Krausmann v Bankstown City Council

Background and the proposal 5On 20 August 2010 I delivered judgment in the matter FRG Developments Pty Ltd v Bankstown City Council [2010] NSWLEC 1228. I upheld the appeal against the council's refusal of an application to establish a brothel at the site. The Orders made provide consent for use of Unit 16 as a brothel for a trial period of 12 months (condition 5). The conditions imposed reflected those put forward by the council and the Police and, of relevance to this case, include conditions requiring works to be in accordance with approved plans (condition 3), separate approval to be obtained for the erection of signage (condition 7), provision of 11 off street car parking spaces (conditions 29 and 31), storage of waste containers (condition 35), provision of a security guard between the hours of 7pm and 7am to regularly patrol the industrial complex (condition 40), operation of the premises in accordance with an endorsed Plan of Management (condition 47). 6The use of the site as a brothel commenced in November 2011 and has operated continually since that time. The consent provides for use on a 24 hour per day, seven days per week basis. 7The application under s96AA was lodged with the council on 10 August 2012 and sought deletion of condition 5. As part of the assessment process the council identified that the fitout of the site had been undertaken contrary to the approved plans. The application was amended on 9 January 2013 to include amended plans and seek modification of conditions 3 and 40. Notification of the amended application by the council resulted in receipt of two submissions, both objecting to the application, one from the Owner's Corporation of the strata plan. 8Despite its staff recommending approval of the application for a further 12 month trial period and excluding the amendment of condition 40, the council refused to modify the consent with the reason for refusal being that the application is not in the public interest. 9The applicant no longer seeks to amend condition 40. 10The council does not oppose the amendment to condition 3 to substitute the amended plans that reflect the current layout of the premises.

The planning controls 11The site is zoned 4(a) General Industrial under Bankstown Local Environmental Plan 2001 (LEP). Use of the premises as a brothel is permitted with consent in that zone. Relevant clauses of the LEP are: Clause 2 Objectives of the plan Clause 6 Definitions Clause 11 Development which is allowed or prohibited within a zone Clause 17 General environmental considerations Clause 32 Access for people with disabilities Clause 33 Brothels Clause 51 Objectives of the Industrial zones Clause 52 Development in the Industrial zones 12Clause 33 of the LEP limits the areas in the zone where development for the purpose of a brothel may be carried out in the Villawood, Greenacre, Milperra and South Bankstown areas to those areas identified on the LEP map. The site is at the northern extremity of the area nominated in the map as the Villawood area where brothels can be carried out. 13Bankstown Development Control Plan 2005 (DCP) applies and the relevant parts are: Part D6 Industrial Zones Part D8 Parking Part D9 Advertising Signs Part D14 Brothels

The issues 14The council's contentions are that condition 5 should not be deleted so as to permit permanent approval as it has not been demonstrated that all conditions of consent have been complied with; the deletion of condition 5 would have an adverse economic impact on other business within the strata complex in terms of obtaining insurance and increasing insurance premiums and the continued use of the premises as a brothel is not in the public interest.

The evidence 15The hearing commenced on site with evidence heard from 6 persons, all of whom own and/or operate businesses or factory units within the strata plan and included the chairman, secretary and 3 committee members of the Owner's Corporation. The issues raised by the objectors are summarised as follows:

• The presence of the brothel has resulted in difficulties and cost increases in obtaining insurance for the complex;
• The brothel has not complied with conditions of consent that require the provision of a security guard, waste collection, parking and approval for advertising signs;
• The brothel has led to problems of vandalism, security, personal safety and rubbish dumping as the security gate cannot be closed after normal business hours; Need the gate closed after hours to ensure these problems do not occur;
• Alleged the operators of the brothel had tampered with the main entrance security gate to ensure that it stays open;
• Concerned that if the gate was repaired and shut at 7pm and opened by some form of remote control by the operator of the brothel to allow clients to enter the site, the wear and tear would result in high maintenance costs to the Owner's Corporation;
• There has been a change in operators of the premises;
• Brothel has reduced property values;
• Fears for personal safety;
• Patrons using parking spaces allocated to other tenancies and blocking access to premises;
• Patrons urinating outside premises.
• When present on site the security guard does not patrol the site and has intimidated occupiers of the complex. 16The council did not put on any expert evidence in the proceedings. Mr Andrew Gough provided expert town planning evidence for the applicant and had also appeared for the applicant in FRG Developments. 17Mr Gough says that whilst there had been conditions of consent that had not been met, this issue was addressed and, with change of operator, the applicant was now operating the premises in accordance with those conditions. He notes that the council has not issued any orders in relation to the premises nor has any prosecutorial action been commenced. He says the council officers report to council in relation to the development application detailed that the crime reports for the area were reviewed and only 1 anonymous report was made to the Police regarding the legality of the brothel operations and worker ill-treatment. He notes no charges resulted and that these were not matters that coincide with an absence of a security guard regularly patrolling the complex at night. 18He did advise that at the time he inspected the site for the purposes of preparing his report for these proceedings he did not see a security guard. He did observe a car on site but did not know who owned it. He observed that the front fence was damaged and security cameras were in place. The main gate to the complex was open, as it had been on the past occasions he had attended the premises. He had not entered the property and had parked on the driveway, observed the very bright lights that had been installed in accordance with consent conditions and considered the lighting would deter persons going beyond the entry to the brothel. 19Mr Gough said the security guard would usually be inside the brothel premises and conduct hourly patrols of the unit complex. He could not assist the Court on times the brothel operated and whether the log appended to the development application that indicated the security guard ceased work on some days at 2am and others at 4am reflected the closure of the premises at that time. He was not able to advise whether the security guard was uniformed or is required to complete an incident log. He acknowledged the concerns of other tenants of the complex regarding parking, behavioural problems and vandalism but said there was no evidence this was associated with the brothel. Mr Gough agreed that it was preferable that the main gate is closed between 7pm and 7am however noted that it would have to be operational for this to occur. He also agreed that the role of the security guard could be better defined. 20In relation to economic impact, Mr Gough says that the operator of the complex is responsible for any premium rise due to its operations and that the complex had insurance. The secretary of the Owner's Corporation, who had provided a detailed submission that includes correspondence relating to insurances and was tendered as Exhibit 6, confirmed this however said that they had experienced difficulties in obtaining the insurance renewals.

Conclusion and findings 21It is apparent from the evidence provided that the operations of the brothel have not at all times been conducted in accordance with consent conditions. The objectors to the application to modify the consent condition to delete the 12 month trial period are of the view that the safety and security of the site has deteriorated since the brothel opened. The evidence before me does not conclusively prove that to be the case. Many incidents cited occurred prior to the business being established. There is also evidence that the parking spaces allocated to individual tenancies are used by persons not associated with any of the units within the complex including Unit 16 and conflicts have occurred when those persons have been challenged as to their right to be on the property. I accept that the complex has been the subject of vandalism however, I am unable to conclude whether this is the result of the brothel use or the fact that the gate has not been repaired for some time. 22Mr Seton, for the council, was not aware of any compliance program that had been put in place to assess the impacts of the brothel during the trial period. According to the council officers' report to the council only two complaints had been received during the trial period and when investigated, were found to be "unjustified". The Bankstown Local Area Command had not received and substantiated complaints. 23The council's case is wholly reliant on the evidence of the objectors. I accept their concerns in relation to the operation of the brothel and the issues that it has caused in relation to storage and collection of waste containers, installation of advertising signs without approval, the lack of security presence and the like, all of which are contrary to the conditions of consent. I also accept the evidence of Mr Gough that the situation has improved under the current operator, however, I am not satisfied that the operations are conducted in a wholly satisfactory manner, particularly in relation to the presence and responsibilities of the security guard. 24In my determination of FRG Developments the issue of safety and security was a primary consideration. The site view undertaken by the Court at that time revealed the main entrance security gate was not operational. At that time the Owner's Corporation would not provide its consent to the applicant to carry out any works on common property. 25The view undertaken in this case showed the gate was again not operational. The evidence of tenants is that it had been some time since it could be used, the time estimated by objectors varying from some months to two years. The recent damage to the fence by persons unknown had meant it was now out of alignment. Repairs were being arranged. I have no evidence that the damage to the gate is the result of the brothel operating from the site. 26The role of the security guard is an important factor in this case, particularly as the applicant cannot rely on control of the security gate as it is common property and therefore under the control of the Owner's Corporation. The consent condition originally proposed by the council and adopted by the Court in the Orders in FRG Developments, condition 40, reads as follows: A security guard is to be upon the premises between the hours of 7.00pm to 7.00am the following day, on all days. The guard is to regularly patrol the industrial complex throughout the night. 27It is apparent from Mr Gough's evidence that for the majority of time the security guard is present on site, that person is located within the brothel premises rather than outside it and only hourly patrols of the complex are conducted. Whilst that may be consistent with the DCP requirement to ensure the safety of clients and workers, the intent of the condition was to extend that safety and security to workers and tenants of the factory complex, particularly as it is not possible, without the consent of the Owner's Corporation, for the gate to be closed and remotely controlled. It is apparent that the role of the security guard should be better defined. 28This was discussed during the hearing. A requirement for the security guard to park a vehicle so as to restrict access down the central driveway and to remain at that location unless an incident occurs within the brothel would go a long way in addressing the concerns of tenants. Contact could be made between the guard and the brothel manager through a pager or mobile phone in the event of an emergency however, at that location the guard could also screen patrons before entering the premises thereby minimising the likelihood of such incidents occurring. The guard would need to be provided with information of tenants who need access to their premises between 7pm and 7am to ensure that access is provided. This would require the co-operation of those tenants and the operator of the brothel as contractor of the services. The Plan of Management could be amended to reflect these requirements and condition 40 amended to clarify the role. 29The issue of insurance has already been resolved through actions of the Owner's Corporation which has amended the bylaws of the strata plan to require the owner of Lot 16 to pay any additional premium charged as a result of the brothel operation. This charge is consistent with the provisions of s77 of the Strata Schemes Management Act 1996 and provided the owner of the site continues to agree to pay that extra amount of premium that can fairly be attributed to the operation of the brothel, I consider that there is no adverse economic impact to the Owner's Corporation. 30In allowing the bundle of documents prepared by the secretary of the Owner's Corporation into evidence, I did so on the basis of giving no weight to the material provided in regard to sale prices of units. This information as presented cannot be evidence in the proceedings and, for the issue to be considered, would have to be in the form of expert valuation evidence. No such evidence was provided. For this reason, having considered the submissions made by objectors, I do not have sufficient evidence that the presence of the brothel is having an adverse economic impact on the locality. 31In view of the above conclusions, and in particular my concerns regarding the role of the security guard, I do not consider that it is appropriate that the condition of consent that restricts the use of the site to a trial period should be removed. Rather, it should be extended for a further 12 month period and condition 40 and the Plan of Management (POM) modified to better defined the role of the security guard. The POM is referred to in condition 47 and therefore that condition also requires modification to reflect the amendment of the POM to detail the roles and responsibilities of the security guard, means of communicating with management, reporting of incidents and the like. 32That role should require a licensed, uniformed security guard with a vehicle also marked as a security vehicle to be onsite at all times between 7pm and 7am seven days per week, even if the brothel is not operating. The guard should park the vehicle so as to obstruct access to the common, central driveway but allow unrestricted access to the Unit 16 parking spaces and ensure that no persons access the area beyond that location other than tenants of the building. This will require the co-operation of the Owner's Corporation however, in view of their concerns regarding safety, I do not consider that this would be an unreasonable condition. The manner of addressing communication between the guard and the manager of the site is a matter for the applicant. 33A further 12 month trial period would allow the assessment of the impacts of the development, provide the council with an opportunity to introduce a regime to monitor compliance and allow the Owner's Corporation time to consider options in relation to any work required on the security gate. 34Because the council did not oppose the changes to the internal layout, it is appropriate to allow that work and modify condition 3 of the consent. The council sought the imposition of an additional condition that required it to be notified of any change in operator of the brothel. As the success of the Plan of Management and the provision of the security guard rely on communication between the operator and the Owner's Corporation, that condition should be allowed and also include a requirement to notify the secretary of the Owner's Corporation. 35The Order of the Court are: (1)The appeal is upheld in part. (2)Development consent 666/2009 for the fitout and use of Unit 16, No 17 Birmingham Avenue, Villawood as a brothel is modified in the following manner: (a)Condition 3 is modified to read as follows: 3. Development shall take place in accordance with Development Application No. DA-666/2009, submitted by FRG Developments Pty Ltd accompanied by Drawing No. DA04, DA05 and DA06 prepared by JND Architectural Services, dated 15 December 2009, Issue C and Section 96AA Application No. DA-666/2009/1, submitted by Wei Krausmann, accompanied by Drawing No. DA04 and DA05, prepared by JND Architectural Services, Revision D, except where otherwise altered by the specific amendments listed hereunder and/or except where amended by the conditions contained in this approval. (b)Condition 5 is modified to read as follows: 5. This consent shall operate for a 12 month trial period from the date Orders were made in Land and Environment Court proceedings 10250 of 2013 Krausmann v Bankstown City Council. Continued use of the site will require a s96 application to the Council two months prior to the expiration of the trial period. The use may continue subject to the final determination of the s96 application by the Council and any appeal against such determination (if any). (c)Condition 40 is modified to read as follows: 40. A licensed and uniformed security guard provided with an appropriately marked security vehicle is to be upon the premises between the hours of 7.00pm and 7.00am the following day, on all days. The guard is to position the vehicle at the southern end of the central driveway so as to obstruct access to all unauthorised persons or vehicles to the factory units on the site and is to ensure that no access to that area is provided to persons other than persons authorised by the Owner's Corporation of Strata Plan 37608. Access by such authorised persons is to be provided at all times it is required. The guard is required to be located within the vehicle or its vicinity at all times to ensure the safety and security of the unit complex and staff of the brothel and is to ensure that patrons and staff of Unit 16 utilise parking spaces allocated to that tenancy in accordance with condition 31 of this consent. (d)Condition 47 is modified to read as follows: 47. The operation and management of the premises is to comply at all times with the Plan of Management dated July 2009 as prepared by Farah Georges (FRG Developments) as submitted with this Development Application and amended to reflect the role of the security guard as detailed in condition 40 of this consent including a requirement that the guard advise management of any incident that occurs whilst on duty. (e)Insert an additional condition, condition 56A to read as follows: 56A. Council and the Secretary of the Owner's Corporation of Strata Plan 37608 is to be notified immediately in writing upon the change in operator of the brothel. (3)The exhibits, other than exhibits A and 1 may be returned. Sue Morris Commissioner of the Court DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 July 2013