Kirzner, Alex v Manly Council; Kirzner, Natalia v Manly Council
[2009] NSWLEC 13
•16 February 2009
Land and Environment Court
of New South Wales
CITATION: Kirzner, Alex v Manly Council; Kirzner, Natalia v Manly Council [2009] NSWLEC 13 PARTIES: APPELLANTS
RESPONDENT
Alex Kirzner; Natalia Kirzner
Manly CouncilFILE NUMBER(S): 60013 of 2008; 60014 of 2008 CORAM: Pain J KEY ISSUES: APPEAL :- appeal from local court against severity of sentence - fresh evidence considered on appeal - whether costs should be awarded to Prosecutor where successful appeal - whether Court should change costs order made in local court when not subject of the appeal
Prosecution:- sentence - carrying out development being use of part of property as separate flat without development consent - plea of guilty - whether s 10A of Crimes (Sentencing Procedure) Act 1999 should be applied - whether culpability lower because appellent had no involvement in arranging unauthorised use - no aggravating circumstances - mitigating factorsLEGISLATION CITED: Crimes (Appeal and Review) Act 2001 s 3 s 31(1) s 37 s 39(2) s 42(3) s 47(1) s 49 s 50(3) s 70
Crimes (Sentencing Procedure) Act 1999 (the CSP Act) s 10 s 10A s 21A s 215
Environmental Planning and Assessment Act 1979 s 76A(1) s 125(1) s 126(1)
Manly Local Environmental Plan 1988CASES CITED: Advanced Arbor Services Pty Ltd v Strathfield Municipal Council [2006] NSWLEC 485
Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357
Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683
Castlebar Holding Pty Ltd v Riley (2005) 138 LGERA 338
Chin v Ryde City Council [2004] NSWCCA 167
Fairfield City Council v Hanna, Samir [2007] NSWLEC 343
Franks v Woollahra Municipal Council [2007] NSWLEC 461
Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189
Holroyd City Council v El-Khouri [2008] NSWLEC 83
Keir & Anor v Sutherland Shire Council [2004] NSWLEC 754
Kirzner v Manly Council [2007] NSWLEC 78
Latoudis v Casey (1990) 170 CLR 534
Nasser v Hurstville City Council (2007) 158 LGERA 34
R v Olbrich (1999) 199 CLR 270
R v Thomson; R v Houlton (2000) 49 NSWLR 383
R v Way [2004] 60 NSWLR 168
Ristevski v Hurstville City Council [2003] NSWLEC 409
Ryde City Council v Chin (No 2) [2003] NSWLEC 162
Willoughby City Council v P and V Masonry Pty Limited [2003] NSWLEC 312DATES OF HEARING: 3 February 2009
4 February 2009 (written submissions)
5 February 2009 (written submissions)
6 February 2009 (written submissions)
9 February 2009 (written submissions)
DATE OF JUDGMENT:
16 February 2009LEGAL REPRESENTATIVES: APPELLANTS
Mr J Johnson
SOLICITORS
Bertock AssociatesRESPONDENT
Mr S Griffiths (solicitor)
SOLICITORS
Pikes Lawyers
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALESPain J
16 February 2009
JUDGMENT60013 of 2008 Kirzner, Alex v Manly Council
60014 of 2008 Kirzner, Natalia v Manly Council
1 Her Honour: Both Appellants pleaded guilty on 8 July 2008 in Manly Local Court to the offence under s 125(1) of the Environmental Planning and Assessment Act 1979 (the EP&A Act) that they carried out without the necessary consent development using a single dwelling house as two separate and self- contained dwellings which use required development consent under s 76A(1) of the EP&A Act. Under the Manly Local Environmental Plan (1988) (the LEP) multi-unit development requires development consent. The offence took place at 36-38 Gurney Crescent Seaforth from 1 December 2007 to 31 March 2008. They were convicted, fined $35,000 each and ordered to pay the costs of the Council in the local court as agreed or assessed. They have appealed in these Class 6 proceedings to the Land and Environment Court against the severity of their respective penalties, not against the costs order made in the local court. The offence is one of strict liability.
2 An appeal to this Court from the local court is enabled by s 31(1) of the Crimes (Appeal and Review) Act 2001 (the Review Act). Under s 37(1) the appeal is heard as a rehearing on the transcript of evidence before the local court. Section 47(1) provides the appeal is by rehearing on the evidence before the local court. In this appeal I consider the matter afresh and it is not necessary that I find any fault in the magistrate’s reasoning (see Franks v Woollahra Municipal Council [2007] NSWLEC 461 at [24]). Under s 39(2) of the Review Act the Court may determine an appeal against sentence by setting aside or varying the sentence, or dismissing the appeal. Under s 49(2) the Court can exercise any function that the local court could have exercised in the original proceedings. I had before me the transcript of the local court proceedings and documents before the local court, the Council’s Statement of Facts, the Council’s submissions on sentence, the plan of house alterations approved by Hussey C in Kirzner v Manly Council [2007] NSWLEC 78 on 15 February 2007 (exhibit A) and a letter from the tenants (the Denhams) dated 16 December 2007 stating that they were living at the Appellants’ house for a short time only until the Kirzners’ daughter returned from Canberra in April 2008 (exhibit B).
3 According to the Statement of Facts relied on by the Council at the local court hearing the Appellants owned the property in 2004 when they lodged a development application with the Council for the construction of a residence. When built there were changes to the lower ground floor which resulted from greater excavation of this area than was provided for in the approved plans. A s 96 modification application was made to the Council by Mr Kirzner and refused. He appealed to the Court in Class 1 proceedings. The appeal was heard by Hussey C in February 2007 and a modified plan was approved. In November 2007 the Council became aware that the premises had been leased or offered for lease since July 2007 and the rental return was $850 per week. They issued a Notice of intention to Issue an order in relation to non compliance with conditions of development consent. On 20 February 2008 the Council’s solicitors wrote to the Appellants and their tenants stating they were in breach of the EP&A Act and requested undertakings that the unauthorised use cease. As no satisfactory response had been received from either Appellant or the tenants the Council’s solicitors forwarded a draft Class 4 application to the Appellants on 7 March 2008. The Council also wrote on 11 March 2008 requesting undertakings that they cease holding out to prospective purchasers that the premises had available a separate self-contained flat, and that there was no consent for such use under the EP&A Act. On 13 March 2008 the Appellants’ solicitor wrote advising that the current tenants would leave on 8 April 2008, there would be no resumption of unauthorised use of the premises and no promotion of the sale of the property as including separate accommodation. A letter dated 25 March 2008 was sent from Ray White Real Estate Manly (Ray White) confirming changes in the advertising of the property to delete reference to separate accommodation. The Denhams vacated the premises on 31 March 2008.
4 I note that the plans approved by Hussey C did not enable all the excavated area to be used as habitable space and Mr Kirzner had to modify the dwelling accordingly. The plan approved by Hussey C shows a bedroom, bathroom, lounge area and laundry at lower ground level. This is the area that was rented to the Denhams.
5 New evidence may be relied on if leave of the Court is given under s 37(2) of the Review Act because the Court is satisfied that it is in the interests of justice to allow such evidence. I gave leave during the hearing for an additional bundle of documents to be relied on in both proceedings (exhibit C). Leave was also granted to rely on an affidavit of Mrs Kirzner dated 2 February 2009 and an affidavit of Mr Kirzner dated 2 February 2009 in matter no 60014 of 2008 (re Mrs Kirzner). Paragraph 9 of Mrs Kirzner’s affidavit is also relied on in matter no 60013 of 2008 (re Mr Kirzner).
6 The bundle of additional documents relied on by the Appellants consists of the following correspondence, inter alia:
a) A Notice of Intention to Issue an Order for compliance with inter alia condition 15 of the development consent requiring modification of the ground floor level granted by Hussey C from Mark Pearson, Manager Compliance & Enforcement, Environmental Services Division, Manly Council to Mr and Mrs Kirzner dated 3 December 2007.
b) A letter from the Council’s solicitor to the Appellants dated 11 March 2008. The letter notes the advertising of 36 Gurney Crescent by Ray White contains reference to an executive apartment and requires the undertaking that such advertising material will be amended and that proceedings may be commenced without notice if it is not.
c) A letter from the Council’s solicitor to the Manager of Ray White dated 12 March 2008. The letter advises that if they continue to market 36 Gurney Crescent as containing a separate executive apartment they may be in breach of the criminal law and civil penalties may also be pursued. The letter states that Council requires amendment of the advertising material and an undertaking in writing that purchasers be informed as to the legality of the separate accommodation.
d) A further letter from the Council’s solicitor to Ray White dated 13 March 2008. The letter notes the amendments to the advertising of 36 Gurney Crescent on their website and requests the removal of the references to self-contained in-law accommodation.
e) A letter from the Appellants’ then solicitor acting on behalf of Mr Kirzner to the Council’s solicitors dated 13 March 2008. The letter confirms the following undertakings of Mr Kirzner:
(i) Termination of the occupation by tenants at 36 Gurney Crescent.
(ii) Not to resume any unauthorised use of the premises.
(iii) No promotion in relation to the sale of the property to refer to any form of separate accommodation at 36 Gurney Crescent.
f) A letter from Ray White to the Council’s solicitors dated 25 March 2008. The letter confirms the request of the solicitors to remove references in the Ray White advertising material to in law accommodation or home office. It notes that these references were removed in “99% of all marketing” but they could not be removed from two publications printing the advertisement. It further notes that Ray White sells a lot of houses that have room to include in laws or for use as a home office and that its intention was not to mislead. It states that Ray White Manly is “sorry that we missed this ad and could not stop it from being printed”.
g) A letter from the Council’s solicitors to the Appellants’ solicitors dated 4 November 2008. The letter is a response to a Notice to Produce and produces, inter alia:
(i) The letter from Ray White Manly to the Council’s solicitor dated 25 March 2008.
(ii) The Notice of Intention to Issue an Order dated 3 December 2007.
(iii) An email from Nicky Denham to the Council’s solicitors dated 13 March 2008.
The Council’s solicitor claims privilege in relation to two letters between himself and the Council.
h) An email from Ms Denham to the Council’s solicitors dated 13 March 2008 confirming that Ms Denham and Mr Denham had been given a Notice to Vacate 36 Gurney Crescent and would do so by 8 April 2008.
i) A letter from Goran Serafinovski of Goral Pty Ltd to Mr and Mrs Kirzner dated 2 February 2006 certifying that inspection on the excavation for foundations of 36 Gurney Crescent had been carried out and approving the additional over-excavation of unstable weathered rock, clay and rock floaters in order to relieve uniform foundations bearing.
j) A letter from Terry Grundmann, Director of Prime Tax Experts to the Land and Environment Court dated 14 October 2008. The letter is a character reference attesting to the Appellants’ good character and expressing certainty that the leasing of 36 Gurney Crescent was based on “a plain misinterpretation or confusion with the council”.
7 Mrs Kirzner’s affidavit attests that while she was a co-owner of the property she had no involvement with the leasing arrangements for the downstairs area to tenants from early December 2007 to 31 March 2008. All such arrangements were managed entirely by her husband. She was unaware that this activity was unlawful and expresses her remorse for the offence. She attended two meetings at the Council with Mr Kirzner and the Council’s enforcement officer at the end of December 2007 and early January 2008 and provided information to him. She had understood that provided the tenant left the premises by April 2008 the Council would not take any enforcement action. Mr Kirzner alone made the application to the Council for development consent for the house and organised all the building work. He was the applicant in the Class 1 appeal proceedings before Hussey C and made all the decisions on that matter. She was not asked to give any evidence by her solicitor in the local court proceedings. Mr Kirzner’s affidavit attests that the contents of Mrs Kirzner’s affidavit are correct.
- Appellants’ submissions
8 Based on the additional evidence before the Court, the Appellants submitted that when they became aware that renting the lower ground floor to the Denhams was a problem they approached the Council’s enforcement office and thought that provided the tenants left by early April there would not be a problem. The area occupied by the tenants could be occupied lawfully by their daughter. The evidence discloses a minor breach of the planning laws.
9 There are no aggravating circumstances of premeditation contrary to the Council’s submissions. It is acknowledged there was financial gain from the rent received but that is not an aggravating circumstance. The advertising of the property for sale as having separate in-law accommodation was explained in Ray White’s letter dated 25 March 2008. The agent took responsibility for that error.
10 The Appellants’ counsel argued that any aggravating circumstances have to be proved beyond reasonable doubt in criminal proceedings. The Council’s Statement of Facts, which is not agreed, is not evidence. The Council has not established, as it is required to do, any aggravating circumstance beyond reasonable doubt.
11 The maximum penalty for the offence under s 126(1) of the EP&A Act is $1.1 million suggesting that breaches of the EP&A Act are serious. There is a wide spectrum of offences likely to be committed under that Act which range from the serious to the far less serious; see Bignold J in Willoughby City Council v P and V Masonry Pty Limited [2003] NSWLEC 312. The Appellants submit that the sentences imposed by the magistrate were too severe in the circumstances of this case.
12 In terms of the mitigating factors to consider on sentence under the Crimes (Sentencing Procedure) Act 1999 (the CSP Act), s 21A, Mrs Kirzner has no prior convictions, is of good character, is unlikely to reoffend, has expressed remorse for the offence in her affidavit, has cooperated with the Council and has pleaded guilty at the earliest available opportunity.
13 Mrs Kirzner’s circumstances are similar to those in Holroyd City Council v El-Khouri [2008] NSWLEC 83 in which case Jagot J applied s 10 of the CSP Act in relation to an offence under s 125 of the EP&A Act of carrying out unlawful development and subsequent occupation of a dwelling. Her Honour did not proceed to conviction and dismissed the proceedings in light of the circumstance that Mrs El-Khouri had no control over the building work being managed by her husband. While an order under s 10(1) of the CSP Act dismissing the charge is not available in this appeal because a conviction has been entered in the local court (see Advanced Arbor Services Pty Ltd v Strathfield Municipal Council [2006] NSWLEC 485, Franks v Woollahra Municipal Council [2007] NSWLEC 461, inter alia), s 10A is an appropriate order which can be made. Section 10A states that:
- (1) A court that convicts an offender may dispose of the proceedings without imposing any other penalty.
(2) Any such action is taken, for the purposes of the Crimes (Local Courts Appeal and Review) Act 2001 and the Criminal Appeal Act 1912 , to be a sentence passed by the court on the conviction of the offender.
It is submitted that the appropriate order for Mrs Kirzner is under s 10A of the CSP Act.
14 It is submitted that Mr Kirzner is of good character, has no prior convictions and is unlikely to reoffend, particularly as the house has now been sold. His culpability is low in the circumstances before the Court.
15 In relation to the principle of evenhandedness the Judicial Information Research System (JIRS) was interrogated in relation to other s 125 offences. There are few offences based on a failure to obtain consent for the use of premises. A copy of searches undertaken on JIRS was handed up by the Appellants’ counsel. He submitted this demonstrated that the penalties imposed in this case were severe when other cases involving more serious breaches of s 125(1) received markedly lesser penalties.
16 Ryde City Council v Chin (No 2) [2003] NSWLEC 162 is one case which did consider whether there was a breach of the EP&A Act due to the use of a property for a flat, a prohibited use in the relevant zone. There was a conviction hearing. The defendant was found guilty of using the property as a flat on the basis of evidence of renting for up to two years by one tenant and 16 months for another. The penalty imposed was $10,000 reduced to $7,500 taking into account, inter alia, the Council’s costs. This approach was not overturned on appeal; see Chin v Ryde City Council [2004] NSWCCA 167. In Fairfield City Council v Hanna, Samir [2007] NSWLEC 343 a penalty of $28,000 was imposed when the defendant built nine extra rooms for which he did not have consent. Counsel for the Appellants argued that a much lower penalty than that imposed by the local court should be imposed on Mr Kirzner.
17 If successful in this appeal the Appellants’ costs ought be paid by the Council.
Council’s submissions
18 The Council’s solicitor relied on the submissions before the local court and additional submissions handed up at the appeal. He argued that there were aggravating features in the Appellants’ behaviour which warranted a large penalty. Their actions were premeditated and demonstrated a pattern of conduct over an extended period of time which was contrary to the legislative objectives of ensuring the orderly scheme of development under Pt 4 of the EP&A Act. In 2006 they built the house not in accordance with the original plans so that it had additional separate accommodation downstairs which could be used as a self-contained unit. They had to lodge a s 96 modification application to regularise the unapproved aspects of the construction. The Commissioner who granted the modification did not allow all the changes sought by the appellant Mr Kirzner and required that part of the excavated underfloor area be rendered non-habitable. The commissioner’s judgment referred to the potential for unauthorised use so that the defendants were on notice of that issue.
19 Further they have profited to the extent of about $14,000 assuming a rental of $850 per week for the offence period, the rental figure being obtained from internet searches. Further the property was advertised for sale as including separate accommodation for several months and this did not cease until the letter dated 25 March 2008 sent by Ray White.
20 The Council submits that general deterrence is a relevant consideration in sentencing for breaches of the EP&A Act, see Gittany Constructions v Sutherland Shire Council [2006] 145 LGERA 189 at [101] – [103]. The letter from Goral Pty Ltd, engineers dated 2 February 2006 appears to be a retrospective approval for the over-excavation. The character reference stating that the Appellants’ conduct was a plain misinterpretation or confusion of the Council is not supported by the facts. The Council’s concerns were not satisfactorily answered until draft Class 4 proceedings were sent in March 2008.
21 The Council also seeks an order for specific costs in the local court. In the local court the magistrate ordered that costs as agreed or assessed were payable by the Appellants. The local court costs order is part of the sentence under appeal (not so says the Appellants who appeal only against the penalty imposed and not the costs order). The order made does not comply with s 215 of the CSP Act which requires that a specified amount of costs must be imposed in any order for costs. That a sentence includes any costs order made by the local court is clear from the definition of “sentence” in s 3 of the Review Act. Because this Court exercises the same powers on appeal as the local court, it can cause the local court’s costs order to comply with s 215(3) of the CSP Act. The confirmation of the costs order by this Court in Franks and Nasser v Hurstville City Council (2007) 158 LGERA 34 is recognition of the appropriateness of the costs order made in the court below notwithstanding that the sentence might be varied on appeal.
22 The Council also seeks costs of this appeal even if the Appellants are successful. It was brought to the appeal by the Appellants and had no alternative but to attend. On the basis that costs are compensatory (Latoudis v Casey (1990) 170 CLR 534), its costs should be paid by the Appellants.
Finding
23 The Appellants pleaded guilty in the local court. The purposes of sentencing are identified in s 3A of the CSP Act. When sentencing the objective and subjective circumstances of the offence must be considered to determine the seriousness of the offence (s 21A(1) CSP Act). Sentences imposed in relation to environmental offences must embrace powerful considerations of general deterrence; see Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 per Badgery-Parker J at [357], Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 per Kirby P at [698], Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189 per Preston J at [215].
24 I should first determine if the Council’s submissions that there are aggravating circumstances in relation to premeditation, the receipt of rental income and inappropriate advertising of the property are substantiated on the evidence before me. Such matters must be proved beyond reasonable doubt by the prosecutor in sentence proceedings; R v Olbrich (1999) 199 CLR 270 at [27] – [28]. None of the aggravating factors identified in s 21A(2) of the CSP Act are relied on by the Council.
25 The evidence I have before me is the transcript and documents tendered before the local court. According to the transcript of the local court proceedings there was little evidence other than the Council’s Statement of Facts and the documents tendered before the local court (see par 2). Mrs Kirzner gave no evidence. Mr Kirzner made an oral statement when not sworn in as a witness and sought to hand up documents but the magistrate did not allow these to be tendered. I also have the new evidence, including the affidavits of the Appellants, to consider.
26 I agree with the Appellants’ submission that the Council has not established beyond reasonable doubt that there was premeditation on the part of the Appellants. The evidence did not establish that they intended to use the premises as rental accommodation being a separate flat without development consent as a result of actions since 2006 in building the lower ground floor. The area which has been lawfully built on the lower ground level had been occupied by their daughter and that is not an unlawful use of the area. R v Way [2004] 60 NSWLR 168 at [198] which the Council relied on to submit that broad circumstances surrounding the offence can be considered does not support the submissions made as to inferences which can be drawn about the Appellants’ actions in building the lower ground level of the house. The building of the lower ground level is a separate matter from the offence arising from its unauthorised use. The fact that the house has been built in accordance with approved plans, which the Appellants are legally entitled to rely on, cannot demonstrate premeditation. I also note that the lower ground floor had to be modified to prevent parts being used for habitable space as a result of Hussey C’s decision. There is no specific warning in the judgment of Hussey C concerning unauthorised use, contrary to the Council’s submissions.
27 There is no dispute that the Appellants have obtained financial gain from the rent received and that was declared as part of Mr Kirzner’s income in his tax return. That on its own in this case is not an aggravating circumstance but is a relevant consideration in considering the objective circumstances of the offence.
28 Another consideration argued to be an aggravating circumstance is the advertising of the sale of the house as having separate accommodation. The advertising of the house on this basis appears to have occurred during February and March 2008. The Council raised further concerns about the advertising in its solicitor’s letter dated 11 March 2008 to the Appellants and in the letters to Ray White dated 12 and 13 March 2008. The Appellant’s solicitor responded promptly to the Council’s concern in a letter dated 13 March 2008 and undertakings were provided that the existing tenancy would cease and not resume and that there would be no promotion of the property as having separate accommodation. Ray White responded by letter dated 25 March 2008. The Appellants have relied on the letter from Ray White dated 25 March 2008 in which that company explains why the advertising was in that form and that it had been changed. I accept the reliance by the Appellants on Ray White in regard to advertising of the property as exculpatory. There is no aggravating circumstance in regard to this aspect of the matter.
29 Additional relevant circumstances are that the Council issued a Notice of Intention to Issue an Order on 3 December 2007 concerning compliance with condition 15 of the development consent. I note that no order was issued by the Council. It is also the Appellants’ evidence that they met the Council’s enforcement officer in December 2007 and January 2008 and provided him with the information requested. The tenants wrote to the Council by letter dated 16 December 2007 explaining they were family friends and were renting the flat while looking for other accommodation (exhibit B). In light of the correspondence between the Appellants’ solicitor and the Council (par 28), there was a prompt response to the Council’s concerns once the solicitor’s letter was sent. That is a relevant consideration when considering the objective circumstances of the offence.
Mrs Kirzner (60014 of 2008)
30 I consider it is appropriate to apply s 10A of the CSP Act to Mrs Kirzner in light of her affidavit attesting to her lack of involvement in the events giving rise to the offence and reliance on her husband in all relevant matters relating to the building and management of the lower ground floor of their jointly owned property. I can do so under s 49(2) of the Review Act as that is also a function which the local court could have exercised. I also take into account the numerous mitigating factors identified by her counsel (par 12). She played no role in the events giving rise to the offence. The order I intend to make is that there be no penalty, so that I am setting aside the penalty order made in the local court.
Mr Kirzner (60013 of 2008)
31 Mr Kirzner was actively involved in the circumstances giving rise to the offence. He was aware of the Council’s concerns from when the Notice of Intention to Issue an Order dated 3 December 2007 was received. The tenants remained in the house until the end of March 2008. I note Mrs Kirzner’s evidence is that following a meeting with the Council’s enforcement officer in December 2007 the Appellants believed that was acceptable to the Council. Nevertheless the Council had to involve its solicitors in writing to the Appellants in March 2008 suggesting there was some delay in Mr Kirzner satisfying the Council about the cessation of the unauthorised use. Once the Council solicitor’s letter was received there was prompt provision of an undertaking to stop the use provided to the Council by Mr Kirzner’s solicitor. It is also a relevant consideration that Mr Kirzner received rental income and derived a financial benefit from it for the four month period of the offence.
32 Breaches of the EP&A Act are serious, as confirmed by the high maximum penalty provided for by the legislature of $1.1 million. While the circumstances of this offence suggest it is less serious it is nevertheless important that there be consideration of general deterrence for this kind of offence when setting a penalty. I intend to apply a lesser penalty than the local court but consider that the penalty should be more than a nominal amount.
33 There are a number of mitigating factors to consider as identified by Mr Kirzner’s counsel. The early plea of guilty and a large discount for the utilitarian value of the plea should be allowed; R v Thomson; R v Houlton (2000) 49 NSWLR 383. Mr Kirzner’s good character and lack of prior convictions all suggest that a substantial discount of any penalty is warranted. Taking into account the analysis of the JIRS cases submitted by the Appellants’ counsel and the penalty imposed in Chin, which is a reasonably similar matter noting that I also took into account the liability for the prosecutor’s costs in that matter, I consider that $16,000 is the appropriate penalty. I will therefore vary the local court order on penalty to that amount.
Costs in local court
34 The magistrate ordered the Appellants to pay the costs of the Council as agreed or assessed. The Council raised in oral submissions at the hearing for the first time that it sought an order for a specific amount of costs. It argues that because an appeal has been lodged against sentence and that includes costs within the definition in s 3 of the Review Act this appeal is also in relation to costs. The Appellants argue to the contrary because they have only appealed against penalty and not costs.
35 While s 31(1) of the Review Act provides generally for appeals on sentence, that does not mean that an appellant must appeal or be deemed to have appealed against every aspect of the sentence made by the local court. While the Council argued that it was open in the appeal for the Court to review the costs order of the local court, there is no basis for me to do so in this appeal. As submitted by the Appellants’ counsel the appeal is only in relation to penalty, not costs. Any time for appeal by the Council on costs has passed (s 42(3)). As the Council has not filed any separate appeal in relation to costs it cannot raise what is effectively an appeal in relation to the costs order in these proceedings. I agree with the Appellants’ submission that the Court’s powers on appeal are circumscribed by the specific limitations on its powers under the Review Act and it can only determine those matters the subject of appeal under s 50(3). It is not open to this Court to rectify errors it may perceive where these are not the subject of an appeal before it.
36 The circumstances raised by the Council in relation to the local court costs order were not raised in Franks and Nasser and those decisions do not support the Council’s argument (par 21). I will not make an order to vary the local court order on costs.
Costs of this appeal
37 Section 49(4) of the Review Act gives the Court power, subject to s 70 which limits the circumstances in which a prosecutor can be ordered to pay costs, to make such order as to the costs to be paid by either party as it thinks just. The Appellants seek an order that their costs be paid by the Council if they are successful in having the orders set aside.
38 The Appellants argue that the costs power is unconstrained in s 49(4) of the Act apart from s 70, which refers to when a conviction is set aside. The Appellants acknowledge that in Castlebar Holding Pty Ltd v Riley (2005) 138 LGERA 338 at [110] the Court of Criminal Appeal held that conviction in s 70 also applied to an appellant whose sentence has been set aside.
39 If the Court considers it is not bound by Castlebar then costs ought follow the event and the Appellants ought to have their costs paid as they have been successful in this appeal and costs are compensatory (Latoudis v Casey). If s 70 does apply then the Court should award costs because of the exceptional circumstances related to the conduct of the proceedings by the Council. The conduct of the proceedings in the local court was unsatisfactory and the Appellants had to appeal in light of that conduct. The solicitors’ rules for the obligation of prosecutors has not been satisfied in several respects.
40 The Council argued that its costs ought be paid as it was brought to the appeal solely because of the Appellants’ actions. If either or both appeals are set aside or varied the Council acknowledged that the typical order made by this Court is that each party pay its own costs. Castlebar is authority for the proposition that s 70 applies to a sentence as well as a conviction so that costs can only be awarded against the Council if s 70 is satisfied. The Council argued there were no exceptional circumstances to justify an award of costs under s 70. The Appellants relied on substantial new material which could have been presented to the local court and was generally in the Appellants’ knowledge. This submission particularly applies to Mrs Kirzner given the affidavit she swore the day before the hearing in breach of directions made that any new evidence be identified by 12 November 2008.
41 There was no material error in the Council’s Statement of Facts contrary to the Appellants’ criticisms of it. The Appellants submit the Council failed to disclose representations made to the Council. This is disputed as the Council did invite the Appellants to tender those representations but the Appellants declined to do so. Even if costs follow the event then Franks and Nasser should be followed.
42 Where a sentence has been varied or set aside on appeal in Class 6 proceedings, the Court has generally made orders that parties pay their own costs of the appeal. In Ristevski v Hurstville City Council [2003] NSWLEC 409, Talbot J considered that the question of what is just under s 49(4) of the Review Act entitles the Court to take into account the way in which the proceedings were conducted by both parties, the manner in which the new evidence is dealt with by both parties and the consequence of that new evidence. Talbot J noted that the Court must bear in mind that costs are awarded “as compensation to a successful party and are not by way of further penalty” at [26]. While the appellants were successful in appealing the severity of their sentence Talbot J at 27 held this was:
- a consequence, largely, of a re-argument based upon proper supporting evidence of the antecedents, contrition and position of the defendant and an explanation of his understanding or misunderstanding or lack of knowledge which led to the first decision .
His Honour made no order for costs.
43 McClellan J made no order for costs in Keir & Anor v Sutherland Shire Council [2004] NSWLEC 754, an appeal against the severity of a sentence imposed in the local court. His Honour noted that although the appeal was successful in that the penalty was reduced “the appeal was made necessary as a consequence of a serious breach of the law” [23].
44 Similar reasoning was applied in Nasser. The Appellant had pleaded guilty and was convicted in the local court of carrying out development without development consent. The appellant was fined $35,000 and appealed the severity of this sentence. Jagot J considered the fine excessive, allowed the appeal and reduced the fine to $22,500. In allowing the appeal and varying the sentence, Jagot J ordered at [42] that both parties pay their own costs of the appeal:
- Although the appellant has succeeded in the appeal. The proceedings were necessary by reason only of the appellant’s unlawful building works.
45 In Franks the appellant successfully appealed the sentence on the basis of severity but was unsuccessful in seeking a s 10 order. I noted at [49] that “as the appeal has been partly successful that the parties should pay their own costs” but did not give detailed reasons for doing so.
46 Considering the approach in those cases in this matter, the appropriate outcome in the interests of justice is that each party pay its own costs. The Appellants are here because they pleaded guilty to an offence in the local court and have been largely successful because of the new evidence they have sought leave to rely on before me. That is material which could have been placed before the local court. It is therefore unnecessary to consider whether s 70 applies as I do not intend to award costs in the Appellants’ favour.
Orders
47 The Court makes the following orders:
- 1. In matter no 60013 of 2008, the penalty order of the local court is varied to $16,000.
2. In matter no 60014 of 2008, the penalty order of the local court is set aside so that no penalty is imposed pursuant to s 10A of the Crimes (Sentencing Procedure) Act 1999.
3. Each party is to pay its costs of this appeal.
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