Willoughby City Council v Spa & Beauty Relaxation Centre Pty Ltd

FACTUAL BACKGROUND 4The respondent at all material times has had a registered leasehold interest in the Property. 5There are two relevant development consents pertaining to the Property, being: (a)Development Consent No. 2000/0466 (D), determined on 29 May 2000, Condition 4 stipulated that: "As advised in the Statement of Environmental Effects, staff are to remain dressed at all times there being no body to body massage or sex offered at this facility. (Reason: Ensure compliance)". (b)Development Consent DA 2007/886 (D) determined on 7 January 2008 for alterations to existing tenancy use, consented to on 7 January 2008 and modified on 6 February 2008. 6Neither provide consent to operate the Property as a brothel, as use for prostitution, or for sex-related uses. 7The respondent company has as its sole director, Ms Mi Sook Kang. 8In 2009 and 2010 a Council officer spoke to the manager of the Premises who denied that any sexual activities were undertaken at the Premises. That information was false. 9On 21 October 2009, the applicant issued Brothel Closure Order No 1932 under s 121B of the EPA Act, which required the respondent to cease using the Premises as a brothel (within the meaning of that term specified by the Restricted Premises Act 1943) and for related sex uses (within the meaning of that term specified by s 2 of the Restricted Premises Act and s 121ZR(1) of the EPA Act). 10On 16 November 2010, the Applicant issued Brothel Closure Order No 2056 under s 121B of the EPA Act, which required the respondent to cease using the Premises as a brothel and for related sex uses in the same terms as described above. 11The respondent has not complied with either brothel closure order; that is, the Premises have been continued to be used for the provision of sexual services.

LEGISLATIVE REGIME 12The subject land is zoned 3(c2) pursuant to the SREP 5. Clause 7(2) provides as follows: 7 Zone objectives and development control ... (2) Except as otherwise provided by this plan, the development control table for each zone specifies the development within each zone that: (a) may be carried out without development consent (including exempt development), or (b) may be carried out only with development consent, or (c) is prohibited. 13In the land use table, a "brothel" is listed as a permissible land use with development consent in that zone. However, cl 36B expressly deals with brothels and sub-clauses (3), (4) and (5) prohibit brothels in that zone in prescribed circumstances. Clause 36B(5) applies in the present case. Clause 36B provides: 36B Brothels (1) In this clause, brothel means premises used habitually for the purposes of prostitution, that is, the engaging in a sexual activity by persons for payment. Premises may constitute a brothel even though used by only one prostitute for the purposes of prostitution. (2) When assessing an application for consent to the use of premises for the purpose of a brothel, the Council must consider the following: (a) the distance between the premises and any place of worship, school, community facility, hospital or medical centre or any place in the vicinity of the premises regularly frequented by children for any reason, (b) whether the operation of the brothel could cause a disturbance in the neighbourhood, taking into account the location of any other brothels operating in the neighbourhood, (c) whether sufficient off-street parking will be provided, (d) whether the brothel will be accessed by a separate entrance, (e) whether the operation of the brothel would interfere with the amenity of the neighbourhood because of its size, operating hours, traffic generation, lighting or noise or the number of its employees and clients, (f) whether the operations of the brothel will utilise circulation areas common to any other use of the premises. (3) Development for the purpose of a brothel is prohibited on land to which this plan applies if the brothel is located at ground level within a business zone. (4) Development for the purpose of a brothel is prohibited on land to which this plan applies in any part of premises within a business zone if that part is used for residential purposes. (5) Development for the purpose of a brothel is prohibited on land to which this plan applies if the premises on which the development is to be carried out are less than 100 metres from any other premises to which consent has been granted to the use of the premises for the purpose of a brothel. (6) The distance between premises referred to in subclause (5) is to be measured as the shortest distance between the premises that the development is to be carried out on and the premises to which consent has been granted to the use of the premises for the purpose of a brothel. 14The terms "brothel" and "prostitution" are not otherwise defined in SREP 5. However, SREP 5 is made under the EPA Act, in which the term brothel is defined as being: brothel means a brothel within the meaning of the Restricted Premises Act 1943, other than premises used or likely to be used for the purposes of prostitution by no more than one prostitute. 15The Restricted Premises Act , s 2 provides: brothel means premises: (a) habitually used for the purposes of prostitution, or (b) that have been used for the purposes of prostitution and are likely to be used again for that purpose, or (c) that have been expressly or implicitly: (i) advertised (whether by advertisements in or on the premises, newspapers, directories or the internet or by other means), or (ii) represented, as being used for the purposes of prostitution, and that are likely to be used for the purposes of prostitution. Premises may constitute a brothel even though used by only one prostitute for the purposes of prostitution. related sex uses means the following: (a) the use of premises for the provision of sexual acts or sexual services in exchange for payment, (b) the use of premises for the provision of massage services (other than genuine remedial or therapeutic massage services) in exchange for payment, (c) the use of premises for the provision of adult entertainment involving nudity, indecent acts or sexual activity if the entertainment is provided in exchange for payment or if the entertainment is ancillary to the provision of other goods or services. 16Sections 76A and 76B of the EPA Act require that: (a)development which requires consent can only be carried out if such a consent has been obtained and is in force: s 76A(1)(a); (b)development for which a consent has been obtained, must be carried out in accordance with that consent: s 76A(l)(b); and (c)development which is prohibited by an environmental planning instrument cannot be carried out: s 76B. 17If the respondent is operating in breach of s 76A(1)(b) and s 76B (or alternatively to s 76B, in breach of s 76A(1)(a)) then the Council can: (a)issue an order pursuant to s 121B of the EPA Act; (b)commence proceedings pursuant to s 123 of the EPA Act; (c)seek relief from the Land and Environment Court as specified in s 20(2) of the Land and Environment Court Act 1979. 18Section 121ZR enacts special provisions relating to brothel closure orders. 19Sections 123 and 124 of the EPA Act relevantly provide: 123 Restraint etc of breaches of this Act (1) Any person may bring proceedings in the Court for an order to remedy or restrain a breach of this Act, whether or not any right of that person has been or may be infringed by or as a consequence of that breach. ... 124 Orders of the Court (1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach. (2) Without limiting the powers of the Court under subsection (1), an order made under that subsection may: (a) where the breach of this Act comprises a use of any building, work or land-restrain that use, ... (3) Where a breach of this Act would not have been committed but for the failure to obtain a consent under Part 4, the Court, upon application being made by the defendant, may: (a) adjourn the proceedings to enable a development application to be made under Part 4 to obtain that consent, and (b) in its discretion, by interlocutory order, restrain the continuance of the commission of the breach while the proceedings are adjourned. (4) The functions of the Court under this Division are in addition to and not in derogation from any other functions of the Court. (5) Nothing in this section affects the provisions of Division 3 of Part 3 of the Land and Environment Court Act. 20Section 20(2) of the Land and Environment Court Act relevantly provides: 20 Class 4-environmental planning and protection and development contract civil enforcement (2) The Court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of the following proceedings: (a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law or a development contract, (b) to review, or command, the exercise of a function conferred or imposed by a planning or environmental law or a development contract, (c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function, (d) whether or not as provided by section 68 of the Supreme Court Act 1970-to award damages for a breach of a development contract. 21SEPP 1 relevantly provides: 2 Definitions In this Policy, except in so far as the context or subject-matter otherwise indicates or requires: Act means the Environmental Planning and Assessment Act 1979. development application includes an application for consent referred to in clause 7 (1) of the Miscellaneous Acts (Planning) Savings and Transitional Provisions Regulation 1980. development standards has the meaning ascribed thereto in section 4 (1) of the Act. 3 Aims, objectives etc This Policy provides flexibility in the application of planning controls operating by virtue of development standards in circumstances where strict compliance with those standards would, in any particular case, be unreasonable or unnecessary or tend to hinder the attainment of the objects specified in section 5 (a) (i) and (ii) of the Act. 6 Making of applications Where development could, but for any development standard, be carried out under the Act (either with or without the necessity for consent under the Act being obtained therefor) the person intending to carry out that development may make a development application in respect of that development, supported by a written objection that compliance with that development standard is unreasonable or unnecessary in the circumstances of the case, and specifying the grounds of that objection. 7 Consent may be granted Where the consent authority is satisfied that the objection is well founded and is also of the opinion that granting of consent to that development application is consistent with the aims of this Policy as set out in clause 3, it may, with the concurrence of the Director, grant consent to that development application notwithstanding the development standard the subject of the objection referred to in clause 6. 22The definition of "development standards" in s 4 of the EPA Act is in the following terms: development standards means provisions of an environmental planning instrument or the regulations in relation to the carrying out of development, being provisions by or under which requirements are specified or standards are fixed in respect of any aspect of that development, including, but without limiting the generality of the foregoing, requirements or standards in respect of: (a) the area, shape or frontage of any land, the dimensions of any land, buildings or works, or the distance of any land, building or work from any specified point, (b) the proportion or percentage of the area of a site which a building or work may occupy, (c) the character, location, siting, bulk, scale, shape, size, height, density, design or external appearance of a building or work, (d) the cubic content or floor space of a building, (e) the intensity or density of the use of any land, building or work, (f) the provision of public access, open space, landscaped space, tree planting or other treatment for the conservation, protection or enhancement of the environment, (g) the provision of facilities for the standing, movement, parking, servicing, manoeuvring, loading or unloading of vehicles, (h) the volume, nature and type of traffic generated by the development, (i) road patterns, (j) drainage, (k) the carrying out of earthworks, (l) the effects of development on patterns of wind, sunlight, daylight or shadows, (m) the provision of services, facilities and amenities demanded by development, (n) the emission of pollution and means for its prevention or control or mitigation, and (o) such other matters as may be prescribed.

DISCUSSION 23Only a "development standard" is amenable to a SEPP 1 objection. The courts have struggled to determine what a development standard is. They have generally drawn a distinction between a development standard and a prohibition. The view has prevailed that SEPP 1 cannot trump a prohibition in a planning instrument whether or not it is in the development control table: Lowy v Land and Environment Court of NSW [2002] NSWCA 353, 123 LGERA 179 at [32] - [43] where the earlier authorities are reviewed. See also Blue Mountains City Council v Laurence Browning Pty Ltd [2006] NSWCA 331, 67 NSWLR 672. The question is one of construction of the relevant provisions of the planning instrument. The problem is that, in a sense, every regulation involves some prohibition. Therefore the distinction tends to be one of form rather than substance. Here, "the distance of any land, building or work from any specified point" is a development standard: s 4(a) of the EPA Act. Yet it is the subject of an express prohibition under cll 7(2) and 36B of SREP 5. 24In Lowy at [38] - [41] Handley JA said: 38 In North Sydney Municipal Council v P D Mayoh Pty Limited [No 2] (1990) 71 LGERA 222 (Mayoh), the majority, Mahoney and Clarke JJA, interpreted the relevant clause in the North Sydney Plan, which was not in the development control table, as a prohibition on the proposed development and not a development standard. Mahoney JA referred to the definition of development standards and said (232-3): If the definition is to be construed according to its terms, three things may be said. First the definition applies, in the first instance, only to provisions which are 'provisions ... in relation to the carrying out of development'. Therefore that with which the definition deals is provisions relating, not to whether development may be carried out at all, but to what occurs in the carrying out of the development and whether, when it is being carried out, particular things are required to be done or particular standards to be observed. ... Secondly, the use of the phrase "requirements are specified or standards are fixed" provides some ... support for the view that that with which the definition deals is details of a development which is to be carried out or the standards to be observed in the carrying out of it and not whether the development may be carried out at all. And, thirdly, the matters detailed in [the] sub pars ... of the definition ... provide further support for this view. They assume that development of a kind ... can be carried out and they provide for the things which are required and the standards which are to be observed in the carrying out of that development. 39 After referring to the relevant clause he said (234): ... what is done is to prohibit the erection of the relevant kind of building, not to make a provision in relation to 'the carrying out of' development of that ... kind ... This is not a matter relating to 'development standards' but to the carrying out of development at all. 40 Clarke JA said (235) that the relevant prohibition was "absolute". He continued: The question ... is one of the construction of [the clause] considered in the light of the terms of [the Plan]. It is not to be resolved by assuming that the zoning tables provide the exclusive code of land use". 41 Clause 9, in which the zoning table of that plan was incorporated, was expressed to apply "except as otherwise provided" in the North Sydney Plan. In that respect it was indistinguishable from cl 8(4) of the Plan (pars 23, 24). Clarke JA said (235-6) that cl 14A (1)(a) provided otherwise because: It prohibits ... the erection of a residential flat building on particular blocks of land situated in Zone 2(c). It is as much concerned with land use as clause 9 is for it prohibits the use of land enjoying the specified characteristics for the named purpose. In a sense it both supplements and qualifies clause 9. It qualifies the clause because it prohibits the use of identified blocks for a purpose which ... would otherwise be permissible under the zoning table and it supplements clause 9 by making further provision in respect of land use within zone 2(c). There is no requirement that all provisions regarding land use appear in clause 9. Indeed the opening words 'Except as otherwise provided' make it plain that other provisions bearing on land use appear in the Plan and are intended to have operative effect notwithstanding that there is a measure of inconsistency between those clauses and clause 9. Understood in this way the zoning provisions and clause 14A (1)(a) operate in conjunction. Under the table a number of uses are prohibited throughout the zone. Under [the clause] an additional land use ... is prohibited in respect of particular sites within the zone ... no doubt the particular prohibition could have been incorporated in clause 9 and if that had occurred I apprehend it would not be suggested that it lay down a development standard. The fact that it didn't appear in the table but later in the plan is, in the light of the express terms of clause 9, of no moment ... The point is reinforced by the fact that [the clause] lays down an absolute prohibition on the use of certain land for a particular purpose whereas development standards lay down requirements or standards against which the proposed development is to be measured. 25Most recently, in Agostino v Penrith City Council [2010] NSWCA 20, 172 LGERA 380 there was a division of opinion in the Court of Appeal as to what constitutes a development standard. Under the local environmental plan considered in that case development was prohibited but there was an exception in cl 41 which provided: Notwithstanding any other provision of this plan, a person may, with the consent of the council, carry out development on land to which this clause applies for the purposes of a fruit and vegetable store with a maximum floor area of 150 sq m. 26Tobias JA (Giles JA agreeing) held that this clause comprised a prohibition upon development for the purpose of such a store having a floor area greater than 150m2 and did not contain a "development standard". His Honour reasoned at [43] - [47]: 43 As has been stated on a number of occasions in the authorities to which I have referred, at the end of the day what is involved in the resolution of the present issue is a question of construction of the particular provisions of the particular planning instrument under consideration. The starting point in the present case, in my view, is the proposition that prior to the insertion of cl 41 into the LEP, a fruit and vegetable store, being a shop (as defined) was a prohibited use. Clause 41 was inserted as an exception to that general prohibition to provide for a particular permissible use on a particular parcel of land. 44 The description of that permissible use is to be found in cl 41(3). In my view the Council's submission that the proper description of that use is a "fruit and vegetable store with a maximum floor area of 150m2" should be accepted so that any such store with a floor area (as defined) exceeding that maximum falls outside the purview of cl 41(3) and is thus prohibited. 45 In Lawrence Browning Basten JA (at [102]), when dealing with the proper identification of the development proposed in that case, observed: Part of that identification should have included reference to the zoning criteria for the land on which the proposed development is to take place. That is because the particular zoning criteria are essential considerations in determining whether the development is permissible. It is clear that, had the erection of dwelling houses been proposed with respect to land on which such a development was not permitted, the decision would have been different. If the consolidation requirement were understood to be a part of the zoning of the land, on the same logic the result would have been different. 46 In the present case, what one is required to do is to identify the proposed development and then to determine whether it falls within the description of that which cl 41(3) makes permissible with consent. In performing this exercise it is necessary to identify which criteria are essential conditions in determining whether the particular development proposed is permissible. Thus as Giles JA observed in Lowy at [116], it is necessary to first address the LEP by reference not only to principle but also to its own structure and provisions. In so doing care is also to be taken to ensure that form does not govern substance: Poynting at [93]. 47 What are those criteria in the present case? As a matter of language, in my view the criteria, which are the essential considerations for determining the permissibility of the proposed development of the appellants, are two-fold. First, the proposed development must be a fruit and vegetable store as defined. Second, it must have a maximum floor area (as defined) of 150m2 . That which is proposed satisfies the first criterion but not the second. It is therefore prohibited. 27McClellan CJ at CL, dissenting, took the view that the clause contained a development standard. His Honour considered that to ask "first whether the control operates as a prohibition is to ask the wrong question. Every requirement or standard amenable to SEPP 1 will be a prohibition": at [71]. In his Honour's view, a provision in a planning instrument which specifies any numerical control of a proposed development almost certainly will be a "development standard" as defined: at [68]. 28Agostino was concerned with a somewhat different planning instrument scheme than the present case. In Agostino a local environmental plan prohibited the development of land for the purposes of a fruit and vegetable store but cl 41 constituted an exception. In the present case, brothels are permissible with development consent in the relevant zone but cl 36B(3), (4) and (5) comprise exceptions by prohibiting brothels in certain circumstances. However, those exceptions have to be construed in the context of cl 7(2) of SREP 5 which provides that "Except as otherwise provided by this plan, the development control table for each zone specifies the development within each zone that:...(b) may be carried out only with development consent". Thus, any exception identifies "which criteria are essential conditions in determining whether the particular development proposed" is prohibited: Agostino at [46]. 29I am bound by the view expressed by the majority in Agostino which attached importance to whether a use is "prohibited". Given the terms of cl 7(2) and since cl 36B(5) is couched in terms of a prohibition, I am driven to the conclusion that cl 36B(5) is not a development standard amenable to a SEPP 1 objection and that the proposed use for the purpose of a brothel at the Premises is prohibited. 30Assuming that I am in error such that a SEPP 1 objection could be made and possibly upheld opening the door to a possible consent, I would still grant an injunction restraining the use of the Premises as a brothel or for related sex uses having regard to the following matters: (a)The respondent has been operating in breach of the planning instrument and conditions of consent for some six years. (b)The planning laws are enforced in the protection of the public interest. Generally, strong countervailing circumstances would be required before a court should fail to enforce a planning consent: Woolworths Ltd v Campbells Cash & Carry Pty Ltd (1996) 92 LGERA 244 at 61 per Cole JA. The only countervailing circumstances proffered by the respondent is that if it is not allowed to unlawfully operate until it obtains a development consent, for which it has not yet applied, it will suffer financial detriment. (c)The respondent has operated for at least six years deriving the majority of its income, it can be inferred, from illegal operation. (d)The respondent attempted to conceal its unlawful operation by providing information to the Council which was incorrect. (e)No development application has been lodged and no undertaking to the Court has been proffered as to the timing of making a development application and prosecuting it expeditiously. (f)There has been a deliberate disregard of the relevant law for an enduring period. (g)The respondent will still be able to carry on a lawful business at the Premises.

ORDERS 31The Court makes the following orders: (1)Declaration that the respondent has not complied with Order No 2056 issued by the applicant on 16 November 2010 to cease using Level 1 "The Annexe", 7 Help Street, Chatswood, also known as Suite 2, 7 Help Street, Chatswood (Premises) as a brothel or for any related sex uses (Brothel Closure Order) and, accordingly, is in breach of the Environmental Planning and Assessment Act 1979 ( EPA Act ). (2)Declaration that the respondent has carried out development in breach of the EPA Act being the use of the Premises as a brothel where such use is prohibited by cl 36B(5) of the Sydney Regional Environmental Plan No 5 - (Chatswood Town Centre) and s 76B of the EPA Act. (3)Declaration that the respondent has carried out development in breach of the EPA Act being the use of the premises as a brothel without development consent where such use requires development consent under cl 7I(2)(b) of the Sydney Regional Environmental Plan No 5 - (Chatswood Town Centre ). (4)Order that the respondent, by its employees, servants or agents be restrained from using, causing or permitting the use of the Premises: (i)as a brothel; or (ii)for related sex uses. (5)The respondent is to pay the applicant's costs. (6)The exhibits may be returned.

Amendments 16 June 2011 - Typographical Errors Amended paragraphs: 2, 5, 26 & 31 16 June 2011 - "with development consent" added to first line Amended paragraphs: 13 16 June 2011 - Typographical Ommission of Heading before this paragraph. Amended paragraphs: 23 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: 16 June 2011