Sibuse Pty Limited v Shaw

[1988] HCATrans 102

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S57 of 1988

B e t w e e n -

SIBUSE PTY LIMITED

Applicant

and

VINCENT FREDERICK SHAW

Respondent

Application for stay and

injunction

MASON CJ

(In Chambers)

Sibuse

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 27 MAY 1988, AT 10.17 AM

Copyright in the High Court of Australia

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MR K. MURRAYd QC:  May it please, Your Honour, I, with my learned

frien s, MR F. DONOHOE and MR P. MOONEY appear for the

applicant. (instructed by Vereker & Partners)

MR B. COLES:  I appear, if Your Honour pleases, for the

respondent.	(instructed by the New South Wales Crown
Solicitor)

MR MURRAY: This is an application, Your Honour, for a stay of

proceedings and an injunction in order to prevent action

on the order of the court of first instance pending the
hearing of our application for special leave to appeal
against the dismissal by a majority of our appeal by

the Court of Appeal of New South Wales.

HIS HONOUR: Yes.

MR MURRAY:  We have put on a summons and an affidavit, Your Honour.

I understand that Your Honour's chambers were furnished quite late this morning with a copy of the reasons of

Their Honours below for refusing the application for - - -

HIS HONOUR:  That is correct. I have read the judgments of the

Full Court on the appeal itself and also on the application

for a stay.

MR MURRAY:  If Your Honour pleases, we respectfully submit that

it is a case which comes directly within the BURGUNDY ROYALE

provisions.

HIS HONOUR:	What does BURGUNDY ROYALE say?
MR MURRAY:	It says, Your Honour - it is a name that I have picked

up as part of the title of the case, Your Honour.	It is a
decision which is more broadly described as JENNINGS

CONSTRUCTIONS V BURGUNDY ROYALE INVESTMENTS PTY LIMITED.

Your Honour, I have a copy of the judgment. It is a	decision of His Honour Mr Justice Brennan. Would
Your Honour mind me if I handed to Your Honour my own copy which is underlined with the parts that I would be
referring to? It might save a moment.

HIS HONOUR: 

Yes, certainly, that is all right.

MR MURRAY: 

It says, Your Honour, that whilst an application to

prevent the operation of an order against which an
application for special leave is brought does - I think
in the words of His Honour:

is an extraordinary jurisdiction -

of the Court.	I am talking of the parts I have underlined,
Your Honour, at page 267.	I now have clean copies if
Your Honour would prefer.

HIS HONOUR:  No, no, this is quite satisfactory.

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MR MURRAY:	And we say, Your Honour, that	the principles

set out there - there are three criteria that His Honour refers to and we respectfully submit that we meet those.

And developing, Your Honour, very briefly the argument in

support of that, the consequences of the order are

traditionally described as drastic. We respectfully

submit that the decision of the Court of Appeal appealed

against which was by a majority goes against a long line

of authority in New South Wales since the enactment of

the DISORDERLY HOUSES regulation legislation.

We respectfully submit that the decision of Their Honours,

the majority, particularly that of His Honour

Mr Justice McHugh,	is against the decision of this Court
in the case of TANOS, Your Honour.	We have that here also.

HIS HONOUR:  But the legislation has been significantly changed

since TANOS, has it not?

MR MURRAY:  Yes, Your Honour, the legislation of the DISORDERLY

HOUSES ACT has not been changed but legislation concerning

many of the activities caught by the DISORDERLY HOUSES

legislation has been altered. The only change, I think,

to the DISORDERLY HOUSES ACT, Your Honour, was a change

to that part concerning prostitution which followed a

decision of the Full Court of New South Wales in a case

of FERGUSON V GEE, which I also have here if Your Honour

wants it, which said that sexual intercourse between

consenting adults was not of the type of matter that was

caught by the then words of the DISORDERLY HOUSES ACT.

Thereafter, the DISORDERLY HOUSES ACT was changed to include the word "prostitution".

HIS HONOUR:  Why do you say Mr Justice McHugh's judgment is

inconsistent with TANOS?

MR MURRAY: In that TANOS, Your Honour, the judgments of

His Honour Mr Justice Dixon and His Honour - - -

HIS HONOUR:  Mr Justice Webb.

MR MURRAY:  Who - the joint judgment, Your Honour, refers to the discretion being a real one. His Honour

Mr Justice McHugh, if I have read it correctly, Your Honour, and in my submission this is what it means is that once the

fact is found of the proscribed activity, be it prostitution,

be it gaming, be it sly grog, be it the resorting of

criminals, that there is really no discretion except

those which arise out of the activities of the owner.

Now, I will respectfully submit that that is inconsistent

with what His Honour Mr Justice Dixon, as he then was -

the Chief Justice and Mr Justice Webb say at page 390 of

TANOS. I have TANOS here, Your Honour.

HIS HONOUR:  Yes. What do they say at page 390 that is

significant on this point?

MR MURRAY:  It is the part that is quoted, Your Honour, by the

Chief Justice in his decision in the court below. I have

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it, Your Honour, and perhaps I could give it to

Your Honour and read part of it as well from another

copy. It begins, Your Honour, at about point 3

where - - -

HIS HONOUR:	Page?
MR MURRAY:	At page 390, Your Honour.
HIS HONOUR:	Yes.
MR MURRAY:

The DISORDERLY HOUSES -

consists of and so on.

The original provisions, however, related

to gaming ..... Thus while the mechanism may

resemble it, the substance widely differs

from t..li.e earlier enactment. After some

definitions -

and so on. A quote:

"Upon the affidavit of a Superintendent ..... "

et cetera.

Then follow four lettered paragraphs setting

out certain respective conditions or states
of affairs. At the conclusion of the four
paragraphs the sub-section ends with the words

conferring the power, viz. "any judge of the

Supreme Court may declai:esuch premises to be a

disorderly house". It is scarcely necessary

to say that the word "may" confers upon the

or not at discretion. judge an authority which may be exercised

Authority is quoted.

In the opening words of the sub-section it

will be noticed that it is required that

"reasonable grounds" must be shown, which

no doubt means facts and circumstances

forming -

et cetera.

You must therefore begin with a superintendent

or inspector actually suspecting and -

thereafter, Your Honour. Your Honour, that case was

concerning a restaurant in Sydney known as the Cedars

of Lebanon. It may or may not help Your Honour's

recollection of the case. It was a restaurant where

liquor was being unlawfully sold.

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HIS HONOUR:	You have the advantage of me there, Mr Murray.
MR MURRAY:	No, Your Honour, not just because I am a resident

of Sydney, Your Honour. I have no advantage of Your Honour

at all. At any rate, Your Honour, it is clear from that

case that, in my respectful submission, the exercise of

the discretion is really the important part of the

legislation once the fact of the proscribed activity

takes place - is shown to be taking place.

The whole matter here, Your Honour, is that amendments

to the PROSTITUTION ACT and the VAGRANCY ACT which have
taken place in New South Wales recently leave a somewhat

peculiar situation. It is our argument that prostitution

is, per se, no longer illegal and that the PROSTITUTION

ACT made that so. And the matters that appeared to have

moved, particularly His Honour Mr Justice Priestley,

just were not, really, the subject of any argument,

debate or evidence in the proceedings before the Court of

Appeal. They were certainly adverted to in debate

between counsel for the then appellant and the bench
but, Your Honour, nothing by way of evidence was advanced

below nor was there any submission made on behalf of the

Crown below, nor in the Court of Appeal, except in

response to questions from the bench, relying upon the

concept that His Honour Mr Justice Priestley has developed

as to whether or not offences are probably taking place.

HIS HONOUR: Well now, what about the two suggested offences,

that the members of the Court of Appeal suggest are

in all probability, taking place? First of all, keeping

a brothel and secondly, living off the earnings of

prostitution?

MR MURRAY: Yes, wholly or in part. Your Honour,the second one

has been continued in the legislation, living wholly or

partly off the earnings of prostitution.

HIS HONOUR:	So, it is an extant criminal offence?
MR MURRAY:	I do not dispute that. What the definition means, Your Honour, of living wholly or in part, is a matter
and submissions and referrals to authority, none of which that would require, in my respectful submission, evidence
were before the Court of Appeal nor were they at all
referred to in the court below. Indeed, His Honour Mr Justice Grove below found that offences such as those
described in the PROSTITUTION ACT, sections 6 and 7,
were not occurring and were unlikely to occur.

The decision of His Honour Mr Justice Yeldham in

one of a series of cases with the name of the appropriate

police officer, SHEPARD - again, I have a copy of it

here if Your Honour wishes - refers to prositution not

being illegal; therefore, people going to such a premises

who are liable for arrest and imprisonment for a period of

six months, unless they can show that they had a lawful
purpose, it seems at least to be supported that such a

purpose··of - the purpose of the premises would be the defence.

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HIS HONOUR:  Yes, but as I understand it, Mr Murray, the premises

are being used for the purpose of prostitution.

MR MURRAY: That is not shrunk from, Your Honour.

HIS HONOUR:  No, and in effect it is being conducted as a

commercial operation.

MR MURRAY: All such premises, by definition - all such actions

are.

HIS HONOUR: Yes, I mean, it is not conducted - - -

MR MURRAY:  It shares that - that is part of the definition of

it.

HIS HONOUR:  Yes. So that somebody is making a profit from the

activities conducted there over and above any earnings

that the prostitutes may make.

MR MURRAY:  Your Honour, there is no evidence of that but it

would be inescapable that it was being run as - - -

HIS HONOUR:  Yes, it is an inference that one would draw from

the circumstances.

MR MURRAY:	It \\Ullld be a completely reasonable inference that the matter was being run for commercial purposes because it is
a building in a shopping centre in one of the inner suburbs of Sydney and, no doubt, someone is a landlord, someone is an owner and rent is being paid and so on. There is no evidence, Your Honour, as to who owns -
that is not quite true.  My respectful submission,
Your Honour, is that whilst it is clear that by definition
all such premises are conducted for commercial gain, there
is no evidence as to whether or not anybody is living off
of the earnings. It is a time-honoured phrase - - -
HIS HONOUR:	Can a company live off the earnings?
MR MURRAY: If a company can live, Your Honour - Your Honour I

would submit no. I would submit that by definition - - -

HIS HONOUR:	It is a question that has not arisen for decision?
MR MURRAY:	Not that I am aware of and I would say the way that the

legislation is intended, Your Honour - and I say this:

it is intended to attack those who prey on, who are the -

excuse me resorting to the vernacular - the touts of,

the pimps of - these are words in the language, Your Honour -
these people. They are the persons against whom those

provisions are directed.

HIS HONOUR:  But I suppose that individuals connected with a

company, for example, the manager, the people in control of it, the shareholders, could, through the moneys they derive from the operations of a company, be held to be living off

the earnings of prostitution.

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MR MURRAY:  Your Honour, I would respectfully submit that the term

is a term of art; it is designed not to attack people who

are indirectly in receipt of money from, such as the owner
of a hotel, the owner of a motel or, for that matter, the

landlord of premise who is collecting rent. Your Honour,

I would respectfully submit that - and this is not a

matter that has been debated in this case. It is a matter

which connnended itself to particularly His Honour

Mr Justice Priestley. It is a matter that was, as I have

said, not debated either in the court of first instance

or, really, in the Court of Appeal except it was mentioned

in passing.

HIS HONOUR:  You say, particularly connnended itself to

Mr Justice Priestley?

MR MURRAY:  Yes, Your Honour.

HIS HONOUR:  You may be right in saying that. My impression

was that it connnended itself to Mr Justice McHugh.

MR MURRAY: In certainly different words, Your Honour. But

coming - before I do answer that, Your Honour. A

company, in my respectful submission, could not be found

guilty to be living off the earnings of prostitution.

Whether or not someone who was employed by that company

in its administration could be or not, Your Honour,

is a different question. It is an old, old question

as to whether or not someone is receiving the proceeds

of crime or whether or not one is not. Indeed, as I

recall it, Your Honour, similar words are used in offences

which cite "living off the proceeds of crime" and I

respectfully submit that a company could not be living

off the earnings and it would be an extraordinary state

of affairs, in the absence of direct evidence, that

someone was within the meaning of the term living off
wholly and part of living from the earnings of prostitution,

that an employee of such a company could be doing that.

Your Honour, the fact that the money comes from

prostitution cannot be the answer. The person who is the

landlord who is collecting the rent, · the cleaner, the person who

provides the plants that periodically were brought in and

serviced in such a premises is, on one argument, receiving

money that is indirectly received from the income of this

premises or such premises which, I suppose, is therefore

the income from prostitution. But it is a total new

concept to the law, in my respectful submission, as to

whether such a person can be said to be living off wholly

or in part - living off the earnings of prostitution.

It is not "receiving money from", it is "living off" and

it is designed for the person who, as I have said -

Your Honour has heard what I have had to say about it.

HIS HONOUR:  What about the other offence, Mr Murray, that is,

keeping a brothel?

MR MURRAY:  Your Honour, I would say that it is at least arguable

that that has been repealed impliedly by the changes in

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the legislation including the PROSTITUTION ACT. There is

a new section in the PROSTITUTION ACT which says that

a person who commits a criminal offence who is keeping -

let me use that word for the moment - premises which are
used for prostitution but which are held out to be a

massage parlour or sauna premises. In other words, you cannot now hold a place out to be a massage palour or a

sauna palour and then run it as a bordello without

incurring criminal offences. Therefore, Your Honour.

it would need careful consideration whether or not the changes

have in fact repealed the common law offence of keeping

a bordello.

HIS HONOUR:  I must say I found it difficult to follow the

Chief Justice's judgment. He quote section 7(2) of the

PROSTITUTION ACT which seems impliedly to recognize the

existence of liability to penalty or punishment of

the keeping of brothels and that would suggest that the

section does preserve the common law misdemeanour.

MR MURRAY:  But, Your Honour, as I recall it - and I do have the

Act here, and perhaps I should hand immediately up to

Your Honour a copy of the PROSTITUTION ACT. My argument

would be that it is only where the premises have the

additional features of being available for the provision of massage, sauna steam, et cetera,"or held out as being available for the taking of photographs" that such a

premises"shall not knowingly suffer or permit the

premises to be used for the purpose of prostitution".

I would respectfully submit, Your Honour, that the

existence - and whilst, as I emphasize, none of this

has been argued yet; rio authority has been referred

to, nor was there any evidence put before the courts

below - I would respectfully submit, Your Honour, that

section 7(1) and section 7(2) of the Act make a new

offence of keeping premises for prostitution only where

they are being held out as section 7(1) indicates.

At least it is arguable, Your Honour.

It was considered by Mr Justice Yeldham in one of

the SHEPARD cases whether or not the PROSTITUTION ACT

provisions. His Honour said, no, and I think Your Honour	impliedly repealed the whole of the DISORDERLY HOUSES
will note that the Chief Justice noted that decision without dissent or disapproval.

But it seems, Your Honour, with respect. to

Their Honours below - and this would be a matter that

I would regard as being of some relevance to the merit of an application for special leave - that to go into

a matter about which there was no evidence and for which

there were no\• submissions, Your Honour, from either side,

and regard that as being firstly the reason for rejecting

the appeal and then, secondly, the reason for refusing the

application for a stay or proceedings, creates a situation

where something that has not been litigated is found

adversely to a party - to both parties in a sense - without,

Your Ho~our, it being canvassed at all, and it does create

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offences, Your Honour. It is an offence for a person

to be found in these premises. It is an offence for

the landlord or the occupier to continue to permit.

They become criminal offences then which carry gaol

penalties. And, Your Honour, I would respectfully

submit that it is irrelevant to the question of whether

or not a premises should be declared to be disorderly;

whether or not it is a common law offence to conduct

a common bawdy-house or even whether or not it is an

offence to live wholly or in part off the earnings of

prostitution.

(Continued on page 10)

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MR MURRAY (continuing):  No one is living at these premises,

Your Honour, at all. There is no evidence that

anyone is living at these premises off the earnings

of prostitution, money is being earned. Nor is

their any evidence, Your Honour, of anyone attempting

to make any accusation of a common law offence. Indeed,

the legislation disclose that when the police visited,

each of the women were told, "No, you are not committing

an offence at these premises" by the vice squad police

officers. No one has suggested that an offence was

being committed. It is merely said that the place was

perhaps disorderly because it was being operated as a

bordello. For these reasons, Your Honour, I respectfully

submit that the consequences of the order of the court

below is such that the only way that the right to apply

for special leave has any substance at all, has any

efficacy, is for there to be a stay and that, with the

greatest of respect, Your Honour, it is to introduce

an irrelevant and divergenary aspect to say that the

court cannot be seen to be condoning illegal behaviour.

Now, we do not know whether there is illegal

behaviour. There is no evidence upon which we can

decide whether there is illegal behaviour. But even if

that is the case, as His Honour the president says in his dissenting reasons on the application for a stay,

it would seem to be injecting a new set of criteria -

HIS HONOUR:  But why? I can understand it being said that the

proper role of a court in circumstances of this kind

is certainly to protect the integrity of the applicant's

right of appeal or the integrity of this application

for special leave to appeal, but on condition that the applicant undertakes that it will not break the law in the meantime.

MR MURRAY: Well, Your Honour, if my client were to undertake that he would not break the law in the meantime, he

would be, in my submission, permitted to go on as he

has been and to conduct premises where the activities

are not illegal, as long as he is not - I do not quite

know, Your Honour, how I could concede that he is

breaking the law. He is not breaking the law. No one

has said that he is breaking the law. No one has

prosecuted him. This case has been afoot for years,

Your Honour. I make no secret of the fact that on my

instructions these premises probably operated yesterday

as they have done - - -

HIS HONOUR:  I do not doubt that, Mr Murray. I mean you have

been commendably frank in the way you have put the

matter to the Court.	You have not sought in any way
to, as it were, hide what is actually occurring.	But

there is, of course, this question as to whether or not
the present and intended conduct of the premises and the

business operated there does involve a breach of the law.

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MR MURRAY:  For Your Honour to find even as a sufficient

probability for the Court to say that it is to be the

dominating or deciding factor in the grant of the stay

of proceedings, I would respectfully submit Your Honour
would want there to be evidence on which it could be

found as a probability, there is none; and there would

want to be some exceptional reason as to why the Court
should be the vehicle for suppressing such suspicion,

such suspected activity in the face of inaction by the

authorities when the case discloses that the authorities

not have the fullest knowledge of these premises but

visit them regularly in a sort of an unofficial

supervisory way, using the phrases used by Their Honours

below.

It would be finding guilt and imposing punishment on

several tiers of people where there has been no

evidence, no accusation and no argument and no hearing.

The tiers of people, Your Honour, are the owner, the

occupier, the landlord and then the seriatum people,

the customers and people who work there and so on.

Your Honour, it appears that if there is a common law

still existing in New South Wales of keeping a brothel,

that has not been debated,nor has there been any

evidence, nor has there been a prosecution. If there

is an offence -

HIS HONOUR:  It seems to have been debated by the judges in the

Court of Appeal. I do not know whether argument was

presented to the Court of Appeal - - -

MR MURRAY:	None, Your Honour.
HIS HONOUR:	But certainly we have differing expressions of

opinion on the part of the majority and the Chief

Justice on that very question.

MR MURRAY:  And I can assure Your Honour that other than it

being raised as a question from the bench, such as

Your Honour asked me, "Is there an offence of living

off the earnings of prostition?" to which I made some

response as I have done to Your Honour the Chief Justice,

it was not before - in the legal sense it was not

before that court at all and that is why, Your Honour,

I feel that what has been injected into the case is

something that is different to the approach that has

traditionally been applied to an application for a stay

pending an application for special leave.

Since Mr Justice Brennan's decision in the

BURGUNDY ROYALE case - and I do have the cases here if

Your Honour wishes them - there has been a series of

decisions of the Court of Appeal, mostly by unanimous

resolution of the court, saying that Mr Justice Brennan

has indicated the way and we can indicate whether we

will or will not preserve the rights of the parties.

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Now, they involve facts such as there being in

existence a television programme wherein patients of
a doctor were grossly critical of the doctor's
professional conduct which wished to be shown at the

same time as the doctor's conduct was being litigated

before the appropriate disciplinary committee.

Another one was money involving Cambridge Credit, that which is much more familiar, whether the money will be

dissipated and those things.

HIS HONOUR:  Yes, but they are different to this present case.

MR MURRAY: Well, Your Honour, they are different in one sense -

I immediately concede that they are different. This is

more importantly different in that it seems that where

the Court of Appeal, the majority, are saying, "Without

there being any evidence, we will find that unlawful

activities are in progress. We will convict and punish,

otherwise it seems that we are condoning something."

Now, we do not know, with respect. My respectful

submission if it is correct that if it were to be run as

a co-operative, as a kibbutz, as a collective, on behalf

of the employees, on behalf of the women or males, then

none of these matters, Your Honour, would arise, but

it would still be liable to declaration under the

DISORDERLY HOUSES ACT because it would still be sexual

activity for money which is the definition of

prostitution. So therefore, Your Honour, I respectfully

submit that the bringing the issue of 'liilether or not sorn:

ancient - the word of the Chief Justice is moribund or -

I have just forgotten the exact word used by His Honour

the Chief Justice - offence under the common law, and

there are a number of them, there are many things,

being a common shrew - Your Honour, if we go to

Blackstone we would find some extraordinarily- - -

HIS HONOUR: Scold, the common scold.

MR MURRAY:  Your Honour, a common scold. I do not know whether

or not we would be able to say the scold is still

scolding and therefore we cannot condone the continuation

of a common law offence, but there are spectrums of

common law offences. Your Honour might recall, from

Your Honour's reading in the past, that gatherings of

jugglers and actors and vagabonds, the legislation has

its origin in the proscription of the theatre - not too

long ago either, only several hundred years, and

whether or not the court would find that by the mere
effluxion of time and the change of community attitudes

those things are no longer offences under the common law.

I have an opinion, I have a submission to make,

but it seems that it creates a whole new set of

criterion if I have to meet it before the Chief Justice

of Australia where in the courts below it was neither

the subject of evidence nor submission nor authority.

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I additionally add, Your Honour, that rightly or

wrongly, correctly or incorrectly, the decision of the
majority in the court below overturns 43, 44 years of
findings of single judges of the Supreme Court of New

South Wales, and the Full Court of New South Wales, and:, the High Court of Australia, the Chief Justice and

Mr Justice Webb, whereby the discretion has been the

gravamen and the moving part of the administration of

the Act which applies to gaming, liquor laws and the

resorting of thieves as well as prostitution.

We would submit, Your Honour, that we do come

within Mr Justice Brennan's three points quite clearly.

The word that has been ens.hrined now in several of the

judgement, the drastic consequences, there is no way

it could be rectified, Your Honour, and it is a matter

of general importance in the administration of law in

New South Wales because not only does it relate to

this Act but it also relates to the whole of the

administration of the land and environment legislation

concerning premises such as this because coming

through the courts, Your Honour, are applications as

to whether or not premises of this nature and this use

attract the jurisdiction of the whole mechanism of

planning or whether they are illegal and therefore no

one can approve and condone them. That is another

reason why the ancillary questions raised by the Court

of Appeal's decision are matters of general importance.

It seems, Your Honour, that there are sufficiently

prima facie important cogent arguments in the judges in the Court of Appeal found that the judge at

first instance was wrong in the way that he exercised - - -

HIS HONOUR:	Yes, I appreciate that.
MR MURRAY:	And secondly, Your Honour, we would say there is

another matter that arises and, indeed, this may be a
matter of some general application itself, and that is

the circumstances in which the High Court of Australia

would give a stay of proceedings itself in circumstances

such as this. So I have several matters: one is the

question of whether or not the DISORDERLY HOUSES ACT

has been correctly interpreted all these years - that

is important, Your Honour; secondly, what the

DISORDERLY HOUSES ACT in fact means in the New South

Wales in the light of the legislative changes that have

taken place; thirdly, by what standards and in what circumstances such a discretion should and could be

exercised; and fourthly, perhap~, Your Honour, assuming

as the case advances an even greater importance as to

what is left of the vestigial renmants of the common law

in New South Wales concerning this part of the law.

The evidence below was that there was something

like, known to the police, 400 - something like 350 to

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450 suburban shop premises such as the one which is

under consideration in this application, that they

are periodically visited and that some of them are

pending before the courts - probably awaiting the

outcome of this case now, Your Honour - but most of

them, as the evidence disclosed, continue. That may

not be relevant, Your Honour, on the question of the

interpretation of the Act but it is relevant on the

question of the application for a stay.

I respectfully submit, Your Honour, that in the

light of the fact that it has been going on for 15 years

now; we immediately got a stay of proceedings from

Mr Justice Grove when he found against us below.

HIS HONOUR:  To enable you to appeal to the Court of Appeal.

MR MURRAY:  To enable us to appeal to the Court of Appeal. We

then, Your Honour, got a somewhat different order from

the Court of Appeal when we made an application

originally for a stay, which we had converted to an

injunction in respense to submissions made on behalf

of the Crown. That injunction, Your Honour, was

restricted to the operation of sections 5 and 7, I think,

of the Act and, in the meantime, the Crown have gone

further and have in fact obtained a certificate from

the Supreme Court of New South Wales which is a condition

precedent to the gazettals and other proceedings. So it

is not as if everything has been frozen, Your Honour.

I merely draw attention to that because, firstly, at

Your Honour's hands, I probably need an injunction as

well as a stay and the fact is that - - -

HIS HONOUR:  You have asked for an injunction in order 2 in

your summons .

MR MURRAY:	Yes, Your Honour, I have asked for an injunction in order 2 of the summons and I think, Your Honour,
that is the safer - I do not shift from that application.
In the light of what has happened, we must get an
difficulty, Your Honour, is that what is now almost -
injunction. The certificate has been obtained. The
and I say this with no disrespect to Their Honours
below - an almost miasma of concern pervades the case
in that the court, on one view, has concern that it
may be,by granting the stay, be seen to giving even the slightest countenance to what might be matters in breach of the law.

Now, I understand the complete effectiveness

of the argument. My response to it, Your Honour, is

that it- is not for the court to administer such

provisions of the law by the granting or otherwise of

a stay of proceedings, and it never has been. I

respectfully submit, Your Honour, that we have a careful

mechanism in the administration of the criminal law

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in our community which has its own sets of standards, its own procedures, and those are the forums to which

people should resort rather than just waiting

to effectively destroy our rights on appeal by
refusing to grant the injunction. There is no way,

Your Honour, that if we succeed in the High Court, as we may well do, that any order of the Court could

restore things to what they are this morning.	They
are our applications.

HIS HONOUR:  Yes, thank you, Mr Murray. What do you say about

this, Mr Coles?

MR COLES:  I oppose the application for a stay, if Your Honour

please, for these reasons. Firstly, in my submission,

as the majority of a differently constituted Court of

Appeal held when the application was made for a stay,

it is the case that, as they put it, a direct and

undisputed consequence of granting a stay would be the

actual, at least potential, of the continuance of a

criminal activity.

HIS HONOUR:  When you say the potential of a criminal activity,

as far as I understand the judgments in the appeal

disposing of the appeal itself, there is an express
finding by Mr Justice McHugh, I think it is, that the

evidence does not establish the commission of a criminal

offence. But then His Honour goes on to say that on

the probabilities, the continued operation of the

premises for the purpose for which they are presently

being used would involve the commission or continuation

of criminal offences. Now, that conclusion seems to me

to rest on two bases: one, the view that keeping a

brothel or a bawdy-house is still an offence, a common

law misdemeanour, a view which the Chief Justice

contests; the second basis is that - and I think

Mr Justice McHugh put it this way - that either the

applicant or someone called Joe - and of course I do

not know who Joe is or what the circumstances are

because I have not seen the evidence - might be enjoying

the receipts that the premises take from the activities

of the girls employed there.

MR COLES:	Yes, there was evidence, Your Honour may recall, of there being somebody at the premises who was the
manager of the premises. Your Honour, if I may put
these matters. Firstly, unquestionably there has been,
and no doubt it can respectfully be argued still is, in
existence the common law misdemeanours identified in the
Court of Appeal.  They have not, Your Honour, been
shown judicially to have ceased to exist, nor have they been shown judicially to have been the subject of
any abrogation by statute, whether by PROSTITUTION ACT
or any other matter~ - -
HIS HONOUR:	Yes, but on an application for a stay it is very

difftcult for me to come to a conclusion one way or the

other'about that.

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MR COLES:  Indeed, Your Honour, but Your Honour, in my

submission, must in effect take the law in which

Your Honour finds it, namely that these offences exist.·

There is an argument as to whether they continue to

exist, but nobody has yet determined that they do not.

HIS HONOUR:  Why do I have to take the law that way? I mean,

I am not a member of the Court of Appeal or the

supreme court. I do not approach applications for a

stay on the footing that the decision of the court

below is correct. I rather approach it on the footing

that it may be that the decision of the court below is

arguably incorrect. Now, that being so, why do I have

to accept that these offences still exist? I do

accept that the second one does because Mr Murray has

made that concession, but he has not made the concession

in relation to the first.

MR COLES:  So far as the second one, Your Honour, that is the

living off the earnings of prostitution, the concession -

there is to be inferred, Your Honour, one may infer that

that is still going on and that is a necessary

consequence of the coIIIID.ercial operation - - -

HIS HONOUR:  We know the girls are there, they are working and

there is no doubt that the premises are not being

conducted as a charitable institution, so somebody is receiving money. But Mr Murray goes on to say, well,

we cannot be sure that the receipt of that money, the

enjoyment of that money necessarily means that somebody

who is liable for the offence of living off the earnings

of prostitution is actually doing so.

(Continued on page 17)

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MR COLES: No. Well, then, Your Honour, one has the inference

that that is more likely the case than not and one has
the fact that even in this application nobody has come

forward to this Court with any evidence, albeit in

short form and perhaps prepared hurriedly, to say that

is the case. For example, were it the case, as

Mr Murray suggests on one view it might be,although

I do not think he presses this, that this was some sort

of collective of ladies who did this on a sort of

mutuality principle, then there might be some short

evidence of that. But at the moment, Your Honour,

there is simply the inference that this is more likely

than not the case: no one - and even, Your Honour,

conceding the limitations as to time that the

applicant presently has, that would have been a matter,

Your Honour, that could have been the subject of evidence

before this Court.

HIS HONOUR: Well, it could be but I can still see that there

might be some legal arguments as to whether people

operating through the mechanism of a company could be

said to be living off the earnings of prostitution.

MR COLES: Well, it is no doubt a legal argument, Your Honour.

One would take those words as one finds them, again, and

say, well, if somebody is living by the derivation of

income that comes from that activity, then whether it is

transmuted through a company or otherwise probably does

not really matter. But that is not really an issue that

Your Honour can decide in this sort of application.

HIS HONOUR:	No.
MR COLES:	And the fact, Your Honour, that it has not been

decided before and the fact that it may be a matter

that is ripe for decision one of these days is, in my

submission, not of itself a factor in favour of a stay

because, accepting, Your Honour, if Your Honour does

accept that at least one of these common law offences

still exists, acceping that the inference is open that

the activities conducted at these premises at least

give rise to the likelihood - and indeed, possibility

may be sufficient, Your Honour - that those offences

will continue to be committed then, Your Honour, that

is an admirable reason, in my submission, for the reason

to which the Court of Appeal arrived and, in my submission,

Your Honour would give some weight to the fact that an

application has been made to the Court of Appeal and

that the Court of Appeal has given it due consideration along the lines that Justice Brennan referred to in the

BURGUNDY ROYALE case.

But there are other aspects, Your Honour, which are equally relevant on the question of whether there should be a stay or not. Whether they are relevant, of course,

regardless of the fact, Your Honour, that they were

no doubt and have been held not to be relevant to the

issue of. discretion because Your Honour knows, in addition

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to the aspects of the inferred probability of the

continuation of offences, there is also the factual

matters that Mr Justice Grove found at first

instance which - conceding, Your Honour, they ultimately

have been held not to be relevant to the discretion

under section 3 of the DISORDERLY HOUSES ACT - would,

in my submission, be relevant in the context of an

application for a stay. And those matters, Your Honour,

concern the fact that there was evidence that there

were two drug-related deaths on these premises; there

was evidence that there was an armed robbery on one

occasion in which not only one of the persons working

at the premises was injured but also a patron; there

was evidence, Your Honour, of hoax bomb calls which

troubled the police and, in short, Your Honour,

accepting those matters are not, as the Court of Appeal

found, accurately to be described as of themselves

disorderly for the purposes of the discretion, they

must, in my submission, carry some weight when one is

deciding whether there should be a stay of the order

which was granted '"at first instance and confirmed,

albeit by majority, on appeal. And, in my submission,

Your Honour ought take that into account as well.

The other matter, Your Honour, that is put, as I

understand it, is that the consequences of making such

an order are, as Mr Justice Street described them,

drastic. That seems to have been considered by

Mr Justice Kirby when he looked at the application for

a stay and he, of course, would have granted a stay

in terms, really, on the footing that the present

applicant would, in effect, disregard the effect of any

order or any declaration that was made. Mr Justice Kirby,

in my submission, regarded the effect of the declaration

as being drastic in the sense that those persons- not

in the premises themselves and its owners, but those

persons who continued to have resort to the premises,

would be subject to severe potential criminal liability

if they could not explain their presence on those premises.

But, in my submission, that, with respect, is an

erroneous way of perceiving the effect of the operation

of the declaration if no stay is granted because one

should assume, Your Honour, if no stay is granted, not

that innocent citizens will be led to resort to these

premises at their own risk but that the applicant will

abide by the declaration until this Court should declare

otherwise - says so and will close the premises down.

So that in that sense the alleged drastic consequences

that the statute - and they are drastic, I concede that.

But the drastic consequences of the declaration are in large measure mitigated by the assumption that the applicant would comply with the declaration if no stay

were granted.

So, in my submission, Your Honour ought to

refuse the application.

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HIS HONOUR:	Yes, thank you, Mr Coles. Yes, do you wish to say anything in reply, Mr Murray?
MR MURRAY:	Yes, just very briefly, Your Honour, in response to

what my learned friend has said and may I· take~.;.

secondly the matters to which he has referred which he

fairly put were regarded as being incorrectly taken into

account in the exercise of His Honour Mr Justice Grove's

decision. In so far as they relate to the matter of a

stay - of course, I say they are irrelevant - nothing

untoward has happened for years, Your Honour.

HIS HONOUR:  When was the last of these untoward events?

The drug-related deaths, when did they - - -?

MR MURRAY: Several years ago, Your Honour. 1984, Your Honour,

I am instructed but I believe it is in the affidavits of the police officers.

HIS HONOUR:	Mr Coles, do you concede it is sometime ago since these untoward events occurred?
MR COLES:	The last one, Your Honour, according to page 4 of

Mr Justice Street's judgment, was 11 May 1986.

HIS HONOUR:	What was that?
MR COLES:	That was the second of the drug-related deaths of a young woman on the premises.
MR MURRAY:	And, Your Honour, the facts are that she came there

it was her first day of employment - and the overdose was

administered either before she came there and immediately.

And in any event, Your Honour, some of them are really,

with respect, only to be mentioned to realize they are

irrelevant.

Someone rang the police station and he said

"I got no satisfaction at the Westside,

therefore I'm going to plant a bomb.

Someone said there's someone acting suspiciously

outside the Westside and someone robbed it with

a gun.

Well, that happens to Westpac, Your Honour, and I do not suppose they would say that Westpac is because of that

disorderly, whatever else may be said about Westpac.

And the other matter, Your Honour, is to reply to

what my learned friend has said. "Someone is receiving

or enjoying money". Well, Your Honour, that cannot be

the criterion by which the question of the offence is to

be adjudged of living from the earnings because someone

is receiving or enjoying money from every prostitution

act, male or female, that the community would possibly

contenance. There has got to be some additional factor
other than renting a room, hiring a car, buying medicines

or whatever, Your Honour. I would respectfully submit

S1T4/3/PLC 19 27/5/88

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that the receipt of money which influenced His Honour

Mr Justice McHugh - and I cannot, of course, dispute

that the place is obviously generating money, that is

the purpose of such commerce all over the world but I

do say, Your Honour, that it would want a lot more

investigation to decide whether or not that amounted to the

criminal offence. And the only other submission I want to

make, Your Honour, is that I can find no evidence in

the papers which would justify the finding of His Honour

Mr Justice Priestley about identifiable person or

persons of the order of 13 or 15, other than the women

themselves earning money from this place. It is

true His Honour Mr Justice McHugh accurately states

the evidence when he says, "A person called Joe is
obviously in receipt of money." Well, now, whether or
not Joe, Your Honour, is living wholly or in part

receiving the money, acting as a messenger or doing

it for love, one would have to have some evidence.

HIS HONOUR:  Mr Murray, is your client prepared to give an

undertaking in the event that the application is
granted to prosecute the application for special leave

and, if it eventuates, the appeal with all due diligence?

MR MURRAY:  Your Honour, that undertaking is given by my attorney

and by myself. I have given it to the Court of Appeal.

We have our application for special leave almost ready

now, Your Honour. We expect to file it next week.

HIS HONOUR:  Yes. I thought you had actually filed your

application for special leave?

MR MURRAY: Well, Your Honour, I was away yesterday. It has

happened. I give that formal undertaking to the Court

on behalf of my client, Your Honour. Your Honour, an

application for special leave to appeal has been filed.

HIS HONOUR: Yes, it has been.

MR MURRAY:  It is the grounds of appeal, Your Honour, that

perhaps we should - - -

HIS HONOUR: Yes. The formal application has been filed. It

needs, of course, to be expanded so that there is -

MR MURRAY:  Yes, Your Honour, we will do that.

HIS HONOUR: - - -a fuller affidavit in support. Now, do not take

that as indicating I have made up my mind on this matter

because what I propose to do is adjourn until 11.30 and

I will give my decision at 11.30, but I wanted to clarify these aspects of the matter with you.

MR MURRAY: Yes, Your Honour, that undertaking is given. My

learned friend has invited me or invited Your Honour to ask

me whether or not w:e -wc:iuld close the pra:nises if it were not

declared in the meantime. Well, Your Honour, if Your Honour

SlT4/4/PLC	20	27/4/88
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were to ask me I would make some sort of a response

to that but that is really not what the issue is,

Your Honour.

HIS HONOUR:  Yes. I do not think I will ask you that question

at this stage, Mr Murray.

MR MURRAY: All right, Your Honour.

HIS HONOUR:  The Court will now adjourn until 11.30.

AT 11. 08 AM SHORT ADJOURNMENT

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UPON RESUMING AT 11.30 AM:

HIS HONOUR: This is an application for an injunction pending

the hearing by a Full Court of this Court of the

applicant's application for special leave to appeal.

The applicant conducts a brothel at

632 Canterbury Road,Belmore. At first instance,

Mr Justice Grove made a declaration under the

DISORDERLY HOUSES ACT 1943 of New South Wales that

the premises were a disorderly house. The declaration

was based on an allegation which has not been disputed

that the premises were habitually used for the purpose

of prostitution. Section 3(1)(e) of the Act enables

a judge of the supreme court to make such a declaration

where reasonable grounds for suspecting that the

premises are habitually used for the purpose of

prostitution are shown.

Mr Justice Grove held that under section 3(1)

a judge has a discretion to make or refuse a

declaration once the necessary condition is established.

He held that the circumstances were such that a

declaration should be made saying that it is always open:

to either party to lead evidence of

disorderliness or lack of disorderliness.

It mmst be relevant to the exercise of

discretionary power. '

His Honour went on to say that the object of section 3(l)(e) is:

the restraint of the operation of any
brothel, the presence of which is contrary

to the good order of the community.

Mr Justice Grove exercised his discretion in favour

of making a declaration because, as he said, and I

quote:

The premises are disorderly in the sense

that the occurrence there of drug related

deaths and their focus as a target for

bomb threat, robbery and other unwelcome

attention are contrary to the maintenance

of good order within the community.

Rejecting a submission that the disorder must arise

from the way in which the premises were conducted,

His Honour concluded that the inquiry should be

directed towards whether the premises were disorderly

and not to what caused them to be disorderly.

The consequences of the declaration made by

His Honour are that after publication of the notice of the declaration, one, that any person found on the

premises is guilty of an offence unless he proves he

was o~ the premises for a lawful purpose; two, that if

SlTS/1/RB	22	27/5/88
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any of the conditions referred to in paragraphs (a)
to (e) of section 3(1) of the Act obtains in relation
to the premises, the owner is guilty of an offence

unless he proves he has taken all reasonable steps to

evict the occupier; three, that if any of those

conditions obtains in relation to the premises, the

occupier is guilty of an offence unless he proves that

he has taken reasonable steps to prevent such conditions

from obtaining; and four, a member of the police force
may, without warrant, enter the premises and do various

things.

The app·licant appealed to the Court of Appeal on

the ground that Hr Justice Grove had taken irrelevant

factors into account in exercising his discretion.

The ambit and content of the discretion was the principal

issue before the Court of Appeal. The applicant's

submission was that the discretion to make a declaration

could not be exercised unless it was shown that the

premises were disorderly. The Court of Appeal, by

majority, Mr Justice MrHugh and Mr Justice Priestley

with Chief Justice Street dissenting, rejected this

submission and dismissed the appeal. Chief Justice Street

and Mr Justice McHugh expressly held that

Mr Justice Grove's exercise of discretion miscarried.

Mr Justice Priestley impliedly was of the same opinion.
Mr Justice Priestley and Mr Justice McHugh considered

that once it was proved that a condition mentioned in

section. 3(1) exists and the occupier intends to continue

it in the future, a declartion should be made.

Apart from accepting that the applicant intended

to continue to use the premises for the purpose of

prostitution, the majority thought that the probabilities

were that the misdemeanour of keeping a brothel and the

offence of knowingly living wholly of in part on the

earnings of prostitution were being committed in

consequence of the use of the premises as a brothel.

In the light of these circumstances Their Honours considered that any discretion to refuse or make a declaration must be exercised in favour of the making of

a declaration. Chief Justice Street would have upheld

the applicant's submission as to the ambit of the

discretion ..

The applicant then applied to the Court of Appeal

for a stay of the judgments and an injunction pending

this Court's determination of the proposed application

for special leave to appeal.	The Court of Appeal
refused this application, again by majority.	On this

occasion Mr Justice Hope and Mr Justice Priestley

constituted the majority with the president dissenting.

The majority refused the application on the ground

that the desirability of preserving the subject-matter of the appeal, or the application for special leave to appeal paled into insignificance when compared with the

probability that criminal offences were being committed

in consequence of the use of the premises as a brothel.

SlTS/2/RB	27/5/88
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Notwithstanding the persuasive reasons advanced

by Mr Justice Priestley and Mr Justice McHugh for

dismissing the appeal I am unable at this stage, in

the light of the dissenting judgment of

Chief Justice Street to conclude that the proposed

appeal is hopeless or that it lacks substance. At
this stage, as it seems to me, the applicant is faced
with a difficult task in showing that the majority in

the Court of Appeal was wrong but I am unable to

conclude, as I have said, that the proposed appeal is

hopeless or lacking in substance.

Accordingly, if no question of criminality were

involved, I would be disposed to grant an injunction

to protect the subject-matter of the appeal. The

question of criminality is of critical consideration

however. The applicant has made it plain that it intends

in the meantime to continue to use the premises for the
purpose of prostitution. In the view of the majority
in the Court of Appeal so to use the premises will, on
the probabilities involve the continuing commission of

criminal offences: one,the keeping of a brothel and,

two, living off or someone living off the earnings of

prostitution.

Mr Murray QC for the applicant disputes the correctness of this view but section 7(2) of the

PROSTITUTION ACT 1979 of New South Wales recognizes

the existence of some other liability to penalty or

punishment"for keeping or being concerned in keeping

a brothel or disorderly house, or for the nuisance

thereby occasioned".

Chief Justice Street seems to have thought that section 7(2) did not preserve the old offence of

keeping a brothel or bawdy-house, although the majority

thought otherwise. Mr Murray supports the Chief Justice's

view that the offence of keeping a brothel is no longer

part of the law of New South Wales. I have some

difficulty in accepting this submission but it is a

question on which I am not able to reach a concluded

view on the very bare submissions which have been

presented during the course of this application.

Mr Murray does not dispute that it is an offence

under the law of New South Wales as it presently stands

to live off the earnings of prostitution but he points

out that Mr Justice McHugh found, and I quote: "The

evidence in the present case stops short of proving

this offence". None the less, His Honour inferred
that the enterprise is conducted for profit and that

the applicant is profiting from the earnings of

prostitutes. Mr Murray contends that in the absence

of specific evidence the Court cannot arrive at a

conclusion that the offence is necessarily being

committed on the premises at this time. There is some

force in this submission and it is my view, having

SlTS/3/RB	24	27/5/88
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heard the arguments of counsel, that on an application
for a stay of proceedings and for an interim
injunction I cannot resolve these disputed question

relating to the cormnission of criminal offences against

the applicant.

Mr Coles for the respondent relied on other

events,to which I have already referred, occurring at

the premises including two drug-related deaths and an

armed robbery as a reason for refusing a stay. However,

in my opinion, the need top:-eserve the subject-matter
of the litigation should, I think, prevail over the
matters relied upon by the respondent, at least for

the purpose of enabling the applicant to have its

application for special leave to appeal determined by

a Full Court of this Court.

Accordingly I propose to grant the injunction

sought by the applicant in the surmnons which it has

filed. I will therefore make the orders sought in

paragraphs 1 and 2 of the surmnons dated 26 May 1988

unless, Mr Coles, you have any submission to make on

the form of the order.

MR COLES:  Not on the form of the orders, if Your Honour pleases.

HIS HONOUR:  Very well. I shall make orders 1 and 2 as sought

in the surmnons upon the applicant giving the

undertaking foreshadowed by Mr Murray that it will

prosecute the application for special leave with due

dilligence and I should also say that order 2 will

endure until further order of the Court.

MR MURRAY: If Your Honour pleases.

MR COLES:	May it please Your Honour.
HIS HONOUR:	Court will now adjourn sine die.
AT 11.43 AM THE MATTER WAS ADJOURNED SINE DIE

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