Rouge Down Under Pty Limited v Council of the City of Sydney

The site inspection 19We undertook an inspection of the premises and the immediate vicinity accompanied by the legal representatives of the parties and those advising and instructing them. During the course of the site inspection, in the premises, we heard evidence given informally by Mr Whitehead, the president of the local residents' association.

The expert evidence 20As is not unusual in proceedings such as these, in addition to expert town planning evidence (given by Mr Lidis on behalf the premises and Mr Nash on behalf the council), evidence was also given by a representative of the police - in this instance by Senior Sergeant Murphy, the licensing supervisor for the Kings Cross Local Area Command. These three witnesses gave concurrent evidence and, on the final day of the hearing, Mr Lidis and Mr Nash gave further concurrent evidence. 21Prior to the hearing, the three experts had met to consider a series of COPS reports (police incident reports) concerning the premises. The three witnesses produced a joint report which analysed a number of the police incident reports with each of the witnesses recording whether or not, in their opinion, the relevant occurrence was evidence of unsatisfactory management. It should be noted, in this context, that a number of the COPS reports were to be disregarded as either trivial or irrelevant. 22On the other hand, several of the COPS reports originally tendered by the council showed, for example, that security staff contracted by the premises had denied access to persons who were under the legal drinking age. This is, in fact, an example of good management rather than of bad management. To the extent that it might be relevant in the proceedings, it stands to the credit of the management of the premises rather than as any foundation for any adverse inference. 23For the most part, the witnesses agreed in the classification of each of the particular incidents - however, with respect to 6 such occurrences, although Mr Lidis and Senior Sergeant Murphy agreed that the incident did not reflect adversely upon management of the premises, Mr Nash drew an unfavourable conclusion. 24For the reasons which follow, it is unnecessary, in our view, to determine whether or not, in a concluded fashion, we should prefer Mr Nash over the other two witnesses although, if it were necessary to do so, it is likely that we would defer to the opinion of Senior Sergeant Murphy given the nature of her responsibilities and her licensing policing experience. However, it is unnecessary to undertake the detailed analysis that would be required to justify such a position. 25In summary, we are satisfied that the uncontested evidentiary position is that there have been, over recent years, a number of examples of unsatisfactory management of the premises. In two respects, the unsatisfactory management has related to trading outside the hours permitted by the development consent for the premises to operate - first, whatever the commencement and expiry dates of the initial trial period for extended trading hours until 6 AM, that trial period had expired and the premises had continued to trade the extended hours without any further trial period being permitted by the council; and, second, in November 2009, the premises traded between the period of noon and 6 PM (a period of trading permitted pursuant to the liquor licensing regime that applies to the premises but not pursuant to its development consent) to host a private Christmas party during which inappropriate sexual performances took place by female entertainers and completely inappropriate sexual activities took place between those female entertainers and members of the audience. 26It is also, as we understand it, common ground that there have been no recorded instances of unsatisfactory management since March 2010 and that, since that time, the premises have not traded beyond their regular trading hours concluding at 3 AM.

The role of a plan of management for licensed premises 27Vinson v Randwick Council [2005] NSWLEC 142; (2005) 141 LGERA 27 established a planning principle concerning the assessment of social impacts from licensed premises when an application was being made for extended trading hours or for the conducting of live entertainment at such premises. The planning principle proposed the questions to be addressed (and potentially relevant matters for consideration) in the following terms:

• 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. 28In the context of applying these questions and matters for consideration to the present application, we need to turn to the current plan of management and to consider what changes are proposed to it. 29The present plan of management that operates for the premises is derived from the 2005 development consent. The agreed position of the experts was that there could and should be significant improvements made to the plan of management. The options for improvement of the plan of management were discussed by them and a range of changes were agreed to as being desirable. In addition, a number of further changes were put by us to the witnesses as possibilities for further improvement and these too, were adopted as desirable by the witnesses. 30A revised plan of management was proposed for the premises as part of the application to the council seeking the further trial period for extended trading hours that is now the subject of these proceedings. That revised plan of management, prepared by Mr Lidis, incorporated a number of improvements to the 2005 plan of management. As part of the joint conferencing in these proceedings, the three experts considered the revised plan of management proposed for this application. 31The various proposed changes to the revised plan of management arising out of the evidence of the three experts were, on instructions, adopted by Mr Clay, barrister for the premises. As a consequence, if a further trial period were to be permitted for the premises, it would be on the basis of incorporating the revised plan of management into the development consent by incorporating in the conditions of consent as an annexure to those conditions. 32At the conclusion of the evidence of the three experts, Senior Sergeant Murphy was asked whether, if the only way to impose the terms of the revised plan of management (by incorporating it in the conditions of consent), would be by granting a further trial period of extended trading hours, did she consider that there would be a public benefit in permitting such a trial and thus imposing the revised plan of management. She indicated that, as we understood her, the public benefit in imposing such a revised and enforceable plan of management might (but would not necessarily always) be sufficient to grant a further trial period of extended hours.

Should improved management of the parameters be expected even if no further trial period extending trading hours is approved? 33During the course of the evidence given by Mr Lidis and Mr Nash, after Senior Sergeant Murphy was excused, Mr Hemmings, barrister for the council, put a series of propositions to Mr Lidis that many of the revisions to the plan of management and the operational practices arising there from were ones that, in the ordinary course of prudent and appropriate management of such premises, should be being implemented as a matter of course. Mr Lidis indicated, in response to this series of questions concerning a range of improvements possible of management practices, that they represented the best management practices for such premises and should be expected to be implemented. 34We accept his evidence and acknowledged the candour with which he gave it, as the answers demonstrated that there were a number of management practices which could and should be implemented whether or not a further trial period of extended trading hours was to be approved.

The two video sequences 35We were shown video sequences of two periods of time in the early hours of the morning. They depicted the footpath outside the premises or in the vicinity. The first of them was, apparently, taken on a mobile phone by a resident of a block of apartments in the vicinity of the rear entrance of the premises on Earl Place. This showed images of a fight on the footpath. There was no evidence that those participating in the fight were patrons of the premises or was there any police record to infer that this may have been the case. 36The second, more extensive video footage was taken by an officer of the council. It shows footpath activity immediately outside the premises and in its vicinity on Darlinghurst Road. Nothing was depicted in this footage that could found any adverse inference against the management of the premises. Social impacts of the present operation 37It is clear that, over recent times, at least until March 2010 when the premises reverted to their legally approved trading hours, there have been three areas of actual or potential adverse social impact arising from the operation of the premises. 38These comprise:

• Any contribution that the operation of the premises might make to antisocial street behaviour (including alcohol fuelled violence) as part of the general occurrence of night and late-night antisocial behaviour in the King's Cross precinct;
• Specific localised social impacts on residents in Earl Place at the rear of the premises occasioned by noise emission from the premises arising from unapproved use of the emergency exit from the premises to Earl Place (allowing music from the premises to be emitted in the late evening or early morning toward the residential receivers nearby); and
• Any specific acts of inappropriate behaviour within the premises. 39The first of these is, in many respects, the most significant from a public policy perspective. As noted at the commencement of this decision, the uncontradicted evidence in these proceedings (as well as frequent public reporting from responsible media organisations concerning general behaviour patterns in the King's Cross precinct - reports to which we consider we can have regard as informing us in the public interest [see Terrace Tower Holdings Pty Limited v Sutherland Shire Council [2003] NSWCA 289; (2003) 129 LGERA 195 at para 81]), is that alcohol fuelled behaviour creates significant policing problems and requires dedication of considerable general duties, licensing and, frequently, specialist response police. This significant policing response that is made necessary because of the alcohol fuelled antisocial behaviour late at night and during the morning hours until after sunrise or a little later is not only a significant financial drain on the public purse but undoubtedly comes at considerable real risk to the men and women serving their community in the New South Wales police force. 40Changes in management practices to the premises since March 2010 and the additional changes that would be required by the mandatory imposition of additional standards of responsibility through a revised plan of management must be balanced against the possible risk that patrons of the premises will, by being permitted to consume alcohol on the premises, contribute to on the street antisocial behaviour and, as a consequence, to the financial and physical cost of policing the King's Cross precinct. 41Based on Senior Sergeant Murphy's evidence, we accept that changes to management practices are like to effect some (at least modest) improvement for the police officers required to face the late night antisocial behaviour in the Kings Cross precinct. The question of whether these improvements require mandating rather than being adopted voluntarily is dealt with later. 42With respect to the impact on nearby residences in Earl Place, there is no doubt that, from time to time in the past, the opening of the emergency exit doors to Earl Place has caused adverse impacts on these residences. Whether the opening of the doors has been occasioned by patrons seeking to go into Earl Place to smoke or by staff of the premises using these doors to remove unruly patrons is, in our view, irrelevant. We consider that the causes of the opening of the emergency exit are irrelevant because, self evidently, the operability of these doors cannot be compromised as they are necessary for emergency egress in the event of some incident, such as a fire, that would require evacuation of the premises. Fixing the doors shut is, equally self-evidently, not an option. 43However, as discussed during the course of proceedings, physical measures linking a cut-out switch on the emergency exit to the noise limiter on the sound control system in the premises can ensure that, whenever the doors are open, no music is played whilst ever the doors are open and thus there is no sound of any nature emitted from the premises to cause an impact on nearby residences. When there is a requirement for such an automatic cut-out system, if coupled with a requirement that the sound regulator and cut-out system is to be in a locked container (with the only keys held by council officers so that the system cannot be adjusted, interfered with or bypassed without the knowledge and consent of the council), this can provide a sufficient physical guarantee that nearby residents can be protected from any late night or early morning loud music emission from the premises. In addition, better staff training can assist in stopping any opening taking place and thus reduce (and attempt to eliminate) any patron or staff noise impact in Earl Place. 44The question of inappropriate behaviour within the premises falls, in our view, into two distinct classes. 45The first is the type of less significant (but nonetheless relevant) matter routinely noted by the police in incident reports for premises such as these. Where there are a small number of instances noted specifically (as is the position for these premises), these are, perhaps, matters where improved internal supervision and diligence by the security staff of the premises can bring about amelioration of (but, we accept, will never entirely eliminate) incidents of this nature. However, although incidents of this nature may be inevitable, such inevitabilities of this behaviour, if diligent management aspires to its elimination and thus reduces the occurrences, can be an acceptable and appropriate outcome. 46We accept, as a general proposition, that this problem and the desired management response approach is applicable not only to these premises but also, generally, to other premises within the King's Cross precinct trading to the same (or a broadly similar) demographic. As a consequence, we are also satisfied that the improvements in the plan of management elsewhere discussed together with an appropriate attitude by management, for these premises, could pursue that broad outcome. 47More problematic, however, is the incident that took place in November 2009. This permitting of a Christmas party for a building company, as a favour to a friend, by the proprietors of the premises was not only an example of poor management (in that the function was permitted to occur in breach of the lawful trading hours of the premises pursuant to their development consent) but also involved sexual conduct of a type, including audience participation, that should not have been permitted to occur. The description given in the police report, a report taken after viewing the closed circuit TV footage of what occurred, used gynaecologically explicit language necessary to describe what took place and does not require to be repeated in this judgement. However, as earlier noted, inappropriate sexual performances took place by female entertainers and completely inappropriate sexual activities took place between those female entertainers and members of the audience took place during this function. 48Whilst, perhaps, at its highest for management of the premises, permitting this function to occur might conceivably be capable of excuse (because of the lack of coincidence between the liquor licensing permitted trading hours and the development consent permitted trading hours - the development consent trading hours being limited to commencing at 6 PM whilst the licensing trading hours operate from 12 noon), there can be no excuse for the failure of the management of the premises to supervise, properly and appropriately, the activities that took place on the premises during this function. This failure, in this instance, demonstrates a singular and significant element not of poor management but of complete failure of management supervision of what was taking place on the premises. 49Whilst there is a requirement for us to presume that, if a development consent is granted subject to conditions, those having the benefit of the development consent will abide by those conditions, that is not in the nature of the assessment that we are required to undertake in these proceedings. 50The provisions of the Late Night Trading DCP , even in the form that now exists at the date of this decision (as a consequence of the recent implementation of various aspects of the Ministerial decision earlier discussed), still requires us to have regard to past management performance in considering whether or not to grant a further trial period for extended trading hours. 51Although these premises have, we accept on the evidence, been subject to a management regime since March 2010 that could be regarded as "good management" for the purposes of assessment pursuant to the Late Night Trading DCP , this is but a modest period of time compared to the past trading pattern at hours in breach of the development consent (trading which, for the purposes of these proceedings, we are satisfied constitutes poor management - a proposition we do not understand to be contested by the proprietor). In addition to this broader element of poor management by non-observation of the earlier trading hour restrictions, we are satisfied that the November 2009 incident, even setting aside the breach of trading hours associated with it, demonstrates such a serious lapse of appropriate supervision and management of events within the premises as to negate, significantly, the limited period of good management since March 2010. 52In addition, the acknowledgement by Mr Lidis that a number of the matters now proposed to be incorporated in the revised plan of management represented best practice for the management of such premises - in circumstances where such best practice has not yet been entirely adopted voluntarily by the management of the premises but would require adoption through a plan of management to be imposed as a condition of consent coming from an approval in these proceedings - also militates against us concluding that, in substantial aspects, that which has and is currently being undertaken by the management of the premises constitutes a sufficient period and quality of good management to warrant a further trial of extended trading hours. 53As a consequence, taken on balance, we are not satisfied, on the merits, that there has been a sufficient time period of good management of a sufficiently improved quality of management (through the implementation of improved management practices - not merely observation of the permitted trading hours), to warrant granting a further trial of extended trading hours. 54We do consider it appropriate, however, to indicate that we accept that some modest progress has been made. We have merely concluded that the extent of the progress is not sufficient to have earned, as yet a further trial period. 55It is not appropriate for us to indicate what might be the temporal extent required nor the necessary further changes to management practices canvassed by Mr Lidis to be implemented satisfactorily for a sufficient good management operating period for the threshold for a further trial being appropriate is crossed. That is a matter for future consideration by the council on some future application supported by further evidence concerning:
• Trading hours observation;
• Such changes in management practices as may have been adopted arising out of Mr Lidis's evidence (and the discussions between and concurrent evidence of the experts, including Senior Sergeant Murphy); and
• Such results that might have flowed from any such management improvements. 56As a consequence, we have concluded that it would be premature to grant any further trial period of extended trading hours because the combination of time and quality of good management has not been sufficient, in light of past performance - including, specifically, the very serious management failure to supervise and prevent the entirely inappropriate sexual activities that took place on the premises in November 2009 - to warrant forming the opinion that such further trial period has been earned.

The Liquor Act freeze 57As earlier indicated, the Liquor Act was amended in 2009 to impose a freeze, in specified circumstances, on increasing patron numbers or extending trading hours for a range of licensed premises, relevantly including the premises that are the subject of the appeal. Whether or not the proposed extension could be granted, in light of the freeze, was also in issue in the proceedings. As a consequence of our conclusion on the merits, it is not necessary to explore this issue further. 58Although we heard legal argument on whether or not this proposal fell within the scope of permitted exceptions to that freeze and matters of construction of the various conditions recorded by the licensing regulator as being imposed on these premises at times prior to the consolidation of the conditional regime in July 2008 as a consequence of the 2007 legislation, given the conclusion that we have reached on the merits, that is not a matter that we need to determine in these proceedings. 59We considered whether we should make a determination on this point against the possibility that we might be held to have erred in law in our conclusion on the merits. However, we are satisfied that the factual basis upon which we have determined that it is inappropriate, on balance, to grant a further trial period is entirely sound and we thus do not need to determine whether or not, had we reached a different conclusion on the merits, we would have been permitted, as a matter of law, to grant the extension sought. 60However, for completeness, we note one factual matter that posed problems in doing so - had the need arisen to rule on this issue. 61The terms of the printout from the Authority that has been provided to us. It is not appropriate to call this printout the liquor licence of the premises as no such formal document, akin to a birth certificate or certificate of registration of a business name, exists. The licence itself, it would appear, is no more than an arrangement of electrons within the electronic data recording facilities of the Authority that facilitates, on command, production of a printout of the relevant terms and conditions applied by the Authority to the relevant licensed premises. Such a printout, providing the terms and conditions of the licence and authorisations for the premises has been tendered in these proceedings. As earlier noted, because of the coming into effect of the new statutory regime in 2007, for a variety of elements, including the necessary elements in the present proceedings, the nominal statutory commencement date of 1 July 2007 was substituted for what might have been the originally applicable date of the determination of the relevant element by the Authority or the imposition of the relevant condition or conditions. 62It is thus not possible to determine the temporal sequencing of these conditions and thus, if relevant (as would have here been the position), the interaction of them.

Conclusion 63Mr Hemmings put the proposition to us that, unless there has been a demonstration of satisfactory management, the provisions of the Late Night Trading DCP do not provide any basis for approving the application and granting an extension of trading hours for the premises on a trial basis. He submitted to us that the underlying framework of the Late Night Trading DCP concerning extensions to trading hours made it clear that such an extension was a privilege and that privilege was one that had to be earned. The price, he said, demanded by the DCP, was a period during which satisfactory management of the premises was demonstrated. 64We accept that this is the proper and appropriate analysis of the provisions of the Late Night Trading DCP that we are required to consider in these proceedings. 65However, in addition to the provisions of Late Night Trading DCP , we are also entitled, indeed obliged, by s 97 of the Planning Act to consider a range of other matters including the broader public interest. We also accept, as was also submitted by Mr Hemmings, that we are not entitled to set aside the policy framework of the DCP and substitute some other, incompatible, basis of assessment we might otherwise prefer (see Botany Bay City Council v Premier Customs Services Pty Ltd [2009] NSWCA 226; (2009) 172 LGERA 338). 66In this instance, we are satisfied, for the reasons earlier discussed, that there has been a period of satisfactory management commencing in about March 2010 to which we are entitled to have regard. This period of satisfactory management engages with, but does not necessarily satisfy, the provisions of the Late Night Trading DCP . 67On the other hand, consistent with the process discussed in Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 115 LGERA 373, we must consider other broader relevant issues including the public benefit. 68In this instance, as earlier discussed, we are also satisfied that the provisions of the revised plan of management to be incorporated in the conditions of consent for a further trial period and, no matter what the outcome of that trial period, would be imposed on an ongoing basis would provide some element of public benefit for our consideration. 69Accepting, as we do, the uncontradicted evidence of Senior Sergeant Murphy that, in some circumstances, the benefits to be obtained from a mandated improved plan of management may warrant the granting of a further trial period for extended trading hours, we have concluded that the period of satisfactory management since about March 2010, when coupled with the benefits of imposing the improvements proposed for the plan of management as part of the conditions of development consent, still cannot not sufficiently tip the balance in favour of granting a further one-year trial period of later trading hours. 70We have concluded, on balance, having regard to the past poor management of the premises (as demonstrated by the non-observation, until March 2010, of the limitation on the permitted trading hours of the premises) and the complete failure of management supervision (as demonstrated by the nature of the sexual activities permitted to take place on the premises during the event in November 2009 - as set out in the uncontested and gynaecologically explicit descriptions in the police report taken from closed-circuit television footage of that event), that the premises should not yet be granted any extension of trading hours even on a trial basis. 71Accepting, as we do, that there has been good management since March 2010, this is not a sufficient period of good management at a sufficient standard of good management for a further trial period to be warranted. 72In reaching this conclusion concerning the standard of management since 2010, we have also had regard to the uncontradicted evidence (by Mr Lidis in support of the application) that there were available improvements in management of the premises that would represent industry best practice but which had not been adopted, voluntarily, by the present management prior to the hearing. 73As a result, accepting that there has been good management since March 2010, that is not of sufficient time or improved quality of good management to have earned the management a further trial extension of trading hours for the premises when weighed against the past poor management observation of permitted trading hours and, particularly, the complete abrogation of management responsibility demonstrated by the November 2009 permitting of the inappropriate sexual performances that took place by female entertainers and the inappropriate sexual activities that took place between those female entertainers and members of the audience. 74As a consequence of reaching this conclusion on the merits, we consider it unnecessary to determine whether or not, in light of what has been described as the liquor freeze, we would have had the power to grant such a trial of any extended trading hours had we reached a different conclusion on the merits. Orders 75As a consequence of the foregoing, the orders of the Court are:

1. The appeal is dismissed;
2. Modification application to modify Development Consent D/2004/1014 to permit a trial period of an extension of the late-night trading hours for premises at 39 - 43 Darlinghurst Road, Kings Cross is determined by the refusal of the proposed modification; and
3. The exhibits, other than Exhibit 1, are returned. Tim Moore Senior Commissioner Mike Ritchie Acting 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: 04 March 2011