The developers who illegally knocked down a historic Melbourne pub have had their penalties almost halved, after a successful appeal in the Victorian County Court.

Key points: County Court Judge Trevor Wraight reduced the total penalty from almost $2 million to just over $1 million

County Court Judge Trevor Wraight reduced the total penalty from almost $2 million to just over $1 million He acknowledged the community outrage at the demolition, but said it was up to Parliament to increase the penalties for this offence

He acknowledged the community outrage at the demolition, but said it was up to Parliament to increase the penalties for this offence The empty site will now become a temporary park until until a new planning application is approved

Raman Shaqiri and Stefce Kutlesovski pleaded guilty to breaching building and planning laws when they demolished the Corkman Irish Pub in Carlton without approval over a weekend in October 2016.

In February, the pair were fined more than $1.3 million plus costs, which amounted to a total of almost $2 million.

But County Court Judge Trevor Wraight reduced that penalty to just over $1 million, after he found the fines to be excessive.

During sentencing, Judge Wraight acknowledged the public anger the demolition had caused, but said it was up to Parliament to increase the penalties available.

"The community was outraged at the audacious manner in which the hotel was demolished by the owners without any consultation with the community," Judge Wraight told the court.

Raman Shaqiri (pictured) and Stefce Kutlesovski organised to have the pub hastily demolished on a weekend. ( ABC News: Nicole Asher, file photo )

"It may be that the community — and possibly the sentencing magistrates in this instance — regard the available maximum penalties in relation to this conduct as inadequate.

"However, unless and until Parliament increases the penalties available, courts are bound by the prescribed penalty and must sentence in accordance with the proper sentencing principle."

Developers made 'commercial calculation'

Judge Wraight said he found there was little evidence of genuine remorse on behalf of Mr Shaqiri and Mr Kutlesovski.

"It was their decision alone to demolish the hotel," Judge Wraight said.

"They made a commercial calculation and weighed up the potential penalties that they would face as a result of the deliberate breach of the law, with the potential profit that would result from development of the site, before going ahead.

"They clearly made that decision with forethought and planning as they needed to organise large machinery and employees to hastily bring down the hotel over the weekend."

In May, a deal was struck between the developers, Planning Minister Richard Wynne and the Melbourne City Council allowing the empty site to be turned into a temporary park by the end of November.

That deal came after an enforcement order for the developers to rebuild the pub in its original form was found to be "not legally sound".

The developers have until mid-2022 to submit a planning application which would need to be approved by both the Planning Minister and the council.

The chief executive of the Victorian Building Authority, Sue Eddy, said the authority was extremely disappointed in the outcome and the decision did not lessen the developers' guilt.

"[The developers] did not have a building permit, had not applied for a building permit, and took it upon themselves to carry out dangerous demolition work without any regard to the state and local laws," she said.

"With the building industry currently under intense scrutiny, it is vitally important to send a clear signal to all builders and developers that the VBA — and the community — will not tolerate illegal building work of any kind."

"The VBA is concerned that today's outcome promotes non-compliance as an optional cost of doing business for those who flout the rules."

The pub was known as the Carlton Inn Hotel in 1957. ( Supplied: State Library of Victoria )

The Environment Protection Authority (EPA) fined the developers $7,500 in 2016, after it discovered some of the rubble had been found at a construction site at Cairnlea, in Melbourne's north-west.

The developers were told they could not remove the debris because it contained asbestos and were ordered to cover it.

The chief executive of the EPA, Cathy Wilkinson, said she was disappointed with the reduced penalty.

"We believed this was a clear-cut case that showed blatant disregard for the environment and the community and deserved a substantial penalty," she said in a statement.

"As the Judge found, this was a case where experienced developers knew better and showed little remorse for their actions and the community are right to feel aggrieved."

Planning Minister will consider law changes

Planning Minister Richard Wynne said the Andrews Government would be reviewing the court decision and he would consider changes to the law.

"Let's make no mistake here, what these cowboy developers did is unforgivable and the community has a right to be outraged by it," Mr Wynne said.

"If the current legislation does not meet community expectations we will strengthen it."

Victoria's Shadow Planning Minister Tim Smith said the County Court decision was "disgraceful" and sent the wrong message to the development industry.

"The Corkman cowboys have got away with the heist of the century," Mr Smith said.

"These two cowboy developers are now going to profit dramatically from illegally knocking down a 160-year-old pub."

Mr Smith called on the Andrews Government to appeal the decision and compulsorily acquire the site.

"This is totally unacceptable and should have the strongest possible consequences for that unlawful behaviour," Mr Smith said.

"The Andrews Labor Government needs to step in here and turn the site into social housing so some good can come of this disaster, and make sure these two rogues never ever profit from their unlawful activity."

Judge Trevor Wraight's sentencing remarks:

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