Land and Environment Court New South Wales

• Medium Neutral Citation: Canterbury City Council v Mihalopoulos (No 3) [2012] NSWLEC 72
• Hearing dates: 9 February 2012
• Decision date: 05 April 2012
• Jurisdiction: Class 4
• Before: Pain J

Decision

1. Mr Mihalopoulos is convicted of the two charges of contempt as particularised in the Statements of Charge.

2. Mr Mihalopoulos is fined $8,000 for the first offence (as particularised in the First Statement of Charge) to be paid to the Registrar of the Court within 28 days of today's date.

3. Mr Mihalopoulos is fined $2,000 for the second offence (as particularised in the Second Statement of Charge) to be paid to the Registrar of the Court within 28 days of today's date.

4. Mr Mihalopoulos is fined $3,000 per calendar month so long as orders 2 and 3 made by the Court on 30 November 2010 continue not to be complied with.

5. Order 4 is suspended for 18 calendar months until 5 October 2013.

6. Mr Mihalopoulos is to pay the Council's costs of the contempt proceedings as agreed or assessed.

7. Order 6 is suspended for 12 calendar months until 5 April 2013.

8. The exhibits may be returned.

• Catchwords: SENTENCE - sentencing following plea of guilty to two charges of contempt for failure to comply with court orders to remove unlawful building work - wilful contempt - contempt not purged - sale of property subject of contempt charges - mitigating factors of financial incapacity, early plea of guilty - periodic fine imposed
• Legislation Cited: Crimes (Sentencing Procedure) Act 1999 s 21A, s 22; Fines Act 1996 s 6, s 7, s 10; Land and Environment Rules 2007 Pt 5 r 5.2(1); Supreme Court Rules 1970 Pt 55
• Cases Cited: ASIC v Sigalla (No 4) [2011] NSWSC 62; Attorney-General (NSW) v John Fairfax & Sons Ltd [1980] 1 NSWLR 362; Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98; Burwood Council v Ruan [2008] NSWLEC 167; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; Canterbury City Council v Mihalopoulos [2010] NSWLEC 248; Council of the City of Sydney v Owners Corporation - Strata Plan 18945 [2011] NSWLEC 7; Environment Protection Authority v Pannowitz (No 2) [2006] NSWLEC 797; (2006) 153 LGERA 126; Environment Protection Authority v Wattke; Environment Protection Authority v Geerdink [2010] NSWLEC 24; Fairfield City Council v Adams (No 2) [2010] NSWLEC 45; Gerondal v Eurobodalla Shire Council (No 5) [2011] NSWLEC 104; Hearne v Street [2008] HCA 36; (2008) 235 CLR 125; Hili v R; Jones v R [2010] HCA 45; (2010) 242 CLR 520; Liverpool City Council v Palerma Pty Ltd (No 2) [2009] NSWLEC 45; Mosman Municipal Council v Kelly (No 4) [2009] NSWLEC 115; Mosman Municipal Council v Kelly (No 6) [2010] NSWLEC 20; NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118; Owners Strata Plan 37762 v Pham (No 2) [2007] NSWLEC 306; Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69; Pelechowski v The Registrar, Court of Appeal [1999] HCA 19; (1999) 198 CLR 435; Pittwater Council v Brown Brothers Waste Contractors Pty Ltd (No 2) [2009] NSWLEC 210; R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309; Street v Hearne [2007] NSWCA 113; (2007); 70 NSWLR 231; Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525; Wood v Staunton (No 5) (1996) 86 A Crim R 183
• Texts Cited: GE Dal Pont, Law of Costs, 2nd ed (2009) LexisNexis Butterworths
• Category: Principal judgment
• Parties: Canterbury City Council (Prosecutor); Basilios Mihalopoulos (Defendant)
• Representation: Mr M Wright (Prosecutor); Mr B Galloway (solicitor) (Defendant); Marsdens Law Group (Prosecutor); Galloways Solicitors & Attorneys (Defendant)
• File Number(s): 40694 of 2010

Judgment

1 Mr Mihalopoulos, the Defendant, pleaded guilty on 7 October 2011 to two charges of contempt relating to orders made by Pepper J on 30 November 2010 in Canterbury City Council v Mihalopoulos [2010] NSWLEC 248. The Statements of Charge were filed on 3 August 2011. It is necessary to sentence Mr Mihalopoulos for the two offences.

2 Pepper J made a finding of unlawful development work being carried out in Clark Street, Earlwood (the property) on 30 November 2010 as set out in [14] as follows:

(a) the construction of the masonry wall 1.8 m high along the eastern boundary, instead of a retaining wall varying in height between 0 mm to 350 mm and upon which should have been constructed a 1.8 m high timber fence;

(b) the construction of the landing leading from the laundry on the eastern side of the new dwelling and the failure to construct stairs in accordance with approved plan no A301C;

(c) the construction of a garbage bin enclosure on the north eastern boundary of the premises beyond the height permitted by the approved plans, requiring the removal of sufficient masonry courses to bring the enclosure back to a height of no greater than 1.2 m above the footpath level;

(d) the construction of a terraced landscape planter bed on top of the entrance to the garage at the rear of the premises, three terraced landscape beds adjoining the garage entrance and the failure to construct two terraced landscape planter beds at the height and dimensions identified in the approved plans; and

(e) the construction of a balcony on the main first floor of approximately 4 m in depth when the conditions of consent permitted a balcony not exceeding a depth of 1 m.

3 According to the chronology of events identified by Pepper J at [16] - [19] the work was done during 2007 and 2008 following the grant of development consent by Canterbury City Council (the Council) to Mr and Mrs Mihalopoulos on 14 September 2007. The orders made by Pepper J required specified building work to be carried out at the property in two different periods of 30 days then 60 days from the date of the orders. The First Statement of Charge relates to order 2 made by Pepper J which required demolition of items (a) - (f) to be completed by 30 December 2010, being 30 days from the date the order was made. Paragraph 5 of the First Statement of Charge states as follows:

As at 30 December 2010 the following structures remained erected on the premises:

(a) the masonry wall along the eastern boundary of the premises;

(b) the raised concrete pathway leading from the laundry to the front and rear of the premises along the eastern boundary of the premises;

(c) the roof of the garbage bin enclosure and the courses of masonry on the walls forming the top 0.6 m of the garbage bin enclosure on the north-eastern boundary of the premises;

(d) the masonry landscape planter bed on the roof of the garage at the rear of the premises;

(e) the three (3) terraced masonry landscape planter beds adjoining the garage at the rear of the premises; and

(f) that part of the balcony adjoining the master bedroom on the second storey of the dwelling on the premises that is constructed at a depth greater than the approved depth of 1 m.

4 The Second Statement of Charge relates to order 3 made by Pepper J which required construction of specified items (a) - (e) to be complied with by 29 January 2011, being 60 days from the date of the order:

As at 29 January 2011 the following had not been constructed on the premises:

(a) a retaining wall along the eastern boundary of the premises commencing at 350 mm in height at the rear or northern boundary of the premises reducing to 0 mm in accordance with the plans the subject of the development consent and modified development consent;

(b) a new timber fence 1.8 m in height on top of the retaining wall and along the entire eastern boundary of the premises in accordance with the plans the subject of the development consent and modified development consent;

(c) a 2.5 m wide landing from the entrance of the laundry on the eastern side of the dwelling, four (4) steps to RL49.79 on the southern side of the landing, three (3) steps to RL50.00 on the northern side of the landing and a concrete pathway from the steps to the rear of the dwelling at a level of RL50.00 in accordance with the plans the subject of the development consent and modified development consent;

(d) a corrugated metal roof over the garage in accordance with the plans the subject of the development consent and modified development consent; and

(e) two (2) terraced masonry landscape planter beds adjoining the garage at the rear of the premises with the highest terrace being no higher than RL51.68 in accordance with the plans the subject of the development consent and modified development consent.

5 Pepper J made orders against Mr Mihalopoulos and Mrs Mihalopoulos. Mrs Mihalopoulos filed a submitting appearance in the Class 4 proceedings before Pepper J. The orders were made ex parte by Pepper J as neither respondent appeared. These two charges of contempt were brought by the Council only against Mr Mihalopoulos.

6 By virtue of the Land and Environment Rules 2007 (the Court Rules) Pt 5 r 5.2(1), Pt 55 of the Supreme Court Rules 1970 apply to these contempt proceedings and state in part:

13 Punishment

(1) Where the contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both....

(3) The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security.

7 I also have power under the general powers of a superior court of record to impose a fine if wilful contempt is established: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 314D - E; Pelechowski v The Registrar, Court of Appeal [1999] HCA 19; (1999) 198 CLR 435 at [147] - [149]; Owners Strata Plan 37762 v Pham (No 2) [2007] NSWLEC 306 at [47]; Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98 at 113; Street v Hearne [2007] NSWCA 113; (2007) 70 NSWLR 231 at [38] - [42]; Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 at [129] - [132] (Hayne, Heydon and Crennan JJ); NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 at [20].

Evidence

8 The Council relied on an affidavit of Mr Ajaka, Council officer, dated 2 August 2011 which confirms that the building work was not done as at May 2011 and June 2011. There is no dispute that the building work required by Pepper J's orders has not been done. An affidavit of the Council's solicitor, Mr Baird, dated 2 August 2011 attaches correspondence sent to Mr Mihalopoulos and Somerville Legal, which acted on Mr Mihalopoulos' behalf in the costs proceedings before Pepper J on 15 February 2011, identifying the work was not done before contempt proceedings were commenced.

9 Mr Mihalopoulos affirmed an affidavit dated 8 February 2012. He is a civil engineer earning $600 per week and pays child support of $290 per month, leaving him with $2,110 per month of disposable income. He states the property was sold on 30 August 2011. The contract for sale of the property, prepared by Somerville Legal, dated 16 May 2011 contained a copy of the order of this Court dated 30 November 2010. A copy of the contract was annexed to his affidavit identifying Mr and Mrs Mihalopoulos as vendors and displaying two signatures at the space for "Vendor". Clause 43 of the contract states that the purchaser is aware of the orders of the Court requiring demolition and construction works to be carried out and agrees to carry out the works in compliance with the Court orders as though they were binding on the purchaser and at the purchaser's expense. The clause also states that the purchaser will indemnify the vendor in respect of any liability arising from any failure to carry out the works in accordance with that clause. Mr Mihalopoulos' affidavit states that the proceeds of the sale of the property were placed in an account controlled by Mrs Mihalopoulos' lawyers, by order of the Family Court. Also annexed to his affidavit is a title search indicating that Mr Mihalopoulos had a one third share in the property as a tenant in common with Mrs Mihalopoulos.

10 Mr Mihalopoulos' affidavit states he has been seeing psychologist Mr Watson-Munro irregularly since September 2009 for issues relating to the failure of his marriage and problems with his failed businesses, inter alia. Mr Mihalopoulos apologises for his failure to comply with the Court orders. He was financially unable to pay for rectifications required by the Court orders such as arranging for the contractors who originally performed the work to return to rectify the work because he had outstanding debts with them.

11 Mr Mihalopoulos tendered five medical reports, four from Mr Watson-Munro, consultant forensic psychologist dated 8 December 2009, 4 November 2010, 8 June 2011 and 9 February 2012, and one from Mr Neilssen, psychiatrist, dated 8 September 2011. These reports state that Mr Mihalopoulos suffers from a depressive illness with features of anxiety disorder and that his Family Court proceedings were unresolved.

12 Mr Mihalopoulos also tendered two letters from Kemp Strang solicitors acting for the Australia New Zealand Banking Group Limited (ANZ), then mortgagor of the property, dated 10 June 2010 and 8 September 2010. The first letter encloses a default notice requiring the default to be remedied within 31 days after which time the mortgagee would commence enforcement proceedings and obtain possession of the property. The second letter states that unless contracts are exchanged within 28 days they will commence enforcement proceedings and advises that the total debt was over $700,000.

13 In oral evidence Mr Mihalopoulos stated that the bank had postponed foreclosure of the mortgage held over the property to allow the sale to his uncle Mr Raptis, the present owner. The sale price was a commercial transaction at $1.6 million. There was no reduction of the sale price in light of clause 43 in the contract. The property was transferred to Mr Raptis on 1 September 2011. Mr Mihalopoulos understood that Mr Raptis would undertake the obligation to comply with the Court orders. The contract for sale was drawn up by his former wife's lawyers. He lives at the property on his own for minimal rent and did so during 2010 and 2011. Mr Mihalopoulos did not know he could bring the matter back before Court regarding non-compliance with the Court's orders. He cannot carry out the Court orders himself because the work required, including electrical work, is complicated.

14 Following the hearing the proceedings were adjourned for one week to allow inquiries to be made of Mr Raptis as to when the work the subject of the orders might be carried out. No further submission in that regard was made by Mr Mihalopoulos' solicitor in the subsequent mention of the matter.

Council's submissions

15 The Council submitted that relevant considerations were the seriousness of the contempt proved, whether the contemnor was aware of the consequences to himself of what he did, the reason for the contempt, whether there has been any apology or public expression of contrition, general and personnel deterrence and the need for denunciation of the contempt.

16 The Council's written submissions identify the relevant principles (set out below at par 22) which relate to contempt proceedings as identified in Wood v Staunton (No 5) (1996) 86 A Crim R 183 at 185 and adopted in numerous cases in this Court (Pham (No 2); Burwood Council v Ruan [2008] NSWLEC 167 at [18] - [19]; Fairfield City Council v Adams (No 2) [2010] NSWLEC 45 at [18]; Mosman Municipal Council v Kelly (No 4) [2009] NSWLEC 115 at [6]; and Council of the City of Sydney v Owners Corporation - Strata Plan 18945 [2011] NSWLEC 79 at [35].

17 The circumstances of the contempt suggest wilful conduct, if not contumacious. The contract condition entered into at the time of sale on 16 May 2011 appears to be an attempt to avoid responsibility for compliance with the Court order. This cannot be contracted out of. There is nothing in the evidence to say that Mr Mihalopoulos is not able to comply with orders. The property was sold for full commercial value and there was no discount for carrying out the work which relieved Mr Mihalopoulos of the cost of doing the work. Mr Mihalopoulos obtained a benefit from breaching the Act and transferred the burden to a third party. It is irrelevant that Mrs Mihalopoulos has not been charged with contempt. She has lived elsewhere in Port Macquarie since 2009. Mr Mihalopoulos has pleaded guilty to the charges of contempt. A substantial penalty is warranted together with the imposition of a continuing penalty while the contempt continues. Mr Mihalopoulos is not physically incapable and is a civil engineer. The Council seeks its costs of the proceedings on an indemnity basis.

Defendant's submissions

18 Mr Mihalopoulos submits that he is unable to comply with the orders because of his financial and psychological circumstances. The Court has to have regard to the fact that the Council only proceeded against Mr Mihalopoulos and not Mrs Mihalopoulos.

19 There are no aggravating factors under the Crimes (Sentencing Procedure) Act 1999 (the CSP Act) which apply. Mitigating factors include that the environmental harm was not substantial (s 21A(3)(a)), Mr Mihalopoulos is unlikely to reoffend (s 21A(3)(g)) and has good prospects of rehabilitation (s 21A(3)(h)). He made early guilty pleas (s 21A(3)(k), s 22). Mr Mihalopoulos accepts responsibility. It is consistent with his medical condition not to do anything. He has not challenged anything. Mr Mihalopoulos is physically not able to do tiling and electrical work and he does not have the necessary skills. He accepts that he has committed contempt and tried to purge the contempt by passing on the obligation through the sale of land contract to someone with financial capacity to do the work. Mr Mihalopoulos was not trying to wash his hands of his responsibility.

20 Contempt is serious but not as serious as contempt in the face of a court. It is wilful contempt only, not contumacious because Mr Mihalopoulos was not "obstinately disobedient". His difficulties in complying are owing to his psychological and financial disabilities. The mortgagor bank was about to sell the property so Mr Mihalopoulos tried to act as responsibly as he could. In so far as environmental effect, it is only a minor inconvenience to the neighbours, not serious environmental harm. Mr Mihalopoulos did not commit contempt for profit, unlike in Manly Council v Haslam. Although the sale was an arms length commercial transaction, the sale price is held in trust as part of the Family Court proceedings on foot, therefore he cannot do anything with the money.

21 The totality principle should be applied to treat the two charges as one event rather than doubling the penalty. Mr Mihalopoulos does not have capacity to pay a large fine, a relevant factor in sentencing under the Fines Act 1996 s 6.

Consideration

22 As the Council submitted, breaches of court orders are serious per Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 at 533 - 534. In Maniam (No 2) at 314 Kirby J stated:

A conviction of contempt of court is the conviction of an offence, criminal in nature. Punishment of the convicted contemnor must therefore take into account the considerations normally applicable to the punishment of crime and apt to uphold the purpose of this jurisdiction, viz, the undisturbed and orderly administration of justice in the courts according to law. Thus in determining the punishment which is apt to the circumstances which have led to a conviction of contempt, it is appropriate to bear in mind the purposes of punishing the contemnor; deterring the contemnor and others in the future from committing like contempts; and denouncing the conduct concerned in an approximately emphatic way ...

23 The importance of punishment for contempt in order to uphold the effective administration of courts of law in general is emphasised in numerous cases such as Mudginberri at 106 - 107; Environment Protection Authority v Pannowitz (No 2) [2006] NSWLEC 797; (2006) 153 LGERA 126 at [20]; Pittwater Council v Brown Brothers Waste Contractors Pty Ltd (No 2) [2009] NSWLEC 210 at [88] - [90]; and Adams (No 2) at [17].

24 The principles identified in Wood referred to in the Council's submissions at par 16 above are:

(1) the seriousness of the contempt proved

(2) whether the contemnor was aware of the consequences to himself of what he did

(3) the actual consequences of the contempt on the relevant trial or inquiry

(4) whether the contempt was committed in the context of serious crime

(5) the reason for the contempt

(6) whether the contemnor has received any benefit by indicating an intention to give evidence

(7) whether there has been any apology or public expression of contrition

(8) the character and antecedents of the contemnor

(9) general and personal deterrence

(10) denunciation of the contempt.

25 The Council relies on principles 1, 2, 5, 7, 9 and 10 in particular. In addition, relevant sentencing considerations under s 21A of the CSP Act must be considered.

Objective circumstances

26 In relation to the objective seriousness of the offences, the nature of the contempt must first be considered.

Wilful contempt

27 Contempt is often considered in terms of whether it is technical, wilful or contumacious. Technical contempt is where the contempt is "casual, accidental or unintentional" and does not arise in these circumstances. Wilful contempt occurs when there is deliberate disobedience but without the intention of defying a court's authority. Contempt is contumacious if there is an element of deliberate defiance of a court's orders; see Adams (No 2) at [13] and Gerondal v Eurobodalla Shire Council (No 5) [2011] NSWLEC 104 at [33]. The Council submitted that Mr Mihalopoulos' contempt is at least wilful, if not contumacious. A further consideration in cases requiring proof of contempt is whether the contempt is civil or criminal in nature, see for example Mudginberri at 106 where the High Court (Gibbs CJ, Mason, Wilson and Deane JJ) stated:

Punishment for contempt serves two functions: (a) enforcement of the process and orders of the court, disobedience to which has been described as "civil contempt"; and (b) punishment of other acts which impede the administration of justice, such as obstructing proceedings in court while it is sitting or publishing comments on a pending case, which have both been described as "criminal contempt" ...

28 The Court of Appeal in Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 considered whether a breach of an undertaking to a court was civil or criminal and held it to be civil contempt unless it involves contumacy, in which case it was criminal contempt. Witham v Holloway at 542 was cited for the statement that regardless of whether the contempt was civil or criminal the criminal standard of proof was required. The issue of proof of the contempt does not arise in this sentencing matter as Mr Mihalopoulos has pleaded guilty and there is no dispute about any factual matters.

29 In assessing whether contempt is wilful or contumacious it is relevant to consider the reasons for non-compliance with the Court's orders by Mr Mihalopoulos, if any are known, which relates in turn to his state of mind. In terms of the reason for the contempt being committed by Mr Mihalopoulos, according to his affidavit, he was experiencing a difficult period from at least September 2009 leading up to the orders being made in November 2010 concerning the failure of his marriage and his business loss. I accept his evidence that he has been under substantial psychological and financial hardship since the making of the Court orders in November 2010 and this provides some explanation for why he was not able to carry out, or arrange to carry out, the work required. I am also aware that he has remained living at the property and has professional qualifications as a civil engineer.

30 Further in relation to his state of mind, the Council's submission that Mr Mihalopoulos cannot contract out of his obligations to comply with a court order through the sale of the property on 30 August 2011 is correct but I do not consider there was a flagrant attempt by Mr Mihalopoulos to do that given the financial and personal circumstances he recounts. This includes imminent foreclosure in September 2010 by the mortgagor, the ANZ bank, prior to the sale of the property to his relative. Arranging the contract for sale drafted with cl 43 appears to have been an attempt at a practical approach to getting the necessary work done. The responsibility to comply with the Court's orders remains that of Mr Mihalopoulos and his wife. I consider his failure to comply with the Court's orders is wilful, not contumacious, in these circumstances.

31 I find it troubling that the Council did not also prosecute Mrs Mihalopoulos for contempt given that she also must have benefitted from the illegal building work and given her larger ownership (two thirds) share in the property. The contract annexed to Mr Mihalopoulos' affidavit contains two signatures for "Vendor", the first being identical to Mr Mihalopoulos' signatures on the bottom of the pages of his affidavit and the second, appearing to be that of Mrs Mihalopoulos. She also agreed to cl 43 in the contract for sale. My view is not altered by the fact that she no longer lives at the property. While Mr Mihalopoulos was charged and pleaded guilty to contempt, which is appropriate in his case, he alone was not responsible for complying with the Court's orders.

32 The failure to obtain the required development consent before work was carried out unlawfully which resulted in the Court orders being made undermines the integrity of the development control system under the Environmental Planning and Assessment Act 1979 (the EPA Act). That failure is further exacerbated by both contempt charges for failing to comply with the orders. The importance of complying with the EPA Act and upholding statutory development control processes to which everyone in the wider community is subject has been identified in a large number of decisions of this Court. No explanation has been provided as to why development not in accordance with the development consent granted by the Council was carried out. The need for general deterrence in cases of this kind arises in these circumstances.

33 The environmental impact resulting from the breaches is relevant to the assessment of the objective seriousness of the offences. The ongoing breach of the Court's orders is clearly impacting on the amenity of the adjoining property as identified in the evidence set out in Pepper J's judgment at [40] - [43]. The photographs attached to the affidavit of Mr Ajaka identify the substantial masonry works carried out without consent. In particular, on the boundary line with the neighbouring property a large masonry fence of substantial height has been constructed which is not in accordance with the varied height wooden fence contemplated in the development consent. At a local scale the impact on the amenity of the neighbour is substantial and an important matter to consider in relation to objective seriousness as the unlawful work is well beyond a technical breach of the EPA Act.

34 These findings relate to the seriousness of the two contempt charges, the contemnor's awareness of the consequences of committing contempt and the reason for the contempt as referred to in Wood at 185. Principles 3, 4 and 6 do not apply. The contempt is of low to moderate objective seriousness.

Subjective circumstances

35 In relation to mitigating factors in CSP Act s 21A(3), I consider Mr Mihalopoulos has shown remorse (s 21A(3)(i), principle 7 in Wood). There is no evidence that Mr Mihalopoulos is likely to reoffend and it appears that Mr Mihalopoulos has good prospects of rehabilitation (s 21A(3)(h)) if his medical situation improves. He pleaded guilty early (s 21A(3)(k), s 22), an important mitigating factor for which a substantial discount on penalty of up to 25 per cent can be given: R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383.

Purging contempt

36 A matter highly relevant to sentencing and the penalty to be imposed is whether the contempt has been purged and when compliance with the Court's orders will be achieved. The property now belongs to a relative and Mr Mihalopoulos resides there. The contempt has not been purged at this stage. There is no evidence of any attempt by Mr Mihalopoulos or the current owner to do anything to comply with the Court's orders. There is no evidence before me of if, and when, any work purging the contempt may be carried out. I accept that to comply with the Court's orders takes some skill and effort as these require demolition completely or partially of masonry structures being the boundary fence, a landing and stairs, removal of masonry in the garbage bin enclosure to reduce its height and demolition of a first floor balcony which is 4m not 1m deep. Some electrical and tiling work is also involved. Some of that work, I consider, could be carried out physically by Mr Mihalopoulos if he is able but some is best performed by skilled tradesmen which will involve cost to him.

37 There is no evidence before me that the work cannot physically be done by or on behalf of Mr Mihalopoulos, despite him no longer being an owner of the property, in terms of matters such as access to the property. Compliance with the orders has not been rendered impossible by the sale of the property. This suggests a periodic fine is appropriate to encourage the purging of the contempt which can be suspended for a lengthy period to provide that opportunity, mindful of Mr Mihalopoulos' psychological and financial position. In Mosman Municipal Council v Kelly (No 6) [2010] NSWLEC 20 Biscoe J stated at [21]:

The coercive purpose of a periodic fine so long as a contempt of a court order continues was accepted by the High Court in Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46, 161 CLR 98 at 114 where it was held there will often be periodic fines for continuing breaches of orders, suspended for a period to permit purging of the contempt.

38 The same consideration as referred to in Kelly (No 6) applies in this matter.

Totality principle

39 As the two charges arise from the same course of conduct it is appropriate that I apply the totality principle. In Environment Protection Authority v Wattke; Environment Protection Authority v Geerdink [2010] NSWLEC 24 at [98] I said:

That principle requires a judge to determine the appropriate sentence for each offence and when reviewing the aggregate sentence, consider whether it is just and appropriate. In this way the overall criminality of all the offences is reflected proportionately in the sentences imposed, Mill v R [1988] HCA 70; (1988) 166 CLR 59 at 62, Postiglione v R [1997] HCA 26; (1997) 189 CLR 295, and Pearce v R [1988] HCA 57; (1988) 194 CLR 610.

Capacity to pay

40 Section 6 of the Fines Act 1996 requires that I take into account Mr Mihalopoulos' means to pay a fine. Mr Mihalopoulos' affidavit states that he receives a wage of $600 per week after taxes and has $2,110 per month after paying child support. His Family Court proceedings have not yet resolved and the proceeds of the sale of the property on which substantial debt was owed are in a controlled money account pending resolution of those proceedings. I am not fully apprised of Mr Mihalopoulos' assets and liabilities but I accept that Mr Mihalopoulos presently has limited means to pay a fine and take that into account in setting a penalty. I cannot vary the statutory period of 28 days for payment of a fine specified in the Fines Act s 7. Application for time to pay any penalty imposed can be made to the Registrar of this Court under s 10 of the Fines Act.

Evenhandedness

41 The principle of evenhandedness requires that the Court consider if there is any general sentencing pattern for like offences in order to determine a consistent approach to penalty: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 702. This principle must always be applied subject to the particular circumstances of the case before the Court, mindful of the different circumstances leading to penalty in other cases. In Hili v R; Jones v R [2010] HCA 45; (2010) 242 CLR 520 at [54] French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ stated:

In Director of Public Prosecutions (Cth) v De La Rosa, Simpson J ... said: "Sentencing patterns are, of course, of considerable significance in that they result from the application of the accumulated experience and wisdom of first instance judges and of appellate courts." ... Past sentences "are no more than historical statements of what has happened in the past. They ... provide guidance to sentencing judges ... and stand as a yardstick against which to examine a proposed sentence" ... When considering past sentences, "it is only by examination of the whole of the circumstances that have given rise to the sentence that 'unifying principles' may be discerned". (footnotes omitted).

42 Fines of the following order have been imposed by the Court. In Pham (No 2) the defendants had been found guilty of contempt for using a spray booth in breach of the Court's orders. The first defendant was convicted and fined $10,000. The second defendant was convicted and fined $5,000 and the fourth defendant was convicted and fined $8,000. In Liverpool City Council v Palerma Pty Ltd (No 2) [2009] NSWLEC 45 the corporation and individual defendants were found guilty of contempt for failing to remove unlawful structures from land and fined a total of $20,000 each in respect of two charges against each defendant. In Brown Brothers (No 2) the respondent was found guilty of contempt in operating a waste management facility without consent. The Court found that the contempt had continued for a prolonged period. The defendant was fined $45,000.

43 In Mosman Municipal Council v Kelly (No 6) the defendant in breach of the Court's order failed to demolish a garage structure at the rear of premises in Mosman. The defendant was fined $20,000 with a periodic fine of $5,000 per month while the breach continued (with that order being suspended for a period of six months).

44 In Adams (No 2) the defendant was convicted of breaching the Court's orders requiring the removal of fill from his land and was fined $15,000.

Conclusion on penalty

45 Taking into account the objective and subjective factors above, in light of the sentencing principles of deterrence and denunciation of the offences and the early pleas of guilty, I consider Mr Mihalopoulos should pay a penalty of $8,000 for the first offence, $2,000 for the second offence in light of the totality principle and a periodic fine of $3,000 per month so long as the orders 2 and 3 made by the Court on 30 November 2010 are not complied with. I will suspend the periodic fine for a period of 18 calendar months to allow time for purging of the contempt.

 

Costs

46 The Council seeks its costs on an indemnity basis. As observed in GE Dal Pont, Law of Costs, 2nd ed (2009) LexisNexis Butterworths, indemnity costs may be awarded in contempt proceedings as a matter of judicial discretion. White J in ASIC v Sigalla (No 4) [2011] NSWSC 62 at [49] suggests these are commonly awarded. Dal Pont states at 547 - 549 (footnotes omitted):

In EMI Records Ltd v Ian Wallace Ltd Megarry VC observed that special costs orders are needed in cases of contempt because 'nothing should be done to deter a person from bringing a contempt to notice of the court; and the risk of having to bear any of the costs will often be a real deterrent'. Contempt proceedings, it is reasoned, serve a public interest, such that a person who successfully brings these proceedings should not be left out of pocket. It has been judicially remarked, to this end, that it is a 'common or usual practice' to order that the contemnor pay costs on an indemnity basis, and the case law reveals multiple examples of indemnity costs awards in this context. But there is no 'rule' that successful contempt proceedings necessarily attract indemnity costs orders, as this would be inconsistent with the exercise of the curial costs discretion.

A relevant consideration is whether, aside from the costs order, a penalty has been imposed for the contempt. If no other penalty is imposed, the court may be more inclined to employ 'a heavy order for costs as a means of imposing something in the nature of a sanction'. If, say, significant fines have been imposed, the 'penal' or 'deterrent' aspect of a special costs order may have less justification. Also relevant is the plaintiff's conduct and level of success.

...

That the contemnor has subsequently purged the contempt will not by itself guard against a special costs order if the contemnor's conduct has already caused the opponent to incur costs in bringing contempt proceedings.

47 Given the fines to be imposed, I do not consider indemnity costs are warranted. I will impose the usual costs order.

Orders

48 The Court makes the following orders:

1. Mr Mihalopoulos is convicted of the two charges of contempt as particularised in the Statements of Charge.

2. Mr Mihalopoulos is fined $8,000 for the first offence (as particularised in the First Statement of Charge) to be paid to the Registrar of the Court within 28 days of today's date.

3. Mr Mihalopoulos is fined $2,000 for the second offence (as particularised in the Second Statement of Charge) to be paid to the Registrar of the Court within 28 days of today's date.

4. Mr Mihalopoulos is fined $3,000 per calendar month so long as orders 2 and 3 made by the Court on 30 November 2010 continue not to be complied with.

5. Order 4 is suspended for 18 calendar months until 5 October 2013.

6. Mr Mihalopoulos is to pay the Council's costs of the contempt proceedings as agreed or assessed.

7. Order 6 is suspended for 12 calendar months until 5 April 2013.

8. The exhibits may be returned.

Decision last updated: 10 April 2012