Manly Council v Horizon Habitats Pty Limited

[2015] NSWLEC 15

Land and Environment Court

New South Wales

Medium Neutral Citation:	Manly Council v Horizon Habitats Pty Limited [2015] NSWLEC 15
Hearing dates:	6 February 2015
Decision date:	12 February 2015
Jurisdiction:	Class 5
Before:	Sheahan J
Decision:	(1)The defendant is found guilty, and is convicted, of the offence charged in the summons. (2)The defendant is ordered to pay a fine of $40,000. (3)The defendant is ordered to pay the prosecutor’s costs, as agreed, or as assessed according to law. (4)All exhibits except Exhibit P1 are returned.
Catchwords:	ENVIRONMENTAL OFFENCES: Development in breach of a consent – plea of guilty – consideration of objective and subjective circumstances – threat of harm to endangered species – application for a discharge without penalty.
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999 Environmental Planning and Assessment Act 1979 Manly Local Environmental Plan 1988 Threatened Species Conservation Act 1995
Cases Cited:	Alramon Pty Limited v City of Ryde Council [2014] NSWLEC 100 Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v Gordon [2005] NSWLEC 695 Blue Mountains City Council v Carlon [2008] NSWLEC 296 Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; 82 LGERA 21 Chief Executive of the Office of Environment and Heritage v Bombala Investments Pty Ltd [2013] NSWLEC 185; 199 LGERA 236 Cooper v Coffs Harbour City Council (1997) 97 LGERA 125 Environment Protection Authority v Gardner [1997] NSWLEC 169 Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; 148 LGERA 299 Garrett v Williams [2006] NSWLEC 785; 160 LGERA 115 Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; 145 LGERA 189 Hardt v Environment Protection Authority [2007] NSWCCA 338; 156 LGERA 337 Keir v Sutherland Shire Council [2004] NSWLEC 754 Ku-ring-gai Council v Steve Nolan Constructions Pty Ltd [2012] NSWLEC 258 Markarian v R [2005] HCA 25; 228 CLR 357 Newcastle Port Corporation v MS Magdalene Schiffahrtsgesellschaft MBH; Newcastle Port Corporation v Vazhnenko [2013] NSWLEC 210 Plath v Rawson [2009] NSWLEC 178; 170 LGERA 253 Poche v Manly Council, NSWLEC, unreported, matters 10915 and 11004 of 2013, 19 August 2014 R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383 Secretary, Department of Planning and Environment v Boggabri Coal Pty Ltd [2014] NSWLEC 154 Thorneloe v Filipowski [2001] NSWCCA 213; 52 NSWLR 60
Category:	Sentence
Parties:	Manly Council (Prosecutor) Horizon Habitats Pty Limited (Defendant)
Representation:	Counsel: A Djemal, barrister (Prosecutor) R Lancaster, SC with A Stafford, barrister (Defendant) Solicitors: Maddocks Lawyers (Prosecutor) Sekel Oshry Lawyers (Defendant)
File Number(s):	50839 of 2014

Judgment

Introduction

1. The defendant company (“Horizon”) has pleaded guilty to a charge brought by the prosecuting Council on 9 October 2014 that:

... between about 1 August 2012 and 31 March 2013, at Manly in the State of New South Wales, it committed an offence against s 125(1) of the Environmental Planning and Assessment Act 1979 [(“the EPA Act”)] in that it did the following thing which was forbidden to be done by s 76A(1)(b) of that Act:

The Defendant did direct workers to carry out development on land to which an environmental planning instrument applied, being development which pursuant to the environmental planning instrument may not be carried out except with development consent, and it directed workers to carry out that development otherwise than in accordance with a development consent which was in force in respect of the said development.

2. The summons provided the following particulars of the alleged offence:

Particulars:

a)   The land: Lots 1 and 2 in DP602702, previously known as 10 and 10A Addison Road, Manly. The Lots have since been consolidated and are now known as Lot 12 in DP 1176898, commonly known as 10 Addison Road, Manly.

b) The environmental planning instrument: Manly Local Environmental Plan 1988 (MLEP 1988).

c)   The development: Two (2) storey dwelling house with basement car parking, swimming pool and associated landscaping works, and consolidation of two (2) Lots into one (1).

d)   The requirement for development consent: under the MLEP 1988 the said development could not be carried out except with development consent.

e)   The development consent in force with respect to the development: Notice of Determination dated 17 February 2011 issued by Manly Council in respect of DA 264/2010 as modified pursuant to section 96(1 A) on 7 June 2011 (the "Development Consent").

f)   Manner of contravention of the development consent by the Defendant:

In the course of carrying out the said development, the Defendant, through its employee, Ian Dearlove, instructed workers, to carry out works on the land, namely, the construction of a new staircase at the south eastern part of the property between the cliff line and the mean high water mark, which was in contravention of the Development Consent conditions ANS07, ANS15, ANS17, ANSI 8, ANS21 & ANS23 in force at the time.

3. Horizon was the builder engaged for the development, and when the summons was returned on 21 November 2014, it pleaded guilty to this charge, and the matter was set down for early hearing, on 6 February 2015.

4. A second charge against Horizon, for breaching the terms of a stop-work order, was withdrawn, by consent, but several other charges, against one owner and the project architect, are currently pending in the Court, in respect of the construction of the staircase.

5. The maximum penalty for the offence charged, in the case of a corporation, is $1.1 million.

6. The prosecution and defence counsel agreed upon a comprehensive Statement of Facts (“SAF” – Exhibit P1).

7. The prosecution also tendered, without objection from the defence, some supporting documents – (a) an aerial photograph of the subject site as vacant land prior to the end of 2011 (Exhibit P2), (b) a small bundle of documents comprising a construction plan drawing, a construction management plan (“CMP”) and a statement of environment management (as required by the relevant DC conditions) (Exhibit P3), (c) a map showing the “Little Penguin Critical Habitat” (Exhibit P4), and (d) a bundle of three photographs taken respectively on 12 October 2012, 16 October 2012 and 21 January 2015 showing the relevant staircase (Exhibit P5).

8. The defendant relied, without objection, on an affidavit by David Asher Moses, the sole director and managing director of Horizon (SAF 2), together with a reference provided by the Managing Director of accounting practice MBP Advisory Pty Limited, Lawrence Myers, who has provided accounting services to Horizon for more than 10 years (Exhibit D1).

The Relevant Facts

9. The subject site (Exhibit P2) is owned by prominent citizens Gregory John Poche and Kay Ellen Van Norton (SAF 6). Their development application was lodged with the Council by their architect Denis Leech, of Leech Harman Architects, and Leech dealt directly with the Council and Horizon on the owners’ behalf in most instances (SAF 15).

10. Horizon understood that Leech was authorised by the owners to give Horizon instructions, and that he was responsible for dealing with all issues associated with Council approvals. Horizon had very little direct dealing or contact with Council about the project (SAF 15 and 16).

11. The owners also separately engaged a “clerk of works” for the project, Sean Hannigan (SAF 17), but Horizon employee Ron Efrat was at all material times the Project Manager, and Ian Dearlove the site supervisor and site foreman (SAF 3 and 4). Dearlove left the company on 14 March 2014 (SAF 64).

12. Part of the subject land along the foreshore falls within an area declared to be critical habitat for the Little Penguin (see Exhibit P4). The Little Penguin has been declared an endangered population under the Threatened Species Conservation Act 1995 (SAF 9).

13. When Council granted to Leech Harman on 17 February 2011 a Development Consent (“DC” – SAF 11) for the construction of a two-storey dwelling house with basement car parking, swimming pool and associated landscaping works on the subject land, and its consolidation into one lot, a number of conditions relating to Little Penguins and Long-nosed bandicoots were imposed (1) to protect ecological habitat (Exhibit P4), including during the doing of works, and (2) to ensure the preparation and observation of a CMP. No works were approved to be done on the rocky cliff and intertidal area of the site (SAF 12).

14. Horizon was engaged under two residential building contracts – one “fixed price”, and the other “cost-plus” – to perform most, but not all, tasks associated with the construction (SAF 13). Some such as supply and installation of joinery, bench tops, doors, tiles and so on, were the responsibility of third party contractors, who occupied the site from time to time to fulfil those functions (SAF 14).

15. Horizon’s CMP (SAF 19 and 20, and Exhibit P3) reinforced the objective of protecting ecological habitat in the locality, with the protection of bandicoots and Little Penguins during the construction phase to be appropriately signed-off by an ecologist as a minimum requirement. The Statement of Environment Management, prepared as part of the CMP, was to outline all measures for the protection of those two species, again to be signed-off by a site ecologist prior to construction. The CMP was to be approved by the Council or an accredited certifier prior to the issue of a construction certificate (“CC”).

16. The prosecutor admits that Horizon complied with the requirements in respect of the CMP and a Statement of Environment Management (SAF 20). That Statement of Environment Management (Exhibit P3, and SAF 21) required the following:

•   No works (sic) of any kind is to occur below the top of the cliff including geotech works without an appropriate licence from DECCW. Including removal of weeds. Conditions ANS07, ANS21 and ANS23

•   There is to be no access to the foreshore by site workers or contractors. A sign prohibiting access is to be attached to the gate. Conditions ANS07, ANS21 and ANS23

•   Site induction is required for all visitors and workers and it will include awareness of the potential for endangered penguins and bandicoots occurring on the site, the restriction of access below the cliff top, that the fines are up to $200,000 and/or 2 years in Gaol for harming penguins or bandicoots or their habitat, the need to seal the site at the end of each day to prevent bandicoot and penguin access and the other requirements of this Environment Management Statement and the [CMP]. A copy of this Statement will be provided to the Principal Certifier and will be laminated and placed in any office, tea room or notice board. ANSI4 and ANSI8

17. Preparatory works under both contracts began in early April 2011 (SAF 18), private certifier Paul Fitzgerald issued a CC for excavation and site works on 29 April 2011, and construction work commenced shortly thereafter (SAF 22).

18. In or around April 2011, Dearlove conducted an inspection of the vacant site. He observed a stairway leading down to the foreshore from the pool fence and noted that it was “not in good condition”, but that it was “possible to get down the stairway if necessary”. There was a “keep out” sign erected at the top of it (SAF 23), indicating that access was prohibited due to the breeding of endangered penguins. Horizon provided Dearlove with a copy of the DC, including the approved plans and conditions, prior to April 2011 (SAF 24).

19. In late April or early May 2011, as part of setting up the construction site, Horizon prepared a site induction agenda (see SAF 25, but no copy of that document is before the Court). The agenda was discussed between Dearlove and Moses, and Moses became the first person to be inducted onto the site.

20. Moses, it is agreed, said to Dearlove words to the effect that bandicoots and penguins must be included in every induction, and Horizon expected that an induction would be carried out when any new people started working at the site, or, ideally, before anyone new went onto the site. Horizon understood that Dearlove conducted site inductions in accordance with that agenda for its contractors and employees. Project managers were regularly reminded of Horizon’s expectations for compliance with relevant planning and environmental laws (SAF 26 – 30).

21. In June/July 2011, the DC was modified and a new CC was issued. The CMP formed part of that new certificate (SAF 31 and 32).

22. After 2 February 2012, Horizon carried out works pursuant to its cost-plus contract, and weekly site meetings were held at the nearby residence of one of the owners. Those meetings were usually attended by the owners, Leech, architect Harvey Little, Hannigan, and Horizon employees (SAF 33 and 34).

23. On or about early August 2012, during one of these weekly site meetings, “the owners” instructed Horizon to replace the existing stairway (SAF 35). Dearlove and Efrat were present, and Dearlove heard one owner urging Leech (SAF 36) to make sure there were stairs down to the waterfront.

24. Leech was heard to undertake to “get that sorted with Council” (SAF 36). It is alleged that he said that that could probably be achieved as a s 96 modification after the stairs were built. Leech was “confident it won’t be an issue” (SAF 37).

25. Thereafter, Dearlove and Efrat proceeded on the basis that Leech would be in contact with Council and seek approval, if necessary, for the rebuilding of the stairway (SAF 38).

26. It is no part of the prosecution case that Moses was personally involved in the decision to proceed with the replacement of the stairs, but he subsequently had a conversation with Leech, where Leech again said he would “deal with Council” (SAF 39). Horizon says that it considered, at the time, that it was not “unusual for minor works such as repair or replacement of an existing structure to not require a consent” (SAF 40). The company (SAF 41) “acted under the instruction of the Owners and their agents in proceeding to construct the stairs and relied on Mr Leech, as the primary contact with Council, to deal with the regulatory requirements for any necessary approval or consent”.

27. Horizon now accepts that it was wrong for its employees to rely on the client’s architect, and that it should have made sure that the relevant approval had been given, or that consent was not required, before any work proceeded on the stairs (SAF 42).

28. Horizon employees or contractors commenced work on the stairs to the waterfront, on or about 21 September 2012. Those employees were aware that there were restrictions on works beyond the backyard, on account of the critical habitat (SAF 43). The new stairway was installed in sections, and some vegetation had to be cleared to facilitate that installation (SAF 44 and 45).

29. Council compliance officers inspected the site on 12 October 2012 (SAF 46 and 48), and observed that the existing stairway had been removed and replaced, but that there were no hand rails, although most of the stairs had been completed (SAF 47). Dearlove was informed of Council’s intention to issue a stop-work order in respect of the stairs (SAF 49). Efrat went to Moses (SAF 50), who confirmed that work should cease pending a discussion with the clients the following Monday, 15 October.

30. At that site meeting, Leech was assigned the task of contacting Council about the stairway (SAF 52).

31. On 16 October 2012, Council and Office of Environment and Heritage (“OEH”) officers inspected the land, and Dearlove was asked by an OEH officer to stop work (SAF 53).

32. Horizon “ceased any further work below the ridgetop no later than this inspection”. The stairs were by that time substantially completed, and only minor works were performed on 15 and 16 October (SAF 54).

33. Horizon relied upon Leech to “sort it out” with Council, but now accepted that it was wrong to rely upon his assurance. Horizon acknowledges that it should have made its own inquires of the Council (SAF 55).

34. A formal stop-work order was issued on 19 October 2012 to the owners, but Moses did not become aware of that order until 2014. No order was issued to Horizon at any time (SAF 56).

35. Horizon was paid for the construction of the stairs (SAF 57).

36. Between December 2012 and March 2013, Horizon continued development work in accordance with its contract (SAF 58). One of the owners is alleged to have expressed to Leech concern about the stairs being unfinished. Leech spoke to Dearlove, who agreed to “get onto it” (SAF 59). The instructions are said to be recorded in his site diary (SAF 60), and, on or about 30 January 2013, Dearlove directed carpenters employed by Horizon to complete further work on the stairs (SAF 61).

37. The further safety-oriented works on the stairway were completed around 7 February 2013, and (SAF 62) involved the addition of wooden handrails, steel cable railings and a wooden bridge at the base of the stairs. Much of that work can be seen in the photographs in Exhibit P5.

38. Horizon now accepts (SAF 63) that even safety-oriented works should have not been allowed to occur, without first checking with Council.

39. On 4 February 2013, Leech made an application to Manly Council for a building certificate for the “repair of existing timber external staircase” (SAF 65). On 5 August 2013, Manly Council refused the certificate, and issued an Order under s 121B of the EPA Act to the owners (SAF 66), who then appealed to this Court (SAF 67) against the refusal of the certificate and against the order.

40. The two matters (Poche v Manly Council, Nos 10915 and 11004 of 2013) were dealt with by Commissioner Tuor, who relevantly determined, in an unreported judgment delivered on 19 August 2014 (at [78] and [80]):

78   ... Given, the agreement of the experts that measures to mitigate the impact of humans are, in principle, feasible and the relatively low risk posed by foxes. I will allow the Applicant to provide details of the mitigation measures and landscaping to screen the stairs ...

...

80   If the applicant chooses to provide the information and it is found to be satisfactory, the Order will be amended to require compliance with the mitigation measures and council directed to issue the Building Certificate in relation to the stairs shown in Exhibits B and C.

41. Following Commissioner Tuor’s judgment, a Plan of Management was prepared and submitted to the Court (SAF 68). Orders were published on 4 November 2014, but (SAF 69) have not been issued.

42. The effect of those orders was to approve the issuing of a building certificate in respect of the stairs, on certain conditions as to works to be done, and observance of the Plan of Management.

43. The plan’s objectives included (SAF 68) reinstatement of vegetation to cover the base of the stairs and provide cover for penguins travelling to a nest on the land. It also provided that no works be carried out in the penguin breeding season (1 June to 29 February) and imposed requirements in respect of signage, exclusion of dogs and cats, and the building of gates to restrict access.

44. Throughout those proceedings Council maintained its opposition to the retention of the stairs, but it now accepts compliance with the mitigation measures in an appropriate Plan of Management as “the next best option” (SAF 70).

45. Penguin surveys indicate that at the “stairs nest” (SAF 72), there has been only occasional breeding (SAF 73). The carpenters engaged on the construction of the stairs did not observe any penguins during the works (SAF 74), and, significantly, while “there was potential for disturbance to a Little Penguin if a pair had been breeding at the nest at that time”, there has been no evidence of actual harm to a penguin or the population (SAF 75). Some critical habitat was cleared, but Tuor C found (at [74]) no reason to consider that the nest would not be used again if the vegetation were re-established and the breeding penguins not disturbed”.

41. Horizon provided “full cooperation” (SAF 77) throughout Council’s investigation of the breaches, or alleged breaches, of the EPA Act. The material prepared and provided by Horizon and its employees has given Council “significant assistance” in its investigation, in this prosecution, and in the prosecutions of the owners and Leech. (Elements of Horizon’s cooperation are detailed in SAF 77 and 79.)

42. Horizon also (SAF 78) entered its plea of guilty at the earliest opportunity, and cooperated with Council to bring the proceedings promptly to an efficient hearing.

The Defendant

48. Moses deposes (pars 1 to 6) that Horizon was established in 1989, that he joined the company in 1994, while studying at university, and that in 2003 he purchased half the business and was made a director. He bought out the other half share in 2009, and became the sole director, but his younger brother Daniel is now the company’s General Manager, and a 50% shareholder.

49. Horizon specialises in the construction of architect-designed, high-end new homes, other buildings, alterations and additions, fit outs etc (par 4).

50. Since Moses became a director, employee numbers have increased from 8 to 60, including 5 apprentices. Horizon’s business model is quite unusual these days, in that it prefers to employ builders and carpenters, rather than using contract labour or outsourcing parts of projects. The company usually runs 12 to 15 major construction projects a year, and Moses has been involved in more than 100 homes (pars 7 and 8). Horizon and its employees hold the owners of the subject site in the highest regard (par 9).

51. Moses confirmed in his affidavit (pars 10 – 13, 15 – 19) much of what is attributed to Horizon in the SAF, regarding reliance on the home owner’s architect without making its own enquiries. He outlined the steps taken to ensure that unapproved work is not undertaken, and he provided details of tender processes, training arrangements and so on.

52. He deposes (in par 14):

On behalf of Horizon Habitats I apologise to the Court for the breach of the law in conducting the work on the stairs and the clearing of the critical habitat. I and Horizon Habitats appreciates unreservedly the importance of professional builders complying with the law and in ensuring that compliance with the law forms part of its everyday process. I have been deeply personally affected by the critical habitat having been cleared without development consent, as I consider that this breach of the law is inconsistent with the culture of compliance and reputation of Horizon Habitats as premium professional builders that I have sought to develop.

53. Over 26 years of operation, the company has not had any previous convictions, and has become a highly recognised reputable builder, with wide expertise (pars 20 – 27, and 35). It is active in the Master Builders’ Association, and has won several awards, including Young Builder of the Year, and Apprentice of the Year. He appended to his affidavit a number of magazine articles indicating the favourable view taken of many of Horizon’s projects (par 34).

54. Horizon is also a certified “green builder”. It reimburses its employees for education and training expenses including TAFE and university. It sponsors local sporting organisations and selected charities including a major environmental organisation in Israel.

55. Mr Myers states (Exhibit D1, pars 3 and 4):

Over the years I have observed the business and operations of Horizon and have had them perform work at my home. In my experience, Mr. David Moses acts with integrity and honesty. He encourages and expects the employees of Horizon Habitats to behave similarly in the performance of their duties. It is my opinion that the company is well run and constantly strives for improvement.

It is my opinion that Horizon Habitats is a good and reputable Company and I am pleased to be associated with it ...

Consideration

56. The well-established principles which this Court applies in sentencing offenders need not be repeated here at great length: I adopt my discussion of them in Newcastle Port Corporation v MS Magdalene Schiffahrtsgesellschaft MBH; Newcastle Port Corporation v Vazhnenko (“Magdalene”) [2013] NSWLEC 210, and the statements of them in cases such as Plath v Rawson (“Plath”) [2009] NSWLEC 178; 170 LGERA 253 (Preston CJ); Environment Protection Authority v Unomedical Pty Limited (No 4) (“Unomedicial”) [2011] NSWLEC 131 (Pepper J); Secretary, Department of Planning and Environment v Boggabri Coal Pty Ltd (“Boggabri”) [2014] NSWLEC 154 (Preston CJ); and Chief Executive of the Office of Environment and Heritage v Bombala Investments Pty Ltd (“Bombala”) [2013] NSWLEC 185; 199 LGERA 236 (Craig J).

57. The Court serves the purposes set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (“the CSP Act”), and considers the aggravating and mitigating factors in s 21A of that Act. In arriving at the sentence it will impose, the Court carries out an “instinctive synthesis” of the objective circumstances of the offence and the subjective circumstances of the offender, and imposes a penalty “proportionate” to those factors: Markarian v R (“Markarian”) [2005] HCA 25; 228 CLR 357; and Boggabri.

Objective factors

58. The maximum penalty for the offence charged is one important objective circumstance in every case. In this case it is $1.1M, which reflects Parliament’s view of the seriousness of the offence: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; 82 LGERA 21. While the present offence is “serious”, the prosecutor concedes (par 16) that it is “not the most serious”.

59. A second important objective circumstance is the objective harmfulness of the defendant’s actions, and the Court must have regard to not only actual harm, but also the potential for harm, and/or the foreseeable risk of harm: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357.

60. The prosecutor acknowledges that there is no evidence of actual harm to any Little Penguins, or to their population, but there was a serious risk of such harm, and some relatively minor and transitory actual harm to their habitat. Dearlove was on notice of concern about the penguins (see [18] above). The appearance of the steps (Exhibit P5) also has a decreasingly harmful impact on the natural aesthetic of the cliff face.

61. While mens rea is not an element of the offence, its seriousness is increased by the deliberate nature of the defendant’s actions: Bentley v Gordon [2005] NSWLEC 695; Gittany Constructions Pty Ltd v Sutherland Shire Council (“Gittany”) [2006] NSWLEC 242; 145 LGERA 189; and Hardt v Environment Protection Authority [2007] NSWCCA 338; 156 LGERA 337.

62. The defendant and Dearlove knew of the terms and conditions of the relevant DC, including those directly referring to the penguins, their habitat, and the exclusion of works on the staircase, and the prosecutor submits (pars 27 – 35, errors in the original):

27.   It is submitted, that the Court should find that the Offender's employees would have all foreseen that the conduct of building the staircase in the critical habitat area was unlawful without council approval.

28.   Further, the Offender had no measures in place to ensure such changes to the existing approvals were obtained before such unlawful works were commenced. This is a matter which aggravates penalty: Environment Protection Authority v Gardner [1997] NSWLEC 169.

29.   In respect of the offence regarding the breach of the stop work order, it is submitted that the corporate Offender wilfully neglected its responsibility to not engage in building works.

30.   A failure to heed advice or warning, including from regulatory authorities, will be an aggravating feature Garrett v Williams [2006] NSWLEC 785 at [110]. In this case, prior to the stop work order being issue the Offender's employees had been adverted to the unlawfulness of the works during the site visit on 12 October 2012.

31.   It is submitted that the Offender ignored the Prosecutor's order to cease the unlawful component of the development on the site and by completing the construction of the staircase.

Reasons for the Commission of the Offences

32.   The Prosecutor submits the Offender did not have a system in place to ensure that its employees would only undertake works consistent with the approved consent conditions in circumstances where a change in the original approved development was to take place.

33.   The Offender was remiss in its duty by relying on the assurances of Mr Leech that approval would be sought following the construction of the staircase.

34.   The Offender had control over the policies and procedures governing its employees and contractors throughout the development.

35.   If a proper system were operative, construction of the stairway would not have been carried out.

63. The prosecutor concludes (pars 36 and 37) that the offences are “objectively serious”: The defendant was at least reckless regarding the requirements of the regulatory regime. It performed unlawful work, and continued it, even after ordered to cease, in an environmentally sensitive area. All this behaviour undermines the integrity of the regulatory regime.

64. In its defence, the defendant company says that its foreman acted under instructions given by the project architect (Leech) on behalf of the owners, and relied on that architect to “sort it with the Council”. It is an agreed fact that one of the owners personally gave instructions on 30 January to complete the stairs to ensure their safety (SAF 58 – 62). The defendant says (subs par 11):

The defendant accepts that it should have sought to obtain independent confirmation from Council (or taken its own advice) either that no consent was required or, if required, that consent had been granted. The defendant also accepts that it should have raised any safety concerns about the lack of handrails, railings or the unfinished base with Council instead of, by its employees, undertaking this work itself.

65. It also relies (pars 22 – 26) on what it calls the “not substantial” harm it claims its actions caused, and its submission (par 30) that its failure to observe the process put in place to meet the conditions of consent does not amount to an “intentional or negligent breach” of the EPA Act. As it submits (pars 31 and 33):

31.   ... this is not a case in which the shareholders or the sole director of the defendant were involved in the direction to build the stairs, let alone actually doing the work themselves. The company’s offence arises from the fact that its employees followed the direction of a third party.

...

33.   The defendant’s employees followed the instructions of an experienced architect, who was understood to have full authority to give directions on behalf of the owners. The owners were people that the company and its employees had good reason to respect and consider to be responsible and law-abiding. The defendant, of course, accepts that following the directions of others is no excuse – the company has pleaded guilty – but in the circumstances it is perhaps understandable how it came to be that the employees did not follow the usual practices of the company but instead relied on and followed the instructions of the architect on behalf of the owners.

66. The defendant argues (par 34) that the offence is of “low objective seriousness”, but I do not accept the thrust of the submission in par 33, just quoted: the “usual practices of the company” should have been to ensure approval.

67. I find the offence of “moderate” seriousness.

Subjective factors

68. The defendant’s submissions point to:

1. its lack of any prior offences;

2. its good corporate character over many years, demonstrated within the industry and in the wider community;

3. its entry of a plea of guilty at the earliest opportunity: R v Thomson, R v Houlton (“Thomson/Houlton”) [2000] NSWCCA 309; 49 NSWLR 383;

4. its demonstration of – and not only its statements of – genuine contrition and remorse (see discussion in Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; 148 LGERA 299, at [203] – [214]), including not only its early plea, but also (a) its co-operation with the prosecution during both the investigation and the various Class 5 proceedings it has brought, (b) its formal apology to the Court (Moses, pars 10 to 14), (c) the presence of Moses throughout the hearing, and (d) the steps it has taken to avoid future non-compliances; and

5. the asserted unlikelihood of its reoffending.

69. The prosecutor acknowledged that the early plea entitles the defendant to the full Thomson/Houlton discount of 25%, and (pars 43 and 44) that the defendant provided “full co-operation” and “significant assistance” to the prosecutor, as claimed. It made no submissions contradicting the other mitigating factors to which the defendants referred.

Arriving at the penalty

70. I regard the criminality involved here, on the part of the builder, quite apart from that of other players not presently before me, as of “moderate”, and not “low”, objective seriousness (see [67] above).

71. Section 3A(b) mandates elements of both general and specific deterrence. As the prosecutor submitted (par 48), I agree that both must play a part in the sentence to be imposed in this case.

72. As the Chief Judge said in Gittany (at [102]), the sentence must “operate as a powerful factor in preventing the commission of similar crimes” by anyone tempted by the prospect that “only light punishment will be imposed”. His Honour’s predecessor said, in Keir v Sutherland Shire Council [2004] NSWLEC 754, at [20], that the penalty must send “a strong warning to builders and others who carry out development work that a breach of the law will be visited with significant financial consequences”.

73. This defendant remains very active in the industry, and plays a leading role in it. It also enjoys favourable publicity in the wider community.

74. Every player in the industry must be regularly reminded that this Court expects obedience to the law, and to conditions of consent.

75. A substantial fine, and an order for costs, are called for, and there is no evidence that the defendant does not have the means to meet both.

76. The defendant is entitled to a substantial discount for the mitigating factors largely conceded by the prosecutor. The principles to apply in arriving at the discount are discussed in Magdalene (at [124] – [129], and [259] – [278]).

77. However, I will not accede to the submission by Mr Lancaster of senior counsel that I should exercise my discretion, under s 10 of the CSP Act, to record no conviction.

78. Section 10 provides:

Dismissal of charges and conditional discharge of offender

(1)   Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders:

(a)   an order directing that the relevant charge be dismissed,

(b)   an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years,

(c)   an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program.

(2)   An order referred to in subsection (1) (b) may be made if the court is satisfied:

(a)   that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or

(b)   that it is expedient to release the person on a good behaviour bond.

...

(3)   In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors:

(a)   the person’s character, antecedents, age, health and mental condition,

(b)   the trivial nature of the offence,

(c)   the extenuating circumstances in which the offence was committed,

(d)   any other matter that the court thinks proper to consider.

...

79. I also discussed in Magdalene (at [142] – [160]), the principles governing the use of s 10. I applied it to the Master of the ship in that case, when I sentenced the owner to a very heavy fine for not adopting good practices.

80. Mr Lancaster submitted (par 58), after referring to Thorneloe v Filipowski (“Thorneloe”) [2001] NSWCCA 213; 52 NSWLR 60; Ku-ring-gai Council v Steve Nolan Constructions Pty Ltd [2012] NSWLEC 258; and Blue Mountains City Council v Carlon [2008] NSWLEC 296:

that this was a comparatively less serious breach of a development consent by a first offender that had processes in place to seek to avoid non-compliance with the development consent, but ultimately employees of the defendant took action outside of those processes and expectations. The defendant was also reassured by a person on whom it had relied in connection with approvals for the project that there would not be a problem.

81. Under s 10(3):

1. I cannot agree that I should accept that this breach is “trivial”, or merely “technical”: Cooper v Coffs Harbour City Council (1997) 97 LGERA 125, per Howie AJ.

2. There are no “extenuating circumstances”.

82. Accordingly, I decline to apply s 10, but I will apply, as in Magdalene at [278], a discount of one-third for mitigating factors.

83. The doctrine of “evenhandedness” requires me to have regard to the general pattern of sentencing for offences of like kind, taking care with relevant factual differences: Bombala at [35] and [115] per Craig J.

84. I reviewed many relevant cases when recently deciding the adequacy of a Magistrate’s penalties in Alramon Pty Limited v City of Ryde Council [2014] NSWLEC 100, and I have reviewed all the cases to which I was referred in the written and oral submissions in the present case, and I conclude that a penalty of $60,000, reduced by one-third, to $40,000, is appropriate in this case.

Orders

85. The Orders of the Court are that:

1. The defendant is found guilty, and is convicted, of the offence charged in the summons.

2. The defendant is ordered to pay a fine of $40,000.

3. The defendant is ordered to pay the prosecutor’s costs, as agreed, or as assessed according to law.

4. All exhibits except Exhibit P1 are returned.

**********

Decision last updated: 12 February 2015