Greater Hume Shire Council v J & L Cauchi Civil Contracting Pty Ltd

[2006] NSWLEC 738

Land and Environment Court

of New South Wales

CITATION:

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

PARTIES:

APPLICANT:
Greater Hume Shire Council

FIRST RESPONDENT:
J & L Cauchi Civil Contracting Pty Ltd

SECOND RESPONDENT:
Joseph Cauchi

THIRD RESPONDENT:
Louise Margaret Cauchi

FOURTH RESPONDENT:
Wyanga Holdings Pty Ltd

FILE NUMBER(S):

41581 of 2005

CORAM:

Biscoe J

KEY ISSUES:

Contempt :- whether a finding of contempt for breach of a court order requires proof that the breach is deliberate.

LEGISLATION CITED:

Environmental Planning and Assessment Act 1979
Environmental Planning and Assessment Regulations 2000

CASES CITED:

Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98;
Evenco Pty Ltd v Australian Building Construction Employees & Builders Labourers Federation (Qld Branch) [2001] 2 Qd R 118;
Fairclough & Sons v Manchester Ship Canal Co (No.2) (1897) 41 Solicitors Journal 225;
Lade and Co Pty Ltd v Black [2006] QCA 294;
Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494;
Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435;
Steiner Products Ltd v Willy Steiner Ltd [1966] 1 WLR 986;
Witham v Holloway (1995) 183 CLR 525

DATES OF HEARING:

03/10/2006

EX TEMPORE JUDGMENT DATE:

10/03/2006

LEGAL REPRESENTATIVES:

APPLICANT:
Mr R K Graham, solicitor
SOLICITORS
Abbott Tout

RESPONDENTS:
Mr P J McEwen SC
SOLICITORS
Balmain Lawyers

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

3 October 2006

41581 of 2005

GREATER HUME SHIRE COUNCIL v J & L CAUCHI CIVIL CONTRACTING PTY LIMITED & ORS.

JUDGMENT

HIS HONOUR:

1 This is a notice of motion by the applicant council that the respondents be punished for contempt by one or more of committal to prison, sequestration or fine. The respondents have pleaded not guilty.

2 The statement of charge is that the respondents are guilty of contempt of Court in that in breach of orders made by the Court by consent on 6 January 2006, they each did not lodge or cause to be lodged on their behalf a development application and environmental impact statement with the applicant as the appropriate consent authority in accordance with the Environmental Planning and Assessment Act 1979 (EPA Act) and regulations by 1 March 2006.

BACKGROUND

3 On 22 December 2005 the Greater Hume Shire Council commenced these proceedings against the four respondents seeking a declaration that they had undertaken or caused to be undertaken the use of land for the purposes of an extractive industry without a prior development consent, and an injunction. The land is described as being within the local government area of Hume, Parish of Yambla, County of Goulburn, being Lot 41 in deposited plan 1004275, located at the corner of the Hume Highway and Bells Road, Tabletop.

4 On the same day, an ex parte injunction was granted to the council restraining the respondents from carrying out any further work for the purposes of or related to an extractive industry, upon any part of the land without the prior written consent of the applicant pursuant to the EPA Act and the Hume Local Environmental Plan 2001. The ex parte injunction was expressed to endure until 28 December 2005. On that date the respondents appeared and the injunction was continued until 30 December 2005. Then it was continued until 6 January 2006, subject to a proviso that the respondents could remove material already extracted from its natural state and stockpiled on the site.

5 On 6 January 2006, consent orders were made. Order 1 was that the revised orders made by the Court on 30 December should continue to apply until 15 May 2006. Order 2 is the order in respect of which this contempt application has been brought:

2. The Respondents will lodge a development application and environmental impact statement with the appropriate consent authority in accordance with the Environmental Planning and Assessment Act and Regulations by 31 1 March 2006.

6 The date “31” March was struck out in the form of this order and substituted by the date “1” March in circumstances which I will recount shortly.

7 The respondents did not comply with order 2 by 1 March 2006 by lodging a development application or an environmental impact statement. They did lodge a development application and environmental impact statement on or about 15 September 2006. The development application is currently in the process of public exhibition.

8 Before me the council conceded that if the respondents had applied for a variation of order 2 by way of an extension of time for compliance, then such an application could not reasonably have been opposed by the council. The concession was properly made having regard to the evidence to which I will refer.

9 Notwithstanding the concession and the fact that the order has now been complied with out of time, the notice of motion for contempt is still pressed in terms that the respondents be punished by one or more of committal to prison, sequestration or fine. The council submitted that this is a case of a civil contempt, which it acknowledged has to be proved to the criminal standard, beyond all reasonable doubt.

10 It is necessary to explain how order 2 of 6 January 2006 came to be made and why it was not complied with. The respondents were advised in a letter dated 20 September 2005 from their solicitors, Minter Ellison, as to alternative courses of action which were available to them in relation to quarrying undertaken by the fourth respondent, Wyanga Holdings Pty Limited, on the subject land. The letter canvassed three alternatives. First, a claim for existing use rights. Secondly, reliance on a development consent which had been granted in 1998 for the use of the land as a quarry (being a deferred commencement consent which provided that the consent could not operate until a number of matters had been submitted to and been approved by the council). Thirdly, lodging a development application which required the preparation and public exhibition of an environmental impact statement.

11 By shortly before Christmas 2005, solicitors for the parties were in communication. On 22 December 2005 other solicitors acting for the respondents, Balmain Lawyers, wrote to the applicant’s solicitors, Abbott Tout. That is the same date on which these proceedings were commenced. The letter stated that the respondents had instructed Mr Corkery, an expert in the creation of Environmental Protection Statements, with a view to him preparing such a statement.

12 At the hearing on 6 January 2006, the respondents were represented by a solicitor from Minter Ellison. It appears from the evidence that he had been instructed by Mr Corkery, who had consulted with one or more of the respondents, that a development application and environmental impact statement could be lodged by 31 March. However, it appears that he decided to agree with the solicitor for the council that that date should be truncated to 1 March. A letter from Minter Ellison of 6 January 2006 explained that the council would not agree to the extension of time to 31 March and that because the council had already agreed earlier in the week to extend the time limit to 1 March, the solicitor for the respondents decided that in the interest of settling the proceedings it was prudent not to press the issue.

13 By 19 January 2006 the respondents had been advised that Mr Corkery had become unavailable to undertake the environmental impact statement until about April, and an enquiry was directed to Mr Corkery by the respondents’ other solicitors, Balmain Lawyers, as to a timeframe within which those works could be undertaken.

14 Between 16 and 25 February or thereabouts, letters were written by those solicitors to alternative consultants to Mr Corkery enquiring whether they could prepare an environmental impact statement within a timeframe which would allow a development application to be filed before the end of February 2006 and enquiring as to the anticipated cost.

15 A letter of 23 February 2006 from the fourth respondent to the council stated: “The 1st March is upon us and we appreciate that we have to tell council what it is we intend to do with the quarry so that whatever we intend to do we can get started and council can have some comfort in our activity”. The letter indicated that a meeting had been held with a representative of the company that owns the land, Jeffla Pty Ltd, which is not one of the respondents. It is common ground that the development application could not have been lodged without the consent of the owner. The letter noted that the solicitor for the quarry owner had received legal advice to the effect that the development consent that had been granted in 1998 was still alive.

16 In February and March 2006 there were a number of meetings with representatives of the owner discussing these issues. It was not until about the end of March that a representative of the owner indicated orally that it would be prepared to agree to the lodging of the development application. That was, of course, after the date required by order 2 of 6 January 2006.

17 At some stage which appears to be after February 2006, Jeffla Pty Ltd commenced proceedings in this Court against the council in respect of the 1998 development consent. I do not have all the details of that action before me, but I think it is common ground that it sought to establish that certain conditions which had been attached to the 1998 consent had been satisfied, with the result that the consent was effective. Orders made on 21 September 2006 in those proceedings record, among other things, that the council was satisfied with compliance with what I gather was the only condition which was still contentious. Thus, those proceedings were substantially resolved in favour of Jeffla Pty Ltd. The purpose of the respondents in the proceedings before me in recently filing a development application and an environmental impact statement was that the 1998 development consent may not be sufficient for the respondents’ future requirements.

18 Balmain Lawyers, the solicitors for the respondents, wrote to the applicant council on no less than seven occasions requesting an extension of time for compliance with order 2 of 6 January 2006. I have noted earlier that it is properly acknowledged by the council’s legal representative before me that if an application had been made by the respondents to the Court for such an extension of time, the council could not reasonably have opposed it. In those requests for extensions of time, which appear to have commenced in February 2006 and continued until at least 26 April 2006, it was explained that difficulties had been encountered in complying with the time limit imposed by order 2. It was explained that an environmental impact statement would take a number of months to prepare and it was proposed that there be an extension of the time in order 2 of three months. The letter of 26 April 2006 said, in similar vein to earlier letters, that it would have been impossible to have prepared the development application and the environmental impact statement without the consent of the owner and that it certainly could not have been prepared within the two months allowed for in order 2.

19 There was little by way of substantive response to those requests. The council’s solicitors’ letter to the second and third respondents of 2 March 2006 warned that unless order 2 was complied with within 14 days, the council would commence proceedings without further notice and seek orders that they be dealt with for contempt of court. There was a detailed letter of reply from the respondents’ solicitors on 6 March 2006, indicating that it was hoped to be able to write in the next day or so confirming the appointment of either Mr Doug Gow or another expert to undertake the preparation of the environmental impact statement and the development application. The council’s solicitors’ letter of 3 May 2006 stated that the orders were made by consent and that the solicitor who represented the respondents on that occasion had substantial experience in such matters in this Court, particularly in relation to development applications in respect of designated development for extractive industries.

20 In the meantime, on 30 March 2006, the applicant’s notice of motion seeking that the respondents be punished for contempt was filed and was made returnable on 5 May.

21 Attempts by the respondents through their solicitors to resolve the matter continued. By their letter dated 23 May 2006 it was suggested that the matter be dealt with in a practical way. The letter stated that the environmental impact statement had been commenced, and that, instead of dealing with past issues, the parties should correct the problems of the past immediately by short minutes and proceed to set up an arrangement that would allow for the proper and workmanlike operation of the quarry. Reference was made to commercial considerations indicating that it was critical that the quarry be made available so that materials could be extracted from it, so as to avoid delays in the construction of a bypass which the quarry materials were servicing.

22 The opportunity to take already won materials from the quarry, in accordance with the orders to which I have earlier referred, expired on 15 May 2006. This was pointed out in a letter of 24 May 2006 from the respondents’ solicitors to the applicant’s solicitors.

23 The unchallenged evidence of the third respondent Louise Cauchi, which I accept, includes the following:

In early January 2006 I was informed that Wyanga would have to obtain an environmental impact statement (“EIS”) to support a development application to obtain consent to increase the quantity of materials to be extracted from the quarry. I was under the belief that materials could be extracted from the quarry because it enjoyed ‘ existing use rights ’. I was told and believed from information obtained from owners of Jeffla that the quarry had been operated continuously since 1928 and to the date that Wyanga commenced to operate it. In early January 2006, I knew nothing of what was involved in obtaining an EIS or for that matter what was needed to prepare a development application to increase the quantity of materials to be extracted from the quarry. I relied on my solicitor, Mr Whitehouse [of Minter Ellison], whom I understand, and understood then, to be an expert in this matter…

Certainly, in early January 2006 I had no idea how long it will [sic] take or what was involved in obtaining an EIS. The orders were agreed to in ignorance of what would be involved in complying with them.

All of the dealings with Jeffla about the quarry have been with Tim Scott who is a resident family member of the directors and shareholders of Jeffla, on the property. At the time the consent orders of the 6th January 2006 were being agreed to by Mr Whitehouse and the solicitors for the Applicant, I was not and never asked by any person, including Mr Whitehouse, to contact Mr Scott or any other member of the Scott family to ask whether Jeffla would agree to the EIS being prepared or consent to the development application being lodged.

24 She deposed to meetings attended in February 2006 by the respondents’ solicitor with representatives of the applicant council and with Mr Scott and his solicitor. One such meeting, held on 15 February 2006, was to obtain the consent of Jeffla Pty Ltd, the involvement of Jeffla and Mr Scott in the preparation and lodgement of the development application, and to secure a contribution to what she described as the “now huge cost of obtaining of the environmental impact statement”. She deposed that, as a result of continuing efforts, by about the end of March Jeffla indicated orally that it would agree to support a development application.

25 Very substantial costs were incurred by the respondents in an endeavour to progress the matter, including in relation to the development application and the environmental impact statement. Monies were also foregone by the respondents because under the consent orders their ability to extract material from the quarry expired on 15 May 2006 when the provision for using stockpiled material expired.

Submissions

26 The council submitted that the respondents were conscious of the consent orders and have been represented by a solicitor throughout; and that had they formed the view that in order to comply with the substantive requirements of order 2 of 6 January 2006 an extension of time was necessary, then they should have applied to the Court. The respondents submitted that it was necessary to find that they intentionally did not comply with the order, and that there was no intention not to comply. Rather, the intention was to comply if possible but they met with intervening circumstances that precluded compliance.

27 In Australasian Meat Industry Employees’ Union v Mudginberri StationPty Ltd (1986) 161 CLR 98 the High Court 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. The joint judgment stated at 106 - 107:

Punishment for contempt serves two functions: ( a) enforcement of the process and orders of the court, disobedience to which has been described as ‘ civil contempt ’; and (b) punishment of other acts which impede the administration of justice, such as obstructing proceedings in court while it is sitting or publishing comments on a pending case, which have both been described as ‘ criminal contempt ’ ... The principal theoretical basis of the distinction is that disobedience to the process and orders of the court in civil proceedings is said to be a civil wrong, a matter between party and party, enforcement being for the private benefit or interest of the party seeking enforcement ... According to some authorities, criminal, but not civil, contempt could be punished by the imposition of a fine. More recent decisions indicate that a fine may be imposed when the contempt consists of wilful disobedience to a court order in the sense that the disobedience is not casual, accidental or unintentional... Although the primary purpose in committing a defendant who disobeys an injunction is to enforce the injunction for the benefit of the plaintiff, another purpose is to protect the effective administration of justice by demonstrating that the court’s orders will be enforced.

The joint judgment continued at pages 108 -109:

A rather similar notion lies behind the cases in which disobedience to an order which is wilful or contumacious amounts to criminal contempt... The point in these cases is that wilful disobedience to a court’s order, especially if it occurs in circumstances where the conduct amounts to public defiance, involves a public injury and this calls into play a penal or disciplinary jurisdiction to deal with criminal contempt...

It is apparent from the foregoing discussion that very great difficulty has been experienced in maintaining the distinction between civil and criminal contempts and, in particular, in elaborating a precise and certain criterion which divides one class of contempt from the other...

There is, accordingly, much to be said for the view that all contempts should be punished as if they are quasi-criminal in character, notwithstanding the adoption of the contrary view by some members of this Court in the decisions to which we have already referred.

However, the distinction between casual, accidental and unintentional disobedience on the one hand and wilful disobedience on the other offers the prospect of a more limited basis for upholding the imposition of a fine by the Federal Court in the circumstances of this case.

The joint judgment at page 111 cited the dictum of Stamp J in Steiner Products Ltd v Willy Steiner Ltd [1966] 1 WLR 986 at 992 that any “disobedience which was worse than casual, accidental or unintentional must be regarded as wilful” . The joint judgment concluded at 113:
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.

28 The elements of contempt and the interrelationship between civil and criminal contempt were again considered by the High Court in Witham v Holloway (1995) 183 CLR 525. The joint judgment said at 530:

In general terms, the distinction between civil and criminal contempt is that a civil contempt involves disobedience to a court order or breach of an undertaking in civil proceedings, whereas a criminal contempt is committed either when there is a contempt in the face of the court or there is an interference with the course of justice. However, disobedience or breach of an undertaking amounts to a criminal contempt if it involves deliberate defiance or, as it is sometimes said, if it is contumacious .

and at 531:
The basis of the distinction between civil and criminal contempt is said to lie in the difference between proceedings which are remedial or coercive in the interest of the private individual and proceedings in the public interest to vindicate judicial authority or maintain the integrity of the judicial process. Thus, in Australian Consolidated Press Ltd v Morgan , Windeyer J described proceedings for civil contempt as being ‘ used primarily to compel obedience rather than to punish disobedience ’.

and at 534:
The differences upon which the distinction between civil and criminal contempt is based are, in significant respects, illusory. They certainly do not justify the allocation of different standards of proof for civil and criminal contempt . . . The consequence is that all charges of contempt must be proved beyond reasonable doubt.

29 McHugh J in a separate judgment said at 541:

This Court has now authoritatively determined that in some circumstances courts do have power to fine for civil contempt. That power exists where the breach has not been the result of ‘ casual, or accidental and unintentional disobedience ’. If, therefore, the breach has been wilful, it is no answer ‘ to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order ’. Thus, if the act or omission that constitutes the breach was done wilfully, the contemnor is now liable to be fined even if the breach was not contumacious.

30 In Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at 484 – 485 [147] – [148] Kirby J distinguished between contempts which were “technical”, contempts which were “wilful but without a specific intent to defy the authority of the Court”, and contempts which were “contumacious”. He 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.

31 Although the authorities to which I have referred seem to me to indicate that it is unnecessary to prove that a breach of a court order was deliberate in order to establish a “technical” civil contempt, in Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 at 497 – 498 [6] Merkel J expressed a different view:

Deliberate conduct which is in breach of a court order will constitute wilful disobedience of the order, and therefore a civil contempt, unless the conduct be casual, accidental or unintentional: see Australian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106-107 and 112-113. However, the disobedience will amount to a criminal contempt if it involves ‘ deliberate defiance or, as it is sometimes said, if it is contumacious ’: see Witham v Holloway (1995) 183 CLR 525 at 530. As is apparent from the Statement of Charge, Louis Vuitton is alleging both civil and criminal contempt. However, as all proceedings for contempt are now regarded as criminal in nature, all of the charges must be proved beyond reasonable doubt: see Witham at 534.

32 In Lade & Co Pty Ltd v Black [2006] QCA 294 the Queensland Court of Appeal split on whether a finding of contempt of an order or undertaking requires proof that the contemnor has deliberately engaged in conduct which breaches the order or undertaking. Jerrard JA thought it did and said at [26]: “…a deliberate act or omission which is in fact in breach of an order will constitute contempt, and to prove contempt it is necessary and sufficient to prove that much. There will be no contempt proved if the act or omission is ‘casual, accidental or unintentional’. The challenge in this case is in describing what constitutes a deliberate omission”. His Honour noted at [21] that in Evenco Pty Ltd v Australian Building Construction Employees & Builders Labourers Federation (Qld Branch) [2001] 2 Qd R 118 the Queensland Court of Appeal split on what was necessary to prove contempt and that the President wrote (at 122) that a failure to comply with an injunction or undertaking may not amount to contempt when genuine and reasonable attempts to comply have been made. Keane JA and Jones J in separate judgments held that the court, to establish contempt, did not require proof of any specific mental element. Keane JA said at [57]:

Under the general law, apart from statute, it was established that " contempt lies in disobedience of a court's order ". References in the authorities to the requirement that conduct be contumacious were concerned with the power to fine a contemnor by way of punishment for a contempt; they were not concerned with establishing whether a contempt had occurred. Punishment was regarded as a consequence solely appropriate to a defiant breach of a court's order. Thus, at common law, this mental element was necessary to authorise imposition by the court of a fine by way of punishment of a criminal contempt as a result of a breach of an order. This mental element was never thought to be necessary to establish a civil contempt of court sufficient to enliven the power of the court to impose non-punitive orders by reason of disobedience to an order of the court or an undertaking to the court.

Keane JA further commented at [63]:

There must, of course, be actual disobedience. There cannot be disobedience if the alleged contemnor does not know of the order which he or she is alleged to have breached. Nor could there be disobedience where the breach of the order occurs by reason of circumstances outside the control of the alleged contemnor.

DECISION

33 In my opinion, disobedience of a court’s order without any specific mental element is a technical contempt. However, in the present case, in my opinion, contempt has not been proved. As Keane JA said in Lade: “Nor could there be disobedience where the breach of the order occurs by reason of circumstances outside the control of the alleged contemnor.” I consider that the breach occurred by reason of circumstances outside the respondents’ control. A letter of 4 October 2005 from Mr Corkery evidences that he considered that the development application and environmental impact statement should be ready for submission to the council by either mid February or mid March. The timeframe which the respondents thought would be agreed to on 6 January 2006 was a timeframe which required a development application and environmental impact statement to be filed by 31 March. They agreed to this in reliance upon the advice of Mr Corkery, believing it would be implemented by the solicitor who represented them on that occasion. The truncation of that timeframe was, it seems, agreed to by the solicitor without express instructions. The subsequent unavailability of Mr Corkery frustrated any reasonable prospect that order 2 could be complied with by the date which was inserted in it, that is 1 March, let alone by the end of March.

34 There were repeated attempts by the other solicitors who represented the respondents in communications with the applicant’s solicitors to bring to their attention the difficulty which had arisen as a result of the loss of Mr Corkery, the attempts to obtain alternative consultants to prepare an environmental impact statement, and the difficulty arising from the fact that a development application could not be lodged without the agreement of the owner. Attempts to obtain the necessary agreement of the owner to the lodging of the development application and attempts to obtain an environmental impact statement were reasonably pursued. But even the oral agreement of the owner could not be obtained until around the end of March 2006, after the date for compliance with the order had expired.

35 For these reasons I find that the charge has not been proved.

36 The respondents apply for costs. The council resists a costs order on the basis that if the respondents had applied to the Court for a variation of order 2 of 6 January 2006, then these proceedings would not have been necessary. The respondents having been successful on the motion for contempt, the applicant council should pay their costs in the absence of disentitling conduct. The fact that the respondents did not apply for an extension of time is not, in my view, disentitling conduct, at least in circumstances where they repeatedly, but in vain, requested the council to agree to an extension of time and where, as the council concedes, if the extension of time had been sought from the Court, the council could not reasonably have opposed it. The primary purpose of punishment for contempt where there has been a breach of a court order in a case such as this is to compel obedience to the original order rather than punish disobedience. Compelling obedience never was realistic in circumstances where the respondents had an overwhelming case for extension of time for compliance with the order, and was beside the point once the development application and environmental impact statement were lodged with the council.

37 I make the following orders:

(1) The applicant’s notice of motion is dismissed.

(2) The applicant is to pay the respondents’ costs of the notice of motion.