Campbelltown City Council v Mhanna

[2010] NSWLEC 57

Land and Environment Court

of New South Wales

CITATION:

Campbelltown City Council v Mhanna [2010] NSWLEC 57

PARTIES:

PROSECUTOR:
Campbelltown City Council

DEFENDANT:
John Mhanna

FILE NUMBER(S):

50050; 50051 of 2009

CORAM:

Biscoe J

KEY ISSUES:

CRIMINAL LAW :- Sentencing - offence of commencing erection of buildings in accordance with development consent when a construction certificate for the building work had not been issued.

LEGISLATION CITED:

Crimes (Sentencing Procedure) Act 1999, ss 3A, 21A, 22
Environmental Planning and Assessment Act 1979, ss 81A(2), 125(1)
Local Government Act 1993, s 124

CASES CITED:

Canterbury City Council v Daoud [2007] NSWLEC 135
Ku-Ring-Gai Council v Vinci [2007] NSWLEC 283
R v Thomson [2000] NSWCCA 309, 49 NSWLR 383
Willoughby City Council v P & V Masonry Pty Ltd [2003] NSWLEC 312

DATES OF HEARING:

18 March 2010

EX TEMPORE JUDGMENT DATE:

18 March 2010

LEGAL REPRESENTATIVES:

PROSECUTOR:
Mr T Howard
SOLICITORS:
HWL Ebsworth

DEFENDANT:
Mr R K Newton
SOLICITORS:
n/a

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

18 March 2010

50050 of 2009
50051 of 2009

CAMPBELLTOWN CITY COUNCIL v JOHN MHANNA

EX TEMPORE JUDGMENT

1 HIS HONOUR: The defendant, John Mhanna, pleads guilty to the charge that between late April 2008 and about 8 May 2008, at Macquarie Fields in the State of New South Wales, he committed an offence against s 125(1) of the Environmental Planning and Assessment Act 1979 in that he did the following thing which was forbidden to be done by s 81A(2) of that Act:

“He did commence the erection of buildings in accordance with a development consent when a construction certificate for the building work had not been issued by the consent authority or an accredited certifier”.

2 The defendant committed the offence by authorising the following works to be carried out which constituted the commencement of the erection of buildings without a construction certificate:

a) excavation for laying of concrete slabs;
b) in relation to two concrete slabs, the construction of formwork and the laying of those slabs;
c) additional works comprising formwork and steel in preparation for the pouring of additional slabs (which were not in fact poured); and
d) the emplacement of drainage lines and pipes.

3 At the time these works were carried out the defendant was a building project supervisor.

4 These works were carried out on land comprising Lots 8 and 9 in DP 233072 and Lot 2 in DP 520114, known as 16-20 Myee Road, Macquarie Fields (the Land).

5 On 11 May 2006 the Prosecutor had granted development consent No. 2340/2005/DA-M for the demolition of the three existing dwellings on the Land and the construction of 15 town-house dwellings and strata sub-division on the Land.

6 It was a term of the development consent that it would lapse unless the development was commenced within two years from the endorsed date or as otherwise provided under s 95 of the Environmental Planning and Assessment Act.

7 Westcity Development Pty Ltd (Westcity) and its director, Ms Tina He, were the owners of the Land.

8 Prior to the commission of the offence, the defendant had entered into an informal arrangement with Westcity, pursuant to which the defendant was to carry out works on behalf of a corporation, Icewick Pty Ltd (Icewick), in pursuance of the townhouse development approved by the development consent.

9 In about late April 2008, the defendant authorised works to commence on the Land.

10 On or around 8 May 2008, the defendant authorised and arranged for concrete slabs to be poured on the Land.

11 During the period from late April 2008 to about 8 May 2008, the defendant authorised the other works particularised in [2] above.

12 At the time the defendant authorised the carrying out of these works, he was aware that a construction certificate was required to carry out those works and he was aware that a construction certificate had not been obtained. When interviewed by council officers later, on 23 June 2008, the defendant stated that, at the time he had authorised the carrying out of these works, he had been informed by the private certifier that a construction certificate was imminent.

13 The defendant made a decision to authorise the carrying out of the building works without a construction certificate because of the need, of which he was aware, to physically commence the development the subject of the development consent within two years of the date of its issue, namely by 11 May 2008, to avoid the consent lapsing on its terms.

14 On 29 May 2008 Mr David Day, an officer of Campbelltown City Council (the prosecutor), inspected the Land in response to information he received. Prior to inspecting the Land, Mr Day reviewed files held by the prosecutor in relation to the Land and had seen the development applications and consents in relation to the Land.

15 Upon arriving at the Land, Mr Day observed that there were three dwellings, located at 16, 18 and 20 Myee Road. He observed timber framework located upon the footpath nature strip adjacent to 2 Myee Road. The customer name on the docket attached to the framework was John Mhanna. He walked down the driveway between 16 and 18 Myee Road which had been modified for the purpose of forming a construction driveway.

16 Mr Day observed construction works in progress at the rear of the dwellings situated on the Land. He saw that two concrete slabs had been formed and poured which were in the approximate location where some of the townhouses the subject of the development consent were to be constructed according to the approved plans.

17 Mr Day also observed additional works comprising formwork and steel for the formwork and slab preparation of certain other of the townhouses the subject of the development consent.

18 Mr Day observed that there was no construction signage identifying the owner or principal certifying authority, or the builder or any names or contact numbers. While inspecting the Land on 29 May 2009, Mr Day took a number of photographs.

19 After inspecting the Land, Mr Day phoned Ms Tina He, who had been nominated as the owner of the Land on the development application form. Ms He informed Mr Day that Mr Mhanna was responsible for the construction works and obtaining the necessary approvals. Ms He gave Mr Day Mr Mhanna’s mobile phone number.

20 That same afternoon (29 May 2009) Mr Day phoned Mr Mhanna on his mobile phone and, after introductions, they had the following conversation:

Mr Day: “I have carried out an inspection of 16-20 Myee Road,
Macquarie Fields, and I believe that the works have commenced without the prior approvals”.

Mr Mhanna: “I am the builder on site. I know I do not have a construction certificate authorising the commencement of works. It is council’s fault that I started the works without a CC, because you would not give me an extension of time on the development application”.
Mr Day: “You will need to come in to council for a formal interview to discuss the site works which have commenced.”
Mr Mhanna: “I will need to speak to my lawyer.”

21 On 2 June 2008 Mr Day prepared and issued to the owners of the Land and Icewick Pty Ltd:

(a) an emergency order No 21 under section 124 of the Local Government Act 1993 (Ref: 138/2008/N-LGA); and

(b) an emergency order pursuant to section 121B of the Environmental Planning and Assessment Act .

22 On 10 June 2008 Mr Day again attended the Land for the purposes of ascertaining whether the orders he had issued had been complied with. He observed that no further works had been carried out on the site.

23 On 23 June 2008, the defendant was interviewed by Mr Day and his colleague, Mr Paul Curley, at the prosecutor’s chambers. During the interview, the defendant said he was the developer of the site and the principal of the corporation Icewick which was nominated as the builder for the purpose of the proposed development on the Land. The defendant admitted that he had authorised the construction works to commence and had arranged for the pouring of the slabs. He again admitted he was aware a construction certificate had not been obtained prior to the commencement of the works and said he was informed it was imminent by a private certifier, Mr Tony Qui.

24 That second emergency order required the defendant to immediately cease all construction, excavation and building works. There is no suggestion that he did not comply with that order.

DEFENDANT’S EVIDENCE

25 The defendant gave unchallenged evidence to the following effect. At the time of the matters, the subject of the charge against him, he was a construction supervisor for Icewick Pty Ltd and has since become a director. In about April 2008 Icewick was approached by Westcity to carry out building works on its land. Westcity was controlled by Ms Tina He. Neither the defendant nor Icewick have ever had any interest in Westcity nor in the subject property other than as a provider of building services in the case of Icewick and as a source of wages in the case of the defendant.

26 Neither the defendant nor Icewick was a developer with respect to the works at the property in the sense of being financially interested in the final outcome of the project. There may have been an erroneous impression gained at one point by the council that the defendant was the developer. In fact, at all times, the developer was Westcity.

27 He learned from Ms He that Westcity had obtained a development consent to demolish three existing cottages on the property and erect fifteen townhouses. He understood from Ms He that she was under considerable financial stress in not being able to get construction under way. In particular, there was a problem, according to Ms He, about satisfying one of the development conditions concerning the grant of an easement because of the slow response by the council to submissions and correspondence on the subject. The defendant understood the problem was becoming critical because the development consent was shortly to lapse.

28 As at the beginning of May 2008 the only other significant matter which had to be attended to before commencement of works on the property was the issue of a construction certificate. The defendant approached a private construction certifier, Mr Tony Qui, and ascertained that a construction certificate could issue immediately once the easement issue was sorted out with the council.

29 At the time, in April or May 2008, the defendant was very sympathetic to the plight in which Westcity and Ms He found themselves. To his mind the council was being deliberately unreasonable and slow in dealing with the easement issue so as to bring about a lapsing of the development consent. The defendant says that he "foolishly" suggested a course of action to Ms He that Icewick arrange to construct the foundations so it could be said there had been substantial commencement of the works and thus save the development consent from lapsing.

30 It was his understanding at that time that this practice was widely used in the building industry to save development consents from lapsing. He says that since the commencement of these proceedings he has obtained legal advice and accepts that his understanding was erroneous in point of law.

31 He says he is very sorry about this lapse on his part and gives an assurance to the Court that he will not counsel or allow this to happen again in respect of any project with which he has any connection.

32 Ms He accepted his suggestion and went ahead and arranged with contractors for Icewick to install two foundation slabs in the rear yard of the existing dwellings. This occurred in early May 2008 and before 11 May 2008.

33 The existing dwellings were not disturbed and are still in place. There is no impact on the amenity of the neighbour nor any adverse visual impact. The slabs are not visible from the street. By the time the council objected to the works the building activity at the site had ceased pending the issue of a construction certificate. Neither the defendant nor Icewick have received any payment for the works carried out on the site. The defendant would be quite prepared to remediate the site. This could be most satisfactorily done with little disturbance to the neighbourhood by recovering the slab areas with natural fill and re-grassing if the council so permits.

34 The defendant is fifty eight years of age. He migrated to Australia from Egypt in 1977 and since then has worked in the engineering and construction industries. He has no prior convictions for environmental or planning offences. He lives with his wife in his son's home. His wife is employed but is not involved in the affairs of Icewick.

35 At the present time he has very limited financial resources of his own. He is mainly dependent on his wife for living expenses. He is working from time to time on a casual basis on building consulting work. He has applied for financial assistance from Centrelink and is waiting for his application to be processed. His health is poor. He suffers from anxiety, hypertension and stress. He believes he does not have any immediate or long term full time employment prospects. He says he has no realistic prospects of paying any substantial penalty from his own resources and would need to rely on his wife and son to assist him.

36 He says he realises that what he has done is stupid and he apologises for it. He says he is deeply distressed and anxious about the trouble which has been caused. He cannot concentrate and has difficulty in sleeping at night because he is so worried about the matter. He says he had good intentions at the time but accepts that he was completely wrong to arrange for the works to go ahead in any way regardless of any hardship to the owner and any view he may have taken about the conduct of the council.

37 After taking legal advice after the commencement of these proceedings, he says he quickly realised his error and indicated that he would plead guilty. He agrees to pay the legal costs of the council.

38 I generally accept the defendant's evidence, subject to one qualification. His evidence that he understood that the practice of arranging for foundations to be constructed was widely used in the building industry to save development consents from lapsing, does not specifically address the circumstance that, in this case, no construction certificate had been issued, and his own understanding was that a construction certificate was required before the work should have commenced.

CHARACTER

39 Two references have been tendered in the defendant's case. One is by a parish priest who has known the defendant and his family for over seventeen years. It establishes that the defendant is a person of good character. The other is by a medical practitioner who has known the defendant as a patient for some three years. It confirms that he is receiving medical treatment and counselling as he is going through a difficult time due to financial problems and also suffers from stress related illness, anxiety and hypertension. This reference also says that he is trustworthy, reliable and keen to help others.

40 The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 as follows:

“ 3A Purposes of sentencing

The purposes for which a court may impose a sentence on an offender 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.”

41 Each of the sub-paragraphs of s 3A of the Crimes (Sentencing Procedure) Act is applicable to varying and limited degrees, bearing in mind that the subject offence is one of strict liability and of a regulatory nature, and that concepts such as harm to victims and rehabilitation of the offender need to be understood in that context.

SENTENCING CONSIDERATIONS

42 The Court is required to take into account the aggravating, mitigating and other factors referred to in ss 21A and 22 of the Crimes (Sentencing Procedure) Act, although they are not exhaustive of the matters which the Court must take into account. None of the aggravating factors referred to in s 21A apply in the present case.

43 The objective circumstances of the offence to which the Court must have regard include the maximum penalty, the need for general deterrence, the defendant's state of mind in committing the offence, and the reasons for committing the offence.

MAXIMUM PENALTY

44 The maximum penalty at the time of the offence was $33,000. It was increased to $110,000 as from August 2008, but there is no submission that I should take the increase into account. The maximum penalty stands in sharp contrast to the maximum penalty generally of $1.1 million for offences against the Environmental Planning and Assessment Act at the time of this offence: s 126. The maximum penalty for an offence reflects the public expression by parliament of the seriousness of the offence. Relatively speaking, this offence was and is regarded by parliament as much less serious than offences generally under the Act.

PLACE OF THE OFFENCE IN THE PLANNING REGIME

45 The commencement of the erection of a building without a construction certificate tends to undermine one of the listed objects of the Environmental Planning and Assessment Act, namely, the object of encouraging the promotion and co-ordination of the orderly and economic use and development of land. The provisions for obtaining construction certificates are part of the approval process and play an important role in the regulatory regime under the Act.

46 The principal approval for the carrying out of development under the Act is a development consent, relevantly under Part 4 of the Act, which, in this case, had been obtained. The carrying out of works without a development consent (not this case) is objectively more serious than the carrying out of works without a construction certificate (this case), because the former offence undermines the approval system in a more material manner than the latter, by subverting the proper assessment of the proposed development and by prejudicing the opportunity for the public participation afforded at that stage of the approval process as contemplated under the Act.

47 The construction certificate is a secondary phase of approval. By this stage, the primary assessment of the appropriateness of the development has already been undertaken. Nevertheless, the obtaining of a construction certificate is a necessary and important pre-requisite to the commencement of building works to ensure the integrity of the construction works, the prior notification of the works to the consent authority and the putting into train of a proper mechanism for the overseeing and certification of the building works by suitably qualified, independent and accredited persons.

DETERRENCE

48 There is a need for general deterrence in order to maintain the integrity of the construction certificate system, particularly given the council's loss of control when private certifiers are used: Canterbury City Council v Daoud [2007] NSWLEC 135 at [45]. One of the purposes of the amendments which replaced the previous building approval regime with the current regime for the granting of construction certificates under part 4A of the Act, including by accredited persons practising in the private sector, was to avoid the need for the resources of local government to be taken up in approval and supervision of development after issuing of development consent. If, as here, a local council is not appointed as the entity responsible for issuing the construction certificate, the council will generally not be in a position to know whether a developer is complying with the post development consent requirements, and, in particular, the requirement to defer commencement of building works until a construction certificate is issued. Consequently, offences of this nature may be difficult to detect and the system relies upon its observance by developers and builders and those involved in the construction process. This suggests that there is a need for sentences to serve as effective general deterrents, provided that no single offender has to shoulder an unfair burden in the attainment of the objective of general deterrence.

49 The prosecutor submits that there is a need for specific deterrence, as the defendant carries out works in the building industry and will continue to experience the temptation, which all developers face in this industry, to short-cut the regulatory requirements, or not properly advert to them, where proper advertence, and compliance with those requirements would occasion financial detriment, commercial disadvantage or inconvenience. However, in my view, the defendant is genuinely contrite and unlikely to re-offend.

STATE OF MIND

50 When the defendant commenced the erection of the buildings on the Land, he knew that a construction certificate was required and was aware that one had not been obtained. The development was required to be commenced within two years of the issuing of the development consent (ie before 11 May 2008). The defendant was obviously concerned that the development consent would lapse if physical works did not commence on the site and, in contravening s 81A(2) of the Act, he was motivated by his desire to secure the advantage for Westcity and, to the extent that it would thereby secure the work for himself, for his own advantage.

OBJECTIVE HARMFULNESS

51 As regards the objective harmfulness of the defendant's actions, there is no suggestion that he carried out work other than in accordance with the approved plans. This is not a case where the absence of a construction certificate went hand in hand with divergence from the approved development. In some respects the case is comparable with Canterbury City Council v Daoud, although in that case the defendant believed that a construction certificate had issued. That belief, however, was not accepted by the Court as entirely reasonable.

52 The defendant submits that there are a number of mitigating circumstances:

(a) the defendant was not a principal in a financial or ownership sense;
(b) this is more a case of misguided zeal in assisting a client in difficulty. The client was under financial stress, and about to have a development consent lapse. Difficulty and delay was being experienced in finalising an easement which was apparently all that prevented the issue of a construction certificate;
(c) the defendant believed the issue of a construction certificate was imminent;
(d) the defendant stood to gain little or nothing by his actions nor did he do so;
(e) the defendant is contrite and has apologised;
(f) the defendant accepts full personal responsibility for his actions;
(g) the works were carried out over a very short period and are minimal in extent and otherwise in accordance with the development consent. There is no adverse visual impact or adverse impact on the amenity or the neighbourhood;
(h) the defendant is prepared to make amends by remediating the site subject to the approval of the owner and the council;
(i) the defendant is fifty eight years of age and has a number of health issues;
(j) the defendant's financial circumstances are poor and his future employment prospects are poor;
(k) any financial penalty imposed on the defendant will be extremely onerous;
(l) the defendant is otherwise of good character and unlikely to offend again;
(m) the defendant quickly entered a guilty plea upon obtaining legal advice;
(n) the defendant cooperated which council; and
(o) the defendant is willing to pay the reasonable legal expenses of the prosecution.

53 I generally accept the defendant's submissions on mitigation subject to a qualification concerning the proposition that he stood to gain little or nothing by his actions. I think that the defendant stood to gain income from the development if it were to proceed and that income was jeopardised if the development consent lapsed.

54 As regards the defendant's financial circumstances, I note his unchallenged evidence, which I have accepted, at [35] that he has very limited financial resources; he is mainly dependent on his wife for living expenses; he works from time to time on a casual basis on building consulting work; he has applied for financial assistance from Centrelink and is waiting for his application to be processed; and he has no realistic prospects of paying any substantial penalty from his own resources and would need to rely on his wife and son to assist him.

55 The defendant has no prior convictions for planning or environmental offences. He is of good character. He has pleaded guilty, not at the first available opportunity, but promptly after he had obtained legal advice. It is common ground that the utilitarian value of the plea was not much diminished by that delay. I assess the utilitarian value of the plea of guilty as being reflected in a discount of twenty per cent on sentence: R v Thomson [2000] NSWCCA 309, 49 NSWLR 383 at [154], [160]. He has shown contrition and remorse. He has cooperated with the council to the extent of preparation of a statement of agreed facts. He has agreed to pay the prosecutor's costs.

CONSISTENCY IN SENTENCING

56 The prosecutor submits that there is no pattern of sentencing available for this category of offence, save that, to date, the small number of offences of this type have attracted relatively low penalties. In Canterbury City Council v Daoud a fine of $5,000 was imposed. Ku-Ring-Gai Council v Vinci [2007] NSWLEC 283 involved demolition of a heritage structure and a fine of $24,000 was imposed. In Willoughby City Council v P & V Masonry Pty Ltd [2003] NSWLEC 312 a $5,000 fine was imposed.

SECTION 10

57 The defendant submits that this is an appropriate case to apply the provisions of s 10 of the Crimes (Sentencing Procedure) Act and order the discharge of the defendant, conditional upon entering into a good behaviour bond, because of the mitigating factors. I do not consider it appropriate to take that course, particularly as the defendant knew that a construction certificate was required and had not been obtained.

AMOUNT OF FINE

58 The factor which to my mind should lead the court to impose a fine which is substantially less than otherwise would be imposed is the poor financial circumstances of the defendant. Synthesising the objective and subjective circumstances, including the discount to which I have referred for the early plea of guilty, I consider that an appropriate fine should be in the sum of $3,000. As indicated earlier, the fine would have been very much greater had it not been for the defendant's poor financial circumstances.

59 The orders of the Court are as follows:

(1) The defendant is convicted of the offence as charged;
(2) The defendant is fined the sum of $3,000;
(3) The defendant is to pay the prosecutor's costs of the proceedings.