Waverley Council v Tovir Investments Pty Ltd and Rappaport (No 3) - [2013] NSWLEC 35

Land and Environment Court

New South Wales

Amendment notes

Medium Neutral Citation: Waverley Council v Tovir Investments Pty Ltd & Rappaport (No 3) [2013] NSWLEC 35
Hearing dates: 18-28/2/13, 1/3/13, 4/3/13
Decision date: 27 March 2013
Jurisdiction: Class 4
Before: Biscoe J
Decision:
The respondents are adjudged guilty of contempt of court as charged and are to pay the applicant's costs.

Catchwords: CONTEMPT - civil contempt - charges of failing to obey consent orders restraining respondents from causing or permitting the use of certain premises for the purpose of backpackers accommodation as defined in the Waverley Local Environmental Plan 1996 - construction of the definitions of "backpackers accommodation" and "temporary accommodation" - consideration of evidence and proof in contempt cases and the distinction between civil and criminal contempt - consideration of the nature and proof of circumstantial evidence - whether buildings were used for the purpose of providing backpackers accommodation as defined - if so, whether the corporate first respondent caused and permitted that use and the second respondent caused it -meaning of "causing" and "permitting" - consideration of attribution of conduct of a person to a corporation in a civil contempt case.
Legislation Cited: Corporations Act 2001 (Cth) s 9(b)(i),(ii)
Evidence Act 1995 s 144(1)(a)
Land and Environment Court Rules 2007, r 6.3
Supreme Court Rules 2005 Pt 55 r 13
Waverley Local Environmental Plan 1996 Part 5 Schedule 2
Cases Cited:
Adelaide City Corporation v Australasian Performing Right Association Ltd (1928) 40 CLR 481
Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310
Athens v Randwick City Council [2005] NSWCA 317, 64 NSWLR 58
Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46,161 CLR 98
Australian Securities & Investments Commission v Adler [2002] NSWSC 171, 41 ACSR 72
Australian Securities and Investments Commission v Sigalla (No 4) [2011] NSWSC 62, 80 NSWLR 113
Azzopardi v The Queen [2001] HCA 25, 205 CLR 50
Blacktown City Council v Pace [2002] NSWLEC 142, 121 LGERA 432
Broad v Parish (1941) 64 CLR 588
Burns v Lipman [1975] HCA 2, 132 CLR 157
Davidson v The Queen [2009] NSWCCA 150, 75 NSWLR 150
Director-General, Department of Environment and Climate Change v Jack & Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232, 172 LGERA 225
Director General of Fair Trading v Pioneer Concrete (UK) Ltd [1995] 1 AC 456 (HL)
Doyle v The Commonwealth [1985] HCA 46, 156 CLR 510

Forestview Nominees Pty Ltd v Perron Investments Pty Ltd [1999] 93 FCA 405, 162 ALR 482
G v H [1994] HCA 48, 181 CLR 387
Goldsmith v Deakin [1933] All ER 102
Gurnett v Macquarie Stevedoring Co Pty Ltd (1955) 72 WN (NSW) 261, 55 SR (NSW) 243
Hearne v Street [2008] HCA 36, 235 CLR 125
Heatons Transport (St Helens) Ltd v Transport and General Workers' Union [1973] AC 15 (HL)
Holland v Jones [1917] HCA 26, 23 CLR 149
Jones v Dunkel [1959] HCA 8, 101 CLR 298
Lyver v State of Victoria [1983] 2 VR 475
Majury v Sunbeam Corporation Ltd [1974] 1 NSWLR 659
March v E and MH Stramare Pty Ltd [1991] HCA 12, 171 CLR 506
Matthews v Australian Securities and Investments Commission [2009] NSWCA 155
Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92, 167 LGERA 91
Osland v The Queen [1998] HCA 75, 197 CLR 316
O'Sullivan v Truth and Sportsman Ltd [1957] HCA 8, 96 CLR 220
Philip v State of New South Wales [2011] FMCA 308
Press v Mathers [1927] VLR 326
R v Jasper [2003] NSWCCA 186, 139 A Crim R 329
Randwick City Council v Athens (No 7) [2004] NSWLEC 213
Reynolds v G H Austin & Sons Ltd [1951] 2 KB 135
Ronowska v Kus (No 2) [2012] NSWSC 817
RPS v The Queen [2000] HCA 3, 199 CLR 620
Shepherd v The Queen [1990] HCA 56, 170 CLR 573
Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52, 219 CLR 165
Waverley Council v Tovir Investments Pty Ltd and Rappaport (No 2) [2013] NSWLEC 21
Wilkie v Blacktown City Council [2002] NSWCA 284, 121 LGERA 444
Witham v Holloway [1995] HCA 3, 183 CLR 525
Z Bank v D1 [1994] 1 Lloyd's Rep 656
Z Ltd v A-Z [1982] 1 QB 558 (CA)
Texts Cited: Cram (ed), Borrie & Lowe: The Law of Contempt, 4th ed (2010)
Ford, Austin & Ramsay, Ford's Principles of Corporations Law, 11th ed (2003)
Category: Principal judgment
Parties: Waverley Council (Applicant)
Tovir Investments Pty Ltd (First Respondent)
Michael Rappaport (Second Respondent)
Representation: COUNSEL:
T Howard (Applicant)
S Duggan SC and M Seymour (Respondents)
SOLICITORS:
Sparke Helmore (Applicant)
Gadens (Respondents)

File Number(s): 40917/10 and 40918/10

Judgment

CONTENTS

Paragraphs

INTRODUCTION
THE CONSENT ORDERS .........................................................................................................
THE CHARGES ............................................................................................................................
DEFINITION OF "BACKPACKERS ACCOMMODATION" ..................................................
EVIDENCE AND PROOF IN CONTEMPT CASES ...............................................................
CREDIBILITY OF COUNCIL WITNESSES .............................................................................
"ACCOMMODATION FOR TOURISTS OR TRAVELLERS": BOTH PREMISES ..........
IMPERIAL AVENUE USE ...........................................................................................................
"Accommodation for tourists or travellers" (Imperial Avenue) .......................................
Foreign languages and accents (Imperial Avenue) ...................................................................
Travellers' vehicles: campervans and cars with interstate plates (Imperial Avenue) ..............
Turnover of occupants; transience of occupation (Imperial Avenue) ........................................
Number of occupants varying with the seasons (Imperial Avenue) ..........................................
Luggage, bags and backpacks (Imperial Avenue) ....................................................................
Bins and waste (Imperial Avenue)................................................................................................
Mattresses/bedding (Imperial Avenue) .......................................................................................
Parties (Imperial Avenue) .............................................................................................................
Conclusion as to tourists or travellers (Imperial Avenue) ..........................................................
"May have Shared Facilities" (Imperial Avenue) ................................................................
"Will generally provide shared accommodation in which there are two or more persons in a room" (Imperial Avenue) ..................................................................................
"Will generally provide temporary accommodation, but may provide permanent accommodation" (Imperial Avenue) ......................................................................................
Continued use before and after the making of the orders (Imperial Avenue) .............
Conclusion as to use (Imperial Avenue) ...............................................................................
KENT STREET USE ...................................................................................................................
"Accommodation for tourists or travellers" (Kent Street) ................................................
Foreign languages and accents (Kent Street) ...........................................................................
Travellers vehicles: campervans and cars with interstate plates (Kent Street) .......................
Turnover of occupants: transience of occupation (Kent Street) ................................................
Number of occupants varying with the seasons (Kent Street) ..................................................
Luggage, bags and backpacks (Kent Street) ............................................................................
Bins and waste (Kent Street) .......................................................................................................
Mattresses/bedding (Kent Street) ...............................................................................................
Parties (Kent Street) .....................................................................................................................
Conclusion as to tourists or travellers (Kent Street) ...................................................................
"May have shared facilities" (Kent Street) ...........................................................................
"Will generally provide shared accommodation in which there are two or more persons in a room" (Kent Street) ............................................................................................
"Will generally provide temporary accommodation, but may provide permanent accommodation" (Kent Street) ...............................................................................................
Continued use before and after the making of the orders (Kent Street) ......................
Council inspection (Kent Street) ............................................................................................
Conclusion as to use (Kent Street) ........................................................................................
DID MICHAEL RAPPAPORT CAUSE THE USE OF THE PREMISES FOR THE PURPOSE OF BACKPACKERS ACCOMMODATION? ......................................................
DID TOVIR CAUSE OR PERMIT THE PREMISES TO BE USED FOR THE PURPOSE OF BACKPACKERS ACCOMMODATION? ......................................................
ORDERS ........................................................................................................................................

1-6
7-9
10-14
15-22
23-26
27-28
29-33
34-89
36-80
37-49
50-53
54-60
61-66
67
68-70
71
72-79
80
81
82-83

84-86
87
88-89
90-129
92-119
92-96
97
98-101
102-104
105-108
109-112
113-116
117-118
119
120
121
122-126
127
128
129
130-143
144-163
164

INTRODUCTION

The applicant, Waverley Council, charges the respondents, Tovir Investments Pty Ltd (Tovir) and Michael Rappaport, with contempt for failing to obey consent orders of the Court restraining them from using, causing or permitting to be used, premises at 6 Kent Street, Waverley and 34 Imperial Avenue, Bondi for the purpose of backpackers accommodation as defined in the Waverley Local Environmental Plan 1996 (LEP). The Kent Street orders took effect on 29 January 2011 and the Imperial Avenue orders took effect on 12 February 2011. In the case of both premises, the charge period commences on about 12 February 2011. In the case of Kent Street, the charge period ends on about 14 April 2012. In the case of Imperial Avenue, the charge period ends in about March 2012.

Tovir owns both premises. Tovir is charged with causing and permitting them to be used for the purpose of backpackers accommodation as defined in the LEP. Michael Rappaport is charged with causing the premises to be used for that purpose. The Council alleges that he managed the premises using vehicles owned by Tovir. He is the son of the shareholders and directors of Tovir, Thomas and Vivian Rappaport.

The respondents pleaded not guilty. They put the Council to proof of its whole case without identifying any issues. The respondents called no evidence apart from tendering a few documents.

The respondents' closing submissions distance Tovir from Michael Rappaport. They submit that the Council has not proved beyond reasonable doubt (a) that the premises were used for the purpose of backpackers accommodation as defined in the LEP, and (b) alternatively, if they were used for that purpose, that Tovir caused or permitted the premises to be used for that purpose. However, if it is found that the premises were used for that purpose, the respondents do not submit that it has not been proved beyond reasonable doubt that Michael Rappaport managed them and caused them to be used for that purpose.

The two subject premises as well as three other residential premises at 86 Blair Street, North Bondi, 1A Kambala Road, Bellevue Hill and 89 Watson Street, Bondi were marketed as accommodation on the Bondi International House (BIH) website and the Bondi Share House (BSH) website. As well as owning the subject premises, Tovir owned the Blair Street premises. Thomas and Vivian Rappaport owned the Kambala Road and Watson Street premises. Thomas and Michael Rappaport were, respectively, a director or shareholder of BIH Pty Ltd and BSH Pty Ltd, as more fully particularised below at [154(b) - (c)].

According to tax returns, Tovir's ownership of the subject premises and the Blair Street premises was as trustee for the Rappaport Family Trust. Three vehicles used by Michael Rappaport in the management of all five premises were registered in the name of Tovir as trustee of that Trust. The one that he used most frequently was a white bus or van that seated 12 passengers.

THE CONSENT ORDERS

In the Kent Street proceedings the Court made consent orders on 28 January 2011 in the following terms:

1. Order that each of the First and Second Respondents be restrained from using, causing or permitting to be used, the premises known, as 6 Kent Street, Waverley for the purpose of "backpackers accommodation", as that expression is defined in Waverley Local Environmental Plan 1996, without first obtaining a lawful consent so to do granted under the provisions of the Environmental Planning and Assessment Act 1979, in circumstances where such consent may be required.

2. Order that each of the First and Second Respondents be restrained from using, causing or permitting to be used, the premises known as 6 Kent Street, Waverley for the purpose of a "boarding house", as that expression is defined in Waverley Local Environmental Plan 1996, without first obtaining a lawful development consent so to do granted under the provisions of the Environmental Planning and Assessment Act 1979.

3. Orders 1 and 2 have effect from 2pm on 29 January 2011.

In the Imperial Avenue proceedings the Court made identical consent orders on 25 February 2011 except that order 3 referred to 12 February 2011 as the date they took effect. This retrospective effect of order 3 was deliberate and is explained by the representation (recorded on transcript) to the Court on the occasion that the consent orders were made that the Imperial Avenue premises had already ceased to be used for the purposes referred to in the orders.

The reference in the orders in both proceedings to "without first obtaining a lawful consent" is explained by the theoretical possibility, discussed by the Court when the Kent Street orders were made (and recorded on transcript), of the prohibited use becoming permissible with development consent by a future amendment to the LEP.

THE CHARGES

As I have said, Tovir is charged with causing and permitting the premises to be used for the purpose of backpackers accommodation and Michael Rappaport is charged with causing them to be used for that purpose. The statements of charge include particulars of the use of the subject premises for the purpose of backpackers accommodation. They are identical as follows in relation to both premises and both respondents except that the concluding words of particular (e) ("during which...premises") appear only in the Imperial Avenue charges and not the Kent Street charges:

During the said period:

(a) The Premises have been used for the purpose of providing accommodation for tourists, travellers and persons engaged in recreational pursuits;

(b) The Premises have had shared facilities such as communal bathrooms, kitchens and laundry facilities.

(c) The Premises have generally provided shared accommodation in which there have been two or more persons staying in a room;

(d) The Premises have generally provided temporary accommodation;

(e) There have frequently been a relatively high number of occupants staying at the Premises, particularly during Autumn of 2011 and in the Spring-Autumn period of 2011 to 2012, during which time there have been up to 30 occupants at the one time occupying the Premises;

(f) The relatively high number of occupants at the Premises has regularly caused the amount of waste generated and stored at the Premises to exceed the capacity of the bins provided and collected as part of Waverley Council's garbage and recycling service; and

(g) The use of the Premises has involved loud parties frequently being held on the Premises, going late into the night, including on week nights.

As against Tovir, the pleaded particulars of causing and permitting the use for the purpose of backpackers accommodation are as follows in relation to both premises:

During the said period:

(a) The First Respondent [Tovir] has at all times been the owner of the Premises;

(b) The First Respondent is an investment vehicle for its directors and shareholders, Thomas Rappaport and Vivian Rappaport;

(c) The First Respondent has derived income from the use of the Premises for the purposes of backpackers accommodation;

(d) Vivian Rappaport and Thomas Rappaport has each been present from time to time on the Premises during the period the Premises have been used for the purposes of backpackers accommodation;

(e) Vivian Rappaport has taken part in the management of the Premises and Thomas Rappaport has assisted in the maintenance of the Premises;

(f) Michael Rappaport, the son of the [sic] Thomas Rappaport and Vivian Rappaport, has actively managed the Premises for and on behalf of the First Respondent, including by arranging the provision of temporary accommodation of the Premises for tourists, travellers and persons engaged in recreational pursuits (collectively, "occupants"); showing the Premises to prospective occupants by taking and accompanying prospective occupants on inspections of the bedrooms and shared facilities on the Premises; charging and receiving payment of fees from occupants for temporary accommodation of the Premises, including by using a portable Eftpos machine to take payment from occupants at and outside the Premises; organising recreational pursuits for occupants of the Premises, including day-trips and recreational excursions, parties and other social events; and providing a private transport service to and from the Premises for prospective and actual occupants and arranging recreational day-trips and excursions for occupants;

(g) The First Respondent has promoted the use of the Premises for backpackers accommodation including through its associated business entity, "Bondi International House";

(h) The First Respondent, through its officers and agents, being aware that the Premises has been used for the purposes of backpackers' accommodation, has taken steps to promote and cause that use and has omitted to take any steps to prevent or curtail that use.

As against Michael Rappaport, the pleaded particulars of causing the use for the purpose of backpackers accommodation are as follows in relation to both premises:

During the said period:

(a) The Second Respondent [Michael Rappaport] has actively managed the Premises, including by arranging the provision of temporary accommodation of the Premises for tourists, travellers and persons engaged in recreational pursuits (collectively "occupants");

(b) The Second Respondent, and persons assisting him in the management of the Premises, have shown the Premises to prospective occupants by taking and accompanying prospective occupants on inspections of the bedrooms and shared facilities on the Premises;

(c) The Second Respondent, and persons assisting him in the management of the Premises, have quoted fees to prospective occupants for the occupation of each of the available bedrooms on the Premises on a weekly or monthly basis;

(d) The Second Respondent has charged and received payment of fees from occupants for temporary accommodation of the Premises, including by using a portable Eftpos machine to take payment from occupants at and outside the Premises.

(e) The accommodation arranged by the Second Respondent for occupants has generally been of a short term nature, involving frequent turnover of occupants on the Premises, often over a period of weeks and sometimes over a period of days;

(f) The Second Respondent has been actively involved in the organisation of recreational pursuits for occupants of the Premises, including day-trips and recreational excursions, parties and other social events;

(g) The Second Respondent has been involved in the promotion of the Premises as a place for temporary accommodation for tourists, travellers and persons engaged in recreational pursuits, including under the banner of "Bondi International House", including by internet advertising;

(h) The Second Respondent has frequently provided a private transport service to and from the Premises for prospective and actual occupants including for the purposes of showing the Premises to prospective occupants; providing shuttle transportation services to and from transport links for occupants on their arrival to and/or departure from the Premises, and arranging recreational day-trips and excursions for occupants.

(i) The Second Respondent, and persons assisting him in the management of the Premises, have frequently delivered mattresses to, and collected mattresses from the Premises.

The expressions "causing" and "permitting" were used in the orders and are alleged in the charges. Their meaning is to be determined by construing the orders. In my opinion, the word "causing" in the orders means that an act or omission of a respondent was so connected with the use of the premises for the purpose of backpackers accommodation that, as a matter of ordinary common sense and experience, it should be regarded as a cause of it. The "but for" test may be a useful aid in determining whether the act or omission is properly to be seen as a cause; it is not a definitive test. See March v E and MH Stramare Pty Ltd [1991] HCA 12, 171 CLR 506 at 515, 522, 524, 530 (a negligence case); Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 at 315, 357-358 (a contract case); Majury v Sunbeam Corporation Ltd [1974] 1 NSWLR 659 at 663-664 (a causing pollution case).

The word "permit" means "intentionally allow", but intention to commit a breach of the order is not required: Broad v Parish (1941) 64 CLR 588 at 595; Lyver v State of Victoria [1983] 2 VR 475 at 478 per Young CJ; Blacktown City Council v Pace [2002] NSWLEC 142, 121 LGERA 432 at [27], [28], [40]. The word "permit" connotes at least de facto power or capacity to stop the other's misconduct: Broad v Parish at 594; Lyver v State of Victoria at 484; R v Jasper [2003] NSWCCA 186, 139 A Crim R 329 at [26]. An element of knowledge is implicit in the word "permits". Knowledge includes actual knowledge and shutting one's eyes to the obvious: R v Jasper [2003] NSWCCA 186 at [33]. "[I]ndifference or omission is 'permission' within the plain meaning of that word where the party charged (1) knows or has reason to anticipate or suspect that the particular act is to be or is likely to be done, (2) has the power to prevent it, (3) makes default in some duty of control or interference arising under the circumstances of the case, and (4) thereby fails to prevent it": Adelaide City Corporation v Australasian Performing Right Association Ltd [1928] 40 CLR 481 at 487. Knowledge is more than suspicion and, to that extent, the passage just quoted needs to be adjusted in the criminal context: R v Jasper at [33]. Since proof of a civil contempt is to the criminal standard, it seems logical that it should also be adjusted in a civil contempt case. Permission is a question of fact and may be express or inferred from circumstances which carry with them a reasonable implication of a discretion or liberty to use property in the manner in which it was used: Broad v Parish at 595. A principal permits an agent or servant to use property for an unlawful purpose, although the principal is itself unaware of that use, if the principal puts the agent or servant in charge of the property and at least leaves it to chance or does not care whether the property would be used for an unlawful purpose or not: Goldsmith v Deakin [1933] All ER 102 at 104 - 105. In such cases, the knowledge of the agent or servant is imputed to the principal: Lyver v State of Victoria at 478.

DEFINITION OF "BACKPACKERS ACCOMMODATION"

Under the LEP, development for the purpose of "backpackers accommodation" was prohibited in the zone where the premises are located. The LEP defined that term:

"backpackers accommodation" means a building used for the purpose of providing accommodation for tourists, travellers or persons engaged in recreational pursuits and that:

(a) may have shared facilities, such as a communal bathroom, kitchen or laundry, and

(b) will generally provide shared accommodation in which there are two or more persons in a room, and

(c) will generally provide temporary accommodation, but may provide permanent accommodation.

The LEP defined "temporary accommodation":

"temporary accommodation" means premises providing short-term accommodation on a weekly and monthly basis, being premises where a person may stay for no more than 2 months.

There is a shift in language between the two definitions in that the former refers to "a building" whereas the latter refers to "premises". Given the context, I think "premises" in the latter means the "building" in the former. The definition of "temporary accommodation" is arbitrary in prescribing a two months limit but, to that extent, removes uncertainty.

The Council alleges that the buildings on the subject premises were used for the purpose of providing accommodation for tourists, travellers or persons engaged in recreational pursuits, predominantly tourists or travellers. In my view, the expressions "tourists", "travellers" and "persons engaged in recreational pursuits", which are not defined in the LEP, overlap and are not mutually exclusive.

Although paragraphs (b) and (c) of the definition of "backpackers accommodation" are the same in imposing a general requirement, they differ in that (c) but not (b) expressly says, in effect, that the building may not satisfy its general requirement. However, I think that is implicit in (b).

By dint of the repeated use of the conjunction "and", the shared facilities, shared accommodation and temporary accommodation referred to in paragraphs (a) - (c) of the definition of "backpackers accommodation" are all requirements of the definition additional to the chapeau's requirement of use for the purpose of providing accommodation for tourists, travellers and persons engaged in recreational pursuits. Their relevance to the latter varies. Shared facilities are no indicator of whether accommodation is provided for tourists, travellers and persons engaged in recreational pursuits since shared facilities commonly exist in other types of accommodation including ordinary households. Shared accommodation with two or more persons in a room is only a mild indicator of accommodation for tourists, travellers and persons engaged in recreational pursuits for it too is often provided in other types of accommodation. However, temporary accommodation is a strong indicator of accommodation for tourists, travellers and persons engaged in recreational pursuits.

The Council submits that the matters in paragraphs (a) - (c) of the definition of backpackers accommodation are essential elements of the definition. The respondents initially submitted that only the chapeau to the LEP definition of "backpackers accommodation" contains essential elements of the definition, and that the balance of the definition in paragraphs (a) - (c) are not essential elements but merely examples or incidental elements which may or may not be present. However, ultimately, after discussion, they orally embraced the construction that the words "will generally provide" in paragraphs (b) and (c) obligate the Council to prove that more often than not the shared accommodation and temporary accommodation to which they refer are provided. In my opinion, the word "may" in paragraph (a) indicates that it does not matter whether or not there are such shared facilities; therefore, somewhat curiously, although it is an element of the definition, it is not an essential element. In my opinion, because of the words "will generally provide" in paragraphs (b) and (c), it is essential that the building provide shared accommodation and temporary accommodation as a general rule, that is, more often than not. Provided that shared accommodation and temporary accommodation are generally provided, it does not matter if non-shared accommodation and permanent accommodation are also provided at the same time or are the only types of accommodation provided at some times.

The Council submits that the definition of "temporary accommodation" should not be construed to mean that persons are prohibited from staying longer than two months. The respondents submit that it should be so construed. I do not accept the respondents' construction. It would be surprising and make little commercial sense for an accommodation agreement to contain such a positive prohibition. In any case, the definition is expressly concerned with what the "premises" in fact provide rather than with the terms of an accommodation agreement, although the latter may cast some light on the former. I construe the definition of "temporary accommodation" as meaning that in fact the premises provide accommodation for no more than two months. If in fact they provide, or also provide, accommodation for longer, then to that extent they provide permanent accommodation for the purposes of the LEP. I marry this construction with paragraph (c) of the definition of "backpackers accommodation" by construing the latter to mean that generally - that is, more often than not - the building in fact provides accommodation for no more than two months, even though it may also provide accommodation for longer. Thus, paragraph (c) is satisfied where premises provide both temporary (no longer than two months) and permanent (longer than two months) accommodation provided that the temporary accommodation, not the permanent accommodation, is the general rule.

EVIDENCE AND PROOF IN CONTEMPT CASES

It is a civil contempt to disobey court orders made in civil proceedings. This is a case of civil contempt. It is not this case, but disobedience to a court order made in civil proceedings only becomes a criminal contempt if, first, if it is alleged that the contempt was contumacious or, secondly, the contempt proceedings only serve a punitive purpose of punishing a past breach and do not serve a remedial, coercive or deterrent purpose: Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92, 167 LGERA 91 at [58] per Biscoe J citing Witham v Holloway [1995] HCA 3, 183 CLR 525 at 530-534, 538-539 and Hearne v Street [2008] HCA 36, 235 CLR 125 at [130], [141]; Matthews v Australian Securities and Investments Commission [2009] NSWCA 155 at [154]; Australian Securities and Investments Commission v Sigalla (No 4) [2011] NSWSC 62, 80 NSWLR 113 at [77] per White J. Apart from procedural differences, the distinction between civil and criminal contempts is largely illusory because in both cases the charge has to be proved beyond reasonable doubt and the usual outcome is punishment: Witham v Holloway at 534. Indeed, the prescribed albeit non-exhaustive punishments for both civil and criminal contempts are the same; namely, in the case of non-corporation committal to a correctional centre or fine or both, and in the case of a corporation sequestration or fine or both: Pt 55 r 13 of the Supreme Court Rules 2005, which apply to contempt proceedings such as these under r 6.3 of the Land and Environment Court Rules 2007; Ronowska v Kus (No 2) [2012] NSWSC 817 at [71]. Nevertheless, a logical difference would be that if a contemnor is adjudged guilty of a civil contempt, no conviction should be recorded.

The respondents submit that the Court can draw no inferences from their silence in Court, that this is neither evidence nor an admission nor a means to fill gaps in the Council's case: Azzopardi v The Queen [2001] HCA 25, 205 CLR 50 at [51]. This invokes the general right to silence rule in criminal trials that the fact that an accused does not give evidence is not of itself evidence against the accused. In contrast, at hearings of civil matters a very different general rule applies, euphemistically called the rule in Jones v Dunkel [1959] HCA 8, 101 CLR 298, that where there is a reasonable expectation that a party would give or call relevant evidence, it will be open to conclude that the failure of the party (or someone in the party's camp) to give evidence leads rationally to an inference that the evidence of that party or witness would not help the party's case: Azzopardi at [34] quoting RPS v The Queen [2000] HCA 3, 199 CLR 620 at [26]. The criminal right to silence rule applies in trials of criminal contempt: Australian Securities and Investments Commission v Sigalla (No 4) at [149] - [153]. The present case involves a charge of civil, not criminal, contempt. Which rule applies at hearings of civil contempt charges? There appears to be no authority on the point. The rationale of the right to silence general rule in a criminal trial is that it is an accusatorial process in which the prosecution bears the onus of proving guilt beyond reasonable doubt: Azzopardi at [34]. Civil contempt proceedings are unique among civil proceedings in that some attributes of criminal proceedings are engaged, including proof beyond reasonable doubt. In principle, because on a charge of civil contempt the applicant bears the onus of proof beyond reasonable doubt and civil contempt may result in similar penalties as criminal contempt, safeguards similar to those appropriate in criminal proceedings apply: Doyle v The Commonwealth [1985] HCA 46, 156 CLR 510 at 516. I conclude that the general criminal trial right to silence rule applies in a trial of civil contempt and not the general civil hearing rule in Jones v Dunkel.

Much of the Council's evidence is not direct evidence but circumstantial evidence, much of it like the strands in a cable rather than links in a chain, from which the Court is asked to infer further facts. In contradistinction to conjecture, an inference is a conclusion of fact drawn from other proved (or assumed) facts by exercising the ordinary powers of human reason in light of human experience: G v H [1994] HCA 48, 181 CLR 387 at 390 per Brennan and McHugh JJ; Gurnett v Macquarie Stevedoring Co Pty Ltd (1955) 72 WN (NSW) 261 at 264, 55 SR (NSW) 243 per Street CJ (Ferguson J concurring). Where the standard of proof is beyond reasonable doubt, not every individual piece of circumstantial evidence relied upon to prove an element by inference has to be proved beyond reasonable doubt. But the final inference on any essential element of the charge or indispensable link in the chain of reasoning must be established beyond reasonable doubt, and such a doubt must be entertained where any other inference consistent with innocence is reasonably open on the evidence: Shepherd v The Queen [1990] HCA 56, 170 CLR 573 at 579-580; Davidson v The Queen [2009] NSWCCA 150, 75 NSWLR 150 at [4] - [20]. Circumstantial evidence has to be considered as a whole, not in separate and isolated compartments, when deciding whether guilt has been established beyond reasonable doubt or whether there is an inference consistent with innocence reasonably open on the evidence: Shepherd at 580; Davidson v The Queen at [11] - [13].

The respondents submit that the evidence in this case is not as direct or strong as the evidence in Randwick City Council v Athens (No 7) [2004] NSWLEC 213 affirmed Athens v Randwick City Council [2005] NSWCA 317, 64 NSWLR 58, where the respondents were found to be in contempt for disobeying consent orders restraining them from using premises for the purpose of backpackers accommodation, as defined in a different planning instrument. That may be so but the evidence in the present case has to be judged on its own merits.

CREDIBILITY OF COUNCIL WITNESSES

The Council called a substantial number of witnesses. Some were cross-examined but their cross-examination did not challenge most of their evidence in chief. They all impressed me as honest, careful and reliable and I accept their evidence.

The only qualification, which does not affect my overall impression, is that the production of diary notes by Mrs Carol Perry in answer to a subpoena to produce that the respondents caused to be issued, was unsatisfactorily dilatory. Some were not produced until after her cross-examination had begun. However, once the respondents had seen all those documents, they indicated that they would not submit that Mrs Perry's accounts as to events on specific dates were not backed up by contemporaneous documents. On that basis, the Council withdrew its tender of those documents.

"ACCOMMODATION FOR TOURISTS OR TRAVELLERS": BOTH PREMISES

Under the LEP, backpackers accommodation is defined in part to mean a building used for the purpose of providing accommodation for tourists, travellers or persons engaged in recreational pursuits: above at [15]. The Council contends that the buildings on the subject premises were used for that purpose, predominantly for tourists or travellers.

There is no doubt the buildings on both the subject premises were used for the purpose of providing accommodation for reward. The tax return of the Rappaport Family Trust, of which Tovir was the trustee, shows substantial rental income from each of the premises. Bank statements show the transfer of substantial amounts of money from a BIH bank account, designated on the BIH website as the account to which rental payments could be made, to a Tovir bank account, as well as payments described as rent in relation to Kent Street paid into the BIH bank account. Michael Rappaport told Mr Hurley, a private inquiry agent, that he collected rent twice a week and that the best way to pay was by credit card on his Eftpos machine. He and his parents were seen collecting rent from occupants of the premises.

The threshold question is whether such accommodation was for tourists or travellers. The circumstantial evidence upon which the Council relies in that regard is organised under these headings:

(a) Foreign languages and accents.

(b) Travellers' vehicles.

(d) Number of occupants varying with the seasons.

(e) Luggage, bags and backpacks.

(f) Bins and waste.

(g) Mattresses/bedding.

(h) Parties.

Insofar as the circumstances invite comparison with a normal residential use, the respondents submit that there is no evidence of what a normal residential use is, if such evidence could ever be produced, and that it cannot be the subject of judicial notice. I disagree. The change in the use of the premises compared with their earlier, normal use was deposed to in the case of the Imperial Avenue premises by Mrs Perry and in the case of the Kent Street premises by Mr and Mrs Zwartz. It is unnecessary to go further but, in addition, s 144(1)(a) of the Evidence Act 1995 provides that: "Proof is not required about knowledge that is not reasonably open to question and is common knowledge in the locality in which the proceeding is being held or generally". No exhaustive list can be compiled of things that are open to judicial notice: Holland v Jones [1917] HCA 26, 23 CLR 149 at 154 per Isaacs J. An imperfect analogy may be drawn with the notice that a judge may take, in a motor accident negligence case, of "what usually occurs on the road": Burns v Lipman [1975] HCA 2, 132 CLR 157 at 162. I think that it is not reasonably open to question and is common knowledge in the locality or generally that it is not a normal or usual use of residential buildings such as these in suburban streets such as these, for there to be, for instance, a high turnover of young occupants carrying luggage and backpacks, increasing in the warmer months, many of them speaking in foreign languages or with foreign accents, some being transported in a bus or other vehicles by a person who appears to be the manager, others in travellers' vehicles, holding frequent noisy parties, with mattresses and bedding often being taken to and from the premises, and for rubbish bins to be often overflowing. In any case, the point of the evidence is not so much to draw a comparison with normal residential use as to indicate use for the purpose of accommodating tourists or travellers.

The respondents submit that no appropriate characterisation of the use of the subject premises could be undertaken based merely on what was observable from outside the premises. I think that is too sweeping a proposition. Also, there is more to it than that in this case.

IMPERIAL AVENUE USE

The Imperial Avenue premises contained a two storey residential building. Upstairs was a residential apartment with four bedrooms, a kitchen, a family/dining room, a bathroom and an ensuite. Three bedrooms are referred to in the affidavit of Mr Banfield who inspected the premises in September 2011; however on his annexed plan on which he marked the layout and on a larger version put to him in cross-examination, he marked four bedrooms, which is corroborated by the evidence of Mr Hurley. An internal stairway was blocked off. Downstairs were two residential apartments, each of which had two bedrooms. One of the downstairs apartments had a kitchen, a dining room and a bathroom but no living room. The other downstairs apartments had a kitchen and a bathroom but no dining room or living room.

Council witnesses as to the use of the Imperial Avenue premises included five neighbours: Mrs Carol Perry (including photographs), Mr Alexander Arthur, Mrs Eleanor Isben, Mr Steven Johnson and Mrs Rebecca Crabb; and four persons who inspected the inside of the premises: Constable Glenn Clifton, Senior Constable Ruebner (including photographs), Mr Warren Banfield, a Council senior building surveyor, and Mr James Hurley (including DVD footage), a private inquiry agent. Evidence of complaints to Council about the alleged use of the premises for the purpose of backpackers accommodation and about extra bin collections was given by Mr Mark Featherstone, the Council's Manager of Buildings and Compliance. As stated earlier, I accept their evidence. From about March 2011 Mrs Perry kept a bit more of a systematic record of events in notes or in emails to the Council's solicitors. However, she did not always record everything because, as she explained in cross-examination, she would have had to write copious notes day in, day out to report everything.

"Accommodation for tourists or travellers" (Imperial Avenue)

Mrs Perry, a teacher, lived in an apartment across the road from the Imperial Avenue premises from 1991. She deposed to two periods of time before the use of these premises changed to the use of which she now complains. First, a period of some years when she knew her neighbours at the premises. They were the Rappaport family with whom she became acquainted. In that period Imperial Avenue was a quiet residential street. Secondly, a period after the Rappaports moved out until the second half of 2010 when there was a "normal tenancy". The things she observed in the second period, which changed thereafter, were as follows: there was not a large turnover of short-term residents; there were not campervans and other vehicles with interstate plates parked in the driveway or in the street outside or nearby; the occupants did not speak in foreign languages or in English with foreign accents; there was not a regular movement of young people coming in and out of the premises; there was no pattern of occupation dictated by the seasons, with a far greater number of occupants during the warmer months particularly summer; garbage bins were not regularly overflowing or excess garbage being taken away separately to the weekly Council collection; there were not frequent loud parties; there was no picking up and dropping off of occupants in buses and vans; and there were no frequent deliveries and pick-ups of mattresses.

Foreign languages and accents (Imperial Avenue)

The neighbours, Constable Clifton and Mr Hurley heard people at the premises speaking in foreign languages or in English with foreign accents.

Mrs Perry deposed to having heard many of the people she had seen coming in and out of the premises in the period since about the latter half of 2010 speaking in a foreign language, including German, Dutch, French, Italian and Israeli, as well as people speaking English with English, Irish, Scottish and Australian accents. This evidence was not challenged in cross-examination. Mrs Perry gave numerous examples which occurred on specific dates in the period from about March 2011 when the occupants of the Imperial Avenue premises spoke with foreign accents. None of this evidence was challenged in cross examination. The respondents do not submit that any of Mrs Perry's accounts of an event on a specific date was not backed up by a contemporaneous document.

Mr Arthur, a fire fighter, lived in an apartment in a building across the road from the Imperial Avenue premises from April 2011, upstairs from Mrs Perry. He deposed that on most occasions when he passed the premises he saw young people at the front or rear of the premises, that he would often say "Hi" in passing and that:

I have never heard any of those people, whom I have seen at, or coming and going from the Premises, speaking with an Australian accent. I have always heard them speaking in foreign languages or with foreign accents.

Mr Arthur deposed to having been woken by noise from parties in the summer months when he has heard people at the front, or in the driveway, of the Imperial Avenue premises, or on the street outside, screaming or singing in foreign languages or with foreign accents, any time from midnight to 5am. He instanced: (a) persons whom he had seen going into and out of the premises from their campervan sometime around Christmas of 2011 speaking with a European accent; (b) a group of about eight young men whom he had regularly seen at the premises in the two-week period leading up to 14 March 2012 of Nordic appearance speaking in a European language; and (c) a young man speaking loudly in a foreign accent on his mobile phone at 1.30am on a day late in February 2012. None of this evidence of Mr Arthur was challenged in cross examination.

Mrs Isben, a retiree, lived with her husband close by in Imperial Avenue from 30 November 2011. Mrs Isben deposed that she has heard persons at the Imperial Avenue premises speaking in foreign languages and with European and Irish accents and broken English. Mrs Isben's evidence about this was not challenged in cross examination.

Mr Johnson, a psychologist, lived during the charge period diagonally opposite the rear of the Imperial Avenue premises except that he was overseas from January to September 2011. Mr Johnson deposed that he had heard persons at the Imperial Avenue premises speaking in English, Scandinavian languages, Italian, Spanish and Portuguese and also persons speaking with an Irish accent. His evidence in this regard was not challenged in cross-examination.

Mrs Crabb, a business analyst, lived close by in Imperial Avenue from November 2011. She often heard persons she had seen coming and going from the Imperial Avenue premises speaking in foreign languages or in broken English with foreign accents. Mrs Crabb's evidence about this was not challenged in cross examination.

Constable Clifton attended the Imperial Avenue premises at 7.30 am on 18 February 2012. He spoke to a few of the more than 40 persons at the premises. He described those few as being "of different nationalities French Italy [sic] and English". This evidence is to be understood as describing the accents or languages of those persons. Constable Clifton was not required for cross examination.

On 28 March 2011, Mr Hurley and his associate "Sandra", posing as persons looking for accommodation, were taken by Michael Rappaport, to the Imperial Avenue premises. Michael Rappaport told Mr Hurley that the Imperial Avenue premises consisted of two apartments on two levels; the top level was full of French people and the bottom level was a mix of one Irish, one Swedish, one German, one Australian, one Chilean and one English person. A young man looking for accommodation who joined them at Bondi Junction after Michael Rappaport had turned back to pick him up, had an accent that sounded American or Canadian and identified himself as a Canadian. When Mr Hurley was taken inside the Imperial Avenue premises, he identified some of the occupants as having foreign accents. He also heard two males speaking there in a foreign language. Mr Hurley was not cross examined.

In summary, the respondents submit:

(a) There is an unproven, underlying assumption that speaking in a foreign accent or language is evidence of nationality and proof of tourism or travelling.

(b) Evidence of an accent is not an indication of national origin and is an indication of nothing more than that the persons learned English as their second language: Philip v State of New South Wales [2011] FMCA 308 at [98] - [101]. Accordingly, no inference should be drawn that they were foreign nationals. They could have been students or other local or even foreign residents and yet not be tourists or travellers. Reference is made to the evidence in cross-examination of Mrs Zwartz (a witness in the Kent Street proceedings) that she used her house to accommodate foreign homestay students, and to the fact that Thomas Rappaport was born in Romania and Vivian Rappaport in Iraq.

(c) Similarly, the appearance of a person or their choice of clothing or what they drank, ate or sang is not proof of their nationality.

(d) A police investigation report in June 2011 indicated that one of the persons residing at the premises was studying.

It is difficult to accept the proposition at [46(b)] above. For example, if someone speaks with a Scottish accent, surely it is a reasonable inference that their country of origin is Scotland. Of course, the inference could be rebutted; for example, by evidence that the person was born in Australia but grew up in Scotland and thereby acquired a Scottish accent Philip v State of New South Wales is distinguishable. It was decided in the different context of alleged racial discrimination under Commonwealth legislation, the issue seems to have been whether in that context a particular person's accent could be substituted as a surrogate of national origin (at [101]), the court appears to have been addressing "the degree" of a person's accent (at [100]), and the circumstances were entirely different.

It may be accepted, as Mr Featherstone indicated in cross-examination, that in the local government area of Waverley there are a substantial number of immigrants who speak with accents as well as young persons attracted to the beach culture, who are not travellers or tourists. The mere fact that a person or some persons at a particular location speaks with a foreign accent or in a foreign language does not of itself prove that they are tourists or travellers.

However, the picture changes when the context and circumstances of this case are taken into account. The body of evidence about persons at the premises speaking in foreign languages or foreign accents cannot be dismissed or marginalised as if it merely constituted isolated instances or what one might expect in the ordinary course of things in the locality. It is significant circumstantial evidence that the building at the Imperial Avenue premises provided accommodation for tourists and travellers when there is taken into account the context and circumstances that:

(a) the foreign accents and languages were absent in that location prior to the second half of 2010;

(b) many different foreign accents and languages were heard spoken by the young persons at the premises over a long period of time;

(c) foreign accents and languages were heard being spoken at the premises by a cross section of witnesses: neighbours, a police officer and a private inquiry agent;

(d) the commencement of foreign accents and languages spoken by the young occupants of the premises coincided with the commencement in 2010 of other indicia that tourists or travellers were being accommodated;

(e) it is evident from the context in which the witnesses heard the foreign accents or languages, that most of those heard to speak with a foreign accent or in a foreign language at the premises were occupants of the premises; and

(f) the premises were marketed to foreigners overseas and an airport pickup service was provided.

Travellers' vehicles: campervans and cars with interstate plates (Imperial Avenue)

The Council submits that there was an unusually high number of travellers' vehicles associated with persons staying at the premises, that is, vehicles which had interstate plates or were campervans or had stickers associated with travelling. Evidence on this aspect was given by Mr Arthur and Mrs Perry. Examples of vehicles of that description are in Mrs Perry's photographs.

Mr Arthur's evidence about travellers' vehicles, which was of rather more probative value than Mrs Perry's, was not challenged. He said:

From October 2011 to date I have also noticed an unusually high number of campervans and cars with interstate number plates parked outside the Premises, outside my unit and elsewhere in Imperial Avenue. I have seen that these vehicles usually stay parked in Imperial Avenue for about 2 or so weeks before they move on and then I see a new set of campervans and cars with interstate number plates park in our street. On three or four separate occasions I have seen occupants of the campervans going into and out of the Premises. Sometimes I have seen them coming out of the Premises with wet hair and holding a towel or a toiletries bag.

Mrs Perry deposed that drivers and passengers of travellers' vehicles were young persons staying at the premises for short periods of time from about the second half of 2010. She instanced about a dozen specific occasions when travellers' vehicles were in or about the Imperial Avenue premises. Three were in the driveway of the Imperial Avenue premises; others were parked nearby in Imperial Avenue; and some were seen with young people apparently from the Imperial Avenue premises getting into or loading them. However, a couple of the travellers' vehicles that she saw appear to have been used by young persons who were only visiting the Imperial Avenue premises or using its facilities rather than residing there. The thrust of the cross-examination of Mrs Perry was as to an alleged lack of nexus between the cars with interstate plates she had photographed and occupants of the Imperial Avenue premises. It was put to her and she denied that she had made up oral evidence that she had seen someone leave the premises and get into a vehicle with interstate plates shown in one of her photos. As I have said, I accept her evidence.

The respondents submit that no inference can be drawn that all the travellers' vehicles identified by Mrs Perry related to Imperial Avenue premises and that the numbers were relatively small such as not to be indicative of a particular use. Some of the travellers' vehicles sighted by Mr Arthur and Mrs Perry can be put aside because the persons using them appear to have only been visiting the Imperial Avenue premises or using its facilities rather than residing there. However, taking into account the context of the location of the premises in an otherwise unremarkable residential street and the internet marketing of the premises as accommodation for young people, I conclude that most of the travellers' vehicles to which they referred were used by young occupants of the premises. It is evidence that the building provided accommodation for tourists or travellers.

Turnover of occupants; transience of occupation (Imperial Avenue)

Evidence that persons occupying the Imperial Avenue premises were young people who stayed for short periods of time was given by the neighbours.

Mr Arthur deposed that in the time he had lived in Imperial Avenue:

...I have seen a constant stream of people entering and leaving the Premises. These people, whom I have seen coming and going from the Premises are generally aged between 18 and late 20's. Often I have seen them carrying day packs, or bags of shopping. On occasions when I have seen people arrive at the Premises for the first time, I have seen them carrying large travel packs.

...

I have also not seen on a regular basis, any of those people coming and going from the Premises for more than 2 weeks at a time. From the time I have lived in my unit I have seen so many people come and go from the Premises, I could not say that there are any long term residents. The only evidence of any one person living in the premises for more than a couple of weeks is a small work van with "Homelift" written on the side. I have regularly seen that van parked in the driveway to the Premises or just outside the Premises since October 2011 to the present date. That aside, I do not recognize any one person as a long term resident at the Premises.

Since I have been living at 49 Imperial Avenue, I have come to know my neighbours who live in the apartment complexes at 47 and 49 Imperial Avenue and who I see regularly. However I have not come to know any person residing at the Premises, because of the frequency with which I have seen people coming and going from the Premises.

Mrs Isben deposed that throughout the time she has been living in Imperial Avenue, she has "observed that the Imperial Avenue Premises appeared to have a huge turnover of occupants".

Mr Johnson deposed that over the six months prior to March 2012, he had noticed a significant turnover in the number of young persons at the premises and each month he observed a new group of persons arriving there.

Mrs Perry deposed that since around the second half of 2010 the people staying at the premises were young people who stayed for short periods because there was a regular turnover of different travellers' vehicles and different occupants.

Mrs Crabb deposed that the persons coming and going from the premises were in their late teens or early twenties, that three or four times every week she saw the (Tovir) bus outside the premises and people with backpacks getting in and out of it, and that around Christmas 2011 the number of young people coming and going increased.

I accept their evidence as indicating that there was a relatively high turnover of occupants and transience of occupation. I consider this to be probative of the proposition that the building provided accommodation for travellers and tourists, who generally may be expected to occupy any one premises for a relatively short period of time.

Number of occupants varying with the seasons (Imperial Avenue)

Evidence of the number of occupants varying with the season was given by Mrs Perry, Mr Arthur and Mrs Crabb.

Mrs Perry deposed that there was a pattern of the numbers of people staying at the premises being dictated by the seasons, with a far greater number of occupants during the warmer summer months. She added:

During the winter months of 2011, the number of occupants at the Premises and the level of noticeable activity there decreased. Then, when the weather got warmer from about Spring of 2011, the activity and number of persons present and staying at the Premises increased again.

During the Summer of 2011 / 2012, the numbers of young people staying at the Premises continued to increase further and, as far as I could tell, there were even more young people staying there than there had been in the previous Summer of 2010 / 2011.

Mr Arthur deposed:

From October 2011 to the present date, I observed that greater numbers of people come and go from the Premises. I also observed that coming into the winter months in 2011, there were less people at the Premises and I did not see people arriving at and leaving the Premises as regularly as when I have seen them doing so during the summer months.

Mrs Crabb, who moved into Imperial Avenue in November 2011, deposed to an increase in young people around Christmas 2011.

The respondents submit that the seasonality evidence has been influenced in part by the Council's indications that more complaints were to be received if Council were to take action which coincided with "the season". The submission is based on an email from the Council's lawyer to Mrs Perry on 29 July 2011 stating that the Council was hardly receiving any complaints at that time and would reconsider the evidence when the next high season came around; and on further email correspondence between them in October 2011 in which the lawyer inquired whether the complainants had been logging their complaints with Council on a regular basis and Mrs Perry replied she had been keeping the Council updated and would ring others that day and encourage them to do the same. Mrs Perry was cross-examined about this and agreed that she would have conveyed her understanding of the emails to neighbours including Mr Arthur, Mrs Isben and Mr Johnson. This does not affect my assessment of their evidence. I do not accept that Mrs Perry or any other witness was influenced to give evidence that was inaccurate, if that is what the respondents are suggesting; nor was that put to them in cross-examination.

The respondents submit that the evidence does not disclose any real difference in the seasons and that people are more likely to be observed out of doors in the warmer months, which is simply a human response to the season and not seasonality. I do not accept the submission except for the broad proposition that people tend to be out of doors more in the warmer months. In my view, the evidence shows that there was an increase in the number of occupants in the warmer months, which is indicative of the building providing accommodation for travellers and tourists.

Luggage, bags and backpacks (Imperial Avenue)

Young persons entering and leaving the Imperial Avenue premises, sometimes dropped off or picked up in the Tovir bus, were regularly seen with luggage, bags or backpacks. Such evidence was given by Mrs Perry, Mrs Crabb, Mr Arthur and Mr Johnson. Mr Hurley, who saw inside the premises, deposed to seeing a suitcase in the hallway and multiple items of luggage in a bedroom. Luggage, bags and backpacks can be seen in photographic evidence. Discounting for the fact that some of the backpacks were of the relatively small type that young persons who are not travellers or tourists might use for day to day use including (for example) to go to the beach, this evidence is indicative that the building provided accommodation for tourists and travellers.

Bins and waste (Imperial Avenue)

There were some eight garbage bins at the Imperial Avenue premises, which were regularly overflowing. Sometimes there were additional garbage bins. On occasions, bags of rubbish were also at or outside the premises. Sometimes Michael Rappaport and others took away rubbish in the Tovir bus. There were substantial number of requests to Council for additional bin collections and complaints by neighbours to the Council about overflowing bins and garbage. Generally, a Council officer either referred complaints to "Legal" to investigate or decided that no action was required.

The respondents submit:

(a) it is not established what is a "normal" amount of garbage disposal. Council's website suggests it accepts that bins will not always fulfil ratepayers' needs;

(b) even if relevant to characterisation of use, the observations of waste generation is not as dire as the Council suggests. Observations of overfull bins are quite random and some observations are made on the day of collection or the day before. It also appears that sometimes bins were not put out or a collection was missed so that a bin was accommodating two weeks garbage when observed to be overfull or requiring an additional collection;

(d) the evidence does not support the conclusion that overflowing bins was a regular occurrence.

I do not accept the submission in (d) above, which is contrary to unchallenged evidence of Mrs Isben, Mrs Crabb and Mrs Perry. Assuming that some specific observations were on the day of collection or the day before and that a bin sometimes contained two weeks garbage, I do not think that is particularly significant overall. In my view, the evidence of overflowing bins and waste indicates a relatively high occupation of the premises which, when coupled with other evidence, is indicative of occupants who were tourists or travellers.

Mattresses/bedding (Imperial Avenue)

Mrs Perry gave evidence of mattresses and bedding being delivered and collected from the premises and being transported in a vehicle on or about ten specific dates between June 2011 and early March 2012. On several of these occasions she identified Michael Rappaport and his assistant as being involved. A photograph taken on the occasions of the execution of a search warrant by Senior Constable Ruebner shows mattresses stored in the stairwell. A surveillance report shows the movement of mattresses in vehicles. I consider that it is evidence of occupants who were tourists or travellers.

Parties (Imperial Avenue)

Evidence of loud parties attended by young people at the Imperial Avenue premises including on weeknights was given by the neighbours.

Mrs Isben deposed that she had heard very noisy parties at the Imperial Avenue premises at least four nights most weeks, the loudest and longest usually between Thursdays and Sundays. They started in the mornings as early as 9.00 am or after lunch and continued into the early hours of the next morning. They could start on a Thursday and continue until late Sunday night. In the case of three parties in February 2012 the noise was so loud that she rang the police.

Mr Johnson deposed that often extremely noisy events were held at the Imperial Avenue premises, often until well past midnight, and that on at least 20 occasions over the six months preceding March 2012 he called the police to ask them to visit the premises to ask the residents to cease excessive noise.

Mr Arthur deposed that from about October 2011 he heard parties at the premises on at least three out of every seven nights every week (every Friday and Saturday night and one other night) from about 10.00 pm to 4.00 or 5.00 am. The noise often kept him awake.

Mrs Perry deposed that since about the second half of 2010 there have been very frequent loud parties at the Imperial Avenue premises, not just on Friday and Saturday nights but also during the week and on Sunday nights. She started to complain about them some time in about late 2010. She gave several specific instances. On 25 June 2011 there was a party there which continued until about 7am when police arrived. On Friday 10 February 2012 there was a very loud party which continued until 7am. On Thursday 16 February 2012 there was a noisy party and she rang the police at 1.00 am. On Friday 9 March 2012 there was a very loud party that continued until the early hours. On 15 March 2012 there was loud music which continued until the early hours of the next morning: at 1.50 am she rang the police to complain.

Mrs Crabb referred to a very loud party on Saturday 11 February 2012. At about 2am a young man with a Brazilian or Spanish accent, who appeared to be drunk or intoxicated, knocked on her door. After being spoken to, he stumbled off towards the Imperial Avenue premises.

The respondents submit that there is no proven link between such parties and travellers and tourists because others could behave in the same way. The respondents point out that on the occasion of one of the parties at Imperial Avenue, a noise abatement notice was issued to a person who resided elsewhere and was only visiting for the party.

In my view, the intensity and relentlessness of partying by youthful occupants are consistent with them generally being tourists or travellers.

Conclusion as to tourists or travellers (Imperial Avenue)

On the basis of the evidence reviewed above, I am satisfied beyond reasonable doubt that the premises were used for the purpose of providing accommodation for tourists and travellers during the charge period.

"May have Shared Facilities" (Imperial Avenue)

The element in paragraph (a) of the definition of backpackers accommodation is that the building "may have shared facilities, such as a communal bathroom, kitchen or laundry". As discussed earlier, the word "may" indicates that it is not essential that it have such shared facilities; indeed, is likely that such shared facilities will exist in many types of accommodation that are not backpackers accommodation. However, there is no doubt that there were such shared facilities at the premises having regard to the observations of the interior of the premises by Mr Banfield, Constable Clifton, Senior Constable Ruebner and Mr Hurley ; and the relatively high number of occupants observed by witnesses. In addition, on 28 March 2011 Michael Rappaport indicated to Mr Hurley that the Imperial Avenue premises had two bathrooms and there were three to four persons per bathroom.

"Will generally provide shared accommodation in which there are two or more persons in a room" (Imperial Avenue)

This is the element in paragraph (b) of the definition of backpackers accommodation. There is a statement on the BIH website, through which the two subject premises and other premises were promoted, that "The landlord generally limits shared rooms to 30% of the total household in order to avoid overcrowding". Whatever the position might have been at other premises, I have no doubt that the subject premises in fact generally provided shared accommodation in which there were two or more persons per room during the charge period. This is clear from the evidence of the relatively high number of occupants, the layout of the premises, and observations inside the premises by Mr Banfield, Constable Clifton, Senior Constable Ruebner and Mr Hurley. Mr Banfield inspected the upper and lower levels of the premises in September 2011 and March 2012. The layout on both occasions was the same. In each bedroom on the first floor there was either a double bed or two single beds. Each bedroom on the ground floor contained either two single beds or a double bed. On Constable Clifton's inspection of what seems to have been the downstairs flat at 7.30 am on 18 February 2012, he opened a couple of bedroom doors and saw numerous people in each room and realised it was a group house with over 40 people living in it. This high estimate may be partly explained by the fact that there had apparently been a party there the night before. On Constable Ruebner's inspection of the upstairs flat in March 2012, he observed that there were multiple beds or mattresses in each bedroom, that about 16 to18 persons could reside there given the amount of bedding available, and that 10 people were residing there at the time of his inspection.

This evidence is fortified by the evidence of Mr Hurley's inspection of the upstairs apartment. On or about 28 March 2011, he observed four bedrooms. Bedroom 1 had three single beds. Bedroom 2 had a double mattress and there were a male and a female sitting on it. Bedroom 3 had two bunk beds. Bedroom 4 had a double bed. Michael Rappaport told him that there were roughly eight or nine people living in the apartment, three boys were living in bedroom 1 and a couple were living in bedroom 2. Mr Rappaport's assistant, Maxim, said 10 people lived inside that apartment.

"Will generally provide temporary accommodation, but may provide permanent accommodation" (Imperial Avenue)

This is the element in paragraph (c) of the LEP definition of backpackers accommodation. The LEP definition of "temporary accommodation" is: "premises providing short-term accommodation on a weekly and monthly basis, being premises where a person may stay for no more than 2 months." The construction of paragraph (c) and of the LEP definition of "temporary accommodation" has been discussed above at [17] - [22].

There is evidence that is inconsistent with the premises providing temporary accommodation as defined in the LEP. First, the BIH or BSH websites, on which the subject premises and other premises owned by Tovir or its directors were promoted, stated that the minimum stay was three months and referred to study options for students, accommodation for students and professionals and Sydney colleges and universities. The reference to a minimum stay of three months was heavily qualified by a statement on the BIH website that an occupant can leave within three months on paying a termination fee of two weeks rent, and was contradicted by a statement on another page of the BSH website that the minimum stay was six months. Secondly, on 28 March 2011 Michael Rappaport told Mr Hurley and his female associate, posing as accommodation seekers and she as a Swedish student, that he targeted students, he didn't like people on a working holiday visa as he had trouble with them in the past, he never took people who wanted to stay for less than three months and most stayed six to 18 months. On the other hand, he also told them that as long as they gave two weeks notice they could leave when they wanted to.

In my view, during the charge period all this did not reflect the reality. It may have been aspirational or transitional, possibly arising from the consent orders made in early 2011, but, if so, it generally had not yet been achieved. On the unchallenged evidence of predominantly high turnover, transience, seasonality and so on to which I have referred, I am satisfied beyond reasonable doubt that the reality during the charge period was that the premises still generally provided temporary accommodation to tourists and travellers.

Continued use before and after the making of the orders (Imperial Avenue)

The respondents do not accept the Council's proposition that there was continuity of use for the purpose of backpackers accommodation before and after the consent orders were made. That proposition is supported by the evidence of Mrs Perry as from the second half of 2010. The respondents criticise her evidence on this issue as vague statements of perception or opinion. Her evidence as to the pre-orders period was in general terms but I would not say it was vague. It was not challenged in cross-examination nor is there any contrary evidence. I accept it. If it is necessary to go further, there is also the fact that when the consent orders were made, their retrospective effect to 12 February 2011 was explained to the Court on the basis that the enjoined uses had already ceased. I take that as evidence that the Imperial Avenue premises were used for the purpose of backpackers accommodation as defined in the LEP prior to 12 February 2011. I conclude that there was continuity of use of the premises for the purpose of backpackers accommodation as defined in the LEP from at least the second half of 2010 until the end of the charge period, without significant abatement.

Conclusion as to use (Imperial Avenue)

In reaching a conclusion, I allow for the fact that a police report of 3 June 2011 evidences that at that time one of the occupants of a ground floor apartment at the Imperial Avenue premises was a student.

Having regard to the totality of the evidence, I am satisfied beyond reasonable doubt that during the charge period the Imperial Avenue premises were used for the purpose of backpackers accommodation as defined in the LEP.

KENT STREET USE

Evidence as to the use of the Kent Street premises was given by three neighbours: Mrs Jane Zwartz, her husband Mr Jonathan Zwartz, and Mr Gregory Kauter. Mr Featherstone produced council records of complaints to Council about the alleged use of the premises for the purpose of backpackers accommodation and about extra bin collections. As stated earlier, I accept their evidence. Mr and Mrs Zwartz lived next door and to the west of the Kent Street premises from 1996 except for two years between 2008 to March or April 2010 when they rented out their house. Mr Kauter lived next door to and to the east of the Kent Street premises from 2008 to 23 February 2012. Mrs Zwartz kept a diary of her observations from November 2010 comprising electronic notes on a computer. In cross-examination she said she did not make a note of everything she saw or heard but for the most part kept a note of the important things.

The building at the Kent Street premises was a duplex. There was one residential unit upstairs and one downstairs, each with its separate entrance. Old council approved plans show that each unit had two bedrooms, a dining room, a kitchen and a bathroom. The plans are the only complete evidence of the interior. However, in addition, Mr Kauter could see from his apartment over the road three bedrooms, two of them upstairs and one downstairs; Mr and Mrs Zwartz, could see from their front balcony into its first floor bedroom on one side; and photographs of parts of the interior appeared on the BSH website on which the premises were promoted. The respondents submit that the Council approved plans are too old to be reliable. As there is no evidence of any alteration to the layout shown in them or of alterations to the relatively small building, I propose to rely on them. There was also a garage at the premises, on the roof of which occupants gathered and partied.

"Accommodation for tourists or travellers" (Kent Street)

Foreign languages and accents (Kent Street)

Evidence as to persons at the Kent Street premises speaking in foreign languages or with foreign accents was given by Mr and Mrs Zwartz and Mr Kauter.

Mrs Zwartz, a manager, made the following observations of people speaking with foreign accents or in foreign languages:

(a) From 2010 the tenants of the Kent Street premises were completely different to those she had come to know before they left Kent Street in 2008, including increased parties often four times per week, many more people (all young) coming and going, and for the first time people at the premises speaking with foreign accents or in foreign languages. Some spoke in Spanish, which is a language she recognises.

(b) On 3 February 2011 there were three people outside the Kent Street premises whom she had regularly seen coming and going for a few days, and one of them spoke with a French accent.

(c) On 8 February 2011 there were many new faces among the people at the premises, she overheard more speaking with French accents, and she estimated there were at least ten people at the premises.

(d) On 17 February 2011, shortly after Michael Rappaport and his assistant entered the premises, a person with a French accent was talking to a person with a New Zealand accent at the premises.

(e) On 18 February 2011 a man who spoke with an American accent was on the footpath outside the premises.

(f) There was a very loud party at the premises on the night of Sunday 20 February 2011 and people arriving at the premises spoke in French.

(g) On Monday 21 February 2011 two young men were standing outside the premises speaking in French.

(h) On 28 February 2011 two young women outside the premises were talking with Irish accents to the occupants of the premises.

(i) On 14 March 2011 Michael Rappaport arrived at the premises with three young people who got out of the bus and entered the premises. They were speaking with American accents.

(j) On 25 March 2011 Michael Rappaport and his assistant and a young couple speaking with French accents entered the premises.

(k) On 26 October 2011 a person on the footpath was speaking with a foreign accent.

(l) On 27 October 2011 during a loud party at the premises a woman at the premises was speaking in Italian.

(m) On 2 December 2011 during a very loud party at the premises, someone at the premises was yelling with either a Spanish or Brazilian accent.

(n) On 3 December 2011 five young men in the backyard of the premises were speaking in Spanish or possibly Brazilian.

(o) On 15 December 2011, Michael Rappaport was at the premises with three young blonde men who had Estonian or Russian accents.

(p) On 29 December 2011 a man with a thick Italian accent was speaking outside the premises.

(q) On 3 December 2011 a young man carrying a suitcase got out of a vehicle (that Michael Rappaport had been seen driving) and went into the premises. He spoke with a foreign accent to someone in the vehicle.

(r) On 10 January 2012 two girls outside the premises were speaking with French accents. They were carrying suitcases, which they took into the premises.

(s) On 4 February 2012, people at the premises were speaking with Irish accents and New Zealand accents.

(t) On 12 February 2012 a young woman on the footpath outside the premises standing next to a suitcase and other belongings, spoke with a French accent on her mobile phone.

(u) Later the same day another woman on that footpath, with several bags, spoke with an Irish accent.

(v) On 23 February 2012 two women let themselves into the premises with a key. They spoke with German or Dutch accents.

Mr Zwartz, a musician and educator, deposed:

(a) As soon as they returned to their Kent Street home in 2010, he heard people at the Kent Street premises speaking with Spanish accents.

A third example is the evidence of Mr Arthur, who deposed:

I have also seen Michael Rappaport driving a 12-15 seater white bus. I have observed the bus stopping at the premises 3-4 times per week at all different times of the day. When I have seen that bus stop at the Premises, I have seen people getting out of the bus, some of whom are carrying backpacks.

On other occasions when I have seen that bus stop at the Premises, between 10 to 15 people come out of the Premises and get onto that bus, which I have then seen drive off.

Sometimes I have seen the same bus pull up in the driveway to the Premises for about 2 minutes and then I have seen a person or some times a few people come out of the Premises and get onto the bus, which I have then seen drive away.

Fifthly, the BIH and BSA websites, through which the premises were promoted, stated that a contact was "Michael" and gave his telephone number, which other evidence shows is that of Michael Rappaport. In closing oral submissions the respondents conceded that the subject premises were promoted through BIH and BSH and that it was a reasonably available inference that this was done by Michael Rappaport (although, they submitted, it had not been shown it was with the knowledge, acquiescence or permission of Tovir).

Sixthly, as is apparent from the BIH and BSH promotional websites, the respondents' promotion of the subject premises was part of a wider business enterprise of providing accommodation involving also the three other premises at 1A Kambala Road, Bellevue Hill, 86 Blair Street, North Bondi and 89 Watson Street, Bondi. As previously stated, Tovir owned the subject premises and the Blair Street premises, and Tovir's shareholders/directors, Thomas and Vivian Rappaport, owned the other two premises. The respondents submit that this does not relate to the charges as particularised, which repeats an objection to admissibility I overruled during the trial: Waverley Council v Tovir Investments Pty Ltd and Rappaport (No 2) [2013] NSWLEC 21 at [8] - [33]. In my view, this evidence is contextual and also cannot sensibly be disentangled so as to confine it to the subject premises. Further, evidence of promotion and management of the wider business enterprise is relevant to whether the respondents promoted and managed the subject premises, which is relevant to whether they caused and permitted the use of the subject premises: ibid at [27], [30]. In the end, this evidence fortifies my conclusion, arrived at independently of it, that Michael Rappaport managed the subject premises.

For these reasons, I am satisfied beyond reasonable doubt that Michael Rappaport managed the premises on behalf of Tovir and thereby caused them to be used for the purpose of backpackers accommodation as defined in the LEP.

DID TOVIR CAUSE OR PERMIT THE PREMISES TO BE USED FOR THE PURPOSE OF BACKPACKERS ACCOMMODATION?

The respondents submit that the Council has not discharged its burden of proving beyond reasonable doubt that Tovir caused or permitted a breach of the Court's orders because it has not proved that Tovir had knowledge of the unlawful use and had in some way connived or arranged for it to take place on its behalf. They submit:

(a) mere ownership of the premises is insufficient: Wilkie v Blacktown City Council [2002] NSWCA 284, 121 LGERA 444 at [40] - [44], [59] - [60];

(b) the fact that Tovir received rental income from the premises does not alone prove that Tovir knew of and participated in the specific use of the premises;

(c) mere presence at the scene of an illegal activity is insufficient unless there is a prior arrangement for the illegal activity to take place: Osland v The Queen [1998] HCA 75, 197 CLR 316 at [72];

(d) there is no evidence of direct management by Tovir. It does not suffice that there is a group of family companies including the family trust (of which Tovir is the trustee), nor that there were occasional visits to the premises by Thomas and Vivian Rappaport, nor that the vehicles used by Michael Rappaport were registered to Tovir;

(e) Michael Rappaport's actions cannot be attributed to Tovir because there is no evidence of the relationship between them, there has been no attempt to show that he was an officer or employee of Tovir, and it has not been established that he was involved in decision-making affecting the affairs or business of Tovir or had the capacity to significantly affect Tovir's financial standing: Ford, Austin & Ramsay, Ford's Principles of Corporations Law, 11th ed (2003) at 8.020 summarising Australian Securities & Investments Commission v Adler [2002] NSWSC 171, 41 ACSR 72;

(f) there is no evidence that Tovir caused the promotion or marketing material on the BIH and BSH websites to be created or published. Nor was there any association between Tovir and BIH and BSH, particularly given that Vivian Rappaport was not a director or shareholder of BIH or BSH. The respondents concede that the subject premises were promoted through BIH and BSH by Michael Rappaport. They also concede that it might be an available inference that he was retained by Tovir to do it. However, they submit that another reasonably available inference is that he was doing it without Tovir's acquiescence, knowledge or permission and did it running the social club on behalf of himself, BIH or BSH - one just does not know;

(g) the Court could not be satisfied, based on the limited evidence of Thomas and Vivian Rappaport attending one of the subject premises, that Tovir was invested with a sufficient level of knowledge to understand the nature of the use being carried out on the premises;

(h) it could rationally be inferred that when Michael Rappaport used Tovir's motor vehicles when managing the premises, he was acting on his own or in his capacity as a director or shareholder of BIH or BSH;

(i) the question is whether Michael Rappaport was acting on the authority, express or implied, of Tovir: O'Sullivan v Truth and Sportsman Ltd [1957] HCA 8, 96 CLR 220 at 228. That has not been proved.

None of the propositions in [144(a) - (c)] above applies here. That is, the evidence against Tovir is not merely of its ownership of the premises, nor is it merely that it received rental income from the premises. Rather, it is both and more. Nor is the evidence merely that Thomas and Vivian Rappaport were present at the premises. It is that and more. As for [144(e)] above, the Council, contends, and I accept, that Michael Rappaport was Tovir's property manager. Whether in that capacity he was Tovir's employee or agent does not matter. I agree that there was no attempt to show that he was an officer of Tovir. The respondents refer to Australian Securities & Investments Commission v Adler but it was concerned with a statutory definition of "officer". In that case it was claimed that Mr Adler had breached his statutory duties as an officer of a corporation and an issue was whether he was an "officer" within the definition of "officer" in s 9(b)(i) and (ii) of the Corporations Act 2001 (Cth), which provides that an "officer" is "a person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation; or who has the capacity to affect significantly the corporation's financial standing". That issue does not arise in the present case.

In my opinion, the Council has discharged its burden of proof in relation to both premises having regard to the following matters in combination.

First, Tovir is a small family company whose directors and shareholders are Thomas and Vivian Rappaport. Michael Rappaport is their son and appears to have lived with them during the charge period.

Secondly, Tovir owned the premises.

Thirdly, Tovir rented out the premises and received the rental income. Where rent was not paid by bank transfer, Michael Rappaport regularly collected the rent. On occasions, so did Thomas and Vivian Rappaport.

Fourthly, Michael Rappaport managed the premises intensively on a daily basis using vehicles owned by Tovir including collecting the rent, transporting people and their luggage as well as mattresses to and from the premises, and showing potential occupants through the premises. He was present with his parents or one or other of them, at the premises on occasions.

Fifthly, Thomas and Vivian Rappaport visited the Imperial Avenue premises sometimes accompanied by Michael Rappaport. Mrs Perry deposed:

(a) Thomas and Vivian Rappaport visited the Imperial Avenue premises on a number of occasions since about the second half of 2010, escorting people inside the premises and collecting money from them;

(b) over the few months preceding 19 March 2012 Thomas Rappaport was occasionally at the premises doing maintenance work and internal repairs;

(d) on an occasion in March 2011 Vivian Rappaport spoke with young people at the premises one at a time, some of them handed something to Vivian Rappaport and she thereupon wrote something in a small book. I infer that she was collecting money from occupants;

(e) on an occasion in October 2011, Tovir's white bus arrived at the premises four or five times, at one stage unloading seven people and Vivian Rappaport was in the driveway meeting them, as they arrived;

(f) on 1 March 2012 the (Tovir) van Thomas Rappaport had driven in the past was parked outside the premises and he was talking to a group of people who had come out of a campervan parked outside Mrs Perry's apartment. Minutes later he, Vivian and Michael Rappaport walked into the premises.

(g) later that day two Council inspectors arrived at the premises and talked to Thomas and Michael Rappaport. Photos of them were taken.

In addition, Thomas Rappaport and Michael Rappaport were present when Mr Banfield, a council Senior Building Surveyor, inspected the Imperial Avenue premises on 5 September 2011 in connection with a building application. Mr Banfield observed that the building had one unit upstairs and two units downstairs, none of which had Council approval. Thomas Rappaport said that he had approval from the Local Government Appeals Tribunal for three units. Mr Banfield said Council had no record of any consent to construct three units and asked Thomas Rappaport to give a copy of the Tribunal's consent to Council. Thomas Rappaport said that when he found it he would do that. No copy of any such consent was received by Mr Banfield.

Sixthly, Thomas and Vivian Rappaport were seen by neighbours at the Kent Street premises and on one occasion Thomas Rappaport was accompanied by Michael Rappaport. One or other of Mr Kauter, Mrs Zwartz and Mr Zwartz deposed:

(a) on an occasion in June 2011 there was a vehicle that was regularly driven by Vivian and Michael Rappaport (and owned by Tovir), parked in front of Mr Kauter's property with two mattresses strapped to its roof;

(b) on 10 March 2011 Vivian Rappaport was at the premises. A photo was taken of her apparently putting something in a garbage bin at the premises. She was also seen at the premises from time to time quite late in the evening and also in a Tovir vehicle and with Michael Rappaport;

(d) on 7 January 2012 Thomas and Michael Rappaport were at the premises;

(e) at about 1 am on a weeknight in 2011, a (Tovir) vehicle was parked outside the premises and Vivian Rappaport was cleaning rubbish bins outside the premises. There was a loud party going on inside the premises. Mr Zwartz spoke to her, after which she knocked on the door of the downstairs flat at the premises, and shortly afterwards loud party noise stopped. The inference, as the respondents accept, is that the noise stopped because she spoke to the occupants;

(f) Thomas Rappaport has been seen the Tovir van that Michael Rappaport has often driven to and from the premises.

Seventhly, the subject properties and three other properties were promoted for accommodation on the BIH and BSH websites. In my view, the following matters indicate that BIH and BSH were associated with the respondents and that the websites promoted the premises with the respondents' permission:

(a) Of the five properties marketed on the BIH and BSH websites, three, including the subject properties, were owned by Tovir and two by Tovir's directors and shareholders, Thomas and Vivian Rappaport.

(b) At all material times the sole shareholder of BIH Pty Ltd was Thomas Rappaport. Its sole director was Michael Rappaport from 22 August 2007 to 17 March 2009. Thomas Rappaport was a director from 26 October 2011 to 25 October 2012. Michael Rappaport was a director from 17 May 2012 onwards. Thus, there was no director between 17 March 2009 and 25 October 2011. I infer that BIH Pty Ltd was controlled in that period by its sole shareholder, Thomas Rappaport.

(c) From the date of BSH Pty Ltd's incorporation on 30 March 2011, its sole director was Thomas Rappaport and its sole shareholder was Michael Rappaport.

(d) The BIH and BSH websites referred to a contact as "Michael" and gave his phone number. Other evidence establishes that that is a phone number of Michael Rappaport.

(e) The BIH websites stated: "Our parent companies own all the properties - so we manage all repairs swiftly". The expression "parent companies" may be understood as a loose reference to Tovir because it owns three of the properties promoted on the website, and to Thomas and Vivian Rappaport because they own the remaining two properties. It does not matter if the term "parent companies" is legally incorrect. There is other evidence of Thomas Rappaport collecting money from occupants and Thomas and Vivian Rappaport carrying out repairs and work (above at [151(a), (b) and (d)] and [153(c)]).

(f) The BIH website referred to the property owner and to Tovir in its terms of use: "For the security of the property owner and the head tenant the sub tenant agrees to pay the rent directly into the property owner [sic] bank account. I agree to these terms and assure Tovir Investments P/L that I have sufficient funds in my credit card to meet these payments".

(g) The post office box address for BIH on the BIH website was the same as Tovir's address on Roads and Maritime Services registration records for Tovir's motor vehicles used by Michael Rappaport when managing the premises and on bank statements for Thomas and Vivian Rappaport's "Tovir Investments Account".

(h) The postal address for BIH Pty Ltd on the BIH website is 1a Kambala Road, Bellevue Hill, which is owned by Thomas and Vivian Rappaport, Tovir's directors and shareholders.

(i) The BIH website provided for payment of rent to BIH and gave its bank account details. Rental payments were made to BIH's bank account, and monies were transferred from that account to Thomas and Vivian Rappaport's Tovir bank account.

(j) The BIH website said that: "The landlord generally limits shared rooms" etc. The "landlord" may be understood as a reference to the owners of the five premises promoted, that is, Tovir and Thomas and Vivian Rappaport.

(k) The BIH website Kent Street link included a tenant testimonial that "Michael and Vivian were great". This appears to be a reference to Michael Rappaport and his mother.

(l) Given all the above, the above, I do not think that the association is negated merely because Vivian Rappaport was not a director or shareholder of BIH Pty Ltd and BSH Pty Ltd.

Eighthly, Tovir through its directors knew that the Court had enjoined the unlawful use of the premises for the purpose of backpackers accommodation in early 2011. In May and November 2011 Tovir had received correspondence from the Council's lawyers raising the issue of the ongoing use of the premises for that unlawful purpose. Tovir must have turned its mind to that issue because it instructed its lawyers to reply to the Council on 15 November 2011 denying the allegation.

It may not always be conclusive but "in any ordinary case the question whether one person authorised another to do an act or series of acts on his behalf is best answered by considering for whose benefit or in whose interest it was intended it should be done": Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52, 219 CLR 165 at [70] quoting Press v Mathers [1927] VLR 326 at 332 per Dixon AJ. Michael Rappaport intensively managed the premises, including its use for the purpose of backpackers accommodation, for the benefit of Tovir.

In my opinion, the evidence shows that the relationship between Tovir and Michael Rappaport was one of owner/lessor and property manager and that it was within the scope of his authority to place occupants in the premises.

I do not accept the respondents' submission that it is a rational inference that Michael Rappaport might have been only acting on his own or on behalf of BIH or BSH. Tovir owned the premises and he used Tovir vehicles to manage them. One of the vehicles was a 12 seater bus or van. It is fairly obvious that Tovir bought it to manage the premises. Insofar as the respondents suggest he might only have been running the BIH or BSH social club advertised on the websites, that is quite inconsistent with the extent of his actions and, in any case, the social clubs appear to be linked to occupants of the promoted premises.

The remedy of an injunction is worth no more than its main sanction, contempt: Witham v Holloway [1995] HCA 3, 183 CLR 525 at 547-548. The contempt sanction protects the administration of justice by holding persons, including corporations, accountable for breaching injunctions.

A corporation is an abstraction, it can only act through living persons. The conduct of a person may be attributed to a corporation because the person is the corporation's relevant directing mind and will or because he is an agent or servant for whom the company is vicariously liable: Director-General, Department of Environment and Climate Change v Jack & Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232, 172 LGERA 225 at [78] - [99] per Biscoe J and the cases there reviewed. In doing particular things, depending on the circumstances of the case, a manager may represent the directing mind and will of a corporation, or may be regarded as the corporation's servant or agent for whose conduct the corporation is vicariously liable.

A rule of attribution counts as a corporation's actions, the actions of its agents or servants, of whatever level, whose work involves compliance with court orders on the corporation's behalf. A corporation disobeys a court order and is in contempt by the deliberate act of its agents or servants whilst acting in the course of their employment, regardless of whether the act was authorised or even expressly forbidden by the corporation, or was done through carelessness, neglect or dereliction of duty, or even was done reasonably on legal advice: Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190, at 194; Heatons Transport (St Helens) Ltd v Transport and General Workers' Union [1973] AC 15 (HL) at 99-100, 108-110; Director General of Fair Trading v Pioneer Concrete (UK) Ltd [1995] 1 AC 456 (HL) at 476-481; Z Ltd v A-Z [1982] 1 QB 558 (CA) at 581; Z Bank v D1 [1994] 1 Lloyd's Rep 656 at 661; Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46, 161 CLR 98 at 112 per Gibbs CJ, Mason, Wilson and Deane JJ; Forestview Nominees Pty Ltd v Perron Investments Pty Ltd [1999] 93 FCA 405, 162 ALR 482 at [47] - [49] per Cooper J and [94] per R D Nicholson J (who placed solicitors acting without authority in a separate category); Cram (ed), Borrie & Lowe: The Law of Contempt, 4th ed (2010) at [6-11]. If an order against a corporation can be complied with only if a servant or agent is prevented from exercising his authority, it is the duty of the corporation to at once withdraw that authority, and if it fails to take all possible steps to do so and such person acts contrary to the terms of the order, it will be in contempt: Z Bank v D1 at 661, 666. By imposing responsibility for those whom a corporation can reasonably be expected to influence or control, the entity is induced to keep itself up to the mark and the administration of justice is protected: Reynolds v G H Austin & Sons Ltd [1951] 2 KB 135 at 149.

Michael Rappaport, whilst acting as Tovir's property manager, deliberately acted in a way that caused the premises to be used for the purpose of backpackers accommodation as defined in the LEP and thereby breached the Court's orders. Therefore, in my opinion, his conduct is to be attributed to Tovir such that Tovir is also in contempt for causing the premises to be used for that unlawful purpose.

In my opinion, the conduct of Tovir's directors, Thomas and Vivian Rappaport, is also to be attributed to Tovir. So far as the evidence discloses, Tovir's directors were its directing mind and will. Clearly, they knew that Tovir's premises were being rented out for Tovir's benefit and that their son Michael was managing the premises using Tovir's motor vehicles. They attended the premises from time to time, spoke to and escorted occupants inside, collected money from occupants and Thomas Rappaport carried out work at the premises. As regards promotion of the premises on the BIH and BSH websites, Thomas Rappaport was a director or shareholder of BIH Pty Ltd and BSH Pty Ltd. It is a reasonable inference, in my view, that they knew, or at least had reason to anticipate, that the buildings on the premises were providing or were likely to provide accommodation for tourists and travellers, had shared facilities, and generally provided shared accommodation and temporary accommodation. They had the power to prevent it, defaulted in their duty of control, and thereby failed to prevent it: above at [14]. Even if they were unaware of the unlawful purpose of the use, by putting Michael Rappaport in charge of the premises as property manager it should be inferred from the circumstances that he had a discretion or liberty to use the premises for the purpose for which they were used; they at least left it to chance whether the premises would be used for the unlawful purpose; and they thereby permitted him to use the premises for the unlawful purpose. Even without attribution of Michael Rappaport's conduct to Tovir, attribution of their conduct to Tovir leads to the conclusion that Tovir at least permitted the premises to be used for the purpose of backpackers accommodation as defined in the LEP, and therefore is in contempt. In my opinion, when Michael Rappaport's conduct is also attributed to Tovir, the combination of attributed conduct leads to the conclusion beyond reasonable doubt that Tovir caused and permitted the premises to be used for that unlawful purpose.

ORDERS

In my opinion, for these reasons, the charges against the respondents have been proved beyond reasonable doubt. The orders of the Court on each of the Council's notices of motion are as follows:

(1) The respondent is adjudged guilty of contempt of court as charged.

(2) The respondent is to pay the applicant's costs to date.

(3) The matter will be listed before me at 9.30 am on 3 April 2013 to fix a date for a sentencing hearing.

Amendments

11 November 2013 - typographical corrections to paragraph 25: change "355" to "390"; move "at 264" to after "261"

Amended paragraphs: 25

Decision last updated: 11 November 2013

Medium Neutral Citation:	Waverley Council v Tovir Investments Pty Ltd & Rappaport (No 3) [2013] NSWLEC 35
Hearing dates:	18-28/2/13, 1/3/13, 4/3/13
Decision date:	27 March 2013
Jurisdiction:	Class 4
Before:	Biscoe J
Decision:	The respondents are adjudged guilty of contempt of court as charged and are to pay the applicant's costs.
Catchwords:	CONTEMPT - civil contempt - charges of failing to obey consent orders restraining respondents from causing or permitting the use of certain premises for the purpose of backpackers accommodation as defined in the Waverley Local Environmental Plan 1996 - construction of the definitions of "backpackers accommodation" and "temporary accommodation" - consideration of evidence and proof in contempt cases and the distinction between civil and criminal contempt - consideration of the nature and proof of circumstantial evidence - whether buildings were used for the purpose of providing backpackers accommodation as defined - if so, whether the corporate first respondent caused and permitted that use and the second respondent caused it -meaning of "causing" and "permitting" - consideration of attribution of conduct of a person to a corporation in a civil contempt case.
Legislation Cited:	Corporations Act 2001 (Cth) s 9(b)(i),(ii) Evidence Act 1995 s 144(1)(a) Land and Environment Court Rules 2007, r 6.3 Supreme Court Rules 2005 Pt 55 r 13 Waverley Local Environmental Plan 1996 Part 5 Schedule 2
Cases Cited:	Adelaide City Corporation v Australasian Performing Right Association Ltd (1928) 40 CLR 481 Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 Athens v Randwick City Council [2005] NSWCA 317, 64 NSWLR 58 Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46,161 CLR 98 Australian Securities & Investments Commission v Adler [2002] NSWSC 171, 41 ACSR 72 Australian Securities and Investments Commission v Sigalla (No 4) [2011] NSWSC 62, 80 NSWLR 113 Azzopardi v The Queen [2001] HCA 25, 205 CLR 50 Blacktown City Council v Pace [2002] NSWLEC 142, 121 LGERA 432 Broad v Parish (1941) 64 CLR 588 Burns v Lipman [1975] HCA 2, 132 CLR 157 Davidson v The Queen [2009] NSWCCA 150, 75 NSWLR 150 Director-General, Department of Environment and Climate Change v Jack & Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232, 172 LGERA 225 Director General of Fair Trading v Pioneer Concrete (UK) Ltd [1995] 1 AC 456 (HL) Doyle v The Commonwealth [1985] HCA 46, 156 CLR 510 Forestview Nominees Pty Ltd v Perron Investments Pty Ltd [1999] 93 FCA 405, 162 ALR 482 G v H [1994] HCA 48, 181 CLR 387 Goldsmith v Deakin [1933] All ER 102 Gurnett v Macquarie Stevedoring Co Pty Ltd (1955) 72 WN (NSW) 261, 55 SR (NSW) 243 Hearne v Street [2008] HCA 36, 235 CLR 125 Heatons Transport (St Helens) Ltd v Transport and General Workers' Union [1973] AC 15 (HL) Holland v Jones [1917] HCA 26, 23 CLR 149 Jones v Dunkel [1959] HCA 8, 101 CLR 298 Lyver v State of Victoria [1983] 2 VR 475 Majury v Sunbeam Corporation Ltd [1974] 1 NSWLR 659 March v E and MH Stramare Pty Ltd [1991] HCA 12, 171 CLR 506 Matthews v Australian Securities and Investments Commission [2009] NSWCA 155 Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92, 167 LGERA 91 Osland v The Queen [1998] HCA 75, 197 CLR 316 O'Sullivan v Truth and Sportsman Ltd [1957] HCA 8, 96 CLR 220 Philip v State of New South Wales [2011] FMCA 308 Press v Mathers [1927] VLR 326 R v Jasper [2003] NSWCCA 186, 139 A Crim R 329 Randwick City Council v Athens (No 7) [2004] NSWLEC 213 Reynolds v G H Austin & Sons Ltd [1951] 2 KB 135 Ronowska v Kus (No 2) [2012] NSWSC 817 RPS v The Queen [2000] HCA 3, 199 CLR 620 Shepherd v The Queen [1990] HCA 56, 170 CLR 573 Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52, 219 CLR 165 Waverley Council v Tovir Investments Pty Ltd and Rappaport (No 2) [2013] NSWLEC 21 Wilkie v Blacktown City Council [2002] NSWCA 284, 121 LGERA 444 Witham v Holloway [1995] HCA 3, 183 CLR 525 Z Bank v D1 [1994] 1 Lloyd's Rep 656 Z Ltd v A-Z [1982] 1 QB 558 (CA)
Texts Cited:	Cram (ed), Borrie & Lowe: The Law of Contempt, 4th ed (2010) Ford, Austin & Ramsay, Ford's Principles of Corporations Law, 11th ed (2003)
Category:	Principal judgment
Parties:	Waverley Council (Applicant) Tovir Investments Pty Ltd (First Respondent) Michael Rappaport (Second Respondent)
Representation:	COUNSEL: T Howard (Applicant) S Duggan SC and M Seymour (Respondents) SOLICITORS: Sparke Helmore (Applicant) Gadens (Respondents)
File Number(s):	40917/10 and 40918/10