Prostitution Licensing Authority v Neilson

[2010] QCA 159

SUPREME COURT OF QUEENSLAND

CITATION:

Prostitution Licensing Authority v Neilson [2010] QCA 159

PARTIES:

PROSTITUTION LICENSING AUTHORITY
(applicant/appellant)
v
DEBBIE KAY NEILSON
(respondent)

FILE NO/S:

Appeal No 14443 of 2009
SC No 8013 of 2009

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

22 June 2010

DELIVERED AT:

Brisbane

HEARING DATE:

8 June 2010

JUDGES:

McMurdo P and Holmes and Muir JJA
Separate reasons for judgment of each member of the Court, each concurring as to the order made

ORDER:

Appeal dismissed with costs

CATCHWORDS:

ADMINISTRATIVE LAW – JUDICIAL REVIEW – GROUNDS OF REVIEW – IRRELEVANT CONSIDERATIONS – where respondent holder of a brothel licence under the Prostitution Act 1999 (Qld) – where respondent charged with offences of illegally procuring prostitution, attempting to procure the destruction of evidence and unlawful assault occasioning bodily harm – where applicant suspended respondent’s licence to operate a brothel – where primary judge found that, in exercising its power under the Prostitution Act 1999 (Qld) to suspend the respondent, the appellant failed to take into account the strength of the prosecution’s case and the fact that the respondent’s brothel was well managed – where trial judge considered it necessary that there be some connection shown between the criminal activity alleged and the privilege of holding the licence – whether trial judge erred in holding that such a connection need be shown – whether appellant failed to take into account relevant considerations in its suspension of the respondent’s licence.

Prostitution Act 1999 (Qld), s 17, s 19, s 26, s 27, s 29, s 30

COUNSEL:

G P Long SC, with N J Thompson, for the appellant
P J Davis SC, with S A McLeod, for the respondent

SOLICITORS:

McInnes Wilson for the appellant
McLaughlins for the respondent

1. McMURDO P:  I agree with Holmes JA’s reasons for dismissing this appeal with costs.

1. HOLMES JA: The respondent, Ms Neilson, holds a brothel licence pursuant to which she may lawfully operate a brothel in premises at Woolloongabba. In April 2009, she was charged with a number of prostitution offences relating to the carrying on of an illegal escort business unconnected with the licensed brothel, as well as offences of attempting to procure another person to destroy evidence and unlawful assault occasioning bodily harm. Under ss 27 and 29 of the Prostitution Act 1999 (Qld), the Prostitution Licensing Authority suspended her licence for a period of 12 months, a decision which was set aside on a judicial review application.

1. The Authority now appeals the setting aside of its decision on grounds that the learned primary judge erroneously considered it necessary that some connection be shown between the criminal activity alleged and the privilege of holding the licence, and that he wrongly found that the Authority had failed to take into account relevant considerations: the strength of the prosecution case and the fact that Ms Neilson’s licensed brothel was well-managed.

The Prostitution Act

1. Part 3, Division 1 of the Prostitution Act sets up a licensing system for brothels. It provides, in Sub-division 1, for the granting of a brothel license to a “suitable person”. Section 17 sets out the matters relevant in deciding whether a prospective licensee is suitable; they include whether the person is of good character, has adequate financial resources to ensure the brothel’s viability, will put arrangements in place to ensure the safety of the persons employed in providing prostitution, and has a transparent business structure for the brothel’s operation which enables all his or her associates to be readily identified. Section 19 concerns the licence issued; it is a personal one and authorises operation of the brothel only at specified premises, subject to the Sustainable Planning Act 2009 (Qld).

1. Sub-division 2 in the same Part of the Act deals with licence cancellation and disciplinary action. Section 26 enables the Authority to conduct a disciplinary inquiry to decide whether there are grounds to take action against a licensee, while s 29(2) confers power on it to take disciplinary action once satisfied there are grounds to do so. The grounds for taking disciplinary action are set out in s 27, and include the fact that the licensee has been charged with or convicted of an offence. (No statutory criteria are provided for the exercise of the discretion as to whether to take action against the licensee, but it was common ground in the present case that it was to be exercised with reference to the public interest.) Section 30 limits the disciplinary action which may be taken where a licensee has been charged with an offence to suspension of the licence for no longer than one year. That suspension must be removed immediately if the charge is withdrawn or the licensee is not convicted of the offence. A licensee convicted of a “disqualifying” offence (an offence of a kind specified by schedule 4 to the Act, including prostitution offences) automatically has his or her licence cancelled.

1. Offence provisions in Part 6 of the Act are directed to ensuring public health, safety and convenience in connection with the provision of prostitution services.  Soliciting for prostitution must not occur other than in a licensed brothel.  No more than 13 persons may work in a brothel, and licensed brothels must at all times be personally supervised by the licensee or a manager approved under the Act.  It is an offence for a prostitute to provide sexual intercourse without a prophylactic, or for a person who has a sexually transmitted disease to work or be permitted to work as a prostitute while infectious.

The Authority’s decision

1. The Authority had before it the charges, a document described as an “overview of allegations” and the Police Service court brief.  Ms Neilson relied on a number of affidavits from staff members who deposed to the orderly and lawful management of the brothel, as well as her own affidavit generally denying the offences and affirming her expertise and diligence in the running of the brothel.  It does not seem that there was any challenge to the evidence that the brothel was a well-run establishment, and the Authority proceeded on that basis.

1. The Authority referred to the charges, noting that it appeared that

“… the prosecution case may be supported by documentary evidence, computer files and telephone records”

and that the assault was said to have been captured on closed-circuit television footage.  On the other hand, three statutory declarations had been tendered to the effect that no injury was observed to the person said to have been assaulted and Ms Neilson asserted that the video footage did not clearly show any assault.  The Authority concluded, in consequence, that it was doubtful that there was any supporting evidence for the assault. 

1. The Authority went on to consider the material advanced on Ms Neilson’s behalf as to the brothel’s management, and said this:

“90. There is a deal of affidavit material placed before the Authority that the licensed brothel ‘88 on Logan’ is very well run and that Ms Neilson is meticulous in her conduct of the licensed brothel.

91. Nevertheless, that does not really bear on the allegations in the QP9’s which allege that most of the illegal activity occurred elsewhere, not at ‘88 on Logan’. Accordingly, a great deal of the material is of very little assistance on crucial matters.”

1. Nothing further was said on this aspect.  The Authority turned to Ms Neilson’s “blanket denial” of the charges, before setting out its conclusion:

“96.The Authority notes that this is not a case of an isolated offence, but of a number of serious breaches of Criminal Code and the Commonwealth Criminal Code over a number of months. The Authority notes that the QP9’s do not allege that Ms Neilson was a participant in organised crime or engaged in money laundering. Nevertheless the allegations in the QP9’s are of activities totally incompatible with the system of strict regulation permitting prostitution to be conducted lawfully at a licensed brothel. As was noted by the Victorian Attorney General, a tough set of controls raises a barrier against organised crime, protects communities against the uncontrolled spread of brothels, affords some level of protection of those who have resorted to prostitution, and guards under-age children from the effects of prostitution. The Authority is of the opinion that the public interest requires that the licence of Ms Neilson be suspended.”

The decision on review

1. In his judgment, the learned primary judge discussed at some length the public interest consideration in the decision making process.  The terms of the legislation indicated, he said, that there were fundamental matters in considering what was required to protect the public interest:

“These would include the obvious need to ensure that licence holders are of good character and do not jeopardise public confidence that brothel premises under their control will be conducted lawfully and in accordance with prescribed standards; that they will not abuse the privilege and special knowledge of the industry in order to engage in unlawful activities; that the industry be protected from persons likely to take advantage of the privileges enjoyed by a licensee; that the persons who provide the services are not exploited.  As well, where there are consequences of disciplinary proceedings which take away public benefit, that loss might have to be weighed against the need for protection.  It seems to me to be inescapable that when the only penalty flowing from disciplinary action is not discretionary but the suspension of the licence itself, there needs to be shown some adverse connection between the allegations and the licensee’s privilege in holding the licence.” [1]  (Italics added.)

The first part of that passage is uncontentious; it is the last sentence which the Authority says manifests error.

[1]      Neilson  v Prostitution Licensing Authority, unreported, Jones J, SC No 8013 of 2009, 9 December 2009 at [49].

1. Issue is also taken with his Honour’s conclusions:

“What confronted the Authority in deciding to take disciplinary action was whether the public interest required, because of the allegations set out in the charges, the suspension of the licence used to conduct the well-managed brothel.  The evidence that the brothel was very well run and that the applicant was meticulous in her conduct of the brothel appears to have been accepted by the Authority.  There was nothing suggested to the contrary.  That fact, it seems to me, was a most material consideration.  The Authority’s conclusion that it ‘does not really bear upon the allegations’ appears to have removed the conduct of the brothel from the Authority’s consideration on the issue of the suspension.  The Authority’s failure to consider this evidence, in my view, constitutes a failure to have regard to a relevant consideration.

This feature seems to me also to be relevant to the issue of the character of the applicant.  In a sense there are competing considerations between the established good character of the applicant insofar as she was granted the licence (and probably had it renewed) and the impact of the allegations suggestive of wanton character.  Those considerations ought to have been weighed but as it appears there was no assessment of the strength of the prosecution case nor of the applicant’s character.  For the Court to do so would be an impermissible assessment of merits.  Such an assessment was, in my view, a necessary consideration in the public interest in circumstances where the only outcome is suspension of the licence.  The Authority’s failure to have such regard was, in my view, an error.”[2]

[2]At [53]-[54].

The Authority’s contentions

1. The Authority contends that the learned judge’s statement, that an adverse connection between the allegations and the privilege of holding the licence must be shown, discloses a fundamental error in his approach. It was not necessary, it says, that the subject matter of the charges involved the operation of the brothel. Nor was whether the brothel was well-managed a consideration which the Authority was bound to take into account. The existence of s 27(d) of the Act, which makes it a ground for disciplinary action that

“the licensed brothel is or has been managed in a way that makes it desirable that action should be taken ...”,

showed that the standard of management was not a relevant consideration when the alternative ground for taking disciplinary action, that the licensee had been charged with an offence, was at issue. 

1. In any case, the primary judge was wrong to say that the fact that the brothel was well-managed had not been considered.  The Authority’s reasons indicated that it had taken into account the fact that Ms Neilson had conducted the premises properly and accorded it little weight, regarding it as of “very little assistance”.  The reference in the last quoted paragraph of the primary judge’s reasons to the consideration of Ms Neilson’s character seemed to relate back to the finding of failure to have regard to Ms Neilson’s high standard of management of the brothel, but was also based on an erroneous conclusion that the Authority had not assessed the strength of the prosecution case.  While no detailed evaluation of the charges was practicable, the Authority had given consideration to the strength of the allegations.

Discussion

1. The learned judge’s allusion to a necessary link between the allegations and the licensee’s privilege did not, contrary to the Authority’s perception, articulate a requirement that the criminal conduct alleged be connected with the running of the licensed brothel.  The connection identified was not between the conduct and the business, but between the conduct and the privilege of licence-holding.  His Honour rather stated (with respect) the obvious: that if the alleged criminal activity bore no relationship to the appropriateness of the licensee’s continuing enjoyment of the privilege, it could not warrant disciplinary action in relation to the licence.  So, for example, a minor traffic offence may have no bearing on either the licensee’s character or the likelihood of his or her brothel being run safely and in compliance with the Act.

1. The Authority is justified, in my view, in asserting that it did make at least some assessment of the strength of the prosecution case.  It referred to the nature of the documentary and other evidence which was apparently available to support the prostitution-related charges and also had regard to evidence Ms Neilson put forward in relation to the assault charge, noting that there was reason for doubt as to the strength of that charge.  On the limited material before it, it is difficult to see how it could have done more in evaluating the case against Ms Neilson.  Accordingly, I do not consider that the Authority failed to take the strength of the prosecution case into account.

1. The learned judge regarded the evidence as to Ms Neilson’s exemplary management of the Woolloongabba brothel as relevant both to her character and to the larger question of public interest.  So far as the first is concerned, it does not seem that the Authority regarded her, but for the allegations, as other than of good character.  But as to the latter, as the learned primary judge observed, the Authority (in paragraph 91 of its decision) took the view that the evidence showing that the brothel was well run was relevant only in so far as it bore on the allegations of criminal activity, and since most of that activity occurred elsewhere (with the exception of the assault and destruction of evidence) it regarded that material as “of very little assistance”. 

1. The policy of the Prostitution Act is to promote the public interest by ensuring that brothels are safe and lawful.  It does so by requiring that they be run by persons of good character, from appropriate premises, in operations which ensure the safety of the employees and the clients, are financially sound and involve business arrangements which are readily scrutinised.  The charges against Ms Neilson went to the first requirement.  Her continuing compliance with the others remained relevant in any consideration of where the public interest lay in exercising the discretion to suspend.  The fact that the Act (not surprisingly) recognises that concerns about management may of themselves be such as to make licence suspension desirable does not negate, but rather reinforces, the relevance of the standard of the brothel’s management in considering the public interest.

1. The Authority failed to recognise the respect in which the consideration that the brothel was well managed was relevant: as going to the public interest in the maintenance of safe, legal, properly run establishments.  It was a relevant consideration to which it did not have regard, as the learned judge correctly found.  Because of that failure the learned judge was correct in making the orders he did.

Order

1. I would dismiss the appeal with costs.

1. MUIR JA:  I agree with Holmes JA’s reasons for dismissing the appeal with costs.