Willoughby City Council v Finlay (No.2) [2010] NSWLEC 233

Land and Environment Court of New South Wales

CITATION : Willoughby City Council v Finlay (No.2) [2010] NSWLEC 233

PROSECUTOR Willoughby City Council PARTIES : DEFENDANT Catherine Marjorie Finlay

FILE NUMBER(S) : 50019 of 2010

CORAM: Sheahan J

KEY ISSUES: PROSECUTION :- development without consent, heritage significance, project designer charged as well as builder, plea of guilty, sentencing options, conviction, costs

LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Environmental Planning and Assessment Act 1979

Plath v Fish and Orogen Pty Ltd [2010] NSWLEC 144 R v O'Neill [1979] 2 NSWLR 582 CASES CITED: Willoughby Council v BCPD Pty Limited [2010] NSWLEC 163 Willoughby City Council v Finlay [2010] NSWLEC 184 Woollahra Municipal Council v Kincorp (NSW) Pty Ltd (No. 2) [2009] NSWLEC 44

DATES OF HEARING: 11 November 2010

DATE OF JUDGMENT: 12 November 2010

PROSECUTOR Mr T Howard, Barrister SOLICITORS Mallesons Stephen Jaques LEGAL REPRESENTATIVES: DEFENDANT Mr M Arch, Solicitor SOLICITORS Concordia Pacific

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

Sheahan J

12 November 2010

50019 of 2010 Willoughby City Council v Finlay (No.2)

JUDGMENT 1 His Honour: In this matter the Council prosecutes a building and interior designer over the demolition of a whole house apart from foundations, when Council had approved, in a development consent granted for the purpose of additions and alterations to the house, demolition and replacement only of its rear sections. 2 The subject property is at 12 Second Avenue, Willoughby, within a heritage conservation area near Willoughby Park. The demolished house is described as "an original Interwar Californian Bungalow", and was bought in late 2008 by Mr Stephen & Mrs Cheryl Evans from the estate of a longstanding resident. 3 The defendant had worked for the Evanses previously and was advising them prior to the auction of the house. Thereafter she (1) submitted on their behalf various applications to Council; (2) prepared several sets of drawings for the building project as well as detailed "briefs" and "specifications"; (3) engaged various professional advisors to assist them; (4) organised the tendering process which resulted in Michael Mayhew's company, BCPD Pty Ltd, being engaged by the Evanses to carry out the building contract; and (5) attended to the certification of the approved project. 4 The relevant development consent (DC 2008/754 – Exhibit W2, tab 2) was granted on a deferred commencement basis on 2 January 2009 and took full effect on 23 January 2009. The building contract with BCPD was entered on 16 February 2009 (Exhibit W2, tab 8), and the construction certificate issued on 23 February 2009. The approved project involved retention of the front façade and some other elements of the existing house. 5 It became apparent during the building works, indeed beforehand, that permanent action was needed to correct some structural problems with the house. After demolition further problems were encountered with the original foundations. Total demolition may well have been appropriate but Council was entitled, indeed obliged by law, to be involved in any such decision. There are detailed requirements set out in the relevant LEP, DCP and Council publications (Exhibit W2, tabs 9-11). 6 The relevant demolition exceeding the Council's approval occurred between 23 February and 4 March 2009. The façade was for a time propped up, but the builder quickly came to the conclusion that it was unsafe and had to be demolished. After some community complaint Council issued a stop work order on 5 March 2009, but withdrew it on 2 April 2009. 7 On 24 April 2009, a new development application was lodged seeking Council's consent for the construction of a replacement house on the site. Consent was granted on 28 August 2009 (DC 2009/218). As it is said in evidence that the new house appropriately replicates the heritage aspects of the demolished house, it appears to be common ground between the prosecutor and the defence that there is, in the end analysis, "nil" or "negligible environmental harm" actually flowing from the excessive demolition. 8 Summonses were issued against Ms Finlay (as the designer), BCPD and Mayhew (as the builder), but not the Evanses (as owners contracting with either or both of Finlay or Mayhew/BCPD), charging development without consent. 9 On 9 July 2010, a plea of guilty was entered on Ms Finlay's behalf, leave was granted to amend the summons, and a September hearing date was set. The amendment was made on 12 July 2010. As a consequence, Ms Finlay was no longer charged with illegal demolition of the front façade of the house. 10 As amended, the charge against Ms Finlay is that she carried out, without the required development consent, development particularised (in par 1(b)) as: " Development: Demolishing a building within a conservation area, namely the whole or part of the following elements of the dwelling which was then located on the Land: (i) roof frame, (ii) northern and southern external walls; and (iii) internal walls being the internal walls of bedroom 1; the eastern and western internal walls of bedroom 2, the eastern internal wall of the lounge room and the eastern and western internal walls of the bathroom ". 11 It is charged (in par 1(e)) that she carried out that development by exercising her "authority" to have the demolition performed by Mayhew and persons acting on his authority and direction. As Mr Howard puts it, she had a "knowing, active concern in the demolition". 12 The case against BCPD (but not against Mayhew personally) proceeded, and came on for trial on 30-31 August 2010. After initially pleading not guilty, the builder changed its plea to guilty. Biscoe J fined the company $40,000 less 25%, plus costs of $45,000. See judgment [2010] NSWLEC 163. 13 When the Finlay matter came on for hearing before Biscoe J on 24 September 2010, His Honour was asked to recuse himself on the basis of comments he had made about her in his BCPD judgment, especially par [35], in which His Honour accepted BCPD's case that it had been misled by Finlay in respect of whether or not there had been approval given to plans which included some or all of the relevant additional demolition. Ms Finlay denies so misleading the builder, and His Honour recused himself ([2010] NSWLEC 184) from hearing the case against her. New dates were set for yesterday and today. Mr Mayhew was subpoenaed to give evidence at the hearing of the Finlay matter, now before me, and he did so. 14 A Statement of Agreed Facts ('SAF') was filed on 20 September 2010 and revised on 23 September 2010 (Exhibit W1), and two volumes of agreed documents were filed on 23 September 2010 (Exhibit W2). Other useful factual background is found in the non-controversial parts of Biscoe J's judgment in the BCPD matter. I shall not repeat a great deal of the SAF or that judgment, but the SAF will remain in the court file. Agreement on a SAF does not preclude the defendant being allowed to adduce further relevant evidence on the question of sentence, and Ms Finlay relied on two filed affidavits, a bundle of documents, and supplementary oral evidence in her own defence. 15 Despite her pleading guilty, Mr Arch for the defendant contends that preparation of plans cannot constitute the offence charged, because it does not involve the carrying out of any development requiring consent. The prosecutor's case is said by Mr Arch to be based upon the alleged "deceitful conduct" by Finlay, as she is neither owner nor builder, nor the on-site supervisor of relevant works, and to some extent that is how the prosecution has proceeded. Mr Howard submits that she made a conscious decision to hide from the Council and the certifier her intention that the whole of the existing house be demolished. 16 In Pain J's decision in Plath v Fish and Orogen Pty Ltd [2010] NSWLEC 144, where an expert allegedly gave mistaken advice, the causal link between the expert's role and the charged environmental harm was not direct. Actions were required on the part of others for the breach to occur, and in this present case, the "others" would be the builder, and possibly also the owners. 17 The defendant also contends that there is no causal connection between her drawings and the carrying out of the additional demolition works, and rejects the prosecutor's suggestion that, despite the absence of actual environmental harm, her role in the matter causes harm to the regulatory regime. I do not accept these submissions. 18 In cross-examination, Ms Finlay conceded that in at least some crucial, if not all, respects she acted as the "project manager", and the building contract identifies her as the "contract administrator". I accept that she cannot accurately be described as either the "site manager" or the "construction supervisor" – those roles were played by Mr Mayhew. 19 In terms of the allegation that she or her plans misled the builder, there are disputes among witnesses as to what was said at various stages. Ms Finlay says in her evidence that she informed all concerned that the construction drawings depicting full demolition had not been approved by Council and that a s 96 application would need to be made, to "tidy things up" and comply with the law. However, she took no action either to seek to amend the DA, or to seek a s 96 modification of the DC. Vague references to needing a s 96 modification "eventually" are clearly inadequate observance of the requirements. 20 On the other hand, she was the author of the application for a construction certificate, and the notice of commencement of works, and does not appear to have communicated to her clients or the builder that work should not commence in mid-late February 2009 without proper approvals in place. She allowed work to commence, knowing that the approval granted by Council was patently insufficient to cover it. 21 While there is absolutely no evidence that Ms Finlay actually instructed the builder at any stage to demolish all he did without approval, she certainly did not explain the legal reality to him or the certifier, let alone the Council as the prime regulator of such a project. She may not have made a cold-blooded deliberate decision to deceive, but she was at least negligent and probably reckless in fulfilling her duties as a professional in the industry. As Mr Howard submitted, she cannot successfully plead such an unrealistic degree of naivety. She has been in the industry long enough to know the basics of the EPA Act regime, including amendments and modifications, and has worked in the Willoughby Council area before. Her referee Mr Weathers says as much, and also refutes her evidence before me that this project was "bigger" than any she had done before. (This project had an estimated budget of $759,000, and he says she has had budgets up to $900,000). 22 A plea of guilty covers all the "essential legal ingredients of a charge but no more", R v O'Neill [1979] 2 NSWLR 582, at 588. See also Woollahra Municipal Council v Kincorp (NSW) Pty Ltd (No. 2) [2009] NSWLEC 44, at par [93]. A plea of guilty cannot be taken to be an acceptance of all the facts alleged by the prosecutor, and a defendant can join issue with elements of the prosecution case. I am satisfied that the prosecutor has established that a conviction should be entered in this case. I decline to make any order under s 10 or s 10A of the Crimes (Sentencing Procedure) Act 1999, as sought. 23 The principles to guide sentencing in such matters are well established and need not be repeated in detail here. I adopt Biscoe J's summary of them in BCPD. 24 Ms Finlay has produced very strong references from significant figures in her personal and professional circles, including Mr Weathers, who described her as "meticulous to design and detail", "conscientious" and "law abiding" in her work. (See references in Exhibit F1). She frankly concedes that on this occasion she has not lived up to the standards attributed to her. Her contrition and remorse have been repeated throughout this matter and I am satisfied as to their sincerity. I accept that she is highly unlikely to offend again, but she must pay the penalty for this aberration in her conduct, and a message needs to be sent to the industry and wider community that strict compliance with the planning regime is required. Absence of environmental harm does not excuse a failure to comply. 25 She entered an early plea of guilty, and has cooperated fully with the prosecutor. Since being charged she has modified her business practices, and apparently did not render any fee statements in respect of the rectification project, which appears to have cost her clients an additional $100,000. She has sustained some extra-curial punishment in terms of damage to her reputation (see Fish at [114]). 26 Ms Finlay has apparently been since 2008 the primary financial supporter of her family which includes three dependent children aged 9 to 13, so the court accepts that she was under some financial pressure at the time of this offence. Clearly her clients were also pressuring her to get the project going very quickly. 27 In the end, I cannot separate Ms Finlay's role and that of Mr Mayhew and his company in terms of culpability for this serious breach of the law. I have decided that her penalty should be the same as that imposed on Mr Mayhew's company by Biscoe J. 28 I will also order her to pay the prosecutor's costs. An amount is sought well in excess of the amount already payable by BCPD for the companion prosecution, so I will leave the amount in this case to be agreed or assessed. 29 The orders of the court are: