TL & TL Tradings Pty Ltd v City of Parramatta Council

Background

1. The background facts are uncontentious and are summarised as follows: 1. The premises comprise part of a two-storey industrial building containing eight units. The site adjoins industrial buildings and is located on the southern side of Sutherland Street, adjacent to Parramatta Road and bound by Berry Street to the east and the Carlingford/Clyde Railway Corridor to the south. The surrounding precinct contains a mixture of light industrial and commercial uses and is in close proximity to a number of approved brothels. 2. On 30 April 2010, development consent was granted by Brown C for the use of the premises as a brothel on a three-year trial period, operating between the hours of 6pm to 7am, seven days a week, with a maximum of six sex workers, one manager, and one contract cleaner at the premises at any one time: I V Trading Pty Ltd v Parramatta City Council [2010] NSWLEC 1170 ('I V Trading'). 3. Consequent upon Council's refusal of a modification application seeking the continuation of the use of the premises as a commercial brothel for a further three-year trial period, TL filed a Class 1 appeal. On 28 November 2016, in TL & TL Tradings Pty Ltd v Parramatta City Council [2016] NSWLEC 150 ('TL & TL Tradings Pty Ltd'), Moore J approved the modification application and permitted the continued use of the premises as a commercial brothel for a two-year trial period. 4. On 19 November 2018, a further modification application was lodged by TL ('subject application') seeking "ongoing and enduring consent" for continued use of the premises as a brothel. On 15 March 2019, TL lodged the present Class 1 proceedings, appealing against Council's deemed refusal of the subject application. 5. On 28 May 2019, after the commencement of these proceedings, Council approved the subject application, however it imposed a further two-year trial period as follows: 2. Trial Period The use of lot 7/3 Sutherland Street as a sex service premises is limited to a 2 year trial period commencing on 21 May 2019. A section 4.55 modification application may be submitted to Council prior to the expiration of the 2 year period seeking the continuation of the sex service premises use (either for a further trial period or for an ongoing and enduring consent). This consent shall continue to operate until such time as that application is determined by the Council (or by the Court if an appeal is filed). Such modification application, should consider, but not exclusively, the impact of the use on the amenity of the occupants in the locality having regard to the manner in [sic] the operator manages the brothel use, including compliance with the Plan of Management referred to in condition 3. Reason: To limit the operation of the sex service premises to a 2 year period to allow the applicant to demonstrate that the business can comply with the Plan of Management and to allow Council to continue to monitor the premises. 1. TL now proceeds under s 8.11(3) of the Environmental Planning and Assessment Act 1979 (NSW) ('EPA Act') which provides: 8.11 Circumstances in which consent taken to have been refused for purposes of appeal rights ... (3) Any such determination of an application does not affect the continuation or determination of an appeal made under this Division against the deemed refusal of consent (or modification of consent) under subsection (1). ... 1. The subject of the appeal is confined to the condition for a further two-year trial period (as imposed by Council on 28 May 2019). 2. Council's SOFAC contains as its sole contention Contention 1 which provides: 1. The application for enduring consent should be refused and a further two-year trial period be imposed because of the inability to safely manage the subject premises as a brothel. Particulars a) During the two-year trial period, the operator(s) failed to comply with the conditions of consent DA910/2008/B including the Plans of Management resulting in a Brothel Closure Orders [sic] and Penalty Infringement Notice being issued by the Respondent, being: • 11 October 2018 - Penalty Infringement Notice 3145390784 • 12 October 2018 - Brothel Closure Order b) During the two-year trial period, the operator(s) failed to operate and manage the brothel in compliance with the Plan of Management, in particular:- • Failure to procure from the owner an [sic] compliant Annual Fire Safety Statement; • Staff officer [sic] includes portable bed allowing the potential use of office for staff sleepovers; • Receptionist unable to provide roster for sex workers; • Induction book not onsite; • No access to managers office; • Staff not trained in the use of fire safety equipment and intercom systems; • sex workers staying at the premises; • not complying with fire safety measures; and • first aid kit empty. c) The failures to comply with the conditions of consent and Plan of Management has placed members of the public and staff at risk. It is not in the public interest for the development consent to be on a permanent basis.

Evidence

1. TL reads the affidavit of its solicitor, Suzanne Michelle Whitty, affirmed 6 September 2019. Ms Whitty summarises the background to the litigation and annexes correspondence between the parties. Ms Whitty opines that there is no prospect that the matter can be resolved by agreement. As such, she deposes that there is little utility in proceeding to a s 34 conciliation conference.
2. TL also relies upon a letter dated 13 September 2019 from its solicitors to Council's solicitors seeking "further and better particulars" of the "case that [TL] must meet…".
3. Without disrespect to the careful submissions made by the parties, their respective positions are summarised below.

TL's position

1. TL submits that Contention 1 should be struck out primarily because the "Particulars" thereto make it clear that the only alleged "inability" (to safely manage the subject premises as a brothel) relates to compliance with the terms of the development consent, rather than any issue with the inherent use of the land or the terms of the development consent. That is, TL contends that Contention 1 does not raise any suggestion that the use of the premises for a brothel is inappropriate; that if the conditions of development consent are complied with, the brothel would not be safely managed; that there is insufficient information; or that there is any deficiency in the operating conditions of the development consent.
2. TL submits that contrary to the requirements of par 6(g) of Sch B of the Land and Environment Court of New South Wales Practice Note - Class 1 Development Appeals ('Practice Note'), Contention 1 provides no identification of the nature and extent of any environmental impact relied upon.
3. In oral submissions, Mr Gadiel reiterated that the concern of TL was that no impacts are identified in Contention 1 and the contention simply amounts to an allegation of failures to comply with the Plan of Management. As such, Mr Gadiel submitted that the contention raised "process" issues, rather than issues relating to impact. Put simply, he says that there is no specific adverse impact identified, and a proper understanding of s 4.15 of the EPA Act requires the Court to determine the matter depending upon impact. Mr Gadiel referred the Court to Sertari Pty Ltd v Quakers Hill SPV Pty Ltd [2014] NSWCA 340 ('Sertari') where the Court of Appeal considered the proper approach to the construction of a condition and related this to the manner in which the Court may approach the consideration of earlier judgments. In the circumstances, I am not assisted in my consideration of the matters before me by reference to Sertari.
4. TL submits, relying upon the principle in Jonah Pty Limited v Pittwater Council [2006] NSWLEC 99; (2006) 144 LGERA 408 ('Jonah') regarding the irrelevance of "past unlawful use to determin[e] whether a consent should be granted or modified", and considering the comments of Moore J when granting the modification in TL & TL Tradings Pty Ltd at [112], that Contention 1 raises purported past illegal conduct which is irrelevant to the Court making a merit determination in a Class 1 appeal.
5. This principle, simply stated, is that "past unlawful use" is not relevant when determining whether consent should be granted or modified because it should be assumed that the party who enjoys the benefit of the consent will observe conditions imposed in (or attached to) a development consent.
6. TL submits that the subject application does not propose any changes to the approved use (e.g. no intensification) or the "legal terms" on which the use is to be carried out. TL says that any evidence of impacts that can only arise from the "unlawful" breach of the terms of the approval is irrelevant, and to consider such material would require a departure from the presumption that conditions will be complied with.
7. Mr Gadiel also suggested that if the Court was against TL's primary position, the Court could consider striking out parts of Contention 1. Specifically, the Court could strike out pars (a) and (b) of the particulars, and the first sentence of par (c).

Council's position

1. Council points to the history of the various modifications sought in relation to the premises and notes that the subject application seeks to replace a trial period contained in condition 2 of the modified consent issued by Moore J on 20 December 2016. That condition provided, inter alia, that the use of the premises was limited to a two-year trial period and that a s 96 modification (as the modification clause in the EPA Act then was) may be submitted to Council prior to the expiration of that period seeking the continuation of the brothel use "either for a further trial period or for an ongoing and enduring consent".
2. Council also notes that after the commencement of these proceedings, it approved the subject application and imposed a new condition to again limit the use of the premises to a two-year trial period.
3. Council's primary submission is that TL's construction of Contention 1 is incorrect because the contention does not state that the trial period is required due to past breaches but, properly understood and construed, it relies upon the inability to safely manage the premises and in that regard, the past conduct is relevant.
4. In response to TL's submission that Contention 1 raises a legally irrelevant consideration (non-compliances with the Plan of Management), Council also points to s 4.56(1A) of the EPA Act which sets out the required matters for consideration in an appeal. Section 4.56(1A) relevantly provides: 4.56 Modification by consent authorities of consents granted by the Court ... (1A) In determining an application for modification of a consent under this section, the consent authority must take into consideration such of the matters referred to in section 4.15 (1) as are of relevance to the development the subject of the application. The consent authority must also take into consideration the reasons given by the consent authority for the grant of the consent that is sought to be modified. ...
5. Council submits that pursuant to s 4.56(1A) of the EPA Act, the question of "doubts as to the ability to safely manage the brothel" is a mandatory consideration in determining whether to grant the subject application because it is a relevant matter under 4.15(1) of the EPA Act. Further, Council submits that it is also relevant in light of the reasons given by Brown C in granting development consent on 30 April 2010 and the reasons given in TL & TL Tradings Pty Ltd by Moore J in 2016 modifying the consent.
6. Council submits that the EPA Act has been amended in a material way since Jonah was decided because s 4.56(1A) now includes the requirement to consider "...the reasons given by the consent authority for the grant of the consent that is sought to be modified". In this regard, Council points to the reasons given by both Brown C and Moore J.
7. Council contends that the failure to comply with the Plan of Management is relied upon, not because that conduct necessarily constituted an illegality, but because that conduct is a valid matter for consideration in that it relates to the planning impacts of the development.
8. Council submits that pursuant to Zhang v Canterbury City Council (2001) 51 NSWLR 589; [2001] NSWCA 167 ('Zhang'), the very purpose of a trial period is to assess the likely impact or suitability of a development. It was with this in mind that Moore J determined that the impacts of the ongoing use could not be identified with precision, and that the trial period imposed was to ensure, among other things, compliance with the Plan of Management. Thus, the purpose of the trial period imposed by Moore J was to ensure that the Plan of Management could be complied with so that safety and amenity impacts were addressed satisfactorily. Understood in this way, Contention 1 is to the effect that a further trial period is warranted.
9. In oral address, Mr Astill further submitted that a properly crafted request for further particulars would address any concerns residing with TL.
10. In the circumstances, Council submits that the Court would not accept TL's proposition that the operation of the premises during the trial period, and particularly the ability to manage the premises safely, are impermissible matters for consideration.

Power to strike out contentions

1. Although there was a suggestion that the motion was brought pursuant to Pts 14 and 15 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR') during the hearing, as a result of a request from the bench in relation to jurisdiction, the parties provided further written submissions on 28 October 2019. It is common ground between the parties, and I accept, that Pts 14 and 15 of the UCPR do not apply to these proceedings primarily because Pt 14 is entitled "Pleadings" and r 14.1 of the UCPR provides: 14.1 Application This Part applies to proceedings commenced by statement of claim and to proceedings in which a statement of claim has been filed.
2. There is no opportunity to file a statement of claim in Class 1 proceedings and therefore Pt 14 of the UCPR has no application.
3. Further, Pt 15 of the UCPR, which is entitled "Particulars", relates (as is made clear by r 15.1) to the particulars that must be given in relation to pleadings. By reference to Pt 14, the reference to "pleadings" in Pt 15 is a reference to a pleading regulated by Pt 14.
4. Despite the above, it is clear, as agreed between the parties, that the Court has power to strike out contentions in the manner sought in the current motion as a consequence of ss 56 to 61 of the Civil Procedure Act 2005 (NSW) and s 23 of the Land and Environment Court Act 1979 (NSW).
5. Suffice it to say that I am comfortable that the Court has power to strike out Contention 1 in Council's SOFAC if I find it appropriate to do so in the circumstances.

Whether it is appropriate to strike out Contention 1

1. In essence, TL submits that Contention 1 does not articulate impacts (contrary to the Practice Note) and when the contention is properly construed (taking into account the particulars), it is clear that it relies upon alleged unlawful past conduct (being matters that are primarily "process oriented"). TL says that the principles considered in the Jonah line of authorities dictate that those matters are not relevant to the Court's consideration of the subject application.
2. Council's position is that s 4.56(1A) of the EPA Act clearly provides that the Court "must take into consideration" the reasons given by the consent authority for the grant of the consent that is sought to be modified (noting that the parties agree that the relevant "reasons" are those of Brown C in I V Trading).
3. Although proceedings in Class 1 of the Court's jurisdiction are conducted with less formality, the other party is entitled to know with precision the specifics of any case brought against it. In the present circumstances, I do not consider that TL has been deprived of knowledge of the nature and specifics of Council's case.
4. In the absence of discrete evidence, and on the assumption that Council will be in a position to marshal evidence in relation to its concerns as articulated in Contention 1 at the substantive hearing, I am of the opinion that TL has not made out its case for the striking out of Contention 1. My reasons, which to an extent accord with those proffered on behalf of Council, may be shortly stated.
5. First, I accept that a sensible construction of Contention 1 provides, in effect, that a trial period should be imposed because of a concern as to the "inability to safely manage the subject premises as a brothel". Although it is particularised in some detail, the contention does not provide, despite TL's submissions, that the trial period is required due to past breaches. While non-compliances are particularised (and may or may not be the subject of evidence in the substantive proceedings), for the purpose of my consideration, I have assumed that such evidence would be available subject to the Court's rulings on the relevance thereof. I do not consider that it is either inappropriate or irrelevant for the non-compliance(s) to be relied upon, at least as facts and circumstances that may establish TL's inability to effectively manage the premises. Again, while not determinative, at the hearing of the substantive appeal, the Court will be entitled, if not required, to consider the reasons of Brown C and Moore J insofar as they may be relevant.
6. Simply stated, I am of the view that when considering a later application for an enduring consent, a court is entitled to consider the operation and the details thereof during a trial period.
7. In Zhang at [85], Spigelman CJ (Meagher and Beazley JJA agreeing) noted that the very purpose of a probationary trial period is to assess the likely impact or suitability of a development where the full implications are not known or cannot be stated with sufficient certainty.
8. It is a matter for the Court at final hearing as to whether the impacts of the ongoing use of the premises can be identified with precision and whether it is appropriate to impose a trial period. In this regard, I am of the opinion that the Plan of Management and the conduct relating to it are appropriate considerations.
9. Second, I accept Council's submission that the final sentence of s 4.56(1A) of the EPA Act requires the Court (at hearing) to take into consideration the reasons given by the consent authority for the grant of the consent that is sought to be modified. At the substantive hearing, the Court would be entitled (although it is a matter for the Court) to take into account the reasons of Brown C in I V Trading and Moore J in TL & TL Tradings Pty Ltd.
10. In addition, it is clear that in hearing the appeal, the Court must also consider the matters in s 4.15(1) of the EPA Act (as are of relevance to the subject application).
11. Third, properly understood, I consider that Contention 1 relies upon TL's inability to safely manage the premises rather than purporting to express a view that the trial period is required due to past breaches. In that regard, I consider that past conduct is relevant - not necessarily because it may have been illegal. Further, the words added to s 4.56(1A) of the EPA Act post Jonah require a cautious approach to the application of the principles in that case. That is not to suggest that the principles have been weakened, but a court is required, in a case such as the present, to consider the reasons given by the consent authority for the grant of the consent that is sought to be modified.
12. As I understand Council's position, it is submitted, and I accept, that it is not the illegality "by itself" which is a relevant factor, however past use (and the impacts thereof) is a valid and relevant consideration. In this regard, I am conscious of the comments of Preston CJ of LEC in Jonah at [38]: For instance, past conduct (regardless of whether it is unlawful) may have given rise to unacceptable impacts, such as unacceptable acoustic impacts on adjoining properties. The experience of impacts of the past use could be relevant in evaluating, first, the likely impacts of a prospective use for which consent is sought of the same or similar character, extent, intensity and other features as the past use, secondly, the acceptability of the likely impacts and thirdly, if likely impacts are considered to be unacceptable, the appropriate measures that ought to be adopted to mitigate the likely impacts to an acceptable level. Past use would, therefore, be of relevance but it is for proper planning reasons, not because the past use happened to be unlawful. The unlawfulness of the past use is not relevant.
13. Although TL relied upon detailed submissions in relation to the manner that this Court has considered the principles in Jonah (with particular emphasis upon the comments of Preston J in Ralph Lauren Pty Ltd v New South Wales Transitional Coastal Panel; Stewartville Pty Ltd v New South Wales Transitional Coastal Panel; Robert Watson v New South Wales Transitional Coastal Panel [2018] NSWLEC 207 at [128]), and drew the Court's attention to the earlier judgment of King CJ in Kouflidis v City of Salisbury (1982) 29 SASR 321; (1982) 49 LGRA 17, I do not consider that the comments therein in relation to past unlawful conduct are necessarily determinative in a strike out application, primarily because neither of those cases dealt with a trial period. In any event, if there is evidence marshalled that may specifically relate to prior unlawful conduct in the current case, that would be a matter for consideration by the Court at the substantive hearing and it may well be at that stage that the Jonah line of authorities may require some further consideration. Despite this, as noted above, I am of the view that it is not appropriate to strike out Contention 1 in its present form.
14. TL submitted that if it was successful in striking out Contention 1 in Council's SOFAC, Council should file and serve an Amended Statement of Facts and Contentions in accordance with Sch B of the Practice Note. As I am not minded to grant the relief sought by TL, there is no need to make an order in relation to re-pleading. Despite this, I note that Exhibit A (the request for "particulars" from TL's solicitors) has not been responded to by Council (understandably given this motion). It may be, and I express no view, that the provision of a response to the request may go some way to clarifying the nature of the evidence that Council may marshal at the final hearing.
15. As noted above, there was agreement between the parties that there was no utility in conducting a s 34 conciliation conference given that the parties had already undertaken without prejudice discussions as recorded in Ms Whitty's affidavit. I am of the view that vacating the conciliation conference will promote the just, quick and cheap resolution of the issues in dispute between the parties.
16. Subsequent to the hearing, on 28 October 2019 the parties provided draft consent orders to be made regarding the preparation of the matter for hearing. The draft orders provided an option to Council to file any amended Statement of Facts and Contentions. I have incorporated those orders into the final orders I make.

Orders

1. In relation to the notice of motion, I make the following orders: 1. Notice of motion filed by TL & TL Tradings Pty Ltd ('TL') on 6 September 2019 is dismissed. 2. Section 34 conciliation conference listed on 18 November 2019 is vacated. 3. TL is to pay the costs of City of Parramatta Council of the notice of motion filed on 6 September 2019.
2. In relation to the substantive Class 1 proceedings, I make the following orders which are generally in accordance with those agreed between the parties: 1. Leave is granted to the parties to approach the Registrar to have a date fixed for a hearing. 2. The City of Parramatta Council ('Council') is to file any amended Statement of Facts and Contentions by 21 November 2019. 3. TL & TL Tradings Pty Ltd ('TL') is to file any Statement of Facts and Contentions in Reply two weeks after the receipt of any further Statement of Facts and Contentions filed by Council (pursuant to order (2) above). 4. The hearing is to commence on site at 9.30am. If the parties consider the site may be difficult to find, they are to file an agreed map showing the proposed location for the commencement of any hearing on site at 9.30am two working days before the hearing. 5. By 18 November 2019, Council is to notify the Court and TL of the identity of its town planner. 6. Under rr 31.19 and 31.20 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR'), the Court makes the following directions regarding expert evidence: 1. Brett Daintry, TL's town planner and Council's town planner (nominated under order (5) above) are to confer in relation to town planning issues under r 31.24 of the UCPR and prepare a joint expert report; and 2. The joint expert report is to be filed and served by four weeks before the hearing. Note: The above directions may be duplicated for each area of expertise required. 1. Unless the Court otherwise orders, expert evidence may not be adduced at the hearing otherwise than in accordance with the directions made by the Court in accordance with rr 31.19 and 31.20 of the UCPR, including compliance with directions as to the time for service and filing of experts' reports and joint expert reports. 2. Parties are to serve a copy of these directions, the Statements of Facts and Contentions, Div 2 of Pt 31 of the UCPR, the Expert Witness Code of Conduct in Sch 7 of the UCPR, and the Court policies on Joint Reports and on Conference of Expert Witnesses on all experts upon whose evidence they propose to rely within three business days of these orders being made, or, for a Statement of Facts and Contentions (or reply) filed after the making of these orders, within three business days of them being filed or served. 3. Experts are directed to give written notice to the Court and the party instructing them if for any reason they anticipate that they cannot comply with these directions. In that case, or if the experts have failed to comply with these directions, the parties will promptly list the matter before the Court for directions and give written notice to the other parties. 4. Experts are to ensure that a joint conference is a genuine dialogue between experts in a common effort to reach agreement with the other expert witness about the relevant facts and issues. Any joint report is to be a product of this genuine dialogue and is not to be a mere summary or compilation of the pre-existing positions of the experts. 5. A joint report is to identify the experts involved in its preparation, the date of their joint conferences, the matters they agreed about, the matters they disagreed about and reasons for agreement and disagreement. A joint report should avoid repetition and be organised to facilitate a clear understanding of the final position of the experts about the matters in issue and the reasoning process they used to reach those positions. Each expert is to sign and date the joint report. 6. Legal representatives are not to attend joint conferences of experts or be involved in the preparation of joint reports without the leave of the Court. 7. At the hearing, the evidence of experts is to be given by way of concurrent evidence, unless the hearing judge or commissioner directs otherwise. 8. A party calling a witness may not, without the leave of the Court, lead evidence from the witness the substance of which is not included in a document served in accordance with the Court's directions. 9. If any witness is required for cross-examination, notice is to be given at least seven days before the hearing. 10. A party who proposes to object to any part of an affidavit, statement or report is to file and serve notice of its objections, including the grounds in support, at least seven days before the hearing. 11. Council is to file and serve a bundle of documents 14 days before the hearing. The bundle is to contain copies of relevant environmental planning instruments, relevant extracts from development control plans and policies, and documents evidencing the lodgement, processing and determination of the application by Council, including all submissions from objectors, and the decision of Council but is not to otherwise include copies of any documents annexed to the development appeal application. Unnecessary copying and duplication of documents is to be avoided. The bundle is to be subdivided into relevant divisions, paginated and have a table of contents. 12. Council is to file and serve a notice of objectors who wish to give evidence in the hearing, of whom Council is aware, seven days before the hearing. The notice is to identify the objector, their address, where they wish to give evidence (on site or in Court) and whether they made a written submission about the application (in which event, the notice is to provide the page number of that submission in the key bundle). If there is no submission, Council should, if possible, file and serve a short statement identifying the topics about which the objector wishes to give evidence. 13. Council is to file and serve draft conditions of consent (in both hard copy and electronic form) 14 days before the hearing. 14. TL is to file and serve its draft conditions in response (in both hard copy and electronic form) seven days before the hearing. 15. If any party fails to comply with a direction of the Court that some action be taken by a specified time, and the defaulting party is not able to take that action within two days of the specified time, the defaulting party is to: 1. Relist the matter before the Court within three days of the specified time; and 2. Provide to the Court on the relisting an affidavit explaining the non-compliance, the reason for the non-compliance and what action the party proposes to take and when the party proposes to take action to comply with the direction. 1. The parties have liberty to restore on three working days' notice.

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 November 2019