Kavanagh and Sons Custom Made Homes Pty Ltd v Larsen
[2011] NSWLEC 187
•24 October 2011
Land and Environment Court
New South Wales
Medium Neutral Citation: Kavanagh & Sons Custom Made Homes Pty Ltd v Larsen [2011] NSWLEC 187 Hearing dates: 24 October 2011 Decision date: 24 October 2011 Jurisdiction: Class 6 Before: Pain J Decision: 1. The appeal against conviction in Local Court matter number 2011/19319 is dismissed.
2. The appeal against sentence in Local Court matter number 2011/19319 is upheld and the penalty order of the Local Court on 21 June 2011 is set aside.
3. In lieu of the penalty imposed in Local Court matter number 2011/19319 $30,000 is imposed.
4. The Appellant is to pay half of the Prosecutor's costs of the appeal as agreed or assessed.
Catchwords: APPEAL - appeal from local court against conviction and sentence - appeal against conviction dismissed - appeal against sentence upheld Legislation Cited: Crimes (Appeal and Review) Act 2001 s 31(1), s 37, s 38, s 39, s 49(2)
Environmental Planning and Assessment Act 1979 s 76A(1), s 121B, s 125
Home Building Act 1989 s 120
State Environmental Planning Policy (Exempt and Complying Development Codes) 2008Cases Cited: Department of Environment and Climate Change v Olmwood Pty Limited [2010] NSWLEC 15; (2010) 173 LGERA 366
Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170
Mosman Municipal Council v Menai Excavations Pty Ltd [2002] NSWLEC 132Category: Principal judgment Parties: Kavanagh & Sons Custom Made Homes Pty Ltd (Appellant)
Steven Larsen (Prosecutor)Representation: Mr A Rogers (Appellant)
Mr G Jackson (solicitor) (Prosecutor)
Harrington Maguire & O'Brien (Appellant)
Pittwater Council (Prosecutor)
File Number(s): 60580 of 2011
EX TEMPORE Judgment
This is an appeal under s 31(1) of the Crimes (Appeal and Review) Act 2001 (the Review Act) against the conviction and sentence of the Appellant, Kavanagh & Sons Custom Made Homes Pty Ltd, by the Local Court at Manly on 17 June 2011 in relation to the charge of carrying out development without development consent, contrary to s 76A(1) of the Environmental Planning and Assessment Act 1979 (the EPA Act) in relation to work on a house and carport at Barrenjoey Road, Palm Beach (the property), which work is an offence under s 125 of the EPA Act . The Appellant was charged as the builder which undertook the work. Mr Larsen, the Prosecutor, is an officer of Pittwater Council.
Under s 37 of the Review Act , an appeal is by way of rehearing on the basis of evidence given in the original Local Court proceedings unless an order varying that is made under s 38. No such order was sought or deemed necessary in this case. Under s 39 of the Review Act , the Court can determine an appeal against conviction by setting aside the conviction or dismissing the appeal.
It is not necessary that I find error in the determination of the magistrate in reaching any conclusion. Section 49(2) of the Review Act states the Court, on appeal, may exercise any function that the Local Court could have exercised in the original proceedings.
Appeal against conviction
I have before me the transcript of the two days of hearing before the Local Court and the exhibits before that Court were in evidence. The particular exhibits to which I was referred were exhibits 1 - 5; exhibit 1 is a statement of Andrew Caponas, Council officer. He prepared a statement of evidence to which he attached a number of appendices. Several of those appendices were referred to by the parties in the course of argument.
Exhibit 2 is the building licence number record for builder's licences obtained under s 120 of the Home Building Act 1989 for Mr Shane Kavanagh and also for the Appellant in these proceedings. Exhibit 3 is a business name extract for a business name of "Kavanagh & Sons Custom Made Homes". Exhibit 4 is a company search undertaken in relation to the Appellant, Kavanagh & Sons Custom Made Homes Pty Ltd. Exhibit 5 is a series of photographs which were tendered as exhibit 5 before the magistrate and contained information and photographs obtained from a real estate agent's website in relation to the property which was sold in May 2009.
The Appellant's counsel also handed up a useful chronology with references to the evidence which was before me and to which I added further relevant events.
DATE
EVENT
REFERENCE/
COMMENTS
15.02.78
Shane Anthony Michael Kavanagh issued with licence number 26394 under the Home Building Act
Exhibit 2, p 1
20.02.07
CAFPIT PTY LTD and LUKE KAVANAGH register trading name "Kavanagh & Sons Custom Made Homes"
Exhibit 3
May 2009
Property purchased by Deborah Balderstone
JACKSON: T 5.19
03.08.09
Kavanagh & Sons Custom Made Homes Pty Ltd registered
Exhibit 4
08.09
Advice from builder to owner
Appendix 5 exhibit 1;
Appendix 6 exhibit 1, Hodgson engineer August 2009; appendix 7, termite report 17 September 2009
Oct 2009
DA lodged
JACKSON T 5.13
9.12.09
Mr Caponas aware of work being carried out
11.12.09
Mr Caponas inspects the premises in the presence of the site foreman, Tea and observes that demolition work had been on the dwelling and the carport structure (but no building work).
Stmt A Caponas par 6, 7
Mr Caponas is informed by the foreman that the works were necessary as there were:
(i)Major structural faults with the building;
(ii)Major termite attacks on the roof timbers;
(iii)that the works were necessary remedial works.
Stmt A Caponas par 8
Mr Caponas observes licence number on the hoarding on the site as that of Shane Michael Kavanagh
T 6.5
Mr Caponas telephones Shane Kavanagh
Stmt A Caponas par 11
"Kavanagh & Sons Custom Made Homes" sends email to Mr Caponas advising the works undertaken were remedial and attaching:
(i)letter dated 11 December 2009;
(ii)structural inspection report of Jack Hodgson Consultants dated 11 December 2009;
(iii)termite detection report
Stmt A Caponas appendix 5,
Stmt A Caponas appendix 6,
Stmt A Caponas appendix 6
18.12.09
Pittwater Council (Mr Caponas) serves Shane Kavanagh with Electronic Penalty Notice (Infringement Notice), together with covering letter, identifying offence as "Development without development consent - class 1/10 building - individual"
Stmt a Caponas par 15; appendix 7
07.01.10
Order under s 12B of the EPA Act served on Shane Kavanagh requiring him to stop work forthwith
Stmt Caponas par 16, appendix 8
12.01.10
Mr Caponas carries out inspection of site with Shane Kavanagh and Luke Kavanagh
Stmt A Caponas par 17, appendix 9
Advises Shane Kavanagh to lode s 149D Building Certificate Application
15.01.10
Kavanagh & Sons Custom Made Homes writes to Mr Caponas attaching letter from structural engineer certifying all underpinning work
Stmt A Caponas par 21, appendix 10
04.05.10
Shane Kavanagh elects to have the matter dealt with in court
Stmt A Caponas appendix 17
04.05.10
Email from Deb Balderstone to Mr Caponas to the effect that "it was agreed and accepted by Council" that they were not undertaking any development works and that it was not necessary to obtain a building certificate
Stmt A Caponas par 23, appendix 12
19.01.11
Court Attendance Notice issued to Appellant listing matter for hearing on 18 February 2011 charging Appellant with carrying out demolition work without consent pursuant to s 76A(1)(a) and 125(1) EPA Act
18.02.11
Matter heard before Magistrate MacIntosh (first day of hearing)
17.06.11
Matter heard before Magistrate MacIntosh who gives judgment and fines Appellant $50,000 (second day of hearing)
I note in particular that in relation to the first few entries identified, Mr Kavanagh had been issued with a builder's licence number since February 1978; that on 20 February 2007 Cafpit Pty Ltd and Luke Kavanagh were registered trading names of Kavanagh & Sons Custom Made Homes; and that in May 2009 the property where the work was conducted was purchased by Ms Balderstone. On 3 August 2009 Kavanagh & Sons Custom Made Homes Pty Ltd was registered as a company, and in August 2009 certain advice was obtained by the new owner of the property from a builder, engineer and pest inspector. Appendix 5 to the statement of Mr Caponas is a letter from Mr Kavanagh to Pittwater Council dated 11 December 2009 referring to his instructions to Jack Hogsons Consultants Pty Limited and Anteater Pest Control to carry out inspections and enclosing their reports. Copies of a structural inspection report from Jack Hodgson Consultants Pty Limited dated 11 December 2009 for an inspection conducted in August 2009 at the request of "Kavanagh & Sons" and a termite detection report for "Kavanagh and Sons Custom Made Homes" for an inspection conducted on 17 September 2009 were appendix 6 to Mr Caponas's statement.
The chronology further identifies that a development application was lodged for the property in October 2009. Council was notified and Mr Caponas became aware of work being carried out on the property on 9 December 2009 and an inspection was carried out by him on 11 December 2009.
I turn now to the grounds of appeal.
1. Appellant not correct defendant
The first ground of appeal is that the Appellant was not the proper defendant. The Appellant's counsel submitted that it is not the correct defendant and that the Prosecutor has not established beyond reasonable doubt that the company, which is charged, was the entity undertaking the building work in question.
Reference was made to exhibit 2, a business name search for Kavanagh & Sons Custom Made Homes, a business name owned by Cafpit Pty Ltd. Reference was also made to exhibit 3, which contains two searches for builder's licence numbers issued under the Home Building Act , one for Mr Shane Kavanagh for licence number 26394, and the Appellant, which has licence number 218602C.
A letter dated 11 December 2009 to Pittwater Council signed by Mr Shane Kavanagh, Director, with builder's licence number 218602C, is on the business name letterhead of Kavanagh & Sons Custom Made Homes, not letterhead of the Appellant company. It was further submitted that the termite inspection report attached to that letter is stated to be prepared for the business name entity, not the Appellant.
It was noted the letter from Jack Hodgson Consultants Pty Limited, attached to the letter of 11 December 2009, refers to Kavanagh & Sons. It is accepted that this is equivocal evidence. It was submitted that as there is evidence to raise doubt that the Appellant is correctly named, the Prosecutor has not established beyond reasonable doubt that the company is the proper defendant.
The Prosecutor's solicitor referred to the same evidence and, in addition, to exhibit 4, a company search of the Appellant. This identifies that it was registered on 3 August 2009 and its directors include Mr Shane Kavanagh.
Information disclosed in exhibits 2, 3 and 4, together with the content of the letter dated 11 December 2009, sent by Mr Shane Kavanagh on the letterhead of Kavanagh & Sons Custom Made Homes nevertheless established beyond reasonable doubt that the Appellant company did carry out the work the subject of the charge.
Consideration
I accept the submissions of the Prosecutor that the Appellant is correctly identified as the defendant in relation to the charge. The letter of 11 December 2009 to Pittwater Council while on business name letterhead for Kavanagh & Sons Custom Made Homes refers to the ABN of the Appellant, is signed by Mr Kavanagh as its director, and quotes the company's builder's licence number. It identifies the nature of the work described as remedial work which was undertaken in relation to the property in Barrenjoey Road, Palm Beach. That the attached pest inspection report is stated as being prepared for the business name, not the company, is irrelevant. As submitted by the Prosecutor, the business name Kavanagh & Sons Custom Made Homes and the director Mr Shane Kavanagh are closely related entities. It may well be the pest company has had dealings in the past with the business known to it by the business name.
The inference that arises clearly from the letter dated 11 December 2009 is that the letterhead is incorrect, as it omits Pty Ltd as part of the Appellant's name when the name and logo are identified at the top of the page. Given that the ABN, director and reference to the company's builder's licence number provide more than adequate proof of the identity of the company undertaking the work the subject of the charge brought before the Local Court, I consider the Prosecutor is successful in resisting this ground of appeal.
I further note that the statement of work, the subject of the charge, is identified as nine items at par 7 of Mr Caponas's statement of evidence. That list is very similar to the eight matters described as remedial work said to be needed on the property in the letter dated 11 December 2009 signed by Mr Kavanagh, sent to the Council. There is also similarity to the five items identified in the letter from Jack Hodgson Consultants Pty Ltd also attached. I consider this ground of appeal fails.
2. Offence not established beyond reasonable doubt
The second ground of appeal raised was that the offence was not established beyond reasonable doubt. Two principal arguments were presented in support of that ground by the Appellant. The first argument by the Appellant was that while the photographs of the current state of the house attached to the statement of Mr Caponas, at appendix 3, show substantial work having been done, it was submitted there is no credible evidence of what the house looked like before this work was commenced. It is necessary to establish what the Appellant has undertaken in order for the Prosecutor to be successful.
The photographs downloaded from the real estate website which were tendered as exhibit 5 before the Local Court and are before me should be accorded no weight as their provenance is unknown. Without evidence of what the building looked like to start with there is no evidence of what the Appellant did, and therefore no proof beyond reasonable doubt that it undertook the work the subject of the charge.
The second argument put forward in support of this ground is that the evidence of Mr Caponas, Council officer, does not establish that the work undertaken was major work to which the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 (the SEPP) did not apply. Further, the Prosecutor did not establish or has not established that the SEPP does not apply to each of the individual building works identified by Mr Caponas in par 7 of his statement of evidence.
The Appellant's counsel submitted that for each matter identified by Mr Caponas in his statement of evidence as requiring development consent, various provisions of the SEPP applied. This was submitted to be appropriate because the Court must determine if the SEPP applies in these circumstances. It was submitted that the evidence of Mr Caponas about whether the SEPP applied should not have been considered or given any weight by the magistrate as no-one but a judge can interpret legislation, here the SEPP. Mr Caponas's opinion about its application was not relevant.
I will briefly summarise the Prosecutor's submissions on those two arguments. Firstly, the Prosecutor's solicitor submitted that it was not necessary to have evidence of what the house looked like before the commencement of work in order for the prosecution to succeed. There was sufficient evidence from the photographs taken by Mr Caponas which show the extensive nature of the work as at 11 December 2009, together with the contents of the letter of the same date from Mr Kavanagh to Pittwater Council to establish the nature of the work undertaken to a sufficient standard for the offence to be proved.
In relation to the second argument, the Prosecutor argued it discharged the onus it assumed before the magistrate of negativing the possible application of the SEPP through the opinion evidence of Mr Caponas once this was raised by the Appellant's legal representatives as a possible defence.
Consideration
I turn now to my reasoning in relation to the two arguments of the Appellant. Firstly, I agree with the Prosecutor's submission that there is sufficient evidence from Mr Caponas and in the letter from Mr Kavanagh to establish beyond reasonable doubt that the work the subject of the offences was undertaken by the Appellant.
It is therefore not strictly necessary to prove the provenance of the photographs taken from the real estate website some time before the sale in May 2009 tendered by the Prosecutor (exhibit 5). These do show an intact house on the site and can be considered as relevant to that extent given the photographs taken by Mr Caponas show substantial demolition of parts of the same building. The provenance of the real estate photographs is sufficiently established to enable some weight to be attributed to them. As I have already said they are not essential to prove the offence. This argument of the Appellant fails in relation to this ground of appeal.
In relation to the second argument concerning the application of the SEPP, the Appellant did not present evidence before the magistrate or this Court that the SEPP applied to the work the subject of the charge. Rather its legal representatives submitted the SEPP applied and stated it was a matter for the Court to determine.
Before the Local Court the Prosecutor sought to negative this possible defence once raised, that the work undertaken was exempt and complying development through the opinion evidence of Mr Caponas. The Prosecutor can seek to negative a defence on the balance of probabilities as has been held in a number of cases including by me in Department of Environment and Climate Change v Olmwood Pty Limited [2010] NSWLEC 15; (2010) 173 LGERA 366 at [259]. As a qualified Council officer Mr Caponas's op inion was that the SEPP did not apply and that the work undertaken was major, not minor, and not covered by the SEPP.
The Appellant's counsel submitted that the opinion evidence of Mr Caponas that the SEPP did not apply was not admissible opinion evidence because the proper operation of the statute was a matter for the Court alone to decide. I do not agree with that submission in that whether the SEPP applies is more likely to be a question of fact than of law. The opinions of qualified persons on factual matters is admissible and necessary where there are likely to be subjective views in relation to the application of the SEPP. Lack of compliance with the SEPP is amenable to proof by opinion evidence of appropriately qualified persons such as a council officer in Mr Caponas's position. Such matters also require more than submission by legal representatives as to whether work is exempt in that some evidence about the nature of the building work must be presented to support the likely application of the SEPP. Such evidence was not presented by the Appellant as part of any defence.
The Appellant's counsel submitted without specific evidence to support the submission that each of the items of the building work identified in par 7 of Mr Caponas's statement came within different parts of the SEPP such as subdivision 10, dealing with carports; subdivision 13, dealing with demolition; subdivision 15, dealing with earthworks; and subdivisions 26 and 27, dealing with minor building alterations external and internal. Submission alone does not establish the SEPP applied to the work. The Appellant did not discharge its onus of establishing that defence on the balance of probabilities. This ground of appeal fails. It follows that the appeal against conviction is dismissed.
Appeal against sentence
I turn now to the appeal against sentence. In relation to the appeal against sentence, under s 39(2) of the Review Act the Court can set aside or vary the sentence or dismiss the appeal. The maximum penalty the Local Court can impose for an offence of this kind is $110,000. The magistrate imposed a penalty of $50,000 together with costs. The magistrate referred to the need for specific and general deterrence given that the Appellant is a builder in imposing what is a very high penalty in the circumstances.
The Appellant was given leave to rely on brief oral evidence of Mr Kavanagh that he had been working as a builder since 1978 and that he or any company he was associated with has not been successfully prosecuted for a breach of the EPA Act to date. The Appellant's counsel submitted that the amount of penalty was excessive for a first offence by the company. The nature of the work was remedial and undertaken because of concerns about occupational health and safety issues on the site, as referred to in the letter of 11 December 2009 sent by Mr Kavanagh to Pittwater Council.
The Prosecutor submitted that deterrence was important given the occupation of the Appellant and there was no evidence suggesting the work was required urgently. Rather, the appropriate way of proceeding, if there had been concerns about safety, was to have sought an order for demolition from the Council under s 121B of the EPA Act but this was not done.
I agree with the Prosecutor that both general and specific deterrence is an important consideration in this matter given the Appellant is a builder who has commenced unauthorised building work before development consent had been granted. There is no credible reason given for why the work had to be done urgently before development consent was granted.
The work undertaken as a whole is substantial and has resulted in much of the existing structure being demolished. There is no evidence before me however of any particular environmental harm resulting from this breach.
The penalty is a heavy one in that it is just under 50 per cent of the maximum able to be imposed by the Local Court. The parties have made brief submissions in relation to sentencing. The parties did not provide any cases they suggested were comparable and I have not been provided with any range of penalties imposed by the Local Court in similar matters to enable me to consider consistency of sentencing in the context of the Local Court.
In the short time available it has been difficult to identify other comparable cases. In one matter for a similar offence before this Court of Liverpool City Council v Leppington Pastoral Co Pty Ltd [ 2010] NSWLEC 170 an owner was prosecuted for demolition without development consent of a local heritage item in derelict condition on a rural property. Biscoe J noted at [51] that according to his research using the judicial information research system on environmental offences, fines imposed in this Court over a 10 year period (2000 to 2010) were in the range of $20,000 to $70,000 where the maximum penalty this Court can impose is $1.1 million.
Another example is Mosman Municipal Council v Menai Excavations Pty Ltd [2002] NSWLEC 132 concerning demolition of a building without development consent by a building contractor. In that matter a fine of $40,000 was imposed but was reduced in light of mitigating circumstances to $30,000.
Deterrence is an important consideration in this case given the Appellant is a builder and should know better the requirements for obtaining development consent. Further, no plea of guilty was entered, rather a contested hearing was necessary so there can be no reduction of penalty on the basis of a plea of guilty.
I do consider the penalty imposed is excessive and I will reduce this to $30,000. The appeal against sentence is therefore upheld and the amount of the sentence to be imposed is varied in accordance with my judgment.
Costs
I take on board the Prosecutor's submissions that the bulk of the day was spent on conviction and not sentence. Further, in light of the fact that the Appellant was partially successful and the Prosecutor was partially successful, the Appellant is to pay half the costs of the Prosecutor.
Orders
The Court makes the following orders:
1. The appeal against conviction in Local Court matter number 2011/19319 is dismissed.
2. The appeal against sentence in Local Court matter number 2011/19319 is upheld and the penalty order of the Local Court on 21 June 2011 is set aside.
3. In lieu of the penalty imposed in Local Court matter number 2011/19319 $30,000 is imposed.
4. The Appellant is to pay half of the Prosecutor's costs of the appeal as agreed or assessed.
Decision last updated: 25 January 2012
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