the sentence and weighs their significance to arrive at an appropriate penalty (Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] and Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [35]-[39], [50]-[84] and [136]-[139]).
3. Section 3A of the Crimes (Sentencing Procedure) Act 1999 ("the CSPA") sets out the purposes of sentencing an offender. The relevant purposes in this case are those contained in s 3A(a), (b), (e), (f) and (g).
4. In addition, s 21A of the CSPA identifies the matters that the Court must take into account when determining the appropriate sentence, including factors in aggravation under s 21A(2), and factors in mitigation under s 21A(3).
5. The relevant subjective circumstances or mitigating factors in the present case are those contained in s 21A(3)(e), (f), (g), (h), (i), (k) and (m) of the CSPA. These are discussed further below in the context of the offence.
6. Although Livbuild's pleas of guilty entail acceptance of the proof beyond reasonable doubt of the elements of the offence, the council nevertheless still carries the onus of proving beyond reasonable doubt any aggravating factors for the purpose of sentencing (Gore v R; Hunter v R [2010] NSWCCA 330; (2010) 208 A Crim R 353 at [27] and [105] and R v Wickham [2004] NSWCCA 193 at [26]).
7. For mitigating factors, the onus of proof lies upon Livbuild on the balance of probabilities (Wickham at [26] and R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at [27]).
8. In determining an appropriate sentence, the Court considers the objective and subjective circumstances of the offence in the context of the relevant legislative framework (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234 and Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65 at [42]). In this regard, the Court has had regard to the objects of the EPAA as set out in s 5 of that Act.

Objective Circumstances of the Offence

1. The primary factor the Court must consider in determining an appropriate sentence is the objective gravity or seriousness of the offence. The circumstances to which the Court may have regard include: 1. the nature of the offences; 2. the maximum penalty for the offences; 3. the harm, if any, caused to the environment by the commission of the offences; 4. Livbuild's state of mind in committing the offences; 5. Livbuild's reasons, if any, for committing the offences; 6. the foreseeability of the risk of harm to the environment by the commission of the offences; 7. the practical measures available to avoid harm to the environment; and 8. Livbuild's control over the causes of harm to the environment: (Bentley at [163]; Gittany at [110] and Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [48]).

Nature of the Offence

1. The offences of undertaking development without consent involved Livbuild engaging in acts that undermined the integrity of the system of planning and development controls enacted in NSW in circumstances where, "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" (Scahill at [46]. See similar statements in Gittany at [104]-[105]; Byron Shire Council v Fletcher [2005] NSWLEC 706; (2005) 143 LGERA 155 at [60]-[61]; Lane Cove Council v Wu [2011] NSWLEC 43 at [17]; Cessnock City Council v Bimbadgen Estate Pty Ltd (No 2) [2011] NSWLEC 140 at [62] and Hurstville City Council v Naumcevski [2011] NSWLEC 226 at [49]).

Maximum Penalty

1. The maximum penalty for an offence reflects the seriousness with which the Parliament views the offence (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 and Plath at [67]).
2. For corporate offenders the maximum penalty for each offence is $1,100,000 (s 126 of the EPAA). It provides a point of comparison or yardstick when determining the appropriate penalty, but there is a spectrum of offending behaviour covered by this provision (Markarian at [31]).

Environmental Harm

1. The environmental harm caused by the commission of an offence is a central consideration in determining the objective gravity of the offence. The concept of harm in the context of environmental offences is broad (Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2006) 148 LGERA 299 at [145]-[147]).

Environmental Impact of the Foreshore Works Offence

1. The council submitted that, in addition to the environmental harm caused by the commission of the foreshore works to the integrity of the planning system, the offence undermined the values and standards enshrined in the various planning instruments governing the development and the site, especially given its location on the foreshore.
2. Issues relating to the sensitive nature of development on a foreshore site to Middle Harbour were recognised in the development applications lodged in respect of the second and third development consents. The applications acknowledged the objectives of the State and local planning controls in this regard. For example, in the development application giving rise to the second consent, it was stated that "there is adequate natural soil depth area between the spa concourse and mean high water mark of Sailors Bay to enable planting of suitable tree/shrub species of adequate mature height and density to complement the existing landscaping within the foreshore area to screen the spa support columns". And, that the "trees would have a canopy compatible with the height of the spa concourse and be supplemented by lower height dense vegetation to provide complete screening of the pool complex when viewed from the water and opposite shores". The documentation accompanying this application also advised that the "extensions to the swimming pool will require minimum earthworks to anchor the support columns and upon completion no changes to the topography will be evident" and that the "proposal will not require the removal of any significant trees".
3. The documents accompanying the development application resulting in the third development consent advised that the design philosophy was "to protect the existing landscaped area adjacent to the waterway and comply with the Foreshore Building Line, whilst maintaining the current street setback". It advised that the "foreshore area will not be altered and the existing jetty is to remain".
4. Accompanying this application was a letter to the Environmental Services Director of the council from Mr Screnci, dated the same day that the development application was lodged, namely, 10 August 2004, advising that the "development application is for work within the existing footprint of the current residence. Thereby requiring minimal excavation (4 cubic metres at the bottom of the internal elevator shaft) and not changing the topography of the foreshore land".

Environmental Impact of the Home Theatre Works Offence

1. In respect of the home theatre works offence, the council conceded that there was no evidence of any actual environmental harm occasioned by the commission of the offence. It submitted, however, that harm resulted from it not being given the opportunity to assess the development.
2. The council correctly, in my view, contended that the integrity of the planning system was damaged by the commission of the offence, in accordance with the line of authorities that regard this as an element of environmental harm (Wu at [45]; Ku-ring-gai Council v Abroon (No 3) [2012] NSWLEC 12 at [90]; Bimbadgen at [62] and North Sydney Council v Perini (No 2) [2013] NSWLEC 91 at [137]). The emphasis in the objectives and development standards for the Environmental Living Zone of the 2012 LEP, and prior to that, the Scenic Protection Zone contained in the 1995 LEP (Zone 2 (2a) - Residential "A2"), is on minimising the impacts of residential development in areas, such as the present site, that are of special ecological and aesthetic value. As a result of Livbuild's unlawful acts, the home theatre works were not assessed against these objectives and standards prior to construction commencing.
3. Again, while the damage to the planning regime may be mitigated to a degree by the Class 1 appeals, and, depending on their outcome, some or all of the unlawful works may be regularised and the environmental damage caused by the home theatre works ameliorated, the benefits flowing to Livbuild from any subsequent approval of these works will, for the reasons given above in relation to the foreshore works, be limited.
4. The council also submitted that there was an unknown potential impact on neighbours from structural performance and changes to sub-surface water movement as a result of the development. However, this potential impact was unsupported by any evidence satisfying the criminal standard and was so speculative that it cannot be considered by the Court in assessing the environmental harm caused by the commission of the offence.
5. Finally, the council submitted that the structure encroaching onto Minimbah Road would require review and resolution pursuant to council's obligations as the roads authority under the Roads Act 1993 as the owner of the road. What this review and resolution entailed was not elaborated upon by the council, and hence, the Court gives minimal weight to it.

Livbuild's State of Mind

1. The offences are strict liability crimes, which means that mens rea is not an element of the offence. However, the state of mind of Livbuild at the time of committing an offence is a relevant consideration when imposing a sentence.
2. A strict liability offence that is committed intentionally, negligently or recklessly will be objectively more serious than one committed accidentally (Director-General, Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [42]-[43] and Gittany at [123]).
3. Mr Rimac, on behalf of Livbuild, accepted that at the time he committed both offences he knew that development consent was required. There can be no doubt, given this admission, that the offences were committed intentionally. This finding increases the objective seriousness of the offences.
4. That Mr Rimac gave evidence to the effect that he believed that the necessary consents would be obtained by Mr Screnci, marginally mitigates his culpability in this regard. The fact remains that when he undertook both works he knew that consent was required and that none was obtained.

Reasons for Offending

1. The objective seriousness of an offence may also be measured by reference to the reasons for its commission (Axer at 366; Gittany at [140]-[141]; Bentley at [237], [246]-[247] and Rae at [47]). For example, an offence committed for financial gain increases its objective seriousness (CSPA s 21A(2)(o)).
2. In the present case, the candid evidence of Mr Rimac on behalf of Livbuild demonstrates to the requisite degree that the commission of both offences was financially motivated. Livbuild committed the offences because it was trying to enhance its portfolio of work and was concerned that if it refused it would lose the building contract for the home theatre works.

Foreseeability of the Risk of Harm

1. The extent to which Livbuild could have reasonably foreseen the risk of harm to the environment caused by the commission of the offences is a relevant objective circumstance in determining an appropriate sentence (Camilleri's Stock Feeds at [700] and Plath at [48]).
2. The council submitted that it was reasonably foreseeable that if Livbuild engaged in both the foreshore works and the home theatre works absent the necessary consents the environmental harm discussed above would ensue. I agree.

Practical Measures Available to Avoid or Mitigate Harm

1. The council submitted that by not undertaking development on the property prior to obtaining the necessary approval, any potential for harm could have readily been avoided. This is undeniably correct.

Control Over the Causes of the Harm

1. I find that Livbuild had complete control over the causes of any the harm to the environment. Notwithstanding the supervision of the works by Mr Screnci, the assistance provided by Prime Workforce and the promises by Mr Screnci to obtain the necessary consents, the fact remains that it was Livbuild's decision alone to undertake the unlawful construction works on the site. At any time it could have refused to do the works. It chose not to do so.

Conclusion on Objective Gravity

1. Having regard to all of the factors discussed above, I find that, contrary to the submissions of Livbuild, the commission of the foreshore works offence is of moderate objective gravity.
2. I find the commission of the home theatre works offence to be of low objective gravity.

Subjective Circumstances

1. A proportionate sentence requires the Court to take into account any mitigating factors that are personal to Livbuild (Rae at [55]; Gittany at [144] and s 21A(3) of the CSPA).
2. Relevant subjective circumstances include: 1. (a) whether Livbuild has a prior criminal record (s 21A(3)(e) of the CSPA); 2. (b) whether Livbuild is of good character (s 21A(3)(f) of the CSPA); 3. (c) whether Livbuild is unlikely to re-offend (s 21A(3)(g) of the CSPA); 4. (d) whether Livbuild has demonstrated remorse for the commission of the offence (s 21A(3)(i) of the CSPA); 5. when Livbuild entered its guilty pleas (ss 21A(3)(k) and 22 of the CSPA); 6. whether Livbuild provided assistance to the council in the investigation and prosecution of the offence (ss 21A(3)(m) and 23 of the CSPA); 7. whether Livbuild is likely to pay the prosecutor's costs of the proceedings; and 8. Livbuild's financial capacity to pay any monetary penalty imposed (s 6 of the Fines Act 1996).

Livbuild's Lack of Prior Criminality and Its Good Character

1. Livbuild has no antecedents and, as a written character reference from Mr Russell Scott in respect of Mr Rimac reinforces, but for the commission of this offence, the company is a good corporate citizen.

Demonstration of Remorse

1. Livbuild expressed remorse for the commission of the offences through Mr Rimac in his affidavit. Further, it has demonstrated that this expression is genuine as evidenced by Livbuild's considerable cooperation and assistance with the council, not only with respect to these proceedings but also in respect of the criminal prosecution of Mr Screnci. Mr Rimac, on Livbuild's behalf, has, moreover, voluntarily participated in a record of interview with the council, provided records to the council, and has assisted in the preparation of a statement of agreed facts in respect of both offences.

Likelihood of Re-offending

1. Livbuild's acceptance of responsibility, its expression of contrition, and the stress suffered by Mr Rimac as a consequence of these proceedings strongly suggest an extremely low likelihood that it will re-offend.

Guilty Plea

1. Livbuild pleaded guilty to the offences at the earliest practical opportunity and the full discount of 25% on sentence ought to be awarded to it in respect of both offences (R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [160]).

Assistance to the Council

1. Livbuild cooperated fully with the council during the investigation of the offences in giving full and frank evidence during a record of interview, providing relevant information and records and, significantly, agreeing to provide evidence in proceedings brought by the council against Mr Screnci. The Court takes into account this assistance in determining the appropriate sentence for the commission for each offence.

Payment of the Prosecutor's Costs

1. The council seeks its costs of the proceedings. The Court is empowered to order an offender to pay the prosecutor's legal costs pursuant to ss 257B and 257G of the Criminal Procedure Act 1986.
2. The payment of the prosecutor's costs by an offender can be considered by the Court when fixing an appropriate monetary penalty (Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78] and [88]; Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220 at [248] and Rae at [68]).
3. Livbuild accepts that it must pay the council's costs of both sets of proceedings. These have been estimated by the council to total approximately $64,000.
4. Having said this, Livbuild has expressed concern that the award of costs should not include any component of the costs associated with the prosecution of Mr Screnci. Ultimately, this will be a matter for a costs assessor if the parties are not able to reach agreement on the quantum of costs payable, plainly however, any order for costs in these proceedings can only be for those legal costs incurred by the council in the prosecution of two offences to which Livbuild has pleaded guilty, and not for some other offence concerning a different defendant.
5. The award of costs should not, in my view, extend to the preparation of any of the agreed bundle of documents. Initially two lever arch volumes of documents were filed in the Court, most of which were otiose when regard was had to the agreed statements of facts. At the request of the Court, therefore, the council refined the material to a single volume of documents. But even then, only a handful these documents (each of which could have been separately tendered) were actually referred to by the council during the course of both its written and oral submissions. Livbuild ought not, therefore, be required to pay for the wasted costs of reproducing documents, including sets of A3 colour plans, to which no mention was made by the council.

Livbuild's Capacity to Pay

1. No evidence was put before the Court regarding Livbuild's financial means so as to engage the exercise of the Court's discretion under s 6 of the Fines Act.

There Are No Aggravating Factors

1. There are no aggravating factors relevant to the present case.

Conclusion on Subjective Considerations

1. The subjective circumstances of Livbuild operate to mitigate to a considerable degree the penalties that would otherwise be imposed by the Court in respect of the commission of the offences.

Sentencing Purposes

1. As identified above, the purposes listed in s 3A of the CSPA also inform the determination of the appropriate sentence. These include: punishment (s 3A(a)); general and specific deterrence (s 3A(b)); making Livbuild accountable for its actions (s 3A(e)); and denunciation of its unlawful conduct (s 3A(f)).
2. Given the totality of the circumstances of the commission of the offences, I accept Livbuild's submission that there is no real need for any element of specific deterrence in the determination of an appropriate penalty.
3. In the present case there is, however, a need for the sentence to have embedded in it an element of general deterrence to promote the objects of the EPAA and to ensure that other corporate builders do not carry out development without having ensured the necessary approval to do so have been obtained (Plath v Hunter Valley Property Management Pty Ltd [2010] NSWLEC 264 at [34]; Scahill at [46]-[47] and [109]; Axer at 367 and Abroon (No 3) at [138]-[139]).

Consistency in Sentencing

1. A relevant consideration is the existence of a general pattern of sentencing by the Court for offences such as the offence in question (Gittany at [179]-[182]; Rae at [69] and Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520 at [18] and [46]-[48]).
2. The proper approach is for the Court to examine whether the sentence is within the range appropriate to the gravity of the particular offence and the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence which merely forms part of that range (Gittany at [182]).
3. The Court was taken to a number of decisions by the parties in order to demonstrate this range. Each case, however, turned on its particular facts and circumstances. Each case is, in some respects, analogous with and, in other respects, distinguishable from, the present offences.
4. What the cases demonstrated is that penalties imposed by the Court for first time offences of this type by an corporation typically range somewhere between $7,000 to $175,000 depending on the mix of objective and subjective circumstances (see, for example, Council of the Municipality of Kiama v Furlong [2009] NSWLEC 139; Naumcevski; Burwood Council v Doueihi [2013] NSWLEC 196; (2013) 200 LGERA 152 and Cowra Shire Council v Fuller [2015] NSWLEC 13).

Whether an Order Under s 10 of the CSPA Ought to be Made

1. Livbuild submitted that this is an appropriate case for an order to be made under s 10 or alternatively s 10A of the CSPA.
2. Sections 10 and 10A of the CSPA relevantly state: 10 Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, … (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. 10A Conviction with no other penalty (1) A court that convicts an offender may dispose of the proceedings without imposing any other penalty.
3. As was noted in Department of Environment and Climate Change v Sommerville; Department of Environment and Climate Change v Ianna [2009] NSWLEC 194 per Pain J, the circumstances in which s 10 orders are appropriate are rare in convictions for environmental offences (at [46]): 46 There are several decisions which emphasise that a grant of a s 10 order under the CSP Act in environmental offences is not lightly given. As I stated in Newcastle City Council v Pace Farm Egg Products Pty Ltd (No 3) [2005] NSWLEC 423 at [24]: Several cases have made it clear that s 10 of the Crimes (Sentencing Procedure) Act (and its predecessor s 556A of the Crimes Act 1900) is rarely applied in pollution cases. In Environment Protection Authority v Attard [2000] NSWCCA 242, Sperling J (with whom Mason P and Smart AJ agreed) stated at [5] that s 556A would only be applied in exceptional circumstances. In Hunter Water Board v State Rail Authority (NSW)(No 2) (1992) 75 LGRA 22, Stein J at 23 said: This court has not infrequently stated that it will be a rare case when a dismissal under s 556A is seen as appropriate for an environmental offence, especially a breach of the Clean Waters Act.
4. It was further observed by Biscoe J in Blue Mountains City Council v Carlon [2008] NSWLEC 296 that the circumstances in which a s 10 order is appropriate are even more limited where, such as in the present case, the environmental offence is one of strict liability. In that case his Honour opined that (at [70]-[71]): 70 This is a strict liability offence in which mens rea plays no part and guilt is established by proof of the objective ingredients of the offence: Caralis v Smyth (1988) 34 A Crim R 193, 65 LGRA 303 at 308 (CCA). It is unusual in the case of strict liability offences for a defendant to receive the benefit of s 10, even if the defendant genuinely believed that it was lawfully entitled to undertake the prohibited activity. The reason for imposing a penalty even where such a belief is held, has been expressed in various ways to similar effect: to invoke the deterrent purpose of educating the offender and the community in the law's proscriptions so that the law will come to be known and obeyed; to ensure that persons take proper steps to ascertain the lawfulness of their proposed conduct; to give effect to the system of planning controls. See Mosman Municipal Council v Menai Excavations P/L (2002) 122 LGERA 89 at [35] (Lloyd J); McDonagh (on behalf of Great Lakes Council) v Birdon Dredging Pty Ltd (1998) 99 LGERA 198 at 205 (Bignold J) quoting Walden v Hensler (1987) 163 CLR 561 at 570; Caralis v Smyth (1988) 34 A Crim R 193, 65 LGRA 303 at 309 (CCA). 71 In the context of strict liability pollution of the environment offences, it has been said that it is a rare case when a dismissal under s 10 is seen as appropriate: Thorneloe v Filipowski (2001) 52 NSWLR 60 (CCA) at [165] - [169] per Spigelman CJ. Nevertheless, in that case, the Court of Appeal made an order under s 10(1)(a) directing that the charge be dismissed in circumstances where there was nothing further that the master of a vessel, a first offender, could have done to avoid the comparatively minor oil pollution the subject of a strict liability offence to which he had pleaded guilty: at [214]. Spigelman CJ held at [178] and [184]: 178 It is, in my opinion, relevant to the exercise of the discretion under s 10 of the Sentencing Act, in the context of a strict liability offence, to consider what the applicant for the benefit of s 10 could have done to avert the event that has occurred. While questions of weight are always for the sentencing judge, it is unlikely that this consideration will be given determinative weight in the case of a serious offence or a repeat offender. Where, as here, there was a comparatively minor pollution by a first offender, this consideration is entitled to weight …

Total Discount

1. The council submitted that notwithstanding the exemplary cooperation of Mr Rimac on behalf of Livbuild and the considerable assistance that he has provided in the prosecution of Mr Screnci, this should not be reflected in sizable (that is to say more than one third) discount in the penalty imposed on Livbuild. By contrast, Livbuild submitted that a more generous discount was justifiable in light of its early pleas of guilty, its favourable mitigating circumstances, and its assistance to the council in proceedings brought against it and Mr Screnci.
2. As Sheahan J noted in Newcastle Port Corporation v MS Magdalene Schiffarhtsgesellschaft [2013] NSWLEC 210, discounts of 30% to 35% are not uncommon in this Court (at [271] and [272]). Discounts of this magnitude reflect the importance to the efficient administration of justice of encouraging and rewarding early pleas of guilty and of the assistance to prosecuting authorities provided by offenders.
3. Nevertheless, the authorities emphasise that however laudable these policy objectives are, a discount in excess of 50% is reserved for only the most exceptional of cases, where the assistance has been of a very high order (SZ v R [2007] NSWCCA 19; (2007) 168 A Crim R 249 at [3]-[5] per Howie J and [46]-[53] per Buddin J). This is because public confidence in the administration of justice would be undermined by an overly lenient sentence that not only fails to reflect the objective criminality of the offender's acts but also fails to reflect the expectations of the community at large.
4. Bearing these principles in mind, in my opinion, a total discount of 40% is, while towards the higher end, not inappropriate in all the circumstances of the commission of the offences. As the council acknowledged, Mr Rimac, on behalf of Livbuild, could not have done more in his provision of assistance to it. This cooperation, in combination with Livbuild's early pleas of guilty and other favourable subjective factors, have the consequence of mitigating to a substantial degree the penalties to be imposed on Livbuild.

Totality Principle

1. The council accepted that the totality principle applies to the penalty to be imposed in respect of both offences. I agree.
2. The nature and scope of the totality principle was recently discussed in Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103, where the Court described it as (at [224]-[228]): [224] The totality principle is a relevant consideration when determining an aggregate penalty in sentencing for multiple offences. In R v Holder; R v Johnston [1983] 3 NSWLR 245, Street CJ explained the application and policy underpinnings of the totality principle as follows (at 260B-E): The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straightforward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences. [225] The High Court in Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 relied on the following passage from DA Thomas, Principles of Sentencing (2nd ed) (1979) at pp 56-57 (at 62 to 63 of Mill): "The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is 'just and appropriate'. The principle has been stated many times in various forms: 'when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong('); 'when ... cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences'." [226] This was echoed by the High Court in Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616 (at [18]) and the Court of Criminal Appeal in R v MMK [2006] NSWCCA 272; (2006) 164 A Crim R 481 (at [11] and [13]). The task of the Court is to ensure that the overall sentence is neither too harsh nor too lenient. [227] The principle will most often be invoked when an offender is being sentenced at the one time for multiple offences arising out of common or related criminal acts. However, the principle may still be applied when sentences are imposed at different times and even by different judges (R v MAK; R v MSK [2006] NSWCCA 381; (2006) 167 A Crim R 159 at [99] and Mill at 64). [228] Care must nevertheless be taken "to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the offender's conduct or the sentence for any individual offence to become disproportionate to the objective gravity of that offence" (Plath at [222]). The identified risk is that, if "sentences are reduced substantially, offenders may view that they can escape punishment for successive deliberate discrete offences" (Gittany at [199] and [201]; R v Harris [2007] NSWCCA 130; (2007) 171 A Crim R 267 at [46] and R v Wheeler [2000] NSWCCA 34 at [36]-[37]). That is to say, the application of the principle must not cause public confidence in the administration of justice to be undermined by any perception that "what is in effect being offered is some kind of discount for multiple offending" (R v MAK; R v MSK at [18]).

Penalty

1. Applying an instinctive synthesis to the objective culpability of Livbuild and its subjective circumstances at the time of the commission of each offence, in my opinion, the appropriate sentence to be imposed in respect of the foreshore offence is a fine of $80,000 discounted by 40% to $48,000.
2. In respect of the home theatre offence, the appropriate sentence is a fine of $40,000, discounted by 40% to $24,000. For the reasons discussed above, it is appropriate to further reduce the penalty for this offence by $5,000, to $19,000, in order to reflect the total culpability of Livbuild's criminal conduct at the site.

Orders

1. The orders of the Court are therefore that: In proceedings no 50764 of 2014 (the foreshore works offence) 1. the defendant is convicted as charged; 2. the defendant is fined the sum of $48,000; In proceedings no 50767 of 2014 (the home theatre works offence) 1. the defendant is convicted as charged; 2. the defendant is fined the sum of $19,000; In proceedings no 50764 and 50764 of 2014 (both offences) 1. pursuant to ss 257B and 257G of the Criminal Procedure Act 1996 the defendant must pay the legal costs of the prosecutor as agreed or assessed; and 2. the exhibits are to be returned.

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: 09 March 2015