Rosa Maiolo v Inner West Council

Land and Environment Court (NSW)|2017-08-11|Before: Mr P, Ms J

Judgment

COMMISSIONER: This is an appeal under s 96(2) of the Environmental Planning and Assessment Act 1979 (the Act) against the refusal of a modification application by Inner West Council (the Council). The modification application sought to amend a condition of consent to allow a further trial period of extended trading hours for the Petersham Inn hotel (the hotel) at 386-396 Parramatta Road, Petersham (the site).
The site is located on the south western corner of Parramatta Road and Phillip Street. The hotel forms part of a multi-storey mixed use strata development which incorporates commercial space fronting Parramatta Road, an internal car park, and residential dwellings above and adjacent to the hotel on Phillip Street; the apartments with an address of 1 Phillip Street.
The Council contended that approval to extend the trial period would not be in the public interest given the poor performance of the hotel during the previous trial period, the close proximity of residential dwellings, particularly those above the hotel premises, and the adverse impacts such hours would have for the amenity of residents in dwellings above and adjoining the hotel.

History of the application

In November 1997, the Court approved an application for alterations and additions to the existing buildings on the site for use as a hotel as well as for retail and residential purposes. This permitted dwellings to be built above the hotel in a multi storey mixed use development comprising 92 apartments over four levels. Six of the apartments are on the first floor immediately above the hotel bar areas with a further twelve elsewhere on the first floor.
A deferred commencement consent, DA 200400670, was granted on 2 March 2005 for alterations and additions involving the fit out of part of the premises for use as a tavern with restaurant/bistro, gambling facilities and to provide entertainment within the hotel. An operative consent was subsequently issued. The consent permitted an extended hours' trial period of 12 months.
In September 2006, the applicant lodged modification application 200400670.01 as the 12 month extended hours trial period had expired before the hotel had completed its renovations or had begun trading. This modification was approved in October 2006. It is unknown when the first trial period commenced or concluded however, in 2015 a further extended hours trial period was applied for (DA400670.02). In response, the consent was further modified in August 2015 to permit extended trading for a further trial period of 12 months.
The consent to DA200400670 as modified included Condition 16 which reads as follows: 1. The hours of operation being restricted to between the hours of 10.00am to 12.00 midnight Mondays to Saturdays and 10.00am to 10.00pm Sundays excluding Public Holidays. 2. For a period of not more than twelve (12) months from the date of the issue of DA200400670.02, the hours of operation being restricted to between the hours of 10.00am to 3.00am the following day Mondays to Saturdays and 10.00am to 10.00pm Sundays excluding Public Holidays. The extended hours of operation referred to in this part of the condition, in excess of those referred to in part (i) of this condition, not relating to the provision of public entertainment. 3. A continuation of the extended hours will require Council's approval under the Environmental Planning and Assessment Act by way of a fresh application. Reason: To ensure that the extended hours of operation are reviewed and assessed in light of their performance and to ensure that the use does not interfere with the amenity of the locality.
This second trial period of extended hours expired on 10 August 2016. Since that date, the operating hours of the hotel have been required to revert to between 10:00am to 12:00 midnight Mondays to Saturdays and 10:00am to 10:00pm Sundays excluding Public Holidays.
On 22 April, 2016 the applicant lodged modification application DA200400670.03 to permit the continuation of extended trading hours for a further trial period of five years.
The application was referred to the Marrickville Local Area Command (LAC) of the NSW Police. The Crime Prevention Officer of the Marrickville LAC recommended the provision of conditions to improve the safety and security of the premises, should consent be granted. The Licensing Unit however, recommended that the application be considered for refusal for the following reasons:

Since the modified hours were approved in August 2015, police reports show that the venue have not had patron numbers to warrant the need to remain open from Monday to Saturday, past midnight.
From midnight to 3am on any night of the week, there is a real risk of an increase in alcohol related crime from intoxicated patrons attempting to enter the venue or attempting to purchase liquor.
The risk of robberies is increased with longer trading hours.
There has been evidence of a lack of compliance with Liquor Act and Gaming Machine Act offences.
There has been evidence of a lack of compliance with modified Council DA consent conditions.
In the short time that the extended hours of operation have been approved, the applicant has not satisfied the police that the opening hours from midnight to 3am will not interfere with the amenity of the local or broader community.

The Licensing Unit requested that the trial be extended for a review period of no more than twelve months in the event that the Council considered the application favourably.
The Council received a further submission from the Licensing Supervisor at Marrickville LAC on 29 June 2016 providing details of a number of incidences recorded on the police events data base system, known as the Computerised Operational Policing System (COPS), further supporting the refusal of the application. These incidences related to breaches of conditions in terms of number of security guards and complaints of extremely loud music and vibration with live music being played after midnight in breach of the Liquor Act 2016. In June 2016, a female patron had also died having consumed ecstasy pills at a 'rave party' held at the hotel. The submission states that these incidences indicate the management of the hotel 'shows a blatant disregard for council and liquor laws, in particular during the temporary extended trading hours, (which) has …caused an impact to our community'.
The application was referred to Council's Monitoring Services Section who recommended that the application be refused given the amenity impacts to residents of apartments above the hotel caused by loud music, the non-compliance with conditions of consent protecting amenity (with regards to noise and number of security guards), and the close proximity of the hotel to residential properties causing concern over the ability of the hotel to protect against amenity impacts.
It was recommended that the applicant submit a revised Acoustic Report and Plan of Management indicating how it was proposed to manage noise, patron behaviour, and music and to demonstrate that all of these measures could be incorporated successfully into the operation of the hotel.
In August 2016, following advertising of the application and receipt of over 40 objections from local residents, the modification application was refused. The basis of the refusal was that the extended trading hours would adversely impact on the amenity of the surrounding neighbourhood, given the breaches of the current conditions of consent and the concerns raised by the police and the public submissions received, with approval not being in the public interest contrary to s 79(C)(1)(e) of the Act. Reference was also made to non-compliance with the Council's Hotel Trading Hours Policy.
The specific contentions raised in the appeal were in terms of this policy and the adverse amenity impacts to residents in close proximity, particularly in terms of acoustic impacts, breaches of a number of conditions of consent imposed to protect that amenity during the trial period, and the inability to manage the premises to address amenity concerns, particularly given the existence of residential apartments above the hotel premises.
The Council also raised a concern with unauthorised works within the hotel including the installation of a stage to facilitate live strip shows and wall partitioning advised by the applicant to be required to better control patron location.

Resident concerns

The original modification application was advertised and 44 submissions were received. Almost all were from residents of 1 Phillip Street including from the Owners Corporation of 1 Phillip Street, objecting to the proposal. In summary, the following issues were raised by the objectors:

Noise impacts on surrounding residents including being subjected to music from the hotel during the extended hours of operation (i.e. between midnight and 3am)
Excessively loud music, with a number of residents who live above the hotel describing the walls and floors vibrating
Likelihood of increased noise impacts and criminal/anti-social behaviour
Anti-social/criminal behaviour of intoxicated patrons congregating outside the hotel in the vicinity of nearby residential dwellings - had experienced patrons involved in drug taking, fighting, public urination, as well as leaving broken glass and empty bottles on the footpath
Extent of non-compliance with conditions of consent and liquor licence
Failure to employ sufficient security staff
Beer kegs being stacked outside the entrance to the apartments above the hotel, obstructing the footpath.

At the commencement of the hearing, the Court heard from a resident of one of the dwellings at 1 Phillip Street located immediately above the hotel.
This resident was one of a number of residents who had written to the Council objecting to continued extended trading hours and also expressing concern that the hotel could become a stripper venue without consultation with neighbours. He believed the application should be refused based on license breaches, including rave parties, which meant residents of 1 Phillip Street were unable to manage daily life given the current management of the hotel. There were additional male patrons attracted to strip shows and openings until 3am with music playing and multiple police attendances required.
Specific concerns were with the hotel management, noise and vibration from music particularly after midnight, and incidences of unacceptable behaviour from patrons leaving the hotel. This included yelling, urinating in gardens and fighting. Locking and clean up by the hotel at 3am also caused sleep disturbance.
The resident believed that the hotel and apartments had to co-exist and advised that the former operation of the hotel, ie. prior to the middle of the most recent trial period (May 2016), had been accepted by residents. This was because the management complied with their license conditions and didn't often trade past midnight given limited demand. However, since the bistro area had been replaced with the strip show stage and music introduced for the shows, the amenity of residents had deteriorated. It was now left to affected residents to monitor compliance and lodge complaints on breaches.
Should the hotel revert to a local hotel with a bistro and no strip shows, and management improve, demonstrated over a year or so, the resident would potentially support extended hours on Friday and Saturday nights but not six days a week until 3am.
The resident also indicated that, in the last 4 months even with the cessation of extended trading, nothing had changed in terms of ongoing problems for residents associated with the hotel. This included noise in apartments from inappropriate music around and after midnight (the time after midnight reported to Council and the police in May 2017), disturbances from patrons leaving the premises, and ineffective management. There was concern that any increased trading hours would extend the amenity impacts without recourse after midnight.

Relevant Planning Controls

The site is zoned B2 Local Centre pursuant to clause 2.2 of the Marrickville Local Environmental Plan 2011 (the LEP). The current uses on the site are permissible. The site is listed as a local heritage item under clause 5.10 of the LEP as the Petersham Inn hotel, including interiors and is located within the Parramatta Road Commercial Precinct Heritage Conservation Area.
Various provisions of the Marrickville Development Control Plan 2011 (the DCP) apply to the site. Particularly relevant DCP controls are found at Part 2.6 - Acoustic and Visual Privacy and Part 5.3 - Commercial/Light Industrial/Residential Interface.
Specifically, Control C7 at Part 2.6.3 of the DCP deals with noise impacts of commercial and industrial development on residential amenity. The following are the relevant provisions of that control All development must comply with the relevant noise control guidelines. Where sites adjoin a residential area or are located within a mixed use building, Council will consider the potential noise generation of any proposed activities including the use of equipment or machinery, the use of amplified music/noise on the site and proposed hours of operation.
Similar provisions are contained at Part 5.3.1 of the DCP which deals with mixed use development and contains the following specific objective (O49) for such development: To minimise the impact of noise and vibration by proposed operations on the subject development and on surrounding developments.
The following control, C78 is also included in the DCP at Part 5.3.1.2, All applications for noise generating uses adjacent to or located in a building containing a residential use must be accompanied by documentation from a qualified acoustic engineer certifying that the acoustic standards can be met.
Part 5.3.1.4 of the DCP deals with hours of operation for mixed use development and states: Where residential and commercial or light industrial uses are located in close proximity, there is potential for activities associated with the uses to have a detrimental impact on the amenity of the neighbouring residents. The determination of suitable hours of operation will depend on the type of uses proposed, its location in relation to residential properties and the impact of operating hours on the occupiers of those properties. Council will seek to ensure that proposed hours of operation are compatible with the type of activities carried out on the premises and the relationship with neighbouring residential occupiers. Council may issue trial periods for operating hours as a condition of consent where ongoing review is deemed necessary. Some applicants may seek approval for trading hours outside of traditional hours of operation. Council needs to ensure that the potential impacts of these proposals are considered, particularly where sites are located in proximity to residential land uses. This applies to both new applications seeking approvals outside of traditional trading hours, as well as existing uses seeking to extend their approved trading hours. Such applications should ensure that all details of operations are provided within its Plan of Management for the use, including security measures for patrons and staff, proposed lighting plan, proposed measures to control noise within the site, including management of patrons entering or exiting premises.
Given its relevance to the appeal, the Council's Hotel Trading Hours Policy is reproduced in its entirety below: Council adopted a merit based approach for the assessment of applications in relation to extended trading hours of hotels on 6 September, 2005. Council endorsed that merit based approach, including the use of management plans and limited consents as the preferred approach for dealing with applications for extended trading hours for licensed premises. Under Council's Hotel Trading Hours Policy, any approval granted for extended hotel trading hours would be limited to a trial period to ensure that the extended trading hours are reviewed and assessed in the light of the performance of the hotel and to ensure that the extended trading hours do not interfere with the amenity of the locality. Under Council's Hotel Trading Hours Policy the length of the trial periods are as follows: Initial Application An application for extended trading hours of a hotel considered suitable for approval would be subject to an initial one (1) year trial period. Second Application Subject to the satisfactory conduct of the hotel premises during that initial trial period, an application for a continuation of the extended trading hours approved in the initial trial period may be granted for a trial period of two (2) years. Third and Subsequent Applications Subject to the satisfactory conduct of the hotel premises during that second (or subsequent) trial period, an application for a continuation of the extended trading hours approved in the second (or subsequent) trial period may be granted for a trial period of four (4) years.

Acoustic and vibration impacts

The primary contention of the Council was that continuing extended trading hours would result in adverse acoustic (and vibration) impacts particularly for dwellings situated above the hotel. Specifically, the Council contended that the hotel was being operated in a manner which adversely impacted the amenity of residents of these dwellings, evidenced through the numerous complaints detailed by the police and by local residents in submissions to Council. Any continuation of the extended trading hours' trial period would therefore likely exacerbate these impacts.
The Council also contended that the hotel was being operated contrary to various development consent conditions designed to prevent loss of amenity. This include conditions requiring the operation of the hotel to comply at all times with its approved Plan of Management, that there be no injury caused to the amenity of the neighbourhood by the emission of noise or vibration, that a minimum of two security guards be employed by the hotel to control the dispersal of patrons from the hotel, and compliance with all of the conditions of any licence or approval issued in respect of the premises.
Of specific concern however was breach of consent condition 7(c) requiring that noise from the licensed premises not be audible within any habitable room in any residential premises between the hours of 12 midnight and 7am. The Council contended that there had been numerous submissions complaining of noise from the hotel being audible in residential dwellings above the premises after midnight. Not only were these breaches of the conditions of consent but they also breached the requirements of the DCP found at Parts 2.6.3 and 5.3.1.
Expert acoustic consultants were engaged by the parties to address this contention. Four joint consecutive reports were prepared by these two experts. The first report was prepared in April 2017 prior to an onsite inspection of the hotel. At that time the experts disagreed as to the level of noise intrusion into the residential apartments immediately above the hotel, leading to a difference of opinion in relation to acoustic compliance. This was in part caused by the inability to access the dwellings immediately above the hotel.
Arrangements were subsequently made by the Council to gain access by both experts to an apartment directly above the hotel to conduct acoustic testing. The results of that testing was set out in a supplementary joint expert report in July 2017. This report identified that music from the hotel was audible inside the apartment that was tested. As a consequence, recommended noise control measures were identified by the experts as was the need for another site visit to assess the controls and adjust the noise limiter settings within the hotel.
Subsequent to the first expert report, the applicant undertook modifications to the interior of the hotel in accordance with the recommendations of their acoustic consultant. These included changes to the location and mounting of speakers (in particular to reduce vibration), carpeting of a stairway, removal of a sound system in the kitchen, and adjustment to the music noise limiter.
In August 2017, the acoustic experts revisited the hotel to inspect the works undertaken and two further joint expert reports were prepared. In these reports, the experts agreed that works had been completed by the applicant to reduce the noise emission to the apartments immediately above the hotel. In this regard, the carpeting of the stairs should have eliminated a specific noise source identified by a resident in one of the apartments, and the vibration isolation of speakers in the public bar area would reduce the level of noise intrusion in the apartments above the public bar.
However, the experts were unable to provide advice as to acoustic compliance of the sound system. It was suggested that further testing should be carried out within the apartments to set noise limits for the music from the bar and club areas of the hotel.
The acoustic experts agreed that, provided the noise limiter within the hotel was set to limit the volume of music to an appropriate level, and that the limits were maintained and no modifications were permitted to the sound systems, then the noise emissions from the hotel could meet the noise criteria required by the relevant regulatory authorities.
In this regard, the applicant provided an undertaking to set the music limiter to not exceed the maximum permissible setting for after midnight and offered that this setting in fact apply at all times, meaning more stringent noise controls would apply prior to midnight than were required.
The acoustic experts proposed draft conditions setting out the noise limits to be met and the manner of assessment and reporting of compliance. They also agreed that extended hours should not occur until the limiters were set to comply with these conditions and a report prepared to confirm compliance with the agreed conditions.
In addition to the acoustic experts, the parties also engaged expert planners to address the Council contentions; Mr Steven Layman for the Council and Mr James Lidis for the applicant.
In terms of acoustic impacts, Mr Layman was concerned that the application relied heavily on active management of acoustic impacts whenever the hotel proposed late night entertainment within a building which also contained residential dwellings. These dwellings were situated directly above the performance and bar areas of the hotel.
Mr Layman noted there was an existing Plan of Management as was required by a condition of consent however, there had been a history of lack of compliance with this. In his view for the Plan of Management to be effective, particularly for residents living above the hotel, complete compliance would be required. Such compliance had not been demonstrated in the past according to police records and the evidence of neighbours in particular regarding live entertainment after midnight and its associated noise.
Furthermore, the Council contended that, in applying for a five year extension of the trial period, the applicant had not understood the intent of the Council's Hotel Trading Hours Policy which requires a progression from a one year trial period of satisfactory operation to two years then four years. It was only after satisfactory conduct of the hotel premises during the initial one year trial period that an application for continuation of the extended trading hours could be granted for a further trial period of two years. Subject to the satisfactory conduct of the hotel during the second (or subsequent) trial period, an application for continuation of the extended trading hours may be granted for a further trial period of four years.
In Mr Layman's view, given the physical connection with residences above the hotel, the proximity of nearby residents, and the lack of satisfactory operation in the past in terms of the Plan of Management, there was no good reason to expect that the applicant could achieve a satisfactory trial period. He referenced incidences that demonstrated the inability of the hotel to operate in accordance with its Plan of Management and liquor licence conditions.
The Council did accept that the hotel had previously operated satisfactorily (according to resident submissions) when it had operated until midnight and functioned as a 'family friendly pub'. For this reason, residents who purchased apartments above the hotel seemed to accept a reasonable level of noise disturbance associated with the hotel. However, it was contended that, since the provision of stripper entertainment, loud music and operation to 3am on most nights, the level of disturbance had changed significantly.
It was noted that, although new management was now proposed and was a key argument by the applicant to support the modification and new trial period, the applicant of these proceedings, Ms Maiolo, was the licensee between 2009 and early June 2016 when some of the complaints were lodged in terms of dance/rave parties and loud music.
Mr Layman contended that the changing nature of the hotel's operation had been facilitated by unlawful works to the interior of the hotel to allow the stripper entertainment and the Council had not approved these unlawful works. The Council also had concerns with the potential for disturbance once patrons left the premises.
To partially address Council and resident concerns, the applicant offered that that dance parties be prohibited by a condition of consent and through the Plan of Management. However, Mr Layman contended that, as there was no definition of dance parties, this would make practical enforcement problematic. Furthermore, the consent never permitted the provision of public entertainment after midnight yet there was evidence that the hotel had had live entertainment after midnight during the most recent trial period in breach of consent conditions and its liquor licence.
In summary, Mr Layman contended that the proposal relied heavily on active measures and benign behaviour by patrons. The hotel had in the past been unable to demonstrate suitable operation under the existing Plan of Management. There had been no demonstrated history of observance of the Plan of Management and liquor licence conditions and there was no reassurance that the proposed Plan of Management would change that. It would allow sale of liquor and live entertainment until 2am. In his opinion, this was incompatible with the hotel's location in a mixed residential development.
Mr Lidis argued that issues with respect to noise raised by the police were confined to a period of four weeks in May and June 2016 when rave/dance parties were held in the premises including after midnight. However these had ceased, the new management of the hotel was not seeking to have such entertainment now, and the condition of consent offered would ensure that such parties were prohibited. This requirement would also be reflected in the updated Plan of Management. He argued dance parties could be defined to not include music provided by DJs or the recorded music for the strip shows.
With such a condition, Mr Lidis believed the residual noise could be controlled and adequate measures put in place to minimise the potential for disturbances once patrons left the premises. Appropriate conditions were recommended by the acoustic experts in terms of internal noise levels.
In order to provide for a precautionary approach to controlling patron behaviour, Mr Lidis recommended controls precluding any new patrons from entering the premises after 2am, that the sale and supply of liquor would cease one hour before closing, and that all strip shows finish one hour before the premises ceased to trade. Such conditions were offered in an updated Plan of Management during the hearing.
Mr Lidis was of the view that the practical effect of such controls would be that the current situation would be improved whereby patrons leave the premises at the same time which places unreasonable pressure on staff and security to deal with larger groups in the sensitive interface with residents on Phillip Street. The proposed measures would ensure that the numbers in the hotel progressively decline in manageable numbers as sections of the hotel shut down. He termed this 'staged shutdown'.
Once strip shows ceased, based on the fact that there would be a lock out in place, no new patrons and no sale and supply of liquor an hour before closure, it was Mr Lidis' experience that approximately half of the patrons would decide to leave within 15 minutes to half an hour meaning a maximum of 115 patrons would be left. In his view, this was about the size of a small bar. The remaining patrons would leave over the remaining time with few left by closing. Mr Lidis argued this staged approach would result in patrons leaving in small groups which is more readily managed, reduces levels of intoxication, reduces numbers within the premises, and allows for the staged shutdown.
Mr Lidis also gave evidence that he had inspected the premises around midnight in March 2017 and there were no issues with respect to patron behaviour and/or noise with security and staff in place outside the premises including along Phillip Street to effectively deal with and manage patron departure. He also argued that the majority of patrons, some 90%, left via Parramatta Road with the only patrons leaving via Phillip Street being patrons who had to access vehicles parked in that street or patrons walking home who were locals. Therefore, in his view, continuation of the extended trading hours would not likely exacerbate impacts based on controls that can be incorporated into the operation of the premises.

Overall amenity impacts on residents and public interest considerations

In essence, the Council's contentions and concerns in terms of amenity impacts were the same as those raised in terms of noise impacts, namely that the hotel was part of a mixed use development (with dwellings above) and was located in a residential neighbourhood. There were resident and police records of incidences demonstrating a history of lack of observance with consent and licence conditions adversely impacting residential amenity.
The Council contended that the impacts on the amenity of the neighbourhood went further than noise and vibration and included instances of anti-social behaviour, intoxication and crime complaints reported by the local police and the Council.
For these reasons, principally the hotel's failure to demonstrate satisfactory conduct during the previous trial period, the Council contended it would not be in the public interest to approve the modification application. In particular, despite the existence of a Plan of Management and consent and licence conditions designed to ensure no injury to the amenity of the neighbourhood, these were not complied with. Given the history of operation during a previous trial period which has caused unacceptable amenity impacts on surrounding residents and the locality, the Council was not satisfied that satisfactory conduct of the hotel premises had been achieved in accordance with the Council's Hotel Trading Hours Policy or DCP requirements.
The Council also referenced the planning principles expressed in Renaldo Plus 3 Pty Ltd v Hurstville City Council [2005] NSWLEC 315 in terms of plans of management as an appropriate mechanism to manage impacts. In Renaldo, at [54], Commissioner Brown defined these principles in the following terms: 54 In considering whether a Management Plan is appropriate for a particular use and situation, the following questions should be considered: 1. Do the requirements in the Management Plan relate to the proposed use and complement any conditions of approval? 2. Do the requirements in the Management Plan require people to act in a manner that would be unlikely or unreasonable in the circumstances of the case? 3. Can the source of any breaches of the Management Plan be readily identified to allow for any enforcement action? 4. Do the requirements in the Management Plan require absolute compliance to achieve an acceptable outcome? 5. Can the people the subject of the Management Plan be reasonably expected to know of its requirements? 6. Is the Management Plan to be enforced as a condition of consent? 7. Does the Management Plan contain complaint management procedures? 8. Is there a procedure for updating and changing the Management Plan, including the advertising of any changes?
The Council was concerned that the proposed Plan of Management relied heavily on active management to deal with extended live entertainment hours including liquor sales until 2am some mornings which Mr Layman considered was inappropriate in a mixed residential development also abutting a residential neighbourhood.
The Council contended absolute compliance with the Plan of Management would be required to achieve acceptable amenity for residents and even a single breach could have unacceptable impacts. History had shown that reliance on the Plan of Management was insufficient to protect amenity where management chose not to comply with it or staff were unaware of it.
Mr Clay, counsel for the applicant, argued that an analysis of the alleged breaches by the hotel recorded in the police COPS system showed few actual breaches, as opposed to recorded events of police attending the premises, other than for a 2 month period in mid-2016 when the hotel was under different management. Further, none of the breaches had resulted in prosecution of the management and a COPS recorded event should not be assumed to be a breach in the absence of such prosecution. As an example, if only one security guard was observed on the premises at the time of inspection, this did not mean the required second guard was not patrolling the neighbourhood.
Mr Clay submitted that there had been 'giant leaps' in the operation of the hotel since the dance parties had been held in mid-2016. He also argued that the extended hours of the operation of the hotel, if appropriately managed, could not be incompatible with having dwellings above when the consent for the mixed use development facilitated trials of such hours knowing the location of the dwellings. He argued that, whilst the impacts could never be nil, they could be managed to be reasonable as the applicant was proposing.
However, Mr Wright, counsel for the applicant disagreed with the interpretation of the police data and stated that an absence of prosecution did not indicate that the breaches had not occurred or did not have an impact. He noted that, prior to the modification application, the hotel management had not gone out of its way to respond to residents' concerns nor to address subsequently agreed adverse amenity impacts in terms of noise, vibration and patron behaviour. Mr Wright noted that 'the same names' appeared consistently in terms of management of the premises, including as proposed and when the rave parties were held, and he took the Court to police records of attending in response to complaints to be met by uncooperative management responses.
Mr Lidis argued that, irrespective, there were a suite of measures now proposed which, if adhered to, would ensure compliance with required noise standards, the consent and the liquor licence and which would minimise the potential for disturbance to the surrounding area. This included a proposed new Plan of Management to ensure that adequate security and surveillance controls were implemented.
The parties agreed that, in accordance with Court practice, the updated Plan of Management should be incorporated in the conditions of consent to provide additional enforcement powers.
Mr Clay referenced Thomas v The Hills Shire Council [2013] NSWLEC 1108 whereby the Council in that instance supported an application to amend trading hours for a hotel on the basis of a more stringent Plan of Management and operating conditions. This was seen as an opportunity for the applicant 'to get its house in order in a way not previously possible' with proposed stronger controls relating to noise and rectification of noise breaches, and stronger provisions for managing the behaviour of patrons. As in the current appeal, in Thomas, the hotel has not been operated in a satisfactory way and the revised Plan of Management was an opportunity to improve and to implement stricter controls against which the operations could be measured after an extended trial period. The conditions and revised Plan of Management was seen to 'put rigor back and provide the tests for delivery by the operator'. Mr Clay was suggesting the same should apply in this instance.
The Council referenced Vinson v Randwick Council [2005] NSWLEC 142 in which then Commissioner Moore established the planning principles for testing an application for licensed premises to extend trading hours, being to require the following questions to be addressed: 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.
The Council argued that in responding to some of these questions, there had been evidence from residents of adverse impacts from extended trading and there was a Plan of Management but it had not been complied with. Therefore the measures intended to protect amenity of residents had been unsuccessful given the inadequate management of the hotel to respond to or address residents' concerns.
In submissions, Mr Wright argued that even the more modest trial period and hours proposed do not change the fact that the applicant has not demonstrated that the conduct of the premises has been satisfactory as required by the Council's Hotel Trading Hours Policy. Further that the hotel was in a particularly sensitive location and this is a matter that must be given significant weight when assessing the suitability of the premises for a further trial period of extended trading.
Mr Wright also submitted that the nature of use of the premises had fundamentally changed. Whilst still meeting the LEP definition of 'pub', it was a very different pub to that which operated when the premises were developed in conjunction with the residential dwellings above. It had been transformed from a family friendly neighbourhood tavern to a strip club which would be a destination in itself and the kind of patrons attracted to such a venue must also be a relevant consideration in determining the nature of potential impacts and the capacity to effectively control patron behaviour.
Mr Wright noted that the premises have been, and are continuing to be, used unlawfully because of the unauthorised works including the stage and poles which are an integral part of the present use of the premises as a strip club. He considered the Court should have regard to the fact that the hotel saw fit to carry out these unauthorised works during the trial period and the fact that they did so was a clear demonstration of unsatisfactory management.
Mr Wright also submitted that, whilst expert evidence may be that internal noise levels could be now managed with the treatments undertaken, the Court could not be satisfied that these addressed acoustic impacts from patrons in the street and in entering and leaving the premises. The Council was concerned that the applicant relies heavily if not entirely on the updated draft Plan of Management to address these impacts however, the past compliance failings of management was a highly significant matter.
Mr Wright also drew the Court's attention to a number of resident complaints of the conduct of persons involved in the management of the premises or associated with the premises including rudeness and aggression in response to resident complaints.
In summary, Mr Wright argued that the application failed to meet an essential precondition for extended hours, namely satisfactory performance through a previous trial period. This lead to adverse amenity impacts. Further, even though Mr Clay acknowledged that the rave parties in May and June 2016 should never have occurred, these incidents occurred under the stewardship of the present operators. In the Council's view, this alone was enough for the application to fail given condition 16 and the Hotel Trading Hours Policy are specifically aimed at ensuring the protection of the amenity of the locality for any extended trading hours trial.
Finally, Mr Wright submitted that there was insufficient justification if any from the applicant that approving the modification would be in the public interest. It relies on active management of a new Plan of Management which would give the Court no confidence that injury to amenity would not occur especially in light of the history of the premises. He claimed there was no evidence from the applicant as to how management would attempt to build or maintain a harmonious and cooperative relationship with neighbours. Therefore the questions as to the suitability and adequacy of the Plan of Management raised in Renaldo were not answered. There is an inherent conflict between the nature of the use and immediately adjoining residential use. Irrespective of the Plan's conditions it would be insufficient to ensure that the conduct of patrons is adequately controlled to avoid amenity impacts in the public domain in the vicinity of the hotel, absolute compliance was required to achieve an acceptable outcome, and past history demonstrates that repeated incidences are likely.
The Council argued that, once a disturbance occurs in the public domain, the impact on amenity has happened and subsequent complaints by residents do little to remedy the impact. The provision of security guards and staged shutdown process do not provide sufficient confidence that the amenity of the residents will be protected. The Council emphasised that there is not a good relationship between those operating the venue and neighbouring residents and there was no evidence that the operators had worked to address this. In summary the past performance of the venue has been unsatisfactory and the Court could not be satisfied on the evidence that a further trial period would not result in further adverse impacts on amenity. It was self-evident that it would not be in the public interest to grant further extended hours given the past impacts and risk of further impacts.
The applicant accepted that the operation of the hotel in the past had been, at times, less than satisfactory, but disputed that the current management had not sought to address residents' concerns claiming that there had been no documented resident complaints in the last 12 months and given the works undertaken to ensure internal noise emissions met regulatory requirements.
Mr Clay submitted that the use had not intensified. It was the same use as had been approved with the same maximum number of patrons and he claimed the local residents did not want to talk to the hotel management.
Mr Lidis re-iterated his view that, subject to the conditions and measures offered or already implemented by the applicant, an extension of trading hours would minimise adverse impacts to the surrounding residents and the locality compared to the existing situation where patrons leave the premises at the same time after midnight. It was therefore in the public interest to grant the extended hours sought. He also reiterated that, when he inspected the premises, they were being satisfactorily managed. This was notwithstanding there had been breaches in the past under the previous management.
Mr Lidis also referred to other premises in the vicinity of the site which also adjoined residential properties and operated until at least 3am, including the Bald Faced Stag at 345 Parramatta Road, albeit he did accept these premises did not have dwellings immediately above them.
Mr Lidis argued that extension of trading hours is sought on a limited and restricted basis so that impacts from the premises can be minimised and re-evaluated at the end of the new trial period. He also noted that it was open to the Court to provide for a lesser trial period as well is to limit the days upon which extended trading hours could occur.
Mr Clay also noted that the more stringent consent conditions and new Plan of Management proposed provided the certainty lacking to date that amenity impacts would be addressed. A further trial period would confirm this. If it didn't the Council or the police could apply to the Court to cease the extended hours on the basis of breaches to these controls.

Findings

The Council has a simple policy to enable licensed premises to trial extended trading hours which, along with a number of DCP controls, is aimed to simultaneously protect the amenity of neighbouring residential properties. The policy offers applicants the opportunity to seek approval for trial periods of extended trading in which to demonstrate that the extended hours can be accommodated without compromising such amenity before extended trading hours can continue.
The intent and requirements of extended hours' trial periods is clearly outlined in the policy. It requires a review and assessment of the performance of the hotel during the trial period to ensure that the extended hours do not interfere with the amenity of the locality. Any request for a further trial period is based on this review and assessment concluding that the extended trading hours did not interfere with the amenity of residents in the locality.
The consent for the Petersham Inn hotel permitted such trial periods. Approval was given for an initial trial period, and a subsequent further trial period, to be conducted to demonstrate that extended hours would not have adverse impacts for residents.
It appears that the operation of the hotel during the first trial period was sufficiently satisfactory that a second trial period was granted. A third trial period, or arguably a new trial period, is now sought.
Common sense would suggest that during trial periods, the operation of the hotel would be undertaken in such a manner to warrant trial periods being extended if such an extension was sought. The contrary occurred in terms of the Petersham Inn.
On the evidence from police and residents, during the most recent trial period, the hotel was operated at times in a manner that breached the conditions of consent imposed to protect amenity, a factor also not denied by the applicant. These breaches had adverse amenity impacts for neighbours who claim breaches still occur since the trial period concluded.
Furthermore, unauthorised works were undertaken which were considered by the Council to intensify the use of the site in a manner which would exacerbate amenity impacts, in particular to allow for strip shows conducted to recorded music. If consent was granted to the modification application these shows (live entertainment) are proposed to be conducted until 2am four days a week with patrons then leaving the premises up until after 3am on these same days. On another two days a week, trading would be until 1am.
In an attempt to secure the further trial period of extended trading sought, the applicant has undertaken certain works to the premises in accordance with the recommendations of acoustic experts in order to meet acceptable noise levels. However whilst these acoustic treatments along with a change of management, proposed staged shutdowns and a more stringent Plan of Management should ensure such amenity impacts would not arise in the future, the history of the operation of the hotel does not support this outcome.
The applicant was the licensee of the hotel at least for part of the most recent trial period when breaches occurred. I also note that the owner of both the property and the business remains the same as it was for the former trial periods.
Therefore, even if some of the management may have changed, it does not appear that great reliance should be placed on 'new management' operating in a significantly different manner to former management as the applicant suggests.
The offers now made to operate to address residents' concerns, and to comply with existing requirements and strengthen the management requirements, have only been in order to gain support to the current application and are therefore in my view insufficient justification to support the extended hours or a further trail period based on 'new management'.
There is simply no basis to subject nearby residents to a further trial period given the history of breaches and when the consequences of even occasional breaches would have an adverse outcome which is unreasonable.
There is no evidence to suggest that allowing a further trial period of extended trading hours would be in the public interest or which adequately demonstrates that the amenity of occupants of dwellings above the hotel would not continue to be unreasonably adversely impacted even if the impacts are diminished by the acoustic treatments undertaken and the new management controls proposed were complied with.
Therefore, whilst I acknowledge that the operators of the hotel have now introduced acoustic mechanisms to minimise noise impacts, propose less extended trading hours than previously applied and have strengthened the Plan of Management all in an effort to minimise amenity impacts to neighbours, the fact remains that there are residential dwellings immediately above the premises. Strict compliance at all times with both the consent and the Plan of Management would be required to avoid adverse impacts and even then such impacts may still occur. This was also the case for the last trial period where compliance was not demonstrated and adverse impacts for neighbours were the consequence.
Specifically, the agreed breaches that occurred during the previous trial period, however infrequent or for whatever reason, clearly had adverse impacts on neighbours.
The performance of the hotel at times during the most recent trial period demonstrates the inadequacy of reliance on management and hotel staff to respond to neighbours' concerns and strictly adhere to a Plan of Management at all times to ensure amenity is retained. This is an inadequate mechanism to rely upon as is evident by past breaches to the existing Plan of Management and given the consequences of breaches particularly on residents of dwellings immediately above the hotel given their close proximity.
A critical issue in this appeal is that considered in Renaldo whether the proposed Plan of Management would require people to act in a manner that would be unlikely or unreasonable in the circumstances of the case, and whether it would require absolute compliance to achieve an acceptable outcome. In my view absolute compliance is required and cannot be guaranteed and nor can the acceptable behaviour of departing patrons.
For a Plan of Management to be effective, a single breach or small number of breaches should not create a situation where there is unacceptable impact. In this instance, the impacts of noise breaches after midnight would be unacceptable in terms of likely causing sleep disturbance to residents living above the hotel. The history of extended hours at this hotel suggest that a strengthened Plan of Management is unlikely ensure a reasonable level of amenity for nearby residents, or give them any comfort that the management will enforce the provisions, notwithstanding such enforcement may be required by the consent.
Even with compliance, impacts are likely to occur. For example, with the best intent to control patron behaviour in leaving the premises, any noise after midnight by patrons once they have left the hotel, would have adverse impacts given the proximity of residential dwellings, moreso than with other licensed premises in the vicinity which have late trading hours and residential neighbours but they do not have dwellings immediately above them.
Moore C refused the Vinson modification on the basis of his uncertainty that any additional anti-social behaviour of departing hotel patrons could be managed to protect the nearby residential areas. He stated: 88 In reaching this conclusion, I have taken into account the fact that, as is well recognised in proceedings of this nature in this Court, it is impossible for any licensed premises (no matter how well managed or vigourously patrolled both within the premises and the immediate neighbourhood) to eliminate entirely all instances of anti-social behaviour 89. It is, as I understand the position, well accepted that the role of management is to minimise such behaviour and to ensure that any incidences are isolated and, if possible, dealt with promptly by the staff or contractors of the premises. 90. For the reasons canvassed earlier, there is no recorded history, let alone an adequate recorded history, from which to conclude that the implementation of the revised security and noise management plan would in fact lead to the minimisation of such behaviour and assurance to the residents that any instance would likely would be likely to be isolated and dealt with properly by the staff or contractors of the premises.
I am similarly not satisfied that anti-social behaviour of patrons leaving the premises, particularly if the hotel continued to offer live entertainment in the form of strip shows, could or would be managed so as to maintain an adequate level of amenity for residents. The role of management is critical in such instances.
Whilst the mechanisms now proposed in an endeavour to ensure that the extended trading hours sought minimise adverse impacts, these do not address the fact that the requirements of the Council policy on which to allow continued trialling of extended hours have not been met. They therefore do not provide sufficient basis to allow the extended trading hours now sought.
I also cannot accept the contention by Mr Lidis that an extension of trading hours would minimise adverse impacts to the surrounding residents and the locality compared to the existing situation where patrons leave the premises at the same time after midnight. Whilst this may be some merit in staggering patron departures, the later the premises operate the more potential for unreasonable adverse impacts on residents in proximity even if there are smaller numbers of patrons making noise.
There is also nothing stopping the hotel operating now so as to stagger departures under their existing approved operating hours to help minimise the impact to neighbours if it was the management's intent to achieve this objective.
I also note that in Thomas, the Council ultimately supported the modification sought as it would enable the hotel to 'get its house in order' by more stringent controls and had confidence that this would be the outcome. The Council in this instance does not share the same view and I understand their reservations. Further, in Thomas, the use of the premises after hours was for dining and entertainment not as a strip club.
It is also not the intent of the Council's Hotel Trading Hours Policy or of condition 16 of the hotel's consent to provide the hotel with a further opportunity to see if they can operate more appropriately, that is satisfactorily, in a new trial period than they could in the last trial period.
In Vinson, Moore C also found that there may well be an existing obligation on an applicant to implement measures proposed to address noise from premises even with current operations irrespective of the outcome of any modification application. The same can be said of the Petersham Inn and the acoustical measures they have undertaken to support their application.
The acoustic experts also agreed that the noise limiter within the hotel would need to be maintained at all times on the set maximum volume of music and maintained appropriately with no modifications to the sound systems in order for the noise emissions from the hotel to meet the required regulatory noise criteria.
Even the applicant's planning expert agreed that adherence to the management measures proposed would be required as would compliance with relevant noise standards and conditions if the potential for disturbance to the surrounding area was to be minimised. In my view, even if disturbance was minimised, this does not mean that it would be acceptable and there was no demonstrable evidence that such adherence would now be forthcoming.
The applicant's claim of no complaints for the last 12 months was disputed by the resident evidence. The applicant would, as a minimum, need to demonstrate appropriate management of the hotel within the existing approved trading hours for a reasonable period of time, without recorded breaches by the police or further substantiated resident complaints, before any new trial period could be reasonably considered. Even then the premises remain at the lowest level of a mixed use development where the close proximity of residential neighbours will make adverse impacts difficult to control particularly if the use of the hotel is intensified as occurred during the most recent trial period.
In summary, the history of the operation of the hotel given it is in a sensitive location being in the same building as residential dwellings simply does not support the modification now sought, which follows a trial period where the premises did not meet the operational requirements of the Council's Hotel Trading Hours Policy to protect the amenity of neighbours on which applications for future trial periods are assessed. The Policy is clear and appropriate. Consent may only be granted to a further extended hours trading period subject to the satisfactory conduct of a hotel during the previous trading period. Therefore it should not be granted in this instance.
Similarly, the stated reason behind condition 16 of the consent is that the extended hours of operation (in any trial period) are reviewed and assessed in light of the performance (of the hotel) to ensure that the use does not interfere with the amenity of the locality. Any such review and assessment as to the performance of the hotel during the most recent trial period can only have an adverse finding and conclude that the performance at times interfered, adversely and unreasonably, with the amenity of the locality.
As I can not be satisfied that allowing extended trading hours from midnight to 3am any day of the week would not (again) unreasonably interfere with the amenity of local residents, I have concluded that it is not in the public interest to permit the modification application to again allow extended trading hours.
Accordingly, the modification application is refused.

Orders

The orders of the Court are: 1. The appeal is dismissed. 2. Modification Application DA200400670.03 to permit a further extended trading hours trial period at the Petersham Inn, 386-414 Parramatta Road, Petersham is refused. 3. The exhibits, except Exhibits A and 2, are returned.

J Smithson Commissioner of the Court DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 September 2017

At a glance

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Judgment (8 paragraphs)

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Cases Cited (3)