Land and Environment Court of New South Wales CITATION : City of Sydney Council v Politic Pty Limited [2001] NSWLEC 218 revised - 19/09/2001 PROSECUTOR City of Sydney Council PARTIES : DEFENDANT Politic Pty Limited FILE NUMBER(S) : 50083; 50083A of 2000 CORAM: Talbot J KEY ISSUES: Prosecution :- plea of guilty - totality principle applied - mitigating circumstances LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 76A, s 76A(1)(b), s 81A, s 96 CASES CITED: DATES OF HEARING: 03/09/2001, 04/09/2001 DATE OF JUDGMENT: 09/20/2001 PROSECUTOR Mr P.J. McEwen SC SOLICITORS Blake Dawson Waldron LEGAL REPRESENTATIVES: DEFENDANT Mr B.J. Preston SC SOLICITORS Mallesons Stephen Jaques JUDGMENT: IN THE LAND AND Matter No. 50083 and 50083A of 2000 ENVIRONMENT COURT Coram: Talbot J OF NEW SOUTH WALES Decision Date: 20 September 2001 City of Sydney Council Applicant v Politic Pty Limited Respondent REASONS FOR JUDGMENT 1. By an amended summons issued in class 5 of the Court's jurisdiction, the prosecutor claims two orders requiring the defendant, Politic Pty Ltd ("Politic"), to answer the following charges:- 1. That during the period from 10 April 2000 to 24 October 2000 it did carry out development being the erection of a building without development consent on land known as 365 George Street, Sydney contrary to s 76A of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"); and 2. That during the period from 18 June 2000 to 24 October 2000 it did commence and carry out the erection of a building on land known as 365 George Street, Sydney without obtaining a construction certificate contrary to s 81A of the EP&A Act. 2. The charge that the defendant carried out development without development consent relates to the removal of a timber floor on the south side of the banking chamber, the removal of sills and windows on the ground floor, the removal of marble lining from window sills and returns on the ground floor and the removal of granite cladding and security grilles and windows on the ground floor of the building. 3. The remaining and separate charge is particularised as the "Removal of timber floor on [the] south side of the Banking Chamber" . 4. The defendant has entered a plea of guilty in each case. 5. Separate charges have been laid in matters No 50085 and 50085A of 2000 against the company Gravity Corporation Pty Limited ("Gravity"). The charges in the other matters relate to earlier work on the same building. Although the matters have been heard together, separate judgments are delivered. 6. Common facts underlie both proceedings, however, the respective charges made against the two companies are distinct and the facts supporting the proof of the commission of the offence in the terms of what was done, otherwise than in accordance with the provisions of the EP&A Act, are unique in each case. This judgment will identify the common findings of fact and then proceed to deal with the facts which relate only to the charges against Politic. The common facts. 7. Development consent D/DB/96/00585H which allows for the demolition of the existing buildings at 357, 359 and 361 George Street, the refurbishment of buildings at 22, 24 to 26 York Street and 365 George Street and the construction of a 33 level commercial tower was granted to Australian Growth Properties by the prosecutor on 19 December 1996 ("the 1996 consent"). A building approval No B199700578 was issued on 11 September 1997 ("the 1997 approval"). 8. Politic acquired the property on 23 August 1999. 9. The development consent was modified a number of times, pursuant to s 96 of the EP&A Act, with an approval for the final modification being granted on 24 December 1999. 10. The building at 365 George Street is designated as the ANZ Bank Building (formerly the ES&A Bank Building). Mr Edmund Blacket created the original design and the building is recognised as a heritage item under the Sydney Central Local Environment Plan 1996. It is part of the National Estate and classified by the National Trust. 11. Building works were commenced, relying upon development consent D/DB/96/00585H, prior to the acquisition of the property by Politic. 12. Between 4 August 1999 and 10 April 2000 various meetings and telephone conversations were held between representatives of the defendant and the prosecutor in respect of the original development consent. 13. Amended drawings were lodged with the City of Sydney Council ("the council") between 25 October 1999 and 3 March 2000. On 10 April 2000 the council granted a further development consent D99/00562 ("the 2000 consent"), in favour of Politic, approving the change of use of the heritage building at 365 George Street from commercial use to commercial/serviced apartments use and the construction of a roof addition comprising a structural transfer system, two levels of serviced apartments and a plant room. 14. Subsequent to its acquisition of the property on 23 August 1999, Politic carried out work on the ground floor and banking chamber. 15. Following an inspection of the building on 27 July 2000 by council officers all works ceased at the request of the council. 16. On 2 August 2000, the defendant lodged an application for a construction certificate for future works. 17. On 21 August 2000, the defendant lodged an application for a building certificate in respect of works that had already been carried out. 18. On 7 November 2000, the defendant commenced class 1 proceedings in this Court by way of an appeal against the prosecutor's deemed refusal of the application for a building certificate and the application for a construction certificate. As a result of discussions between the two parties a building certificate and a construction certificate were issued pursuant to consent orders made on 11 January 2001. The charges against Politic. 19. In the meantime, on 7 September 2000 the council authorised the defendant to complete the refurbishment of the ANZ Banking Chamber and on 22 December 2000 the council issued a building certificate for that part of the building. 20. The following facts are set out in a statement of agreed facts:- An area of timber floor boards in the ground floor banking chamber was damaged during demolition of the sills and windows … and was not practically able to be salvaged. Politic then caused the timber floor on the south side of the Banking Chamber to be removed. This was development in a manner not consistent with the Conservation Management Plan and Heritage Impact Statement, without development consent … and without a construction certificate … Politic caused the sills and windows on the ground floor between grids 2 and 4 and grids 5 and 6 to be removed in a manner not in accordance with the 2000 Consent … The sills and windows between grids 2 and 4 were rebuilt following a request from Council made on 7 September 2000. The sills and windows between grids 5 and 6 remain at the lower level. Politic caused the marble lining from window sills and returns on the ground floor between grids 2 and 3 and between grids 5 and 6 to be removed in a manner not in accordance with the 2000 Consent … The marble lining was rebuilt following a request from Council made on 7 September 2000. 21. The Court is satisfied that the entry of the plea of guilty, together with the statement of agreed facts, admits to the essential legal ingredients of the offence in that it acted without development consent as follows:- The removal of the timber floor, sills and windows, marble lining from window sills, granite cladding and security grilles was not authorised by the consent obtained by the defendant. 22. Notwithstanding that the plans lodged in support of the 1996 consent and the second development application made in 2000 showed that the existing window sills had been, or would be, lowered to floor level, condition 17 of development consent D/99/00562 expressly provides as follows:- Sill heights along King Street are to be retained except where disabled access to the Banking Chamber is required. 23. It is not disputed that the work of removing the timber floor on the south side of the banking chamber was not covered by a construction certificate when the work was done. 24. The evidence shows beyond reasonable doubt that until an existing carpet was removed on the ground floor, the existence of a wooden floor under the carpet was not readily evident by visual inspection. A director of Politic, Victor Charles Comino, states in an affidavit read by the Court that he was unaware of the existence of the timber floors until the carpet was removed on 15 July 2001. 25. Orwell Peter Phillips, a heritage architect, was engaged to prepare a Heritage Impact Statement in relation to the property at 365 George Street. Mr Phillips has sworn an affidavit and the defendant relies upon his evidence. In his opinion, the loss of the heritage and conservation value to the building as a whole by the removal of the timber floor on the south side of the banking chamber is slight, having regard to the following matters:- (a) the timber floors were laid on battens set into the concrete floor above the jack arches. They may therefore have been part of the Wardell works (circa 1890) to the building, but if so, were evidently altered during the Robertson and Marks works (circa 1925). The timber floors were laid as a walking surface in staff areas and Terrazzo flooring (intended to be seen and exposed) was laid in public areas. From my observations of the finish of the timber floors when uncovered, the timber floors had never been previously exposed. Moreover, I interpret the documentary evidence to indicate that the timber floors were never intended to be exposed, as original drawings of the buildings show a linoleum floor of which no evidence was found; (b) based on the assessments of significance of other fabric in the CMP, I would suggest that the timber floors in the Banking Chamber are of medium significance; (c) the damage to the timber floors occurred during the lowering of window sills on the south and east sides of the building, most likely caused by the use of demolition machinery on the masonry walls. The section of the floor that was damaged could not be salvaged and the damaged pieces of flooring were removed; (d) to allow carpet to be laid, a cement screed has now been installed where the timber is missing, over a plastic membrane, which can readily be taken up and the timber floor replaced in future if required; and (e) evidence of the original timber floor survives along the north side of the Banking Chamber. 26. The sills and windows that were removed on the ground floor have been reconstructed to their original appearance using fixed glazing instead of openable casement sashes. The marble lining under these windows has also been reconstructed following reinstatement of the sills. The granite cladding under the windows has been reconstructed as part of the reinstatement of the sills, in accordance with requests made by the council, although the granite facings on the outside of the building have more vertical joins than before their removal. 27. Mr Phillips swears that the security grilles were removed to enable the sills to be lowered and the windows removed. Moreover, during removal the security grilles were found to be "rusted and brittle" and consequently were not able to be salvaged or re-used in the reconstruction works. Mr Phillips doubts that the existing security grilles were original and believes that they may have been added as an afterthought. It is his opinion that reconstruction of security grilles on the remaining windows is not warranted on heritage grounds. 28. Mr Comino has explained that his understanding at all times was that the grant of the 2000 consent did not invalidate the 1996 consent. He says he examined the 2000 consent and observed that it made no mention of the 1996 consent and that both consents substantially overlapped in relation to the specified works. It was his understanding that the development could continue, pursuant to the 1996 consent and the 1997 approval, notwithstanding the fact that a construction certificate was outstanding in respect of the 2000 consent. He says that the sills and windows removed on the ground floor were demolished pursuant to the 1996 consent. Although Mr Comino is a director of the defendant company, his understanding and explanations must be regarded as his own personal opinion rather than that of the defendant itself. Nevertheless, his evidence is helpful for the Court to gain an understanding of the circumstances under which the offence took place. 29. It might be said in favour of the defendant that the history of the matter is complex and that the change of ownership after the commencement of work, pursuant to the 1996 consent which was followed by further work under the 2000 consent, could lead to confusion. Nevertheless, the breaches of the EP&A Act are clear, firstly, in terms of the work carried out otherwise than in accordance with the development consent, and secondly, in relation to the removal of the timber floor without the benefit of a construction certificate. Much of the damage has been overcome by reinstatement. 30. Although Susan Duyker, a heritage consultant employed by the prosecutor, regards the timber floor structure as integral to a jack arched floor structure over the eastern section of the basement, which is highly significant, its presence, nevertheless, appears to have gone undetected until it was virtually destroyed. It is difficult to understand the statement by Ms Duyker that the loss of the timber floor diminishes the heritage significance of the building but, nevertheless, it remains a fact that the timber floor was removed and replaced contrary to the provisions of the EP&A Act. The penalty 31. Notwithstanding that separate charges have been laid it is appropriate that the penalty for the two offences by Politic be assessed in accordance with the totality principle so that the total fine does not exceed a penalty consistent with the overall criminality involved. 32. The offences by Politic occurred after 1 February 2000 when the penalty for a breach of the EP&A Act, in this respect, was increased from $110,000 to $1,100,000. The increase in the maximum penalty by a factor of ten does not direct the Court to have regard to the level of a penalty applicable prior to the increase and then apply a factor of ten. 33. This increase in penalty clearly demonstrates the public interest in requiring compliance with the EP&A Act and the seriousness with which offences are regarded by the parliament. 34. The first return date of the summons was on 6 February 2001 and a plea of guilty was entered on the sixth callover date, namely 26 April 2001. An agreed statement of facts had been prepared and the matter was set down for hearing over one day on 12 June 2001. The defendant is entitled to a full discount for the utilitarian value of its plea of guilty and its co-operation in the preparation of a statement of agreed facts. 35. The defendant has shown its contrition by carrying out works of reinstatement. 36. The Court accepts the submission made by Mr McEwen SC, on behalf of the council, that there is a heightened responsibility on the owner of a property who is carrying out work in respect of an item which has heritage significance. 37. After taking account of the mitigating factors and the seriousness of the offence the Court is satisfied that an appropriate penalty is a total fine of $60,000. 38. In matter No 50083 of 2000 the Court finds the offence proved. The defendant is convicted and fined the sum of $50,000. 39. In matter No 50083A of 2000 the Court finds the offence proved. The defendant is convicted and fined the sum of $10,000. Orders 40. The Court makes the following orders:- (1) In matter No 50083 of 2000 the defendant is convicted of the charge in the summons. (2) The defendant is ordered to pay a penalty in the sum of $50,000 in matter No 50083 of 2000. (3) In matter No 50083A of 2000 the defendant is convicted of the charge in the summons. (4) The defendant is ordered to pay a fine in the sum of $10,000 in matter No 50083A of 2000. (5) The defendant is ordered to pay the prosecutor's costs as agreed or assessed. (6) The exhibits may 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.