Burwood Municipal Council v C. North

[1989] NSWLEC 188

Land and Environment Court

of New South Wales

CITATION:	Burwood Municipal Council v. C. North [1989] NSWLEC 188
PARTIES:	APPLICANT Burwood Municipal Council RESPONDENT C. North
FILE NUMBER(S):	10275 of 1987
CORAM:	Hemmings J
KEY ISSUES:	:-
LEGISLATION CITED:	Land and Environment Court Act 1979 Environmental Planning and Assessment Act 1979
CASES CITED:	Gray v. Fairfield City Council 1987; Ryde Municipal Council v. Royal Ryde Homes and Anor,(1970) 19LGRA 321; Parramatta City Council v. Shell Company of Australia Ltd, (1972) 26LGRA 25.; Minister for Aboriginal Affairs and Anor v. Peko-Wallsend Limited and Ors, 162CLR 24
DATES OF HEARING:
DATE OF JUDGMENT:	05/02/1989
LEGAL REPRESENTATIVES:

JUDGMENT:

HIS HONOUR: Christine North, with the consent of the owner, made a development application to Burwood Municipal Council to use premises known as 88Parramatta Road, Croydon, for:|CF2.|PSI

"...commercial premises. Insofar as the Council seeks details of the use of the premises, they will be used for the purpose of prostitution."|CF1.|PSO

At its meeting of 26thMay, 1987 the Council rejected the said application for the reason "it would enjoin Council in an illegal act". The applicant appealed to this Court and on 22ndSeptember, 1987 Senior Assessor Jensen determined that appeal by granting development consent to the use of the subject premises for |CF2.|PSI "commercial purposes involving prostitution"|CF1.|PSO,

subject to a number of conditions.

Council appeals to this Court pursuant to s.56A of the Land and Environment Court Act 1979 ("the L.&E. CourtAct").

Council submits that the Assessor erred in law in:-

1. That the only decision reasonably open to him on the facts was that the respondent was the keeper of a brothel within its meaning as a common law misdemeanour.

2. Failing to give consideration as to whether the development consent, as granted, would be for a common law misdemeanour.

The respondent submits that:-

1. A question of law arises if the only decision reasonably open to the Senior Assessor was that the respondent was the keeper of a brothel within the common law misdemeanour.

2. In reaching this decision on the balance of probabilities the Court will take into account the gravity of the allegation; i.e. the commission of a criminal offence.

3. The Court should be particularly slow to reach such a conclusion where it knows, as it does here, that proceedings have been instituted under the Disorderly Houses Act. The very issues which would lead the Court to refuse to exercise its discretion in favour of the respondent will be agitated in the Supreme Court.

4. The conclusion in Gray v. Fairfield City Council (10559/86, unreported, CrippsC.J., Land and Environment Court, 24thNovember 1987), is wrong or distinguishable on a number of grounds.

5. The evidence in this case was capable of supporting a finding and the learned Assessor did find the premises were not conducted as a brothel.

It is common ground that a use of the subject premises for "commercial purposes" is permissible under the relevant environmental planning instrument with the consent of the Council. At the time of the said development application the subject premises were used for the purpose of a brothel and on 9thJune 1987 SteinJ., on application by the Council, made the following orders:|CF2.|PSI

"1. The respondent by themselves, their servants and/or agents be restrained from using or causing or permitting to be used, the premises known as 88Parramatta Road, Croydon, for the purposes of prostitution with the consent of the applicant.

2. That the operation of this order be suspended until seven days after the dismissal, should that occur, of the present application (10275/87)."|CF1.|PSO

It is also common ground that, for the purpose of making this application, the applicant sought legal advice and devised a licensing arrangement and management procedures intended to bring the use of the premises outside the meaning of "brothel" as a common law misdemeanour. The Assessor apparently formed the opinion that the proposed use, which he described as "a potentially emotive commercial activity", was accepted by the Council as having no environmental or other planning implications under s.90 of the Environmental Planning and Assessment Act, 1979 (the E.P.&A.Act"). The Assessor described the "fundamental issues" as being:

1. Legal issues as to whether what was proposed constituted a brothel.

2. Whether the Land and Environment Court had power to approve a brothel.

3. Whether, as a matter of policy, it should do so.

The hearing of the matter then took an unusual course. The above "issues", at the request of the parties, were included in a number of "questions of law" which were referred by the Assessor to the Chief Judge pursuant to s.36(5) of the L.&E. CourtAct. The referred matters, as formulated by the parties, concerned both matters of fact and law. It is apparent that to enable a Judge to answer questions of law, relevant matters of fact should have first been determined by the Assessor. There was no determination by a Judge of referred questions of law, and the matter was returned to the Assessor who, in his reasons for judgment, stated that the Judge requested that |CF2.|PSI"the planning and environment issues be determined first"|CF1.|PSO. The hearing before the Assessor proceeded pursuant to s.36(6)(a) and evidence was taken over two days.

The Assessor made a number of findings of fact and said:|CF2.|PSI

"The reason that the Council has refused to deal with the matter is related to a concern that it would be involving itself in an activity which it believes is illegal in terms of other parts of New South Wales law. This latter area, which involves a determination as to the meaning of the term "brothel", its legality and its relevance to what is before the Land and Environment Court, it is not my intention to traverse. |CF1.|PSO(Emphasis added.)

|CF2.|PSIBy contrast, what was presented to this Court and, apart from its special complexion, being involved in commercial transactions involving sex, is not seen to be other than a commercial activity, which in terms of s.90 is entirely acceptable at the location at which it presently exists. On this basis the conclusion is unarguable that what is sought at No.88 Parramatta Road should be approved."|CF1.|PSO

However, the Assessor did not refer the matter back to CrippsC.J. for determination of the questions of law upon his findings of fact. He said:|CF2.|PSI

"If, as a matter of law, the premises which has been presented to this Court is deemed to be a 'brothel' is further deemed to be illegal and therefore this Court should as a matter of policy refuse its consent, then evidently the respondent has rights of appeal available under the Land and Environment Court Act. In anticipation of this eventuality, a transcript of the proceedings has been obtained."|CF1.|PSO

Notwithstanding that the matter had been returned to the Assessor for determination of necessary facts and the planning and environment issues only, he granted a development consent for the proposed use. In my opinion, it is abundantly clear that in so doing the Assessor made an error of law.

S.36(6) provides:|CF2.|PSI

"Where a question is referred to the Chief Judge under subsection (5) -

c) the assessor or assessors shall not make an order or decision to which the question is relevant until a Judge has determined the question;"|CF1.|PSO

The referred questions of law were obviously relevant to the orders and decision of the Assessor and he therefore had no authority to make the order granting development consent. His duty pursuant to s.36(6), after finding relevant matters of fact, was to await the determination of the referred questions of law.

The Assessor has erred in law and, pursuant to s.56A, Ishould uphold the appeal and set aside the decision to grant a development consent. However the parties agree, and the Chief Judge directs, that as the questions of law referred pursuant to s.36 are the same questions raised in this appeal, if possible all relevant questions of law should be determined by me in these proceedings.

It is an open question as to the power of a consent authority to grant development consent to a purpose which, if implemented, would be a common law misdemeanour (Gray's case, supra). Nevertheless the Council and this Court on appeal have a duty pursuant to s.90 of the E.P.&A.Act to determine, in the exercise of discretion and after a consideration of the circumstances of the case and the public interest, whether an application for that purpose should be approved.

The order of the Assessor in this matter to grant development consent is in the widest of terms. It expressly permits the use of the subject premises for the purpose of prostitution. However, none of the conditions of the development consent prohibit its use as a brothel, or limit the number of prostitutes who may use the premises at any one time, or restrict the use of rooms in the building to the purposes designated on the plan accompanying the application, or even in accordance with the licence agreement or in the manner described by the applicant. Whilst the applicant has devised procedures and arrangements for the way in which she presently intends to use the building, unless expressly or by necessary implication included, such matters or even particulars of the application for development consent are not embodied in the approval; see Ryde Municipal Council v. Royal Ryde Homes and Anor,(1970) 19LGRA 321, and Parramatta City Council v. Shell Company of Australia Ltd, (1972) 26LGRA 25. A development consen

t is not personal and runs with the land, and may therefore be used for approved purposes by subsequent owners or occupiers unrestricted by details of the application which are not necessarily incorporated in such approval.

In my opinion, in breach of s.90 of the E.P.&A.Act, the Assessor failed to take into consideration as a relevant circumstance of the case and the public interest, in the determination of the development application, whether or not the orders he proposed to make would permit the premises to be used or were proposed to be used by the applicant for the purpose of a common law misdemeanour. Whilst Iaccept the Assessor's finding that what is proposed could be merely described in planning terms as "commercial transactions", the order made is to grant a development approval which would, by its terms, also permit the premises to be used for the purpose of keeping a brothel. In my opinion, many criminal activities, e.g. storage, packaging, distribution, or buying and selling of narcotics, in the planning sense may also be described as commercial or industrial uses. Clearly, questions of public interest and public policy demand that the consequence of granting a development consent for the use of premises intended for

such criminal purposes must be taken into consideration. In my opinion, in the same way it is against the public interest to grant consent for what has been determined to be a common law offence and, if carried out, would render the user liable to a term of imprisonment.

However, the respondent submits that the Assessor granted the said development consent because he determined on the facts that the development was not for the purpose of a brothel. Notwithstanding that, in his reasons for he judgment expressly declined to "traverse" the meaning of the term "brothel", its legality or its relevance to the subject application, some doubt arises because he did make a number of findings of fact which the respondent submits can only be relevant to a determination by him of the questions of law referred to a Judge.

The Assessor canvassed the evidence of the steps taken by the applicant as the former manager of the brothel to|CF2.|PSI

"...transmogrify herself into a commercial tenant of the owner of the building, who receives fees, on an agreed basis, from sub-lessees. The applicant, as a part of the agreement, provides certain domestic services including cleaning and gardening, but does not, it appears, involve herself in direct management of the girls' activity or with their clientele."|CF1.|PSO

In my opinion, on a fair reading of the Assessor's reasons, it is clear that he made no findings as to whether such steps taken by the applicant were successful, and therefore that he was of the opinion that the proposed use was not that of a brothel. In my opinion, the only facts determined by the Assessor were those necessary to find whether the use was for a "commercial purpose" in the defined planning sense, and therefore permissible in the relevant zone.

Iam satisfied therefore that also for those reasons this appeal must be upheld. The Court may therefore remit the matter to the Assessor for determination in accordance with this decision, or "make such other order in relation to the appeal as seems fit" (s.56A(2)(b)). The usual order is to remit the matter to the Assessor as the sole arbiter of matters of fact and this Court must not exceed its supervisory role by reviewing or precluding a decision on its merits; Minister for Aboriginal Affairs and Anor v. Peko-Wallsend Limited and Ors, 162CLR 24. If on such facts different conclusions are reasonably possible, this Court cannot substitute its opinion for that of the Assessor. However, if the matter is remitted and only one conclusion is open on such facts and the decision of the Assessor was to the contrary, that would be an error of law.

In the hearing before the Assessor, not only were relevant matters of fact as to the nature of the use in issue, but the credibility of some witnesses was strongly challenged. However, in order to determine what orders Ishould make, Iwill assume that the premises will be conducted by the applicant and her licensees in the manner described by her, if development consent is ultimately granted by the Court.

The applicant leases 88Parramatta Road from the registered proprietor to enable her to earn licence fees from its use by a number of prostitutes for the purpose of prostitution.

The subject premises has a narrow building thereon which was erected originally as a semi-detached dwelling. It has frontage to Parramatta Road and a parking area at the rear facing Wychbury Lane. The premises has a side entrance and a rear entrance, and a laundry and additional toilet at the rear. Access to the premises by the rear entrance is to a room described as a "reception" area with a number of chairs, and a kitchen annexe. The reception area leads into a room described as "Lounge2", giving access to "Bedroom2". A door in the hall, if closed, restricts access to all parts of the building. An access is available from the side passage to a hall, bathroom, a room which apparently previously was a bedroom and now is described as a lounge room with chairs, and a large bedroom described as "Bedroom1". Each room is provided with appropriate furniture by the applicant.

The prostitutes are not sub-lessees and there is only a licensing arrangement between the applicant and two prostitutes to conduct their trade in identified parts of the same building. Such licensee is granted sole right and privilege to conduct the business of prostitution, and for such purpose, access by servants, agents and members of the public. However, with the consent of the licensor, the prostitutes may assign the benefit of the licence and her rights thereunder for the purpose of prostitution. Iassume that with the applicant's permission the prostitutes might assign rights to enable each other, their servants or agents or others to use the whole building as one enterprise. The licence may be terminated on seven days' notice in writing by either party.

The parts of the building described as reception, kitchen and laundry are common areas. There is a communal telephone and answering machine for the use of the prostitutes. Apparently any prostitute may answer telephone calls made to the premises, but there is no common appointment book and each prostitute makes individual appointments. There is no receptionist provided at the premises, but this is not prohibited by the licence. The applicant attends only for the purpose of collecting the licence fees once a week and checking the condition of the premises. A cleaning service and laundry service provided by the licensor. The prostitutes covenant with the licensor that each of them will at least once per week submit herself to a medical examination and prevent herself contracting sexually transmitted diseases.

In my opinion, the only conclusion that the learned Assessor could have come to had he directed his attention to the question, even taking into account the gravity of the allegation, was that the use even as proposed by the applicant was to keep a place resorted to by a number of prostitutes and their customers for the purpose of prostitution or the provision of sexual services for reward. In all of the circumstances, in my opinion, the premises not only could but would be used as a brothel, which is for a common law misdemeanour and therefore development consent should be refused.

Irespectfully adopt the opinions of CrippsC.J. (Gray's case, supra) and, for the above reasons, consider that there is no useful purpose in remitting this development application to the Assessor. The rejection of this application does not preclude the making of a further and different application for consent to activities which would not necessarily involve the use of the premises as a brothel. In the exercise of my discretion therefore Iorder that the appeal be upheld.

The orders of the Court are:

1. Appeal upheld.

2. Development consent refused.

3. Exhibits may be returned.

4. Respondent to pay Appellant's costs of this appeal.