A recent case has sent a warning to property developers not to ignore their planning and environment law obligations, such as preservation responsibilities over heritage listed sites. Furthermore, directors cannot hide behind corporate structures to avoid personal liability, writes property development lawyer ROBERT STARKE.
Heritage-listed buildings have long been a thorn in the side of developers due to the costs and restrictions of compliance, and from time-to-time developers have looked for ways to circumvent these restrictions.
For example, in Leichhardt Council v Geitonia Pty Ltd (No. 6) , the NSW Land and Environment Court found a property development company and a project management company guilty of a breach of planning laws when they illegally demolished a heritage-listed shopfront in Annandale in Sydney’s Inner West.
The Court held that the director, sole shareholder and “alter ego” of the property development company was personally liable for the breach. The director was fined $200,000 plus costs.
This result sends a warning to property developers who may be tempted to ignore Council’s heritage controls and breach planning laws.
The Court asserted that directors of companies – in particular directors of property development companies – cannot hide behind their companies to avoid liability when in breach of the law. The Court is prepared to lift that “corporate veil” and hold company directors personally liable in relation to breaches of planning and environmental laws pursuant to the Act.
Property developers with issues like this should seek professional legal advice as there are usually other solutions to the problem.