Manly Council v Leech

[2015] NSWLEC 149

Land and Environment Court

New South Wales

Medium Neutral Citation:

Manly Council v Leech [2015] NSWLEC 149

Hearing dates:

24 August 2015 - 4 September 2015

Date of orders:

17 September 2015

Decision date:

17 September 2015

Jurisdiction:

Class 5

Before:

Biscoe J

Decision:

In matter 50837/14:
(1) The defendant is acquitted of the offence charged.

(2) The summons is dismissed.

Catchwords:

ENVIRONMENTAL OFFENCES – whether project architect carried out development, namely construction of external stairs down the side of a cliff in a penguin critical habitat area, that required development consent other than in accordance with a development consent that was in force, by directing the builder to construct the stairs or by reason of the extent of his control over the builder.

Legislation Cited:

Environmental Planning and Assessment Act 1979 ss 76A(1), 96, 121B, 121D, 121H, 121ZL, 125(1), 149B
Local Government Act 1993 s 124
Threatened Species Conservation Act 1995 s 91

Cases Cited:

Bobolas v Waverley Council [2012] NSWCA 126, 187 LGERA 63
George v Rockett [1990] HCA 26, 170 CLR 104
Kempsey Shire Council v Slade [2015] NSWLEC 135
Leichhardt Council v Geitonia Pty Ltd (No 6) [2015] NSWLEC 51
Manly Council v Horizon Habitats Pty Limited [2015] NSWLEC 15
Mosman Municipal Council v Keesing [2006] NSWLEC 836
North Sydney Council v Moline (No 2); North Sydney Council v Tomkinson [2008] NSWLEC 169
Poche and Anor v Manly Council [2014] NSWLEC 1274
Rafailidis v Camden Council [2015] NSWCA 185
State of New South Wales v Corbett [2007] HCA 32, 230 CLR 606
Terranora Group Management Pty Ltd v Director-General Office of Environment and Heritage [2013] NSWLEC 198, 200 LGERA 1

Texts Cited:

G E Del Pont, Law of Agency (LexisNexis Butterworths, 3rd ed, 2014)
Peter Watts & F M B Reynolds, Bowstead and Reynolds on Agency (Thomson Reuters, 20th ed, 2014)

Category:

Principal judgment

Parties:

50836/14, 50837/14
Manly Council (Prosecutor)
Denis John Leech (Defendant)

  50841/14, 50842/14
Manly Council (Prosecutor)
Kay Ellen Van Norton (Defendant)

Representation:

COUNSEL:
50836/14, 50837/14
A Djemal and J Smith (Prosecutor)
A M Pickles and N F Hammond (Defendant)

 

50841/14, 50842/14
A Djemal and J Smith (Prosecutor)
G P Craddock SC and M Staunton (Defendant)

 

SOLICITORS:
50836/14, 50837/14
Maddocks (Prosecutor)
Wood Marshall Williams (Defendant)

  50841/14, 50842/14
Maddocks (Prosecutor)
Lindsay Taylor (Defendant)

File Number(s):

50836/14, 50837/14, 50841/14, 50842/14

Judgment

TABLE OF CONTENTS

INTRODUCTION   1-12

THE STOP WORK ORDER CHARGE   13-29

THE UNLAWFUL DEVELOPMENT CHARGE   30-152

Legal principles   33-37

The Stairs   38-40

The development consents   41-43

The contract between the owners and the architect   44-47

The building contracts   48-52

Witnesses   53

Did the defendant instruct the builder to construct the stairs in or about August 2012?   54-102

Did the defendant instruct the builder to finish the Stairs on 29 January 2013?   103-137

Control over the builder: the alternative case   138-152

ORDERS   153

INTRODUCTION

1. This is the prosecution of an architect, Denis John Leech, on two charges in relation to the unlawful construction of an external stairway and balustrade (the Stairs), roughly 40 metres long, on a waterfront property at 10 Addison Road, Manly (the Property).

2. The Property extends from Addison Road in an easterly direction to the high water mark of Little Manly Cove in Sydney Harbour. The Stairs were constructed from the top of a steep cliff on the eastern part of the Property down the side of the cliff to the foreshore of Little Manly Cove. The Stairs were constructed towards the end of the period of construction of a luxurious dwelling house and swimming pool on the Property.

3. The owners of the Property are, and at all material times were, Kay Ellen Van Norton and Gregory John Poche. Their project architect was Leech Harmon Architects. Mr Leech said in his affidavit that he was the principal of Leech Harmon Architects. The owners’ builder, Horizon Habitats Pty Ltd, constructed the Stairs. The prosecutor is Manly Council.

4. There are many references to penguins in the evidence. The population of penguins at Manly is the only known population of Little Penguins on the mainland of NSW. The eastern part of the Property below the cliff top is within the declared critical habitat for the Little Penguin, which has been declared an endangered population under the Threatened Species Conservation Act 1995. A Little Penguin burrow was within a few metres of part of the Stairs at the time of their construction.

5. The prosecution is founded on these uncontroversial facts. Construction of the Stairs was unlawful because it required development consent. The two development consents that Council had granted for the project did not authorise construction of the Stairs or any other work below the cliff top. In October 2012, when the Stairs had been partly constructed, Council issued a notice to the owners that Council alleged was a stop work order in terms of order 19(a) under s 121B(1) of the Environmental Planning and Assessment Act 1979 (EPA Act). In early 2013 the builder resumed and finished construction of the Stairs.

6. Consequently, Council prosecuted the owners, the builder and Mr Leech charging them with two offences against s 125(1) of the EPA Act.

7. One charge was that they breached a Council order dated 19 October 2012 addressed to the owners to stop work on the Stairs (the stop work order charge). As against Mr Leech, it was alleged that he breached the order by instructing the builder on 29 January 2013 to finish constructing the Stairs, which the builder did.

8. The other charge was that they did a thing forbidden by s 76A(1)(b) of the EPA Act by carrying out development, namely construction of the Stairs, that required development consent otherwise than in accordance with a development consent which was in force in respect of the development (the unlawful development charge). The prosecutor alleges that Mr Leech is vicariously liable for the builder’s construction of the Stairs because –

1. he verbally instructed the builder in about August 2012 to construct the Stairs and (after a stoppage of some months due to the stop work order) verbally instructed the builder on 29 January 2013 to finish constructing the Stairs; or

2. if the owners and not he gave the instructions, given that construction of the Stairs did not have development consent, he could and should have issued an instruction to the builder countermanding the owners’ instructions.

9. The summons does not capture the full extent of the way the unlawful development charge is pressed against Mr Leech, but that is the way the prosecution was conducted and it is common ground that the charge should be determined on that basis.

10. By consent, the prosecution against one of the owners, Mr Poche, was withdrawn. The stop work order charge was withdrawn against the builder, who pleaded guilty to the unlawful development charge and was sentenced: Manly Council v Horizon Habitats Pty Limited [2015] NSWLEC 15 (Sheahan J).

11. The trial of the other owner, Ms Van Norton, and Mr Leech proceeded before me. In the course of the trial, I dismissed the summons relating to the stop work order charge against each on a question of law (proceedings 50841/14 and 50836/14). My reasons are set out below. On the fourth day of the trial, Ms Van Norton changed her plea to guilty in relation to the unlawful development charge against her (proceedings 50842/14) and withdrew from the hearing.

12. For the reasons that follow, I am not satisfied beyond reasonable doubt that Mr Leech is guilty of the remaining unlawful development charge (proceedings 50837/14). Therefore, I propose to acquit him of that charge and dismiss the summons.

THE STOP WORK ORDER CHARGE

13. The stop work order charge is based on an alleged stop work order by Council in terms of order 19(a) in the Table to s 121B of the EPA Act, dated 19 October 2012 and addressed to the owners.

14. During the trial I dismissed the stop work order charge against Mr Leech and Ms Van Norton on a question of law, holding that the document was not a valid order under s 121B. In doing so, also I rejected the prosecutor’s tender of evidence said to be relevant to the owners’ subjective understanding as to whether or not it was such an order. I said that I would give my reasons later, which I now do.

15. In my opinion, the issue of whether or not the document is a stop work order in terms of order 19(a) in the s 121B Table is to be determined objectively by construing the document, and evidence as to the subjective understanding of the recipient is irrelevant.

16. Section 121B of the EPA Act provides:

121B Orders that may be given by consent authority or by Minister etc

(1) An order may be given to a person by:

…

(a) a council

…

to do or to refrain from doing a thing specified in the following Table if the circumstances specified opposite it in Column 2 of the Table exist and the person comes within the description opposite it in Column 3 of the Table.

17. Order 19(a) of the Table is in the following terms:

(a)   Building work… is being carried out in contravention of this Act

18. In the present case, the heading and chapeau of the alleged s 121B order are as follows:

ENVIRONMENTAL PLANNING & ASSESSMENT ACT 1979

SECTION 121 B

ORDER

TAKE NOTICE that Manly Council (“Council”) intends to give to you an Order in terms of Order No 19(a) in the Table to Section 121B of the Environmental Planning and Assessment Act 1979 (“the Act”) in the terms set out below on the grounds that building works are being carried out unlawfully in contravention of the Act.

[emphasis added]

19. Thereunder appear a page and a half of words under the headings: Schedule of Works, Time Period for Compliance with Orders, Reasons for Order, Offence, Penalty, Execution of Order by Council, Right of Appeal Against Order, and Orders that Make or are Likely to Make Residents Homeless. Under the heading “Time Period for Compliance with Order” the document states:

This is an Order given, and expressed to be given, in an emergency. Immediate compliance with this Order is therefore required. Accordingly, you are directed to carry out the schedule of works immediately.

20. The reference to “carry out the schedule of works” is to the previous paragraph headed “Schedule of Works”. That schedule does not identify any works that are to be carried out, but rather requires that no works be carried out. This confusion is compounded by the paragraph under the fourth heading of the following page:

EXECUTION OF ORDER BY COUNCIL

If you fail to comply with the terms of this order Council may do all such things that are necessary or convenient to give effect to the terms of this order, including the carrying out of any work required by the order, and may, among other things, recover from you the costs incurred by Council in so doing: see section 121ZJ of the Environmental Planning and Assessment 1979.

21. It is mandatory to give notice of intention prior to giving most orders listed in the s 121B Table: s 121H. However, it is not mandatory for notice of intention to be given in respect of order 19(a) in the Table or an order given in an emergency: s 121D(a) and (b). That does not prevent a council from issuing a warning foreshadowing the giving of such an order, particularly where the council may face a claim for compensation by a person on whom an order is served for any expense incurred by the person as a consequence of the order: s 121ZL.

22. A statutory order requiring someone to do or not do something that is subject to penal consequences, and the authorising statute, are strictly construed. Consequently, the validity of such an order depends on strict compliance with the statutory conditions governing its issue, and it will not be enforced unless it is expressed in clear and unambiguous language: George v Rockett [1990] HCA 26, 170 CLR 104 at 110-111; State of New South Wales v Corbett [2007] HCA 32, 230 CLR 606 at [87]-[88], [105] (Callinan and Crennan JJ, Gleeson CJ and Gummow J agreeing) and at [16]-[22] (Kirby J); Mosman Municipal Council v Keesing [2006] NSWLEC 836 (Lloyd J); Bobolas v Waverley Council [2012] NSWCA 126, 187 LGERA 63 at [41]-[50] (McColl JA, Macfarlan JA and Tobias AJA agreeing); Terranora Group Management Pty Ltd v Director-General Office of Environment and Heritage [2013] NSWLEC 198, 200 LGERA 1 at [40] (Biscoe J). Such an order must convey clearly and unambiguously to the person to whom it is given that that person is being ordered to do or refrain from doing something, and that it is not merely a statement of intention to issue such an order in the future: Bobolas v Waverley Council. There is a close analogy with the principle that, because of the potentially serious consequences, a person will not be found in contempt of court for breach of a court order that is not clear and unambiguous: Rafailidis v Camden Council [2015] NSWCA 185 at [45]-[47].

23. In Mosman Municipal Council v Keesing, Lloyd J held that a tree preservation order issued pursuant to an environmental planning instrument was invalid. A tree preservation order did not have effect until it had been published in a newspaper circulating in the area of the council. Lloyd J held at [9] that there was no tree preservation order in force because the published order was “prospective in its terms”. It was in the following terms:

Council considers it expedient for the purpose of securing or preserving existing amenity to revoke all tree preservation orders presently in force in the Mosman Municipal Council area, for the area covered by Mosman Local Environmental Plan 1998. A new Tree Preservation Order to be known as Mosman Tree Preservation Order 2001 is to be made pursuant to the provisions of Mosman Local Environmental Plan 1998.

[emphasis added]

24. In Bobolas v Waverley Council, there was a successful appeal against a decision of this Court granting relief sought by the council to enforce three identical orders purportedly in terms of order 22A under s 124 of the Local Government Act 1993 to each of the three appellants, requiring that they remove and dispose of waste on residential premises. The central issue on appeal was the validity of the orders. There was no mandatory requirement for giving notice of intention prior to giving an order 22A in the Table to s 124. The orders in Bobolas v Waverley Council were each headed “Order 22A under section 124 of the Local Government Act 1993”, and the chapeau stated that the council pursuant to s 124 “orders you to”. However, terms of futurity appeared in the following heading “Terms of the Proposed Order” and in the following words under subsequent headings: “The order will be given” and “The order will require that you comply” (italics added). Consequently, the Court of Appeal held that the orders were invalid, stating:

[42]   In New South Wales v Corbett [2007] HCA 32; (2007) 230 CLR 606 (at [89]–[108]), Callinan and Crennan JJ (Gleeson CJ and Gummow J agreeing) considered the construction of search warrants in the context of the “balancing of a person’s private interest in the inviolability of his house, his ‘castle and fortress’, against the public interest in the ‘gathering of evidence against, and the apprehension and conviction of, those who have broken the criminal law’.” Their Honours (at [105]–[107]) held that the concept of “strict compliance” stated in George v Rockett was satisfied in respect of the issue of a search warrant despite an incorrect description of the offence relied on to found its issue in the application form. It was sufficient (at [107]) that “there could be no mistake about the object of the search or about the boundaries of the search warrant”.

[43]   The principles underlying such cases bear, as I have said, analogical application to interpreting the present legislation and the validity of orders purportedly issued to found, if need be, entry to a person’s home.

[44]   The principle that an order, albeit not one authorising entry to premises, be expressed in such terms as to convey its purpose clearly to the recipient, was applied by Cowdroy J in Foster v Sutherland Shire Council.

…

[47] Section 124 of the LG Act enabled the respondent to “order a person to do or refrain from doing a thing specified [in cl 22A]”. It spoke in present terms. An order issued pursuant to its terms had to convey clearly to the recipient that that person was being ordered at that time to do or refrain from undertaking the identified action by reason of the receipt of the order.

[48] The terms of the s 124 orders in this case did not convey any requirement for immediate implementation or compliance. Rather, they were expressed in terms of futurity. The heading to the part of the order referring to the removal of rubbish was expressed to be “Terms of the proposed order”. The idea that an order was yet to be given was confirmed in that part of the document headed “Reasons for the order”, by the phrase “the order will be given…”. That notion of futurity was also reaffirmed in that part of the document identifying the "Period for compliance" where the words”… the order will require that you comply…” appear.

[49]   These statements were not mere surplusage of the nature of the incorrect statutory reference in New South Wales v Corbett. Rather…they went to the heart of the document. The recipient of the s 124 order could not be certain as to whether it required present compliance or, rather, whether it was some sort of warning notice in anticipation of an order requiring removal of rubbish being issued at a later date.

[50] In such circumstances, in my view, the s 124 order was invalid…

25. In the present case, the document states in its chapeau that Council “intends” to give an order. Thus, it is framed in terms of futurity. The chapeau qualifies all that follows. What follows is what the order intended to be given in the future will say. It does not require present compliance. At the very least, the recipient could not be certain as to whether it required present compliance or, rather, whether it was some sort of warning notice.

26. The prosecutor submitted that in determining whether the document is an order under s 121B, if I consider that it is sufficiently uncertain as to whether it is an order or merely a statement of intention, then I should hold it to be invalid. But, the prosecutor submitted, if I consider that it to be of a lesser order of uncertainty in that respect, then I should admit evidence that the prosecutor wished to tender to the effect, it argued, that the recipient of the notice understood that it was a s 121B order.

27. I reject the submission, for which there is no authority. The task is one of objective construction of the document, as Bobolas illustrates. The prosecutor’s submission is mainly based on the following obiter dicta of Kirby J in State ofNew South Wales v Corbett at [42] in the first sentence concerning whether the recipient of a search warrant was in fact misled by an incorrect statutory citation:

It cannot be suggested that either of the respondents was in fact misled by the incorrect statutory citation. Mr Corbett was still in hospital when the search warrant was sought and executed. The reference to the provision of the 1989 Act would have had no more meaning for Mrs Corbett, as delimiting the ambit of the search, than would a concurrent reference to the transitional provision in the 1996 Act that had the effect of correcting the erroneous reference. The real indication of the applicable ambit of the search warrant was contained in the words of the application for the search warrant that remain unaltered, namely "Possession of Firearms". That phrase adequately, and accurately, identified the subject matter of the search that was then conducted. The new provision was thus "corresponding".

28. State of New South Wales v Corbett was a claim for damages for trespass on the basis that the search warrant pursuant to which the alleged trespass occurred was invalid because the application for the warrant referred to legislation that had been repealed and replaced. The High Court determined that it was valid simply by construing the application and the resulting warrant objectively. Kirby J’s reference to the respondents (plaintiffs) not being in fact misled by an incorrect statutory citation does not undermine that approach and in any event was obiter.

28. To admit, as the prosecutor proposes, evidence as to how recipients understood such a document would open up a Pandora’s box of, first, potentially different constructions of the document according to a recipient’s subjective understanding of what it means and, secondly, satellite litigation as to a recipient’s state of mind. For example, the document in the present case was issued to two persons. Suppose that one gave evidence that he understood it to be an order, and the second that it was only a statement of intention or that she was uncertain whether it was one or the other. All this is avoided by the objective theory of construction of documents.

THE UNLAWFUL DEVELOPMENT CHARGE

30. I turn to the unlawful development charge.

31. The prosecutor alleges that Mr Leech offended s 125(1) of the EPA Act by unlawfully carrying out development, namely construction of the Stairs, contrary to s 76A(1)(b) of the EPA Act:

1. by instructing the builder to construct the Stairs before they were constructed in October 2012 and (following stoppage caused by the stop work order) by instructing the builder to finish constructing the Stairs on 29 January 2013; or

2. by virtue of his control over the works whereby if the owners directed the builder to construct or finish constructing the Stairs, he could and should have countermanded the instruction.

32. Sections 76A(1) and 125(1) of the EPA Act provide:

76A   Development that needs consent

(1) GeneralIf an environmental planning instrument provides that specified development may not be carried out except with development consent, a person must not carry the development out on land to which the provision applies unless:

(a)   such a consent has been obtained and is in force, and

(b)   the development is carried out in accordance with the consent and the instrument.

…

125   Offences against this Act and the regulations

(1)  Where any matter or thing is by or under this Act, other than by or under the regulations, directed or forbidden to be done, or where the Minister, the Secretary, a council or any other person is authorised by or under this Act, other than by or under the regulations, to direct any matter or thing to be done, or to forbid any matter or thing to be done, and that matter or thing if so directed to be done remains undone, or if so forbidden to be done is done, a person offending against that direction or prohibition shall be guilty of an offence against this Act.

Legal principles

33. It is an element of the offence under s 76A(1) of the EPA Act that the defendant has carried out development. To “carry out” development requires positive acts, omission to act is insufficient: North Sydney Council v Moline; North Sydney Council v Tomkinson (No 2) [2008] NSWLEC 169 at [24]. In that case one of the defendants, Mr Moline, was charged with committing an offence against s 125(1) of the EPA Act by carrying out development in contravention of s 76A(1)(b). The prosecution was, inter alia, on the basis of vicarious liability by being responsible for the conduct of another who carried out the unlawful development. Mr Moline was a part owner of land on which the development was carried out and agreed with others to develop it. Mr Moline was the architect of the original works but not of the offending works and, although he was a licensed builder, was never appointed as the builder. He did not engage any contractors to undertake works and did not provide instructions or directions to contractors, and he told his co-owner that excavation should only be in accordance with development consent plans: at [111]. He was acquitted. Preston CJ of LEC held:

[24]   To “carry out” such development, positive acts are required; omission to act cannot suffice. A person could carry out such development by personally doing the positive acts involved, such as carrying out the excavation or pouring the concrete slab or erecting the walls. The person could also be attributed with having carried out such development by being responsible for the conduct of another person who did the positive acts of excavation, pouring of the concrete slab or erection of the walls.

34. There was an issue as to whether Mr Moline was vicariously liable for unauthorised excavation work carried out by a contractor (Mr Jack) and for unauthorised building works by a person or persons unknown. Preston CJ identified the circumstances in which an accused will be vicariously liable for the conduct of an independent contractor:

[114]   Between Mr Moline and Mr Jack, there was no relationship of employer and employee or of principal and agent. Mr Jack was an independent contractor. Generally, an accused will not be vicariously liable for the conduct of an independent contractor: Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48; Environment Protection Authority v Multiplex Constructions Pty Ltd (2000) 112 LGERA 1 at 58-59 [277]. There are exceptions to this general principle. An accused may be vicariously liable where the accused has directly authorised the doing of the actus reus by the independent contractor: see Environment Protection Authority v Multiplex Constructions Pty Ltd (2000) 112 LGERA 1 at 59 [278], [280] and Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd (2003) 128 LGERA 240 at 262 [104] – 263 [106]. An accused may be vicariously liable where the work done by the independent contractor is subject to the control and direction of the accused in the actual execution of the work: see Environment Protection Authority v Multiplex Constructions Pty Ltd (2000) 112 LGERA 1 at 59 [280], 61-62 [290]. In Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd (2003) 128 LGERA 240 at 262 [102], Pearlman J described the content of the control test as follows:

That test involves a right to direct and control a course of action, in circumstances where the right is capable of exercise and is, or is likely to be, effective. It relates to the manner in which the independent contractor undertakes the course of action, that is, the way in which the tasks are to be performed or how they are to be carried out.

35. His Honour explained why Mr Moline was not liable:

[111]   The evidence establishes that Mr Moline:

(a)   anticipated he would act as the builder and to this end took out insurance and nominated himself in documentation to the PCA [principal certifying authority] as builder;

(b)   however, he never was appointed as the builder, there being no legally enforceable written contract with all of the owners of the land appointing him as the builder;

(c)   never took possession of the building site and, in fact, was not provided with a key to the padlock on the gate of the site security fence and could only enter the site when Mr Dean Tomkinson was present and the gate was unlocked;

(d)   the only physical work he did on site was, on 15 November 2005, to peg out the location of the building’s external walls showing the extent of excavation, but this was done in accordance with the development consent plans;

(e)   the only other work he performed in relation to the carrying out of the development was, in early November 2005, to order the site security fence and hay bales but he did not install them;

(f)   did not engage any contractors to undertake demolition, excavation or building works on the site;

(g)   did not provide any instructions or directions to any contractors who had been engaged by another person or persons to undertake demolition, excavation or building works as to the work to be carried out, including the nature or extent of the work or the manner of carrying out the work, with the one exception of providing advice to the excavator about watering to suppress dust, after a complaint and fine by the Council;

(h)   did not pay any contractors for work undertaken by them in relation to demolition, excavation or building works on the site and, indeed, had all financial documentation removed from him in late November 2005, so that he was in no position to do so;

(i)   visited the site in the week of 14 November 2005 and observed the excavation contractor had excavated beyond the building’s external walls that Mr Moline had marked out on 15 November 2005;

(j)   told Mr Alan Tomkinson that excavation should only be in accordance with the development consent plans;

(k)   was not present when the Council officers visited the site on 24 November 2005 and observed the over-excavation not in accordance with the development consent plans;

(l)   did not instruct Mr Havilland, architect, to prepare the basement floor plans showing the extension northwards of the basement with two parallel walls and four stores or void spaces, did not authorise Mr Alan Tomkinson to so instruct Mr Havilland, and was told by Mr Havilland that he would not take instructions from Mr Moline as he was not his client;

(m)   did not instruct Mr Harrison, engineer, to prepare engineering drawings, did not authorise Mr Alan Tomkinson to so instruct Mr Harrison, and Mr Harrison identified Mr Alan Tomkinson as his client;

(n)   gave advice to Mr Alan Tomkinson not to build the walls shown on Mr Havilland’s drawings, which walls were not in accordance with the approved plans, but such advice was rejected;

(o)   sent a letter on 1 February 2006 resigning from the project to the Council and Mr Alan Tomkinson before building works were carried out in accordance with the drawings by Mr Havilland and Mr Harrison, and not in accordance with the development consent plans; and

(p)   was not present when the Council officers visited the site on 14 February 2006 and observed the unauthorised building works not in accordance with the development consent plans.

…

[115]   The evidence does not establish that Mr Moline directly authorised the unauthorised excavation by Mr Jack (if he did it), or that Mr Jack was subject to the control and direction of Mr Moline in the actual execution of the excavation. Mr Moline had no enforceable contractual rights as a builder, was not in possession of the site, was not the project manager, was not the site supervisor, did not engage Mr Jack, and except for advice as to watering to suppress dust, had no contact with Mr Jack and did not give any directions to Mr Jack as to the actual execution of his work. To the contrary, the evidence establishes Mr Moline’s lack of power to control and direct the work, including excavation, on the site.

[116]   In relation to the unknown person or persons who carried out the unauthorised building works, the evidence also does not establish any relationship whereby that person or those persons were directly authorised by Mr Moline to do the unauthorised building works or were subject to the control and direction of Mr Moline in the actual execution of the building works. Again, the evidence establishes Mr Moline’s lack of power to control and direct the building works on the site.

[117]   In these circumstances, the prosecution has not proven beyond reasonable doubt that Mr Moline was a person who carried out development otherwise than in accordance with the consent given.

36. In Leichhardt Council v Geitonia Pty Ltd (No 6) [2015] NSWLEC 51 at [116] I wrote:

In a strict liability offence case such as the present, a corporation may be liable directly for the conduct of a person who is the embodiment of the company or its directing mind and will, and vicariously for servants or agents or, in some circumstances, independent contractors: Department of Environment and Climate Change v Jack and Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232; 172 LGERA 225 at [78]–[95] (Biscoe J) and the authorities discussed therein. One of the recognised exceptions to the general rule that a principal is not vicariously liable for the actions of an independent contractor is where the defendant directly authorised the unlawful act or if the act was the necessary consequence of the direct authorisation: North Sydney Council v Moline (No 2) [2008] NSWLEC 169 at [115] per Preston CJ of LEC; Environment Protection Authority v Multiplex Constructions Pty Ltd [2000] NSWLEC 6; 112 LGERA 1 at [278] per Lloyd J; Environment Protection Authority v McConnell Dowell Constructors (Aust) Pty Ltd [2003] NSWLEC 70 ; 128 LGERA 240 at [104]–[106] per Pearlman J; Stoneman v Lyons [1975] HCA 59; 133 CLR 550 at 573–4 per Mason J, at 562 per Stephen J; Kondis v State Transport Authority [1984] HCA 61; 154 CLR 672 at 692 per Brennan J, who gave this example: “If I prevail upon the driver of a taxi to drive dangerously, I cannot escape liability for the consequences by pointing to the general employment of the driver by the owner of the taxi”.

37. The subject crime is environmental circumstance crime where there does not necessarily have to be any consequence. Such a crime is conceptually different from an environmental crime of consequence, such as causing pollution. The principles of vicarious liability appear to be the same in each, as Moline illustrates. However, in the context of an environmental crime of consequence where principles of causation arise, “cause” has been interpreted broadly and potentially casts the liability net more widely: Kempsey Shire Council v Slade [2015] NSWLEC 135 at [24]-[43] in which I reviewed Australian, English, American, Canadian and New Zealand authorities.

The Stairs

38. The Stairs are roughly 40 metres long and replaced dilapidated old stairs to the east, ie on the water side, of the top of the cliff at the rear of the Property. The old stairs comprised:

1. four stone steps from a gap in the retaining wall on the cliff line to the top of wooden stairs;

2. wooden stairs down to a point adjacent to a cliff cave, which is roughly 50 to 60 percent of the way down the cliff;

3. a stone path or steps from there down virtually to the water; and

4. a metal pole railing along the whole length of the above.

39. The new Stairs were constructed by the builder in three stages and time periods as follows:

1. In late September/early October 2012, replacement timber steps including vertical timber posts for a balustrade were built and installed to the point on the cliff adjacent to the cave. At the same time, the four existing stone steps at the top adjacent to the retaining wall were recapped. Construction of the timber Stairs stopped due to a verbal stop work order on 16 October 2012. At that time, construction was incomplete because the timber handrail and steel cables balustrade had not been constructed. The written stop work order of 19 October 2012 was then issued (discussed above).

2. In late January/early February 2013 a timber handrail and steel cables between the vertical posts were constructed.

3. In late February 2013 the timber handrail and steel cables were extended alongside the lower stone path or steps virtually to the water, and a timber bridge was constructed over a narrow gully at the bottom.

40. Mr Leech is alleged to be vicariously liable for the first and second stages by instructing the builder to do the work. The third stage work was carried out at the instruction of Ms Van Norton. The prosecution does not allege that Mr Leech gave an instruction to do the third stage work. Mr Leech denies that he gave any instruction to the builder to construct the Stairs. Alternatively or additionally, the prosecution contends that Mr Leech is liable for all three stages of construction on the basis of his control over the builder. In that respect, the prosecution’s main argument is that Mr Leech is liable because he had contractual power to countermand any instruction the owners gave the builder to construct the Stairs, and failed to do so.

The development consents

41. In February 2011, on the application of Mr Leech on behalf of Leech Harmon Architects, Council granted development consent for construction of a two storey dwelling house, swimming pool and associated landscaping works on the Property and consolidation of two lots into one. It did not authorise construction of the Stairs. A condition prohibited all works below the top of the cliff without an appropriate licence from the Department of Environment, Climate Change and Water. The development consent was modified in June 2011. The modification did not authorise construction of the Stairs.

42. In July 2012, again on the application of Mr Leech on behalf of Leech Harmon Architects, Council granted a second development consent for alterations and additions to the existing retaining wall on the cliff line, including reduction in ground level and relocation of the glass balustrade on the retaining wall. This development consent did not authorise construction of the Stairs.

43. Neither consent contemplated construction of the Stairs or any work below the retaining wall on the cliff top at the rear of the Property. Mr Leech understood this.

The contract between the owners and the architect

44. The contract between the owners and their architect, Leech Harmon Architects, is evidenced by two offer letters dated 12 April 2010 and 10 May 2011 written by Mr Leech on behalf of the architect to the owners, which the owners accepted.

45. Mr Leech’s letter of 12 April 2010 offered the services of Leech Harmon Architects for, first, design of the house; secondly, contract documentation including preparation of a development application; and, thirdly, contract administration including site visits and certification of works during construction.

46. Mr Leech’s letter of 10 May 2011 proposed variation of the contract administration work and a greatly increased fee for contract administration based on revised plans incorporating an increased scope of works. After stating that the contract administration work will be carried out through Lindsay Little & Associates Pty Ltd in conjunction with Leech Harmon Architects, Mr Leech wrote:

Our duties will include–

1.   To conduct “Observation Inspections” of the works as appropriate including site meetings, certification of progress payments to the Builder and Consultants and deal with day to day matters relating to the Building Contract.

2.   Deal with Builder on all matters relevant to the Fixed Price and the Cost Plus Contracts.

3.   Arrange for the Private Certifier to:

Issue the Construction Certificate

Carry out inspections at relevant stages as required under the DA consent

Issue a Certificate of Occupation

4.   Arrange for Water Board Approval.

5.   Liaison with Structural Engineer on all Structural Design and construction matters.

6.   Attendance at weekly Site Meetings.

7.   Daily discussions with Builder, Client, Clerk of Works, Consultants and Suppliers on building matters as required.

8.   Interpretation of documents and provide on site instructions.

9.   Liaise and assist with selection of materials.

10.   Check Progress Claims and certify same for payment. In addition check invoices for Cost Plus Contract.

11.   Check construction work for adherence to documents and quality of finish.

12.   Monitor job progress against job program.

13.   Issue approvals for delays and/or wet weather.

14.   Provide details of construction and fitout as required.

15.   Assist Clerk of works as required.

47. In fact, Mr Harvey Little, a builder, carried out most of the day to day contract administration on the project, including attending most site meetings, on behalf of Mr Leech. Both men were directors of Lindsay Little Architects, which is connected in some way with Lindsay Little & Associates Pty Ltd (the entity referred to in the 10 May 2011 letter). Lindsay Little Architects were engaged by Leech Harmon Architects to do that contract administration work.

The building contracts

48. In April 2011 the owners and the builder entered into two building contracts:

1. a fixed price contract in the sum of $3,300,000 for construction of the house to the lock-up stage, which was reached in February 2012. The scope of works included a list of specified items. The fixed price contract stated that the contract drawings and specification were prepared by Leech Harmon Architects and were approved by Mr Leech;

1. a cost plus contract, with a budget of $4,620,576, for the “fitout and external works” once the building was brought to the lock-up stage, and for the pool. The scope of the works was described non-exhaustively as including a long list of items. The last item was “any other items that are not covered specifically in the fixed price contract”. Clause 2(g)(i) provided that the owners will ensure the builder receives all terms and conditions of any approval by an Authority which affects or is relevant to the works. Clause 12(a)(i) obligated the builder to comply with any applicable statute.

49. The Stairs were not included in the listed scope of works items in either contract. The construction of the Stairs by the builder in 2012 and 2013 was treated by all concerned as a variation to the cost plus contract. I agree it was a variation. They were constructed pursuant to an oral instruction. Thus, the contractual requirement that an instruction be in writing (see below) was ignored.

50. Clause 8 of the cost plus contract provided:

8.   Possession of the Site, Access and Site Meetings

(a) (i)   The Builder is to have exclusive and uninterrupted possession of and access to the site for the performance of work. The possession to be given to the Builder includes access to other parts of the property necessary to enable the Builder to carry out work.

    (ii)   If access is required to any other property in order for the works to be carried out it will be the responsibility of the Owner to do or authorise any actions necessary to gain such access.

(b)   The Owner acknowledges that the site is a work site which, by reason of the work to be undertaken, can be a dangerous place. As such the Owner will comply with any direction of the Builder concerning site access and movement around the site.

(c)   The Owner or his duly appointed representative or an authorised officer of the Lending Authority may have access to the site for the purpose of inspecting and viewing the progress of the works but only with the consent of the Builder. Access to the site by the Owner without Builder supervision and permission is not allowed.

(d)   The Owner or a person authorised by the Owner to provide instructions to the Builder concerning the works is to be available to attend on site at times nominated in any construction program provided by the Builder or otherwise at mutually agreed times. The parties agree to use any such meetings to discuss and resolve issues relating to the works.

The Builder may record minutes of any meetings and will provide a copy of any such minutes to the Owner.

(e)   Neither the Owner nor any duly appointed representative will give or be entitled to give at any time directions to the Builder’s workers or Trade Contractors relating to the works or any part thereof. Any instructions concerning the works which are to be in writing and are to be provided directly to the Builder.

51. Clause 14 of the cost plus contract provided for variations:

(a)   The works as initially understood at the time of contracting may be varied by:

       (i)   the execution of additional work;

      …

      (iv)   deletions or omissions from the works.

For the sake of clarity a variation is established by:

• Written instructions from the Owner of the Owner’s representative; and or

• The supply to the Builder of post contract details such as drawings; and or

• the discovery of an otherwise unknown or latent condition,

which alters the work done, the work to be done or requires adjustments to an existing situation or the work which was otherwise expected to be done.

Accordingly, a variation may for example result from such things as a request from the Owner, a choice made by the Owner, dealing with latent conditions and complying with the requirements of an Authority.

(b)   The Builder is not obliged to vary the Contract or carry out any extra work unless he consents, which consent is not to be unreasonably withheld.

(c) (i)   If the Builder agrees to undertake a variation by the Owner, the variation is to be detailed in writing ad signed by the Owner (or the Owner’s agent) and the Builder. Documents detailing the variation, including as appropriate, amended drawings or specifications, become contract documents.

   (ii)   The Builder may require, prior to the execution of any variation, that the Owner produce evidence, satisfactory to the Builder, of the Owner’s capacity to pay for the variation.

…

(f)   Neither the Owner nor any duly appointed representative will give or are entitled to give at any time directions to the Builder’s workers or subcontractors concerning the works or any part thereof. All instructions are to be given to the Builder and are to be in writing.

52. Special conditions of the cost plus contract titled “Special conditions to enable Architect administration of cost plus contract” designated Leech Harmon Architects as the architect. Within the cost plus contract, Mr Leech on behalf of Leech Harmon Architects signed an acknowledgement of those further special conditions. They included the following:

SPECIAL CONDITIONS TO ENABLE ARCHITECT ADMINISTRATION OF COST PLUS CONTRACT

The following provisions are to be used by the parties to enable the contract to be administered on behalf of the Owner by a person referred to for the purposes of the contract as the Architect:-

1. (a)   for the purpose of this contract the Architect will be the disclosed agent of the Owner.

  (b)   the Owner, in recognition of the above, will not interfere with or impede the Architect carrying out his duties as an Architect for the purpose of this contract.

2.   The Architect is authorised to and required to:-

  (a)   issue instructions to the Builder, concerning the works to be carried out, amended or corrected.

  (b)   supply to the Builder all relevant documents to enable the works to be carried out including any documents relevant to setting out the works.

Any instruction or direction given by the Architect to the Builder will equal an instruction or direction by the Owner.

3.   In order to determine the amount of money, if any, payable to the Builder by the Owner, the Architect is to assess and certify claims by the Builder pursuant to the provisions of the contract. The Architect must follow the terms of the contract in this regard.

4.   Any instruction which the Architect gives is to be in writing. Where an instruction is given orally, the Architect must promptly confirm it in writing.

Where the Architect fails to confirm an oral instruction in writing, such instruction as recorded by the Builder will constitute a proper and accurate record of the instruction.

Any such recording by the Builder must be served pursuant to the contract on both the Owner and the Architect and within five (5) days of the instruction or lesser period if mutually agreed. The Architect has three (3) days or lesser period if mutually agreed to amend or correct that record. If no alteration is received in writing the Builder’s record will for all purposes stand.

5. (a)   The Builder is to comply with all reasonable instructions from the Architect.

  (b)   If the Builder, by written notice to the Architect, queries the nature of the instruction or the requirement for the instruction, the Architect must within three (3) days of the request or lesser period if mutually agreed, identify the basis for the instruction and answer the query by the Builder.

…

7. (a)   In circumstances where the Architect is replaced by the Owner for the purposes of administering the contract then the Owner must as soon as practicable advise the Builder in writing of the termination of the Architect’s services.

  (b)   However the Owner will be and is bound by and can not disregard any decision, expression of reasonable satisfaction as to work of the Builder, consent or instruction given by the Architect up to the time of notification to the Builder pursuant to (a) above.

  (c)   If the Owner intends to replace the Architect the Builder will have the right to object to any replacement Architect provided the basis for the objection is reasonable.

Witnesses

53. Prosecution witnesses included the builder’s employees or officers Ian Dearlove (the site foreman), Ron Efrat (the project manager) and David Moses (the managing director); Council investigating officers Carl Georgeson, Blake Dyer, Monique Nichols and Glen Hugo; and Office of Environment and Heritage (OEH) investigating officers Deborah Stevenson and Benjamin Hope. Defence witnesses were Mr Leech and Mr Harvey Little, who was a builder engaged by Leech Harmon Architects to do most of the day to day contract administration of the project. He reported to Mr Leech.

Did the defendant instruct the builder to construct the stairs in or about August 2012?

Background

54. Between 2011 and 2013 a dwelling house was constructed on the Property pursuant to the fixed price contract and the cost plus contract of April 2011 between the owners and the builder.

55. In 2010 when Mr Leech was preparing a development application for the dwelling house, the owners expressed a desire to be able to repair the existing stairs to the waterfront at some stage. As Mr Leech was conscious that the cliff was part of the critical habitat of the Little Penguin, he sought advice from an ecologist, Nicholas Skelton, who had been engaged by Leech Harmon Architects to prepare a report to accompany the development application. On the basis of that advice, Mr Leech advised the owners that because of the critical habitat it would be better to obtain development consent for the house and proceed with it before any later attempt to obtain a consent for the repair of the harbour stairs as the latter would take a long time.

56. In January 2012, after consulting Mr Skelton, Mr Leech sought and received instructions from one or both of the owners to make an application to repair the retaining wall on the cliff line and to repair the flight of timber stairs below the retaining wall. Mr Skelton advised him that the retaining wall may be capable of being done with a licence under s 91 of the Threatened Species Conservation Act 1995, but that the timber stairs work would need a development consent including a species impact statement. On 26 March 2012 Mr Skelton provided Mr Leech with a fee proposal for undertaking a species impact statement and with a sketch of timber stairs.

57. On 23 March 2012 Mr Leech applied to the OEH for a licence under s 91 of the Threatened Species Conservation Act. The application stated the following. The proposal involved the replacement of an existing dilapidated retaining wall and glass pool fence 32 metres long and 1 metre wide (on the cliff line). The licence was sought as the proposal was adjacent to Little Penguin critical habitat and above a Little Penguin nest. The proposal does not need a DA. The action does not include any change to the existing stone steps in the centre of the wall. There is no Little Penguin habitat likely to be affected by the proposed action. The application continued:

There is currently no Penguin access to this site due to missing treads in the wooden flight of stairs leading up from the harbour foreshore. There is potential for these stairs to be repaired, if so, access from the foreshore is still poor and unlikely as there is such a large flight of stairs to traverse (see photos) and access into the dense low, weedy vegetation will still be difficult.

58. On 26 March 2012 Mr Leech wrote to the OEH stating in part:

We are about to submit a Threatened Species Development Application for works within Little Penguin Critical Habitat to upgrade/replace a set of existing stairs at 10 Addison Road, Manly that currently allow access to the harbour foreshore for this property.

The stairs are in poor condition with a few steps missing. This flight of stairs will be replaced and the stone and cement steps refurbished to make them safer to use. Draft plans are attached.

This proposal involves land wholly within this property that is above the mean high water mark and below the cliff top. This area is within “Critical Habitat Area B” for the Endangered Little Penguin Population at Manly. The property is also within the known habitat area of the Endangered Long nosed Bandicoot Population at North Head. However due to a pool fence gate, bandicoots are not likely to be able to enter this area.

Should your officers wish to visit the site, they have owners’ permission.

Could you please inform us of your requirements for an SIS with respect to the Environmental Planning and Assessment Act 1979, Section 75F.

To save time and costs we will be going straight to a SIS rather than also having a Flora and Fauna Report on this simple site that is within Critical Habitat. There has also been a recent Flora and Fauna report on this site for the adjacent house that is currently being built. Manly Council will not allow a 5(1)(C) Threatened Species Development Application to be lodged without a SIS as the property is within Little Penguin Critical Habitat and we require Director General’s Requirements in order to complete the SIS. I believe that Benn Treharne is already familiar with the site.

Could you please process this request as soon as possible so that the SIS can be finalised.

59. Following advice dated 20 April 2012 received from Mr Skelton and the likely significant delay for a development consent for the Stairs and the need for a retaining wall approval application to be lodged urgently, Mr Leech lodged a modification application under s 96 of the EPA Act for the repair to the retaining wall alone. Later he was told that a new development application would be required for the retaining wall work. Therefore, he withdrew the modification application and on 7 May 2012 lodged a development application for “repairs and restoration of existing rock retaining wall”. Council granted consent to that application on 5 July 2012. The consent described the proposed development as, “Alterations and additions to existing retaining wall including reduction in ground level by 900mm and relocation of glass balustrades”.

60. Before that consent was granted, the builder pulled down the retaining wall between 23 April and 3 May 2012 and rebuilt it between 3 May and 16 June 2012.

Site meetings

61. Site meetings in relation to the project were usually held each Monday morning. According to Mr Little, whom I accept in this respect, before the lock-up stage they usually commenced at a nearby apartment of the owners before continuing on site, but after the lock-up stage they were mostly held on site. In 2012 Mr Leech attended few site meetings. Mr Little attended most of them. Mr Little agreed in cross-examination that he was Mr Leech’s “eyes and ears” on site. Mr Little could not recall Mr Leech being present at any site meetings between June 2012 and February 2013. Site meetings were also usually attended by the owners, the owners’ clerk of works Sean Hannigan and three builder’s representatives: site foreman Ian Dearlove, project manager Ron Efrat and managing director David Moses.

Contemporaneous records

62. There are in evidence three sets of contemporaneous records: site meeting minutes kept by Mr Efrat, hand written notes of site meetings made by Mr Little for his own benefit, and a daily diary site kept by Mr Dearlove which recorded site visitors, activities and architect’s instructions. Many of the site meeting minutes kept by Mr Efrat are not in evidence: they cannot now all be located. Relevant missing site minutes include those for 30 July 2012, between (but not including) 27 August 2012 and 15 October 2012, and after 3 December 2012. The minutes in evidence do not expressly record who was present and are in the form of emails from Mr Efrat to persons who were present as well as to others if they needed to be advised of what had been discussed. Mr Efrat sent such emails to the owners, Mr Hannigan and Mr Moses whether or not they attended a particular site meeting. Mr Little regularly attended site meetings. Mr Leech rarely did so, but Mr Little showed the emails to Mr Leech. Astutely, Mr Efrat understood that if he sent minutes to Mr Little, he was also sending them to Mr Leech because they were one body.

Contemporaneous records 30 July – 15 October 2012

63. It is convenient to first analyse the contemporaneous written records relating to the Stairs and the evidence of Council and OEH officers before considering in detail the evidence at trial of Messrs Dearlove, Efrat, Moses, Little and Leech.

64. On 30 July 2012 there was a site meeting. An agenda for this meeting, received by Mr Little, is in evidence. There are no minutes in evidence, nor did Mr Little receive any minutes. Mr Little’s notes made at the meeting support his evidence that an owner instructed the builder to replace the Stairs. I consider this important evidence in more detail below.

65. Mr Little’s handwritten notes, written at site meetings, contain only two references to the subject stairs: at site meetings on 30 July 2012 and 21 January 2013, neither of which were attended by Mr Leech.

66. The first written record of work being carried out in relation to the new Stairs appears in Mr Dearlove’s site diary for 17 September 2012. The site diary records that work on the Stairs commenced on 17 September 2012 (“template for rear stairs”), continued on 21 September 2012 (“stairs to water set out”), 27 and 28 September 2012 (“stairs to penguins”), and 2 October to Tuesday 16 October 2012 (“stairs to penguins”) when it stopped due to a verbal stop work order given to the builder on that date during a site visit by OEH and Council investigating officers (see below). At that time the Stairs then under contemplation were complete except for the handrails and the steel cables between the vertical posts.

67. Other evidence establishes that work was done in the relation to the Stairs in the garage on site starting on about 27 September, and that their installation over the cliff commenced on Monday 8 October 2012 (see below OEH officer Deborah Stevenson’s report re her site visit on 16 October 2012 and the notes of OEH officer Mr Hope on that date).

68. In Mr Efrat’s fortnightly project budgets, the Stairs first appeared under the heading “Carpentry” in the project budget of 24 September 2012: “Waterfront staircases $20,000”. They also appeared in a budget comparison document prepared by Mr Efrat on the same date as “Staircases to waterfront”. They did not appear in the builder’s preceding project budget of 31 August 2012. They did appear in the builder’s project budgets dated 5 October and 19 October 2012, which were respectively part of the supporting documentation for progress certificates Nos 23 and 24 certified for payment by Mr Leech on 15 and 26 October 2012, following approval for payment by Mr Little. Invoices totalling over $5,000 dated 26 September and 3 and 4 October 2012 for timber and associated screws and brackets for the Stairs were also included in the supporting documents for progress certificate No 23.

69. On Friday 12 October 2012 two Council officers, Carl Georgeson and Shane Smith, conducted a site inspection and took photos of the Stairs. Mr Georgeson asked Mr Dearlove if he was aware that the Stairs works are unlawful and require consent. Mr Dearlove said that the owners advised him to carry out the works. Mr Georgeson said they needed to stop work and he would send a formal stop work order shortly.

70. Mr Dearlove informed Mr Efrat of what had happened and Mr Efrat informed Mr Moses. According to Mr Moses, he responded that work should stop. Nevertheless, work on the Stairs continued on 15 and 16 October 2012, as the site diary records.

71. On Monday 15 October 2012 there was a site meeting and the attendees were on site. They were the owners and Messrs Little, Hannigan, Dearlove, Efrat and Moses. Neither the minutes of this site meeting nor the site diary indicate that Mr Leech was present. There was a telephone conversation between Mr Moses and Mr Leech on that day, which is alluded to in the site meeting minutes of 15 October 2012 as follows:

HH replaced the existing dangerous staircase to the back as instructed. HH has notified DL regarding Council and DL advised he will sort it out.

72. “HH” meant the builder Horizon Habitats Pty Ltd; “DL” meant Denis Leech. It appears, and is confirmed by Mr Efrat’s evidence, that the second sentence indicated that the builder had notified Mr Leech of the Council officers’ visit on 12 October: it was this that Mr Leech advised he will sort out.

73. Work on the Stairs stopped on 16 October 2012 because on that day there was a site visit by Council officers and OEH officers when one of them gave a verbal stop work order and told Mr Dearlove that a (written) stop work order would be issued. The site diary for 16 October 2012 records, “Stop work order issued”. Mr Dearlove told the owners about this.

74. One of the OEH officers who attended the site on 16 October 2012 was Ms Deborah Stevenson, whose evidence I accept. Earlier that day she spoke by telephone to Mr Leech. Her contemporaneous handwritten note of her telephone conversation with Mr Leech, with which her oral evidence was consistent, was as follows:

- I rang Denis to ask for permission to go on site & inspect works (stair case) in critical habitat @ 10-10A Addison Rd Manly

- Denis confirmed that the owners of 10-10A Addison Rd were overseas & said that he was authorised to give owners consent for activities on their property.

- I told Denis I would email him & request permission to go on site. I asked that he respond to my email ASAP

- Denis told me that the site was a construction site & said I would need a green card. He said that the site foreman (Ian Dearlove) would be able to induct me in lieu of a green card. I told him I had a green card.

- Denis then told me what works had been undertaken @ 10-10A Addison Rd. He said that there was an old timber stair case in critical habitat which leaves the property from an old retaining wall.

- Denis then provided a background to the works on the retaining wall. He explained that the wall was collapsing & said that council had required a DA for its repair. He said that the DA issued by Council for the retaining wall had stipulated that works were not to impinge on critical habitat. These works were undertaken because he was concerned that the wall might collapse into the critical habitat & injure the little penguins.

- Denis said that he was also concerned that the delapidated [sic] staircase below the retaining wall would collapse & injure penguins below & that the owners of 10-10A Addison would incure [sic] a fine as a result.

- Consequently Denis said that they went over the edge of the cliff line into critical habitat, which he knew was illegal, & repaired the stairs.

- Denis said that he understood that the area was a sensitive one, so the works were done carefully.

- Denis said that he recalled dealing with me in relation to the da for 10-10A Addison Rd. He mentioned the studies that had been done to support this DA

75. Mr Leech in evidence said he did not disagree with much of the contents of that note, but nevertheless qualified it in a way that presented himself as being unaware that works had been carried out below the cliff line and as postulating to Ms Stevenson that it could have been to carry out works in relation to the retaining wall and stone stairs. I prefer Ms Stevenson’s contemporaneous note as likely to be more accurate.

76. In an email to Ms Stevenson later on 16 October 2012, Mr Leech on behalf of the owners gave permission to enter the Property to carry out an inspection.

77. Later on 16 October 2012, Ms Stevenson, another OEH officer Benjamin Hope, and two Council officers Monique Nichols and Aleisa Lamanna, inspected the Stair works and spoke to Mr Dearlove and to Peter Westwood, the builder’s deputy site foreman. Shortly after the site inspection, Ms Stevenson prepared an inspection report (based on her notes), the accuracy of which I accept. It included the following account of what was said by Mr Dearlove or Mr Westwood:

I asked who had authorised the works. Ian said that the works had been authorised by Greg Poche, the owner of 10 – 10A Addison Road. Ian spoke to Mr Poche about the state of disrepair of the staircase at one of their weekly site meetings. Ian recommended that the staircase be replaced. Mr Poche said that it would take two months to get approval for this from Council and told Ian to go ahead and replace the stairs without any approval because they were a safety hazard. I asked Ian whether Mr Poche had given him written instructions to replace the staircase without approval from Council. Ian said that the instructions from Mr Poche were verbal only.

I asked who had undertaken the works. Ian and Peter told me that the works had commenced on Monday 8 October 2012. The components of the staircase were cut and assembled on-site in an underground garage prior to the staircase being installed in critical habitat.

I asked whether the works were complete. Ian said that apart from the handrails, which had yet to be installed, the staircase was complete.

I asked whether Ian and Peter were aware that the works were in critical habitat for the endangered population of Little Penguin at Manly. Ian and Peter replied that all of the workers on site, including them, were aware that works were in Little Penguin critical habitat. Ian added that the owner of 10 – 10A, Mr Poche, also knew that the staircase was being constructed in Little Penguin critical habitat.

I asked what approvals were sought for the works. Ian said that no approvals were sought even though he, Peter Westward and the owner, Mr Poche, knew that approvals were required.

I asked what precautions were undertaken in removing the old staircase and constructing the new staircase in critical habitat. Ian said that they tried to minimise the amount of work undertaken in critical habitat by preparing and assembling as much of the new staircase as possible in the underground garage of 10 – 10A Addison Road and then installing it critical habitat.

[emphasis added]

78. During the Council and OEH site visit on 16 October, Mr Hope took notes. His note of what Mr Dearlove said included the following:

Constructed new stair in same location to BCA standard – Authorised Greg Poshe [sic] spoke at weekly site meeting – builder said not allowed, owner not prepared to wait two months, and said to proceed – dismantled with hammer – work performed by employees, carpenter and 2 apprentices – penguin induction to all (very aware)…works performed Monday last week stairs assembled inside and lowered in – brush cut after installation – complete bar hand rail – 1 penguin at start of excavation moulting penguin late to leave it was approximately 18 months ago at start date…architect not involved with design; designed on site – aware works in critical [habitat] – Mr Poche also aware, but more concerned about public safety – no approval sought, builder aware it was required, “it will take months”.

[emphasis added]

Evidence of witnesses

79. I turn to the evidence at trial of Messrs Dearlove, Efrat and Moses for the prosecution and the evidence of Messrs Little and Leech for the defence concerning who gave an instruction to replace the old stairs.

80. It is the defence case that the owners instructed the builder to replace the old stairs at a site meeting on 30 July 2012 when Mr Little but not Mr Leech was present; that a 15 October 2012 telephone conversation with Mr Moses after the Stairs were partly constructed was the only occasion when Mr Leech said he would sort it out with Council; and that the evidence of prosecution witnesses that he used substantially the same words and more on an earlier occasion should not be accepted.

A meeting on 30 July 2012

81. On 30 July 2012 there was a site meeting. Mr Little gave clear evidence of this meeting, which I accept. Mr Efrat’s email containing the agenda for the 30 July 2012 meeting was received by Mr Little and is in evidence. Any minutes for this meeting are missing from the evidence and were not received by Mr Little. Those present included (but were not necessarily limited to) the owners, Mr Dearlove and Mr Little. Mr Leech was not present. Towards the end of the meeting they were standing near the gap in the retaining wall at the rear of the Property. In the context of what Mr Little saw as an absence of any provision for what was to happen to the old stone stairs and the timber stairs, Mr Little was privy to a conversation between Mr Dearlove and Mr Poche. Mr Dearlove pointed to the gap and asked what are we going to do about the stairs, they cannot be left like that because they are dangerous. Mr Poche told Mr Dearlove, “You better go ahead and replace those stairs then”.

82. Mr Little’s handwritten notes made at this meeting allude to this instruction by the words, “Ian 11. Rear stairs to Harbour OK” and “12. Detail of side of stairs”. The latter note was in respect of a statement made by Mr Dearlove: “Was there ever a balustrade attached to the old timber stairs? Are replacement balustrades being added to the new stairs?” Mr Little could not recall the answers to those questions.

83. In cross-examination, Mr Dearlove agreed that at the meeting on 30 July 2012 he asked what are we going to do about the stairs because they cannot be left like this. He agreed that somebody at the meeting suggested it was okay for him to build the stairs, and said that it was Ms Van Norton’s decision that they go ahead and build the Stairs but the decision was possibly some time later. He said it was discussed on more than one occasion. He then appeared to backtrack, saying it was possible a conversation about the stairs occurred on 30 July but he did not recall it.

84. I prefer Mr Little’s clear evidence as to the 30 July 2012 meeting, which is supported by his contemporaneous handwritten notes.

85. In cross-examination, Mr Little gave the following evidence, which I accept. He thought it very important to tell Mr Leech what was said at the 30 July 2012 meeting with respect to the stairs. He relayed to Mr Leech that approval was necessary and that people wanted to go ahead with the stairs now. He raised this issue with Mr Leech a handful of times after 30 July. He was not aware of the work in relation to the Stairs in the garage on site before the Stairs were installed on the side of the cliff. He became aware that the Stairs were being constructed without approval and relayed this to Mr Leech and Mr Leech responded that at some stage approval would be obtained. I observe that it appears that this must have occurred in the week commencing 8 October 2012 because, as noted above, Mr Dearlove told the OEH officers on 16 October 2012 that construction (installation) commenced (on the side of the cliff) on that date. It appears likely that it occurred on 11 October 2012 because that is the only day that week that the site diary records Mr Little as being on site. It is possible that it was on 9 October because Mr Little’s own diary notes that he was to meet with the owners at Manly that day.

86. Mr Little had no recollection of a meeting after 30 July 2012 attended by the owners and Messrs Moses, Dearlove, Efrat, Little and Leech when the stairs were discussed. He accepted that it was possible such a meeting occurred. He denied that Mr Leech said at such a meeting to go ahead with the stairs. He based this denial on his recollection as well as on his assessment that the man he knew would not say this when there was no approval. This assessment was undermined (as he substantially conceded in cross-examination) by the fact that on 29 January 2013 Mr Dearlove sent Mr Leech an email recording the latter’s instruction to complete the footpath crossing without Council approval.

87. In cross-examination or re-examination, Mr Leech gave evidence to the following effect, which I accept to the extent that it is not inconsistent with the evidence of Mr Little. Following the 30 July 2012 meeting, Mr Little reported to him that the owners had instructed the builder to go ahead with the Stairs. Mr Leech did not understand there was a timeframe or that it was going to happen immediately. It was put to Mr Leech twice in cross-examination that he told Mr Little he would try and get approval for it in future. On each occasion, Mr Leech’s disjointed reply was not a denial. He replied to Mr Little that it could not be done without approval and that he was hopeful the owners’ instruction left a bit of time (to get approval). He also replied, “That wasn’t a firm decision...there was no program given to me by [the owners] to proceed with preapprovals or whatever…I had no reason to assume that they were about to unilaterally carry out works.” In the context of his October 2012 progress certificates he became aware from Mr Hannigan that preparatory work was being done in the garage to prepare the stairs for whatever they were ultimately going to do. Mr Hannigan told Mr Leech they were doing preparatory work purchasing materials for the stairs etc. At some stage Mr Leech became aware that work on the stairs had commenced. On 24 September 2012 he began certifying payment of invoices for materials for the stairs. He heard scuttlebutt that broken treads on the old stairs were being replaced.

A meeting in or about August 2012?

88. Mr Dearlove’s evidence included evidence to the following effect (allowing for differences between his evidence in chief and in cross examination). There was a site meeting in early August 2012 at which the owners, Mr Little and Mr Leech, and perhaps Mr Efrat and Mr Moses were present. Ms Van Norton said she wanted the stairs built as soon as possible. Mr Moses brought up that they weren’t supposed to be down there. Ms Van Norton told Mr Leech to sort it out with Council. Mr Leech said he would get it sorted with Council. Ms Van Norton said go ahead and start building the Stairs as soon as possible. In cross-examination, Mr Dearlove attributed four additional words to Mr Leech: “Go ahead with it”. The way those additional words came into the evidence are unimpressive and I attach no weight to them, particularly having regard to Mr Dearlove's pre-trial statements. In Mr Dearlove’s pre-trial record of interview by a Council solicitor in May 2014, he said that the owners gave the instruction and told Mr Leech to get a s 96 (EPA Act modification) and Mr Leech said we'll sort that out just get them built before someone falls down there and hurts themselves. However, in the interview he then said that those words probably came more from the owners. Earlier, on 16 October 2012, Mr Dearlove told OEH officers that it was Mr Poche that who the instruction, and on 12 October 2012 he told Mr Georgeson that the owners gave the instruction.

89. Mr Efrat’s evidence included evidence to the following effect. There was a site meeting a few weeks before the 24 September 2014 budget for the Stairs, which was attended by the owners, Mr Little, Mr Leech, Mr Dearlove and Mr Moses and possibly Mr Hannigan. Mr Leech advised the clients that the stairs could be replaced and it would not be an issue, and the owners instructed the builder to replace the stairs. Mr Efrat assumed that next day the builder could rip up the staircase and replace it.

90. Mr Moses gave evidence to the following effect. There was a site meeting prior to 12 October 2012 and after construction of the Stairs was under way, attended by the owners, Mr Efrat and Mr Dearlove perhaps Mr Hannigan, and possibly Mr Little. At the meeting he was made aware that repairs to the stairs were under way. He was unaware at that time that the bulk of fabrication of the stairs had already taken place in the garage on site. Mr Moses seemed unsure whether Mr Leech was present at this meeting; however, he said he believed it was Mr Leech who said at the meeting he would deal with Council.

91. Since other evidence indicates that construction (installation) of the Stairs following work in the garage on site commenced on 8 October 2012, it seems that the meeting to which Mr Moses referred was between 8 and 12 October 2012.

92. Mr Moses’ evidence is inconsistent with his June 2014 interview by a Council solicitor when he indicated that at a site meeting on 15 October 2012 Mr Leech said he would sort Council out and it wouldn’t be a problem, and that he did not recall any earlier meeting in relation to the Stairs. I am not satisfied beyond reasonable doubt that Mr Leech was at the meeting to which Mr Moses referred.

93. That conclusion and the other evidence of Mr Moses cast some doubt on the reliability of the evidence of Mr Dearlove and Mr Efrat because they say Mr Moses was present at a meeting when the Stairs instruction was given before Stairs construction commenced, whereas Mr Moses says that the meeting he attended was after construction commenced.

94. Mr Leech denied that he was ever at a meeting in the period July to September 2012 at which he said it was OK to go ahead with the Stairs or that he would sort it out with Council.

15 October 2012

95. There was a site meeting on Monday 15 October 2012, which Mr Leech did not attend. Mr Moses gave evidence that at this site meeting it was said that on the preceding Friday rangers had told Mr Dearlove to stop work, Mr Moses inquired why they needed to do the work on the Stairs, and someone, whom I conclude was probably Ms Van Norton, said it was because the Stairs were in a poor state of repair.

96. Mr Moses gave evidence that on 15 October 2012 he had a telephone conversation with Mr Leech when Mr Moses said that Council had come and stopped the work and Mr Leech said the stairs were unsafe and need to be repaired and he would deal with Council. However, in cross examination Mr Moses ultimately conceded that all Mr Leech said was that he would sort it out with Council and that he could not recall whether or not it was only Ms Van Norton who gave the instruction.

97. I prefer Mr Leech’s following clearer account of his telephone conversation with Mr Moses on 15 October 2012. Mr Moses said, “Council had been to the site and told us to stop work at the back. We have replaced the staircase as instructed by Greg and Kay as it was dangerous. Can you sort this out?”. Mr Leech said, “OK, I will sort it out with Council”.

98. Mr Leech’s recollection of that conversation is more consistent than that of Mr Moses with the minutes of the meeting and with a follow-up email of 15 October 2015 from Mr Efrat to Mr Leech, as follows: “As discussed, we had a safety issue with the existing back wall staircase. It was crumbling and falling apart. We rebuilt it in the same position and as it was in order to make sure no one gets injured”.

99. In evidence Mr Leech said the following. As at 15 October 2012 he understood the old stairs had been repaired but did not know the full extent of the work because he had not been on site for several months and relied on what he was told on 15 October by Mr Moses by telephone and by Mr Efrat by email. He assumed from that telephone conversation and email that the rebuilding of the back staircase was a reference to the stone stairs above the timber stairs because the email refers to “stairs crumbling and falling apart”. At that date and for a while afterwards he was still not aware of the construction of new Stairs. The statement in his letter to Council of 7 October 2012 (see below) that the works were not a new construction but replacements of timber components of an existing stair reflected his state of awareness at that time, and he had not at that stage been to the site to inspect what had been constructed. He did not realise the extent of the scope of the work on the Stairs until he received an email from Mr Dearlove enclosing photographs on 22 January 2013 (discussed below).

100. On Mr Leech’s own evidence, on 15 October 2012 he was told by Mr Moses that the builder had “replaced the staircase as instructed by” the owners. Mr Leech certified for payment for timber for the new Stairs on 15 October 2012. On Mr Little’s evidence, which I have accepted, after the meeting of 30 July 2012 when an owner instructed Mr Dearlove to replace the stairs, Mr Little reported what had occurred to Mr Leech. Mr Little was Mr Leech’s “eyes and ears” on the site, became aware most likely on 11 October 2011 (as discussed earlier) that the Stairs were being constructed, and at some unknown time thereafter, relayed this information to Mr Leech. On the evidence, it is difficult to accept that as at 15 October 2012 Mr Leech did not understand that replacement of the old timber stairs had commenced. However, I am prepared to give him the benefit of the doubt and conclude that at that date he thought it was the old stone stairs that had been replaced and that repair work had been carried out on the old timber stairs.

Conclusion

101. I have accepted Mr Little’s evidence as to the 30 July 2012 meeting, which Mr Leech did not attend, when an owner gave an instruction to replace the Stairs. It is unnecessary to resolve the conflict between the witnesses as to whether there was a further meeting attended by Mr Leech at which the owners or an owner again gave that instruction and when Mr Leech said something in relation to it. At its highest, if the evidence of the prosecution witnesses Mr Dearlove, Mr Efrat and Mr Moses were to be considered in isolation from the competing evidence of Mr Little and Mr Leech, I would have decided that after the meeting of 30 July 2012 there was another meeting when the owners or one of them again instructed the builder to replace the old stairs and that Mr Leech said he would sort it out with Council. Given the differences between and within, in their evidence and between their evidence and earlier records of interview of Mr Dearlove and Mr Moses, I would not have been prepared to conclude that Mr Leech said any more than that. However, it is unnecessary to decide whether there was another meeting after 30 July 2012 at which the owners or an owner again gave that instruction and Mr Leech said he would sort it out with Council. That is because Mr Leech’s statement that he would sort it out with Council did not constitute an instruction to the builder to construct the Stairs.

102. Accordingly, I do not accept that the prosecution has proved beyond reasonable doubt that in or about August 2012 Mr Leech instructed the builder to construct the Stairs.

Did the defendant instruct the builder to finish the Stairs on 29 January 2013?

103. On 19 October 2012 Council sent the owners a document that it alleges was a stop work order in relation to the partly constructed Stairs in terms of order 19(a) under s 121B of the EPA Act. It became the subject of the stop work order charge that I dismissed at trial as against Mr Leech and Ms Van Norton.

104. In early December 2012 the owners sent Mr Leech a copy of Council’s notice, addressed to the owners, of intention to issue an order for removal of the Stairs under s 121B of the EPA Act. Although the notice was dated 9 November 2012, a handwritten note by Mr Poche on the copy sent to Mr Leech evidences that the owners had been overseas and only saw it on their return in early December.

105. On 7 December 2012 Mr Leech on behalf of the owners wrote a letter to Council in response to the notice, which included the following:

1.   The Orders refer to a “new timber and masonry stair”, which we would agree requires Council consent. The Orders appear to be predicated on the works in question being a new construction.

2.   The “works” are in fact replacement of timber components of an existing stair that was in serious disrepair due to timber rotting and weather damage. The existing stair is on our Clients’ property and although used irregularly, it provides vital access to the lower part of the site for maintaining the property.

Remedial works to the stair, as with other access structures on adjoining sites, have been regularly carried out over many years by previous owners of the properties.

3.   In the case of this most recent maintenance work, Council Officers attended the site, and raised the issue of the works being within a critical habitat for small penguins and ordered that the works not continue until a future suitable time that would not effect [sic] the penguin colony.

The remedial work was immediately stopped and will not commence until we ascertain and are advised of a suitable time in the coming months.

106. The statement in the first sentence of paragraph 1 of the letter is inaccurate because the intended orders did not expressly describe the “timber and masonry stair” as “new”. However, that was their implicit predicate.

107. On 16 December 2012 Ms Van Norton emailed Mr Little and Mr Leech on the subject of the occupation certificate requesting them to come to the site meeting next day with the solutions to Council’s demands. She referred to “our site meeting many weeks ago” and to the stop work order that had been given. That site meeting appears to have been the one on 15 October 2012. There are no site meeting minutes for 17 December 2012 in evidence. The site diary for that day records Ms Van Norton, Mr Little, Mr Moses and Mr Hannigan, but not Mr Leech, on site. However, Mr Little recalled that Mr Leech and he both went to a site meeting that day. It is reasonable to infer that Mr Leech would have looked at the Stairs on that occasion.

108. That email of 16 December 2012 is unclear to an outsider reading it. However, on the evidence of Mr Little, which I accept, the owners were concerned that all outstanding works under the development consent be completed in order that the certifier, Fitzgerald, could issue an occupation certificate before 1 January 2013 so as to avoid the owners incurring land tax in respect of the Property.

109. On 19 December 2012 Mr Leech issued a certificate of practical completion.

110. On 21 January 2013 at a meeting that Mr Leech did not attend, Mr Little made a file note: “Back stairs – railing”. Mr Little did not recall with whom that subject was discussed. He had a vague recollection that stainless steel was discussed as a possibility for completing the handrail for the Stairs.

111. On 22 January 2013 Mr Dearlove emailed Mr Leech three photographs of what the email described as, “Manly penguin stairs”. The photographs show the partially constructed Stairs without a handrail and with a sign at the top stating, “DANGER DO NOT ENTER”.

112. In his affidavit, Mr Leech said he did not realise the full scope of works on the timber stairs until he saw those photographs. This suggests that it was then that he first realised that the old stairs had been replaced. However, in cross-examination he appeared to retreat from this, saying the photographs could be construed not as replacement of the old stairs but “as lifting the old stairs up, sanding them down, replacing every single piece of them and putting them back in exactly the same location is what I was told so when I looked over the edge of these things in the January period with work having stopped on it I wasn’t able from standing up the top to determine whether or not they were the original old stairs with new treads, whether they had new foundations, whatever.”

113. It is difficult to accept his suggested interpretation of the photographs. Prima facie they appear to me to indicate new Stairs. If he looked over the edge in January (as he seemed to indicate), it should have created the same impression.

114. On 23 January 2013 the owners signed permission for Mr Leech to lodge a building certificate in respect of the Stairs.

115. On 25 January 2013 Mr Leech, on behalf of Leech Harmon Architects, lodged with Council an application for a building certificate under s 149B of the EPA Act to regularise unauthorised work described as “repair and restoration of existing external stairs on property”. An attached site survey plan showed the extent of the stairs that had been constructed at that time ie down as far as the cave in the cliff. One of the plans enclosed with the application indicated that below the Stairs, “existing stone stair and path with pipe handrails” were to be retained. In fact, as noted below, in February 2013, at the oral direction of Ms Van Norton, those pipe handrails were replaced by a timber handrail and steel cables balustrade and, at the bottom, a timber bridge was built over a narrow gully close to the water.

116. Mr Dearlove’s site diary for 29 January 2013 is important because it is the basis of the prosecution case that on that date Mr Leech instructed Mr Dearlove to finish the Stairs. The site diary for that date includes reference to an architect’s instruction:

from Denis 1) finish penguin handrail 2) go ahead with footpath crossing.

117. “Denis” was a reference to Mr Leech. The site diary does not record Mr Leech visiting the site on 29 January 2013.

118. On the same day, 29 January 2013, Mr Dearlove sent Mr Leech (and apparently others) an email:

Dear All, confirming our instructions to proceed with the crossover as per plans and without Council approval.

119. The “crossover” is a reference to the footpath crossing referred to in the site diary. It appears that there was no development consent as at 29 January 2013 for the crossover.

120. At trial Mr Dearlove said he directed the carpenters to complete the Stairs, and that while they were being constructed, Ms Van Norton also instructed him that the Stairs needed to be completed.

121. Site diary activity entries thereafter included: 30 January 2013 “handrails to penguin fence”, 31 January “handrail to penguin stairs”, 1 February “handrail to penguin fence”, 4 February “penguin stair handrail”, 5 February “s/s [stainless steel] wire ballistrade [sic] to penguin”, and 6 and 7 February “s/s wire ballistrade [sic]”.

122. While that work on the Stairs was going on, Ms Van Norton asked Mr Dearlove to build a bridge across a gully at the base and to finish the new handrail down to there. This extra work, including the wooden handrail, steel cables and a wooden bridge at the base, was done and was noted in the site diary for 27 and 28 February 2012 as: “handrail to rock” and “handrail to rock platform”.

123. As a result of Council requesting additional fees, on 27 February 2013 Mr Leech lodged with Council a revised building certificate application, which described the unauthorised work as “repair of existing timber external staircase”.

124. On 5 August 2013 Council refused the building certificate application and issued an order to the owners under s 121B of the EPA Act to remove the Stairs on the ground that they were erected without consent. In 2014 the owners’ merits appeals against both decisions were allowed by a commissioner of this Court: Poche and Anor v Manly Council [2014] NSWLEC 1274. The commissioner’s subsequent orders approved the issue of a building certificate on certain conditions as to work to be done and observance of a plan of management which, among other things, provided for protection of the penguins.

125. In a May 2014 interview of Mr Dearlove by a Council representative, Mr Dearlove said that it was Ms Van Norton who gave the instruction to complete the handrail for the Stairs and indicated that this was in a context where she was looking after things on the job as Mr Poche had had a stroke or something. In the interview he did not say that Mr Leech had given an instruction to complete the handrail for the Stairs.

126. Inconsistently, at trial Mr Dearlove gave evidence that on 29 January 2013 Mr Leech instructed him by telephone to complete the penguin handrail, and that Ms Van Norton had obviously been onto Mr Leech because he did not think Mr Leech otherwise would have rung and given the instruction. In giving that evidence, Mr Dearlove relied entirely on his said site diary entry “finish penguin handrail” on that day. He had no independent recollection of Mr Leech giving the instruction.

127. In cross-examination, Mr Dearlove agreed that in May 2014 he had no recollection of Mr Leech telling him to finish the handrail on the Stairs and explained his inconsistent evidence at the May 2014 Council interview by saying he did not have his site diary with him at the interview.

128. Mr Leech gave the following affidavit evidence. He had no recollection of speaking to Mr Dearlove on 29 January 2013. He did not recall giving any instruction to finish the “penguin fence” or the “penguin handrail”. He certainly gave no instruction to finish the Stairs. The only distinct instruction he recalled was the one confirmed in writing by Mr Efrat on that day to complete the footpath crossing. The terms “penguin fence” or “penguin handrail” was an expression he used to describe the glass balustrade above the retaining wall at the rear of the property that prevented access to the cliff and the penguin habitat below, and that as used by him it was not related to the Stairs. At the time, he was liaising with the certifier (Fitzgerald) to finalise outstanding matters to enable the issue of an occupation certificate. Matters that needed to be completed before an occupation certificate could be issued included the footpath crossing, the glass balustrade and gate on top of the retaining wall, and the adjacent glazed fence panel between the Property and the adjoining land to the north. If he gave any instruction to complete the “penguin handrail” or “penguin fence” (which he did not recall), it was about completion of the balustrade and fence on top of the retaining wall.

129. In cross-examination Mr Leech said the following. In late January 2013 he studiously avoided any instruction in relation to the Stairs because of the actions they were taking (I understand this to be a reference to the building certificate application of 25 January 2013). He did give an instruction to Mr Dearlove on 29 January 2013 to finish the glass balustrade on top of the retaining wall. In that regard, he could not remember whether he used the words “penguin handrail” or “handrail, balustrade or the like”. The penguin handrail was the component on the site that prevented penguins entering the site or people entering the penguin area, it was incomplete and the occupation certificate certifier was “screaming” about it. Like the footpath crossing, its completion had become critical for the occupation certificate.

130. I observe that his recollection in cross-examination of giving an instruction on 29 January 2013 to complete the glass balustrade is not consistent with his affidavit evidence that he did not have a distinct recollection of giving an instruction other than in relation to the footpath crossing. The discrepancy is troubling. On the basis of the discrepancy, the prosecutor suggested to him that he was not being honest, which he denied.

131. I am satisfied that, pursuant to an instruction, work on the Stairs down as far as the cave was completed between 30 January and 7 February 2013. Then, pursuant to an instruction by Ms Van Norton, on 27 and 28 February 2013 the handrail and steel cable balustrade were extended to close to the water and a small bridge was constructed over a gully at the bottom.

132. The question remains whether it has been proved beyond reasonable doubt that the first mentioned instruction was given by Mr Leech and that he thereby intended to refer to the handrail on the Stairs.

133. I am satisfied that on 29 January 2013 Mr Leech gave an instruction to Mr Dearlove to complete something which was described in the latter’s site diary as “penguin handrail”. I am prepared to accept that he used the expression “penguin handrail” to Mr Dearlove. Mr Little’s evidence was that the term used on site for the railing that went down the stairs was the penguin hand railing, which is consistent with Mr Dearlove’s evidence as to his understanding.

134. However, I have a reasonable doubt as to whether Mr Leech intended to refer to the handrail for the Stairs. Mr Leech’s evidence was to this effect: (a) in giving instructions to Mr Dearlove on 29 January 2013 he was focussed on obtaining an occupation certificate from the certifier, Fitzgerald; (b) Fitzgerald was “screaming” for completion of two items: the footpath crossing and the swimming pool fence, which included the glass balustrade and gate on top of the retaining wall and the adjacent glazed side boundary fence; (c) the two instructions he gave Mr Dearlove on 29 January 2013 and recorded in the site diary were intended by Mr Leech to refer to those two items; and (d) in his mind that glass balustrade (and gate) was the penguin fence or penguin handrail that kept penguins out of the construction site. The following matters provide some support for his evidence:

1. Mr Dearlove told Council when interviewed in June 2014 that it was Ms Van Norton who instructed him to complete the Stairs.

2. In evidence, Mr Dearlove had no independent recollection of Mr Leech giving an instruction to finish the Stairs but relied on his “finish penguin handrail” diary entry for 29 January 2013 to conclude that he did.

3. Approved plans in both development consents described the existing glass balustrade above the retaining wall as “handrail”.

4. There is ambiguity in the expression “penguin handrail” in the site diary for 29 January 2013. That description does not appear elsewhere in the site diary in respect of the Stairs. The activity on 30 January 2013 is identified in the site diary as “handrail to penguin fence”. There is a question as to whether the “penguin fence” was the same as the “penguin stairs”, which was the description in the site diary activity for 31 January and 4 February 2013. The Statement of Environmental Management under the first development consent for the project required a fence on top of the cliff to keep penguins out of the construction site. The old and then the new glass balustrade above the retaining wall constituted that fence, as Mr Dearlove agreed in cross-examination.

5. On 16 December 2012 Ms Van Norton emailed Mr Little and Mr Leech on the subject of the occupation certificate requesting them to attend the site meeting tomorrow with their solutions to the owners’ problem and referring to Fitzgerald (the private certifier for an occupation certificate) and the stop work order. The email is unclear to an outsider reading it. However, on the evidence of Mr Little, the owners were concerned that all outstanding works under the development consent be completed in order that Fitzgerald could issue an occupation certificate before 1 January 2013 so as to avoid the owners incurring land tax liability in respect of the Property.

6. On 20 December 2012 Fitzgerald conducted a final inspection of the Property and on 14 January 2013 sent a final inspection letter to the owners (a copy of which is annexed to Mr Leech’s affidavit) listing the outstanding matters. They included completing the works to the driveway and the swimming pool fencing. The works to the driveway were the “footpath crossing” referred to in the site diary entry re an architect’s instructions on 29 January 2013. The swimming pool fencing included the glass balustrade and gate on the retaining wall and the adjacent glazed fencing on the northern boundary of the Property. Completion of the Stairs was not listed among Fitzgerald’s outstanding matters, no doubt because it lay outside the scope of the issued development consents and was irrelevant to the occupation certificate.

7. On 22 January 2012 Mr Dearlove sent photographs of the partly completed new Stairs to Mr Leech. The purpose was not established in evidence. The prosecution submits that the purpose was for Mr Leech to confirm that it was fine to go ahead with completing the handrail for the stairs. In my view, a reasonable and at least equally available inference is that it was to assist Mr Leech in lodging a building certificate application for the Stairs, which he did three days later. This was against the background of Council’s notice of intention to issue a demolition order that was brought to Mr Leech’s attention in December 2012.

8. On 25 January 2013 Mr Leech lodged with Council an application for a building certificate in respect of the “repair and restoration of existing external stairs” on the Property. An attached site survey plan showed the extent of the Stairs that had been constructed at that time ie down as far as the cave in the cliff.

9. As at 29 January 2012, Mr Leech was negotiating with the certifier to finalise outstanding matters to enable the issue of an occupation certificate. As noted above at (f), the outstanding matters included completing the footpath crossing and the swimming pool fencing.

10. Mr Leech’s evidence, which I accept, was that as at 29 January 2013 the swimming pool fencing, comprising the glass balustrade and gate on top of the retaining wall and the adjoining glazed fencing between the Property and the adjoining property was to his understanding incomplete and that the certifier for the occupation certificate was “screaming” for them to be completed. Photographs taken by Mr Hope on 25 January 2013 indicate that at least the adjoining glazed fencing needed to be completed (as Mr Dearlove acknowledged in cross-examination), and are insufficient to negate Mr Leech’s evidence.

135. Taking all this into account, I am left with a reasonable doubt as to whether on 29 January 2013 Mr Leech intended by the words he used to instruct Mr Dearlove to finish the Stairs, even if that is what Mr Dearlove understood.

136. As noted earlier, Ms Van Norton gave a further instruction to carry out the third stage of the work on the Stairs, and it is not part of the prosecution case that Mr Leech gave an instruction in respect of the third stage.

Conclusion as to prosecution’s instruction case

137. Accordingly, the case against Mr Leech that in about August 2012 he instructed the builder to construct, and on 29 January 2013 to finish, the Stairs has not been proved beyond reasonable doubt.

Control over the builder: the alternative case

138. I turn to the prosecutor’s alternative case against Mr Leech, which assumes that the owners and not Mr Leech instructed the builder to construct the Stairs. The alternative case is that Mr Leech’s control over the builder was such that he should nevertheless be held liable for the construction of the Stairs because, given that their construction did not have development consent, he could and should have issued an instruction to the builder countermanding the owners’ instruction to the builder to construct the Stairs.

139. The prosecutor submits that the control test (discussed above at [33]-[37]) is satisfied by the following:

1. Special conditions of the cost plus contract (to enable architect administration) empowered the defendant to issue an instruction cancelling the owners’ instruction to the builder to construct the Stairs.

2. In cross-examination, the defendant agreed with the proposition that special conditions 1(b) and 7(b) empowered him to direct the builder to stop the unlawful work on the Stairs that the owners had instructed the builder to do. I note that this was after the cross-examiner had him read and consider those conditions, and that his said understanding appeared to be at that time and not necessarily what he understood during the project.

3. The defendant had responsibility for obtaining development approvals for work on site and the Stairs works. I note that under the contract between the owners and the architect, the only relevant duty of the architect was to prepare a development application for the house: see [45] above. His subsequent conduct in relation to development applications was by way of delegation to him by the owners as a matter of course of conduct.

4. The defendant had authority to grant access to the site. I do not consider that this is accurate. It is based on the fact that on 16 October 2012 Mr Leech wrote to OEH officer Ms Stevenson giving the owners’ permission to enter the site to carry out an inspection (not the builders’ permission). However, (as Mr Leech intimated in cross-examination) under cl 8 of the cost plus contract, the builder had exclusive and uninterrupted possession of and access to the site for the performance of the works and the owner or his representative only had access for the purpose of inspecting and viewing progress of the works and only with the consent of the builder: above at [50].

5. The defendant said in evidence that the works on the stairs were part of his brief. I note that what he actually said that it was part of the client’s brief.

6. The defendant certified the builder’s claims for payment, which included materials for and work on the Stairs.

7. The defendant authorised the gap in the retaining wall to be left in anticipation of stairs being built.

8. The defendant had authority to instruct the builder to carry out work on site prior to receiving development approval, as evidenced by the crossover instruction of 29 January 2013.

9. The retaining wall was completed prior to obtaining development consent under the direction of the defendant. Whilst the builder did complete the retaining wall prior to development consent being granted (see above at [60]), I note that in cross-examination the defendant denied that he directed or authorised it. I do not think that it has been established that he directed or authorised it.

10. The defendant attended a site meeting on 17 December 2012 to provide “solutions” to the owners in relation to, among other things, the purported stop work order relating to the unauthorised waterfront stairs.

11. The defendant was aware that unapproved works on the Stairs were going to commence.

140. As a threshold point, the defendant submits that the contract administration duties of the architect, as agent of the owners, in relation to variations ordered by the owners were limited to administering variations for work that was lawful, and therefore did not extend to issuing instructions in relation to the variation for the new Stairs ordered by the owners, which was unlawful because that work required and did not have development consent. There is force in the submission. As a general principle, compliance by an agent with a principal’s instructions is not required when the instructions are not lawful: Peter Watts & F M B Reynolds, Bowstead and Reynolds on Agency (Thomson Reuters, 20th ed, 2014); G E Del Pont, Law of Agency (LexisNexis Butterworths, 3rd ed, 2014) at [11.3]. The principle is readily adaptable to the present context where the instruction to do the unlawful work is given by the owner to the builder. The principle is not diminished by the fact that on 29 January 2013 Mr Leech himself gave an instruction to the builder to finish the crossover which, it appears, was unlawful because development consent for the crossover had not yet been obtained. It is unnecessary to express a concluded view because, in my opinion, the prosecutor’s control case fails for other reasons.

141. The most important consideration then is whether, as the prosecutor submits, special conditions 1(b) and 7(b) read with 2 (re enabling architect administration) of the cost plus contract empowered the architect to issue an instruction to the builder countermanding the owners’ instruction to the builder to construct the Stairs. Clause 14 of the cost plus contract empowered the owners to vary the contract by a written instruction to the builder: see [51] above. The Stairs were a variation to the cost plus contract, orally instructed by the owners.

142. It is convenient to repeat the following special conditions, which are set out more fully at [52] above:

SPECIAL CONDITIONS TO ENABLE ARCHITECT ADMINISTRATION OF COST PLUS CONTRACT

The following provisions are to be used by the parties to enable the contract to be administered on behalf of the Owner by a person referred to for the purposes of the contract as the Architect:-

1. (a)   for the purpose of this contract the Architect will be the disclosed agent of the Owner.

(b)   the Owner, in recognition of the above, will not interfere with or impede the Architect carrying out his duties as an Architect for the purpose of this contract.

2.   The Architect is authorised to and required to:-

(a)   issue instructions to the Builder, concerning the works to be carried out, amended or corrected.

(b)   …

Any instruction or direction given by the Architect to the Builder will equal an instruction or direction by the Owner.

…

4.   Any instruction which the Architect gives is to be in writing. Where an instruction is given orally, the Architect must promptly confirm it in writing.

…

5. (a)   The Builder is to comply with all reasonable instructions from the Architect.

…

7. (a)   In circumstances where the Architect is replaced by the Owner for the purposes of administering the contract then the Owner must as soon as practicable advise the Builder in writing of the termination of the Architect’s services.

(b)   However the Owner will be and is bound by and can not disregard any decision, expression of reasonable satisfaction as to work of the Builder, consent or instruction given by the Architect up to the time of notification to the Builder pursuant to (a) above.

(c)   If the Owner intends to replace the Architect the Builder will have the right to object to any replacement Architect provided the basis for the objection is reasonable.

143. The builder was not a party to and (so far as the evidence discloses) had no knowledge of the content of the contract between the owners and the architect, Leech Harmon Architects, evidenced by the latter’s letters to the owners of 12 April 2010 and 10 May 2011: referred to above at [45]-[46]. The latter letter listed the architect’s duties including dealing with the builder on all matters relevant to the two building contracts and providing on site instructions.

144. In my opinion, the architect’s “duties” to which special condition 1(b) refers did not include a duty to countermand an instruction given by the owner to the builder. Therefore, special condition 1(b) is insignificant for present purposes. In my opinion, special condition 7(b) is irrelevant because, read in context, it is concerned with circumstances where the architect is replaced by the owner for the purposes of administering the contract. That did not occur in the present case.

145. The architect was the disclosed agent of the owner: special condition 1(a). No contractual words, nor implication authorised the architect, as agent, to countermand its principal’s instruction. Any instruction or direction given by the architect to the builder equalled an instruction or direction by the owners: special condition 2. If the architect had power to countermand an instruction of the owner, it would not equal the instruction of the owner but would be superior to it.

146. If the architect had power to countermand an instruction of the owner, an absurd stand-off could hypothetically occur where the owner repeatedly instructed the builder to do X and each time the architect countermanded the instruction. In my opinion, that is not within the contemplation of the contract.

147. The prosecutor pointed to a term of the owner/architect contract requiring the architect to “check construction work for adherence to documents and quality of finish”: above at [46(11)], and submitted that “documents” included development consents. That is arguable, but even if it is so I do not consider that it empowered the architect to countermand the variation instruction by the owners to the builder to replace the old stairs.

148. A principal may be vicariously liable when work done by the principal’s independent contractor is subject to the control and direction of the principal in the actual execution of the work: see the authorities reviewed above at [34]-[36]. There is no authority for the transportation of this principle so as to visit liability on a project architect where the independent contractor is the builder with whom the architect has no contractual relationship and the principal is the owner. Assuming that this principle should be transported, in my opinion it is inapplicable in the present case because no express contractual words nor implication empowered the architect, nor the owners, to control and direct the builder in the actual execution of the work. They could do no more than stipulate by an instruction the form of the work as the final result required. The choice of method of working and control of the site was the builder’s alone: see clauses 8 and 14 of the cost price contract set out above at [50]-[51].

149. I conclude that on the proper interpretation of the costs plus contract, Mr Leech had no power to countermand the owner’s instruction to carry out the Stairs work. Therefore, the foundation for the prosecutor’s invocation of the control test fails.

150. The fact that agreement was extracted from Mr Leech in cross-examination, after being asked to read special conditions 1(b) and 7(b), that he understood (at least at trial) he had such contractual power is insufficient to visit liability upon him.

151. Even if I am in error and he did have this power and understood that he had the power during the project, in my opinion he was under no duty or obligation to exercise the power, and his omission to do so does not satisfy the control test. The other matters listed above on which the prosecutor relies do not, in my view, lead to satisfaction of the control test.

152. For those reasons, I am not satisfied that the unlawful development charge against Mr Leech has been proved beyond reasonable doubt.

ORDERS

153. The orders of the Court in matter 50837/14 are:

1. The defendant is acquitted of the offence charged.

2. The summons is dismissed.

3. The exhibits may be returned.

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Decision last updated: 18 September 2015