Hurstville City Council v Dong Xing Group Pty Ltd

Judgment This determination was given extemporaneously and has been edited prior to publication 1This is an application made by Hurstville City Council under s 121ZS of the Environmental Planning and Assessment Act 1979 (the Act) for orders to enforce a Brothel Closure Order issued on 21 January 2011 to Dong Xing Group Pty Ltd (the respondent) in relation to premises at Unit 1/1214 Norman Street, Peakhurst (the premises). This matter was heard together with Matter No 10487 of 2011 . 2Dong Xing Group Pty Ltd is the registered proprietor of the premises. The order made pursuant to s 121B (Order 1) of the Act (the Order) directed the respondent to cease using the premises for the purposes of: (a)A brothel or massage parlour; (b)The provision of sexual acts or sexual services in exchange for payment; (c)The provision of massage services in exchange for payment. 3The reasons for the Order were stated to be: (1)The premises are being used for a purpose for which development consent is required but has not been obtained. (2)The premises are being used for sexual massage in exchange for monetary payment which is a use which requires development consent which has not been obtained. (3)The development application 09/DA-479 was refused on 11 June 2010 as the application failed to satisfy the mandatory requirement of Clause 49 of Environmental Planning and Assessment Regulation 2000 in that the owner's consent (the Owner's Corporation) had not been provided. 4The Order specified 28 days for compliance. 5On 26 May 2011 the Council's solicitors notified the respondent that Council had evidence that the premises were still being used for the purposes of a brothel in breach of the Order and the Act, and that Council was proceeding to file an application under s121ZS of the Act for a utilities order. The Council lodged a Class 1 application on 8 June 2011 seeking the following orders: (1)An order that the respondent has failed to comply with the attached Brothel Closure Order issued by the Applicant to the Respondent pursuant to s 121B of the Environmental Planning and Assessment Act on 31 January 2011; (2)An order that the utility companies which service the premises at Unit 1/1214 Norman Street Peakhurst are to cease providing their services to Unit 1/1214 Norman Street Peakhurst for a period of three months from the date of this Order; (3)An order that the Respondent pay the Applicant's costs of these proceedings; (4)Such or any further order that this Honourable Court deems fit. 6The respondent's solicitors filed a submitting appearance, save as to costs, on 25 July 2011. 7At the hearing the Council's representative indicated that the Council was seeking only the second of the orders sought in the application, namely that the utility companies cease providing their services for a period of three months (a utilities order). The respondent's representative confirmed that it consented to such an order being made. The respondent's representative was granted leave pursuant to Pt 6 r11 of the Uniform Civil Procedure Rules 2005 to make submissions. 8The respondent's representative submits that while consenting to the making of a utilities order, the respondent notes that it is the owner of the premises and has not been running the business and has applied three times for development consent. The respondent accepts that there is evidence on which the Court could find that the premises are being used a brothel. However, the premises have been leased to A Ming & Co, and the respondent is happy to resume occupancy of the premises to conduct its own business. 9The premises are part of an industrial estate containing twenty units, located in zone No 4 (Light Industrial Zone) under the Hurstville Local Environmental Plan 1994. The use of the premises for the purposes of a brothel is permissible with development consent. The Council's records indicate that respondent has lodged three development applications for the fitout and use of the premises as sex services premises since February 2009, the most recent being lodged on 15 December 2010. That application was considered by the Council's Development Assessment Committee on 8 March 2011, and refused on the basis there was no consent from the Owner's Corporation of the Strata Plan. 10Section 121ZS of the Act confers powers on the Court to enforce a brothel closure order: 121ZS Enforcement of brothel closure orders by cessation of utilities (1) If a person fails to comply with a brothel closure order, the Local Court or the Land and Environment Court may, on the application of the person who gave the order, make an order (a utilities order ) directing that a provider of water, electricity or gas to the premises concerned cease to provide those services. (2) An order may apply to the whole or part of premises. (3) A utilities order ceases to have effect on the date specified in the order, or 3 months after the order is made, whichever occurs first. (4) An application for a utilities order must not be made unless not less than 7 days notice of the proposed application is given to the following persons: (a) any person to whom the brothel closure order was given, (b) any provider of water, electricity or gas to the premises who is affected by the application, (c) any owner or occupier of the premises. (5) An owner or occupier of premises, or a provider of water, electricity or gas to premises, who is affected by an application for a utilities order is entitled to be heard and represented in proceedings for the order. (6) In determining whether to make a utilities order, the court is to take into consideration the following matters: (a) the effects of the failure to comply with the brothel closure order, (b) the uses of the premises, (c) the impact of the order on the owner, occupier or other users of the premises, (d) whether the health or safety of any person, or of the public, will be detrimentally affected by the order, (e) any other matter the court thinks appropriate. (7) A utilities order must not be made for premises, or any part of premises, used for residential purposes. (8) A provider of water, electricity or gas must comply with a utilities order, despite any other law or agreement or arrangement applying to the provision of water, electricity or gas to the premises, or part of premises, concerned. (9) No compensation is payable to any person for any damage or other loss suffered by that person because of the making or operation of a utilities order or this section. (10) A provider of water, electricity or gas must not, during a period that a utilities order is in force in relation to premises, or part of premises, require payment for the provision of water, electricity or gas services to the premises or part of premises (other than services related to the implementation of the order). (11) The Land and Environment Court or the Local Court may make a utilities order when it determines an appeal against a brothel closure order, if subsections (4) and (5) have been complied with. 11A "brothel closure order" is defined in s121ZR of the Act to mean: ...an order No 1 or No 15 under the Table to section 121B (1) to cease using premises as a brothel or in respect of the use of premises as a brothel, whether or not the order also prohibits the premises from being used for, or relates to the use of the premises for, any related sex uses. 12The term "brothel" is defined in the Act to mean: A brothel within the meaning of the Restricted Premises Act other than premises used or likely to be used for the purposes of prostitution by no more than one prostitute. 13The Restricted Premises Act 1943 defines "brothel" to mean premises: (a) habitually used for the purposes of prostitution, or (b) that have been used for the purposes of prostitution and are likely to be used again for that purpose, or (c) that have been expressly or implicitly: (i) advertised (whether by advertisements in or on the premises, newspapers, directories or the internet or by other means), or (ii) represented, as being used for the purposes of prostitution, and that are likely to be used for the purposes of prostitution. Premises may constitute a brothel even though used by only one prostitute for the purposes of prostitution. 14The Council's evidence included an affidavit sworn by Mr Ryan Asplet, Development Compliance Manager, on 25 July 2011, in which he provides evidence of complaints received by the Council about the use of the premises from January 2009 to June 2011, inspections by private investigators on 19 January 2009, 16 March 2009, 7 July 2009 and 28 October 2010, inspections by New South Wales Police on 10 February 2011 and 5 March 2011, newspaper advertisements from 13 January 2009, 5 January 2009, 22 January 2009, 10 March 2009, 31 March 2009, and 16 September 2010, and photographs taken by Council compliance officers on 20 August 2010, 16 December 2010, 24 January 2011, 25 February 2011, 29 March 2011 and 13 April 2011. 15Mr Asplet's evidence included evidence of conversations which he had when he attended the premises on 16 September 2010, telephone conversations made on telephoning the contact number provided in the newspaper advertisements in September 2010, on 22 December 2010, 20 January 2011, and 15 March 2011, and his observations on attending the premises on 24 January 2011, 25 February 2011, 29 March 2011 and 13 April 2011. 16In oral evidence Mr Asplet stated that he had telephoned the contact number at 4.30pm on 23 August 2011 and spoke to a woman. He asked her whether the premises were open and she answered " yes ", whether they provided full service and she answered " yes ", and what the price was and she answered " Seventy dollars for a half hour and $100 for a full hour ." He drove to the premises at 5.58pm on 23 August 2011 and observed a red light and an illuminated "open" sign at the premises. Photographs taken by Mr Asplet on that occasion were tendered in evidence. 17The Council's evidence included a copy of a title search for the premises and copies of three commercial leases which included a term that "The premises shall be used only as a full body therapeutic massage parlour." Those leases were between the respondent and Asian Relaxation Centre (for the term 8 January 2009 to 7 January 2013), the respondent and Xin Yu Ge (8 July 2009 to 7 July 2010), and the respondent and Stanley Luu (8 May 2010 to 7 May 2013). The Council provided a copy of a further lease between the respondent and A Ming & Co for the term 3 December 2010 to 2 December 2012, stating that the premises "Shall be used only as hardware wholesale and general trading." 18I am satisfied, based on the documentary evidence, that the respondent is the owner of the premises at Unit 1/1214 Norman Street, Peakhurst. I am satisfied based on the Council's evidence from Mr Asplet, and an affidavit sworn by Mr Mark Raymundo, town planner, on 17 August 2011, that the use of the premises for a brothel or a sex services premises is a use which requires development consent under the relevant zoning and that there is no development consent authorising such a use of the premises. The order issued on 31 January 2011 directed that the respondent cease the use of the premises as a brothel within 28 days. On the evidence before me the respondent did not exercise its right to appeal that brothel closure order, or take steps to remove its tenant. 19I am satisfied based on the affidavit evidence of Mr Asplet as to his telephone conversations, the inspections by New South Wales Police and Council officers, that the premises have been used as a brothel after the date for compliance with the brothel closure order. In particular there is the evidence of Mr Asplet's inspection of the premises on 29 March 2011 and 13 April 2011, including photographs, his telephone conversations on 25 July 2011 and 23 August 2011, and the photographs taken by him on 23 August 2011. The affidavit evidence of Mr Asplet, confirmed by the photographs, establishes that the premises include a waiting area, six rooms which each contain a shower and a lounge or a bed, and a storage room. The inspection of 25 February 2011 noted the presence of seven women at the premises on that occasion. 20Based on this evidence I am satisfied that the respondent has failed to comply with the brothel closure order issued to it as owner of the premises on 31 January 2011. For the reasons given in Matter No 10487 of 2011, I am also satisfied that Ming Chang, to whom a brothel closure order was issued by the Council on 19 May 2011 in relation to the premises, also failed to comply with a brothel closure order. 21The Council's evidence as to notification of the providers of utility services to the premises is in the form of an affidavit sworn by Ms Oksana Shashko on 10 August 2011, which annexes copies of correspondence with Energy Australia, Ausgrid Australia, TRUEnergy Australia and Sydney Water. Ms Oksana's affidavit includes evidence of a telephone conversation in which she was advised that Energy Australia has changed its name to Ausgrid and had supplied electricity to the premises up to 1 March 2011, that the account holder is Dong Xing Group Pty Ltd (the respondent), and that from 2 March 2011 the appropriate contact is TRUEnergy. Ausgrid confirmed by letter dated 29 July 2011 that it would neither consent to nor oppose the Council's application. The Council's evidence does not indicate what TRUEnergy's position is in response to the notification of the application by letter dated 29 July 2011. I am satisfied based on the evidence of Ms Oksana that TRUEnergy has been informed of the application. Ms Oksana provides evidence of a telephone conversation with the debt recovery manager of Sydney Water in which she was advised that Sydney Water did not wish to be involved in the proceedings and would comply with Court orders. I am satisfied that the providers of water and electricity to the premises have been notified of the application for a utilities order in compliance with s121ZS(4) of the Act . 22Section 121ZS(6) sets out the matters that must be taken into consideration in determining whether to make a utility's orders: (a) the effects of the failure to comply with the brothel closure order: 23The evidence before me includes records of complaints made to the Council since January 2009 from the proprietors of neighbouring businesses and from the Owners Corporation of the unit complex in which the premises are located, including complaints of damage to common property and security issues. The Owners Corporation of Strata Plan 64228 obtained an order from the Consumer Trader & Tenancy Tribunal on 9 October 2009 directing the respondent to comply with Special Bylaws 2 and 3 of Strata Plan 64228 and to immediately cease operating a brothel and/or massage parlour from the premises. That order was confirmed on appeal. 24The Council's evidence includes copies of penalty infringement notices issued to the respondent on 1 April 2009, 7 October 2010, 31 January 2011 and other notices issued to two individuals, one being the respondent's director and another being an agent of the respondent. 25I am satisfied the effects of the failure to comply with the brothel closure order is the continuation of an unauthorised use of the premises, which is opposed by the Owners Corporation of the Strata Plan, and which has impacted on neighbouring businesses. (b) the use of the premises: 26Based on the evidence above I am satisfied that the use of the premises has been since early 2009 as a brothel. The Council's evidence includes photographs taken of the premises at the various inspections undertaken by Council officers, which confirm that building works, including the erection of partitions and plumbing and associated works, have been undertaken at the premises. (c) the impact of the order on the owner/occupier or other users of the premises: 27The respondent, as owner, consents to the making of the utilities order. The affidavit of Ms Oksana includes an email from Mr Ding, the agent of the respondent, to the Council's solicitor stating that if they could get rid of the tenants he could move back into his own unit. The impact on the occupier would be, on the evidence before the Court, the cessation of a business which is unauthorised. (d) whether the health or safety of any person or of the public will be detrimentally affected by the order: 28There is no evidence that the health or safety of a person or the public would be detrimentally affected by the making of a utility order. (e) any other matter the Court thinks appropriate: 29There is detailed evidence before the Court of the long term use of the premises as a brothel, as evidenced by the newspaper advertisements and by the complaints received by the Council. There is evidence of consistent attempts by the Council to have the unauthorised use ended, as evidenced by the penalty infringement notices and other orders issued under s 121B of the Act. Those orders included an order issued under s121B to the respondent as owner of the premises on 20 March 2009 in similar terms to the order of 31 January 2011. On the evidence before me there was no appeal made in respect of that order. 30Section 121ZS(7) requires consideration of whether the premises or any part of them are used for residential purposes. The Council submits that this provision is directed at a lawful use for residential purposes and that there is no such lawful use. If s121ZS(7) requires consideration of actual, as opposed to lawful, use for residential purposes, the Council submits that the evidence at its highest is that there may be occasionally people sleeping over at the premises but that otherwise the inclusion of beds, cooking facilities and bathing facilities is consistent with the use of the premises as a brothel. The photographs forming part of the Council's evidence confirm that there are beds, kitchen facilities, including cooking facilities and showers. I agree with the Council that there is no indication from those photographs or from the evidence of the Council officers or police officers who have inspected the premises, of any evidence such as presence of wardrobes that would support a finding of occupation of the premises as residential premises. I am satisfied that s 121ZS(7) would not preclude the making of the order. 31Having regard to the matters specified in s 121ZS(6) I am satisfied that it is appropriate to make a utilities order as sought by the Council. 32The orders of the Court are: