TECC Limited v Auckland City Council HC Auckland CRI 2010-404-182

[2010] NZHC 1688

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI 2010-404-000182

TECC LIMITED

Appellant

v

AUCKLAND CITY COUNCIL

Respondent

Hearing:         19 July 2010

Appearances: M I S Phillipps for the Appellant

T Mayo for the Respondent

Judgment:      21 July 2010 at 5:00 pm

JUDGMENT OF WYLIE J [Appeal against sentence]

This judgment was delivered by Justice Wylie on 21 July 2010 at 5:00 pm

pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors/Counsel:

Szigetvary Law, P O Box 3643, Shortland Street, Auckland 1140

Auckland City Council, Private Bag 92 516, Auckland

M I S Phillipps, P O Box 3320, Shortland Street, Auckland 1140

TECC LIMITED V AUCKLAND CITY COUNCIL HC AK CRI 2010-404-000182  21 July 2010

[1]      On 5 May 2010, TECC Limited (“TECC”) pleaded guilty to three charges of breaching  an  Auckland  City Council  bylaw.    It  accepted  that  it  had  caused  or permitted signage to be placed in a public place for the purposes of advertising its business — a brothel — without the necessary approvals.

[2]      Following its pleas, it was sentenced by her Honour Judge B A Cunningham in the District Court at Auckland.  It was fined $500 on the first offence, $750 on the second, and $1,000 on the third.  In addition, Court costs of $130 each were imposed in relation to the last two convictions.

[3]      TECC has appealed against the sentence.  It argues that the fines imposed are manifestly excessive.

Background

[4]      TECC operates a brothel in Cross Street, Newton, Auckland.  The brothel is licensed under the name of “Chicago Gentlemen’s Club”.

[5]      In February 2010, it was served with 10 informations which alleged that it had  committed  an  offence  under  s 239  of  the  Local  Government  Act  2002  by breaching Part 20.2.3(b) of the Auckland City Consolidated Bylaw (Public Places)

2008.

[6]      The relevant bylaw reads as follows:

A  person  shall  not,  without  the  prior  written  approval  of  an  authorised officer or unless specifically authorised by a bylaw:

(a)       ...

(b)       place or leave, or cause or permit to be placed or left, any material or thing including any signage, in, on or over any public place for the purpose of sale, exhibition, demonstration, storage or otherwise.

[7]      The 10 informations covered the period 23 July 2009 to 2 November 2009.

[8]      The first call of the informations was on 9 March 2010.  The appellant was then remanded without plea.   There were two further adjournments on 24 March

2010 and on 21 April 2010.

[9]      On  5  May  2010,  the  informations  were  called  again.     Seven  of  the informations were withdrawn by the Auckland City Council (“the Council”).  TECC entered guilty pleas to the other three which related to offending on 23 July 2009,

21 August 2009 and 19 September 2009. A four page agreed summary of facts was submitted to the Court.

[10]     Photographs of the signage were sought by Judge Cunningham, and handed up to the Court by counsel during the sentencing submissions.   The photographs were of the signs exhibited on 21 August and 19 September 2009.  They disclosed the times that those signs were exhibited.  There was no photograph of the sign the subject of the 23 July 2009 offending.

The Judge’s sentencing notes

[11]     Her Honour Judge Cunningham noted TECC’s pleas.  She recorded that she had seen photographs of the signs and that it appeared that the same had been held up by an individual.   She commented that this had been done at a time when the maximum number of potential customers were likely to see them, just before 5:00 pm in relation to two of the signs, and at 11:00 pm in respect of the third sign.

[12]     Her Honour’s sentencing notes contained the following passage:

Ms Mayo for the Council tells me that it took a prosecution to bring this matter to a halt and it would be obvious, from what I have already said, that there were three occasions, in three successive months; that says to me that TECC Limited was not taking any notice of the Council’s requests to stop it.

[13]     Her Honour went on to note that neither counsel had been able to supply her with any detail of fines imposed in similar cases.  She noted that the maximum fine was  $20,000.    She  considered  that  she  needed  to  impose  a  fine  that  not  only

denounced what had occurred, but would deter others from doing likewise. She accepted that the appellant had pleaded guilty at the earliest opportunity. She then went on to impose the fines and Court costs which I have noted above at [2].

The appeal

[14]     The notice of appeal is dated 24 May 2010.

[15]     I  have  received  helpful  submissions  from  Mr  Phillipps  for  TECC.    He referred to the relevant bylaw, and to the applicable provisions in the Local Government Act.   He then submitted that Judge Cunningham had erred in the approach she adopted.

a)       First, he submitted that she should have sentenced on the summary of facts which had been agreed and filed with the Court, and that she had erred in principle in sentencing on a wider basis.   Specifically, he submitted that there was nothing to support her Honour’s observation that “... it took a prosecution to bring this matter to a halt...”.

b)Secondly, he submitted that her Honour failed to follow the approach in R v Taueki,[1] and to apply the totality principle.

[1] [2005] 3 NZLR 372 (CA).

c)       Thirdly, he submitted that her Honour failed to take into account the purposes and principles of the Sentencing Act 2002.

d)Fourthly, he noted that TECC had entered guilty pleas, and submitted that in accordance with R v Hessell,[2]  the pleas should be taken into account in setting the appropriate fines.

[2] [2009] NZCA 450.

[16]     In conclusion, he submitted that the correct approach would be to fine TECC approximately $500 on  the first offence, add  an uplift of $250 for  each of the subsequent offences, then apply a discount of 20 per cent to reflect mitigating factors

he submitted applied, and then give a discount of 33 per cent for the guilty plea.  He submitted that this approach would result in a fine of somewhere in the vicinity of

$600.  He submitted that an alternative approach would be to impose a fine for each offence of $300, then apply the appropriate discounts for mitigation and the early guilty plea — once again resulting in a fine in the vicinity of $600.

[17]     Ms Mayo appearing for the Council, accepted that the summary of facts made no reference to warnings having been given to TECC.  She nevertheless asserted that that did not mean that no warning letters were issued, but simply that the summary of facts did not refer to them.   She then asserted that her Honour was entitled to accept “as proved, all facts, expressed or implied, that are essential to a plea of guilty or a finding of guilty” — s 24(1)(b) of the Sentencing Act.  She submitted that Judge Cunningham was entitled to take starting points of $500, $750 and $1,000 respectively for each offence, and that in the absence of relevant case law, the fines imposed were appropriate, given the maximum penalty of $20,000 per offence detailed in the legislation.  She submitted that in the circumstances the fines could not be said to be manifestly excessive.  She submitted that her Honour had taken into account the purposes and principles of the Sentencing Act, and specifically that she had referred to the need to denounce the appellant’s conduct, and to deter others from doing likewise.

[18]     In summary, she submitted that any fine imposed should not be seen to be a mere licence to offend.   She submitted that her Honour had imposed fines which were modest given the scheme of the Act, and that they could not be said to be manifestly excessive.

Analysis

[19]     TECC has pleaded guilty to breaching s 239(1) of the Local Government Act. That section reads as follows:

(1)Every  person  commits  an  offence  and  is  liable  on  summary conviction to the penalty set out in section 242(4) or (5), as the case may be, who breaches a bylaw made under Part 8 of this Act.

[20] The bylaw breach in the present case is bylaw 20.2.3(b). I have set it out above at [6]. The bylaw was made under Part 8 of the Local Government Act — ss 143–223.

[21]     Section 145 of the Act gives territorial authorities the general power to make bylaws for one or more of the following purposes:

a)        protecting the public from nuisance;

b)        protecting, promoting and maintaining public health and safety; and c)           minimising the potential for offensive behaviour in public places.

[22]     There was no challenge to the bylaw in the present case, and there is nothing before me to indicate which purpose it was intended to advance.

[23]     It is noteworthy that the bylaw was not made under the Prostitution Reform Act 2003.  That Act permits a territorial authority to make bylaws for its district that prohibit or regulate signage that is in, or is visible from, a public place, and that advertises commercial sexual services — s 12.   However, bylaws may be made under this section only if the territorial authority is satisfied that the bylaw is necessary to prevent the public display of signage that is likely to cause a nuisance or serious offence to ordinary members of the public using the area, or is incompatible with the existing character or use of an area.  Bylaws made under this section may prohibit or regulate signage in any terms, including, without limitation, by imposing restrictions on the content, form or amount of signage on display.  Under s 13(2), a bylaw can be made under s 12, even if, contrary to s 155(3) of the Local Government Act, it is inconsistent with the New Zealand Bill of Rights Act 1990.

[24]     I am aware that the Council does have a bylaw dealing with signage on brothels or on sandwich boards advertising brothels.   That bylaw — No. 30.5 — does purport to govern the content of such signage.  I do not know whether it was in force at the time of TECC’s offending and I note that in its terms it may be doubtful whether bylaw 30.5 could have applied to the signage here in issue.  Nevertheless, it

is noteworthy that bylaw 20.2.3 does not directly relate to the content of signage, and at least in regard to brothels, the Council can regulate content under a different empowering statute if it wishes to do so. I return to this issue below at [42].

[25]     Bylaw  20.2.3(b)  does  not  prohibit  the  placing  or  leaving  of  signage simpliciter.  Rather, it prohibits the placing or leaving of signage without the prior written approval of an authorised officer.  No grounds are specified in the bylaw to guide an authorised officer in determining whether or not to grant approval and neither Mr Phillipps nor Ms Mayo were able to assist me in advising how the bylaw works in practice.

[26]     The penalty for breach of the bylaw is governed by s 242(4) of the Local

Government Act.  It provides as follows:

(4)A person who is convicted of an offence against a bylaw made under Part  8  (other  than  a  bylaw  made  under  Part  8  referred  to  in subsection (5)) is liable to a fine not exceeding $20,000.

[27]     A breach of a bylaw can have other consequences.  Relevantly, the District Court may grant an injunction restraining a person from committing a breach of a bylaw — s 162.  When an injunction is issued and an offender continues to breach the bylaw, the consequences can be serious.   They can extend to committal for contempt:  see Auckland City Council v Finau.[3]

[3] [2003] DCR 286.

[28]     There are two observations to be made about s 242:

a)       First, the section applies in its terms to all bylaws made under Part 8 of the Local Government Act.   Bylaws cover a very wide range of activities.   The omnibus maximum penalty detailed in the section would clearly be both disproportionate and inappropriate for some of the more minor matters covered by bylaws.  For example, Allan J has held that a simple liquor ban breach contrary to a bylaw would be unlikely  to  ever  attract  a  penalty  anywhere  near  the  stipulated

maximum:   see Oldfield v Police.[4]   Similarly, McKenzie J has held

[4] HC Hamilton CRI-2009-419-62, 11 February 2010.

that to fine at the maximum level permitted would clearly be disproportionate for an offence against a parking bylaw:  see Ross v Wellington City Council.[5]

[5] HC Wellington CRI-2006-485-47, 28 July 2006.

b)        Secondly,  under  the  now  largely  repealed  Local  Government  Act

1974, the maximum fine for breach of a bylaw was $500 — s 683(1). Parliament has seen fit to substantially increase the maximum fine available.

[29]     Notwithstanding that the penalty for breach of a bylaw is a fine only, it is clear that the purposes and principles of the Sentencing Act are applicable — see s 40(1) of the Sentencing Act.  Moreover, in determining the appropriate sentence, a Court may accept as proved any fact that is disclosed by evidence at the hearing or trial, and any facts agreed on by the prosecutor and the offender, and must accept as proved all facts expressed or implied that are essential to a plea of guilty or a finding of guilty — s 24(1).

[30]     Finally,  by  way  of  general  comment,  in  fixing  a  fine,  the  methodology discussed by the Court of Appeal in R v Taueki[6] should be followed:  Department of Labour v Hanham & Philp Contractors Ltd.[7]   It follows that a starting point must be determined notwithstanding that this will often be a difficult exercise.  The starting point  should  take  into  account  any  aggravating  or  mitigating  features  of  the offending.    It  is  then  necessary  to  determine  whether  there  are  aggravating  or

mitigating factors personal to the offender which require that the sentence should be higher or lower than the starting point.  This involves a consideration of the factors mentioned in ss 8 and 9 of the Sentencing Act which relate to the offender, as opposed to the offending, as well as any other matters relevant to the personal circumstances of the offender.  The most significant mitigating factor will often be an early guilty plea, for which a substantial reduction in the starting point will

normally be justified:  see R v Taueki[8] and R v Hessell.[9]

[6] [2005] 3 NZLR 372.

[7] (2008) 6 NZELR 79 (HC) at [61]–[78].

[8] At [44].

[9] [2009] NZCA 450 at [49]–[50].

[31]     I now turn to apply these generalised principles to the sentence imposed by her Honour Judge Cunningham.

[32]     I accept Mr Phillipps’ submission that her Honour took into account matters which  had  not  been  agreed  to  by TECC  and  which  were  not  contained  in  the summary of facts.  Specifically, her Honour:

a)       observed that two of the signs were exhibited just before 5:00 pm when the number of potential customers was at its maximum; and

b)took into account an assertion made by Ms Mayo for the respondent that it took a prosecution to bring the matter to a halt, and that TECC did not take any notice of the Council’s request to stop displaying the signage.

[33]     The fines, and in particular the escalating amount, imposed by her Honour suggest that these matters were important.  There is no reference to either matter in the summary of facts or in the photographs.  The photographs record that only one offence, that on 21 August 2009, occurred at or about 5:00 pm.  The offence which occurred on 19 September 2009 occurred at 11:00 pm.   There is no information about the 23 July 2009 offending.   Nor is there anything to suggest that it took a prosecution to bring matters to a halt.  If the Council was asserting that notice had been given to TECC, if that assertion was denied, and if it was suggested that this was an aggravating factor justifying a greater penalty in respect of the later offences, then the disputed facts procedure provided by s 24(2) of the Act should have been followed.  That did not occur.

[34]     It is wrong in principle to sentence on a wider basis than was accepted by the offender unless the facts are properly established:  see McEvoy v Police.[10]

[10] CA21/82, 17 December 1982.

[35]     Mr Phillipps submits that the Judge did not apply the Taueki methodology.

[36]     I am mindful of the pressure under which the District Court operates.  Judges in that Court do not have the luxury of time, which is generally available in this Court, when they are sentencing, particularly for minor offences.  Nevertheless, there is force in Mr Phillipps’ submission.  The Judge did not expressly and transparently follow the Taueki methodology.  In particular, she did not detail her starting point for sentencing and as a consequence, the discounts she allowed are not readily apparent.

[37]     Further,  her  Honour  did  not  expressly  articulate  which  purposes  and principles of sentencing detailed in the Sentencing Act she relied on, other than to record in broad terms that she needed to impose a fine that denounced what had occurred and which deterred others from doing likewise.  Specifically, she did not comment on the gravity of the offending or on TECC’s culpability.

[38]     The appeal was brought under s 121(3) of the Summary Proceedings Act

1957.  Relevantly it provides as follows:

(3)In the case of an appeal against sentence, the High Court may— (a)         Confirm the sentence; or

(b)If the sentence (either in whole or in part) is one which the Court imposing it had no jurisdiction to impose, or is one which is clearly excessive or inadequate or inappropriate, or if the High Court is satisfied that substantial facts relating to the offence or to the offender's character or personal history were not before the Court imposing sentence, or that those facts were not substantially as placed before or found by that Court, either—

(i)Quash  the  sentence  and  either  pass  such  other sentence warranted in law (whether more or less severe) in substitution therefor as the High Court thinks ought to have been passed or deal with the offender in any other way that the Court imposing sentence   could   have   dealt   with   him   on   the conviction; or

(ii)      Quash  any  invalid  part  of  the  sentence  that  is severable from the residue; or

(iii)      Vary,   within   the   limits  warranted   in  law,  the sentence or any part of it or any condition imposed in it.

[39]     Notwithstanding the shortcomings in the process followed, I must ask myself whether the fines imposed by the Judge were clearly excessive.   As part of the process, I must determine what fines should, in my view, have been imposed.   In undertaking that exercise, I confine myself to the limited information contained in the summary of facts accepted by TECC, and in the photographs made available by counsel.

[40]     I consider first the relevant purposes and principles of sentencing.

[41]     Notwithstanding Mr Phillipps’ submission to the contrary, it seems to me that some harm was done to the community.   The summary of facts records that the Council had received complaints from members of the public about the offending signage.  The harm may have been relatively minimal, but nevertheless, s 7(1)(a) of the Sentencing Act applies.   It is appropriate to hold TECC accountable for that harm. Moreover, the sign was exhibited on three occasions, in each case in breach of the bylaw.  There is a need to promote in the appellant a sense of responsibility for the harm the breaches of the bylaw have caused — s 7(1)(b).  There is also a need to denounce the conduct in which the appellant was involved, namely repeated exhibition of a sign in a public place in breach of the bylaw — s 7(1)(e) — and to deter others from committing the same or a similar offence — s 7(1)(f).

[42]     The following observations can be made about the offending:

a)       Had prior approval been obtained, then no offence would have been committed.  The offence lay in the failure to seek approval (although quite what would have happened had approval been sought is not clear).

b)The bylaw was made under the general provisions in the Local Government Act rather than the more nuanced provisions in the Prostitution Reform  Act.    It  does  not  seek  to  directly control  the content of signs.  While the signage in issue in the present case was not subtle, it would seem to me to be inappropriate to treat the content of  the  signs  as  an  aggravating  feature.    If  the  Council  wishes  to

regulate the content of such signs, it should do so by way of bylaws made under the Prostitution Reform Act.  I note that Ms Mayo did not ask me to take the content of the signs into account.

c)       The signs were displayed on at least one occasion when the roading network was likely to have been extremely busy — namely, at approximately 5:00  pm.   There must  have been  a possibility that drivers would be distracted by the signage and that public safety could have been in issue.

d)       The signage was exhibited on three separate occasions. e)     The signage was relatively small and it was hand held.

f)        There is nothing to suggest that the signage was displayed for any lengthy period.

g)       Two of the offences were committed in the Karangahape Road area and the other in Queen Street.  Karangahape Road and parts of Queen Street  are  areas  known  for  their  colourful  character,  especially  at night.

h)A conscious decision was clearly made by TECC to arrange for and to exhibit the signage and on more than one occasion, but there is no evidence that it did so in the face of objections from the Council.

While the gravity of the offending was in my judgment relatively minor, the degree of culpability of TECC appears to me to be rather more obvious — s 8(a).

[43]     Further, the offending in my judgment is relatively minor in comparison with other similar types of offence under the Local Government Act.  I refer to s 242(5), which provides that breach of a bylaw dealing with trade waste can attract a fine of up to $200,000.   Similarly, where a person is convicted of an offence against a bylaw, the person is liable to pay to the local authority the cost of remedying any damage caused in the course of committing the offence, which is to be assessed by a

Judge, and recovered as if the costs are a fine — s 176.   These comparisons are relevant under s 8(b) of the Sentencing Act.

[44]     Section  8(e)  requires  that  I take  into  account  the  general  desirability  of consistency with appropriate sentencing levels in relation to similar offences.  Here, counsel could not assist me in this regard.   There is no tariff case or guideline judgment, and neither their research, nor mine, disclosed any relevant authorities.

[45]     Section 9(1)(i) is relevant.  As I have already indicated, in my view there was premeditation on behalf of the appellant.  Clearly it arranged for the signage to be exhibited and on more than one occasion.

[46]     There is no lead offence as such, although in my view the offending which occurred at 5:00 pm or thereabouts on 21 August 2009 is the most serious, given the time of day and the busy nature of the roads at that time.

[47]     It is common ground that a fine has to be seen as a penalty, and that it should not be in such amount as to be simply an overhead or a cost of business.

[48]     The signage did advertise the availability of services.   However, I have no information about the profits derived by TECC as a result of the breach of the bylaw. Nor do I have any information about the financial capacity of TECC to pay any fines imposed.  I am required to take that issue into account — s 40(1).  Given that it was not raised by Mr Phillipps, I assume that financial capacity is not in issue.

[49]     Taking all matters into account, in my view, as a starting point, a fine of $750 is appropriate in relation to the offending which occurred on 21 August 2009.  The offence which occurred on 19 September 2009 occurred at 11:00 pm on Queen Street.  Given the time of night and the general nature of the area at that time, as a starting point, a fine of $500 seems to me to be more appropriate in relation to that offence.   There is no information before me as to when the offending on 23 July

2009 occurred.   Taking the view most favourable to TECC, it is in my view an appropriate starting point is a fine of $500 in relation to that offending.

[50]     I have considered the totality principle.  In my judgment it is not offended by the fines I consider appropriate.

[51]     It follows that the starting points I have adopted would result in a total fine of

$1,750.

[52]     There are some mitigating factors personal to TECC. a)         It has no previous convictions.

b)        There is nothing to suggest that any signage was displayed by TECC

in breach of the bylaw after November 2009.

[53]     I allow a discount of $150 for these two factors, or $50 per offence.

[54]     Finally  in  this  regard,  there  is  the  fact  that  TECC  entered  guilty  pleas. Mr Phillipps submitted that the guilty pleas were entered at the first reasonable opportunity.   In that regard, I note that there were three adjournments before the pleas were entered.  There is no explanation before me as to why the pleas were not entered at an earlier point of time, and I am not satisfied that they were entered at the first reasonable opportunity.  Nevertheless, I accept that a substantial discount is still appropriate.  In my judgment, a discount of 25 per cent is appropriate in the present case.

[55]     It follows that the total fine I impose in relation to all three offences is

$1,200.

[56]     This total fine is significantly less than that imposed by her Honour Judge Cunningham, and it follows that, in my view the fines imposed by her Honour were clearly excessive.

[57]     The  appeal  is  allowed  and  the  fines  imposed  by  her  Honour  Judge

Cunningham are quashed.  In substitution therefore, I impose the following fines:

a)        In respect of the offending committed on 23 July 2009            $337.50

b)        In respect of the offending committed on 21 August 2009       $525.00

c)        In respect of the offending committed on 21 September

2009

$337.50

The order for the payment of Court costs made by her Honour Judge Cunningham stands.

[58]     In my view, no award of cost is appropriate in relation to this appeal.  The fine suggested to her Honour by TECC at the initial hearing was $150 for each offence, and I have imposed fines substantially in excess of that figure.  There was no guidance available in the case law and in my view an award of costs would not be appropriate in the circumstances.  I direct that costs are to lie where they fall.

Wylie J