Moonlight City Pty Ltd v Council of the City of Sydney

Land and Environment Court (NSW)|2009-12-22|Before: Mr J

CITATION : Moonlight City Pty Ltd v Council of the City of Sydney [2010] NSWLEC 1004

APPLICANT Moonlight City Pty Ltd PARTIES : RESPONDENT Council of the City of Sydney

KEY ISSUES: DEVELOPMENT CONSENT :- Karaoke venue Trading hours

Architectural Property Services Pty Ltd v Rockdale City Council [1999] NSWLEC 83 Jonah Pty Ltd v Pittwater Council (2006) 144 LGERA 408 CASES CITED: Randall Pty Ltd v Leichhardt Council [2004] NSWLEC 277 Vinson v Randwick Council (2001) 141 LGERA 27 Zhang v Canterbury City Council (2001) 115 LGERA 373

APPLICANT Mr J Johnson, Barrister

SOLICITORS Mr D Lalic Jackson Lalic Lawyers LEGAL REPRESENTATIVES: RESPONDENT Ms M Carpenter, Barrister

SOLICITORS Ms M Doheny Council of the City of Sydney

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10764 of 2009 Moonlight City Pty Ltd v Council of the City of Sydney

JUDGMENT 1 Commissioner: This is an appeal pursuant to s97 of the Environmental Planning and Assessment Act 1979 (the Act) against the imposition by the Council of the City of Sydney (the Council) of a condition on development consent D/2009/1302 granted on 28 September 2009 relating to operating hours of the Mamba Karaoke venue at 259-261 Sussex Street Sydney (the premises). 2 The applicant sought approval in development application D/2009/1302 for continuation of operating hours from 8.00am to midnight Sunday to Wednesday and an extension of operating hours from 8.00am to midnight on Thursday to Saturday to 8.00am to 2.00am. Condition 2 imposed on the consent provides: The hours of operation are regulated as follows: (a) The hours of operation must be restricted to between 8.00am and 10.00pm Mondays to Sundays inclusive. (b) Notwithstanding (a) above, the use may operate between 10.00pm and 12.00 midnight for a trial period of one year from the date of this consent. (c) A further application may be lodged to continue the trading hours outlined in (b) above before the end of the trial period. Council's consideration of a proposed continuation and/or extension of the hours permitted by the trial will be based on, among other things, the performance of the operator in relation to the compliance with the development consent conditions, any substantiated complaints received and any views expressed by the Police.

3 The appeal to the Court was made pursuant to s97(1) of the Act, however the only issue in the proceedings has been in relation to Condition 2. The applicant sought in its application to the Court that condition 2(b) be amended to permit trading until 2.00am on Thursday, Friday and Saturday evenings for a trial period of one year. 4 The issue between the parties concerns the impact of extended operating hours on the character and amenity of the surrounding area. The applicant seeks the extension of operating hours as requested in development application D/2009/1302 for a trial period of one year, and has agreed to the imposition of a reviewable condition pursuant to s80A(10B) of the Act enabling review of performance periodically at 3 month intervals. The Council opposes the extension of operating hours beyond midnight; and in the alternative, if the appeal is upheld, that a reviewable condition be imposed enabling it to undertake a review at any time during a one year trial period on provision of at least 14 days notice to the operator. Background 5 The premises are located on the south western corner of Sussex Street and Druitt Street, on the western fringe of the CBD. The surrounding buildings are predominantly commercial in nature, and there are a number of residential properties in the vicinity, the closest of which is the Newhaven building at 278-284 Sussex Street which is on the other side of Sussex Street and approximately 20 metres to the south east. The Crown Plaza Hotel is at the rear of the premises. 6 The premises have operated under different management as a karaoke venue since 2005. Development consent D/2007/2389 granted on 14 April 2008 to THC Trading Pty Ltd for a two year period approved hours of operation between 8.00am to midnight seven days a week, and limited the number of patrons to 112. A review under s82A of the Act lodged on 18 June 2008 requesting a review of condition 2 relating to hours of operation and seeking approval for trading to 2.00am on Monday to Thursday and to 4.00am on Friday and Sunday was not successful, and condition 2 was amended on 18 August 2008 to reduce trading hours to 10.00pm with a one year trial to midnight. A Place of Public Entertainment approval was issued on 8 August 2008, to expire on 14 April 2010. 7 The applicant took possession of the premises in 2008 and undertook renovations, and commenced operating in July 2009. The applicant applied on 28 May 2009 pursuant to s96 of the Act to modify development consent D/2007/2389 to include a condition for the continued Place of Public Entertainment approval; approval was granted on 3 July 2009 for a further two years, to lapse on 14 April 2010. Condition 2, with a trial period of trading until midnight seven days a week, remained. 8 The development application the subject of these proceedings was lodged on 17 August 2009. The Council notified the application from 21 August 2009 to 12 September 2009 and received seven submissions opposed to the application, including a submission from the NSW Police. 9 The premises operate subject to a liquor licence issued on 30 April 2009. The liquor licence permits the consumption of liquor on the premises from 10.00am to midnight on Monday to Wednesday nights, and to 2.00am on Friday, Saturday and Sunday nights. At the commencement of the hearing the applicant sought leave to amend the application so as to permit extended operating hours on days consistent with those in the liquor licence; the applicant subsequently confirmed its intention to maintain the current application for extended trading hours on Thursday, Friday and Saturday nights, acknowledging that if approval were granted to trade until 2.00am on those nights, unless the liquor licence is amended, consumption of liquor would have to cease by 12.00am on Thursday. Evidence 10 The hearing commenced with a site view. Evidence was given by Mr Colin Campbell, a resident of Newhaven apartments. Expert planning evidence was given by Mr David Ryan (on behalf of the applicant) and Ms Cheryl Mayo (on behalf of the Council). Additional evidence was provided by Mr Ching Hao Yin, Manager of the premises, and by Sergeant Jason Maxwell, Licensing Sergeant of the City Central Local Area Command, NSW Police. Planning Controls 11 The premises are in the City Centre zone as defined in the Sydney Local Environmental Plan 2005 (the LEP) and are permissible with consent. The aims of the LEP are set out in cl11, and are: (a) to protect and enhance the diversity and special qualities of the City of Sydney, and its surrounding areas, and (b) to establish the City of Sydney as the best place to live in, work in and visit, and (c) to foster environmental, economic, social and physical well-being so that the City of Sydney continues to develop as an integrated, balanced, sustainable and prosperous living city of world standing, and (d) to encourage orderly, sustainable and high quality development of land and other resources within the City of Sydney, and (e) to conserve the environmental heritage of the City of Sydney.

12 The objectives of the City Centre zone are provided in cl36: The objectives of the City Centre zone are: (a) to encourage Central Sydney's role and growth as one of the Asia-Pacific region's principal centres for finance, commerce, retailing, tourism, cultural activities, entertainment and government, and (b) to permit a diversity of uses which reinforce the multi-use character of Central Sydney, and (c) to facilitate the development of buildings and works that are of a scale and character consistent with achieving the other objectives of this zone, and (d) to provide for increased residential development with appropriate amenity and to ensure the maintenance of a range of housing choices, and (e) to enhance the amenity of parks and community places by protecting sun access, and (f) to ensure wind levels are consistent with pedestrian comfort and the amenity of the public domain, and (g) to ensure satisfactory sky exposure, levels of daylight and ventilation to the public areas of Sydney, including the parks, places, streets and lanes, and (h) to recognise and enhance the character of Special Areas, and (i) to facilitate the conservation of items and areas of heritage significance, and (j) to protect the fine-grained urban fabric of Central Sydney, especially the existing network of streets and lanes, and to provide for high quality development that contributes to the existing urban form, and (k) to extend retail uses on frontages to retail streets, and (1) to provide active frontages to streets.

13 Part 6 of the LEP contains Special provisions for certain uses, including clauses 28 and 29: 28 Objectives for amusement centres, brothels, restricted premises, late opening pubs and the like The objectives of this Part are: (a) to minimise the impact of certain uses which may degrade the amenity of the City of Sydney, such as amusement centres, brothels, restricted premises, late opening pubs and the like, and (b) to ensure that such uses are not concentrated together, and that their cumulative impact is assessed, and (c) to improve the character and attractiveness of the City of Sydney for residential, retail, commercial and cultural activities. 29 Amusement centres, brothels, restricted premises, late opening pubs and the like Consent may be granted to the carrying out of development for the purpose of amusement centres, brothels, restricted premises, late opening pubs and the like only if the consent authority is satisfied that: (a) the proposal would not have a detrimental impact on the amenity of the locality and the desired character of the locality, as indicated by: (i) the objectives for the zone in which the land is situated, and (ii) if the land is in a Special Area, the character statements and specific objectives for the Special Area as set out in Schedule 6, (b) the proposal would not result in an inappropriate concentration of that use and, together with other of the above uses in the locality, result in a detrimental cumulative impact, and (c) the proposal would not be detrimental to other uses considered to be more consistent with the objectives of the zone in which the land is situated.

14 The Central Sydney Development Control Plan 1996 (the DCP 1996) applies. Part 9 contains provisions for "amusement arcades, restricted premises, late opening pubs and the like", including as objectives: - to discourage the concentration of amusement centres, brothels, restricted premises, late opening pubs and the like - to ensure the design operation, location and cumulative impacts of such uses on the surrounding area are considered. 15 The premises are within an undesignated area, that is not within a Local Centre Area, City Living Area or Late Night Management Area, under the City of Sydney Late Night Trading Premises Development Control Plan 2007 (the Late Night Trading DCP) which came into effect on 1 January 2008. The premises fall within the definition in para 2.4(f) being "premises that are used as a karaoke venue where the owner or occupier sells or supplies liquor for consumption on the premises", and are characterised as "Category A Premises - High Impact". Table 1 of the Late Night Trading DCP provides for indoor trading hours for Category A premises operating in an undesignated area as being base: 10.00am to 10.00pm and extended: 10.00am to midnight. The opposite side of Sussex Street is designated as City Living Area under the Late Night Trading DCP; the applicable trading hours for a Category A premises in the City Living Area are base: 7.00am to 11.00pm and extended: 7.00am to 5.00am the following day. 16 The objectives of the Late Night Trading DCP are set out in part 2.2: The objectives of this DCP are to: a identify appropriate locations and trading hours for late night trading premises; b ensure that late night trading premises will have minimal adverse impacts on the amenity of residential or other sensitive land uses; c ensure that a commitment is made by operators of late night trading premises to good management through the implementation of robust plans of management; d encourage late night trading premises that contribute to vibrancy and vitality, as appropriate for a Global City; e encourage a broad mix of night time uses with broad community appeal that reflect the diverse entertainment and recreational needs of people who work and live in the City of Sydney as well as people who visit the City; f encourage a diversity of night-time activity in defined Areas; g prevent the proliferation of poorly managed high impact late night premises; h ensure that new late night trading premises do not reduce the diversity of retail services in an area; i ensure that development applications are accompanied by sufficient information so that proposals for night trading premises can be fully and appropriately assessed; j provide the possibility of extensions of trading hours for premises where they have demonstrated good management during trial periods; k encourage premises with extended trading hours that are of a type that do not operate exclusively during late night hours and may be patronised both day and night; l ensure that appropriate hours are permitted for outdoor trading; and m ensure a consistent approach to the assessment of applications for premises seeking night trading hours.

17 The Council contends that historically the premises have demonstrated a poor management history, and while acknowledging the change of management, contends that it is appropriate to exercise caution in the public interest. The Council relies on evidence of past breaches of the development consent and the liquor licence, including breaches during the present management, and impacts on the amenity of the surrounding area. The Council relies on the requirement in cl29 of the LEP that the consent authority be satisfied that late opening premises not have a detrimental impact on the locality having regard to the objectives of the zone; on the objective of the DCP 1996 of ensuring that late opening pubs and the like are located, designed and operated such that the use does not detrimentally impact on the general amenity and safety of the city; and on the provisions of the Late Night Trading DCP. In particular, the Council submits that the Late Night Trading DCP requires proponents of high impact trading premises to demonstrate responsible management over time, and states that late night trading is a privilege and will only be approved where an ongoing commitment to good management is evidence through a series of successful trial periods. 18 The applicant submits that the assessment of amenity and impact must be made in the context of the objectives of the City Centre zone under the LEP, as one of the Asia Pacific region's principal centres for tourism, cultural activities and tourism. The applicant submits that the Council's Policy on Trading Hours for New and Existing Premises, which was replaced by the Late Night Trading DCP, is relevant as the current development consent was pending before the Late Night Trading DCP came into effect, and that the proposal is consistent with that Policy which provided for standard hours in the City Centre zone of 8.00am to midnight and extended trial hours to 2.00am seven days a week. While acknowledging that significant weight should be given to the Late Night Trading DCP, the applicant submits that it applies blunt characterisations by way of impact and location of premises which should not be applied in a way that ignores the circumstances of the case. In particular, the applicant points to the designation of any karaoke bar of any size as high impact; and to the omission of the premises from the City Living Area under the Late Night Trading DCP, which it says is inconsistent with the boundaries of the LEP zoning map. 19 Ms Mayo was of the opinion that the proposal is inconsistent with the provisions of the LEP, including the aims in cl11(a) and (e), clauses 28 and 29, and the objective cl36(d) of the City Centre zone. Mr Ryan's evidence was that he has been informed by the applicant that the hours of operation need to allow for early morning operation on peak days to sustain the viability of the business; and that should the business become unviable that would contribute to the loss of a venue which contributes towards the cultural activities and entertainment available in this part of the CBD, contrary to the objective cl36(a) of the City Centre zone. Ms Mayo was of the opinion that operation of the premises beyond midnight was likely to result in additional noise and disturbance to nearby residential properties, increased antisocial behaviour within the locality, and harm to the overall character and public safety of the area; Mr Ryan was of the opinion that adherence to the approved Plan of Management was likely to overcome these issues. 20 Much of the expert planning evidence focussed on the provisions of the Late Night Trading DCP. Ms Mayo was of the opinion that it is appropriate to adhere to the recommendations of this DCP unless an exceptional reason to justify deviation exists. Mr Ryan considered that such a reason exists on the basis that the location of the premises within an undesignated zone is anomalous. In his opinion there is no apparent logic to the zone boundary, with the City Living Area on the other side of Sussex Street; an application for a karaoke venue with extended trading to 5.00am next door to the Newhaven apartments residential building would be capable of being compliant with the Late Night Trading DCP, whereas the same venue directly opposite on Sussex Street would not. In the Statement of Environmental Effects and in his evidence Mr Ryan pointed to the approval of other karaoke premises located opposite or near residential buildings, and in particular to approval by the Minister of extended hours for CBD Karaoke at 1 Dixon Street, a site which has the same locational characteristics and a greater density of adjoining residential properties; Ms Mayo disagreed that the sites were comparable. Findings 21 I accept that a viable karaoke venue could contribute to the diversity of uses, and more specifically to entertainment opportunities, in central Sydney, consistent with the objectives in cl36(a) and (b) of the City Centre zone. The general statement of objectives must be read subject to the specific provision in cl 29 of the LEP which requires that consent may only be granted to a use of the kind identified in that provision (which includes the premises) if the consent authority is satisfied that, among other things, the proposal would not have a detrimental impact on the amenity of the locality. This concern is also reflected in the provisions of the DCP 1996, in particular the objectives of part 9. 22 The applicant submitted that I should have regard to the Council's Policy on Trading Hours for New and Existing Premises, which was adopted in August 2001 and replaced by the Late Night Trading DCP on 1 January 2008. The decision of Lloyd J in Architectural Property Services Pty Ltd v Rockdale City Council [1999] NSWLEC 83 is authority for the proposition that the controls of a DCP applicable when a development application is made may be taken into consideration notwithstanding that it has been repealed and replaced by another DCP by the time of determination. However, at the time the applicant took over the premises and at the time of the development application the subject of these proceedings, the Late Night Trading DCP was in effect. In any event, while the former Policy would suggest that licensed premises could be permitted to trade on a trial basis to 2.00am seven days a week, that would not necessarily assist the applicant, as the Policy was prefaced with the requirement that it be "subject to all other aspects of a development being satisfactory". The amenity issues which are identified in cl29 of the LEP and in the DCP 1996 would be equally relevant to a merits assessment of whether extended trading hours for these premises would be permitted under the former Policy. 23 The approach to be adopted to the Late Night Trading DCP is that identified by the Court of Appeal in Zhang v Canterbury Council (2001) 115 LGERA 373: while not being determinative, its provisions are to be considered as a fundamental element in, or focal point to, the decision-making process. The objectives of the Late Night Trading DCP in part 2.2 include both the encouragement of late night trading premises that contribute to the vibrancy and vitality of the city (2.2(d)), and ensuring that late night trading premises have minimal adverse impacts on amenity (2.2(b)). The provision for trial periods for extended hours is addressed in part 2.7: Approvals for late night trading premises will be limited in time to enable Council to assess the ongoing management performance of a premises and its impact on neighbourhood amenity. Any extended hours (ie. beyond the "base" hours identified in Table 1) will be subject to a trial period. Trial periods also allow Council the flexibility to review the conditions on development consents and respond to such things as changes in the late night character of a neighbourhood and changes in management. If the Council determines that a trial period has been unsatisfactory then trading hours will revert to the base hours. Council will consult with an applicant prior to making such a determination. 24 I accept that the exclusion of the western side of Sussex Street where the premises are located from the City Living Area may sit oddly with the zoning under the LEP, and that to that extent there may be an anomaly in how the premises are characterised in the Late Night Trading DCP. However, the issue is not whether the characterisation of the premises as not being within the City Living Area might be considered to be appropriate from a planning perspective, but whether the controls that apply as a consequence of that characterisation ought to be applied in the circumstances of these particular premises. The inclusion of the eastern side of Sussex Street directly opposite the premises in the City Living Area could possibly enable a karaoke venue, as a Category A - High Impact premises, to operate to 5.00am. However, any application for such operation would, consistent with the Late Night Trading DCP, have to be determined against the provision in that DCP for gradual extensions of up to two additional operating hours for successive trial periods if the previous trial period has been considered to have been satisfactory (3.1(b)). This is consistent with the strategy of the Late Night Trading DCP, which includes recognition that late night trading hours "will only be approved in circumstances where an ongoing commitment to good management is evident through a series of successful trial periods" (at 2.1). Further, even if the premises had been in a part of Sussex Street included in the City Living Area, any application for extended hours would have to be assessed in the context of the Character Statement for City Living Areas in Appendix 1 of the Late Night Trading DCP, which states that: …extended hours are dependent on context and impact, and in cases where impacts on residential properties cannot be effectively managed, late night trading will be limited to a narrower range of trading hours. 25 The applicant submits that the Council has not been consistent in its application of the Late Night Trading DCP. The applicant submits that all other karaoke venues in the CBD trade under extended trading hours which is having an impact on the viability of the applicant's business, and relied in particular on the approval of the karaoke venue at 1 Dixon Street. That approval was not granted by the Council and would not of itself be a basis for supporting an argument that the provisions of the Late Night Trading DCP should not be applied to these premises. Further, the evidence before me indicates that there are differences between these two premises both in terms of location within the CBD and location on their respective sites, and I am not satisfied that the sites are comparable. On the issue of viability and comparability with karaoke venues generally in the CBD, I agree with the Council that this should be given limited weight: the Late Night Trading DCP was in effect, and the premises were subject to a development consent limiting trading hours to midnight, when the applicant took over the premises. 26 In considering the Late Night Trading DCP as a focal point of the decision-making process, the issue is whether it is appropriate to extend the trading hours as sought by the applicant in the context where the premises have been operating subject to a trial period. 27 The purpose of having a trial period in assessing impacts of sensitive uses was identified by the Court of Appeal in Zhang: 84 Where, as in this case, the nature of the development application is for the "use" of existing premises - and, accordingly, adverse effects are readily reversible - a probationary or trial period may be an appropriate exercise of the statutory discretion. 85 The implications of the approach adopted by Talbot J would unnecessarily limit the statutory power to permit development for a specific period where the full implications of the development are not known or cannot be stated with sufficient certainty. In any such case, the "likely impact" or "suitability" will never be capable of complete assessment. Indeed, that is the very purpose of the probationary or trial period. The scope and purpose of the Act is better served by permitting experimentation, at least in circumstances where adverse effects will cease if the development consent were not, in the event, extended. The focus is then on "likely impact" during the probationary period. 28 Assessment of impact in the context of an application for extension of trading hours for a use which may have an adverse impact on residential amenity was considered by Tuor C in Randall Pty Ltd v Leichhardt Council [2004] NSWLEC 277: 25. Principles for the assessment of an extension or intensification of a use which may have an adverse impact on residential amenity, such as a hotel, are:

· First, is the impact of the operation of the existing use on residential amenity acceptable?

If the answer is no, then an extension or intensification, would be unacceptable unless there is no overall increase in impact or there are measures proposed which would mitigate the existing impact. · Second, if the answer is yes, is the impact of the proposed extension or intensification still acceptable? 29 These principles were amplified by Moore C in Vinson v Randwick Council [2005] NSWLEC 142: 13 In amplification of the broad principles set out in Randall, the planning principles for testing an application for licensed premises to extend trading hours, increase permitted patron numbers or for additional attractions such as music or other entertainment require addressing the following questions:

What are the adverse impacts of the present trading hours, permitted number of patrons and permitted activities? Evidence of anti-social behaviour at or linked to the premises taken from records such as the police COPS system and/or other police records and/or diaries kept by local residents is preferable to generalised anecdotal evidence that cannot be tested by the applicant against any records kept by the operator of the premises. A similar position applies to complaints about other amenity impacting behaviour such as noise from people on the premises or its plant and equipment; noise from entertainment provided on the premises or the noise necessarily arising from patrons such as car doors, engines starting or late-night conversations in residential streets in the vicinity. Demand for on-street parking may also be relevant. In assessing the likely adverse impact of increased trading hours, permitted number of patrons or permitted activities for licensed premises, the objectors' fears of adverse impacts, no matter how genuinely felt, are relevant only to the extent that there is a reasonable probability that impacts will occur. What measures are in place to address those impacts? Measures include the number and times of engagement of security personnel, designated duties performed by them together with patrolling patterns. Identification of and responses to specific trouble spots should be considered. The method and timing of street litter collection are also relevant. For premises that provide entertainment, noise control measures that do not require intervention by an operator may also be relevant. How are those measures documented? A well-documented management plan for the premises and its availability to local residents is a positive factor. The measures that are currently in place to record and respond to complaints made by residents are also relevant. Have those measures been successful? The period during which the control measures (for the current trading hours, permitted number of patrons and permitted activities) have been operating is relevant to enable assessment of the likely success of their being applied to extended hours. If the present management regime has been in operation for a relatively short period, or has been unsuccessful or not fully implemented, less weight can be given to it than to a management regime which has succeeded in reducing antisocial behaviour. What additional measures are proposed by the applicant or might otherwise be required? If any extension of hours, numbers or activities is likely to be acceptable but only subject to additional measures to reduce noise or anti-social behaviour, a trial period may be appropriate to test those measures. 30 The trial period allowing trading until midnight was first imposed in the s82A review of development consent D/2007/2389 on 18 August 2008, expressed to run for 12 months from the date of the amendment. However, the evidence before me is that the applicant has been managing the premises only since they re-opened in July 2009. The parties agreed that it would not be appropriate to judge the management of the premises by reference to concerns about the previous operator.

Operation of the premises during the trial period 31 It was common ground that there are no amenity impacts from the internal noise generated by operation of the karaoke bar itself. The parties disagreed as to whether under the present management there have been breaches of the development consent and liquor licence, and impacts on the amenity of the surrounding area attributable to the premises or the patrons of the premises.

32 Four residents of Newhaven apartments, the owner of two units (one in Newhaven apartments) and a resident on Sussex Street made written submissions opposing the application. The central concern raised in those submissions concerns noise and the behaviour of patrons congregating outside the premises to smoke or on leaving the premises. One resident refers to an incident on 1 September 2009 when at 12.36am he called police "and had them attend due to continual noise disruptions which had been going on for over 1 hour from these premises". In his written submission dated 8 September 2009 Mr Campbell referred to "a gradual build up of noise in the street outside the bar from about 10.00pm through to 1.00am" over recent weeks. Mr Campbell stated that on Saturday 5 September: … a large noisy group were continually circulating outside the karaoke bar entrance on Sussex Street between 10.00pm and 12.30am on Sunday 6 September. At 1.30am on Sunday 6 September 2009, I counted more than twenty patrons exiting the front door of the bar in Sussex Street, which had the main lights turned off, but dim internal lighting. These people congregated on the corner of Sand and Sussex outside the bar in noisy groups shouting at each other from across the road outside Newhaven, etc. 33 Mr Campbell gave oral evidence in his capacity as resident in Newhaven apartments and on behalf of his wife and another resident. Mr Campbell stated that he is at home three to four nights a week; Sussex Street between Druitt Street and Bathurst Street has little traffic after 12.00. Most nights people come out of the premises and gather on the street in numbers, up to 30 or 40. The people are young and some are under the influence, and they are noisy and run around and push each other. He has no objection to the premises operating to midnight however the premises does not work to the approved hours.

34 Mr Campbell provided a typed summary of his concerns, including a summary of observations of the premises starting in September 2008 (Ex 6). The two page summary of observations from 2008 is dated 19 May 2009 and appears to have been provided as an attachment to submissions made to the Council. A separate list of recorded incidents relates to events since the applicant commenced operating the premises, with entries for 5/6 September 2009, 16 September 2009, 17/18 September 2009, 24 October 2009, 25 October 2009, and 11 October 2009. Mr Campbell's notes were only made available to the applicant at the hearing, and there was a short adjournment to enable the applicant and its representatives to consider them. The entries for 2009 include observations of groups of people outside the premises in Sussex Street talking, laughing, shouting, and smoking; and people entering and exiting the premises on Sussex Street at 1.30am on 5/6 September 2009, at 2.04am on 24 October 2009, and 1.40am on 25 October 2009. The summary for 17/18 September 2009 records that at 1.20-1.30am "fourteen or so people came out of back of karaoke bar into Sand Street shouting and running up and down the street then congregating on corner of Sussex and Sand Street. Some then return down Sand Street and into karaoke bar through back entrance", and at 1.45am "sixteen or so people at back entrance of karaoke bar, very noisy, shouting then came up to intersection of Sand/Sussex Streets to continue". 35 Mr Johnson for the applicant challenged the accuracy of Mr Campbell's summaries, on two bases: first, that Mr Campbell could not be sure that the people he observed coming up Sands Street or congregating on the corner had come from the premises, and secondly, that the notes had been typed from written notes some of which had been made by his wife. Mr Campbell conceded that he cannot see the rear entrance of the premises in Sands Street from the balcony of his unit. Mr Yin disputed Mr Campbell's evidence concerning the evening of 5/6 September 2009, stating in his affidavit that he has no recollection of anything unusual happening that evening. Mr Yin also disputed the written objection relating to the evening of 1 September 2009, stating in his affidavit: I worked on 31 August 2009 and 1 September 2009 at Mamba. I regularly walk outside to monitor what is happening, I am very aware of the need to prevent impacts in the neighbourhood. There were no groups of drunk patrons from mamba. The incident records show nothing particular happened. Monday and Tuesday nights are quiet nights for us. 36 Other evidence of noise and other impacts comes from NSW Police. An extract from the COPS database (Ex 9) records that at 12.36am on 1 September 2009 a complaint was made to police of "constant shouting and conversation coming from large groups of people from the karaoke bar". Exhibit 10 is another extract from the COPS database which records a more serious incident on Sunday 11 October 2009 which occurred after a group had left the premises, and had returned at 12.40am with a baseball bat and other items including machetes, and in which a security guard was assaulted. 37 Mr Yin gave oral evidence about the incident on 11 October 2009, stating that a group of 20 to 30 people at a birthday party had been smoking and were asked to leave. They were not willing to leave and security called for backup, and four security guards arrived. The group left the premises and the security guards remained inside. The group were still unhappy and someone had a baseball bat; the four security guards came out and one called the police. Mr Yin agreed in cross examination that there was no entry in the Incident Book that police were called, and stated that the police were called after the premises were closed. 38 Sgt Maxwell provided a written submission to the Council opposing the extension of operating hours, in which he stated: Central Local Area Command is already over saturated with late night trading licensed premises. Historical data shows direct links Liquor Outlet Density and Alcohol Related Crime and/or Violence from such venues and police suggest that any increase in any premise's trading hours would significantly intensify already pressing and pre-existing issues . 39 Sgt Maxwell confirmed in oral evidence that NSW Police oppose any extension of trading hours in the City Central Local Area Command. In paragraphs 6 to 13 of his affidavit Sgt Maxwell outlines adverse incidents recorded on the Police database for the period 18 February 2007 to 22 November 2008. On 21 August 2009 compliance notices were issued for two breaches of the Liquor Act 2007 and cl31(1) of the Liquor Regulation 2008. Paragraphs 15 to 27 detail events of 31 October 2009 when Sgt Maxwell attended the premises with two other officers. In summary, the officers entered the premises at 12.20am on Saturday 31 October 2009, and were greeted by one security guard and the manager, Mr Yin. Six persons were in one of the rooms; and a further 12 persons walked out of another room and left by the fire exit at the rear of the premises. The fire exit door was chocked open by an object wedged on the underside of the door. One security guard was on duty, and the security sign on sheet indicated that the second guard had signed off at 12.00am. 40 In his affidavit Mr Yin disputed the terms of the conversations recorded by Sgt Maxwell as having occurred on 31 October 2009; however he did not dispute that there were patrons still at the premises after midnight, stating: In accordance with Mambo Karaoke usual practice, we turned the karaoke machines off at 11.50pm and security and all members of my staff asked patrons to start leaving at 11.55pm. Most people did leave when they were asked. Unfortunately, it was difficult for management and security to get the group of people referred to in paragraph 19 of the statement of Jason Maxwell dated 11 November 2009 to leave. It was for this reason they were still in the room at 12.15am. I confirm the staff of Mamba Karaoke were trying to ensure that all outstanding patrons left the premises in a quiet and orderly manner. Unfortunately, management of Mamba Karaoke and security did not commence this task prior to 11.50pm. 41 The absence of one of the two security guards on 31 October 2009 was the subject of evidence. In his affidavit Mr Yin stated that he had been informed by the security guard that there was an emergency at a different licensed premises 300 metres away and that he was going to attend, with a two way radio so he could talk to the remaining guard. Mr Yin provided a copy of a Gladius Security Services Time Sheet which shows that the security guard who signed off at 12.00 signed on again at 12.30 until 12.45am. In oral evidence Sgt Maxwell stated that he was given a copy of the sign on sheet showing the security guard having signed off at 12.00 at 12.40am. In cross examination Sgt Maxwell confirmed that the second security guard had returned while he was at the premises; he did not mention this in his affidavit because the breach had already occurred. 42 Further evidence concerning the operation of the premises, in particular whether there have been breaches of the consent or liquor licence since July 2009, comes in the two Incident Books maintained by the applicant (Ex G), one by security (from 25 August 2009) and the other by management (from 21 August 2009). The Incident Book maintained by management records three occasions on which the premises closed or the last customer left after 12.00: 28 August 2009, 29 August 2009, 31 August 2009, and 12 September 2009. On 10 October 2009 the Incident Book records: Room V3 asked to leave not willing to go. Security involved to assisted to ask to move at 12.20. 43 The Incident Book states that the police were not called. Findings 44 The development consent D/2009/1302 which came into effect on 28 September 2009 requires that the premises be operated and managed in accordance with the Plan of Management dated August 2009 (condition 7), and requires that the management/licensee must ensure that the behaviour of patrons entering and leaving the premises does not detrimentally affect the amenity of the neighbourhood (condition 4(b)); this consent also requires that the use of the premises continue to operate in accordance with the terms and conditions of the various existing current development consents (condition 11). The consent operating from 14 April 2008 to 14 April 2010 (D/2007/2389/A) requires that on Friday, Saturday and Sunday when the premises is trading, two security guards are to be employed from 8.00pm until 30 minutes after closing or until the last patron has left the premises (condition 9); that an incident register be kept in which any incident involving any staff members including security personnel and when a patron or staff member including security personnel is injured as a result of an assault is to be recorded (condition 13); and that management must ensure that the behaviour of patrons entering and leaving the premises does not detrimentally affect the amenity of the neighbourhood (condition 11(b)). The liquor licence (Ex 7) includes conditions requiring a Security Incident Register in similar terms to condition 13 (condition 340), and condition 370 relates to security personnel, including a requirement that they are to remain at the entry/exit point until 30 minutes after closing or until the last patron ahs left the premises, and that there be at least two security guards employed from 8.00pm on Thursday, Friday and Saturday.

45 It was apparent from the site view, which included a view from Sands Street at the rear of the premises, that while people on the roadway or the other side of Sands Street would be visible from the balcony of Mr Campbell's unit, it would not be possible to observe whether someone came out of the back door of the premises or not. I accept, therefore, that the limited view that an observer might have from the balcony might cast doubt on any conclusions that people observed at the rear of the premises might have come from the premises, as opposed to having walked past the premises from Darling Harbour. Mr Campbell volunteered that the typed notes provided by him were typed from handwritten notes made by him and his wife. There was no basis not to accept that those notes were based on contemporaneous observations, and I accept them on that basis. The notes support a finding that on at least two occasions (24 and 25 October 2009) patrons have entered the premises from Sussex Street after midnight, and on two others (5/6 September and 16 September 2009) there has been noise from patrons entering and exiting the premises before midnight. The entry in the Incident book for 5/6 September does not record the time the premises closed; there are no entries at all for 16 September or 24 October 2009. The COPS record for 1 September 2009 supports the written submission that there was disturbance from noise from patrons of the premises after midnight on 1 September 2009. While Mr Yin denied that there had been any problem on the nights of 1 September or 5 September 2009, there was nothing in his evidence that would support a conclusion that he would necessarily be aware of everything that was happening outside the premises throughout the evening. The residents' evidence that patrons have been on the premises after midnight is also supported by the records in the Incident Books. I accept the evidence of Mr Yin, which was supported in this regard by Sgt Maxwell, that it is sometimes difficult to manage getting patrons to leave the premises particularly when they have been drinking. Sgt Maxwell's evidence was that in such a situation it would be appropriate to shut the premises half an hour early if patrons were going to cause problems. 46 Management of the behaviour of patrons so as not to detrimentally affect the amenity of the neighbourhood extends beyond management of the closing of the business. It was apparent from the site view and the photograph annexed to Sgt Maxwell's affidavit showing a metal ashtray outside the front door of the premises with the sign "Smokers Thank You" that the expectation is that patrons will leave the premises temporarily to smoke. That is supported by the records in the Incident Books (Ex 7) which record a number of instances where patrons have been smoking, are warned, and then asked to leave. On the assumption that the premises are complying with the Plan of Management provision that the rear entry to Sands Street is for staff and emergency access only, that supports the evidence of Mr Campbell that groups of patrons congregate outside the premises in Sussex Street smoking and talking during the hours of operation of the premises. 47 The evidence of the resident objectors was that of acceptance of a certain level of noise and disturbance before midnight, but not after. The applicant raised as a concern that residents had not complained directly to the management of the premises, nor responded to attempts to make contact with the residents of Newhaven, including by letter dated 9 September 2009. I accept Mr Campbell's explanation that he, as a resident, had concerns about approaching the management of the premises directly. Mr Yin in his affidavit outlined (at paragraph 9) steps taken by the applicant to ensure that the premises trade in accordance with conditions, and further states that having become aware of the concerns of the residents in relation to the congregation of patrons outside the premises, they propose to instruct security and other staff to walk patrons away from the premises and see them into cabs and other forms of transport. Conclusion 48 I am satisfied that the operation of the premises under the present management has not been in compliance with the conditions of the development consent in two respects: first, the evidence that patrons have entered and left the premises after midnight on a number of occasions; and secondly, the failure to maintain two security guards at the premises on 31 October 2009. Unlawfulness of past use is not necessarily a relevant factor in determining whether or not to grant or modify a development consent; it may, however, be relevant when it has given rise to unacceptable impacts, as outlined by Preston CJ in Jonah Pty Ltd v Pittwater Council (2006) 144 LGERA 408: 38 For instance, past conduct (regardless of whether it is unlawful) may have given rise to unacceptable impacts, such as unacceptable acoustic impacts on adjoining properties. The experience of impacts of the past use could be relevant in evaluating, first, the likely impacts of a prospective use for which consent is sought of the same or similar character, extent, intensity and other features as the past use, secondly, the acceptability of the likely impacts and thirdly, if likely impacts are considered to be unacceptable, the appropriate measures that ought to be adopted to mitigate the likely impacts to an acceptable level. Past use would, therefore, be of relevance but it is for proper planning reasons, not because the past use happened to be unlawful. The unlawfulness of the past use is not relevant. 49 Disregarding the incidents recorded by the NSW Police and concerns identified by residents before the commencement of operations by the present management, I am satisfied that there have been unacceptable impacts on nearby residential properties since July 2009. The current operation of the premises has an impact on the residents, both during approved operating hours through the noise generated by groups of patrons congregating outside the premises to smoke and as they arrive and leave the premises, and after approved operating hours. Both Ms Mayo and Mr Ryan were in agreement that the approved Plan of Management if fully complied with would be adequate in addressing adverse impacts associated with the use, in full compliance with the development consent and liquor licensing conditions; the experts disagreed, however, whether extension of trading beyond midnight would be likely to result in additional noise and disturbance to nearby residential properties.

50 In the context where the operation of the premises under the current approved operating hours has given rise to unacceptable adverse impacts, I am not persuaded that it is appropriate to extend the operating hours for Thursday, Friday or Saturday evenings. The applicant has been operating the premises for a relatively short period of time, and has not demonstrated the good management during the trial period that might form a basis for an extension of trading hours. I agree with the applicant that the imposition of a reviewable condition enabling review at any time on 14 days notice could create a situation of uncertainty for the applicant, the Council and the residents. I am not persuaded, however, that a reviewable condition in the form proposed by the applicant would be sufficient to allay concerns as to whether the premises could operate in a manner that did not generate additional noise and disturbance to nearby residential properties if there were to be an extension of the approved trading hours. The appropriate course is for the trial of trading hours to midnight to continue for a sufficient period to enable the applicant to demonstrate that, with changes to management practices as foreshadowed by Mr Yin, it is able to operate the premises with acceptable impacts on residential amenity. Condition 2 should remain in the form imposed by the Council when granting development consent D/2009/1302. 51 The orders of the Court are: 1. The appeal in relation to Condition 2 of development consent D/2009/1302 is dismissed. 2. Development application D/2009/1302 for operation of a karaoke venue at 259-261 Sussex Street Sydney is determined by the grant of development consent subject to the conditions in Annexure A. 3. The exhibits are returned.

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.

(2006) 144 LGERA 408

(2001) 115 LGERA 373

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Judgment (25 paragraphs)

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Cases Cited (6)