DATES OF HEARING: 13, 14, 15 and 18 December 2000

Medium Neutral Citation [2001] VCAT 1986

2. In substitution of the decision of the respondent, the applicant be issued a prostitution service provider licence enabling her to conduct business at 58 Dudley Street, West Melbourne, in the State of Victoria, known as "The Main Course" subject to the following conditions :

(a) Other than in strict compliance with the Prostitution Control Act 1994 ("the Act") as amended, varied or substituted from time to time and any regulations made thereunder, she will have no interest in any brothel business or massage parlour business whatever (whether direct, indirect, through a corporate structure or otherwise) other than at 58 Dudley Street, West Melbourne ("No 58").

(b) She and Tamdee Pty Ltd ("Tamdee") will make all reasonable endeavours to sell the premises at 5 Truck City Drive, Campbellfield ("Campbellfield") by 30 June 2001.

In the event that Campbellfield is not so sold, she may apply to VCAT at any time prior to 30 June 2001 for an extension of the date on such terms or conditions as VCAT considers appropriate.

(i) Intends to retain her interest in the freehold premises at 62 Dudley Street, West Melbourne ("No 62").

(ii) Will have no interest whatever (whether direct, indirect, through a corporate structure or associate or otherwise) in any brothel, escort agency, or prostitution services business at No 62.

(d) She will not act as a prostitution service provider other than in strict accordance with the Act as amended, varied or substituted from time to time and any regulations made thereunder.

(e) She will not use any name as her own name other than "Donna Joy Lawson", "Donna Joy Murdoch" and "Donna Joy Lawson-Murdoch" without the prior written approval of the BLA or any successor thereof (which approval will not be unreasonably withheld).

(f) If upon application by the Respondent (BLA) VCAT is satisfied of a breach of any of these Conditions, VCAT may cancel the Applicant's licence or take any such steps as it deems appropriate.

(g) These Conditions operate for the duration of the Applicant's licence.

3. The parties have leave to apply relating to the matters in paragraphs (b) and (f) of the conditions referred to in (2) hereof.

4. By Consent: The applicant pay to the respondent the sum of $45,000 in respect of costs of this application, such sum to be paid by 30 April 2001.

For the Applicant: Mr Ritter QC with Ms Cure, Ms Gobbo and

For the Respondent: Mr Chettel instructed by Victorian Government

1. The applicant, who is also known as Donna Joy Lawson, Donna Joy Murdoch and Donna Joy Lawson-Murdoch, applied for a prostitution provider licence pursuant to the provisions of the Prostitution Control Act 1994 ("the Act")in respect of premises, which are defined by that Act as a brothel, situated at 58 Dudley Street, West Melbourne. The application was made on 11 September 1995 and received by the then Prostitution Control Board on 13 September 1995.

2. On 31 August 1999, the respondent refused to grant the applicant a prostitution service provider licence ("the decision"). On the same day, the applicant lodged an application with this Tribunal to review the decision.

3. By reason of the provisions of s.69 of the Act, individuals, who immediately before 13 June 1995 carried on a brothel business with an in force planning permit to use the land for that purpose, or carried on an escort agency, were deemed to hold a licence provided they lodged an application for a prostitution service provider licence prior to 14 September 1995. That deeming provision carries on, once an application for review is lodged with this Tribunal, until that application is determined. Thus, the applicant has been able to continue carrying on the business of a brothel within the meaning of the Act, at 58 Dudley Street, West Melbourne, because of the review to this Tribunal, inspite of the decision of the respondent to refuse a licence.

4. It should be noted, that until the amendment of the Act by Act No 44/1999, which Act amended s.75 of the Act on 1 September 1999, it was arguable, that the premises at 58 Dudley Street, West Melbourne, could in fact be classified as a massage parlour rather than a brothel by reason of the planning permit that had been issued, even though the services provided at those premises were in fact identical to the services provided at a brothel (see Killeen v Clarris (unreported) Supreme Court of Victoria 11 November 1987).

5. Prior to the amendment of the Act in 1999, and by virtue of the operation of previous sections of the Act, a person was permitted to hold a licence for only one single brothel of which the use had already commenced. That is, prior to the amendment, a person was entitled to hold planning permits for any number of massage parlours as defined by the Act and a brothel, provided that of the latter only one had a use which had already commenced.

6. Immediately prior to the amendment, the interest of the applicant in relevant premises were as follows :

(a) 58 Dudley Street, West Melbourne (known as "The Main Course") ("58 Dudley Street") which was operating as a massage parlour with the right to be used as a brothel, and which premises are the subject of this application;

(b) 556 Swanston Street, Melbourne ("The Swanston Street premises") where the applicant held a permit for a massage parlour running with the land and buildings but which the applicant maintains was tenanted;

(c) 5 Truck City Drive, Campbellfield ("The Truck City premises") where the applicant was the owner of the freehold and buildings and held the relevant permit for a brothel;

(d) 4 Drummett Street, Clifton Hill ("the Clifton Hill premises") which were the subject of a permit owned by an entity of which the applicant had a substantial interest called "Fannys By Gaslight Pty Ltd" which later changed its name to "First Spectrum Pty Ltd". It will also appear that the applicant played some part in the operation of this brothel;

(e) 62 Dudley Street, West Melbourne ("62 Dudley Street"), which was owned by Classic Towers Pty Ltd, in which company the applicant had an interest through an agent known as Dennis James Sullivan. A massage parlour permit was in existence in respect of these premises.

7. The applicant, who was born in January 1952, commenced her association with the brothel/massage parlour business in about 1984 when she started operating a massage parlour at 5 Horne Street, Elsternwick. After amendments to the 1984 Planning Scheme, and a refusal of an application for a permit, that business became illegal. As a result of a continued operation of that business, in 1987 the applicant was convicted of two offences, one living off the earnings of prostitution and the other having the care and management of a brothel. Fines were imposed, which on appeal, were reduced to $500 in each case. It should be noted that the applicant has also been convicted in New South Wales in 1985 in respect of an offence known as "bringing property into New South Wales" which in effect means that she was in possession of stolen property which she brought into New South Wales. The applicant gave an explanation for this matter, which I accept which in effect means she was put in the position of having possession of the property as a result of unfortunate circumstances.

8. In 1998, she was convicted of obtaining a permit by a false statutory declaration, which offence dated back to 1992. As a result of this conviction, the applicant entered into a bond to be of good behaviour with conviction upon condition that she pays the sum of $3500 into the Court fund payable by 1 May 1999. Also in 1998, the applicant was convicted in relation to an offence relating to a "stun gun".

9. Subsequent to the leaving of the business in Horne Street, Elsternwick, the applicant took a lease over the premises at 58 Dudley Street, purchased the business in about July 1987 and the freehold of the property some twelve months later. Subsequently, the premises were renovated and altered so as to increase the number of rooms. The business operated under the names of "The Main Course" and "The Butterfly Inn", which business is conducted by a company known as "Seventh Colombo Pty Ltd" which is a family trust company. The directors of Seventh Colombo Pty Ltd are the applicant under the name of Donna Lawson-Murdoch and her mother Joyce Lawson. Prior to 2 October 1995, Harold Lawson was a director of Seventh Colombo Pty Ltd.

10. The property at 58 Dudley Street is owned by Popular Pastimes Pty Ltd which company currently has as its shareholders in equal numbers the applicant and her mother who are both directors. From 1990 to 2 October 1995, the directors were Norman Williams who was an associate and friend of the applicant and Dianne Campbell, whose name was used in this instance and in a number of other instances, to which I will refer, by the applicant without her knowledge. Dianne Campbell is in fact a cousin of the applicant who lives in Mount Gambier and had no knowledge whatsoever of the use of her name by the applicant and has no interest in any brothel or has ever had any such interest. She was a director of Popular Pastimes Pty Ltd from 22 February 1986 to 4 December 1996.

11. Seventh Colombo, in its position as the owner of the business at No 58 Dudley Street, employs eight receptionist managers, 40 ladies and two cleaners. Apart from the use of false names, there has never been any complaint in relation to the conduct of the business at 58 Dudley Street. It was put to me by Mr Ritter QC who appeared with Miss Cure, Miss Gobbo and Mr Rubenstein for the applicant, that the business was well conducted and there was no suggestion whatsoever that the business had ever been troubled by any of the matters that normally plague brothels/massage parlours, that is, drugs, child prostitution or unsafe sex. Put another way, it was an extremely well run business. There was nothing to contradict this statement and I am confident in making a finding that the applicant is an experienced and good operator of massage parlours/brothels and insofar as the actual day to day operation of the establishment is concerned, it is and always has been an extremely well and properly run business in relation to which no complaints were made.

12. It should be noted, that when making application for the prostitution service provider licence in September 1995, the applicant cited Dianne Campbell as a director of the owner of the premises wherein, she in fact had never consented to act as a director and was a name used by the applicant herself who was also cited as a director. The applicant stated, that she did not know this was on the form, because it was filled in by her then accountant Mr DeStefano of Geelong, who has since been charged with various offences. However, the applicant did admit to making a declaration as to the truth and correctness provided in the application, even though she was unaware of the contents of the application.

13. In a questionnaire which accompanied the application and which was filed by the applicant, the applicant gave several pieces of wrong information. She was asked whether she was ever known by another name to which she answered "Lawson". However, she failed to disclose several other aliases which she had used, including the name of her cousin to whom I have referred "Dianne Campbell", her cousin's brother "Shaun Campbell", her 90 year old aunt "Ursula Button" and other names to which she now admits which include Suzanne Dey, Tibbles, and Anne Collins, and the surname Peterson. While she admitted that she had been previously charged or convicted of an offence, she stated she had not been so charged or convicted for the past eleven years. However, she had been convicted of two of the offences to which I have referred in that past eleven years prior to September 1995, namely the offence in New South Wales and the offence in 1987 of two offences of living off the earnings of a prostitute and the care and management of a brothel.

14. In 1998, the applicant purchased premises known as 5 Truck City Campbellfield with the intention of erecting a building on those premises and using the same as a brothel. Again, the applicant wrongly used the name of Dianne Campbell as the purchaser of the property.

15. The applicant applied to the responsible authority for a brothel permit to construct premises suitable for a brothel on the 5 Truck City property in the name of Dianne Campbell. However, unbeknown to the applicant, the real Dianne Campbell had previously been convicted of a shop stealing offence and thus was held ineligible to hold such a permit. Eventually, the applicant used a friend by the name of Judy Jacks to apply for and obtain such a permit in relation to those premises.

16. While it was the applicant's intention to sell the 5 Truck City land as vacant land with the relevant permit, she was unable to do so. So eventually, in January 1995, the property was transferred to a company known as Camberfield Pty Ltd in which, the applicant and her friend and associate Norman Williams were directors. On 2 October 1995, those directors' names were substituted for the said Dianne Campbell who again knew nothing about her involvement, and her brother Shaun Campbell who also knew nothing about his involvement as directors and shareholders of Camberfield Pty Ltd. That situation subsisted until about 1997.

17. The 5 Truck City property was eventually fully developed and furnished but did not commence operation as a brothel until it was sold to other parties being Vimplane Pty Ltd and Ors (no association with the applicant), for the sum of $1.4M in about July 1998. However, the buyers failed to pay a sum of approximately $350,000 and the applicant was hopeful that she could resell the property at a profit, so she agreed to repurchase the property in the sum of $1.5M (which took into account the $350,000 that was owing). Unfortunately, for the applicant the purchasers, who were in Sydney, decided not to purchase the property from the applicant and thus she is still left with this property which is owned by a company called Tamdee Pty Ltd of which she is currently the sole director and shareholder. It should be noted, that the applicant by herself or through any of her associates or companies or aliases has never in fact operated any business at the premises at 5 Truck City Drive. She has been for some considerable time and is still desirous of selling these premises and in fact, has given an undertaking to this Tribunal that she will "make all reasonable endeavours to sell the premises at 5 Truck City Drive, Campbellfield, by 30 June 2001". In the event that Camberfield is not so sold, she may apply to VCAT at any time prior to 30 June 2001 for an extension of the date on such terms or conditions as VCAT considers appropriate.

18. In December 1995, an associate and friend of the applicant, one Lyndon Richardson, applied for a prostitution service provider licence in respect of the 5 Truck City premises. The applicant suggested in her evidence, that she was assisting Ms Richardson to apply for this licence in order that a business would be started at the 5 Truck City premises so that it would become more saleable. In her application form, Ms Richardson stated that Dianne Campbell and Shaun Campbell were the directors of Camberfield Pty Ltd who at that time were the owners of those premises. The applicant encouraged Ms Richardson to sign a statutory declaration stating the truth and correctness of the particulars in the application form which had been completed, including the position of the said Dianne and Shaun Campbell. At all times, of course. the applicant knew that Dianne and Shaun Campbell knew nothing of their position and they were for this purpose in fact herself. In response to the application for a licence by Ms Richardson in respect of the 5 Truck City premises, on 28 February 1986, the then Prostitution Control Board wrote to Ms Richardson inquiring about the relationship, if any, between Dianne and Shaun Campbell and the applicant and Norman Williams. They also requested the addresses of Dianne and Shaun Campbell and required such information to be put in the form of a statutory declaration. In response to that request, the applicant arranged for a person unknown to declare a statutory declaration dated 22 April 1996 in the name of Shaun Campbell giving the required information and the applicant signed a statutory declaration also on 24 April 1996 in the name of Dianne Campbell stating amongst other things that :

"I have read the statutory declaration by Lyn Richardson and say that it is true and correct in relation to the matters relating to Camberfield Pty Ltd".

19. On 10 May 1996, the applicant's then solicitors, Aitken, Walker & Strachan, wrote to the Prostitution Control Board stating, inter alia :

"We are advised that the current directors (and shareholders) are cousins of Donna Murdoch. We are advised that they have no business relationship. We are further advised that there is no relationship either personal or business between Norman Williams and the current directors and shareholders. As to the interest of Dianne Campbell in the project, we point out that Dianne Campbell was the original freehold owner of the property (after it was subdivided) from 1989 to 1992".

Clearly this information was incorrect and not true.

20. It should be noted, that since 1997, the ownership of the 5 Truck City Drive property has been properly and truly reflected as being owned by Tamdee Pty Ltd with the applicant as the sole director. The applicant states, and I accept, that she initially started to use aliases including other people's names and then felt the need to continue doing so in order to cover up what had gone on in the past. However, since about 1987, she has made every effort to regularise her position so that her involvement is transparent.

21. In 1990, the applicant purchased the Swanston Street property, which had a permit for its use as a massage parlour. She then commenced for a time to operate the business of a massage parlour from those premises under the name of "Temptations".

22. In 1992, the applicant's business at the Swanston Street premises ceased and she leased the property to a company called Tyndero Pty Ltd, which company was run by a Mr R Williams and a Mr C Willis and, in 1983, that company assigned its lease to Tenth Brick Pty Ltd which was run by a Mr Gary Overall with whom the applicant had no association and it would appear that the transaction was entirely at arms length.

23. On 30 May 1994, the applicant transferred the Swanston Street property to a company of which she was 100% owner called Wingrove Pty Ltd. Initially, Wingrove Pty Ltd has had as directors three associates and friends of the applicant, namely, Norman Williams, Margaret Harris and Judith Jacks as well as the applicant herself. However, since 1996, the applicant has been the sole director of Wingrove Pty Ltd and owns all the shares therein.

24. In late 1999, the tenant vacated the premises in Swanston Street and the massage parlour closed. Soon after the closing of the massage parlour, on behalf of her company Wingrove Pty Ltd, the applicant entered into a contract of sale of the property with a Mr Fletcher. That sale was completed on the day that this hearing commenced, namely, 13 December 2000. Apparently, the applicant sold this property for less than its true value, in order to demonstrate to this Tribunal that she was making every effort to divest herself of all properties to which brothels/massage parlours had any connection save and except for Nos 58 and 62 Dudley Street, West Melbourne. I accept that that is in fact what the applicant is attempting to do. She was not at any time throughout this proceeding challenged as to that intention.

25. At paragraph 29 of the witness statement tendered into evidence, the applicant explains the purchase of the Clifton Hill property :

"In about September 1993, my friend Norman Williams purchased the property at 4 Drummett Street, Clifton Hill for $400,000 ("the Clifton Hill property"). He purchased the property with a right to nominate another company as purchaser. The arrangement we had was that Williams would operate the brothel and that Maria Semren would be the principal manager. Our arrangement was that a company owned and controlled by Williams and me would be nominated as the buyer".

26. It should be noted, that not only was Norman Williams a close associate of the applicant but also was the said Maria Semren.

27. The company that was nominated to purchase the property was First Spectrum Pty Ltd. At the current time, Norman Williams is a shareholder of that company. However, the applicant used the name of her 90-year-old aunt Ursula Button (without her consent) to be a 99% shareholder and director of that company between October 1993 and September 1997.

28. The business of the brothel at Clifton Hill was largely run by Semren and Williams but with a considerable amount of assistance from the applicant. Such assistance took the form not only of advice but of supplying day-to-day needs of the massage parlour when required, such as condoms, bed linen etc.

29. It should also be noted that First Spectrum Pty Ltd which was previously known as Fannys by Gaslight Pty Ltd renovated the Clifton Hill premises soon after they were acquired and the applicant was closely involved with such renovation.

30. From about August 1996, the company attempted to sell the property in Clifton Hill and the business was also for sale. Eventually, the property was sold in October 1998 and from that time onwards, the applicant had no association with the property or the business whatsoever. It is also noted, that in September 1997, the name Ursula Button was removed from the records of the company and Norman Williams became the sole director.

31. In an application made by Norman Williams for a prostitution service provider licence in September 1995, he cited himself and Ursula Button, both of 6 Arnold Road, East Brighton (the applicant's address) as the directors of the company which owned the premises, namely, Fannys by Gaslight Pty Ltd. It would have been quite apparent to the applicant, that Norman Williams was required to give a statutory declaration affirming that the application was true and correct in every particular in relation to this application. It would equally have been apparent to the applicant that Williams knew that Ursula Button was not a director of Fannys by Gaslight Pty Ltd and that the name Ursula Button was in fact the applicant. It is also likely that Williams was deposing to false addresses for both himself and Ursula Button.

32. The applicant also signed an order for the Registrar of Titles to register a mortgage in relation to the Clifton Hill property, which was signed by the applicant using Ursula Button's name, which signature was obviously false as far as the applicant was concerned.

33. The applicant expressed, what I believe to be, sincere regret and remorse as to her conduct in relation to the Clifton Hill property and business. The property and business have now been sold. So its relevance in relation to this application is only insofar as it shows the conduct of which the applicant participated in, in the past. By selling this property, along with the Swanston Street property, the applicant has taken what I believe to be a painful step which demonstrates her bona fides in relation to the regret which she has expressed and the remorse which she has shown for her past wrongful acts.

34. In late 1996, Classic Terrace Pty Ltd contracted to purchase, with a lease back arrangement to a Mr Sedgman, the property at 62 Dudley Street, West Melbourne. A Dennis Sullivan, was the shareholder and director of Classic Terrace Pty Ltd, even though entities associated with the applicant had put up all the money to purchase the property at 62 Dudley Street.

35. A few months after Classic Terrace Pty Ltd bought the property, Sedgman ceased to operate the same as a massage parlour and the day-to-day operations were taken over by Dennis Sullivan and a person named Maryanne Anderson who was the holder or deemed holder of a prostitution service provider licence. She had apparently managed the business for twelve years under its previous owners. Upon Maryanne Anderson's licence being refused in June 1999, the business at No 62 Dudley Street ceased and the property has been locked up and disused since then. The only use to which the property has been put is that it has a sign on it saying that the business that was previously conducted in that property is now conducted at the applicant's premises at 58 Dudley Street. The applicant undertook to me that she would remove that sign.

36. It is notable in the material, that the applicant states that both Dennis Sullivan and herself treated his holding in Classic Terraces Pty Ltd as the applicant's. The applicant said that her aim in acquiring No 62 Dudley Street and in holding the same is that one day she will acquire No 60 Dudley Street and then be able to join those two properties up with her current massage parlour/brothel at No 58 Dudley Street and make the three small establishments into one very large establishment. It is quite apparent, that at the time that the business at No 62 Dudley Street was being operated, it was being operated by Sullivan, as a front, for the applicant. However, it is also quite apparent that that operation has ceased altogether (apart from the ownership of the premises) and that I am confident unless and until the applicant can lawfully consolidate the three premises to which I have referred and obtain proper lawful permission to operate those three premises together as a brothel, the premises at No 62 will not be operated as a massage parlour or brothel, while they are in the ownership control of the applicant or while she has any interest therein whatsoever. This confidence arises from an undertaking which the applicant has given, which I will refer to in more detail below and from the contrition which the applicant has shown for her past wrongdoings.

37. A document was tendered in evidence headed "Lawson Group of Companies". This is a document that was initially prepared by the applicant's then accountant Mr DeStefano setting out the companies of which the applicant had an interest and the various directors of those companies. The applicant stated that this document along with handwritten alterations which she made was given to the Prostitution Control Board at the time at which she applied for her licence, the subject of this application. The Prostitution Control Board's successor the Business Licensing Authority did not have a copy of this document on its files. The document which was tendered in evidence, was a copy of a document seized by police on a raid on the applicant's premises in about 1998 or 1999. Mr Chettel pointed out that the document as exhibited contained alterations made by the applicant which could not have been made on a document filed in September 1995 when the licence application was filed. For example, Dianne Campbell was written in as a director of Camberfield Pty Ltd but she did not become a director until October 1995, Shaun Campbell was written in and crossed out as a director of Camberfield Pty Ltd and he did not become a director of that company until October 1995 and did not cease to be a director until 1997. In relation to Seventh Colombo Pty Ltd, the name Donna Murdoch was written in as a director and crossed out but that did not happen until 1997. The applicant explains that she was very reliant on her accountant for the information and that she was doing her best to write in what she thought was correct. Clearly, some of the information that she put in this document could not have been known to her in September 1995. However, it is my belief that the applicant was more than likely confused about this document and confused when people became directors or ceased to be directors of her various companies. Further, it is likely that she was confused about delivering this document to the Prostitution Control Board in 1995.

38. The restrictions on the ownership of multiple brothels have varied over the years. By reason of the Planning (Brothels) Act 1984 s.49C(1) :

"A person who at any time has an interest in more than one permit granted by a responsible authority for the use of land for the purposes of the operation of a brothel shall be guilty of an offence".

It should be noted that by reason of being a shareholder or a director of a company, which operated a brothel or land on which a brothel was used, was not sufficient to give that person an "interest" in the brothel pursuant to s.49C(2) and (3).

39. When the Prostitution Control Act 1994 came into being in 1995, s.75 was inserted which read as follows :

"(1) A person must not have at any one time an interest in more than one unexpired permit granted for the use of land for the purposes of the operation of a brothel, being a permit under which the use has started ....

(2) For the purposes of sub-section (1), a person has an interest in a permit if the permit was granted in respect of land owned by that person or an associate of that person, whether alone or jointly with any other person.

(3) For the purposes of this section two persons are associated if one is -

(a) a spouse or de facto partner of the other; or

(c) a person who has entered into a business arrangement or relationship with the other in respect of the use, occupation, management or otherwise of land; or

(d) directly receiving any income derived from a business carried on by the other; or

(e) a body corporate and the other is related body corporate within the meaning of s.9 of the Corporations Law".

40. It will be noticed, that s.75 of the Prostitution Control Act 1994 in s.49C of the Planning (Brothels) Act 1984 were both caught by what O'Brien J said in his judgement in Killeen's case. In that case, his Honour distinguished between a brothel and a massage parlour and found that the Act did not apply to massage parlours even though similar activities were carried out in massage parlours rather than brothels. It will be remembered that the only brothel permits to which the applicant was in any way involved were those relating to the Truck City premises and the Clifton Hill property. However, it should be noted that, at the time that the applicant was using other people's names, she was not aware of the Killeen type distinction and had the belief that it was necessary for her to engage in such deceptive conduct in order for her to continue with her interest. She readily admitted to this fact.

41. As I have previously mentioned, s.75 was amended in September 1999 by Act No 44/1999 s.26. Section 75 now reads as follows :

(a) an interest in more than one current licence authorising the carrying on of a business of a kind referred to in the definition of "brothel" in section 3, including a deemed licence arising by force of section 69 authorising the carrying on of such a business; or

(b) an interest in more than one unexpired permit granted for the use of land for the purposes of the operation of a brothel, being a permit under which the use has started.

Penalty: Level 6 imprisonment (5 years maximum) or a level 6 fine (600 penalty units maximum) or both.

(a) a person has an interest in a licence if the licence was granted to, or is deemed to be held by, the person or an associate of that person; and

(b) a person does not have an interest in a licence granted to, or deemed to be held by, a business partner of that person if the licence or deemed licence authorises the business partner to carry on a prostitution service providing business at the same premises as those at which that person is authorised to carry on such a business by a licence granted to, or deemed to be held by, that person; and

(c) a person does not have an interest in a licence granted to, or deemed to be held by, another person only because the person is an approved manager of a prostitution service providing business carried on by he other person under the authority of that licence or deemed licence; and

(d) a person has an interest in a permit if the permit was granted in respect of land owned or leased by that person or an associate of that person, whether alone or jointly with any other person.

(3) for the purposes of this section two persons are associated if one is -

(c) a person who has, or a person who is an associate of a body corporate which has, entered into a business arrangement or relationship with the other or with a body corporate of which the other is an associate -

(i) in respect of the use, occupation, management or otherwise of land; or

(ii) that enables or will enable the person, or a body corporate of which the person is an associate, to exercise a significant influence over or with respect to the management or operation of a prostitution service providing business carried on by the other or by a body corporate of which the other is an associate; or

(d) directly receiving any income derived from a business carried on by the other; or

(e) a body corporate and the other is a related body corporate within the meaning of section 9 of the Corporations Law; or

(f) a person who is a lessee or sub-lessee of land used for the purposes of the operation of a brothel that is owned or leased by the other or by a body corporate of which the other is an associate; or

(g) a body corporate and the other is an associate of the body corporate.

(3A) For the purposes of sub-section (3)(c), (f) and (g) a person is an associate of a body corporate if he or she -

(a) is a director or secretary of the body corporate or a spouse or defacto partner of such a director or secretary; or

(b) holds or will hold any relevant financial interest, or is or will be entitled to exercise any relevant power (whether in his or her own right or on behalf of any other person), in the business of the body corporate and thereby is able to or will be able to exercise a significant influence over or with respect to the management or operation of that business; or

(c) holds or will hold any relevant position (whether in his or her own right or on behalf of any other person) in the business of the body corporate.

(4) For the purposes of this section two persons are not associated only because one has borrowed money from the other (being a bank as defined in section 5 of the Banking Act 1959 of the Commonwealth or a bank constituted under a law of a State or a financial body within the meaning of the AFIC (Victoria) Code) and the repayment of the debt is secured by a mortgage over or in respect of land owned by the debtor.

(5) An offence against sub-section (1) is an indictable offence".

42. Thus, by the 1999 amendment, it is now clear that the conduct to which the applicant engaged would have been illegal had it taken place subsequent to that amendment in 1999. However, bearing in mind that the Act requires a subjective test as to the suitability of an applicant to be licensed, see s.37, 38 and 39 of the Act (below), in my view, for the purposes of this application it does not really matter whether or not the applicant's structure was illegal at the time or not. The fact is that the applicant thought it was illegal and went to great lengths to try and avoid her interest in various companies and brothel/massage parlour being noticed by the authorities. Her aim was to gain an advantage acting in a way that she believed was illegal.

43. The relevant tests to be applied in considering whether or not the applicant should be licensed, are found in s.37, 38 and 39 of the Act. Those sections read as follows :

"37(1) The Authority must refuse to grant a licence to a person whom it is satisfied -

(a) is not a suitable person to carry on business as a prostitution service provider; or

Section 38 provides the factors to be considered as to whether the applicant is "a suitable person". Section 38 reads as follows :

"(1) In determining whether an applicant for a licence is a suitable person to carry on business as a prostitution service provider, the Authority must consider -

(a) whether the applicant is of good repute, having regard to character, honesty and integrity;

(d) whether the proposed business structure is sufficiently transparent to enable all associates of the applicant (whether natural persons or bodies corporate) to be readily identified for the purposes of section 37; ..."

"(1) The Authority must grant a licence to an applicant if it is satisfied that the applicant is eligible for the grant of the licence.

(2) A licence may be granted subject to the conditions or restrictions set out in the licence which may include, in the case of an escort agency, requiring a specified type of communication system to be made available to, and used by, persons working in the business.

(3) A licence remains in force until it is surrendered, suspended or cancelled.

(c) does not vest by operation of law in any other person".

44. During the hearing of this application, the applicant, in order to demonstrate her bona fides gave an undertaking to the Tribunal. It was also said on behalf of the applicant that should the applicant be successful, she consented to the undertaking forming conditions as to the licence save and except for paragraph 8 of the undertaking which, if the applicant was successful, could form part of a consent order which the Tribunal should make. The undertaking which the applicant gave reads as follows :

_"_DONNA JOY LAWSON (also known by her married names Donna Joy Murdoch and Donna Joy Lawson-Murdoch) UNDERTAKES THAT -

1. Other than in strict compliance with the Prostitution Control Act 1994 ("the Act") as amended, varied or substituted from time to time and any regulations made thereunder, she will have no interest in any brothel business or massage parlour business whatever (whether direct, indirect, through a corporate structure or otherwise) other than at 58 Dudley Street, West Melbourne ("No 58").

2. She and Tamdee Pty Ltd ("Tamdee") will make all reasonable endeavours to sell the premises at 5 Truck City Drive, Campbellfield ("Campbellfield") by 30 June 2001.

In the event that Campbellfield is not so sold, she may apply to VCAT at any time prior to 30 June 2001 for an extension of the date on such terms or conditions as VCAT considers appropriate.

(a) Intends to retain her interest in the freehold premises at 62 Dudley Street, West Melbourne ("No 62").

(b) Will have no interest whatever (whether direct, indirect, through a corporate structure or associate or otherwise) in any brothel, escort agency, or prostitution services business at No 62.

4. She will not act as a prostitution service provider other than in strict accordance with the Act as amended, varied or substituted from time to time and any regulations made thereunder.

5. She will not use any name as her own name other than those above without the prior written approval of the BLA or any successor thereof (which approval will not be unreasonably withheld).

6. If upon application by the Respondent (BLA) VCAT is satisfied of a breach of any of these Undertakings and/or Conditions, VCAT may cancel the Applicant's licence or take any such steps as it deems appropriate.

7. These Conditions and Undertakings operate for the duration of the Applicant's licence.

8. If the Applicant's Application herein for a licence is granted (whether conditionally or otherwise) then the Applicant will pay to BLA $45,000 in respect of its costs by 30 April 2001.

45. Thus the test to be applied as to whether the applicant is a suitable person to carry on the business of a prostitution service provider is whether she is of good repute having regard to "character honesty and integrity and whether, the proposed business structure is transparent".

46. Mr Ritter made it clear, that when considering the applicability of the provisions of ss.37, 38 and 39 to the applicant, I must consider her "suitability" as of this date, not her suitability or lack thereof in the past. This proposition was not contested by Mr Chettel. Mr Ritter referred me to one of my own decisions in Re Simon Matthew Pty Ltd v Motor Car Traders Licensing Authority (1998) 14 VAR 98 at 104 where I stated :

"While it may be stated, that in relation to the offence complained of, the applicants' business was carried on in a `dishonest, unfair or inefficient manner' that is not the test to be applied. The test to be applied, as this section is also worded in contemporary terms, is whether at this time (or perhaps at the time of the hearing before the respondent) business is carried on in a dishonest, unfair or inefficient manner".

47. Likewise, in this case, the test to be applied is whether the applicant at this time is a suitable person to hold a prostitution service provider licence.

48. Mr Chettel submitted, that on the evidence of the applicant's past wrongdoings concerning the management of massage parlours/brothels, and her deliberate lack of transparency in the way she had conducted her business by using false names, I should not be satisfied that the applicant was a suitable person within the meaning of the Act.

49. Mr Chettel stated that if the applicant is unsuitable to hold a licence, the giving of the undertaking or putting a condition on the licence cannot make her a suitable person. While the statement of Mr Chettel may be correct, the fact that the applicant was willing to give such an undertaking and consent to the conditions being inserted on the licence are factors, amongst others, which I should take into account in determining whether she is a suitable person. By the giving of the undertaking she has demonstrated, that she has at this time and, in my view, intends to in the future abide by the provisions of the Act and not to engage in the sort of conduct which she has in the past, and which she readily admits was wrong and unlawful.

50. Mr Chettel also stated, relying on the decision of Mihjevic v BLA (unreported VCAT 1999/1985 - November 1999 - Levine DP and Members Snow and Reid) that the onus rests upon the applicant to satisfy me that she is a suitable person. Mr Ritter did not contest the question of onus and thus, I have to be positively satisfied that the applicant is a suitable person to hold the licence for which she has applied.

51. Mr Chettel then pointed to a number of factors in the applicant's past conduct which he said demonstrated that she was not a suitable person. He further stated, that she was only admitting part wrongful conduct and was contrite and remorseful about her past because she was aware that the respondent would be able to prove the allegations which had been made against her. While I accept that the applicant would have been aware that the respondent would have been able to prove the allegations made against her, I am not convinced that that is why she expressed remorse and contrition during the hearing while giving her evidence. In fact, I gained the impression that she was genuine in her contrition and remorsefulness.

52. Mr Chettel pointed to a number of examples of past conduct which he said indicated that the applicant was not a suitable person to hold a prostitution service provider licence. The instances to which he referred, have been mentioned above, and included making false declarations herself, inciting others to make false declarations, using other people's names without their consent and to hide her involvement in interests in brothels/massage parlours which she held and having people act as front persons for her in the operation of brothels/massage parlours. In particular, he referred to Dennis Sullivan's operations at 62 Dudley Street, West Melbourne, and Norman Williams' operation at Clifton Hill. Mr Chettel also referred to an incident involving one Amanda Shepherdson (Donohue) who was the wife of the applicant's partner's father. The applicant paid Miss Shepherdson the sum of $2000 to apply for a permit in respect of the premises at 5 Truck City so that the applicant would be able to obtain a permit for those premises to operate a brothel.

53. While all these incidents are both lamentable and inexcusable and conduct of a very serious kind, they are incidents which, the applicant now admits were serious and wrong at the time and I gained the impression that she is sincere in her regret for having taken the actions which she took in the past.

54. The applicant's conduct in hiding her interests in businesses, conducting them through fronts and the use of false names is clearly a very serious matter going directly against what s.79 of the Act, both before and after the amendment, was designed to stop. Mr Chettel thus submitted that under those circumstances, the applicant is unfit to hold a licence. However, it should be noted, that since 1997 or 1998 at the latest, the applicant has, in my view, done her very best to extricate herself from the situation which she created by unravelling the corporate structure involving fronts and false names, and disposing or attempting to dispose of her interests in multiple brothels/massage parlours. At the current time, and for a considerable time now and in the past, it is abundantly clear that the applicant has only operated one massage parlour/brothel and that is at 58 Dudley Street, West Melbourne. That business has been operated, at least in the last two or three years, lawfully and, on the uncontradicted evidence of the applicant, on an extremely proper basis. The applicant has produced into evidence many testimonials from ladies that have worked for her in that business, which speak of the applicant and her conduct of that business in extremely glowing terms. There is no suggestion that any of the evils that are frequently associated with massage parlours/brothels have, in any way, darkened the door step of 58 Dudley Street. That is, there is no suggestion that things such as drug trafficking, child prostitution, unsafe sex or other bad practices have happened at that business. In my view, the applicant deserves credit for being able to keep these evils away from her business.

55. Mr Chettel pointed out that the declaration accompanying the applicant's application for a licence was false (listed Dianne Campbell as a director of Popular Pastimes Pty Ltd) and that the questionnaire accompanying the application also had false information, relating to convictions and the use of names. But, it must be remembered, that this material was filed in September 1995, which is over 5 years ago.

56. Mr Chettel also pointed out that material which was tendered before this Tribunal (being a response to the respondent's s.49 statement - Exhibit "A") and to which the applicant testified as being true and correct at the hearing, was also incorrect in that it stated, referring to 62 Dudley Street, West Melbourne, "the applicant had served as a guarantor for the purposes of the freehold and building, by the Director of the registered proprietor, namely, Dennis James Sullivan" and that it further stated, "Classic Terrace Pty Ltd is a corporate entity unconnected with the applicant ...". While it is correct to say that the applicant identified this material as being true and correct, I also take into account that in her evidence in chief, immediately after she did identify such material as being true and correct, she made clear her true position in relation to No 62 Dudley Street, West Melbourne. Looking at both the material tendered, and the applicant's evidence in chief as given, I can only conclude that it was not the applicant's intention to mislead the Tribunal and that she did not in fact mislead the Tribunal.

57. Mr Chettel pointed to a further incident involving the applicant's dishonesty. In that, in dealing with a draftsman by the name of McLaughlin, she signed a number of false documents, which she knew would be submitted to various responsible authorities. Mr Chettel submitted that this along with the other conduct of the applicant showed that she was a person willing to engage in false and misleading and illegal conduct. In my view, this action relating to McLaughlin falls into the same category as a number of other illegal and false actions of the applicant. It was wrong, the applicant has admitted it was wrong and, is contrite and remorseful that it has ever happened. Further, it is something that happened in excess of two years ago.

58. Mr Chettel submitted, because of the applicant's repeated past acts of dishonesty and deception, she was not a suitable person to hold a licence. He relied on two cases heard by this Tribunal concerning brothels, where in each case, because of past wrongdoings of the applicant, the applicant's application for a licence and approval as manager of a prostitution service provider was refused. He submitted, that these cases were sufficiently similar to the present, for the Tribunal to deal with Miss Murdoch in the same manner. In the matter of Dimozantos v BLA (VCAT unreported 22 November 2000), the Tribunal found : "a lack of genuine remorse in relation to the events which led the Applicant's incarceration and the lack of acceptance of responsibility in relation to those matters to be such that the Applicant is not of good repute within the meaning of the expression in Section 51(1)(a) of the Act". This current case is different because here I find the applicant is genuine in her remorse.

59. He also relied on a decision of this Tribunal constituted by Davis DP in Hardy v Business Licensing Authority (unreported 22 November 2000). In that application, at paragraph 80, the Deputy President stated :

"... the conduct in contravention of the Act which occurred on the premises during the period that Mr Hardy owned the business and managed it with the assistance of Ms Li reflects adversely on the suitability of the Applicants to hold licences as prostitution service providers".

60. It is also noted, however, in the same case at paragraph 48, the Deputy President stated :

"We do not accept the Applicants' explanations for the failure to inform the Authority about their interest in the Blackburn business until requested by the Authority to do so in December 1999. Mr Hardy's explanations were varied and, in our view, disingenuous".

"Section 45 of the Act makes it an offence to give information in an application that is false or misleading in a material particular. Full disclosure in relation to business undertakings is central to the objects of the Act in preventing ineligible people from becoming prostitution service providers. It is also particularly important having regard to the identification of associates for the purposes of section 37(1)(d) of the Act".

62. Mr Chettel submitted, that the situation here is very similar to that of Hardy and that I should follow what the Tribunal did in that instance. However, in my view, there is a real difference between this case and Hardy's case in that, there the Tribunal took the view that the applicant was disingenuous in his remorse, while I take the contrary view of the applicant in this particular instance.

63. Mr Chettel submitted, that insufficient time had flowed between the applicant's last wrongful act and the present time, for the Tribunal to be satisfied that the applicant was a suitable person within the meaning of the Act. He referred me to a decision of the New South Wales Court of Appeal in Ex Parte Tziniolis (1966) 67 SR (NSW) 448 at 461 where Walsh JA stated :

"Reformations of character and of behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man".

64. That does not mean that a person cannot, by remorse and other means show that they have changed their behaviour. Clearly, there are many examples of where people have done the wrong thing, reformed themselves, and have steered a proper and lawful course after that time. In Aavelaid v Dental Board of Victoria (1999) VSC 255 (unreported Supreme Court of Victoria) Coldrey J at paragraph 75 stated :

"The nature of the initial misconduct, the subsequent attitudes tot he person disqualified towards it, the person's behaviour during the period of disqualification, the passage of time itself are all factors which will be relevant in determining whether a person has demonstrated that they are currently of good character".

65. In this case, the applicant, albeit with knowledge that she was under close scrutiny by both the respondent and the police force has over the last two years, engaged in a course of conduct, which is both impeccable and commendable. She has shut No 62 Dudley Street and received no profit from that premises for a considerable period of time. She has sold the Swanston Street premises in order to divest herself of premises that she should not hold, and has used her best endeavours to sell the Truck City premises and has certainly not operated the same.

66. Further, it is noted that the present structure of the applicant's business at 58 Dudley Street is clear and transparent within the meaning of s.38(e). Her mother and herself are the only directors of both the owner of the premises (Popular Pastimes Pty Ltd) and the owner of the business Seventh Colombo Pty Ltd.

67. Further, she has shown that she is willing to co-operate with the police and assisted when requested. For example, when Maryanne Anderson, lost her right to conduct the premises at 62 Dudley Street, West Melbourne, and the premises were shut down, the police asked her to employ the girls that were previously employed at No 62. The applicant willing acceded to such a request.

68. Further, it is noted that the undertaking that was given to this Tribunal, demonstrates the applicant's intention, to conduct her business in a proper and lawful manner without any of the wrongs which she has committed in the past.

69. I do not find, the decisions of Dimozantos and Hardy, which were referred to me by Mr Chettel a lot of assistance, because of the different findings that I have made in relation to the applicant in this case as to what was found by the Tribunal in those cases. I note what was said by Holland J in Re Sheard (1996) 1 NZLR 751 at 755 :

"I do not find it helpful to refer to other decisions on different facts as to the meaning of that word (suitability). Where a statute uses an unambiguous and well understood word or expression and chooses not to enlarge on the ordinary definition of the word or expression by special interpretation in the statute, it is usually unwise for a court to add to the ordinary meaning of the word as a general guide for all cases, as distinct from applying the word to the particular facts before it".

70. I believe that quotation is particularly appropriate here, as the statute itself, assists with the meaning of the word "suitable", by reference to sub-sections (a)-(f) inclusive of sub-section (1) of s.38, and in particular (a) where it refers to "character, honesty and integrity".

71. In deciding, whether the applicant is a suitable person to be licensed within the meaning of the Act, I need to look at her conduct in the context of her vocation, that is, a prostitution service provider. In Petracaro v Commissioner of Consumer Affairs (1994) 62 SASR 387 at 392 Olsson J stated :

"... the Tribunal ... had failed to place the relevant record in a proper and logical perspective.

I am left with the firm impression that it has, in effect, denied this man the possibility of pursuing a livelihood by reason of considerations which, at best, were very peripheral to the consideration of whether he was a fit and proper person to be a category 3 bricklayer and stonemason within the meaning intended by the Act; ....

That inquiry must primarily be directed to the situation as it stands at the time of the application, given that past events may assist as being relevant indicative background. Although the expression `fit and proper' is capable of extending to the three characteristics of honesty, knowledge and ability, what is pertinent for consideration depends on the statutory context and the qualifications directly relevant to the particular vocation".

72. In my view, there is a real distinction between wrongful and unlawful conduct relating to the business structure of the enterprise (as is the case here) and wrong and unlawful conduct going to the day to day operation of the business. There is no suggestion in this case that the applicant has transgressed in the day to day operation of her business. A more negative view of the applicant's suitability would be taken had there been fault with her day to day operation.

73. In this instance, clearly, the applicant's wrongful conduct is relevant to her vocation bearing in mind s.75 and s.38(1)(e) of the Act. However, it is not central to her vocation as are matters such as the day to day conduct of the brothel/massage parlour itself. That is, the exemplary way that the applicant has conducted the business both currently and in the past. As I have previously mentioned, there has been no hint whatsoever of the applicant's business being involved with drugs, child prostitution, unsafe sex and the like practices. Mr Ritter emphasized this point commenting on the wrongful conduct of the applicant in the past :

"What did the public lose by the use of the names of relatives?

(a) inability to verify the fact that Ms Murdoch had no disqualifying offences of the kind mentioned at s.37 of the Act;

(b) probity check under s.36(3) and 36(4) of the Act were in any event being carried out in relation to Ms Murdoch (for her own application) that were incomplete;

(c) whether or not the relatives names were used, or even if Ms Murdoch had used her own name as a director, the multi interest provision of s.75 of the Act was not infringed.

(d) The relatives lost little or nothing. There is no suggestion that they incurred any liability as `directors'. The conduct has not been called into question"

74. While I agree with these comments made by Mr Ritter, I do not think that the wrongful conduct of the applicant to which I have earlier referred and in particular the matters which are referred to by Mr Ritter should be taken lightly by this Tribunal. However, I am of the view, looking at the applicant's suitability as of this time, while these are matters that should be taken into account and given serious consideration, they are not matters which should be disqualifying factors in themselves. Breaches of the law should be taken into account along with all other matters to consider suitability in particular the character, honesty and integrity of the applicant at this time.

75. I have weighed up the serious breaches which the applicant has committed as against the exemplary day to day running of her brothel/massage parlour at Dudley Street over many years, together with the remorse and contrition which she has shown before the Tribunal. I also take into account the undertaking which the applicant has given as showing that she is a person who has mended her way and that it is unlikely that she will repeat in the future the wrongs she has done in the past. Further, I take into account the fact that the operation of her business at 58 Dudley Street, West Melbourne, is transparent within the meaning of s.38(1)(e) at the present time and has been for a number of years.

76. Taking all these matters into account, I am of the view that the applicant is a suitable person to hold a prostitution service provider licence pursuant to the Act, subject to the conditions referred to in the undertaking other than paragraph 8 thereof.

77. In relation to the question of costs, the parties have consented that if the applicant is successful in this application, she should pay the respondent's costs of this application which have been fixed at $45,000 by 30 April 2001 and I will so order that by consent.