Hornsby Shire Council V Atifame Pty Limited & Another [1999] NSWLEC 69

Land and Environment Court of New South Wales CITATION: Hornsby Shire Council V Atifame Pty Limited & Another [1999] NSWLEC 69

PARTIES APPLICANT Hornsby Shire Council

FIRST RESPONDENT Atifame Pty Limited

SECOND RESPONDENT James Warren Byrnes

NUMBER: 40083 of 1998

CORAM: Pearlman J

KEY ISSUES: :- contempt of court - failure to comply - mitigating factors

LEGISLATION CITED: contempt of court - failure to comply - mitigating factors

DATES OF HEARING: 03/10/1999

DATE OF JUDGMENT DELIVERY: 03/23/1999

APPLICANT Mr J E Robson (Barrister)

SOLICITORS McKees LEGAL REPRESENTATIVES: FIRST & SECOND RESPONDENTS Mr N A Hemmings (Solicitor)

SOLICITORS Allen Allen & Hemsley

JUDGMENT:

Contents

Section Paragraph Number

Introduction 1 to 3 Background 4 to 8 The alleged breaches 9 The appropriate punishment 10 to 12 The factors taken into account (a) Reliance on the Council 13 to 17 (b) Prompt instructions 18 to 20 (c) Confusions about the plans 21 to 25 (d) Flocculation and pumping out 26 to 28 (e) Difficulties and uncertainties 29 to 32 (f) Compliance 33 to 35 (g) Apology 36 Conclusion 37 to 41 Orders 42

IN THE LAND AND 40083 of 1998 ENVIRONMENT COURT Pearlman J OF NEW SOUTH WALES 23 March 1999

HORNSBY SHIRE COUNCIL Applicant v ATIFAME PTY LIMITED First Respondent JAMES WARREN BYRNES Second Respondent JUDGMENT

Introduction

1. These are contempt proceedings. By notice of motion, the applicant, Hornsby Shire Council, seeks an order finding both the first respondent, Atifame Pty Ltd, and the second respondent, Mr J W Byrnes, guilty of contempt of the orders of the Court.

2. A number of orders were made by the Court on 26 June 1998 relating to construction being carried out on a site known as 10 Playfair Road, Mt Colah ("the site"). On the site, the first respondent (of which the second respondent is currently the sole director) is in the process of constructing a multi-unit housing development, comprising 16 dwellings.

3. The statement of charge alleges that the respondents are in breach of some of those orders, namely, those numbered 2(d), 2(e), 2(f) and 2(g) which are as follows: "(d) Construct and maintain a temporary sediment basin with embankments one (1) metre in height to ensure all turbid (and sediment laden) water from the property is contained. All clean water (ie from roofs) is to be directed to the Council drainage system within the adjoining park. The sediment basin is to be flocculated and pumped out regularly.

TIMEFRAME: By Monday, 29 June 1998.

(e) All sediment fences and berms are to be constructed and maintained as per Exhibit B plans. If a fence, berm or catch drain is breached or is not operating, it is to be repaired within a reasonable time.

TIMEFRAME: Ongoing (ie until building works complete).

(f) Install the internal drainage system and connect the existing roof areas that have been provided with roof sheeting (through suitable guttering and downpiping) to the clean water drainage system. The roof drainage system is to be connected to the internal drainage system by passing the temporary sediment pond and exiting to the Council system as clean water.

TIMEFRAME: By Friday, 3 July 1998.

(g) An order requiring the provision of guttering and downpiping as buildings are provided with roof sheeting, and connection of those roof drainage systems to the clean water drainage system within three (3) days of the roof sheeting being installed.

TIMEFRAME: Ongoing (ie until building works complete)."

Background

4. On 16 April 1998, the council commenced class 4 proceedings seeking declarations to the effect that the respondents were carrying out works upon the site in breach of conditions of a development consent numbered 98/95. At the same time, the council sought, by notice of motion, various urgent orders relating to sediment control, and orders substantially in the terms sought were made by the Court on that date.

5. On 25 June 1998, the council applied to the Court, by way of notice of motion, seeking orders in substitution for the orders of 16 April 1998. The orders sought related generally to sediment control and compliance with a plan numbered 8020 and tendered in evidence as ex "B". No orders were however made on that day, the Court noting that a site meeting was being arranged in order to endeavour to resolve the issues in dispute.

6. The following day, 26 June 1998, the Court made a number of orders by consent, including orders 2(d), 2(e), 2(f) and 2(g) ("the relevant orders") which I have earlier set out.

7. On 11 February 1999, the council filed the present notice of motion for contempt, and at the same time, sought further orders relating generally to sediment control works. The orders which the council sought on that date were made. Ultimately, the contempt proceedings were set down for hearing.

8. It is important to note that the site was under constant supervision by many council officers over a period commencing around August 1997, and it was actually agreed at one point that there would be weekly inspections. Thus Mr T J Stenning, a trainee environmental health and building surveyor, deposed to having inspected the site on 20 occasions, sometimes accompanied by Mr P David, senior subdivisions engineer, or by Mr K Gowenlock, compliance officer, or by Mr R Welfare, senior environmental health and building surveyor, or by Mr C Formosa, council officer. Mr A R Davis, environmental protection officer, deposed to having inspected the site on 19 occasions, sometimes accompanied by Mr Gowenlock, but also on occasions with Ms L Gee, Mr L B Doyle, and Mr Stenning. Mr G J Mallison , manager, subdivisions, deposed to having inspected the site on 25 June 1998 with Mr Gowenlock and Mr David. Mr Doyle deposed to having inspected the site on 16 April 1998 with Mr J Noakes. In addition, the council's solicitor, Mr G N McKee, visited the site on some occasions during that period.

The alleged breaches

9. The statement of charge gives particulars of the way in which the relevant orders are said to have been breached. Affidavit evidence as to their respective observations of the alleged breaches was given by Mr Stenning and by Mr Davis. The alleged breaches and the dates upon which they were respectively observed by Mr Stenning and Mr Davis may be summarised as follows: Order 2(d) · sediment basin not maintained so as to ensure turbid water is contained:

Stenning inspections: 12/11/98; 25/1/99; 9/2/99; 25/2/99 Davis inspections: 21/7/98; 7/8/98; 17/8/98 · clean roof water not being directed to council's clean water system

Stenning inspections: 14/10/98; 16/10/98; 21/10/98 · sediment basin has not been flocculated and pumped out regularly

Stenning inspections: 8/1/99; 25/1/99 Davis inspection: 17/8/98

Order 2(e) · sediment fence below sediment basin not operating satisfactorily

Stenning inspection: 2/3/99 · sediment fence on southern boundary not maintained

Stenning inspections: 27/10/98; 4/11/98; 11/11/98; 24/2/99

Order 2(f) · defective pipes carrying clean water from roof of dwellings 1 to 5 Stenning inspections: 4/11/98; 28/1/99; 24/2/99 · defective pipe carrying water from dwellings 6, 7, 8 and 9

Stenning inspections: 16/2/99; 24/2/99 · by reason of defects and breaks in pipes, the internal drainage system not functioning

Stenning inspections: 28/1/99; 4/3/99

Order 2(g) · downpipes of dwellings 10, 11, 12, 13 and 14 have not been provided in such a way as to achieve ongoing connection to the council's water system

Stenning inspections: 21/10/98; 27/10/98; 4/11/98; 11/11/98; 17/11/98; 16/2/98; 24/2/99

I am satisfied beyond reasonable doubt that the respondents have breached the relevant orders. The evidence of Mr Stenning and Mr Davis is substantially unchallenged. In any event, the respondents admit that they have failed to comply with the relevant orders, although they did not enter a formal plea.

The appropriate punishment

10. Section 67 of the Land and Environment Court Act 1979 provides as follows: "67. The Court shall have and may exercise the functions vested in the Supreme Court in respect of the following matters - … (d) the apprehension, detention and punishment of persons guilty of contempt, or of disobedience to any order made by the Court, or of any process issuing out of the Court;"

Part 55 r 13 of the Supreme Court Rules 1970 (which applies in this Court by virtue of pt 6 r 1 of the Land and Environment Court Rules 1996) provides that the punishment may be, amongst other things, by way of fine.

11. In the circumstances, the council seeks a finding of contempt in respect of each respondent, and the imposition of a fine by way of punishment.

12. The respondents, however, claim that there are a number of factors in mitigation which would lead the Court to desist from imposing a fine, and instead to accept the respondents' apology and to require them to pay the council's costs.

The factors taken into account

(a) Reliance on the council

13. The respondents claim that they relied upon the council officers to give instructions as to the work to be carried out in order to comply with the relevant orders. The second respondent, Mr Byrnes, contended that the council officers gave instructions which were imprecise and confusing, and thereby contributed to the failure of the respondents to comply with the relevant orders.

14. In giving oral evidence, Mr Byrnes said that, "gullibly", in his view, he relied upon the instructions given on numerous site visits to him or to his site foreman by various council officers. He said that, in concentrating on what was being said by council officers, he lost sight of the relevant orders.

15. The site foreman was Mr Vlad Barac. He deposed to being an employee of VNB Project Management Pty Limited, and stated that he worked on the site under contract to the first respondent.

16. I do not consider that reliance upon the council exonerates the respondents from an obligation to comply with the relevant orders. There is no doubt that the respondents were made aware of the alleged breaches of the relevant orders. On each visit, Mr Stenning drew the attention of Mr Barac to the defects he had observed. As a consequence of Mr Stenning's inspection with Mr Welfare, written notice of work required to comply with the whole of the orders of 26 June 1998 was given to both respondents. On 17 August 1998, Mr Davis gave written notice to both respondents requiring flocculation of the water in the sediment basin.

17. Furthermore, Mr Byrnes can hardly have been unaware of the importance of the orders. First, Mr Barac reported to him on a regular basis. Secondly, the council's solicitor, Mr McKee, wrote to the respondents' solicitors on 14 July 1998, 15 July 1998, 15 October 1998 and 12 November 1998 pointing out that the orders were being breached.

(b) Prompt instructions

18. Mr Byrnes stated in his affidavit that he asked Mr Barac "… to continue to make sure that the Orders were being complied with." He said that "… when I was made aware of such non-compliance issues they were remediated immediately. I advised Vlad Barac to made (sic) sure that things were in an up-to-date matter (sic) …".

19. In his affidavit, Mr Barac said that "[A]s soon as I got a copy of the Orders, I instructed 2 labourers on the Site to carry out the works necessary to comply with the Orders".

20. I accept this evidence as showing that from time to time Mr Byrnes and Mr Barac issued instructions with a view to compliance, but they obviously failed to ensure that their instructions were carried out, because the evidence shows that various breaches continued for a considerable time. One example relates to the requirement to connect downpipes to the clean water drainage system (orders 2(d) and 2(g)). Mr Stenning drew attention to this requirement at his first inspection on 14 October 1998, and, although the particular dwellings which were in breach varied from time to time, he drew attention to the same matter on eight of his further visits. Another example relates to maintaining the temporary sediment basin so that all turbid water was contained on site (order 2(d)). Mr Stenning drew attention to this requirement on four inspections as did Mr Davis on three inspections.

(c) Confusion about the plans

21. There are two matters concerning plans which the respondents point to as contributing to breaches of the relevant orders.

22. First, there was a delay in obtaining the original plans which occurred as a result of the contract of the original builder being terminated and it being required to leave the site. It appears that the information which was unavailable related to RL levels for the road works, and that led to difficulty in locating and constructing stormwater lines and dish drains in the road areas.

23. Secondly, the copy of ex "B" which was furnished to Mr Barac, apparently by the council, is not identical with the actual plan which comprises ex "B".

24. In my opinion, these matters do not excuse the respondents from non-compliance with the relevant orders. Those orders were concerned with sediment control, not with road works or building works. If, as the respondents appear to claim, the road works required some modification to the relevant orders in relation to the work required or the timeframes which were set, then the appropriate course of action was at least to inform the council of that fact when it kept seeking compliance, or, more appropriately, to approach the Court for modification, it having granted liberty to all parties to apply on 24 hours' notice.

25. Moreover, there was no evidence to show that any discrepancy between the plan furnished to Mr Barac and ex "B" contributed in any way to the breaches of the relevant orders. That is hardly surprising, because an examination of both plans shows that they are substantially the same, although ex "B" contains more detail. The conversations between council officers and Mr Barac, deposed to by Mr Stenning, indicate that Mr Barac was aware of the nature of the orders, and was in no doubt about what had to be done.

(d) Flocculation and pumping out

26. The respondents contended that, during periods of heavy rain, the temporary sediment basin was inadequate, and it was necessary to pump it out into the stormwater drain in the adjoining Orr Playground. Furthermore, they contended that, during periods of heavy rain, flocculation of the sediment basin was ineffective.

27. I accept that turbid water was not contained on the site in times of heavy rain. There was no evidence to contradict the respondent's contention that heavy rain had the consequences I have outlined.

28. However, the significance of this factor is reduced by the fact that there was no evidence as to whether it was raining on each of the seven occasions during which council officers observed turbid water leaving the site in breach of order 2(d). The council file notes suggest that it was raining on four occasions - nothing is said about the other three.

(e) Difficulties and uncertainties

29. There were a number of difficulties and uncertainties which I take into account in the respondents' favour.

30. First, the site is, according to Mr Stenning's oral evidence, large and very steep. Unfavourable weather conditions aggravated that difficulty. There was no precise evidence about weather conditions, but it was raining on the occasion of some of the council inspections, and photographs tendered in evidence suggest that rain had a detrimental effect on the site.

31. Secondly, although the orders which were made on 26 June 1998 refer to the implementation of a timetable of works "with reference to Exhibit B", the plan which comprises ex "B" lacks any detail about the temporary sediment basin required to be constructed pursuant to order 2(d). The plan is silent as to the location, design, capacity and dimensions of the temporary sediment basin. (It was unclear from the evidence what actually occurred in relation to this matter, although it appears that a temporary sediment basin was constructed in order to deal with surface runoff, and a detention basin was constructed in order to collect roofwater). The breach which is particularised in relation to order 2(d) is a failure to maintain the temporary sediment basin. Without any precision as to its construction in the first place, there must be some uncertainty about the standard to which it was required to be maintained.

32. Thirdly, it was contended by the respondents and by Mr Barac that, in order to progress construction works, it was necessary from time to time to disconnect temporary sediment and drainage control works. Thus, for example, according to the respondents, the downpipes from the dwellings were from time to time disconnected. The council officers acknowledged this need, but claimed that disconnected works were not adequately restored or maintained.

(f) Compliance

33. The breaches of the relevant orders have not been continuous since June 1998. The council's solicitor notified the respondents' solicitors on 15 October 1998 that the relevant orders were being complied with during July and August of that year. He also notified them on 20 November 1998 that the relevant orders were generally being complied with. A similar observation was made by Mr Stenning on 1 December 1998 and again on 24 December 1998.

34. Yet breaches occurred over the whole period, some of them continuing for a considerable time, despite the warnings of council officers. That is demonstrated by the number of times breaches of the relevant orders were observed by the council officers.

35. I take into account, however, the council's concession at the hearing of these contempt proceedings that the respondents are presently complying with the relevant orders.

(g) Apology

36. On behalf of the first respondent and on his own behalf, Mr Byrnes has expressed regret at the breach of the relevant orders. He stated in his affidavit that it was his belief that the relevant orders were being complied with and that any alterations were carried out with the council's approval. In giving oral evidence, he said that he was sorry and embarrassed that the breaches had occurred.

Conclusion

37. The respondents were bound by the relevant orders, and they had an obligation to comply with them. As I have earlier stated, I am satisfied beyond reasonable doubt that the respondents committed the breaches of the relevant orders in the manner particularised by the council in its statement of charge.

38. But overall I am left with a distinct impression of confusion and a lack of precision in the carrying out of works on the site. The works required to comply with the relevant orders were not precisely set out in ex "B", and the instructions given on site inspections by council officers were not direct, clear and precise. That is not because of any dereliction of duty on behalf of the council or its officers, but because of the huge number of site inspections and the very many council officers involved.

39. What, then, is the culpability of the respondents? Their conduct falls far short of contumacious behaviour. They were not deliberately flouting the relevant orders. Yet the breaches of those orders were more than merely technical, and they were not casual, accidental or unintentional ( Australian Meat Industry Employees Union and Ors v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 113). Despite the overall confusion and imprecision, the breaches occurred because the respondents failed to take responsibility for compliance with the relevant orders, and because the respondents showed a sloppiness and lack of care in ensuring compliance. Furthermore, the breaches were numerous, and many of them continued for some time, despite warnings from the council and its solicitor. That degree of culpability requires the imposition of a fine, thereby fulfilling the "very substantial purpose of disciplining the defendant and vindicating the authority of the court"; ( Mudginberri at p 113).

40. I have not lost sight of the fact that, whilst the relevant orders bound both respondents, the first respondent is controlled by the second respondent, Mr Byrnes having admitted in giving oral evidence that he was the sole director of the first respondent. In reality, the obligation to comply with the relevant orders fell upon Mr Byrnes. Although he was not on the site on a daily basis, he was, according to his own evidence and that of Mr Barac, in constant communication with Mr Barac. Mr Byrnes represents the corporate mind of the first respondent, and he could have brought about compliance with the relevant orders on the first respondent's behalf and on his own behalf. It is appropriate, therefore, that the punishment for contempt of the relevant orders should fall upon the second respondent.

41. Taking into account all the factors I have mentioned, I consider that a fine of $5000 is appropriate. The council seeks payment of its costs in relation to these contempt proceedings, and its costs in relation to the notices of motion returnable on 16 April 1998, 25 June 1998 and 11 February 1999 such costs having been reserved. It is appropriate to make an order in favour of the council for those costs.

Orders

42. My formal orders are therefore as follows:

(1) The first respondent, Atifame Pty Limited, and the second respondent, James Warren Byrnes, are each guilty of the contempt of orders 2(d), 2(e), 2(f) and 2(g) made by the Court on 26 June 1998;

(2) I impose upon the second respondent a fine of $5000 to be paid to the Registrar of the Court within one month of today's date;

(3) No punishment is imposed in respect of the contempt of the first respondent;

(4) The respondents must pay the costs of the council as agreed or as assessed in respect of these contempt proceedings and the notices of motion returnable on 16 April 1998, 25 June 1998 and 11 February 1999;

(5) The exhibits may be returned.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 12 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE M L PEARLMAN AM.

Associate

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