Land and Environment Court of New South Wales CITATION : Maitland City Council v Link Building Services Pty Limited [2008] NSWLEC 71 This decision has been amended. Please see the end of the judgment for a list of the amendments. PROSECUTOR: Maitland City Council PARTIES : DEFENDANT: Link Building Services Pty Limited ACN 003 906 483 FILE NUMBER(S) : 50018 of 2007 CORAM: Lloyd J KEY ISSUES: Prosecution :- carrying out development without first obtaining development consent - plea of guilty - penalty - relevant objective considerations - gaining commercial advantage - no environmental harm - no direct expression of contrition and remorse - mitigating factors Crimes (Sentencing Procedure) Act 1999 s 3A LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 76A(1)(a) and s 125(1), Fines Act 1996 Pt 2 Div 2 Keir v Sutherland Shire Council [2004] NSWLEC 754 R v Elfar [2003] NSWCCA 358 CASES CITED: R v McGourty [2002] NSWCCA 335 R v Qutami [2001] 127 A Crim R 369 R v Visconti [1982] 2 NSWLR 104 DATES OF HEARING: 31 January 2008 EX TEMPORE JUDGMENT DATE : 31 January 2008 PROSECUTOR: C J Leggat SC Solicitors: Thomson Norrie LEGAL REPRESENTATIVES: DEFENDANT: G Green (solicitor) SOLICITORS: Pike Pike & Fenwick JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Lloyd J Thursday, 31 January 2008 LEC No. 50018 of 2007 MAITLAND CITY COUNCIL v LINK BUILDING SERVICES PTY LIMITED [2008] NSWLEC 71 EX TEMPORE JUDGMENT 1 HIS HONOUR : The defendant, Link Building Services Pty Limited, pleads guilty to a charge that between 19 April 2005 and 5 December 2005 at East Maitland it committed an offence against s 125(1) of the Environmental Planning and Assessment Act 1979 ('the EP&A Act ") in that it carried out development being development which required development consent in circumstances where a development consent had not been obtained contrary to s 76A (1)(a) of the Act. The question for determination is the appropriate penalty which should be imposed. 2 The defendant entered a plea of guilty at an early opportunity and has co-operated with the prosecutor not only in its investigation of the offence but in the preparation of an agreed statement of facts. 3 It is convenient to briefly refer to the agreed statement of facts in order to understand the nature of the offence. The offence was committed on a property known as the Bank Hotel at Nos. 72-74 Melbourne Street, East Maitland. 4 The defendant corporation is and has been at all relevant times the owner of that property and is also a building company which is engaged in other building activities. The sole director and secretary of the defendant company is Mr Allan James Stivano. 5 The land at Nos. 72-74 Melbourne Street East Maitland is zoned 3(b) Support Business under the the Maitland Local Environmental Plan 1993 ("the LEP"). On land so zoned development consent is required to carry out any development other than prohibited development. The use of land for the purpose of a hotel is not prohibited development. 6 The land is also within the East Maitland Heritage Conservation Area as defined in the LEP. Clause 33 of the LEP provides that a person shall not in respect of a heritage conservation area demolish or alter a building or work within the area except with the consent of the council. The council also has a development control plan the objective of which is to control changes to buildings located within conservation areas and to ensure that any new development in a conservation area will respect and enhance the heritage character of the building and its surrounding area. The Bank Hotel is not, however, listed in the local environmental plan as an item of environmental heritage. 7 On 3 June 1992, the council granted development consent for alterations and extensions to the existing hotel subject to conditions. In August 1992, the council issued a building approval relating to that development consent. On 9 November 2006, the council approved an application for modification of the 1992 consent. The modification related to the approval of a roof over the lower storey and other matters to which reference need not be made. On 24 November 2005, the council issued a building certificate relating to the ground floor of the hotel only and excluding other things such as the front façade facing Melbourne Street, the front entry and foyer area facing Melbourne Street, the new awning over the Melbourne Street footpath and other items. 8 On 18 October 2006, the council granted consent to a development application for a change of use of the first floor as a function centre subject to conditions including a deferred commencement condition requiring amendment of the 1992 consent by way of conversion of the first floor accommodation rooms to void space. The council later issued a second notice of determination for a change of use part of the ground floor to children's room, smoker's area and bistro addition and first floor to void space. On 10 November 2006, the council advised that it was satisfied that the deferred commencement condition of the development consent of 18 October 2006 had been complied with. 9 The council has granted approvals under s 68 of the Local Government Act 1993 for a place of public entertainment for parts of the hotel. On 13 March 2007, the defendant lodged a development application for the use of the first floor as a function centre. On 25 September 2007, the council resolved to approve that development application subject to conditions. 10 In or about April of 2005, the defendant took occupation of the hotel and commenced building works to renovate the hotel. Those works continued until about 5 December 2005. The prosecutor and the defendant agree that the only relevant development consent pursuant to which building works might have been carried out then was the 1992 consent. The defendant agrees that those works about which there is agreement have been carried out not pursuant to any consent including the 1992 consent. The parties agree that some forty-five items of building work were carried out not pursuant to any consent and were therefore unlawful. There is a dispute about some twenty or so additional items which I need not resolve for the purpose of this prosecution hearing. 11 There were various communications between the parties and a number of conversations took place once the council became aware of work being carried out. In particular, an inspection on 7 July 2005 by Mr Christopher Phillip Thompson of the council disclosed works being carried out and he held a conversation with Mr Stivano advising him that the building is located in a heritage conservation area and council approval should have been sought before doing any work. On that occasion Mr Stivano said " I'm sorry if I've done anything wrong, it was not my intention. I'll get on to my architect straight away and arrange a meeting as soon as possible ". 12 On 2 August 2005, Mr Thompson made a further inspection, again meeting Mr Stivano during which he told him " You have to stop work on anything that hasn't been approved ". On 5 August 2005, there was a discussion between Mr Thompson and Mr Stivano in which Mr Thompson again said " You can't do work on the terrace and back portion of the roof because the changes are not covered by the 1992 consent ". Mr Stivano replied " I can't stop work, I need to keep going until I get it closed in ". Notwithstanding these conversations the council did not issue any stop work notice on the defendant company. 13 On 9 November 2005, the defendant gave certain undertakings to the council including undertakings to lodge a fully detailed application for a building certificate and to lodge a separate development application for other work. The undertakings were duly complied with and on 24 November 2005 a building certificate as referred to in the undertakings was issued. On 18 October 2006, the council issued a development consent to the application that had been lodged on 18 October 2006 for change of use of the first floor to use as a function centre. 14 As I have noted, the question before the Court is the penalty to which the defendant should now be subject in the light of carrying out work without development consent. In considering the question of penalty there are a number of relevant considerations. The first relevant consideration is the purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act 1999. They are as follows: (a) to ensure that the offender is adequately punished for the offence; (b) to prevent crime by deterring the offender and other persons from committing similar offences; (c) to protect the community from the offender; (d) to promote the rehabilitation of the offender; (e) to make the offender accountable for his or her actions; (f) to denounce the conduct of the offender; (g) to recognise the harm done to the victim of the crime and the community. 15 In the present case the victim of the crime is the community because the defendant has failed to comply with a requirement of the law that any building or development work should be the subject of prior development consent. 16 The primary consideration in sentencing is of course the objective gravity or seriousness of the offence. The primary indicator of the objective gravity or seriousness of the offence is the maximum penalty prescribed by the legislature. The maximum penalty in the present case is $1.1 million for a corporation. 17 In the present case the objective gravity or seriousness of the offence has been described by Mr Thompson in his evidence. He says that he has no concern about any non-compliance with the Building Code of Australia. He says that there is virtually no environmental harm, that this is a technical prosecution and that the council has no concerns about the work that has been done which, it must be said, the council subsequently approved. On the other hand, the objective seriousness is highlighted by the fact that this is a deliberate and wilful contravention of the EP&A Act which occurred in a commercial setting. It can only be described as a serious breach. 18 The system of planning control would become somewhat ineffective if persons were to carry out development without ensuring that the necessary development consent had been first obtained. There is clearly an onus on those who carry out development to ensure that any necessary development consent has been obtained. 19 The next consideration is one of general deterrence. This is a major consideration in the imposition of penalties of this kind, since the penalty imposed must deter not only the offender but also those engaged in similar activities from committing like offences, to procure that they will take the precautions necessary to ensure that offences of this nature do not occur. 20 In Keir v Sutherland Shire Council [2004] NSWLEC 754, which also concerned a breach of s 76A(1) of the Act, McClellan J highlighted the particular need for general deterrence in relation to contraventions of the development controls. Relevantly his Honour stated that a court must impose a penalty which is not only appropriate with respect to the actions of the offender but which also sends a strong warning to builders and others who carry out development work that a breach of the law will be visited with significant financial consequences. 21 On the question of specific deterrence I accept the submission that the risk of this defendant re-offending is low. It is however relevant that the defendant is a building company engaged in this kind of work and is not what might be described as an otherwise uninformed person. 22 The parties have referred to a number of other cases in which penalties have been imposed for offences of a similar nature. The need to do so arises because of the need to apply the principle of even-handedness. That principle requires the sentencing judge to pursue the ideal of even-handedness in the matter of sentencing; that is, full weight is to be given to the collective wisdom of other sentencing judges in interpreting and carrying into effect the policy of the legislature. The collective wisdom is manifested in the general pattern of sentences currently being passed in cases which can be recognised judicially as relevant to the case in hand: see R v Visconti [1982] 2 NSWLR 104 at 107. 23 There is however a risk in that the penalty in each case turns on the facts of each individual case and often comparison with other decisions may be of limited utility. I acknowledge, however, that the parties have not made indiscriminate reference to other cases but have limited reference to cases which are of some utility. I do not refer to them by name, since there are many of them, but I have had regard to each of the cases to which I have been referred. 24 There are a number of subjective factors that also have to be considered. Firstly , the defendant stood to gain a commercial advantage in doing the work that was done. The fact that commercial advantage has not, however, materialised in the events that have happened is not of great importance. The fact is that the work was done with the aim of gaining a commercial advantage. The defendant was thus able to trade earlier than it otherwise would. 25 Secondly , the plea of guilty must be taken into account. I accept the fact that the plea of guilty was made at an early stage and that the defendant has provided assistance to the prosecutor. The plea of guilty, it is sometimes said, exhibits contrition and remorse on the part of the defendant. The defendant in the present case, I am informed, addressed the council on 25 September last year and publicly apologised to the council for what he had done. In the present case the defendant, and, in particular, the director and secretary of the defendant, has not given evidence. In my opinion the fact that the defendant has not given evidence, either by affidavit or orally by Mr Stivano, to personally express contrition or remorse does not establish the fact that the defendant is contrite or remorseful as a consequence of what it has done. 26 As was stated by the Court of Criminal Appeal in R v Elfar [2003] NSWCCA 358 at [25] (referring to R v Qutami [2001] 127 A Crim R 369 and R v McGourty [2002] NSWCCA 335) , if an offender in sentencing proceedings wishes to place before the court evidence which is designed to minimise his criminality then it should be done directly and in a form that can be tested. In the present case, as I have said, there had been no direct evidence from Mr Stivano and no opportunity to test that evidence. I therefore treat any evidence of contrition and remorse expressed through the defendant's solicitor as being of little or no weight. 27 Having regard to all of the matters to which I have referred it is appropriate that there be a monetary penalty. In fixing a monetary penalty I take account of the fact that the defendant has agreed to pay the prosecutor's costs in the sum of $80,000. The penalty which I now impose is, therefore, lower than that which would otherwise be the case having regard to the large amount of costs which the defendant has agreed to pay. 28 The penalty I have in mind is a penalty of $25,000, which I reduce by 30 per cent for the mitigating factors to which I referred above, to $17,500. This sum, together with the order for costs, constitutes, in my opinion, a sufficient monetary punishment of $97,000. The formal orders of the Court, therefore, are: 1. The defendant is convicted of the offence as charged. 2. The defendant must pay a penalty in the sum of $17,500 in accordance with Pt 2 Div 2 of the Fines Act 1996. 3. The defendant must pay the prosecutor's costs in the agreed sum of $80,000. 4. The exhibits may be returned, except for Exhibit "A". I hereby certify that the preceding 28 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd. Associate ********** - 1 - 20/02/2008 - Deletion of repeated words "As was stated by the Court of Criminal Appeal in" - Paragraph(s) [26] 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. 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