Queanbeyan City Council v Sun (No 2)

[2013] NSWLEC 64

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Queanbeyan City Council v Sun (No 2) [2013] NSWLEC 64
Hearing dates:	8 May 2013
Decision date:	09 May 2013
Jurisdiction:	Class 4
Before:	Biscoe J
Decision:	(1) The respondent is fined the sum of $20,000 to be paid to the Registrar of the Court within 28 days. That sum is apportioned equally for the respondent's breach of order 4 and breach of order 5 made by the Court on 2 April 2012. (2) The respondent is fined the further sum of $10,000 per calendar month commencing in July 2013, to be paid to the Registrar of the Court, the first payment to be made by 1 July 2013 and then by the first day of each month thereafter so long as the respondent is in breach of order 4 or order 5 of the Court made on 2 April 2012. The said sum is apportioned equally for the respondent's breach of order 4 and his breach of order 5. (3) Order 2 is discharged when the respondent has complied with orders 4 and 5 of the Court made on 2 April 2012. (4) The respondent is to pay the applicant's costs on an indemnity basis as agreed or assessed. (5) The exhibits may be returned.
Catchwords:	CONTEMPT - sentence for disobeying Court orders to enforce conditions of a development consent - whether Crimes (Sentencing Procedure) Act 1999 and Fines Act 1996 apply to civil contempts and, if not, whether should be applied by analogy.
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999 s 3 Fines Act 1996 s 6 Environmental Planning and Assessment Act 1979 s 121B
Cases Cited:	Attorney-General for NSW v Whiley (1993) 31 NSWLR 314 Australian Securities and Investments Commission v White (No 4) [2011] NSWSC 62, (2011) 80 NSWLR 113 Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] HCA 46, (1986) 161 CLR 98 Burwood Council v Ruan [2008] NSWLEC 167 Hearne v Street [2008] HCA 36, (2008) 235 CLR 125 NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 Palerang Council v Banfield (No 2) [2012] NSWLEC 158 Queanbeyan City Council v Pre-Cast Concrete Solutions Pty Ltd [2008] NSWLEC 147 Queanbeyan City Council v Sun [2012] NSWLEC 70 Queanbeyan City Council v Sun [2013] NSWLEC 6 Waverley Council v Tovir Investments Pty Ltd (No 3) [2013] NSWLEC 35 Witham v Holloway [1995] HCA 3, (1995) 183 CLR 525 Wood v Staunton (No 5) (1996) 86 A Crim R 183
Category:	Sentence
Parties:	Queanbeyan City Council (Applicant) Kuan Ren Sun (Respondent)
Representation:	COUNSEL: T To (Applicant) S Fraser (Respondent) SOLICITORS: Herring & Associates (Applicant) Zone Legal (Respondent)
File Number(s):	41226/11

Judgment

1. The respondent, Mr Kuan Ren Sun, has been found guilty of contempt for disobeying orders made by the Court, as charged in the applicant Council's statement of charge: Queanbeyan City Council v Sun [2013] NSWLEC 6. He is now before the Court for sentencing.

Use of the premises

1. The respondent owns the land described as Lot 138 in Deposited Plan 8732 and known as 28 Aurora Avenue, Queanbeyan (the Premises).

1. The respondent owns and conducts a business trading as Action Fabrication and Welding (the Business), the principal activity of which is steel fabrication. The respondent conducts the Business from the Premises.

1. The use of the Premises for the Business has been ongoing since at least September 2004.

1. On 2 April 2012 the Court ordered the respondent to comply with various specified conditions of the "modified consent" (order 4) and various specified conditions of the "second consent" (order 5). In each case, the period permitted for compliance to be achieved was 90 days, that is, by 2 July 2012.

1. The modified consent was granted on 14 July 2004: Queanbeyan City Council v Sun [2012] NSWLEC 70 (Class 4 judgment) at [4]. It authorised the erection of an industrial building and the use of the premises for industrial engineering purposes.

1. The second consent was granted on 23 November 2004: Class 4 judgment at [4]. This consent authorised the demolition of an existing building on the premises, an extension to the factory building (being the factory building erected pursuant to the modified consent) and the rearrangement of parking arrangements at the rear of the premises.

1. Since at least September 2004 the premises have been used for industrial purposes (steel fabrication). That use has been carried on in circumstances where the conditions of the modified consent and second consent have not been complied with: Class 4 Judgment at [5]. The matter came to Council's attention in November 2009, but having regard to the nature of the non-compliances, it is obvious that the non-compliances have been throughout the period of the use; for example, the façade of the building was left unpainted. An order under s 121B of the Environmental Planning and Assessment Act 1979 served by the Council on the respondent on 5 May 2010 to effect compliance was not complied with: Class 4 Judgment at [6]. It was the continued non-compliances that led to the making of the Court's orders in the Class 4 proceedings on 2 April 2012.

The contempt proceedings

1. The notice of motion and statement of charge for contempt in these proceedings were served on the respondent on 3 December 2012.

1. On 7 December 2012 the proceedings were before the Court. There was no appearance by or on behalf of the respondent. A date for the hearing of the motion was set down on that day.

1. On 24 January 2013 the respondent's solicitor filed a notice of appearance.

1. On 25 January 2013 the respondent, by way of email to the Court from his solicitor indicated his intention to enter a plea of guilty to the charge and proposed a timetable for the carrying out of work so as to bring himself into compliance with the Court's orders made on 2 April 2012. That timetable expired on 30 May 2013.

1. On 31 January 2013, on the hearing of the motion, a plea of guilty was entered in accordance with the written notice given by the respondent, and the respondent was found guilty of contempt of court.

1. On 1 March 2013 the matter was mentioned. There was no appearance by or on behalf of the respondent. However, some progress had been made by the respondent towards achieving compliance with the Court's order made on 2 April 2012. The hearing date for sentencing was set on this day.

Actions of the respondent to comply with the Court's orders

1. After the commencement of the contempt proceedings the respondent has carried out, or caused to be carried out, substantial work towards achieving compliance with the Court's orders made on 2 April 2012. However, the respondent remains in breach of orders 4 and 5 of the Court made on 2 April 2012, in the following respects, of which the first is the most substantial:

(a)   wire security fencing around the perimeter of the Premises has not been erected;

(b)   landscaping of the front and rear of the Premises has not been carried out;

(c)   grab rails to disabled facilities have not been installed;

(d)   monetary contributions, in an amount of $2,007.85 as at 15 April 2013, remains unpaid;

(e)   a sign has not been erected on the entry gate to the Premises, indicating parking at the rear of the Premises;

(f)   a loading bay has not been line-marked;

(g)   parking spaces, including a disabled parking space, has not been line-marked;

(h)   areas of the Premises required to be used for parking have continued to be used for storage of materials.

Purpose of sentencing

1. The primary purpose in punishing a respondent who disobeys a court order is to enforce the order for the benefit of the applicant. Another purpose is to protect the effective administration of justice by demonstrating that the court's orders will be enforced: Australian Meat Industry Employees Union v MudginberriStation Pty Ltd [1986] HCA 46, (1986) 161 CLR 98 at 107.

1. Attorney-General for NSW v Whiley (1993) 31 NSWLR 314 at 320-321 is sometimes cited for the proposition that the Crimes (Sentencing Procedure) Act 1999 applies to sentencing in contempt matters including for disobeying court orders. However, that was a case of criminal contempt and was not concerned with contempt for disobeying a court order. Subsequently, the High Court clarified that disobeying a court order is a civil contempt, unless it is alleged that the contempt was contumacious or the contempt proceeding was only to serve the purpose of punishing a past breach, and does not serve a remedial, coercive or deterrent purpose: Witham v Holloway [1995] HCA 3, (1995) 183 CLR 525, 530-534, 538-539; Hearne v Street [2008] HCA 36, (2008) 235 CLR 125 at [130], [141]. The contempt in the present case is a civil contempt. The Crimes (Sentencing Procedure) Act 1999 is concerned with sentencing of an "offender", which it defines as "a person whom the court has found guilty of an offence": s 3. I do not think that a civil contempt is an "offence". However, as I observed in Waverley Council v Tovir Investments Pty Ltd (No 3) [2013] NSWLEC 35 at [23], apart from procedural differences the distinction between criminal contempt and civil contempt is largely illusory because in both cases the charges have to be proved beyond reasonable doubt and the usual outcome is punishment. Therefore, in my opinion, although the Crimes (Sentencing Procedure) Act does not apply directly to sentencing for civil contempts, its sentencing factors apply by analogy.

1. The following address relevant sentencing factors identified in that Act and in the frequently cited Wood v Staunton (No 5) (1996) 86 A Crim R 183 at 185 (Dunford J).

Objective seriousness

1. The contempt is the breach of two of the Court's orders. It was, and is, serious. The contempt is wilful but not contumacious. The respondent knew of the Court's orders and has disobeyed them, but without specific defiance of the Court's authority.

1. The contempt is ongoing, despite belated moves to purge the contempt. The length of the period of time that the respondent's use has been carried on, in breach of the requirements of the modified consent and the second consent, increases the objective seriousness of the contempt.

1. The respondent was on notice of possible contempt proceedings because of the service of the Court's orders upon him on 14 May 2012 and a further warning before the proceedings were commenced. He has been legally represented since 24 January 2013.

Reason for contempt

1. For the respondent it is submitted that his breach of the Court's orders are attributable to financial difficulties and also to cultural attitudes (he is said to be Chinese, with limited command of the English language).

1. On or about 24 January 2011, following service on the respondent of the summons in the Class 4 proceedings upon him, the respondent identified, as a reason for not complying with the modified consent and the second consent, a "financial shortage which I can explain or prove if necessary". Evidence of this kind was adduced at the sentencing hearing. In relation to the respondent's business, financial statements for the financial years from 2008 to 2012 (the ones for 2012 are drafts) indicate that:

(a)   the turnover of business has greatly declined from about $1.8 million in each of 2009 and 2010 to about $377,000 in 2012;

(b)   net profits for the business have greatly declined from about $134,000 in 2008 to about $16,800 in 2011 and $4,000 in 2012;

(c)   as at 30 June 2012, the surplus of assets over liabilities was about $185,000;

(d)   between 2008 and 2012 there has been a very large financial drain on the business represented by legal fees in excess of $250,000. It is said, and I am prepared to accept, that these are costs of defending Supreme Court proceedings brought by a construction company against the respondent alleging negligent carrying out of work, but that the plaintiff in those proceedings has since gone into liquidation and the Supreme Court proceedings have been terminated. Thus, this financial drain now lies in the past.

1. A recent bank statement for the respondent's business shows cash in the bank of about $27,000 and another recent bank statement shows that the respondent has an available line of credit (to the extent it has not been drawn down) of about $442,000.

1. It appears that this year the respondent has incurred expenses of about $76,000 in order to comply with the orders of the Court. He estimates that he will have to expend about another $10,000 in order to achieve total compliance (on the basis that the respondent himself will do the fencing work and some of the other work).

1. I accept that since about 2010 the respondent's business has greatly declined and has been under financial pressure. Nevertheless, on the evidence, I am not satisfied that his financial resources have been insufficient to comply with the orders of the Court.

1. If it be the case that (as submitted) failure to comply with the conditions of the development consent and the Court's orders may be attributable to cultural difficulties (for which there is no evidence), I do not accept that this provides any excuse for the failure and breach period.

1. I do not go so far as to say that the contempt was committed for financial gain, but I think that the respondent preferred his financial interests to those of his obligation to comply with the orders of the Court.

Consequences of contempt: environmental harm and other impacts

1. There has been very limited actual environmental harm as a result of the respondent's non-compliance with the Court's orders. The only harm is the impact on the amenity of the area by reason of the absence of a painted façade (rectified by 10 April 2013) and landscaping (yet to be rectified).

1. There has been a potential for environmental harm as a result of the respondent's non-compliance with the Court's orders. The potential harm was the impact of uncontrolled stormwater run-off not being contained within the Premises, and on properties adjoining the Premises. The potential for such harm ceased by 10 April 2013.

1. There has been a risk to the safety of persons coming to the Premises, to the property adjoining the Premises to the west, and persons upon that adjoining property as a result of the respondent's non-compliance with the Court's orders. The risks are created by:

(a)   Prior to 10 April 2013 there not being a sufficiently high retaining wall along the western boundary towards the rear of the Premises such that vehicles, including heavy trucks, could drive or fall over the boundary to the property adjoining the Premises to the west, which was at a lower elevation than the Premises.

(b)   The failure to erect a fence along the western boundary on top of the required retaining wall.

(c)   The storage of materials at the rear of the Premises in areas required to be kept free for parking.

Contrition and guilty plea

1. There is an expression of contrition and remorse through the entry of a guilty plea. However, the guilty plea was indicated after a hearing date was set and only a few days before the hearing itself. It cannot be said that the plea was entered at the first available opportunity or even at a relatively early time in the proceedings. The discount for a guilty plea is to be accordingly limited. Beyond that there is no evidence of remorse. The belated attempts by the respondent to bring himself into compliance with the Court's orders can be seen as an attempt to limit the consequences that flow from the contempt.

Antecedents and character

1. So far as the evidence discloses, the respondent has no prior convictions and is not of bad character.

Deterrence

1. There is a limited role for specific deterrence, given the length of time the use has been conducted, and the fact that the contempt has not been fully purged. Further, the manner in which the respondent has conducted himself in these proceedings (generally by not appearing) and in notifying the intention to plead guilty by email and then seeking to be excused from appearance, suggests the respondent has not treated non-compliance with the Court's orders with the seriousness it deserves. Whilst the evidence does not go so high as to suggest any likelihood of re-offending, some consideration of specific deterrence in the sentence is warranted.

1. The more dominant factor in the present case is general deterrence. The punishment should denounce the disobedience of the Court's orders in a sufficiently emphatic and public way so that others may be deterred from similar disobedience.

Completion of works

1. The matters to be completed in order to comply with the Court's orders are relatively minor except for fencing. The respondent proposes to complete the outstanding work within six weeks (ie by 19 June 2013) at an estimated cost of $10,000 on the basis that the respondent will do the fencing work and some of the other work and contract out the rest. This represents an extension of about three weeks compared with the timetable provided by the respondent to the Court at the January 2013 hearing of the contempt changes when he estimated that the works would be completed by 30 May 2013. The primary purpose of the Council in bringing the proceedings is to enforce the Court's orders. It is therefore good that the applicant has eventually done so much to comply and has evidenced an intention to fully comply within a relatively short further time.

Totality

1. Although there is an ongoing contempt in respect of two charges, both contempts arise out of the same set of circumstances. For example, the failure to fence the perimeter of the Premises is a breach of both the modified consent and the second consent, and therefore a contempt of both order 4 and order 5. I think it would be appropriate, applying the totality principle, to determine a single fine globally, and because the contempts arise equally out of each charge, to apportion half of the total fine to each charge.

Comparable cases

1. There is a principle of even-handedness in sentencing, however caution must be exercised in comparing the sentences passed in different factual contexts.

1. I take into account the cases I identified in Burwood Council v Ruan [2008] NSWLEC 167 at [26]-[28], which provide a guide to the range of penalties imposed for contempt in cases of wilful contempt, generally in the range of $7,500-$50,000, with the higher penalties (generally over $20,000) being imposed in cases involving environmental harm or the risk of environmental harm.

1. Palerang Council v Banfield (No 2) [2012] NSWLEC 158 (Pepper J) concerned disobedience to orders to cease the use of, and to demolish, an unlawfully erected shed used as a residence. The respondent entered a late plea of guilty on the day of hearing of the contempt motion, and advanced evidence of financial hardship. There was no actual environmental harm. At the time of sentencing, it appears the contempt had been ongoing for about 6 months, and continued. A fine of $16,600 and a monthly periodic penalty of $2,000 was imposed, with the periodic penalty discharged if the contempt was discharged within a further three months. The cases discussed in Banfield (No 2) at [128]-[131] identified principal fines generally in the range $12,000 to $20,000.

1. In Queanbeyan City Council v Pre-Cast Concrete Solutions Pty Ltd [2008] NSWLEC 147 (Sheahan J) concerned breach of undertakings given to the Court and consent orders. Both sought to achieve compliance with development consent conditions for a site used for pre-cast concrete manufacture. There was no environmental harm from the contempts, but the business, and the use, continued despite the failure to bring itself into compliance with the requirements of the consent, and its undertakings. The respondent there enjoyed and profited from the use for almost three and a half years. The Court was satisfied that the financial benefits to the respondent company were substantial. A fine of $80,000 (including discounts for absence of harm, and plea) was imposed in relation to the breach of undertakings and a fine of $48,000 (after similar discounts) was imposed for the breach of the consent orders.

The appropriate penalty is a fine

1. In my opinion, the appropriate penalty is a fine. The Court determines penalty by an instinctive synthesis of relevant factors. In this case, the factors may be summarised as:

(a)   the length of time of the contempt (some 10 months at the time of sentencing),

(b)   the fact that the contempt remains unpurged;

(c)   the absence of completely satisfactory explanation for the failure to comply with the Court's orders, although I accept that the respondent had financial difficulties.

(d)   very limited actual environmental harm in terms of amenity of the locality;

(e)   a risk of environmental harm from uncontrolled discharge of stormwater;

(f)   a risk to safety of persons and property for about nine months during the period of contempt;

(g)   a plea of guilty but only shortly prior to the hearing of the motion;

(h)   a limited need for specific deterrence but greater need for general deterrence;

(i)   substantial purging of the contempt over the last few months and an intention to purge the contempt completely within six weeks.

1. In my judgment, a fine of $20,000 should be imposed.

A periodic fine is also appropriate

1. As the contempt remains unpurged, despite there having been substantial steps taken to achieve compliance. I propose to impose an additional monthly fine of $10,000 per month for as long as the contempt remains unpurged, suspended for two months to give the respondent the opportunity to fully purge the contempt. The coercive purpose of contempt proceedings is supported by such a penalty.

Capacity to pay

1. The Fines Act 1996 requires the court to consider the means of an "accused" to pay a fine for (relevantly) an "offence": ss 4(1)(a), 6. A civil contempt is not an "offence": [17] above. Therefore, the Fines Act does not apply. However, since the distinction between criminal and civil contempts is largely illusory, I think that independently of the Fines Act it is appropriate to consider whether a civil contemnor has the means to pay. On the financial evidence, I am satisfied that the respondent has the means to pay the proposed fines.

Costs

1. The applicant seeks its costs of the whole proceedings on an indemnity basis.

1. Indemnity costs are commonly awarded in civil contempt cases for two reasons. First, it is an important sanction to mark the Court's condemnation of the breach of its orders. Secondly, so as not to discourage the bringing of contempt proceedings by leaving the applicant out of pocket. In NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 at [102] Campbell J said:

In imposing a costs order for contempt, the Court aims so far as it can to provide full indemnity to a party who obtained a court order which has been breached in a way which amounts to contempt. Thus, the usual order for costs is that the contemnor pay the costs on an indemnity basis. There is no reason to depart from the usual order in the present case.

1. In ASIC v White (No 4) [2011] NSWSC 62, (2011) 80 NSWLR 113 at [49] White J said: "In cases of civil contempt, the award of costs, often on an indemnity basis, is an important sanction, and not infrequently a sufficient sanction, to mark the court's condemnation of the breach of its orders".

1. In the circumstances of present case, I consider that there should be an order for indemnity costs.

Orders

1. The orders of the Court are as follows:

(1)   The respondent is fined the sum of $20,000 to be paid to the Registrar of the Court within 28 days. That sum is apportioned equally for the respondent's breach of order 4 and breach of order 5 made by the Court on 2 April 2012.

(2)   The respondent is fined the further sum of $10,000 per calendar month commencing in July 2013, to be paid to the Registrar of the Court, the first payment to be made by 1 July 2013 and then by the first day of each month thereafter so long as the respondent is in breach of order 4 or order 5 of the Court made on 2 April 2012. The said sum is apportioned equally for the respondent's breach of order 4 and his breach of order 5.

(3)   Order 2 is discharged when the respondent has complied with orders 4 and 5 of the Court made on 2 April 2012.

(4)   The respondent is to pay the applicant's costs on an indemnity basis as agreed or assessed.

(5)   The exhibits may be returned.

Amendments

10 May 2013 - clerical and clarification corrections

Amended paragraphs: cover page, paragraph [45]

Decision last updated: 10 May 2013