Land and Environment Court New South Wales Medium Neutral Citation: Maitland City Council v Khalil [2012] NSWLEC 58 Hearing dates: 29 February 2012 Decision date: 29 February 2012 Jurisdiction: Class 4 Before: Preston CJ Decision: Orders as set out at [44] Catchwords: CIVIL ENFORCEMENT - failure to repair or make structural alterations to a building in accordance with statutory orders - failure to remove waste from a building in accordance with council order - orders to remedy breaches of statute - applicant council sought court order for it to carry out work required by statutory orders - respondent building owner sought for court to extend time in statutory orders to carry out works himself - variation of statutory orders not within Court's Class 4 jurisdiction - respondent provided no clear timeframe for work to be carried out - order that council carry out work required by statutory orders Legislation Cited: Environmental Planning and Assessment Act 1979 ss 121B, 121H, 121U, 121ZJ, 122 Local Government Act 1993 ss 124, 132 144, 672, 676, 678 Category: Principal judgment Parties: Maitland City Council (Applicant) Mr Andre Khalil (Respondent) Representation: Dr J F Kildea (Barrister) (Applicant) Mr A Khalil (Respondent in person) MRM Thompson Norrie Lawyers (Applicant) File Number(s): 40832 of 2011 EX TEMPORE Judgment A building owner fails to comply with statutory orders to repair a building 1On the main street of Maitland, at 324 High Street, stands a derelict and dilapidated three-storey building. It once was a hotel, last called the Carrington Hotel, but later it was a pet shop called, with consonantal alliteration, Bob's Bird Barn. This business was not successful. 2By 1994 the building became vacant. Vandalism increased over the next two decades. Glass windows were broken, doors removed, brick walls demolished, an awning over the footpath damaged and internal fittings and fixtures broken. Intruders, birds and vermin have occupied the building leaving rubbish and excrement. Fire, rain and other elements have damaged the building. The building has not been repaired or maintained. 3Over the last decade the local council, Maitland City Council ("the Council"), has repeatedly requested and directed the building owner, Mr Khalil, to repair the building. One such direction was on 25 August 2009 when the Council issued a statutory order requiring the owner to repair the building within three months. Mr Khalil did not do so. Two other statutory orders were given on 12 October 2010. These are the orders that give rise to these proceedings. 4The first order, issued on 12 October 2010, was an order No 4 under s 121B of the Environmental Planning and Assessment Act 1979 ("EPA Act") requiring Mr Khalil, as the owner of the building, to repair or make structural alterations to the building as specified in the order. The work specified included repairs to the awning over the footpath, the window and door openings on the lower, middle and upper levels, the brickwork at the side and rear of the building, the gutters and downpipes, and the internal stairway, and sealing openings, windows and doorways to prevent unauthorised entry to the building. The reasons stated for giving the order were that the building was or was likely to become a danger to the public and was in a dilapidated state so as to be prejudicial to its occupants or to persons or property in the neighbourhood. The works specified were to be completed within 60 days of the order. 5The second order, issued on 12 October 2010, was an order No 22 under s 124 of the Local Government Act 1993 ("LG Act") requiring Mr Khalil, as the owner of the building, to remove from the building and dispose of the waste specified in the order, including debris, materials, droppings, rubbish, faecal matter and the like. The reasons given were that the waste provided or was likely to provide harbourage for vermin, posed or was likely to pose a fire and safety hazard, and caused or was likely to cause the spread of disease by micro organisms. The action specified was required to be done within 30 days of the order. 6Mr Khalil did not comply with either order by undertaking the works or actions specified within the period specified or at all. Mr Khalil says he cannot afford to pay for the work. 7Since these orders, the building has continued to be vandalised and damaged. The Council has carried out some emergency work, including sealing openings, windows and doorways to prevent unauthorised entry by intruders. However, such works do not prevent ingress of rainwater, birds or vermin to the building. The current state of disrepair of the building is worse than when the two statutory orders were issued on 12 October 2010. The council brings civil enforcement proceedings 8The Council has brought these proceedings to achieve compliance with the two statutory orders. By summons filed 14 September 2011, the Council seeks declarations that Mr Khalil has not complied with the orders. Instead of orders compelling Mr Khalil to do the work required by the statutory orders, which orders may be futile given Mr Khalil's lack of financial means and past failure to comply, the Council seeks for the Court to make an order under s 121ZJ(11) of the EPA Act and s 678(10) of the LG Act, that the Council exercise its functions under those sections to carry out the work required by the two orders. Breaches of the statutory orders and Acts 9The proceedings have been heard today. The Council has read affidavit evidence and tendered documents establishing, and I find, that: the building was in a state of disrepair and contained waste, being circumstances justifying the issuing of the statutory orders under s 121B of the EPA Act and s 124 of the LG Act (affidavit of Mr Graeme Gardiner of 13 April 2011, Mr Christopher Thompson of 18 August 2011, and Mr George Williams of 16 February 2012 attaching Mr Khalil's email of 13 February 2012 referring to the risk to health and safety of entrants to the building); the issuing and service of the statutory orders under s 121B of the EPA Act and s 124 of the LG Act (affidavit of Mr Thompson of 18 August 2011, and documents in exhibit CPT-1 and CPT-2 admitted into evidence as exhibit A and affidavits of Nadia Iannitti of 25 June 2010 and 15 October 2010); and there was ongoing non-compliance by Mr Khalil with the orders (affidavits of Mr Thompson of 18 August 2011 and 17 February 2012). 10Mr Khalil failed to carry out the works and action required by the statutory orders within the periods specified by the orders. Furthermore, by operation of s 121ZQ(1) of the EPA Act, the s 121B order continues to have effect even though the period specified for compliance in the order has expired. Mr Khalil's failure to comply therefore continues to date. 11Mr Khalil's failure to comply with the statutory orders involves a breach of the respective acts (ss 122(a)(i) and (b)(v) of the EPA Act and ss 672(a)(i) and (b)(ii) of the LG Act. The Court may make such orders as it thinks fit to remedy the breaches (s 124 of EPA Act and s 676 of the LG Act), including by making orders under s 121ZJ(11) of the EPA Act and s 678(10) of the LG Act requiring the Council to exercise its functions under those sections to carry out the work required by the two statutory orders. The building owner's defences are ineffectual 12Mr Khalil has appeared for himself. He has filed documents styled "Points of Defence" dated 23 January 2012, "Points of Defence No 2" dated 24 February 2012 and "Points of Defence No 3" dated 29 February 2012 in response to the Council's points of claim. These documents are not pleadings in form or substance. I allowed these documents to be admitted as Mr Khalil's statements of evidence when he gave oral evidence at the hearing. 13At the outset, I note that Mr Khalil does not deny that the building is in a bad state of repair and needs action. Indeed, he has expressed concern for the health and safety of persons entering the building. Mr Khalil also does not deny that he has failed to comply with the statutory orders by not undertaking the works and action required by those orders. Nevertheless, Mr Khalil defended the proceedings. As best I can understand Mr Khalil's defence, from the three points of defence documents and his explanations to the Court at the hearing, Mr Khalil's grounds are as follows. 14First, Mr Khalil complains about the timing and the manner of service of the two statutory orders of 12 October 2010. The Council read affidavit evidence of Ms Nadia Iannitti of 25 June and 15 October 2010 deposing to service of both the notice dated 18 June 2010 to give the proposed order under s 121H of the EPA Act and s 132 of the LG Act and of the actual orders dated 12 October 2010 under s 121B of the EPA Act and s 124 of the LG Act on Mr Khalil by personally handing to Mr Khalil the documents at his residence in Sydney. 15Ms Iannitti was available for cross-examination and Mr Khalil cross-examined her. Ms Iannitti recognised Mr Khalil and said that she had personally served him on three occasions, one of which was to serve the orders of 12 October 2010. She recalled she asked him whether he was Andre Khalil and he replied "Yes." She denied she did not serve Mr Khalil personally in October 2010. Mr Khalil denied that he was personally served the orders in October 2010 but does not deny being personally served with the notices in June 2010. 16I accept the evidence of Ms Iannitti that she personally served the orders on Mr Khalil. She is a licensed process server of many years experience and swore a contemporaneous affidavit within days of serving the orders on Mr Khalil when her recollection was fresh. Mr Khalil's denial was made in both his first and second points of defence dated 23 January and 24 February 2012 respectively, about one and a half years later and after many other events, including service of other documents, had occurred which may have confused his recollection of the service of the orders in October 2012. 17Accordingly, I find that the Council has served the notice and orders on Mr Khalil and thereby the orders have been given under s 121U of the EPA Act and s 144 of the LG Act. 18For completeness, I note that Mr Khalil did not contest that he was served in September 2011 with the summons commencing the proceedings and the accompanying affidavits which also contained the orders. 19Secondly, Mr Khalil says he was powerless as an individual to prevent or find a solution to the constant vandalism to his building. Mr Khalil lives in Sydney and says he is unable to provide surveillance of the building in Maitland. He says the crime, vandalism, drug use and graffiti in Maitland is a social problem that needs to be solved by governments, not individuals. He claims the police have not acted to prevent crime, vandalism and graffiti in Maitland and have made no arrests in relation to vandalism, trespassing and graffiti to his building. Mr Khalil claims the Council has no street infrastructure to monitor crime such as surveillance cameras and strong lighting in crime hot spots, in particular, in the laneway beside Mr Khalil's building leading from High Street to the Hunter River. Mr Khalil claims the Council could have monitored criminal activity around his building but failed to do so. 20Mr Khalil also claims that rubbish in the carpark of his building has been thrown there by motorists using the nearby council carpark or other persons disposing of waste. He says the Council should be responsible for removing the rubbish and waste from his land or should build a high fence to stop motorists and other trespassers using his carpark and depositing rubbish there. 21These claims of Mr Khalil do not provide a legal defence to Mr Khalil's failure to comply with the statutory orders. The responsibility to put and maintain privately owned buildings in a proper state of repair and cleanliness rests on the building owner. There is no responsibility on the police or the local council to do so. There is also no responsibility on those authorities to secure the building or prevent trespassers entering the private building. That responsibility again rests on the building owner. Where the owner does not discharge this responsibility, the EPA Act and LG Act give the local council power to order the owner to rectify the problem. The owner is required by law to comply with such an order. The owner is not relieved of responsibility because of any perceived inaction by the police or the local council. 22Thirdly, Mr Khalil claims the statutory orders were illegal because they were an abuse of power. Mr Khalil gives four grounds for his claim of abuse of power. One was that it was an abuse of power for the Council to pass the blame onto the victim to escape the responsibility of having to address the results of its own negligence. Again, this claim affords no legal defence. The Council had no responsibility to put Mr Khalil's building in a state of good repair and maintain it. Mr Khalil, as the building owner, had that responsibility. The Council did have the power to issue the statutory orders. The exercise of these powers by the Council, for the purpose for which they are granted, in the circumstances permitted, to require Mr Khalil as the building owner to do the work required of repairing and cleaning up the building, was not an abuse of power. 23The second way Mr Khalil claims there was an abuse of power was that the Council knew, when it issued the orders, that Mr Khalil could not comply due to severe financial hardship. This is not a legal defence. Neither the EPA Act nor the LG Act obliges the Council to refrain from exercising the powers to issue statutory orders to require the repair and clean up of a building because the building owner is of limited financial means or is experiencing financial difficulties. The owner has options available to comply with an order, including borrowing finance. Ultimately, the owner might be forced to sell the property to a person who is in a financial position to comply with the order. 24A third way Mr Khalil claims there was an abuse of power was because the Council had taken legal action in the Local Court against him to recover unpaid rates a few weeks before commencing these proceedings in this Court to enforce the statutory orders, which Mr Khalil claims proves that Mr Khalil was singled out and punished for no reason. I reject this claim. The two proceedings are unrelated. The issuing of the statutory orders was a response to continued inaction by Mr Khalil to repair and clean up the building. The proceedings were brought to enforce the statutory orders. They were not brought to punish Mr Khalil because of his delay in paying rates. 25The fourth way Mr Khalil claims there was an abuse of power was that the Council gathered enormous amounts of evidence to bring the court case to enforce Mr Khalil to comply with the statutory orders. Mr Khalil says the costs could have been avoided and the money better spent by the Council taking action to solve the community problem with vandalism. This claim provides no legal defence. The Council was under no legal responsibility to take the action Mr Khalil suggests or spend the money on that action instead of issuing to Mr Khalil, and then bringing proceedings to enforce compliance by Mr Khalil, with the statutory orders. There is no abuse of process by the Council bringing the proceedings against Mr Khalil. 26Fourthly, Mr Khalil says that he is of limited financial means and cannot afford to self-fund the works and action required by the statutory orders. Furthermore, notwithstanding many attempts, Mr Khalil has found it impossible to borrow money or otherwise raise finance from lenders to repair the building. Mr Khalil says he has been unsuccessful in letting the building since 1994 to a tenant who is prepared to repair the building. The current state of deterioration and damage to the building makes it unlikely any tenants would now be prepared to undertake the works required in lieu of payment of rent. 27Mr Khalil's impecuniosity may provide an explanation for his failure to comply with the statutory orders but it does not provide a legal defence. 28Accordingly, Mr Khalil has not established any defence to the Council's case that he has failed to comply with the statutory orders under s 121B of the EPA Act and s 124 of the LG Act and has thereby breached the EPA Act and the LG Act. I am satisfied that Mr Khalil has breached and continues to breach the respective statutory orders and Acts. Remedying the breaches 29In relation to remedies, Mr Khalil has not provided any reasons to the Court for not making a declaration of the breaches. I consider it is appropriate in the circumstances of this case for the Court to make the declaration sought by the Council in the summons publicly to pronounce and denounce the illegal conduct of Mr Khalil. 30In relation to orders for the doing of the works, Mr Khalil submitted that he, not the Council, should carry out the work. He asked the Court to extend the time for compliance with the statutory orders. In these Class 4 proceedings brought by the Council to enforce compliance with the statutory orders, the Court does not have jurisdiction to vary the statutory orders. That could only be done in a Class 1 appeal if Mr Khalil had appealed against the order, which he did not do. However, the Court could issue an injunction compelling Mr Khalil to undertake the works and actions specified in the statutory orders within a specified period of time. This would, in effect, extend the time by which Mr Khalil would have to complete the works and action. 31Although Mr Khalil said he wished for more time to undertake the works, he did not specify in his points of defence documents, or in his oral evidence, any time by which he would actually undertake the works and action required by the statutory orders. His expression of intention to do the works was temporally open ended. In his closing address, on being pressed by me as to when he intended to do the works, Mr Khalil suggested six months but with an option to extend the time if there was bad weather or unforeseen circumstances. He said he could provide progress reports to the Court. 32Mr Khalil has not provided any evidence from which the Court could conclude that he is likely to be able to undertake the works at any time in the future. Considering both the Council's evidence and Mr Khalil's evidence, I am of the view that there is no real likelihood that Mr Khalil will in fact carry out all of the works required by the orders in six months or any reasonable period of time. Mr Khalil has been aware of the problems that vandalism has been causing to his building for 18 years yet he has been unwilling or unable to take action to address the problems. Since at least 2009, he has received notices and statutory orders from the Council to repair the building and he has failed to undertake the works required to repair the building. His evidence of the impossibility of being able to raise finance in the past to fund the works, and there being no relevant beneficial change in his circumstances, speaks against Mr Khalil being able to raise funds to carry out the works in the future. 33In oral evidence, Mr Khalil said he was intending to sell his home in Sydney when he finishes work he is doing on that building. Mr Khalil did not provide any timeframe for when he would complete the work on the Sydney home or sell it. Mr Khalil said he had tried to sell his Sydney home before but had not attracted what he considered to be a high enough price so he did not sell it. Mr Khalil said he would use the proceeds of sale of his Sydney home to fund the carrying out of the works required by the statutory orders on the Maitland building. There is no certainty that Mr Khalil will sell his Sydney home any time soon and have sufficient funds from the sale to undertake the works required by the statutory orders. 34Mr Khalil also gave evidence that, although he is currently unemployed, he has undertaken various finance courses and hoped to set up a business which would provide income to undertake the works required by the orders. Again, this idea is inchoate. Mr Khalil has taken no steps yet to establish such a business or attract clients from whom he could generate any income. He has provided no time frame for when sufficient income would be able to be earned to fund the works required by the statutory orders. 35Finally, Mr Khalil in oral evidence said he has undertaken some studies in architecture and structural engineering which could enable him to undertake the works required by the statutory orders. Again, Mr Khalil has provided no timing for when he would be able to undertake the work. It would appear from his other evidence that it would be after he finishes work on his Sydney home. He also said he could not start until utilities (particularly water and electricity) are reconnected to the building because he would want to stay in the building while he did the work. He has made no attempt to rearrange reconnection. Mr Khalil's ability to do the work would be hampered by the need for him to have sufficient funds to buy materials to undertake the work. Until he can raise the funds, he would not be able to purchase the materials and thereby do the work. 36There is also a doubt that Mr Khalil will be motivated to do the works. He has said that it is futile to do the works without solving the overall social problem in Maitland. He may not be prepared to carry out the works which he considers to be futile. 37For all these reasons, I find there is no real likelihood of Mr Khalil being able to carry out the works required in six months or any reasonable time frame. The risk to persons and property posed by this building demands a certain and immediate response. Mr Khalil cannot provide that response. 38This leaves ordering the Council to carry out the work. Mr Khalil opposed the Court making orders requiring the Council to carry out the work required by the statutory orders. As I understand it, his opposition was twofold. First, Mr Khalil was concerned about the high cost of the Council doing so and Mr Khalil's inability to repay that cost to the Council. Mr Khalil did not provide any evidence to prove that the Council's proposed works would be unreasonably costly, such as obtaining and providing to the Court quotes of builders. The Council has an obligation only to do such things as are necessary or convenient to give effect to the terms of the orders. Hence, the scope of works will be confined by the works and actions specified in the statutory order. The Council is not at liberty to undertake other works or actions. I do not consider this ground to be sufficient to oppose the carrying out of the needed works by the Council. 39Mr Khalil's second ground of opposition was that the undertaking of the works and actions required by the statutory orders would not solve the broader community problem of vandalism. The building may be broken into the next day by vandals. I reject this ground of opposition. The undertaking of the works and actions required by the orders will address the risk to people and property posed by the building currently, which is the purpose for which the statutory orders were issued. The securing of the building by the works, of course, may prevent unauthorised entry to, and vandalism of, the building. The statutory orders were never issued for the purpose of solving the broader social problem of vandalism in Maitland. Hence, the fact that the works and actions required by the statutory orders will not solve the broader social problem of vandalism in Maitland is not a reason not to undertake the works and action. 40Once the works are undertaken, Mr Khalil will still have a responsibility as the building owner to take effective steps to prevent vandalism to his building and keep it in a state of good repair. He cannot pass that responsibility on to others, including the Council or the public. 41For these reasons, I consider it is appropriate to make the orders sought by the Council under s 121ZJ(11) of the EPA Act and s 678(10) of the LG Act. Costs of the proceedings 42Finally, the Council seeks its costs of the proceedings. The Council has been successful in the event of establishing breaches of the orders and Acts and of obtaining the relief it sought in the summons. The proceedings are in Class 4 of the Court's jurisdiction where the usual order is that costs follow the event. This means that Mr Khalil should pay the Council's costs of the proceedings. Mr Khalil has not established any circumstance or conduct of the Council which would make it fair or just to depart from the usual order. Mr Khalil says that a cost order would punish him. I disagree. A cost order compensates the successful party for its costs of establishing its case against the unsuccessful party. Mr Khalil was, and continues to be, in breach of the statutory orders and the Acts. The Council has been forced to bring these proceedings to remedy Mr Khalil's breaches. It should be compensated for the cost of doing so. 43Mr Khalil also said he could not afford to pay the Council's costs. However, Mr Khalil has said that he intends to sell his Sydney home to raise finance for repairing the Maitland building. This may result in sufficient funds to also pay for the Council's costs of the proceedings. In any event, Mr Khalil's asserted impecuniosity is not a sufficient reason to not award costs to compensate the Council. The amount of the costs can be agreed or, failing agreement, can be assessed. This provides Mr Khalil an opportunity to have the bill taxed. Orders 44Accordingly, the Court: (1)Declares that the order in respect of the land and premises described in the Schedule ("the subject land") pursuant to s 121B of the Environmental Planning and Assessment Act 1979 ("EPA Act") dated 12 October 2010 addressed to the respondent ("the s 121B order") has not been complied with. (2)Declares that the order in respect of the subject land pursuant to s 124 of the Local Government Act 1993 ("the LG Act") dated 12 October 2010 addressed to the respondent ("the s 124 order") has not been complied with. (3)Orders, pursuant to s 121ZJ(11) of the EPA Act, that the applicant exercise its functions under s 121ZJ(1) of the EPA Act in respect of the subject land, namely to do all such things as are necessary or convenient to give effect to the terms of the s 121B order including the carrying out of any work required by the s 121B order. (4)Orders, pursuant to s 678(10) of the LG Act, that the applicant exercise its functions under s 678(1) of the LG Act in respect of the subject land, namely to do all such things as are necessary or convenient to give effect to the terms of the s 124 order including the carrying out of any work required by the s 124 order. (5)Orders that the respondent pay the applicant's costs of the proceedings. SCHEDULE All that piece and parcel of land and three storied brick premises erected thereon situated in the City of Maitland being Lot 1 in DP86247 and being the property known as number 324 High Street, Maitland. 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: 30 March 2012