Crosseyed Management Pty Ltd v Parramatta City Council

EX TEMPORE Judgment 1Crosseyed Management Pty Limited (Crosseyed) has appealed pursuant to s 121ZK of the Environmental Planning and Assessment Act 1979 (the EPA Act) against an order made by Parramatta City Council (the Council) under s 121B of the EPA Act. The order made by the Council was one requiring the cessation of use of premises at 22A Hunter Street, Parramatta for the purpose of a brothel (the premises). Compliance with that order was required by 1 March 2013. 2It is accepted by Crosseyed that the order has not been complied with and that the use of the premises for the purpose of a brothel continues. Nonetheless, it seeks a stay of the order in circumstances that I will shortly describe. 3The Council accepts that the Court has power to grant the stay that Crosseyed seeks. Section 22 of the Land and Environment Court Act 1979 (the Court Act) is identified by the parties as a source of power so to do. The order sought by Crosseyed is a stay of the s 121B order by the Council, pending determination of a Class 1 appeal that has been lodged pursuant to s 97 of the EPA Act, seeking development consent for the use of the premises as a brothel (proceedings 13/10135). The latter appeal was lodged with the Court on the same date as the appeal instituting the present proceedings. The s 97 appeal has not been fixed for hearing pending determination of the present motion. 4The premises would appear to have been used as a brothel, with development consent, since 2007. In August 2007 the Council granted development consent for brothel use but limited the number of sex workers to two. In 2010, a further development application was lodged with the Council seeking consent for internal alterations to the premises and their use by a greater number of sex workers and employees. That application was refused by the Council. Following that refusal an appeal was brought to this Court. 5On 29 March 2010, a Commissioner of the Court granted development consent for the use of the premises as a brothel, authorising its use with a maximum number of eight sex workers on site at any one time, together with two employees (Sansiro Group Pty Ltd v Parramatta City Council [2010] NSWLEC 1065). Conditions of that consent also provided for a limited number of car parking spaces onsite, the provision of car parking apparently being a significant issue in those proceedings. 6Relevantly, the conditions of the 2010 consent imposed a temporal limitation upon its operation. Condition 2 of the operational conditions was in the following terms: "This consent is until 31 March 2012 [sic]. Prior to 31 March 2012, if the applicant wishes to continue the use, a development application to continue the use of the premises as a brothel should be lodged with the Council." 7Applying what is said to be a literal interpretation of Condition 2, the then proprietor of the brothel business conducted on the premises lodged a development application with the Council seeking consent to continue that brothel use beyond 31 March 2012. The application so to do was lodged on 30 March 2012, that is one day prior to the expiry of the 2010 consent. It is that development application which is the subject of the pending s 97 appeal. 8Following its lodgement with the Council on 30 March 2012, the development application took considerable time to process. There is in evidence before me a detailed report on the application prepared by Council staff for consideration by the Council (the staff report). The staff report indicates that following its lodgement, the development application was publicly notified between 18 April and 9 May 2012. The premises were inspected by Council officers on 20 July 2012 when use of the premises as a brothel was apparently observed to be continuing. Yet it was not until 18 December 2012 that the development application was refused by the Council. 9There is no challenge to the exercise of power by the Council when determining to refuse the present development application. However, it is relevant to be noticed for present purposes that the staff report, which is dated 10 December 2012, reflects a detailed consideration of the application by staff members exercising different disciplines within the Council. The report recommended that consent be granted to the application, subject to a number of conditions. 10The appeals to this Court, both from the Council's refusal of the development application and from the order given by the Council to Crosseyed on 30 January 2013 were filed on 26 February 2013. Crosseyed's application for a stay is intended to secure what might be called the status quo pending determination of the s 97 appeal. Mr Newport, who appeared for Crosseyed, has indicated that his client is prepared to accept directions from the Court for the early determination of that appeal, including an expedited process for the preparation and exchange of any expert evidence. Crosseyed is also prepared to obtain such early hearing date as the Court may be prepared to allocate. In short, Crosseyed does not seek to delay the determination of the development appeal. Further, the Company accepts that should the s 97 appeal be dismissed, there will be no challenge to the order issued by the Council under s 121B requiring the cessation of the present use of the premises. 11The present application is, in some respects, of a kind to which considerations applicable to the grant of an interlocutory injunction may appropriately be applied. That is, it is appropriate to identify whether there are arguable grounds upon which the s 97 appeal might be sustained ("a serious question to be tried") and secondly, whether any harm flows from the continuation of the presently unauthorised use pending determination of that appeal ("the balance of convenience"). 12The Council opposes a grant of the stay sought by Crosseyed. Mr Zoppo, who appears for the Council, founds his opposition upon the public interest in preserving the integrity of the planning process by ensuring that only permitted or permissible development activities are undertaken on any given parcel of land. The present activity cannot be undertaken without development consent. Mr Zoppo also submits that the Court should not be seen to sanction activities, even temporarily, that have commenced without development consent where such consent is required. There is substance in these submissions. 13Mr Zoppo further submits that the strictures that should be applied to the continued operation of a brothel in the absence of an existing development consent, even when a development appeal seeking consent for that activity is pending before the Court, is demonstrated by the provisions of s 124AB of the EPA Act. That section circumscribes the Court's power to grant an adjournment of proceedings commenced in Class 4 of the Court's jurisdiction in which an injunction is sought to restrain the unlawful use of premises as a brothel. Section 124AB(2) requires that an adjournment to enable a development appeal to be determined when proceedings have been commenced "to remedy or restrain a breach of the Act" should not be granted unless exceptional circumstances are shown. The subsection further provides that the fact of a development application having been made "is not by itself an exceptional circumstance." The force of the submission must, once again, be acknowledged, even accepting, as Mr Zoppo does, that s 124AB is not directly applicable to the present case as there are no proceedings presently before the Court "to remedy or restrain a breach of the EPA Act" (cp s 124AB(1)). 14Notwithstanding the force of these submissions, there are, to my mind, counterbalancing factors that would support the grant of a stay for the short term that is sought by Crosseyed. While I would not suggest that what I am about to say would identify an "exceptional circumstance" within the meaning of s 124AB(2), it is significant to my mind that, in the present case, use of the premises as a brothel has been sanctioned by the grant of development consent since 2007. Further, there is no evidence before me to suggest that in the conduct of that activity there has been any breach of the conditions upon which the consent has been granted. 15I think this circumstance differentiates the present case from those cases to which s 124AB might more usually be applied. The primary focus of the section, so it seems to me, is directed to a circumstance when the use of the premises as a brothel is discovered, proceedings are then brought to restrain that use and, as a defensive mechanism, the brothel user then lodges a development application seeking development consent for that use. In the present case, a continuation of the existing development consent had been sought, in apparent conformity with a literal application of a condition attaching to that consent. Although the application was not legally effective to achieve that result, objectively judged there was an intent to comply with the law. 16Important to the exercise of my discretion, when considering whether there is an arguable ground or grounds upon which Crosseyed might sustain its s 97 appeal, is the staff report to which I have earlier referred. That report reflects consideration of the development application by a number of different officers within the Council, including the internal crime prevention officer and the Council planner responsible for assessment of the development application. For his part, the planner detailed the consideration given to the application and ultimately recommended the grant of development consent, subject to stringent conditions that include limiting the operation of the consent for a further 12 months only, having regard to the possible change in surrounding land uses consequent upon present planning controls. 17In the staff report, the planner identifies the fact that development for the purpose of a brothel is a permissible activity under the applicable planning instrument; that it appears to comply with the development standards contained in that instrument for such use and that it also complies with the relevant development control plan pertaining to development applicable to the premises. Although the staff report refers to the history of use, nowhere does it indicate that during the period in which the premises have been used as a brothel in accordance with the 2007 and 2010 development consents, there have been reported breaches of conditions. 18There are two further matters that need to be noticed which emerge from the matters discussed in the staff report. The first is that during the three week period of public notification of the proposed development application no submissions were received from any quarter objecting to the grant of development consent. Secondly, although the application was referred to the local area command of the police, resulting in an objection to the grant of consent, the only five incidents reported by the police as being related to the use of the premises as a brothel were incidents in which employees working in the premises were the victims of alleged offences rather than the perpetrators of those offences. That information was assessed in the staff report by the Council's crime prevention officer and not regarded by that officer as a basis upon which to recommend refusal of the application. 19In summary, Crosseyed submits that although the continuing operation of the premises as a brothel involves a breach of the EPA Act, there is no evidence advanced by the Council of any existing or likelihood of harm as a result of the continued conduct of the activity pending determination of the s 97 appeal. Although harm in the sense of a breach of the law is acknowledged, the absence of harm to which Crosseyed refers is an absence of harm to the local environment or to persons who might be in proximity to the premises. I accept that submission. Further, for reasons earlier indicated, the staff report provides a basis upon which to determine, for the purpose of this application, that there are arguable grounds upon which to advance the s 97 appeal. For these reasons I propose to grant a stay of the order made by the Council under s 121B of the EPA Act. 20That stay will be limited to the time by which the hearing of the s 97 appeal is reasonably likely to be concluded and a decision obtained. To that end, I propose to direct that the orders previously made for listing of both appeals on 23 April 2013 be vacated and that the matter be listed on Friday of this week, 19 April 2013, to enable the Registrar to give directions to have the matter prepared for hearing and to fix a date for hearing. By taking that course, there would seem to me to be ample time for the matter to be prepared, heard and decided not later than 30 June 2013. This ensures that the period of stay is, at a maximum, about two and a half months. I should add that the vacation of the Registrar's order listing the matter on 23 April and bringing it forward to Friday of this week is a matter agreed in by both parties. 21Finally, I should make clear that nothing that I have said in giving these reasons for granting the stay sought by Crosseyed should be taken as reflecting in any way upon the merits of the s 97 appeal. My observations and acceptance of facts are made strictly for the purpose of determining the present stay application. No doubt evidence will be given by or on behalf of both parties relevant to the determination of the s 97 appeal. 22For the reasons that I have stated, I make the following orders: