Canterbury-Bankstown Council v The Owners Strata Plan No 71808

[2023] NSWLEC 81

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Canterbury-Bankstown Council v The Owners – Strata Plan No 71808 [2023] NSWLEC 81

Hearing dates:

23 May 2023

Date of orders:

28 July 2023

Decision date:

28 July 2023

Jurisdiction:

Class 4

Before:

Pritchard J

Decision:

Orders at [166]

Catchwords:

SENTENCE – contempt – guilty plea – failure to comply with consent orders – contempt not purged – principles of sentencing – serious contempt in relation to fire safety – whether the contemnor was aware of Court orders – reason for contempt – appointment of strata managing agent pursuant to s 237 of the Strata Schemes Management Act 2015 (NSW)

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW)

Environmental Planning and Assessment Act 1979 (NSW) ss 121B, 121ZC (former numbering), 9.34, Sch 5

Fines Act 1996 (NSW) ss 4(1)(a1), 6

Interpretation Act 1987 (NSW) s 34(1)

Land and Environment Court Rules 2007 (NSW) rr 6.3, 7.5

Local Government Act 1993 (NSW) s 694

Strata Schemes Management Act 1996 (NSW) ss 162, 183B

Strata Schemes Management Act 2015 (NSW) ss 4, 56, 237

Supreme Court Rules 1970 (NSW) Pt 55, r 13

Uniform Civil Procedure Rules 2005 (NSW) r 40.7

Cases Cited:

Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; [1986] HCA 46

Bayside Council v Zein [2023] NSWLEC 42

Blacktown City Council v Everson [2019] NSWLEC 4

Blacktown City Council v Jason Gabriel Saker (No 4) [2022] NSWLEC 80

Burwood Council v Ruan [2008] NSWLEC 167

Camden Council v Rafailidis (No 4) [2014] NSWLEC 22

Canterbury City Council v Mihalopoulos (No 3) [2012] NSWLEC 72

Council of the City of Sydney v Owners Corporation – Strata Plan 18945 [2011] NSWLEC 79

Council of the City of Sydney v The Owners Strata Plan 18820 [2017] NSWLEC 81

Fairfield City Council v Adams (No 2) [2010] NSWLEC 45

Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242

Greater Hume Shire Council v J & L Cauchi Civil Contracting Pty Ltd [2006] NSWLEC 738

Hawkesbury City Council v Kara-Ali (No 3) [2019] NSWLEC 55

Inner West Council v Balmain Rentals Pty Ltd & Anor [2022] NSWLEC 20

James v Owners - Strata Plan No 11478 [2016] NSWSC 1558

James v Owners Strata Plan No SP 11478 (No 4) [2012] NSWSC 590

Mill v The Queen (1988) 166 CLR 59 at 63; [1988] HCA 70

NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118

Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57

Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435; [1999] HCA 19

Queanbeyan City Council v Sun (No 2) (2013) 195 LGERA 14; [2013] NSWLEC 64

R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 383

Steiner Products Ltd v Willy Steiner Ltd [1966] 1 WLR 986

Sutherland Shire Council v Perdikaris [2020] NSWLEC 111

The Owners - Strata Plan 5709 v Andrews [2009] NSWCA 189

Water NSW v Barlow (2019) 244 LGERA 1; [2019] NSWLEC 30

Waverley Council v Tovir Investments Pty Ltd and Rappaport (No 4) [2013] NSWLEC 88

Witham v Holloway (1995) 183 CLR 525; [1995] HCA 3

Wood v Staunton (No 5) (1996) 86 A Crim R 183 at 185

Texts Cited:

New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 3 December 2003 at 6092

Strata Schemes Management Bill 2003

Category:

Sentence

Parties:

Canterbury-Bankstown Council (Applicant)
The Owners – Strata Plan No 71808 (Respondent)

Representation:

T Ward (solicitor) (Applicant)
C Koikas (Respondent)

Solicitors:
Pikes & Verekers Lawyers (Applicant)
Bannermans Lawyers (Respondent)

File Number(s):

2021/181504

Publication restriction:

Nil

JUDGMENT

Introduction and outcome

1. In these proceedings, the applicant, Canterbury-Bankstown Council (Council) seeks orders that the respondent, the Owners – Strata Plan No 71808 (the respondent) be punished for contempt for failing to comply with consent orders made by Moore J on 8 November 2021 in civil enforcement proceedings 2021/181504 (the consent orders). The orders were, relevantly, that:

2. Within four months of the date of these orders, the respondent must provide the applicant with:

(a) a fire safety certificate from an accredited practitioner (fire safety) with current accreditation from Fire Protection Association Australia in accordance with section 59 of the Building and Development Certifiers Act 2018 (BDC Act) demonstrating that each of the essential fire safety measures described in Schedule 1 to these orders have been installed in the existing building situated at 3 Fetherstone Street, Bankstown (Building) and are operating in accordance with the fire safety schedule issued with the fire safety order under Division 9.3 of the EP&A Act given by the applicant on 31 May 2018 (Order): and

(b) an interim annual fire safety statement in accordance with clause 175 of the Environmental Planning and Assessment Regulation 2000 dealing with each of the essential fire safety measures described in Schedule I to these orders.

3. Within nine months of the date of these orders, the respondent must provide the applicant with a fire safety certificate from an accredited practitioner (fire safety) with current accreditation from the Fire Protection Association Australia in accordance with section 59 of the BDC Act demonstrating that each of the essential fire safety measures described in Schedule 2 to these orders have been installed in the Building and are operating in accordance with the fire safety schedule issued with the Order.

4. Within twelve months of the date of these orders, the respondent must cause a registered certifier (within the meaning of the Environmental Planning and Assessment Act 1979) who holds current registration as a “building surveyor­unrestricted” or “certifier-fire safety” for the purposes of section 6(4) of the BOC Act to:

(a) carry out a fire safety measures audit of the Building in accordance with term 1.06 of the Order for each essential fire safety measure described in Schedules I and 2 to these orders, and the other essential fire safety measures that are listed in the fire safety schedule issued with the Order; and

(b) provide the applicant with:

(i) an upgrade strategy for the Building which details the remaining works that are required so that all essential fire safety measures that are listed in the fire safety schedule issued with the Order will be implemented to a standard no less than specified in the schedule; and

(ii) a proposed schedule for completion of those works; or

(c) alternatively to (b), provide the applicant with an upgrade strategy for the Building which details the remaining works that are required by the Order, and a proposed schedule for completion of those works.

2. By notice of motion and statement of charge filed 2 December 2022, Council charged the respondent with three counts of contempt in failing to comply with Orders 2, 3 and 4 of the consent orders. The three charges are that:

1. since 12:00am on 22 March 2022 and continuing, the respondent failed to provide Council with a fire safety certificate and interim annual fire safety statement contrary to Order 2 of the consent orders (the first charge);

2. since 12:00am on 20 July 2022 and continuing, the respondent failed to provide Council with a fire safety certificate contrary to Order 3 of the consent orders (the second charge); and

3. since 12:00am on 10 November 2022 and continuing, the respondent failed to provide Council with an upgrade strategy contrary to Order 4 of the consent orders (the third charge).

3. On 3 February 2023, the respondent pleaded guilty to the three charges of contempt. It arises to sentence the respondent.

4. I have determined that it is appropriate to impose the following monetary penalties on the respondent:

1. in relation to the first charge, a sum of $10,000;

2. in relation to the second charge, a sum of $7,500; and

3. in relation to the third charge, a sum of $5,000.

5. Having regard to the entry of a guilty plea by the respondent, for which I have applied a discount of 25 percent and the totality principle, for which I have also applied a discount of 25 percent, this produces by way of penalty for the three charges a fine in the amount of $11,250. In addition, I have determined to impose a periodic fine in the amount of $2,000 in relation to each of the three charges, payable on the first day of each calendar month, commencing on 31 January 2024 until the contempt is purged.

Background

6. The parties agreed to a statement of agreed facts filed on 6 April 2023 (SOAF) from which the background set out below is largely derived.

7. The consent orders made by Moore J on 8 November 2021 relate to fire safety matters at premises at 3 Fetherstone Street, Bankstown (the premises). The premises are a 12-storey unit complex with commercial tenancies on the ground floor.

8. The premises were erected in or about 2002 and 2003 in reliance on a development consent granted by the former Bankstown City Council on 13 September 2000 (as modified on 4 July 2001), and construction certificates issued by Lyall Ernest Dix on 5 May 2002 and 18 September 2002.

9. A fire safety certificate was last issued in relation to the premises on 15 December 2003 by Peter Prasad of Pyramid Consulting Pty Ltd.

10. There is an extensive history of previous fire safety orders issued in relation to the premises. That history includes the following:

1. on 2 September 2016, Fire & Rescue NSW issued an emergency fire safety order pursuant to the former ss 121B and 121ZC of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) to the respondent, requiring it to rectify deficiencies with the smoke detection and alarm systems on the premises (September 2016 emergency fire safety order);

2. on or about 11 July 2007, 16 December 2010, 29 January 2015, and 20 April 2016, Council issued development control orders pursuant to s 9.34 of the EPA Act to the respondent, requiring specified things to be done to ensure and/or promote adequate fire safety and/or fire safety awareness under item 6 in the table to the former s 121B(1) of the EPA Act; and

3. on 31 May 2018, Council issued a development control order pursuant to s 9.34(1)(b) of the EPA Act to the respondent, specifying a number of works required to be performed on the premises under “Part 2 Fire safety orders” of Schedule 5 to the EPA Act (May 2018 fire safety order).

11. On 22 November 2019, solicitors for Council, Pikes and Verekers Lawyers, wrote to the secretary of the respondent, stating that Council had recently received a report from Fire and Rescue NSW to the effect that a recent inspection of the premises had revealed that a number of fire safety measures had not been met. The solicitors for Council said (emphasis in original):

The latest fire safety deficiencies discovered in relation to the Premises give rise to grave concerns that its use constitutes or is likely to constitute a life-threatening [sic] to occupants of the building in the event of fire. We are instructed that immediate action on The Owners’ part is required in relation to the following essential fire safety measures (by reference to the enclosed fire safety schedule that was provided to The Owners pursuant to clause 168 of the EP&A Regulation on 31 May 2018 at the rear of the enclosed latest order that was given to The Owners by Council)…

12. In its letter of 22 November 2019, Council’s solicitors required that an accredited certifier prepare and provide to Council a detailed plan addressing the required fire safety measures by 3 December 2019. Council’s solicitors said that “in the event such a plan is not received within the time specified and/or the necessary fire safety upgrades are not carried out within time, Council may commence Class 4 civil enforcement proceedings”.

13. On 9 November 2020, Senior Member Wilson of the New South Wales Civil and Administrative Tribunal (NCAT) made an order pursuant to s 237(1)(a) of the Strata Schemes Management Act 2015 (NSW) (SSMA) “appointing Foreshew Strata Agency Pty Ltd as the strata managing agent to exercise all the functions of an owners corporation for 24 months, from today to 9 November 2022” (the compulsory management order).

14. Section 237(1) of the SSMA relevantly provides:

237 Orders for appointment of strata managing agent

(1) Order appointing or requiring the appointment of strata managing agent to exercise functions of owners corporation The Tribunal may, on its own motion or on application, make an order appointing a person as a strata managing agent or requiring an owners corporation to appoint a person as a strata managing agent—

(a) to exercise all the functions of an owners corporation, or

(b) to exercise specified functions of an owners corporation, or

(c) to exercise all the functions other than specified functions of an owners corporation.

15. Section 4 of the SSMA defines “function” as follows:

function includes a power, authority or duty, and exercise a function includes perform a duty.

16. In relation to the circumstances in which an order may be made under s 237, s 237(3) provides as follows:

(3) Circumstances in which order may be made The Tribunal may make an order only if satisfied that--

(a)  the management of a strata scheme the subject of an application for an order under this Act or an appeal to the Tribunal is not functioning or is not functioning satisfactorily, or

(b)  an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under this Act, or

(c)  an owners corporation has failed to perform one or more of its duties, or

(d)  an owners corporation owes a judgment debt.

17. Section 237(6) provides as follows in relation to the return of documents and other records held by a strata managing agent appointed under s 237:

(6) Return of documents and other records A strata managing agent appointed as a consequence of an order under this section must cause a general meeting of the owners corporation to be held not later than 14 days before the end of the agent’s appointment and must on or before that meeting make arrangements to return to the owners corporation all documents and other records of the owners corporation held by the agent.

18. In relation to persons who may make an application under s 237, s 237(8) provides:

(8) Persons who may make an application The following persons may make an application under this section--

(a)  a person who obtained an order under this Act that imposed a duty on the owners corporation or on the strata committee or an officer of the owners corporation and that has not been complied with,

(b)  a person having an estate or interest in a lot in the strata scheme concerned or, in the case of a leasehold strata scheme, in a lease of a lot in the scheme,

(c)  the authority having the benefit of a positive covenant that imposes a duty on the owners corporation,

(d)  a judgment creditor to whom the owners corporation owes a judgment debt.

19. Significantly, s 56 of the SSMA provides the following in relation to the exercise of the functions of an appointed strata managing agent:

56 Exercise of functions of strata managing agent appointed by Tribunal

If a strata managing agent is appointed by the Tribunal, or by an owners corporation on an order of the Tribunal, to exercise a function—

(a) the function cannot, while the strata managing agent holds office, be exercised by any other person, and

(b) anything done or suffered by the strata managing agent in the exercise of the function has the same effect as it would have if it had been done or suffered by the person who, but for paragraph (a), could have exercised it.

20. The applicants for the compulsory management order were Benjamin Antoniak and Khoah Ngyen. A record of the orders made by NCAT was in evidence, however “the detailed oral reasons given” were not.

21. Pursuant to the compulsory management order, Foreshew Strata Agency Pty Ltd (Foreshew Strata) was to exercise all the functions of the respondent for a period of 24 months commencing 9 November 2020, and ending 9 November 2022.

22. During the period of compulsory strata management, on 24 May 2021, Council’s solicitors sent a letter to the secretary of the respondent, stating that a recent visual inspection of the premises had revealed that “none of the active and passive fire safety measures are in order or working condition to justify occupants’ safety in the built environment, occupants’ safe evacuation or Fire Brigade intervention”. The letter acknowledged that on 18 May 2021, the secretary of the respondent had provided to Council a defect rectification quote from FCF Fire & Electrical, however the quote was dated 1 April 2021 and valid for 30 days. Council’s solicitors wrote:

Council appreciates the assistance it has been receiving of late from The Owners’ new managing agents, including procurement of the above Quote and facilitation of the recent site inspection. However, it is clear from the above and the history of the matter referred to in previous correspondence that immediate action is still required on The Owners’ part in relation to each of the essential fire safety measures that were listed in table form in our letter of 22 November 2019.

23. Further, Council’s solicitors advised that the respondent was required to engage a registered certifier to prepare a detailed plan relating to the implementation of fire safety measures by 1 June 2021, and that (emphasis in original):

…in the event such a plan is not received within the time specified and/or the necessary fire safety upgrades and maintenance are not carried out within time, Council will commence Class 4 civil proceedings against The Owners in the Land and Environment Court of New South Wales seeking urgent relief to remedy and restrain The Owners’ breaches of the EP&A Act and the EP&A Regulation arising from the ongoing fire safety deficiencies associated with the Premises. If such proceedings are necessarily commenced, our client will be seeking an order that The Owners pay its costs of the proceedings.

The Class 4 civil enforcement proceedings before Moore J

24. On 24 June 2021, during the period of compulsory strata management, Council commenced Class 4 civil enforcement proceedings seeking declarations and orders in relation to breaches of the EPA Act. In the Class 4 civil enforcement proceedings, Council sought relief, which included the following:

1. A declaration that the respondent has breached the Environmental Planning and Assessment Act 1979 (EP&A Act) by, contrary to clause 177(1) of the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation), failing to cause the applicant to be given an annual fire safety statement for the existing building situated at 3 Fetherstone Street, Bankstown (Building) within 12 months after a fire safety certificate for the Building was last issued on 15 December 2003 (or since).

2. A declaration that the respondent has breached the EP&A Act by, contrary to section 9.37(1) of the EP&A Act, failing to comply with the terms of an order under Division 9 .3 of the EP&A Act given by the applicant on 31 May 2018 (Order) for the purposes of ensuring adequate fire safety in the Building.

3. A declaration that the respondent has breached the EP&A Act by, contrary to clause 182(1) of the EP&A Regulation, failing to maintain the essential fire safety measures in the Building to a standard no less than that specified in the fire safety schedule issued with the Order.

4. An order that within one month of the date of these orders, the respondent provide the applicant with a fire safety certificate from a registered certifier (within the meaning of the EP&A Act) who holds current registration as a "building surveyor - unrestricted" or "certifier - fire safety" for the purposes of section 6(4) of the Building and Development Certifiers Act 2018 demonstrating that each of the essential fire safety measures described in the Schedule to these orders have been installed and are operating in accordance with the fire safety schedule issued with the Order.

5. An order that within three months of the date of these orders, the respondent:

a. provide the applicant with a fire safety certificate from a registered certifier (within the meaning of the EP&A Act) who holds current registration as a " building surveyor - unrestricted" or "certifier – fire safety" for the purposes of section 6(4) of the Building and Certifiers Act 2018 demonstrating that the other matters numbered terms 1.01, 1 .02, 1.03, 1.04, 1.05, 1.09, 1.10, 1.13, 2.01 , 2.02, 2.03, 2.04, 4.03, 4.07, 4.08, 4.09 and 4.10 in the Order have been complied with; and

b. for the above purpose, cause the certifier referred to above to carry out a fire safety measure audit in accordance with term 1 .06 of the Order for each essential fire safety measure applicable by virtue of the fire safety schedule issued with the Order.

25. On 19 October 2021, Mr Matthew Harriman of Enhanced Building Services Consultants (EBS Consultants), who was engaged by the respondent on 9 July 2021 (see below at [44]), sent an email to Jean Green of Foreshew Strata stating that the required fire defect works in relation to the premises were estimated to cost $1,680,000 as “a very brief ballpark and will likely increase/decrease significantly.”

26. In the Class 4 civil enforcement proceedings, the respondent relied on an affidavit of Mr Harriman of EBS Consultants, sworn 4 November 2021, attaching a preliminary report outlining Mr Harriman’s observations and comments in relation to fire safety measures requiring attention at the premises. In relation to “Fire Order Item 3.01” concerning the state of the existing fire detection and alarm system upgrade, Mr Harriman concluded:

This presents a serious risk to the building occupants and seriously hinders NSW Fire and Rescue’s ability to locate and address a fire within the building.

27. The parties provided to the Court proposed consent orders requiring the respondent to address the necessary fire safety measures at the premises within specified periods of time. On 8 November 2021, Moore J heard the matter, and required that Mr Harriman be examined in chief to address “matters of immediate concern” in relation to his report before his Honour was to be satisfied that the consent orders were appropriate to be made. In particular, Moore J asked the following questions of Mr Harriman, and Mr Harriman provided answers as follows:

Q. I take you to the next matter, which is 3.01. When would rectifying that problem fit within the timetable that is currently proposed by the consent orders?

A. At this point in time, 3.01 is tendered for the first six months under schedule 1 of the consent orders. We have now audited the system to identify the full extent of noncompliances. I have received the preliminary report from Fire Management Solutions who audited the entire system. I have not received their full report as yet. The report does identify several noncompliances, including the functionality of the system in its entirety. There are smoke detection spacing issues and the building occupant warning system fails to sound at a certain level, these items can be rectified…

Q. Is it your assessment as a matter of public safety risk that the risk of permitting six months for that to be rectified is as a matter of your professional fire safety opinion an acceptable risk…if it is, you can just say “yes”, but if it’s not, what do you say to me now should be an alternative time regime with respect to that?

A: Your Honour, I cannot guarantee that the system will activate as intended. However, the audits have been undertaken. The six months is of reasonable time period, in my experience, based on the current ability [sic] of contractors specialising in this area to address the system and rectify it…

Q. …Is it an acceptable public safety risk, given the inadequacy of the detection and warning system, to permit the building to be occupied on the assumption that within a period of six months the defects with the detection and warning system will be rectified?

A. No.

28. Moore J adjourned the proceedings to allow the parties to confer and prepare revised orders addressing his Honour’s concern in relation to public safety. The parties proposed a revised Order 1 to the proposed consent orders to address the public safety concerns within two weeks. On the same day, 8 November 2021, Moore J made the consent orders but did not dismiss the proceedings until 25 November 2021, upon having received affidavit evidence from Council confirming that the respondent had complied with Order 1. In dismissing the proceedings on 25 November 2021, Moore J noted that there was then compliance with Order 1, and that the question of compliance with the remainder of the consent orders was with Council, and not the Court.

29. On 15 December 2021, the respondent was served with sealed copies of the consent orders containing a penal notice in accordance with r 40.7 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). The penal notice attached to the consent orders provided as follows:

TAKE NOTICE that if you fail to do the acts required of you by paragraphs 2, 3, 4 and 5 of the Orders (which bear this Penal Notice) within the times specified therein, you are liable to imprisonment or to sequestration of property.

Events subsequent to the Class 4 civil enforcement proceedings before Moore J

30. On 17 December 2021, also during the period of compulsory strata management, the respondent received a letter from Lannock Strata Finance attaching a facility agreement for a proposed loan in the sum of $2 million.

31. On 17 January 2022, during the period of compulsory strata management, at an extraordinary general meeting, the respondent made the following resolution:

MOTION 2 – Multi-Drawdown loan

RESOLVED that the Owners Corporation enter into and execute a loan contract with Lannock Capital 2 Pty Limited (ACN 153 391 283) to fund the Owners Corporation’s obligations to [m]eet the payment obligation for completing [f]ire defects prescribed by the fire order placed on the Strata plan 71808 and legal fees.

32. On 20 January 2022, the respondent entered into the facility agreement for a multi-drawdown loan in the amount of $2 million with Lannock Strata Finance (the Lannock loan). It was an agreed fact that the respondent entered into the Lannock loan for the purpose of funding the fire defect works and to comply with the consent orders.

33. On 4 February 2022, Mr Harriman commenced undertaking the balance of the works required by Orders 2 to 4 of the consent orders.

34. On 25 August 2022, Council’s solicitors wrote to the respondent’s solicitors, Bannermans Lawyers, in relation to the respondent’s non-compliance with the consent orders, as follows (emphasis in original):

We are instructed that contrary to the above orders (both 2 and 3), your client has provided neither the 2 x fire safety certificates nor the interim annual fire safety statement referred to in the orders to our client. We also note that paragraphs 4 and 5 of the Orders require further fire safety upgrade works to be completed and appropriately certified to Council by 8 November 2022 and 8 November 2023 respectively…

As such, we are instructed that unless the 2 x fire safety certificates and interim annual fire safety statement required by paragraphs 2 and 4 of the Orders are provided to Council in full compliance with their requirements by 5pm on 8 September 2022, charges of contempt of Court may be laid against your client in the Court without further notice. We note that the Penal Notice on the final page of the Orders (which was personally served on your client) details additional enforcement mechanisms if the Orders are not complied with.

35. Subsequent to the ending of the compulsory strata management period on 9 November 2022, at a general meeting of the respondent held on 30 November 2022, the strata committee of the respondent consisting of lot owners was elected.

36. Also on 30 November 2022, the respondent resolved that “Foreshew Strata Agency…be re-appointed as strata managing agent of Strata Scheme No 71808 for a further 12 months”.

The contempt proceedings

37. On 2 December 2022, Council filed a notice of motion and statement of charge, seeking that the respondent be charged with and found guilty of three counts of contempt for failure to comply with Orders 2, 3 and 4 of the consent orders.

38. The first return of the notice of motion for contempt was listed before the list judge on Friday, 16 December 2022. On 15 December 2022, Duggan J vacated the hearing and relisted the matter for 3 February 2023.

39. On 22 December 2022, EBS Consultants entered into a contract with an electrical contractor to undertake approximately $280,000 worth of upgrade works to the electrical systems at the premises.

40. On 23 January 2023, EBS Consultants undertook a progress inspection of the contracted works with representatives of Fire Management Solutions. A site report was issued to the respondent outlining the extent of the works completed to that date.

41. As noted above at [3], at the mention on 3 February 2023, the respondent pleaded guilty to the three charges of contempt.

42. On 23 May 2023, it was agreed between the parties that the requirements of Orders 2, 3 and 4 of the consent orders made on 8 November 2021 remained outstanding.

Evidence

43. At the hearing before me, Council relied on the SOAF and the underlying documents. The respondent read the following affidavits:

1. Mr Matthew Harriman, the respondent’s fire safety consultant, sworn 2 February 2023 and 11 May 2023;

2. Mr Stevce Babamovski, general manager of Foreshew Strata, sworn 11 May 2023; and

3. Mr George Minas, member of the respondent’s strata committee, sworn 18 May 2023.

All three witnesses were required for cross-examination.

Mr Harriman

44. In his affidavit sworn 11 May 2023, Mr Harriman deposed that he was engaged by Mr Cameron Gowers of Foreshew Strata on 9 July 2021 to undertake an audit of the subject strata scheme, and has since managed the fire safety compliance of the respondent. In his affidavit sworn 2 February 2023, Mr Harriman said that on 6 August 2021, he was engaged by Mr Gowers also to “attend to the legal proceedings with Bannermans Lawyers”. Mr Harriman said that between August 2021 to October 2021, he “focused on the interim orders and consent orders which included attending court, liaising with council, Mr Mark Cottam and Bannermans.”

45. Mr Harriman exhibited to his 11 May 2023 affidavit a progress report he had prepared on 22 April 2023. He said that “many of the works required by the Consent Orders have been completed”. He identified the following works which, as at 22 April 2023, remained outstanding:

1.02 Steel bollards outside exit doors

1.03 Non-slip finish to stair treads

1.09 Re-entry from isolated exits

1.10 Separation of rising and descending stair flights

1.12 Fire-isolated passageway to be provided

1.13 Discharge of central fire isolated exits

1.14 Smoke control in exit stairs

1.15 Signage to smoke doors

1.16 Implementation of fire engineering report

4.01 Fire doors to units and stairways/other areas

4.02 Mechanical air handling system

4.03 Evidence for fire stopping material

4.04 Wall and ceiling penetrations

4.05 Works to existing automatic fire sprinkler system

4.09 Separation of lift motor room

4.10 Removal of gas installation and mechanical air handling ducting from discharge point of fire isolated passageway

5.01 Pump room

5.02 Installation of fire hydrants

46. Mr Harriman gave evidence in relation to the progress of the outstanding works and the estimated timeframe within which he expected them to be completed: some items taking 2 to 3 weeks, while others, such as item 1.14 smoke control in exit stairs he estimated to take between 6 and 9 months. Mr Harriman’s expert opinion was that non-completion of several of the outstanding works presented a “relatively low risk to the fire safety of the scheme”, whilst several others presented a “medium fire safety risk to the scheme”.

47. Under cross-examination, Mr Harriman said that he had been engaged by the respondent in relation to fire safety matters at the premises since approximately July 2021 (that is, after the commencement of the period of compulsory strata management). He said that he undertook an inspection of all lots at the premises, except for commercial lots containing a dental surgery, in October 2021. In arranging access to each lot, Mr Harriman said that his practice was to give two weeks’ notice to the residents of each lot by performing a “door drop” of a letter indicating the proposed date and time of the inspection, as well as the purpose of the inspection. Such notice (undated) was later admitted into evidence by the respondent (the access letter).

48. In re-examination, Mr Harriman said that he did not have any conversations with lot owners about the consent orders.

49. Mr Harriman was taken through some of the items of outstanding works specified in his affidavit. Mr Harriman said that some of those items were not “onerous” works to be undertaken, whilst others were “onerous”. In relation to item 1.03, “non slip finish to stair treads”, Mr Harriman said that that task was not onerous, rather time-consuming and costly, estimating that a skilled labourer could undertake that task within three to four weeks.

Mr Babamovski

50. In his affidavit sworn 11 May 2023, Mr Babamovski, general manager of Foreshew Strata, deposed that on 30 November 2022 (that is, after the ending of the period of compulsory strata management), Foreshew Strata was re-appointed as the strata managing agent for a further 12 months. Mr Babamovski said that on 20 January 2022 (that is, during the period of compulsory strata management), the respondent entered into the Lannock loan. Mr Babamovski identified liabilities in the respondent’s balance sheet dated 10 May 2023, named “Lannock Loan – Capital Works” which he said were loans taken out “for the sole purpose of complying with the Consent Orders” (emphasis added). He said that on 21 April 2023, he paid a total of $182,338.32 to Fire Management Solutions and EBS Consultants for works undertaken in compliance with the consent orders made on 8 November 2021 from the funds obtained from the Lannock loan. As at 9 May 2023, the respondent’s cash at bank was $28,830.75.

51. In cross-examination Mr Babamovski said that Foreshew Strata is a firm of some 25 years’ experience in strata management, and currently manages approximately 297 properties, half of which require Foreshew Strata to undertake tasks related to fire safety matters. Mr Babamovski said that he did not commence employment at Foreshew Strata until 11 April 2022, and took over the management of the respondent at the end of May 2022.

52. Mr Babamovski confirmed that when a strata scheme is under compulsory strata management, individual lot owners are still issued special levies for payment when a resolution to issue a special levy is made. Council’s solicitor, Mr Ward, referred Mr Babamovski to minutes of an extraordinary general meeting of the respondent on 30 March 2021 when the respondent, under compulsory management, raised a special levy for the sum of $59,110.43 for “the required fire safety defect repairs”. Although Mr Babamovski was not present at that meeting, he said that as a consequence of that motion, individual lot owners would have received a special levy for payment in accordance with the motion.

Mr Minas

53. In his affidavit sworn 11 May 2023, Mr Minas identified his occupation as “Solicitor”. Email correspondence annexed to his affidavit included Mr Minas’ email signature, identifying him as “Principal” at Minas & Associates, with the address “Suite 62, Level 1, 3-7 Fetherstone Street”. Mr Minas deposed to having purchased his lot in the respondent’s strata scheme in 2018, at which time he was unaware of the fire safety issues. Mr Minas said that he became a member of the strata committee of the respondent in 2019, in which year he made a number of “preliminary attempts to rectify the fire safety defects, including engaging in discussions with various fire safety contractors.” However, he said that the strata committee was not able to engage an appropriate fire safety contractor “on the basis that there were too many non-compliance issues.”

54. Mr Minas said that the respondent was under the compulsory management order from 9 November 2020 until 30 November 2022 (9 November 2022 being the date that the compulsory management period ended, but the first general meeting thereafter being held on 30 November 2022). He said that he was not aware until December 2022 (after the respondent had exited the compulsory management period) of the Class 4 proceedings in which the consent orders were made by Moore J on 8 November 2021.

55. Mr Minas’ understanding was that at the time the consent orders were agreed to, the advice from the respondent’s fire safety contractor (Mr Harriman) was that works were “capable of being completed within the time frame specified in the consent orders”; namely, within four months, nine months and twelve months respectively for Orders 2, 3 and 4.

56. Mr Minas said that safety is of utmost importance to the respondent, and that the respondent has not been deliberately slow to comply with the orders. Rather, there had been several issues outside the respondent’s control that had caused delays. Mr Minas deposed that a fine would add to the significant financial burden to which the lot owners were already subject.

57. Mr Minas also expressed regret in relation to the contempt, stating:

I can confirm that the owners corporation has expended every effort in undertaking the necessary works to rectify the fire safety issues in the Scheme, and will do so in the most timely manner possible.

Speaking on behalf of the owners corporation, we are deeply sorry to the Court, the Council, first responders and the community for not having remediated the building sooner. We understand the risk of harm and want nothing more than for the building to be made safe and compliant.

58. Under cross-examination, Mr Minas testified that sometime in 2019 he became aware of fire safety issues at the premises when a private contractor serviced the sprinklers at his lot in the premises. However, he was informed by other lot owners “sometime after mid-2022” about the Lannock loan to pay for fire defect works at the premises (which loan had been the subject of resolution at an extraordinary general meeting held on 17 January 2022). Mr Minas also recalled receiving an access letter, and providing Mr Harriman access to his lot for the purpose of an inspection. He considered that to be “a standard procedure for maintaining the fire system in the building”.

59. Mr Minas gave evidence that during the period of compulsory strata management, he did not make any inquiries as to the status of compliance with the fire safety matters of which he was aware because he “had no say” in the matter.

60. Mr Minas said he recalled paying special levies during the compulsory management period, but did not recall receiving minutes of meetings conducted in that period at which resolutions were made to raise special levies. Council put to Mr Minas that he would have been aware of matters the subject of special levies which he and other lot owners were required to pay.

61. The respondent later tendered a document titled “Notice of maintenance contributions” issued to Mr Minas on 14 July 2021. The descriptions in relation to levies payable by Mr Minas were in general terms: “Special Levy – Legal/Lawyers” and “Special Levy Building Services”. Accordingly, the respondent submitted that little weight would be attributed to Council’s suggestion that notices of special levies would have imparted knowledge on the part of the lot owners of the proceedings before Moore J in which the consent orders were made.

Sentencing principles in relation to contempt

62. Part 55 of the Supreme Court Rules 1970 (NSW) (SCR) applies to the consent orders, being orders made in Class 4 of this Court pursuant to r 6.3 of the Land and Environment Court Rules 2007 (NSW) (LEC Rules). Rule 13 of Part 55 of the SCR provides as follows in relation to punishment for contempt:

13   Punishment

(1)  Where the contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both.

(2)  Where the contemnor is a corporation, the Court may punish contempt by sequestration or fine or both.

(3)  The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security.

63. There is no maximum penalty specified in the SCR, the LEC Rules or the EPA Act for contempt. ^[1]

    1. Sutherland Shire Council v Perdikaris [2020] NSWLEC 111 at [44] (Perdikaris).

64. The Crimes (Sentencing Procedure) Act 1999 (NSW) (CSP Act) applies to a sentence for criminal contempt and, by analogy, to civil contempt. ^[2] In Council of the City of Sydney v The Owners Strata Plan 18820 (SP 18820), ^[3] Robson J considered the CSP Act to provide “both guidelines and a framework to the Court when it is considering civil contempt”.

    2. Queanbeyan City Council v Sun (No 2) (2013) 195 LGERA 14; [2013] NSWLEC 64 at [17] (Biscoe J) (Queanbeyan); Perdikaris at [44].

    3. [2017] NSWLEC 81 at [46] (Robson J).

65. In Sutherland Shire Council v Perdikaris (Perdikaris), Preston CJ said that “[i]n sentencing for contempt, the court will take into account the same principles as are applicable in sentencing for an ordinary criminal offence”, ^[4] citing NCR Australia Pty Ltd v Credit Connection Pty Ltd (NCR Australia). ^[5]

    4. Perdikaris at [46].

    5. [2005] NSWSC 1118 at [24] (Campbell J).

66. Similarly, in relation to the standard and onus of proof in civil contempt proceedings, Campbell J said the following in NCR Australia at [27] (emphasis added):

27.  When a Judge is finding facts for the purpose of a sentence concerning crime, a fact which will be used in a way which is detrimental to the offender must be proved beyond reasonable doubt, while a fact which will be used in a way which will be advantageous to the offender can be proved on the balance of probabilities: R v Olbrich (1999) 199 CLR 270 at 281, approving R v Storey [1998] 1 VR 359 at 369. In Witham v Holloway (1995) 183 CLR 525 the High Court held that a contempt could be found proved only if it was established beyond reasonable doubt. The reason was that the punitive nature of the proceedings brought with it the criminal standard of proof. Consistently with that principle, the standard of proof used in deciding factual matters for the purpose of imposing a sentence for contempt of court should be the same as is used in imposing a sentence in criminal matters.

67. Accordingly, I accept that in finding factual matters, particularly of aggravation, in sentencing for contempt, I am to be satisfied of those matters beyond reasonable doubt. ^[6]

    6. See also Hawkesbury City Council v Kara-Ali (No 3) [2019] NSWLEC 55 at [129] (Sheahan J) (Kara-Ali); Inner West Council v Balmain Rentals Pty Ltd & Anor [2022] NSWLEC 20 at [49], [54], [56] (Robson J) (Balmain Rentals).

68. Both parties submitted that the Court should have regard to the ten factors relevant to sentencing for contempt identified by Dunford J in Wood v Staunton (No 5) (Wood). ^[7] Those factors, applied by Biscoe J in Waverley Council v Tovir Investments Pty Ltd and Rappaport (No 4) (Tovir), ^[8] are as follows:

    7. (1996) 86 A Crim R 183 at 185.

    8. [2013] NSWLEC 88 at [17].

1. The seriousness of the contempt proved;

2. whether the contemnor was aware of the consequences to himself of what he did;

3. the actual consequences of the contempt on the relevant trial or inquiry;

4. whether the contempt was committed in the context of serious crime;

5. the reason for the contempt;

6. whether the contemnor has received any benefit by indicating an intention to give evidence;

7. whether there has been any apology or public expression of contrition;

8. the character and antecedents of the contemnor;

9. general and personal deterrence; and

10. denunciation of the contempt.

(the Wood factors).

Characterisation of the contempt

69. It follows from the respondent’s plea of guilty to the three offences, and Mr Harriman’s evidence, that there has been non-compliance with Orders 2, 3 and 4 of the consent orders made by Moore J on 8 November 2021. Disobedience of a court order is contempt. ^[9] It arises first for the Court to characterise the contempt.

    9. Witham v Holloway (1995) 183 CLR 525; [1995] HCA 3 at 530 (Brennan, Deane, Toohey and Gaudron JJ).

70. Council referred to the decision of Biscoe J in Burwood Council v Ruan,^[10] where his Honour identified the three classes of contempt as technical, wilful and contumacious. The three classes of contempt were described by Preston CJ in Perdikaris at [41]-[42] as follows:

41. There is also a distinction between a technical contempt and a wilful or contumacious contempt. The essential purpose of the distinction is to differentiate between conduct which, although constituting contempt, does not justify any punitive sanction, and conduct which does: Attorney-General v John Fairfax & Sons Ltd [1980] 1 NSWLR 362 at 367. In drawing this distinction, the intention of the person in committing the contempt is relevant (Bell v Stewart (1920) 28 CLR 419 at 429-432), although not necessarily determinative.

42. There is also a distinction between wilful and contumacious contempt, although the distinction cannot always be sharply drawn: Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 501. Both wilful and contumacious contempt involve intentional non-compliance with a court’s order. Contumacious contempt goes further than wilful contempt in that it also involves knowing defiance of the court’s order and the authority of the court. Contumacious disobedience and defiance of a court’s order renders criminal what would otherwise be civil contempt: Witham v Holloway at 538-539; Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 at [130], [141], [2], [24]. For this reason, the purpose of punishment differs. In the case of merely wilful civil contempt, the purpose of punishment will be to ensure future compliance with the court’s order. In the case of contumacious criminal contempt, as the person committing the contempt has evidenced their knowing defiance, the court will be concerned not only to ensure future compliance with the court’s order, but also to sanction the past defiance: Ritchie’s Uniform Civil Procedure NSW, [SCR Pt 55.13.2].

10. [2008] NSWLEC 167 (Biscoe J) at [7]-[16].

71. Council submitted that the failure of the respondent to comply with Orders 2, 3 and 4 of the consent orders was wilful, and not “casual, accidental or unintentional”. Council did not submit that the respondent’s contempt was contumacious.

72. In so submitting, Council relied on the decision of Robson J in SP 18820 where his Honour considered the characterisation of contempt where there had been a protracted delay in complying with orders made by consent in the Court’s Class 4 jurisdiction. At [39]-[41] his Honour said:

39. I note that in relation to a protracted delay in attending to orders of the Court, Pain J in Fairfield City Council v Adams (No 2) [2010] NSWLEC 45, dealt with a contempt of orders made by consent in the Court’s Class 4 jurisdiction requiring the removal of fill placed on land without consent. In determining the class of contempt, her Honour found that efforts were made intermittently over a lengthy period of time to comply with the orders. Her Honour found that, whilst there were efforts made, there was a period of inactivity, which was behaviour that her Honour found was best characterised as “wilful”.

40. In Council of the City of Sydney v Owners Corporation – Strata Plan 18945 [2011] NSWLEC 79, Pepper J also dealt with a contempt of orders made by consent in the Court’s Class 4 jurisdiction. In that case, the Class 4 proceedings were commenced seeking civil enforcement resulting from the respondent’s failure to comply with a fire safety order, made under s121B of the EPA Act. The circumstances of that case resulted in a contempt occurring because there was a delay in the commencement of works due to the need for the body corporate to pass a resolution to approve a quotation. Council in that case conceded that the respondent was in the hands of its various contractors, and stated that the respondent had been naïve as to the time required to complete the works. Justice Pepper found that, in spite of a delay in the passing of the resolution to authorise the expenditure of works, the overwhelming delay was caused by the contractors. Her Honour found that the contempt was wilful because the respondent deliberately did not comply with the Court order, but did so without any intention to defy the Court’s authority. Her Honour went onto say at [34]:

... I have no difficulty in characterising the contempt as sufficiently wilful that the imposition of a fine would, in my opinion, be within the power of the Court.

41. In the present matter, I find that the contempt was wilful in the sense that while it did not reveal a specific intent to defy the authority of the Court, the conduct of the respondent, was not casual, accidental, or unintentional.

(emphasis added).

73. The respondent submitted that its contempt should be characterised as technical contempt, and that a punitive sanction was not justified. It relied on the following principles submitted to be of particular relevance:

1. disobedience of a court’s order without any specific mental element is a technical contempt; ^[11] and

2. technical contempt is casual, accidental or unintentional. ^[12]

   11. Greater Hume Shire Council v J & L Cauchi Civil Contracting Pty Ltd [2006] NSWLEC 738 at [33] (Biscoe J).

   12. Fairfield City Council v Adams (No 2) [2010] NSWLEC 45 at [13] (Pain J) (Adams).

74. The respondent submitted that unlike technical contempt, wilful contempt comprises a deliberate disobedience, but without the intention of defying the court’s authority, and contempt is contumacious where there is an element of deliberate defiance of a court’s orders. ^[13] As noted above at [71], Council did not submit that the respondent’s contempt was contumacious.

    13. Adams at [13].

75. The respondent referred to the decision of the High Court in Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (Australasian Meat), ^[14] where it was held that the Federal Court had power to impose a fine for wilful disobedience of an order, and that a deliberate commission or omission which was in breach of an injunctive order or an undertaking would constitute wilful disobedience unless it were casual, accidental or unintentional. In their joint judgment, Gibbs CJ, Mason, Wilson and Deane JJ cited the dictum of Stamp J in Steiner Products Ltd v Willy Steiner Ltd where Stamp J held that any “disobedience which was worse than casual, accidental or unintentional must be regarded as wilful”. ^[15] The joint judgment concluded at 113:

It follows that a deliberate commission or omission which is in breach of an injunctive order or an undertaking will constitute such wilful disobedience unless it be casual, accidental or unintentional.

14. (1986) 161 CLR 98; [1986] HCA 46 (Gibbs CJ, Mason, Wilson and Deane JJ).

15. Australasian Meat at 111 citing Steiner Products Ltd v Willy Steiner Ltd [1966] 1 WLR 986 at 992.

76. The respondent submitted, and is plainly correct, that in contempt proceedings, Council bears the onus of proving beyond reasonable doubt:

1. that the contempt was wilful or contumacious, rather than technical; or

2. that the contempt was contumacious, rather than wilful; and

3. the facts and circumstances that aggravate the seriousness of the contempt. ^[16]

   16. Balmain Rentals at [39].

77. The respondent submitted that particularly relevant to the characterisation of the contempt here as technical was the compulsory management order, the effect of which was like an “agent owing fiduciary duties to owners corporations”. However, the respondent said that Foreshew Strata, as compulsorily appointed strata manager, differed from normal agents as they were “in control of the actions of the [respondent]”, and were accordingly its “putative principal”.

78. The respondent referred to the fact that during the compulsory strata management period, submitted to extend from 9 November 2020 to 30 November 2022, the Class 4 proceedings were instituted by Council and the consent orders were made. Two days after the end of that period, on 2 December 2022, it was submitted, the applicant charged the respondent with contempt.

79. The respondent submitted that the evidence demonstrated that during the compulsory strata management period, the individual lot owners of the respondent:

1. were not aware of the existence of Class 4 proceedings;

2. were not involved in agreeing to the consent orders;

3. did not know consent orders had been entered;

4. had no control over the functions of the respondent, including in relation to taking the necessary steps to satisfy the consent orders; and

5. only learned that the consent orders had been agreed after the contempt charges had been laid.

80. It follows, the respondent submitted, that the contempt did not involve the respondent’s intentional non-compliance with the consent orders. Accordingly, its contempt was neither wilful nor contumacious, and the better view is that the contempt was technical since there was no specific mental element. The contempt occurred “unconsciously since it was unaware of the consent orders, and even if it did know of the consent orders, it was entirely “at the mercy” of the mandatorily appointed strata manager who was the putative principal at the relevant time. By extension, the respondent submitted, its contempt was casual, accidental or unintentional.

81. I have found that the respondent’s contempt ought be characterised as more than technical. It may be the case that individual lot owners of the respondent were not aware of the existence of the Class 4 proceedings, and were not involved in agreeing to the consent orders. There is no evidence before me from individual lot owners, other than that of Mr Minas to that effect. However, the consent orders related to an extensive history of previous fire safety orders issued in relation to the premises (as above at [10] to [12]). That history precedes the appointment of Foreshew Strata on 9 November 2020 as the strata managing agent.

82. Following the cessation of the period of appointment of Foreshew Strata as strata managing agent on 9 November 2022, there was a period of approximately one month prior to the commencement of the contempt proceedings on 2 December 2022. On 9 November 2022 (or on the respondent’s case on 30 November 2022), upon the ending of the compulsory strata management period, the respondent resolved at a general meeting that Foreshew Strata be reappointed as strata managing agent for a further 12 months.

83. In any event, and most significantly, the fact of the appointment of a strata management agent pursuant to s 237(1) of the SSMA to exercise the functions of the owners corporation did not relieve the owners corporation of its obligation to comply with the consent orders made by the Court in civil enforcement proceedings in relation to ongoing fire safety deficiencies at the premises.

84. I do not accept that the respondent, the Owners – Strata Plan No 71808, was entirely “at the mercy” of the appointed strata managing agent, and relieved of its duty to comply with orders made by the Court in civil enforcement proceedings in relation to it. This is to misconceive the juridical nature of a strata managing agent appointed pursuant to s 237 of the SSMA, and the functions exercised by it. Section 237, read together with s 56(b), makes clear that if a strata managing agent is appointed by NCAT to exercise a function, anything done or suffered by the strata managing agent in the exercise of the function has the same effect as it would have if it had been done or suffered by the person who could have exercised it.

85. I do not consider ss 237 and 56(b) of the SSMA to be ambiguous or obscure, or that the ordinary meaning conveyed by them to lead to a result that is manifestly absurd or is unreasonable. ^[17] However, to confirm that the meaning of ss 237 and 56(b) of the SSMA is the ordinary meaning conveyed by the text of the provisions, I have regard to the following extrinsic material.

    17. Interpretation Act 1987 (NSW) s 34(1).

86. The predecessor to s 237 is found in s 183B of the Strata Schemes Management Act 1996 (NSW) (SSMA 1996), which is in materially similar terms to s 237 of the SSMA. It provided:

183B   Orders for appointment of strata managing agent

(1) Order appointing strata managing agent to exercise functions of owners corporation The Tribunal may, on its own motion, make an order appointing a person as a strata managing agent:

(a)  to exercise all the functions of an owners corporation, or

(b)  to exercise specified functions of an owners corporation, or

(c)  to exercise all the functions other than specified functions of an owners corporation.

87. Section 162 of the SSMA 1996 similarly empowered an “[a]djudicator” to appoint a person as a strata managing agent to exercise the functions of the owners corporation in the same terms as in s 183B(1)(a)-(c).

88. Section 183B of the SSMA 1996 was inserted by the Strata Schemes Management Bill 2003 (SSM Bill 2003). In the second reading speech for the SSM Bill 2003, Ms Meagher, Minister for Fair Trading and Minister Assisting the Minister for Commerce, said in the context of strata managing agents generally (emphasis added):

Under the Strata Schemes Management Act, owners' corporations can only delegate their functions to licensed strata managing agents. In other words, only strata managing agents can be appointed to stand in the place of the owners' corporation, making decisions and taking actions as if they were the owners' corporation.

Other people can help the owners' corporation in carrying out tasks and duties, but only strata managing agents can be given the power to make decisions for, and undertake the full role of, the owners' corporation.

89. The provisions of the SSMA 1996 were considered in a number of decisions, the reasons of which bear upon the issue which the respondent has raised in these contempt proceedings, namely whether the knowledge of individual lot owners in relation to actions undertaken by a strata managing agent during a period of compulsory strata management bears in any way on the characterisation of the owners corporation contempt.

90. In James v Owners - Strata Plan No 11478 (James 2016), ^[18] Darke J observed the following in relation to a managing agent appointed pursuant to s 162 of the SSMA 1996:

101. A managing agent appointed pursuant to s 162 of the Act is empowered by the terms of the order to carry out some or (in this case) all of the functions of the Owners Corporation. The managing agent is thereby and to that extent placed in a position akin to that of the Owners Corporation itself (cf Owners — Strata Plan 5709 v Andrews [2009] NSWCA 189 at [69]). The relationship that exists between an owners corporation and the owners of lots in the strata scheme has been held to involve a statutory trust.

18. [2016] NSWSC 1558 at [101].

91. His Honour made those observations in relation to the plaintiff’s contention that the compulsorily appointed strata managing agent (and the principal of that agent, Mr Anderson) owed the plaintiff, a lot owner in the strata scheme, a duty of care in carrying out the functions of the owners corporation. Darke J held at [110] that there were a number of considerations which told strongly against the existence of the duty of care alleged. One of those considerations was that “an owners corporation, as trustee of the common property, only has duties to act in a positive way to the extent that such duties are imposed by the strata titles legislation” (at [104]).

91. The Owners - Strata Plan 5709 v Andrews (Andrews) ^[19] concerned, among other things, whether the appointed strata managing agent was required to hold a general meeting pursuant to s 76(4) of the SSMA 1996, which provided that “[i]f the owners corporation is subsequently faced with other expenses it cannot at once meet from either fund, it must levy on each owner a contribution to the administrative fund, determined at a general meeting of the owners corporation, in order to meet the expenses.” On that issue, counsel for the individual lot owners contended that because the SSMA 1996 required a general meeting, the appointing strata managing agent should have held such a meeting regardless of the fact that individual lot owners did not have the ability to vote, because the functions of the owners corporation were to be exercised by the strata managing agent. Hodgson JA (Tobias JA and Young JA agreeing) rejected that argument, finding as follows:

69. Section 76(4) sets out one function of an owners corporation; and if that function is to be exercised by a strata managing agent pursuant to s 162(1)(a), it is not exercised by the owners corporation itself. What s 76(4) requires to be determined at a general meeting is the contribution “it”, that is the owners corporation, must levy; and if the levying function is exercised by the strata managing agent, so it is not the owners corporation itself that is levying the contribution, in my opinion the requirement of a general meeting has no application.

19. [2009] NSWCA 189.

93. In James v Owners Strata Plan No SP 11478 (No 4) (James 2012), ^[20] Ball J referred to Andrews as follows (emphasis added):

41. … As Hodgson JA pointed out, where the strata managing agent is appointed to exercise all the functions of the owners corporation he or she acts in the place of the owners corporation and can disregard all meeting and voting requirements under the Act...

20. [2012] NSWSC 590 at [41].

94. Ball J proceeded to observe, in relation to a submission made by the plaintiff that Mr Anderson, the principal of the appointed strata managing agent, owed to the lot owners a duty of procedural fairness (emphasis added):

53.  In the present case, Mr Anderson is not exercising a public power or something analogous to it. Although he is exercising a statutory power, that power is concerned with the administration of private property in which a number of individuals have an interest. His position is analogous to that of a receiver or an administrator of a company. When an owners corporation makes a decision that affects other owners, it is not exercising a “public power” and does not need to afford procedural fairness. In particular, the making of a by-law under ss 52 or 65A only affects the private rights, interests and expectations of other lot owners. The SSM Act sets out procedures to ensure that those rights, interests and expectations are not unfairly defeated. So long as the decision is made in accordance with those procedures, it is valid. The appointment of a strata scheme manager under s 162 does not convert what was otherwise a private power to make decisions for the management of the strata scheme into a “public power”.

95. In finding that Mr Anderson impermissibly raised a resolution that required lot owners’ consent, without such consent, Ball J observed (emphasis added):

93.  When a lot owner gives consent under s 52, the lot owner is not giving that consent as an organ of the owners corporation. Rather, the lot owner is giving that consent in a personal capacity. The requirement of consent is necessary because that owner’s personal rights will be affected by the by-law. Under s 162 of the SSM Act, Mr Anderson is given the powers of the owners corporation, the executive committee and office bearers of the executive committee. He is not given any of the powers given to an individual lot owner under the Act. Consequently, his purported consent on behalf of individual lot owners is ineffective.

Conclusion in relation to characterisation of the contempt

96. I find, beyond reasonable doubt, that the respondent’s contempt was wilful, rather than technical. There is nothing in the evidence before me capable of supporting a finding that the contempt was contumacious. Nor, as noted above at [71] and [74], did Council submit that I should make any such finding.

97. I find, as submitted by Council, that the failure of the respondent to comply with Orders 2, 3 and 4 of the consent orders was not “casual, accidental or unintentional”. As in SP 18820, ^[21] there has been a protracted delay in complying with consent orders made in the Court’s Class 4 jurisdiction. Whilst some efforts were made by Foreshew Strata, they were made intermittently and there were considerable periods of inactivity. As Pain J found in Fairfield City Council v Adams (No 2),^[22] whilst there were efforts made, there were periods of inactivity. Such behaviour is best described as “wilful”.

    21. At [39]-[41] (Robson J).

    22. Adams at [15].

98. Likewise, as Pepper J found in Council of the City of Sydney v Owners Corporation – Strata Plan 18945,^[23] and I find here, the respondent was in the hands of its contractor, Mr Harriman, who was unrealistic in estimating the time to complete the works the subject of the consent orders. As Pepper J found (at [41]), I find that the contempt here was wilful in the sense that while the respondent did not reveal a specific intent to defy the authority of the Court, its conduct was not casual, accidental or unintentional.

    23. [2011] NSWLEC 79.

99. While the consent orders were made on 8 November 2021, they are informed by a long history of the respondent’s non-compliance with fire safety orders, in particular the May 2018 fire safety order, and Mr Minas having sought to make attempts to rectify the fire defects on the premises in 2019, but having been unable to engage a fire safety contractor “on the basis that there were too many non-compliance issues.” The consent orders were also agreed in the context of Mr Harriman assisting the respondent in the Class 4 civil enforcement proceedings and providing sworn evidence in relation to timelines within which works would be completed. During the period of compulsory management, the respondent entered into the Lannock loan on 20 January 2022 for the purpose of funding defect works in compliance with the consent orders. Council did not commence the contempt proceedings until 2 December 2022. And as at the hearing before me on 23 May 2023, the contempt had not been purged. Having regard to this history, I do not find that the respondent’s contempt can be characterised as technical in nature.

Application of the Wood factors

100. I now turn to consider the ten Wood factors identified by Dunford J, referred to above at [68].

Factor 1: The seriousness of the contempt

101. Where the contempt relates to matters of fire safety, it has been held by the Court to be serious. ^[24] Council submitted that the failures by the respondent here to comply with the consent orders would be considered serious, and that the consequence of those failures is that essential fire safety matters at the premises have not been addressed.

     24. SP 18820 at [49]-[51].

102. In the proceedings before me, the respondent’s fire safety consultant, Mr Harriman, deposed that non-completion of certain works would present a “medium fire safety risk”. Those works include the following items identified in the May 2018 fire safety order:

Item 4.03 – Evidence for fire stopping material

Item 4.04 – Wall and ceiling penetrations

Item 4.09 – Separation of lift motor room

Item 5.01 – Pump room

103. I find, beyond reasonable doubt, the contempt to which the respondent has pleaded guilty to be serious.

Factor 2: Awareness of the consequences of the contempt

104. Council submitted that the respondent was aware of the consequences of failing to comply with the consent orders. Council relied upon its correspondence to the respondent on 22 November 2019, 24 May 2021 and 25 August 2022 (both prior to and during the period of compulsory strata management) in relation to the fire safety deficiencies at the premises (see above at [11]-[12], [22]-[23] and [34]).

105. The respondent submitted that it was not aware of the consent orders or the implications of not complying with them. Further, it submitted that even if it was aware of the consent orders, the fact that the respondent was under compulsory strata management meant that it had no liberty to take steps to comply with the consent orders. That burden fell on the compulsorily appointed strata manager.

106. The respondent submitted that during the period of the compulsory management order, lot owners such as Mr Minas who purchased Lot 62 in 2018, were not aware that Class 4 proceedings had been instituted against the respondent. The respondent submitted that Mr Minas and other lot owners were also not consulted in relation to entering the consent orders. Lot owners such as Mr Minas who, it was submitted, will have to suffer the brunt of any sentence the Court orders in these proceedings, only became aware that Class 4 proceedings had been instituted and that consent orders had been entered into and breached roughly two days after the election of the new strata committee on 30 November 2022, upon Council laying the contempt charges on 2 December 2022.

107. The respondent relied on the following evidence in support of its submission that it was not aware of the consent orders:

1. Minutes of meetings held 3 December 2020, 30 March 2021, 9 July 2021, 17 December 2021, 17 January 2022, 25 February 2022, 19 July 2022 and 30 November 2022 (the front page of which said “Nil owners in attendance…Foreshew Strata Agency has been appointed as Compulsory Managers”) were submitted to illustrate that the compulsory strata management period subsisted for the entirety of the Class 4 proceedings, and only ended two days prior to the contempt charges being laid.

2. The letter from Council’s solicitors dated 22 November 2019 (see above at [11]-[12]), which predated the commencement of the Class 4 proceedings and the entering of the consent orders, the respondent submitted could not logically have informed the respondent of the consequences of not complying with the consent orders.

3. The letter from Council’s solicitors of 24 May 2021 (as to which see above at [22]-[23]), sent electronically to the email address [email protected] of Mr Gowers in the employ of Foreshew Strata, and also predating the entering of consent orders, were submitted to provide no evidence as to being received by anyone within the respondent or to any individual lot owners. It was submitted that the Court would accept on balance that the letter was not circulated, given the evidence of Mr Minas sworn 18 May 2023, and that the letter could not inform the respondent of the consequences of not complying with “future” consent orders.

4. The letter from Council’s solicitors of 25 August 2022 sent to the respondent’s solicitors concerning the consent orders (as to which see above at [34]) was also submitted by the respondent to be of relevance. The respondent’s solicitors filed a notice of appearance on 22 July 2021 during the compulsory strata management period which listed the filing party’s address as 800-812 Old Illawarra Road, Menai, being the office address of Foreshew Strata. The respondent submitted that an inference would be drawn that instructions were being obtained from Foreshew Strata, rather than from the “owners corporation” or any individual lot owners.

5. Copies of the consent orders and attached penal notice pursuant to r 40.7(3) of the UCPR (see above at [29]) served on Foreshew Strata at Unit 20, 800-812 Old Illawarra Road, Menai on 15 December 2021, were submitted not to invite an “automatic finding” that the respondent was aware of the consent orders. Whether the respondent had knowledge of the consent orders was a matter “inexorably linked with the categorisation of the contempt as technical, wilful or contumacious”, and in relation to which Council bears the onus of proof beyond reasonable doubt. Proof of service of the consent orders on the appointed strata manager did not, in the respondent’s submission, discharge that burden.

6. The Lannock loan for $2 million, which the respondent submitted was taken out by the appointed strata manager by calling a meeting (with itself) on 17 January 2022, in the absence of any members of the respondent. It was submitted that lot owners such as Mr Minas had no involvement or say in the strata managing agent taking out the Lannock loan in the respondent’s name.

7. Further, the fact that Mr Gowers of Foreshew Strata engaged Mr Harriman as the consultant responsible for managing the fire safety compliance of the owners’ strata scheme since 9 July 2021, was submitted to provide no evidence that anyone from the owners corporation was involved in or aware of this engagement process.

108. I accept that the letters of 22 November 2019 and 24 May 2021 predated the Class 4 proceedings and the consent orders. However, I find that the evidence relied on by the respondent referred to above at [107(1)-(7)] does not establish that the respondent was unaware of the consent orders. This submission disregards that during the period of compulsory strata management, Foreshew Strata stood in place of, and was exercising the functions of the owners corporation.

109. The respondent further submitted that even if the Court did not accept that the lot owners were not aware of the Class 4 proceedings or the consent orders, the respondent was “at the complete mercy” of the compulsory appointed strata managing agent in terms of ensuring compliance with the consent orders. During the compulsory strata management period, the lot owners in the strata scheme of the respondent were submitted to have no control over the “business” of the respondent, including in taking the necessary steps to ensure compliance with the consent orders. That “onus” fell with the compulsory appointed strata manager who failed to ensure compliance with the consent orders. It is correct that during the compulsory strata management period, Foreshew Strata exercised all the functions of the owners corporation. However, I do not accept that during that period, the respondent owners corporation was “at the complete mercy” of the strata managing agent appointed by NCAT pursuant to s 237(1) of the SSMA to exercise all the functions of the respondent.

110. In considering the factor of whether the respondent was aware of the consequences to itself of what it did, I find beyond reasonable doubt that the respondent was so aware.

111. For reasons given above at [96]-[99] in relation to the characterisation of the contempt it may have been the case that individual lot owners were not aware of the Class 4 proceedings and consent orders, however that does not avoid a finding that the respondent was aware of the consequences of failing to comply with the consent orders.

112. During the period of compulsory management, Foreshew Strata exercised all the functions of the owners corporation. There was a lacuna in the evidence before me as to the circumstances in which Foreshew Strata, on 9 November 2020, came to be, and on 9 November 2022 ceased to be, appointed strata managing agent by order of Senior Member Wilson of NCAT pursuant to s 237(1)(a) of the SSMA. Nonetheless, it is tolerably clear, and I find beyond reasonable doubt, that during the period of compulsory management – 9 November 2020 to 9 November 2022 – the owners corporation, as contemnor, was aware of the entry into the consent orders and the consequences to itself of failing to comply with the consent orders. The respondent was also undoubtedly aware of fire safety deficiencies at the premises prior to the commencement of the period of compulsory management on 9 November 2020. I do not consider it tenable to find, contrary to the contention of the respondent, that the respondent, through its strata managing agent, exercising all the functions of the owners corporation, can be absolved of awareness of the consent orders and the consequences of failing to comply with them.

Factors 3 & 4: The actual consequences of the contempt on the relevant trial or inquiry; whether the contempt was committed in the context of serious crime

113. The parties did not submit, and I do not find, these factors to have been engaged on the facts here.

Factors 5 & 6: The reasons for the contempt; any benefit to the respondent

114. The Class 4 proceedings were commenced on 24 June 2021 relating to the May 2018 fire safety order issued by Council (see above at [24]).

115. The respondent agreed to the consent orders and was clearly aware of the seriousness of complying with them: see the transcript of the proceedings before Moore J on 8 November 2021 (above at [27]). Prior to Moore J being satisfied that it was appropriate to make the consent orders, Mr Harriman provided evidence in relation to the time frames under the proposed orders and the risks to occupants of the premises. That evidence necessitated amendments to the proposed consent orders to include the requirement to undertake certain works within two weeks pursuant to Order 1. His Honour was not prepared to dismiss the proceeding, and instead adjourned the proceeding for a further mention to ensure that there was compliance with Order 1.

116. Mr Harriman’s evidence given on 8 November 2021 demonstrates consideration by the respondent of contractor availability and the time frames to undertake aspects of the outstanding fire safety works. The parties agreed that the respondent was served with a sealed copy of the consent orders containing the penal notice pursuant to r 40.7(3) of the UCPR, which detailed the consequences of a failure to comply (see above at [29]). Subsequent correspondence from Council’s solicitors dated 25 August 2022 (see above at [34]) provided the respondent with further time to comply with the consent orders; namely, by 8 September 2022 to comply with Order 2 which had been required by the consent orders to be complied with by 8 March 2022.

117. The respondent submitted that the reasons why the compulsorily appointed strata manager was not able to ensure compliance with the consent orders were explained in the affidavits of Mr Harriman sworn 2 February 2023 and 11 May 2023, the affidavit of Mr Babamovski sworn 11 May 2023 and the affidavit of Mr Minas sworn 18 May 2023. Again, the respondent submitted that it had “no role to play in ensuring compliance” with the consent orders, that it was not aware of the existence of the consent orders, and that even if it was, being under compulsory strata management meant that it had no decision-making power, including to take the necessary steps to ensure compliance.

118. It was agreed between the parties that as at 19 October 2021, the respondent had an understanding of the costs of undertaking works, as indicated in Mr Harriman’s email providing a “ballpark” estimate of $1,680,000 (see above at [25]). However, it was not until some two months later on 17 December 2021, that funding was sought. It was after a further month, on 17 January 2022, that the respondent resolved to enter into and execute a contract for the Lannock loan (see above at [31]). Mr Babamovski gave evidence that on 21 April 2023, he paid a total of $182,338.34 to Fire Management Solutions and EBS Consultants, using the funds from the Lannock loan, for works undertaken in compliance with the consent orders. Having regard to Mr Harriman’s “ballpark” estimate of $1,680,000 provided to the respondent on 19 October 2021, during the Class 4 civil enforcement proceedings, it is evident that a significant amount of the works remain to be completed.

119. No steps were undertaken by the respondent to seek to amend the time frames provided in the consent orders to address its failure to comply with the orders. These contempt proceedings were commenced on 2 December 2022, and at the date of sentencing hearing the respondent had not purged the contempt despite having had some 5 months to do so. This lengthy delay was not explained in the respondent’s evidence.

114. In relation to the reasons for the contempt and the question of any benefit to the contemnor, again I note the paucity of evidence in relation to the circumstances surrounding the appointment of Foreshew Strata as the strata managing agent to exercise all functions of the owners corporation by order of NCAT on 9 November 2020. It is clear, however, and it was agreed, that during the period of the appointment of Foreshew Strata, as at 19 October 2021, the respondent had an understanding of the costs of undertaking works, that on 17 December 2021 funding was sought, and that on 17 January 2022 the respondent resolved to enter into and execute a contract for the Lannock loan. In light of the juridical reality, that during the period of compulsory strata management, Foreshew Strata exercised all the functions of the respondent, I cannot find that the respondent had “no role to play in ensuring compliance” with the consent orders. It is inherently illogical to contend at the same time that the respondent, at an extraordinary general meeting, resolved to enter into and execute a contract for the Lannock loan, but being under compulsory strata management, had no decision-making power.

Factor 7: Contrition and apology

121. The respondent offered an apology and expressed contrition for its contempt by way of the affidavit of Mr Minas sworn 18 May 2023 (see above at [55] to [57]).

122. At the sentencing hearing, Council accepted that Mr Minas’ affidavit did contain “some way of apology and contrition from the respondent in relation to these particular breaches.”

123. The respondent submitted that although the apology given by Mr Minas was belated, the Court would have no doubts about its genuineness given that:

1. the deadline for the respondent’s evidence was 11 May 2023;

2. Mr Minas only obtained consent from the respondent to “act on behalf of the Strata Committee” in these proceedings on 20 February 2023, evidenced by the respondent’s minutes of general meeting dated 20 February 2023;

3. Mr Minas took responsibility for the failure of the compulsorily appointed strata manager to comply with the consent orders despite only learning of them after the contempt charges were laid;

4. Mr Minas acknowledged the seriousness of the failure to comply with the orders;

5. Mr Minas deposed that the respondent had been taking the necessary steps to purge the contempt since becoming aware of the contempt after the charges were laid;

6. Mr Minas deposed that prior to the compulsory strata manager being appointed (and prior to the Class 4 proceedings being commenced and consent orders entered), the respondent was taking steps to rectify the fire safety matters at the building and remains committed to rectifying the issues with the funds available to it through finance; and

7. the respondent had also been responsible for progressing the fire safety works since regaining control of the functions of the owners corporation on 30 November 2022, as evidenced in the following minutes:

1. minutes of meeting dated 30 November 2022 (the first meeting after the compulsory strata management period ended);

2. minutes of meeting dated 20 February 2023, in particular motion 3 which resolved to pay $138,544.29 to Fire Maintenance Solutions in relation to its invoice for fire system upgrade works; and

3. minutes of the annual general meeting held on 12 April 2023, in particular motion 12 which resolved to engage a suitably qualified consultant to carry out an annual fire safety statement and report.

124. The respondent conceded that an apology is “not enough” in the circumstances, and accepted that the contempt is serious because it concerns fire safety matters. Accordingly, it submitted that the appropriate penalty would be one that is both non-punitive, but also directed at achieving compliance as a matter of urgency.

125. The respondent relied on Pelechowski v Registrar, Court of Appeal (NSW),^[25] where Kirby J said that in a case of “technical” contempt, where the contemnor has offered an apology which the court accepts, it will sometimes be sufficient to make a finding of contempt coupled with an order for the payment of costs. However, I have found that the contempt here charged is not merely technical (see above at [96]-[99]).

     25. (1999) 198 CLR 435; [1999] HCA 19 at [147]-[148].

126. The respondent agreed to paying Council’s costs in the agreed sum of $23,500, and submitted that this is a matter that ought be taken into account when formulating the appropriate sentence.

127. I find that the respondent has offered an apology for the offences charged here. I also find that the respondent, through the evidence of Mr Minas, has demonstrated contrition for the contempt which I have found to be intentional. These are matters to which I have regard in sentencing the contemnor.

Factor 8: Character and antecedents

128. The respondent submitted that it did not have any previous convictions, and Council did not contend otherwise. I accept that the respondent has no previous convictions and this is a matter to which I have regard in sentencing the contemnor.

Factor 9: General and personal deterrence

129. In Balmain Rentals, Robson J said at [60] in relation to deterrence, both general and personal, in sentencing for contempt:

60. I find that general deterrence is an important part of any sentencing calculation and particularly where the Court’s orders were made in circumstances where the defendant actively participated in (and indeed agreed to) the entry of orders in the primary judgment; and where it was aware of the facts and matters with which Council was originally concerned. In relation to deterrence, both general and personal, I accept, and I note the comments of Kirby J in Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435; [1999] HCA 19 at [149]:

“Unless courts are seen to respond firmly to deliberate defiance of their orders, their effectiveness in the authoritative determination of disputes of law would be undermined. And if they were not effective, ‘serious and lasting damage to the fabric of the law may result’ …”

130. Council submitted that in addition to general deterrence, personal deterrence has a role to play in these proceedings given that the contempt has not been purged. In SP 18820 Robson J held at [59]:

59. Given that the Court Orders related to fire safety concerns in an older building, especially one that was used for accommodation and had only a single egress for occupants of the upper floors, and the fact that works were not undertaken in earnest until recently, any penalty imposed by the Court should properly operate to provide specific as well as general deterrence for non-compliance with the orders of the Court.

131. The respondent submitted that in the present circumstances, the owners corporation did not participate in (or indeed agree to) the entry of the consent orders the subject of the contempt. It was submitted that this is a matter that would weigh heavily against the imposition of a punitive sanction. It was also submitted that in considering general and personal deterrence, the Court should have regard to the respondent’s submission that the contempt was technical.

132. Again, in relation to the submission that the owners corporation did not participate in (or agree to) the entry of the consent orders, I find that this disregards that the strata managing agent, appointed by an order of NCAT pursuant to s 237(1) of the SSMA where the Tribunal was satisfied as to one of the circumstances enumerated in s 237(3), exercised during the period of its appointment all the functions of the respondent. The second reading speech for the predecessor to s 237(1), s 183B of the SSM Bill 2003 (which was in relevantly similar terms) made Parliament’s intention clear (see above at [88]): the strata managing agent was appointed to stand in the place of the owners corporation, and to make decisions for and undertake the full role of the owners corporation.

133. In relation to general and specific deterrence, for the reasons given above at [96]-[99], I do not accept that the contempt here charged was technical. I adopt the reasons of Robson J in Balmain Rentals ^[26] in relation to deterrence, both general and personal, in sentencing for contempt.

     26. [2022] NSWLEC 20 at [60] (Robson J).

134. I also respectfully adopt the reasons of Robson J in SP 18820 at [59] in relation to the role of personal deterrence in these proceedings which involve fire safety concerns in circumstances in which the contempt has not been purged.

135. I have regard to general and specific deterrence in sentencing the contemnor here.

Factor 10: Denunciation

136. Council submitted that the punishment imposed must also be a denunciation of the contempt.

137. The respondent again submitted that it was not aware of the existence of the consent orders, and that the contempt was casual, accidental or unintentional, and did not justify a punitive sanction. For the reasons given above at [110]-[112] in relation to awareness, I reject those submissions.

138. As the chief judge held in Perdikaris, the punishment imposed must also be a denunciation of the contempt. ^[27]

     27. Perdikaris at [62] (Preston CJ).

Even-handedness in sentencing for contempt

139. In Bayside Council v Zein,^[28] Pain J said at [50] in relation to sentencing for contempt:

50. In Environment Protection Authority v Hanna [2013] NSWLEC 41 I stated at [69]:

69. As contempt is a common law offence there is no statutorily defined maximum penalty. The consideration of similar offences where these exist can assist in sentencing in a principled and proportionate way although I note contrary observations in the Sentencing Bench Book, Judicial Commission of NSW at [20-155] on p 9540 - 9541, "No tariff of sentences for contempt" due to the great variation in circumstances giving rise to a charge of contempt. The Court has generally imposed a fine as a penalty in contempt proceedings…

28. [2023] NSWLEC 42 (Pain J).

140. In SP 18820, Robson J considered previous authorities in relation to the range of penalties imposed for “wilful” contempt. At [62] his Honour said:

62. In Tovir (No 4), Biscoe J referred at [34] to the caution to be exercised in comparing sentences passed in different factual contexts. His Honour made similar comments in Queanbeyan at [38]-[41], where his Honour noted that the range of penalties imposed by this Court in cases of wilful contempt have generally been in the range of $7,500 to $50,000 with higher penalties (which were defined as being over $20,000) being imposed in cases involving environmental harm or the risk of environmental harm. These figures were sourced from Ruan at [26]-[28], and so related to matters before the Court prior to 2008.

141. In SP 18820, Robson J imposed a fine of $15,000 for the contemnor’s failure to comply with the requirements of a fire safety order in relation to a 3-storey strata building. At the time of sentence the contempt had been purged, his Honour having adjourned the sentencing hearing for a month to enable compliance with the orders to be achieved. ^[29]

     29. SP 18820 at [20]-[21].

142. I have regard to the authorities referred to above in relation to the approach to be taken to sentencing for contempt in the present case. I also have regard to the fact that as at the date of hearing, the respondent had not purged its contempt. To ensure even-handedness in sentencing, I consider below at [147]-[151] a number of cases where the contempt had not been purged at the sentencing hearing.

Penalty where the contempt has not been purged

143. Given that compliance with Orders 2, 3 and 4 of the consent orders remains outstanding, Council submitted that the penalty imposed should also “coerce” the respondent to comply with the consent orders. In addition to the imposition of a fine for each of the three offences, Council submitted that consideration should be given to the imposition of a periodic fine so long as compliance with Orders 2, 3 and 4 remains outstanding.

144. The respondent submitted, in agreement with Council, that an appropriate penalty would “serve the thrust of civil contempt proceedings, which is to compel compliance”. The key difference between the parties’ submissions on an appropriate penalty was whether a punitive penalty should be imposed in addition to a periodic fine for continuance of the contempt.

145. The respondent submitted that a sentence should be imposed in terms similar to that imposed by Sheahan J in Camden Council v Rafailidis (No 4) (Rafailidis) ^[30] where his Honour made orders on 18 March 2014 that the contemnors pay a monthly fine of $2,000 payable on the first calendar day of each month, not commencing until 1 June 2014 and ceasing when the works the subject of the contempt charges had been completed to Council’s satisfaction.

     30. [2014] NSWLEC 22.

146. The respondent submitted that such an approach here would achieve the two “prongs” of:

1. being non-punitive to reflect the contempt as being technical (a submission I have previously rejected); and

2. compelling compliance.

147. In Rafailidis, Sheahan J imposed a punitive fine of $10,000 on the contemnors. In that case, the contemnors were required to comply with orders of the Court made on 18 September 2012 to “demolish and remove the existing single storey dwelling on the Property, or otherwise obtain an appropriate development consent to allow it to remain in some for [sic] or another” by 4 July 2013. As at the date of the contempt hearing before Sheahan J on 18 March 2014, the contempt had not been purged. His Honour held that:

Had [the contemnors] done something about the old house following the laying of the charge of contempt, I would have been inclined to treat the disobedience to that time as “technical” contempt, but it has continued, and their contempt is, at least, “wilful”. In fact, it is not that far short of “contumacious”, when one takes into account the approach taken to the charge — one defendant did not appear, and the other refused to participate properly, in her own interests.

148. Council relied on a number of cases in which periodic fines have been imposed: Kara-Ali; Blacktown City Council v Everson (Everson); ^[31] and Blacktown City Council v Jason Gabriel Saker (No 4) (Saker). ^[32]

     31. [2019] NSWLEC 4 (Molesworth AJ).

     32. [2022] NSWLEC 80 (Pepper J).

149. In Kara-Ali, the three respondents each pleaded guilty to four charges of contempt for failure to obey court orders made on 27 August 2018. The effect of those orders was that the respondents demolish certain structures on the property and be restrained from carrying out a number of activities on the property, including the clearing of trees and/or vegetation, earthworks, certain religious activities, and constructing structures. As at the sentencing hearing on 28 February 2019, Sheahan J accepted that the respondents had “gone a long way towards purging their contempt” (at [90]). However, elements of the contempt remained outstanding in relation to one of the orders. Sheahan J imposed a continuing fine of $2,000 on each of the respondents for each calendar month after 30 June 2019 during which the respondent failed to comply with the order.

150. In Everson, on 9 December 2016, Robson J made orders by consent that by 28 February 2017 the respondent remove all scrap materials and goods collected, stored, or abandoned on the subject premises. On 26 July 2017, Council filed a notice of motion and statement of charge for contempt to which the respondent pleaded guilty on 5 December 2017. At the contempt hearing on 31 January 2018, the respondent had not purged the contempt. On 17 January 2019, Molesworth AJ imposed by way of penalty a fine in the amount of $5,000, as well as a periodic fine in the amount of $2,000 per month for each month that the contempt had not been purged. ^[33]

     33. Everson at [73].

151. Saker concerned unpermitted use of land for the receipt of fill material and earthworks. Molesworth AJ made final orders on 8 October 2018 that the respondent, amongst other things, engage a suitably qualified person to prepare a Waste Removal and Remediation Plan. On 14 December 2021, the Court found the respondent guilty of contempt for failure to comply with this order. As at the contempt hearing on 30 June 2022, the respondent had not purged the contempt. The respondent gave evidence in relation to his reasons for the contempt, including that there had been flooding on the property. However, he had on no occasion sought to have the orders varied to accommodate those circumstances. Pepper J found that the respondent’s testimony was that “he has not, and moreover, that he will not, comply with the final orders”, and that the “real reason”, in my opinion, for his contemptuous behaviour is his defiance of the Court’s authority”. ^[34] Her Honour held that the respondent’s contempt was wilful and contumacious, and objectively serious. Her Honour imposed a monetary penalty of $40,000 and a suspended periodic fine of $10,000 to be paid monthly, starting 1 August 2022, until the contempt was purged.

     34. Saker at [65].

The totality principle

152. Although neither party made any submission in relation to the application of the totality principle in sentencing for the three offences here charged, I have nonetheless had regard to it. ^[35]

     35. See, for example, Balmain Rentals at [69] (Robson J); Kara-Ali at [183]-[185] (Sheahan J); Queanbeyan at [37] (Biscoe J); Canterbury City Council v Mihalopoulos (No 3) [2012] NSWLEC 72 at [39] (Pain J).

153. The totality principle requires that in imposing sentences for related offences, after calculating the appropriate sentence for each offence, the Court should consider whether the aggregate sentence imposed is just and appropriate having regard to the totality of the criminal behaviour. ^[36]

     36. Mill v The Queen (1988) 166 CLR 59 at 63; [1988] HCA 70 at [8] (Wilson, Deane, Dawson, Toohey and Gaudron JJ); Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242; at [196] (Preston CJ); Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57 at [40] (McHugh, Hayne and Callinan JJ); Water NSW v Barlow (2019) 244 LGERA 1; [2019] NSWLEC 30 (Barlow) at [111] (Preston CJ).

154. In accordance with the totality principle, I have considered the appropriate penalty for each offence charged and reviewed the aggregate to ensure that it reflects the total offending of the respondent. ^[37]

     37. Barlow at [111] (Preston CJ).

Guilty pleas

155. The maximum discount on the otherwise applicable starting penalty to be afforded to a respondent who has pleaded guilty is 25 percent. ^[38] The full measure of this discount is only afforded to those respondents who enter a guilty plea at the earliest opportunity.

     38. R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 383 at [151]-[152] (Spigelman CJ, Wood CJ at CL, Foster AJA, Grove, James JJ agreeing).

156. The respondent submitted that it entered pleas of guilty at the earliest opportunity, being the first return of the motion for contempt which was filed on 2 December 2022 and given a first return date of Friday, 16 December 2022. However, the first return date was vacated on Thursday, 15 December 2022 by Duggan J (see above at [38]).

157. The Court’s fixed vacation period began on Monday, 19 December 2022, and the first day of term for 2023 was Monday, 30 January 2023. 3 February 2023 was the first Friday list judge day of term for 2023. The respondent entered a plea of guilty to each of the charges on that occasion. Accordingly, the respondent submitted that the appropriate sentence should be adjusted to reflect a 25 percent discount.

158. I accept the respondent’s submission. I find that the respondent entered pleas of guilty at the earliest opportunity, and that it should receive a 25 percent discount for the early entry of the pleas.

Means to pay

159. Section 4(1)(a1) of the Fines Act 1996 (NSW) (Fines Act) includes within the definition of “fine”, “any monetary penalty imposed by a court for contempt of court”. When imposing a fine for contempt, the Court must consider the provisions of the Fines Act, including that in s 6 relating to the accused’s means to pay a fine.

159. I find that the respondent has the means to pay a fine. There was no evidence or submission to the contrary.

Conclusion on appropriate penalty

161. I consider that the appropriate monetary penalties are as follows:

1. In relation to the first charge (that since 12:00am on 22 March 2022 and continuing, the respondent failed to provide Council with a fire safety certificate and interim annual fire safety statement contrary to Order 2 of the consent orders), a penalty in the amount of $10,000.

2. In relation to the second charge (that since 12:00am on 20 July 2022 and continuing, the respondent failed to provide Council with a fire safety certificate contrary to Order 3 of the consent orders), a penalty in the amount of $7,500.

3. In relation to the third charge (that since 12:00am on 10 November 2022 and continuing, the respondent failed to provide Council with an upgrade strategy contrary to Order 4 of the consent orders), a penalty in in the amount of $5,000.

162. These amounts should be discounted by for the utilitarian value of the pleas of guilty in the case of each offence charged by 25 percent. Having regard to the totality principle, the circumstance that the three offences arose from essentially the same conduct of the respondent in failing to comply with Orders 2, 3 and 4 of the consent orders, I also apply a discount of 25 percent.

163. This results in a monetary penalty:

1. for the first charge, in the amount of $5,000;

2. for the second charge, in the amount of $3,750; and

3. for the third charge, in the amount of $2,500.

164. This results in a total penalty for the three offences charged of $11,250.

Costs

165. At the sentencing hearing, the parties informed the Court that they had reached agreement in relation to costs, namely that the respondent is to pay the applicant’s costs of the motion in the agreed sum of $23,500 to be made within 28 days. I am satisfied that this is a suitable approach to the question of costs.

Orders

166. The Court makes the following orders:

1. The respondent is convicted of each count of contempt of Court as contained in the statement of charge filed on 2 December 2022 for failure to comply with consent orders made in proceedings 2021/181504 by Moore J on 8 November 2021 (the consent orders).

2. The respondent is ordered to pay the following fines to the Registrar of the Court within 28 days of the date of judgment, for payment to the applicant pursuant to s 694 of the Local Government Act 1993 and r 7.5(3) of the Land and Environment Court Rules 2007:

1. In respect of contempt of order 2 of the consent orders $5,000;

2. In respect of contempt of order 3 of the consent orders $3,750; and

3. In respect of contempt of order 4 of the consent orders $2,500.

3. The respondent is fined $2,000 per calendar month, to be paid to the Registrar of the Court on the first calendar day of each month, so long as order 2 of the consent orders is not complied with to the applicant’s satisfaction.

4. The respondent is fined $2,000 per calendar month, to be paid to the Registrar of the Court on the first calendar day of each month, so long as order 3 of the consent orders is not complied with to the applicant’s satisfaction.

5. The respondent is fined $2,000 per calendar month, to be paid to the Registrar of the Court on the first calendar day of each month, so long as order 4 of the consent orders is not complied with to the applicant’s satisfaction.

6. Orders 3, 4 and 5 above are suspended until 31 January 2024.

7. The respondent has leave to apply to the Court by notice of motion to vary the monthly penalty in orders 3, 4 and 5 above, upon sufficient cause being shown.

8. The respondent is to pay the applicant’s costs of the notice of motion filed by the applicant on 2 December 2022 in the agreed sum of $23,500.00 with payment to be made within 28 days of the date of these orders.

9. The parties have liberty to restore the matter before the Court on 3 days’ notice.

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Endnotes

Amendments

28 July 2023 - Corrected typographical error in [166] and coversheet

Decision last updated: 28 July 2023