City of Sydney Council v De Cue Pty Ltd

Land and Environment Court (NSW)|2006-06-23|Before: Preston CJ, Mr J

CITATION : City of Sydney Council v De Cue Pty Ltd [2006] NSWLEC 763

APPLICANT City of Sydney Council PARTIES : RESPONDENT De Cue Pty Ltd

KEY ISSUES: Brothel :- order that occupier cease use of premises as brothel - operation of brothel causes disturbances in and interference with amenity of neighbourhood

CASES CITED: Suzelle Antic v City of Sydney Council [2006] NSWLEC 276 (23 June 2006); Suzelle Antic v Waverley Council [2005] NSWLEC 125 (24 March 2005)

DATES OF HEARING: 09/10/2006, 10/10/2006, 01/12/2006, 06/12/2006

APPLICANT Mr M Craig QC with Mr E Ozen SOLICITORS LEGAL REPRESENTATIVES: Maddocks RESPONDENT Mr J Robson SC with Mr M Sahade SOLICITORS Comino Prassas

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

1 HIS HONOUR: Mistys is a brothel operated by a company, De Cue Pty Ltd ("De Cue"). The principal of the company is Ms Suzelle Antic. 2 Mistys' current business address is 3 Tusculum Street, Potts Point. Mistys moved to these premises in October 2005. Previously, Mistys had operated in Bondi. Mistys operates from the premises under a lease between De Cue and the owner entered into in August 2005. 3 From the time Mistys commenced operation at 3 Tusculum Street, residents and other occupiers of premises in the area around Mistys have experienced disturbances in and interference with the amenity of the neighbourhood. The residents and occupiers claimed that the cause of the disturbances in and interference with the amenity of the neighbourhood are the clients of Mistys and their associates. They claim that clients of Mistys and their associates have illegally parked in and around Tusculum Street, generated loud noise from their cars, caused loud noise by yelling and boisterous behaviour while congregating in the neighbourhood and engaged in antisocial behaviour including urinating, fighting, using offence language, throwing rubbish and intimidating residents and students of a nearby school. 4 The residents and occupiers have made numerous complaints to the City of Sydney Council and to the police over an extended period, from shortly after the commencement of operation of Mistys in October 2005 to date. 5 The Council, being satisfied that it had received sufficient complaints about Mistys, made application to this Court for an order that the operator of Mistys, De Cue, not use or allow the use of the premises at 3 Tusculum Street for the purposes of a brothel. This Court has power to make such an order under s 17(1) of the Restricted Premises Act 1943 (NSW). 6 De Cue contests the Council's application for such an order. Although conceding the Court has power to make the order, De Cue submits that the Court would exercise its discretion not to do so. De Cue submits that the disturbances in and interferences with the amenity of the neighbourhood have not been sufficient to warrant making an order, the operation of the brothel has improved and will continue to improve as De Cue implements a plan of management for Mistys. De Cue relies on the fact that the Council and the Court on appeal determined to grant deferred commencement consent earlier in the year. De Cue also submits that an order would cause financial hardship to De Cue and to the sex workers who work at Mistys. 7 The Court's task is to determine whether the Court should make an order restraining De Cue from operating its brothel on the premises at 3 Tusculum Street. The power to order premises not to be used as a brothel 8 The Court has power, on application by a local council, to make an order that an owner or occupier of premises that are a brothel and that are situated within the area of the Council, is not to use or allow the use of the premises for the purposes of a brothel: s 17(1) of the Act. 9 The Court is restricted in the matters it can take into consideration in making an order under s 17(1) to the matters enumerated in s 17(5) of the Act. Subsection 17(5) provides that: "In making an order under this section the Land and Environment Court is to take into consideration only the following: (a) whether the brothel is operating near or within view from a church, hospital, school or any place regularly frequented by children for recreational or cultural activities, (b) whether the operation of the brothel causes a disturbance in the neighbourhood when taking into account other brothels operating in the neighbourhood or other land use within the neighbourhood involving similar hours of operation and creating similar amounts of noise and vehicular and pedestrian traffic, (c) whether sufficient off-street parking has been provided if appropriate in the circumstances, (d) whether suitable access has been provided to the brothel, (e) whether the operation of the brothel causes a disturbance in the neighbourhood because of its size and the number of people working in it, (f) whether the operation of the brothel interferes with the amenity of the neighbourhood, (g) any other matter that the Land & Environment Court considers relevant" 10 The chapeau of the subsection operates both to make matters listed in the subsection relevant matters that must be considered as well as to make matters outside the subsection irrelevant matters that must be ignored. Paragraph (g) mitigates this effect to some extent by permitting the Court to take into consideration any other matter which the Court considers relevant. However, any matter the Court might wish to consider would still have to be within the subject matter, scope and purpose of the power under s 17 of the Restricted Premises Act. 11 The power to make an order under s 17(1) of the Restricted Premises Act is available irrespective of whether the use of the premises as a brothel is lawful or unlawful under the Environmental Planning and Assessment Act 1979. Hence, even if development consent has been granted under the Environmental Planning and Assessment Act 1979 authorising the use of premises as a brothel, the Court would still have power to make an order under s 17(1) that the premises not be used as a brothel if the circumstances (being those in s 17(2), (3) and (5)) warrant it. 12 De Cue submitted that the considerations in s 17(5) require fault on the part of the owner or operator of the brothel where the use of the brothel is lawful under the Environmental Planning & Assessment Act 1979 (such as where development consent has been granted to use the premises for the purpose of a brothel) but not where the use was unlawful under the Act (such as where use of the premises as a brothel is prohibited or the use is permissible with consent but no consent has been obtained or the use is being carried out otherwise than in accordance with a consent). If fault is not proven, De Cue submitted, the Court has no power under s 17(5) to make an order. De Cue was unable to point to any word or phrase in s 17(5) which either expressly stated fault was required or from which such an implication could be drawn. De Cue instead submitted that such an implication would be drawn from the fact that an order under s 17(1) is an in personam order against the owner or occupier of the brothel. 13 I reject this submission. There is no warrant in the words of s 17(5) or s 17(1) or from the in personam nature of the order under s17(1) to require fault on the part of the owner or occupier of the brothel before the Court has power under s 17(1) to make an order. 14 Further, it would be impossible to draw an implication of a requirement for fault in one situation where operation of the brothel is lawful under the Environmental Planning & Assessment Act 1979 but not in another situation where the operation is unlawful under that Act. I note that neither situation is even referred to in s 17(1). Section 17A does refer to proceedings that can be brought under s 123 of the Environmental Planning & Assessment Act 1979 to remedy or restrain a breach of that Act in relation to the use of premises as a brothel. This is in a different context, namely, the use of circumstantial evidence to find that particular premises are used as a brothel. But it does show that the legislative draftsman was aware of that Act and those proceedings, yet chose not to refer to either in s 17(5). This reinforces the conclusion that s 17(5) is not concerned with fault and lawfulness under that Act. Facts not in issue between the parties 15 There are a number of facts that are not in issue between the Council and De Cue:

(a) De Cue is the occupier of the premises at 3 Tusculum Street, Potts Point;

(b) The premises are within the local government area of the City of Sydney Council;

(d) Complaints have been made about the brothel by persons answering one or more of the descriptions in s 17(3) of the Act to the Council;

(e) The Council was satisfied under s 17(2) of the Act that it had received sufficient complaints about the brothel to warrant making the application to the Court for an order under s 17(1);

(f) The Council's application to the Court stated the reasons why the Council is of the opinion that the operation of the brothel at the premises should cease based on one or more of the considerations in s 17(5)(a)-(f), as required by s 17(4) of the Act; and

(g) Immediately adjacent to the premises is St Vincent's college which is a school within the meaning of that word in s 17(5) of the Act. Overview of evidence 16 The Council adduced a considerable body of evidence from about 30 witnesses addressing most of the heads of consideration that the Court needs to take into account under s 17(5). The witnesses called by the Council fell into the following categories:

(a) Local residents who reside in Tusculum Street: Mr Geoffrey Baker (resident of Rockwall Gardens), Mr Janet Breden (resident of 11 Tusculum Street), Mr Bernie Chamberlaine (resident of Rockwall Gardens), Mr Christopher Curtis (resident of 17 Tusculum Street), Mr Anthony Dowling (resident of Rockwall Gardens), Ms Katherine Dorrough (resident of 2B Tusculum Street), Mr Andrew Douglas (resident of 13 Tusculum Street), Mr Brett Doyle (resident of Rockwall Gardens), Ms Stephanie Fowler (resident of Rockwall Gardens), Mr Michael Gorman (resident of Rockwall Gardens, a residential apartment building at 1A Tusculum Street), Ms Fariba Imani (resident of Rockwall Gardens), Mr Brett Imlay (resident of 13 Tusculum Street), Mr Denis James (resident of Rockwall Gardens), Ms Carolyn Looby (resident of 5 Manning Street), Ms Gayle McNeice (resident of Rockwall Gardens), Mr James McNeice (resident of Rockwall Gardens), Ms Karin Osterberg (resident of Rockwall Gardens), Mr Grant Palmer (resident of Rockwall Gardens), Mr Richard Pierce (resident of Rockwall Gardens), Mr George Proos (resident of Rockwall Gardens), Mr Kenneth Ryan (resident of 2 Tusculum Street), Ms Jennifer Wells (resident of Rockwall Gardens);

(b) Students and parents of St Vincent's College: Ms Stephanie Fowler (student), Ms Emily O'Connor (student), Ms Patricia O'Connor (parent of student), Mr Robert Back (parent of student);

(d) Police: Constable Diana Harmer and Superintendent Mark Murdoch;

(f) Private Investigator engaged by the Council: Mr Mark Penney; and

(g) The Council town planner: Ms Suzanne McMahon. 17 All of these categories of witnesses gave evidence of experiencing first hand disturbances in or interference with the amenity of the neighbourhood attributable to the operation of Mistys. In addition, the concierge, police and council ranger gave evidence of receiving complaints of such disturbances in and interferences with the amenity of the neighbourhood, primarily from residents and occupiers of premises in and around Tusculum Street. 18 I will deal with the particular subject matters of the witnesses' observations and complaints under the discussion below of the heads of consideration under s 17(5) of the Act. Suffice it to say at this stage that the evidence is clear, consistent and compelling in establishing that the operation of Mistys has caused and is continuing to cause disturbances in and interference with the amenity of the neighbourhood. There are simply too many incidents and too many witnesses recording incidents in similar terms for any other conclusion to be drawn. 19 De Cue suggested that there was a well orchestrated campaign by the residents to close Mistys and that accordingly the residents' evidence should be disregarded or discounted. I reject that submission. The totality of the evidence is overwhelming in establishing that incidents have repeatedly occurred in and around Tusculum Street attributable to the operation of Mistys. The fact that persons who experienced these incidents might have been urged to record and notify the police or the Council of the occurrence of the incidents does not mean that the incidents did not occur. They clearly did. The fact that people who have experienced the incidents are sufficiently motivated to record them or to notify the police and the Council of them underscores the effect that the incidents have had on the witnesses. 20 The private investigator, Mr Penney, gave evidence of the surveillance he conducted for three nights on 25, 26 and 27 August 2006. Mr Penney's logs of his surveillance describe numerous incidents associated with clients of Mistys or their associates of illegal parking, talking loudly and swearing whilst entering, exiting or congregating near Mistys, and driving vehicles with very loud engines and muffler noise, revving of engines and spinning of tyres. Mr Penney observed 90 male persons entering Mistys on 25 August 2006, 115 on 26 August 2006 and 80 on 27 August 2006. 21 The Council town planner, Ms McMahon, gave evidence on the numerous letters of objection to the development application by De Cue to increase the size of the brothel and of the location of the nearest brothels, being Madonnas and Golden Apple. 22 De Cue adduced evidence from the following categories of persons:

(a) Local residents who reside in Tusculum Street: Ms Jill Carstairs (resident of 54/5 Tusculum Street), Mr Stephen Kemp (resident of 33/5 Tusculum Street), Mr Walter Pernu (resident of 16/5 Tusculum Street), Mr Sidney Phillips (resident of 45/5 Tusculum Street), Robert Wechsler (owner of the residential flat building at 5 Tusculum Street although not a resident);

(b) Private investigators engaged by De Cue: Mr Michael Beggs and Mr Guy Oakley;

(c) The principal and a manager of Mistys: Ms Suzelle Antic (the principal) and Ms Anne Chick (receptionist/duty manager);

(f) Occupational health and safety planning consultant: Ms Julie Bates; and

(g) A solicitor: Mr Nicholas Prassas. 23 The residents (except for Mr Wechsler) all resided at 5 Tusculum Street, next door to Mistys. The owner of 5 Tusculum Street had an informal agreement with De Cue to allow the principal and staff of De Cue to park their vehicles in the carpark of 5 Tusculum Street. The residents were asked by the owner if they would give evidence about the operation of Mistys. The residents gave evidence that they had not personally been disturbed by or had their amenity interfered with by the operation of Mistys. However, the evidence of these residents did not prove that the incidents about which the witnesses for the Council gave extensive evidence did not occur or that those incidents did not cause disturbance in or interference with the amenity of the neighbourhood. 24 The evidence of the private investigators, Messrs Oakley & Beggs, concerned surveillance they had conducted on six nights, four in July 2006 (14, 15, 21 and 22 July) and two in August 2006 (4 and 5 August). The private investigators' evidence recorded numerous incidents on those 6 nights of illegal parking by clients of Mistys, cars with loud music, noisy exhausts, revving engines and blasting horns driven by clients of Mistys or their associates, loud talking, yelling and occasionally yelling of obscenities by clients entering or leaving or congregating near Mistys, anti-social behaviour by clients of Mistys and their associates including smashing bottles on the road, hitting a road and traffic sign with a stick, urinating on trees in Tusculum Street, on nearby apartment block walls and even on the tyres of the private investigators' car, vomiting in the street, and throwing rubbish onto the footpath and the street. This surveillance evidence, by itself, establishes that the operation of Mistys results in disturbance in and interference with the amenity of the neighbourhood. 25 The evidence of Ms Antic discussed the operation of Mistys. Ms Antic acknowledges that early teething problems were encountered with clients in the first weeks of operation of Mistys at Tusculum Street. However, Ms Antic says that the business has since run in a much quieter way. She says the type of behaviour the subject of complaints by the residents is antithetical to allowing the business to be maintained and run profitably and well. Ms Antic gave evidence of measures she has taken to address the complaints. This included establishing a telephone "hotline" for complaints and notification in April 2006 to the residents by a flyer of the hotline. Ms Antic gave evidence of the preparation and revision of plans of management for Mistys and the implementation of the plans. Ms Antic gave evidence of De Cue's considerable expenditure in upgrading the premises at Tusculum Street and in meeting the conditions of the deferred commencement consent. Ms Antic said that any lack of success in curtailing the incidents and complaints has not been for lack of trying on her part. 26 Ms Antic said the whole of the business of Mistys runs on regular clients and she would know by name 95% of them. The clients have travelled with the business from the Bondi premises to Tusculum Street. There is difference between the clients during the day (who are older) and the night (who are younger). The majority of the clients drive to the premises. Unlike at Bondi where there was ample parking, there is a scarcity of parking in Tusculum Street. She had observed, on a number of occasions, that clients have "hotted-up" cars. Ms Antic said that clients often arrive and leave in groups, 2, 3 or 4 at a time. Multiple client use of working rooms is not uncommon. 27 Ms Antic said there was a difference between the previous brothel operated at Tusculum Street, which was a full service brothel, and Mistys which is a massage and masturbation service. Ms Antic said this results in different clientele. 28 The brothel's receptionist and duty manager, Ms Chick, also gave evidence of the operation of Mistys. Ms Chick said she had not heard or witnessed at any time commotion outside the premises. She had heard sounds from hotted up cars travelling up and down the street. She had not witnessed groups loitering outside the premises. She had never received any telephone complaints from residents. 29 The town planner, Mr Winnacott, gave evidence of the town planning history of the site. A brothel had apparently operated on the premises at 3 Tusculum Street illegally for 20 years prior to 1997. On 25 June 1997, the former South Sydney City Council granted development consent to use the premises as a brothel subject to conditions. The premises operated pursuant to the consent as a brothel. 30 In August 2005, De Cue entered a lease of the premises, commencing operation on October 2005. On 1 November 2005, De Cue lodged a development application for alterations and additions to the brothel, including to increase the number of bedrooms from 7 to 10. The use of the premises for the purposes of brothel was not sought as this use had already been approved by the 1997 consent. 31 On 20 March 2006, the Council granted deferred commencement consent. The applicant, being dissatisfied with a number of the conditions, appealed to this Court. The disputed conditions, including restricting the number of bedrooms to 7, the requirement for a 5 year trial period and the restrictions on advertising. As part of the appeal, De Cue had prepared for it by Ms Bates a new plan of management for the operation of the brothel. 32 The Court determined the appeal on 23 June 2006, dismissing De Cue's appeal and granted deferred commencement consent subject to conditions as the Council had done: see Suzelle Antic v City of Sydney Council [2006] NSWLEC 276 (23 June 2006). 33 Mr Winnacott visited the premises and surrounding area on two occasions, once on a Saturday night (29 April 2006) and the other during the day on a Monday (1 May 2006). Mr Winnacott did not observe any of the incidents that had been raised in the complaints. 34 Mr Winnacott considered it appropriate that procedures be put in place and facilities provided to ensure that a high level of amenity, safety, security and hygiene is available for both staff and clients of the business and that disruption to the amenity of the surrounding area does not occur. Mr Winnacott noted that the applicant had engaged Ms Bates to prepare a new plan of management for the operation of the brothel. Mr Winnacott reviewed Ms Bates' plan. Mr Winnacott stated he was satisfied that De Cue is taking reasonable steps to upgrade the premises and improve the operation of the business. Mr Winnacott considered "it is reasonable to assume that these steps will have the effect of minimising external impacts on the surrounding neighbourhood". He stated further: "I consider that if appropriately implemented this plan of management will provide an operational framework to facilitate a safe and hygienic environment for staff and clients within the premises and to minimise disturbance to the surrounding area. No plan of management can ensure that no anti-social behaviour will occur. However, I consider that the proposed plan of management, with the amendments required to be made by conditions of development consent, together with other conditions of consent will provide a satisfactory basis for the ongoing operation of the brothel". The plan of management prepared by Ms Bates together with the conditions of both the 1997 consent and the 2006 deferred commencement consent, would provide in his opinion a satisfactory basis for the ongoing operation of the brothel. 35 Mr Winnacott also analysed the surveillance reports of the two private investigators engaged by De Cue. The results of Mr Winnacott's analysis were that 49.8% of the anti-social incidents observed by the private investigators in the area, including Tusculum Street, related to Mistys. By type of anti-social incident, 91% of illegal parking, 49% of loud voices, 53% of urinating and 67% of vomiting, related to the operation of Mistys. 36 Mr Winnacott also considered the s 17(5) considerations. 37 The occupational health and safety planner, Ms Bates, gave evidence of her preparation of a plan of management for Mistys. Ms Bates drafted the plan of management used in the appeal before the Court. Ms Bates stated the plan of management was implemented after its preparation. She stated she had attended Mistys after the preparation and implementation of the plan of management. In May 2006, she conducted a training workshop for staff at Mistys. 38 Ms Bates considered that Mistys is run as reasonably as could be expected for any reasonable operator of a brothel. She considered the brothel has regard to the sensitivity of the neighbourhood, the neighbours, client and sex workers' security, safe sex practices, hygiene and client behaviour. She was of the opinion Mistys could not be run in a more efficient and reasonable way. 39 The social planner, Dr Berg, gave evidence of risks associated with the sex industry, the plan of management prepared by Ms Bates, Dr Berg's observations of the operation of the brothel, including her brief discussions with sex workers, and her summary of the security incidents book maintained by the security guard on duty at the brothel. Dr Berg stated that the plan of management provides protection for sex workers, their clients and the neighbours of the business. 40 Dr Berg expressed her opinion of the likely consequences of the closure of Mistys. These included:

(a) In the short term, men would not be able to relieve their sexual frustration at Mistys;

(b) For some time these men would continue to come to Tusculum Street looking for Mistys and being frustrated by its absence they would be likely to behave in a noisy and anti-social manner;

(c) The men might use other sex services premises which might not have any of the health, safety and security provisions currently in place at Mistys or worse, street sex workers; and

(d) Mistys would be replaced by another sex services operator in the same premises fairly soon because the development consent would presumably remain. 41 The solicitor for De Cue, Mr Prassas, gave evidence of his observations of the buildings in Tusculum and Manning Streets, Potts Point. Considerations relevant to making an order (a) The brothel is near a school 42 The brothel is immediately adjacent to St Vincent's College. The closest building of the college to the brothel is the dormitory for secondary students. There are 700 students at the college. 43 Ms Emily O'Connor, a boarding student at St Vincent's College, stated that her room in the college boarding house faced the premises and was approximately 10 metres away from it. The brothel was visible from her window. Ms O'Connor stated that from October 2005, she was regularly woken during the night by the noise created by people gathering outside the brothel. The people yelled and screamed rude remarks outside the brothel. She frequently saw groups of men congregating outside the brothel and cars parked all over the street and on the footpath. She saw a man urinating on the steps of Rockwall Gardens before rejoining the group of people congregating outside Mistys. Ms O'Connor stated that on many occasions in the last term of 2005 when she and other boarders were sitting on the balcony of the dormitory, clients of Mistys coming in and out of Mistys screamed rude remarks to her and other girls. The students felt uncomfortable using the balcony. Ms O'Connor's mother also gave evidence of the proximity of the brothel to the boarding house where her daughter resided and of writing a letter of complaint about Mistys to the Council. 44 Ms Fowler, the boarding captain of the college, stated that the boarding house overlooked the premises and that the brothel was clearly within the view of the bedrooms of the third floor. She said that on occasion when she visited the girls who were living in the bedrooms on the third floor facing the brothel, she heard a lot of noise from clients of Mistys either entering or exiting the brothel. This was noise she had not heard prior to October 2005 when Mistys commenced operation. Ms Fowler stated that on one occasion clients who had come out of the brothel called out to her and another girl sitting on the balcony asking them for their names, inviting them to come down and asking for their numbers. Ms Fowler stated that as Boarding Captain she has received complaints from other boarders since October 2005 about noise coming from Mistys waking them up, noise coming from cars playing loud music and driving off very fast at night and men calling out to them, making inappropriate comments and swearing. 45 I find the first consideration established. Mistys is operating within view of a school and has had an unacceptable impact on children at the school. (b) The brothel causes a disturbance in the neighbourhood 46 The neighbourhood in which the brothel is located is bounded by the buildings around Tusculum Street and Manning Street to the east of Tusculum Street. The neighbourhood includes St Vincent's College and the Rockwall Gardens apartment block to the north, and the residential buildings either side of Tusculum Street through to the intersection of Tusculum Street and Hughes Street to the south. 47 The neighbourhood is overwhelmingly residential in nature. The only commercial building other than the brothel is the Australian Institute of Architects' building "Tusculum" in Manning Street. This is the office of a professional architectural body and only operates during daytime business hours. The brothel is the only business open during the night. 48 There are no brothels other than Mistys operating in the neighbourhood. The closest brothels to the premises at 3 Tusculum Street are Madonnas and the Golden Apple. Madonnas is 400 metres away while Golden Apple is 480 metres away from 3 Tusculum Street. These brothels are not in the neighbourhood. There is no evidence of the amount of noise or vehicular or pedestrian traffic created by these brothels. 49 The operation of Mistys brothel has caused, and is continuing to cause disturbance in the neighbourhood. The disturbance involves clients of Mistys and their associates illegally parking, causing loud noise from their cars, causing noise by talking or yelling whilst coming or going to or congregating outside the brothel and engaging in anti-social behaviour. 50 The evidence of the residents called by the Council, the concierge, the police, the council rangers and the private investigators engaged both by the Council and De Cue, all establish repeated and continuous disregard by clients of Mistys of the parking restrictions in and around Tusculum Street. The issuing of parking tickets, patrols by council rangers, and even notification by the operators and security guards of Mistys has not checked the continual disregard for the law by the clients of Mistys. The parking restrictions are designed to ensure traffic and pedestrian safety and preserve amenity in the neighbourhood. The disregard of these restrictions undermines these goals. 51 The evidence of the residents called by the Council, concierge, police as and private investigators again is consistent in describing numerous incidents from October 2005 to date of clients of Mistys driving their vehicles with loud engine and exhaust noise and loud music, revving engines and screeching tyres. The noise from these vehicles disturbs the neighbourhood. 52 The evidence of the residents called by the Council, concierge, police and the private investigators also establishes that the clients of Mistys repeatedly and continuously cause noise in speaking loudly and yelling, including occasionally yelling obscenities. A feature of the operation of Mistys is that is caters for small groups of clients. As a result, predominately young men regularly attend the brothel in groups, especially during the evening. These young men often loiter on the streets in the vicinity of the brothel having loud discussions. Additionally, associates of clients attending the brothel often wait outside. Often these people cause a great deal of noise in the neighbourhood. The noise includes persons speaking loudly, swearing and playing loud music throughout the night. On occasions where they have been asked by residents to keep quiet the response has been aggressive. 53 The evidence of the residents called by the Council, concierge, police and the private investigators establishes repeated and continuous anti-social behaviour by clients of Mistys and their associates. Such anti-social behaviour includes urinating in the street, on vehicles and on buildings, vomiting, fighting, using offensive language, throwing rubbish into the street or private property and intimidating residents and students of the college.

54 These incidents have introduced to the neighbourhood a sense of unease and fear. Residents called by the Council have described being fearful of going out into the street at night. The students of St Vincent's College also have given evidence of noise disturbance and of persons calling out to them and of feeling uncomfortable.

55 The evidence establishes that the degree of disturbance is significant and unacceptably impacts on the neighbourhood. The essentially residential nature of the neighbourhood, including the dormitory of St Vincent's College, makes the neighbourhood sensitive to these disturbances. (c) No off street parking 56 Mistys has no off street parking for staff, sex workers or clients. The evidence does not establish the precise staff numbers. However, there is at most times the operator and a receptionist/duty manager and at least 10 sex workers on the premises at one time. The number of clients can be large. Mr Penney observed 115 clients on one night. Obviously, not all of the clients arrive and have a need for parking at one time. However, the evidence establishes that groups of clients arrive regularly and that multiple clients can be in a working room. These numbers of staff, sex workers and clients create a demand for multiple off-street parking. However, the evidence is that parking in Tusculum Street is restricted and scarce. Demand for parking exceeds supply. This necessarily results in the illegal parking and circulating traffic noise with the concomitant impacts described above. 57 Mistys has had some informal arrangement whereby the operator and staff of Mistys have parked on the premises of 5 Tusculum Street. However, no development consent has been granted for the use of 5 Tusculum Street for parking for the brothel. De Cue has no legal arrangement with the owner of 5 Tusculum Street permitted off-street parking for Mistys in the future. (d) Suitable access to brothel 58 Access to the brothel is from Tusculum Street. It is suitable. This is not a consideration which would justify making an order under s 17(1). (e) Size of brothel and number of workers 59 The development consent granted in 1997 restricted the number of working rooms of the brothel to 7 and the number of sex workers at any one time to 10. De Cue illegally commenced to carry out works to increase the number of rooms to 10. De Cue lodged a development application in November 2005 to increase the number of rooms to 10. The Council granted consent but imposed conditions restricting the rooms to 7 and requiring the illegal works to be reversed. De Cue appealed. The Court dismissed the appeal, maintaining the Council conditions. 60 Throughout this period from commencing occupation to date, De Cue has advertised Mistys as having "50 Ladies! Now 10 rooms!" and as being at a "bigger, sexier location" at 3 Tusculum Street. These advertisements continued to be placed by Mistys even after rejection by the Council and the Court of the application to increase the number of rooms and sex workers. The operator and receptionist/duty manager stated that multiple clients can be in each room. 61 Large numbers of clients have been observed to use the premises on weekends. Mr Penney observed up to 115 clients per night. 62 The size of the brothel, the number of sex workers and the number of clients are related to the nature of the brothel operated by De Cue. 63 Prior to October 2005, the premises at 3 Tusculum Street were operated by another operator as a full service brothel. This operation had a reduced number of sex workers and clients and, according to all of the evidence, operated without causing any disturbance in or interference with the amenity of the neighbourhood. 64 Mistys is a different type of brothel. While sexual intercourse is offered, the majority of clients seek massage and masturbation by the sex workers. As noted, Mistys caters for clients who prefer to come in groups, rather than individually. The operator and receptionist/duty manager gave evidence that the client base for this type of brothel run by Mistys is different to the client base of a full service brothel or indeed other brothels of the nature of Mistys. The fact that clients arrive and leave in groups results in many of the disturbances in and interference with the amenity of the neighbourhood that have occurred. 65 The combination of the nature of the brothel, the client base of Mistys, the client numbers, the size of the brothel and the number of sex workers results in disturbance in the neighbourhood. (f) Interference with amenity of the neighbourhood 66 The repeated and continuous activities of the clients of Mistys and their associates in illegally parking, causing traffic noise, causing other noise from congregating, and engaging in anti-social behaviour have interfered with the amenity of the neighbourhood. This interference is significant and unacceptable. (g) Other matters 67 De Cue submitted three matters should be considered by the Court: the existence of a plan of management to control the operation of Mistys brothel, the hardship and costs that would be caused to De Cue and the sex workers if an order under s 17(1) were to be made and the existence of development consents authorising the use of the premises as a brothel.

Plan of management 68 The operator of Mistys, Mr Winnacott, Ms Bates and Dr Berg have stated that the disturbances in and interference with the amenity of the neighbourhood that have been caused in the past by the operation of Mistys will all be solved in the future by implementing the plan of management prepared by Ms Bates. Accordingly, De Cue submits, an order should not be made against De Cue restraining it from operating the brothel. I do not agree for a number of reasons. 69 First, prior to operating Mistys at 3 Tusculum Street, De Cue operated Mistys in premises at Bondi. The brothel was of the same nature, had the same client base and numbers, and had the same management. The brothel at Bondi was the subject of the same types of complaints as had been made against the brothel at 3 Tusculum Street. These are set out in the judgment of the Court determining an appeal by Ms Antic on behalf of De Cue against a refusal to grant development consent for the brothel at Bondi: see Suzelle Antic v Waverley Council [2005] NSWLEC 125 (24 March 2005). At Bondi also, the operator of Mistys relied heavily on a plan of management to address all of the disturbances in and interferences with the amenity of the neighbourhood. However, whatever plan of management that De Cue had in force at Bondi was evidently ineffective. The proposed plan of management in that case was held by the Court likely to be ineffective to properly address the complaints: see at [59]-[66]. 70 Secondly, after moving from the Bondi premises to 3 Tusculum Street and commencing operation in October 2005, De Cue could reasonably be expected to have implemented from the outset a plan of management which would be effective to avoid causing a repeat of the brothel causing disturbances in and interference with the amenity of the neighbourhood. Yet, within weeks of commencement of operation in October 2005, complaints were being received of the brothel disturbing the neighbourhood and interfering with the amenity of the neighbourhood. Again, whatever plan of management was being implemented was ineffective to address these concerns. 71 Thirdly, the plan of management that De Cue had for the operation of the brothel after commencement in October 2005 and that was the subject of the development application for the alterations and additions to 3 Tusculum Street, was considered to be inadequate by the consultant engaged by De Cue, Ms Bates. Ms Bates prepared in April 2006 a new plan of management for the purposes of De Cue's appeal against the Council's decision to place conditions on De Cue's development application. 72 However, even that plan of management was considered by the Court in determining the appeal against the conditions of the deferred commencement consent for 3 Tusculum Street to be inadequate to address many of the issues raised by the residents and St Vincent's College: see Suzelle Antic v City of Sydney Council [2006] NSWLEC 276 (23 June 2006) at [38],-[45]. The Court found the plan of management cannot address the unacceptable antisocial behaviour of persons attending the brothel and their companions outside the brothel in Tusculum Street. Persons who engage in such behaviour will not be constrained by a direction to act in accordance with the plan of management to "enter and leave in a quiet and orderly manner". The Court also found that the plan of management cannot address the spontaneous and disruptive outbursts from persons attending the brothel and their companions in Tusculum Street that can disturb local residents and students. The Court also found that the presence of a security guard at the brothel can itself create unacceptable disturbances in the neighbourhood. 73 Fourthly, the operator and the receptionist/duty manager of Mistys and Ms Bates stated that the plan of management has been implemented by De Cue in operating the brothel since Ms Bates prepared it in April 2006. Yet, the evidence of the residents called by the Council, the concierge, the police, the council rangers and the private investigators described numerous incidents that have occurred after April 2006 that have caused disturbance in the neighbourhood and have interfered with the amenity of the neighbourhood. These include the illegal parking, traffic noise, patron noise and anti-social behaviour. Evidently as the Court had predicted in its judgment on the appeal, even the revised plan of management of Ms Bates is ineffective in curtailing these incidents. 74 These facts lessen the weight that can be given to the opinions of Mr Winnacott, Dr Berg and Ms Bates that the plan of management will minimise disturbances to the neighbourhood. Their predictions that the plan of management would have that effect are negated by the numerous incidents that have caused disturbances in and interferences with the amenity of the neighbourhood and that have occurred after the plan of management has been implemented. None of Mr Winnacott, Dr Berg or Ms Bates addressed these continuing incidents or why the plan of management was not having the effect that they had predicted. 75 Fifthly, the characteristics of the brothel operated by De Cue in this location have caused and are inherently likely to cause incidents that disturb the neighbourhood and interfere with the amenity of the neighbourhood. These characteristics include the type of brothel operated by De Cue, its established client base with its propensity for group activities and track record of engaging in incidents revealing a complete disregard for the rules and mores of a civilized and considerate society, the numbers of clients and the absence of any off-street parking. The neighbourhood in which the brothel is operated is one characterised by proximate and sensitive residential and school land uses. This combination of a brothel with characteristics likely to cause a nuisance and a sensitive neighbourhood is inherently likely to cause on-going disturbances in and interferences with the amenity of the neighbourhood. 76 Having regard to these matters, there is no likelihood that the plan of management will be any more effective in the future in controlling the incidents that cause disturbance in and interference with the amenity of the neighbourhood.

Impact on De Cue and sex workers 77 An order restraining De Cue from using the premises for a brothel will cause financial loss to De Cue. De Cue has entered into a lease of the premises and has expended considerable money in renovating and upgrading the premises. 78 Nevertheless, the evident purpose of the Restricted Premises Act is to ensure that brothels do not operate in a manner which causes unacceptable impacts and complaints in relation to the matters described in s 17(5). 79 In this case, I am not satisfied that there is sufficient justification to allow this particular brothel which operates with significantly unacceptable impacts to continue operating indefinitely on the ground that cessation of operation would cause financial hardship to the brothel. To so allow the continued operation would be to place the burden of the significant social and environmental costs caused by the brothel to be borne by the residents and occupiers of premises in the neighbourhood. The purpose of the legislation, and of the facility in s 17 of local councils being able to apply for and the Court being able to make an order that an owner or occupier of premises that is a brothel cease using or allowing the use of the premises for the purpose of the brothel, is to bring the social and environmental costs caused by the brothel back to the operator or owner of the brothel. 80 In this case, I find the costs to the community in the neighbourhood of the brothel of allowing the continued operation of this brothel outweigh the costs to De Cue if an order to cease the use of the brothel is made. 81 Further, some mitigation of financial hardship to an occupier of the premises can be made by staying any order under s 17(1) for a period of time to allow the occupier to relocate the brothel from the premises to alternative premises that may be more suitable. 82 Similarly, any hardship to sex workers of the brothel caused by an order of the Court under s 17(1) is not a justification for allowing a brothel to continue indefinitely causing social and environmental costs. Again, however, a stay of an order can alleviate some of the hardship that may be caused to sex workers. 83 In this case, in any event, the sex workers are independent contractors, not employees of De Cue. They can and do provide their services at a variety of sex service providers. Any closure of Mistys at 3 Tusculum Street will not prevent the sex workers from providing their services elsewhere. 84 I do not consider the consequences referred to by Dr Berg, if Mistys were ordered to close, including the inability of clients to relieve their sexual frustration at Mistys, to be of weight.

Existence of development consents 85 De Cue submits that the fact that the premises have the benefit of development consents permitting use as a brothel is a relevant matter against making an order under s 17(1). I disagree. 86 The fact that development consent was granted in 1997 for the use of the premises as a brothel and a deferred commencement consent was granted in 2006 for alterations and additions to the brothel under the Environmental Planning and Assessment Act 1979 is not, in the circumstances of this case, a persuasive reason for not making an order under s 17(1) of the Restricted Premises Act. As I have noted earlier, the power to make an order under the Restricted Premises Act restraining the use of premises as a brothel is available regardless of whether the premises can be lawfully used or are being lawfully used as a brothel under the Environmental Planning and Assessment Act 1979. The Restricted Premises Act is concerned with controlling any brothel that causes adverse impacts of the kind described in s 17(5). If a particular brothel has caused and is likely in the future to continue to cause these adverse impacts, an order that the use of that brothel cease is appropriate regardless of the fact that a development consent to use the premises for a brothel subsists. 87 An order directed to an occupier only restrains that occupier from using or allowing the use of the premises for a brothel. A subsisting development consent may enable another operator to use the premises for a brothel under the Environmental Planning & Assessment Act 1979, but again any other operator would also need to ensure that the operation of their brothel does not cause unacceptable impacts of the kind described in s 17(5) of the Act. 88 De Cue also submitted that the Council and the Court on appeal considered the numerous incidents and complaints of the residents and students and staff of the school when dealing with De Cue's development application for alterations and additions to the brothel. Both the Council and the Court determined to grant consent to that development application, albeit on conditions including a deferred commencement condition. 89 However, the issue of the use of the premises as a brothel was never before the Council or the Court. The development consent granted in 1997 approved that use. The development application in 2005 was merely for alterations and additions to that approved use. Neither the Council nor the Court had power in determining the 2005 development application to revoke the 1997 consent and refuse to allow the use of the premises as a brothel. The most the Council and the Court could do was to endeavour to regulate the use as a brothel to minimise the incidents and complaints. 90 If the question of the use of the premises as a brothel had been at large, there would be good reason to believe that the use would have been refused. The characteristics of the brothel, the experience of its operation and the material change in the nature of the neighbourhood to a predominately residential character strongly point to the brothel being an unacceptable use of the land. If the development consent were to be sought today, it ought properly to be refused. Conclusion 91 Considering all of the factors under s 17(5) of the Act, I am of the view that the Court should make an order under s 17(1) that De Cue not use or allow the use of the premises at 3 Tusculum Street for the purposes of a brothel. 92 From the commencement of operation of the brothel in October 2005 to date, the brothel operated by De Cue has caused significant and unacceptable disturbances in and interferences with the amenity of the neighbourhood. These are not the result of isolated incidents. Incidents have been occurring continuously since De Cue commenced operating Mistys brothel. The incidents are a routine characteristic of the operation of Mistys. The incidents are not trifling annoyances. The nature of the incidents and their repetitive and routine characteristics represent significant departures from accepted rules and mores of a civilised and considerate society. 93 As a usual occurrence, the children and young women of the adjacent St Vincent's College should be able to sleep in their bedrooms without being woken by loud yelling, offensive language and car and traffic noise. They should be able to enjoy sitting on the balcony of their dormitory with their friends without being harassed and abused. They should not have to look out to see men urinating in the street and engaging in other anti-social behaviour. They should be able to feel comfortable in residing at the boarding school which is their home during school term. 94 All of the residents of Tusculum Street, as a usual occurrence, should be able to enjoy the amenity of the pleasant, urban residential environment. They and their guests should be able to walk and drive in Tusculum Street without suffering the inconvenience and ill-effects of illegal parking. They should be able to enjoy the peace and quiet of their dwellings and to sleep at night without noise disturbance by boorish persons and their vehicles. They should be able to live in a neighbourhood where urinating, vomiting, fighting, damaging signs and throwing rubbish in the public domain is not a nightly occurrence. They should be able to walk down the street without fear or sense of unease. 95 The students and residents have not been able to and are not likely in the future to be able to enjoy these aspects and quality of life without being disturbed by these repetitive and routine incidents. 96 These incidents are attributable to the operation by De Cue of its brothel Mistys in the neighbourhood. The nature of the brothel run by De Cue, its client base (including the propensity for group activities and a track regard of disregard for the rules and mores of a civilised and considerate society), the numbers of clients, the numbers of sex workers, the way in which De Cue has operated the brothel (including its advertising and lack of effective implementation of a plan of management) and the likely way in which De Cue will operate the brothel in the future, and the absence of any off-street parking for the brothel have resulted and will continue to result in the occurrence of the incidents. The nature, proximity and sensitivity of the surrounding residential and school uses ensure that these incidents have caused and will continue to cause disturbances in and interferences with the amenity of the neighbourhood. 97 The hardship and costs to De Cue and to the sex workers that may flow from the making of an order under s 17(1) may be taken into account. In the circumstances of this case, however, the hardship and costs to De Cue and the sex workers are more than outweighed by the hardship and costs to the residents and occupiers of premises and the students of the school in the neighbourhood if an order under s 17(1) were not to be made. The residents and students of the neighbourhood are not to be valued less than De Cue and the sex workers. 98 The hardship and costs to De Cue and the sex workers can be alleviated to some extent by staying any order that De Cue not use or allow the use of the premises at 3 Tusculum Street for the purposes of a brothel for a period of time. In the stay period, De Cue and the sex workers can relocate their business to another location, preferably one that is less sensitive and is better able to absorb the inevitable impacts that this type of brothel is likely to cause. 99 De Cue and the Council addressed the Court on the length of the period of time that any order under s 17(1) should be stayed. 100 De Cue's submissions were in the alternative. First, De Cue submitted the stay should be to the end of the term of the lease, namely 11 August 2010. Alternatively, a period of 24 months should be allowed, with a fallback position of 12 months. As a safeguard, De Cue submitted the Court could re-list the matter in 6 months time to review the appropriateness of the period of stay made. De Cue referred to the following circumstances as justifying a stay of the length submitted:

(a) The Court would not find that the use of the premises as a brothel by De Cue was unlawful under the Environmental Planning and Assessment Act 1979.

(b) The nature of the incidents that have caused disturbances in and interferences with the amenity of the neighbourhood are not "life-threatening" and the degree of affectation is not serious.

(d) There was never any intention on the part of De Cue to cause the incidents or the consequential disturbances in or interference with the amenity of the neighbourhood.

(e) De Cue's business of operating the brothel is successful.

(f) An order restraining De Cue's use of the premises and brothel will have severe commercial consequences to De Cue.

(g) Considerable time would be needed to mitigate these commercial consequences to De Cue: (i) If the business were to be sold: the business is of a specialised nature and therefore has a limited number of potential purchasers. A potential purchaser would be circumspect given the risk of an order against it. (ii) If De Cue is to vacate the premises: De Cue would need to assign the lease. An assignment of the lease requires the consent of the owner of the premises. By cl 13 of the lease, the lessor has 60 days to consider an application to assign. De Cue would have to first secure an interested party and the assignee would have to prove to the reasonable satisfaction of the lessor that the assignee is financially sound and has a reputable experience in conducting the permitted use. Delays could be expected. (iii) If De Cue wishes to relocate its business to alternative premises: De Cue would need to find alternative premises that are suitable and can lawfully be used as a brothel. De Cue read an affidavit of Ms Bates that stated that she knew of three sex services premises for sale, two in Surry Hills and one in Windsor. The Surry Hills premises are 3 and 6 working room capacities. The Windsor premises has a capacity of 5 working rooms. Ms Bates stated that if new premises are desired, a development application for sex services premises can take up to 12 months for determination; (iv) An order under s 17(1), even if its operation is stayed, might cause De Cue to commit an anticipatory and/or fundamental breach of the lease which the lessor could act upon to terminate the proprietary right to the premises as a lessee. This could have the consequence of De Cue commencing action for an unlawful termination. Further delays could be anticipated and any potential purchaser of the business or lessee would not be interested in an assignment of a lease until those proceedings are settled. (v) Potential purchasers of the business or assignees of the lease would not be actively engaged during the festive season. Normal activity returns to the market in March. (vi) If De Cue is not able to vacate the premises with a proper assignment and in accordance with the lease it runs the risk of forfeiting its security deposit of $80,080, being sued for damages by the lessor or being the subject of an adverse cost order.

(h) De Cue has expended $800,000 on the premises, of which $600,000 was incurred to refurbish the premises. Refurbishment costs remain for the benefit of the landowner and are unrecoverable by the lessee. The balance of $200,000 was incurred for security equipment, staff amenities, refrigeration and other goods which raise concerns whether such items are fixtures and are therefore the property of the landowner.

(i) Without the ability to assign the lease and secure new premises and to complete the transactions simultaneously, there is a real risk of De Cue's staff and the sex workers abandoning the business. This would damage the reputation and goodwill of the business. 101 The Council submitted that the periods of time sought by De Cue were excessive. The Council submitted 1 month or at least no longer than February 2007 should be permitted. 102 The Council referred to the fact that De Cue has been on notice of the possibility of an order being made by the Court under s 17(1) for some time. These proceedings were commenced in April 2006. At that time, De Cue had already appealed the Council's decision in relation to the development application for alterations and additions to the brothel. De Cue sought, and the Court granted, an adjournment of these proceedings whilst De Cue's appeal was heard and determined. The consequence has been that De Cue has had already a period of time to start making arrangements for the possible outcome of an order under s 17(1). 103 The Council submitted that the evidence reveals a demonstrable failure by De Cue to operate the brothel in a way so as not to cause problems in the community. A stay allows these problems to continue. The adverse consequences to the community should not be allowed to continue for a long period of time. 104 The Council submitted that Ms Bates' evidence focuses on the length of time to obtain development consent for new premises to be used as a brothel. The other option is to buy or lease premises that already have the benefit of consent for use as a brothel. This is what De Cue did when it moved from Bondi to 3 Tusculum Street. This course would involve considerably less time. 105 In determining the length of the period of the stay, a balancing exercise must be undertaken. An order would not be made under s 17(1) unless the Court considers the operation of the brothel causes sufficiently serious adverse impacts of the type referred to in s 17(5), as to warrant making the order. A stay should not be of such a length of time that it undermines the purpose and effect of making the order. De Cue's submission that the stay should be for a period of 4 years to the end of the lease would have this effect, as would its alternative submission of 24 and 12 months. The significant and unacceptable disturbances in and interferences with the amenity of the neighbourhood that have occurred and that justify the making of the order under s 17(1) have occurred in the 12 month period since October 2005 when De Cue commenced operation. To stay an order for 12 months or more would be to allow a repetition for the same period of the significant and unacceptable disturbances and interferences. 106 In my opinion, staying an order under s 17(1) for a period of 4 months results in an acceptable balancing of the prejudice to De Cue and the community. This period is some 2 months longer than the period within which the lessor can consider a request for assignment of the lease and allows for De Cue to find an assignee and submit to the lessor a request for assignment of the lease. 107 This period allows time to find and purchase or lease alternative premises which can be lawfully used as a brothel. Ms Bates' evidence is that she knew of two in the inner city area. Others may well exist. Moving to such premises does not preclude De Cue at the same time finding other premises and making a development application for use of those premises as a brothel. If consent is forthcoming, a further move could be arranged to those premises. 108 This period would also ensure that the festive season is concluded and normal activity in March is resumed. 109 The other factors referred to by De Cue have been dealt with elsewhere in the judgment. The fact that the use has not been proved to be unlawful under the Environmental Planning & Assessment Act is not determinative for reasons earlier given. The incidents caused by De Cue may not be life-threatening, but nevertheless for the reasons given earlier their nature and their repetitive and routine characteristics make them significant and unacceptable. 110 The absence of intention by De Cue to cause the incidents or adverse impacts is also not determinative. An order under s 17(1) is not to punish an owner or occupier of a brothel that causes unacceptable impacts of the kind referred to in s 17(5). It is to remedy these impacts. As I have earlier held, fault is not an ingredient required under s 17(5). Equally, the absence of fault or intention is not determinative in the exercise of the discretion order a stay of an order under s 17(1). 111 The success of De Cue's business of operating the brothel is, of course, a cause of the unacceptable impacts. By reason of its success, De Cue has not altered, and does not wish to alter, the business, including changing the type of brothel, the client base or the client numbers. The success of the business also means that De Cue has more to lose if an order is made that De Cue cease operating its business at the premises. A stay for the proposed period of 4 months should provide an opportunity for De Cue to minimise the consequences to its business by actively pursing other premises. 112 De Cue's considerable expenditure on refurbishing the premises may be lost no matter what period is selected for a stay of an order under s 17(1), at least less than a stay to the end of the lease in 2010. This factor is therefore not of great assistance. 113 Accordingly, I consider an order under s 17(1) should be made but its operation should be stayed for 4 months. Orders 114 The Court makes the following orders:

De Cue Pty Ltd, its servants and agents are not to use or allow the use of the premises known as 3 Tusculum Street, Potts Point for the purpose of a brothel.

The respondent is to pay the applicant's costs of these proceedings, as agreed or assessed.

The exhibits may be returned. **********

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Assessment Act 1979(NSW)s 123

Restricted Premises Act 1943(NSW)s 17(1)-17(5), s

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