Wollongong City Council v Hollis

Land and Environment Court (NSW)|2017-12-06|Before: Moore J

Introduction

On 18 June 2015, Wollongong City Council (the Council) commenced Class 4 proceedings against Mr Hollis, seeking to restrain him from using his property at Avondale, a south-western suburb of Wollongong, as a waste or resource management facility. The Council also sought an order requiring Mr Hollis to remove from the shed on his property the interior fitout which permitted it to be used as a dwelling as no consent had been given for this.
These proceedings did not result in any evaluative judicial determination of Mr Hollis' activities at the site, as Mr Hollis and the Council reached agreement as to what was an appropriate regime through which Mr Hollis would remove the substantial quantities of building materials he had taken to his property as a by-product of his business activities as a demolition contractor and that he would remove the interior fitout of the shed..
The proceedings came before me on 2 October 2015. I was satisfied that it was appropriate to make those orders. Mr Hollis was present at the time of making those orders and I was satisfied that he understood the requirements. It is to be noted that the orders were entered on 25 November 2015 and I am satisfied that the sealed orders were served on Mr Hollis.
Council subsequently formed the opinion, following inspections of Mr Hollis' property, that Mr Hollis had not fulfilled the obligations which were imposed on him as a consequence of those orders.

Charge 1 The Respondent Paul Andrew Hollis has failed to comply with the Order of this Honourable Court made on 2 October 2015 in that he has failed to remove, or cause to be removed, all Material, as defined in the Order, from Lot 2 DP 867347 (otherwise known as 155 Avondale Colliery Road, Avondale) by the time required by paragraph 2 of the Order made by this Honourable Court, a copy of which is annexed hereto and marked with the letter "A".

Charge 2 The Respondent Paul Andrew Hollis has failed to comply with the Order of this Honourable Court made on 2 October 2015 in that he has not, within 120 days of the date of that Order, demolished and removed, or caused to be demolished and removed, the Works, as defined in the Order, from the Shed on Lot 2 DP 867347 (otherwise known as 155 Avondale Colliery Road, Avondale) as required by paragraph 4 of the Order made by this Honourable Court, a copy of which is annexed hereto and marked with the letter "A".

Finding of "guilty" on Charge 2

In my earlier judgment (Wollongong City Council v Hollis [2017] NSWLEC 123), I found Mr Hollis guilty of Charge 1 but deferred such a formal finding on Charge 2 until matters relating to a permanent stay of some matters otherwise covered by Charge 2 was settled (see [50] to [56] of my earlier judgment). That has now been done as later described and the terms of the stay are set out in the orders at the conclusion of this judgment.
It is therefore necessary to record a formal finding that Mr Hollis is guilty of Charge 2 (but only to the extent of his failure to remove items not provided for in Order (1) of the orders at the conclusion of this judgment).

The contempt hearing

Proceedings to deal with those charges took place over a period of ten months and I subsequently delivered my reserved decision on 25 September 2017. It is unnecessary to repeat further detail about the history of this matter. It is sufficient to note that, having found Mr Hollis guilty of Charge 1 of the two contempt charges which had been laid against him (and deferred such a finding on Charge 2 for the reasons set out earlier), I set the matter down for a sentencing hearing on 6 December 2017 and gave directions setting out the necessary timetable for preparation for that sentencing process.

Mr Hollis' evidence

Mr Hollis tendered bank and taxation records (Exhibit 3) for the purposes of the sentencing proceedings. This material dealt with his financial circumstances. This was admitted as evidence, without objection from Mr O'Gorman-Hughes, counsel for the Council.
This material from Mr Hollis established that he had earned, on average over the last two taxation years, only a modest taxable income. His mortgage account statement also showed a total debt of over $750,000 as at 30 June 2017. No current operating account information was provided nor any information about the current value of his property holdings.
However, as is later discussed, these documents did not, in any sense, constitute a balance sheet of his assets and liabilities to give me any idea of his net worth.

The Council's further evidence at the sentencing hearing

At the sentencing hearing, the Council relied on three further affidavits. Two of those were from Mr Sharp, Council's Development Project Officer (Regulation) and one was from the Council's solicitor, Mr Reilly. Mr Reilly's affidavit and one of those of Mr Sharp were procedural in nature.
However, Mr Sharp's affidavit of 30 October 2017 dealt with the state of Mr Hollis' property on 19 October 2017, this being the date of the latest of Mr Sharp's inspections. Mr Sharp had deposed three earlier affidavits concerning his inspections of the Avondale property since the proceedings originally commenced in 2015.
Neither Mr Sharp nor Mr Reilly was required by Mr Hollis for cross‑examination.
Mr Sharp's inspection demonstrated that, although Mr Hollis had made some modest further progress toward complying with the outstanding elements of the 2015 orders since he had been found guilty by me of non‑compliance with the requirement to clean up the areas of his property that had been designated as Areas 4 and 7, much remained to be done.
Mr Sharp's affidavit deposed, at [44], that, for Area 4, the nature of the material that still required removal in order to satisfy the Council that the terms of the extent of clean-up of that area arising from the 2015 orders were met comprised: large concrete blocks; all steel pipes, beams and stands; aluminium/colour bond corrugated sheeting; aluminium/colour bond poles and posts; and timber pallets.
Similarly, with respect to Area 7, Mr Sharp deposed that the material remaining unremoved, as at the date of inspection, comprised: seven (7) shipping containers and contents; (pre-cut) concrete panels; parts for a shed on top of red shipping container; the windows and window frames that are not the size and required fire resistance for the approved dwelling; screen doors and frames that are not the size, and required fire resistance, for the approved dwelling; the dust suppressor; steel platforms/walkway and associated sheeting; steel frames (x 2); rubber pipes on steel platform; and stockpiled timber and timber pallets.

Development of operative orders to purge the contempts

Introduction

During the course of the hearing, it became apparent that the matter of greater importance to the Council than punishing Mr Hollis (although the Council did propose that he be fined for breaching the 2015 Orders) was to have Orders 2 and 4 of the 2015 Orders complied with (except to the extent that their outcome is to be modified as discussed below).

Charge 1

Order 4 of the 2015 Orders required Mr Hollis to remove the building materials he was storing on the site in three identified areas marked on an air photo appended to the 2015 Orders. Mr Hollis has completed the removal of materials from one of those areas but materials remain to be removed from Areas 4 and 7 of the areas defined on the air photo.
During the course of the hearing, I suggested to Mr O'Gorman-Hughes that the Council's representatives confer with Mr Hollis on the precise terms of what the Council might identify as material permitted to be retained in Areas 4 and 7 as being material Mr Hollis might be permitted to retain on site as it was potentially usable for the purposes of constructing the dwelling on the site for which he had consent. That discussion took place and an agreed list was developed.
Two matters remained for further consideration. First, Mr Hollis has a number of large concrete blocks (of approximately one metre by 600 millimetres by 600 millimetres in size) in Area 4. From the photographs in evidence taken during the course of Mr Sharp's most recent inspection, all but one of these blocks are neatly stacked. Mr Hollis wishes to retain them against the possibility that he may be able to use them on the site. The Council's position was that it had given no development consent which would permit the use of those materials for any purpose of the site.
I suggested that, within the timetable of the structure of the orders that would arise from these proceedings, Mr Hollis should be permitted to retain those blocks on site provided he obtained development consent from the Council for their utilisation of the site. Such development consent would necessarily be required to be obtained prior to the end of a six-month period. The Council and Mr Hollis agreed to this proposition and it is provided for in the orders at the conclusion of this judgment.
The discussions between Council's representatives and Mr Hollis had also resolved a number of details to clarify the intent of the scope of the orders with respect to Areas 4 and 7 (for example, the original drafting had suggested that all pallets needed to be removed from site). However, the Council was not objecting to the retention of the neatly stacked pallets of bricks and pavers which Mr Hollis had proposed for use in the construction of his approved dwelling. The draft, as originally framed, would not have required the removal of those bricks and pavers but would, theoretically, have required the removal of the pallets upon which they were stacked.
Following the refinement in the drafting, I am satisfied that the proposed terms of the orders comprise a sufficiently detailed regime that I could impose on Mr Hollis that would require him to have completed the necessary removals from Area 4 within three months of the making of the orders (as cleaning up Area 4 will enable Mr Hollis to avoid the fine that will otherwise be triggered by his failure to do so).
A similar position applies with respect to the requirement which will be ordered mandating that Mr Hollis clean up Area 7 within six months from the date of the orders and to do so in the fashion specified. Satisfactorily completing this task will enable Mr Hollis to avoid triggering the fine that will otherwise apply if Area 7 has not been cleaned up in the manner prescribed by the end of that six-month time period.
Mr Hollis also has, in Area 4, seven shipping containers on the site. The Council's position is that all of them ought to be required to be removed. Mr Hollis concedes that there is no proper basis upon which he could propose that all of the containers remain on site. He did seek to be permitted to retain three of them in order to store materials which were proposed to be available for construction of his approved dwelling and which were materials (such as Western Red Cedar and Australian Cedar interior wall cladding), that required to be stored out of the weather pending their possible future utilisation.
Although I indicated to Mr Hollis that I had a preliminary disposition to permit him to retain two shipping containers, he pressed for that number to be increased to three. I am satisfied, under the circumstances, that it is appropriate to permit three shipping containers to remain on the site to store materials that required to be stored out of the weather and are for his approved dwelling.
Mr Hollis explained to me, during the course of his submissions, the philosophy that drives him as a demolition contractor (that being his small‑scale, self-employed business) so that he endeavoured, for reasons of his environmental commitment, to recycle as much as was possible from any of the demolition sites where he worked (as an alternative to just "crushing up all the material and taking it to the tip"). He explained that, although he did take some materials to the tip, he also endeavoured to retain reusable materials. In this regard, I accept that his motives are socially and environmentally responsible.
However, as the Council submits, and, as is the foundation for the requirement to clean up Mr Hollis' site, this site is zoned E2 - Environmental Conservation and E3 ‑ Environmental Management under the Wollongong Local Environmental Plan 2009 (the WLEP).
A Waste or Resource Management Facility (how the activities Mr Hollis conducts on his site are properly to be characterised) is a type of development not permissible in these zones. Materials, for the purposes of giving effect to Mr Hollis' approved development consent for his dwelling, are, on the other hand, permitted to be stored on his site in anticipation of their use for that construction purpose.
As consequence, the orders that are to be made in these sentencing proceedings will specify the materials required to be removed from Area 4 and from Area 7 in order to satisfy the Council that the intent of Order 2 of the 2015 Orders has been met. The Council proposes (and I accept is the appropriate course to follow) that Mr Hollis be fined an initial amount for the breach of Order 2 of the 2015 Orders but that there be more substantial deferred fines attaching to the ongoing obligation to remove the required materials from Areas 4 and 7. I am satisfied that this is the appropriate penalty structure to adopt.
As a further consequence, separate deferred fines are imposed by the orders at the end of this judgement for failure to remove the required materials from each of Areas 4 and 7. If the required materials (except the large concrete blocks) are removed from Area 4 within three months of the date of my orders in this judgment, the deferred fine does not crystallise to be paid. Similarly, for Area 7, provided the required materials are removed by the end of six months, the deferred fine for that area will not crystallise to be paid.
The large concrete blocks in Area 4 are also encompassed in the order addressing the requirement to remove the materials from Area 7 because of the longer time frame agreed for Mr Hollis to seek development consent from the Council to use these blocks on the site.

Introduction

The second of the contempt charges arose from the fact that Mr Hollis had fitted out the substantial shed that he had erected on the property so that the shed could be used as a dwelling.
Mr Hollis had no consent from the Council to use the shed for this purpose, although the Council had, as part of his development consent, approved a separate dwelling a comparatively short distance from the shed.
The relevant 2015 Order (Order 4) required Mr Hollis to remove the interior fitout so that such a residential use was not possible.
For reasons which do not need to be explored further, Mr Hollis made a development application to the Council seeking to permit the shed to be used as a dwelling but did not proceed with that proposal because of the cost that would need to be incurred in complying with bushfire protection requirements. As a consequence, the order to remove the interior fit out remained operative and not complied with.
However, Mr Hollis did make a further application to the Council, an application to modify the approval of the shed so that some elements of the shed fitout could be retained. The retained elements would not permit the shed to be used as a dwelling, but would provide appropriate facilities for Mr Hollis' utilisation when he was working around his property.
As a result of the approval of the modification application, the Council agreed that, with respect to those items approved to be retained by the modification application, there should be a permanent stay of the 2015 Order requiring the removal of those now approved elements.
During the course of this sentencing hearing, two further elements of the present interior fitout were agreed by the Council as appropriate to be retained. The first of those elements is the laundry sink and its cupboard base and the second is an L-shaped section of the present kitchen workbench - being the section of the kitchen workbench that demarks the kitchen space from the remainder of the interior fitout. I note that it was made expressly clear by the Council that its agreement to the addition of these two elements of the current fitout to the aspects now permitted to be retained and protected by the permanent stay order did not extend to any other element of the kitchen fitout.
Mr Hollis also sought approval to retain a bar structure which he had erected within the shed. The Council resisted any extension of the stay order to this structure. I ruled that the expression "benches", when used as a general term, did not encompass workbenches (after drawing Mr O'Gorman-Hughes' attention to the distinct differences between these terms as defined in the Macquarie Dictionary). As a consequence, I ruled that the bar was not within the scope of the orders requiring removal of elements of the internal fitout of the shed. As a consequence, there was no need to incorporate this structure in the list of items for which the stay order was to provide as it was not within the scope of the original orders.
As with Charge 1, an initial fine and a separate, higher deferred fine is imposed by the orders at the end of this judgement for failure to remove the required fittings from Mr Hollis' shed. The deferred fine will not crystallize if the elements of the shed's fitout not protected by the stay order at (1) of the orders of this judgment are not removed within three months of the date of the orders in this judgment.

Introduction

Although s 21A of the Crimes (Sentencing Procedure) Act 1999, (the Sentencing Procedure Act) does not apply, strictly, in circumstances where what is being dealt with is sentencing on charges of contempt, nonetheless, the list of potentially relevant factors concerning the subjective circumstances of an offender to which that legislation does apply provide useful guidance when assessing the subjective circumstances of a contemnor in proceedings such as these. There are a limited number of those factors which are relevant for my consideration of penalties appropriate to be imposed on Mr Hollis.

Financial gain

The breaches of the orders were not carried out for financial gain. There is no suggestion that Mr Hollis is selling (or has sold) second hand building materials from the Avondale site.

Contrition and remorse

Although Mr Hollis has not specifically expressed contrition or remorse for his breaches of the 2015 Orders, his conduct in endeavouring to undertake some of the necessary compliance activities does provide some degree of acknowledgement of, and insight into, what was required of him. Although minor, this is to be taken in his favour.

Assistance to the Council in the contempt hearing process

Mr Hollis has co-operated with the Council (although he pleaded not guilty) in the sense that he has candidly admitted the inadequacy of his compliance with the 2015 Orders and has also made some further endeavour to comply (partially) since my decision of 25 September 2017.

Prior convictions

Mr Hollis has no relevant prior convictions.

Specific deterrence

The need for specific deterrence for Mr Hollis can be achieved by the structure of the orders I have crafted so that failure to fulfil the remaining requirements for removing materials from, or the required fittings in the shed at, 155 Avondale Colliery Road, Avondale within the time periods nominated will result in further substantial fines being imposed on him.

General deterrence

The deferred fine structure of the orders will also provide a more general warning that it is necessary to fulfil the obligations of orders such as those to which Mr Hollis agreed in 2015.

Mr Hollis' capacity to pay penalties

The material which had been tendered by Mr Hollis provided me with details concerning his income and his debts. They set out the mortgages that he owed on the property at Avondale and on a dual occupancy property at 79 Marshall Street, Dapto. He did not provide any information concerning the value of his assets.
The Council tendered two documents extracted from the Council's rating database. These disclosed that the land value for Mr Hollis property at Avondale was $660,000 for rating purposes whilst that for the property at Dapto was $195,000. In this context, it is appropriate to note that these are statutory valuations made pursuant to the Valuation of Land Act 1916 and are valuations which ignore any built improvements on either property.
Although it is not possible to estimate what might be the extent to which these land values understate what might be the appropriate market value for each of the properties to which they relate, it is undoubtedly the ordinary position that the statutory values do understate what would be a relevant market value. As a consequence, for the purposes of these proceedings, it is sufficient for me to conclude that the value of Mr Hollis' real estate holdings would likely well exceed the amount of the debts which they secure (being debts which total approximately $750,000) as the total of the statutory valuations is $855,000.
As to Mr Hollis' income, I am satisfied that the Notices of Assessment issued to him pursuant to the Income Tax Assessment Act 1997 (Cwth) disclose that he has earned only a modest taxable income on average over the past two years.
However, as a consequence of what I can glean of Mr Hollis' net worth, I am satisfied that I have sufficient information to enable me to take into account Mr Hollis financial circumstances (pursuant to s 6 of the Fines Act 1996) when it comes to the question of setting appropriate penalties with respect to each of the charges for which Mr Hollis has been convicted. It is clear that he has some capacity to pay fines of more than merely token amounts but that he is not a man of substantial means.
Importantly, on the question of the adequacy of information as to Mr Hollis' capacity to pay a penalty, I note that the Council did not wish to cross-examine Mr Hollis on the material which he had tendered (and which tender had been accepted by me, in the absence of an affidavit, on the basis that the Council would be entitled to cross-examine Mr Hollis on the material if it wished to do so).

Penalties to be imposed

The appropriate course of punishment to adopt is one which will have Mr Hollis incur modest fines immediately (together with the agreed costs to be paid to the Council) but place him at risk of significant further fines if he fails to complete the obligations which now remain on him arising out of the 2015 Orders.
Structuring the penalties in this fashion is designed to achieve the primary outcomes sought from the 2015 Orders - cessation of use of 155 Avondale Colliery Road, Avondale as a waste or resource management facility and cessation of the shed at that address as a dwelling.

The Council's costs

Mr O'Gorman-Hughes indicated, during the course of the sentencing hearing on 6 December, that the Council's costs of the contempt proceedings up to the end of that day were of the order of $20,000. The question of the Council's costs was one of the matters I asked be discussed with Mr Hollis during the course of one of the adjournments which took place during that day.
Mr O'Gorman-Hughes advised me that the Council had made an offer to Mr Hollis as a basis upon which the Council would accept a fixed sum costs order. He advised me that Mr Hollis had not yet responded to this offer.
I suggested that it was desirable that Mr Hollis respond to the Council's offer on costs, one way or the other, and that I be advised of this position in sufficient time for me to finalise this judgement. I asked Mr O'Gorman-Hughes to explain to Mr Hollis what was the effect of the matters dealt with by his Honour in the passage to which I have referred.
During the course of the Council's submissions, Mr O'Gorman-Hughes had taken me to a passage in the decision of Biscoe J in Blacktown City Council v The Penatrators Pty Limited (No 5) [2015] NSWLEC 62, at [26], where his Honour had dealt with the prima facie position that, in contempt cases, there was, effectively, a "no discouragement" position as to costs because the bringing of contempt charges was something that was in the public interest in order to protect the integrity of the Courts when making enforceable orders.
Mr Hollis and the Council subsequently agreed to an order for costs in two fixed instalments and the time for payment of each instalment. That agreement is provided for in Order (11) of the orders in this judgment.

Orders

The orders of the Court are: 1. Order (4) of the orders made on 2 October 2015 is permanently stayed to the extent that it requires: 1. the removal of those items from the Shed which were approved by the Council's modification of the development consent DA-2002/491/D on 13 September 2017, namely the: 1. timber mezzanine level; 2. staircase; 3. internal walls and doors; 4. toilet (approved on the ground floor); 5. sinks (approved in the ground floor toilet/water closet); 6. shower (approved in the ground floor toilet/water closet); 7. external windows and doors; 8. lighting fixtures and fittings; 9. rear timber landing and stairs; and 1. the removal of the sink and the bench identified in Annexure A. 1. Paul Andrew Hollis is guilty of Charge 1 that, in breach of Order 2 made by the Court on 2 October 2015 (the Orders), he failed to remove, or cause to be removed, all the material located on Areas 4 and 7 (as defined in the Orders) at 155 Avondale Colliery Road, Avondale within the time specified by the Orders; 2. On Charge 1, Paul Andrew Hollis is fined $500; 3. On Charge 1, Paul Andrew Hollis is fined a further $7,500 unless within 3 months of 12 December 2017 (that is, 12 March 2018), all material in Area 4 is removed from 155 Avondale Colliery Road, Avondale other than excavators, excavation equipment, trucks, trailers, one skip bin, pavers (including the pallets underneath them) and concrete blocks and as provided for in (5)(b) below; and 4. On Charge 1, Paul Andrew Hollis is fined an additional $7,500 unless, within 6 months of 12 December 2017 (that is, 12 June 2018): 1. the following material in Area 7 is to be removed from 155 Avondale Colliery Road, Avondale: 1. four (4) of the seven (7) shipping containers and contents; 2. (pre-cut) concrete panels; 3. parts for a shed on top of the red shipping container; 4. the windows and window frames that are not the size and required fire resistance for the approved dwelling; 5. screen doors and frames that are not the size, and required fire resistance, for the approved dwelling; 6. steel platforms/walkway and associated sheeting; 7. steel frames (x 2); 8. rubber pipes on steel platform; and 9. stockpiled timber and timber pallets; 10. crushed materials shown at photos 22 and 24 of the affidavit of John Sharp sworn 30 October 2017; and 11. timber pallets other than those with bricks, pavers or blocks on them; 1. any large concrete blocks within Area 4 are removed from 155 Avondale Colliery Road, Avondale, except those large concrete blocks whose use at that property is approved by a development consent; 1. Three (3) shipping containers are permitted to remain on 155 Avondale Colliery Road, Avondale for the purpose of storing materials for the dwelling approved to be constructed on the site; 2. Any windows and window frames and screen doors and frames that are the size and required fire resistance for the approved dwelling are permitted to remain on the site provided they are stored in the shipping containers permitted to remain on the site. 3. Paul Andrew Hollis is guilty of Charge 2 that, in breach of Order 4, he failed to demolish and remove, or cause to be demolished and removed, the Works (as defined in the Orders) from the Shed (as defined in the Orders) at 155 Avondale Colliery Road, Avondale within the time specified by the Orders; 4. On Charge 2, Paul Andrew Hollis is fined $500; 5. On Charge 2, Paul Andrew Hollis is fined a further $7,500 unless, within 6 months of 12 December 2017 (that is, 12 June 2018), Order 4 of the Orders (other than those parts of Order 4 which have been stayed pursuant to (1) of these orders) is complied with. 6. Paul Andrew Hollis is to pay the costs of Wollongong City Council to the Council on the basis that $8,500 is to be paid to the Council within 45 days of the date of these orders and that a further $8,500 is to be paid to the Council by 30 April 2018.

Annexure A Annexure A Page 1 Lower Floor Plan (300 KB, pdf) Annexure A Page 2 Amended Kitchen Floor Plan (287 KB, pdf) 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: 13 December 2017

At a glance

Court

Decision date

Before

Source

Judgment (24 paragraphs)

Parties

Cases Cited (2)