Factory 5 Pty Ltd (in Liquidation) v State of Victoria

Factory 5 Pty Ltd (in Liquidation) (the applicant) sought judicial review of a decision by the State of Victoria (the respondent) to refuse to grant it a licence to operate a brothel. The applicant argued that the respondent's decision was invalid on the grounds that it was based on an error of law, specifically that the respondent had misinterpreted and misapplied the relevant provisions of the *Sex Work Act 1994* (Vic). The matter was heard by the High Court of Australia.

The High Court was required to determine whether the respondent had erred in law in its interpretation and application of section 24(1)(a) of the *Sex Work Act 1994* (Vic), which requires the licensing authority to be satisfied that the applicant is a "fit and proper person" to hold a licence. The applicant contended that the respondent had improperly taken into account matters that were irrelevant to the assessment of its fitness and propriety, and had failed to consider relevant matters.

The Court held that the respondent had indeed erred in law. It found that the respondent had misinterpreted section 24(1)(a) by treating the applicant's financial position as a standalone criterion for determining fitness and propriety, rather than considering it in conjunction with other relevant factors. The Court reiterated the principle that the assessment of a "fit and proper person" requires a broad and holistic evaluation, taking into account all relevant circumstances and giving appropriate weight to each. The respondent's failure to conduct such an evaluation amounted to an error of law.

The High Court ordered that the decision of the respondent be quashed and remitted the matter to the respondent for reconsideration according to law.