Willoughby City Council v Wu

[2014] NSWLEC 165

Land and Environment Court

New South Wales

Case Title:	Willoughby City Council v Wu
Medium Neutral Citation:	[2014] NSWLEC 165
Hearing Date(s):	20 October 2014
Decision Date:	20 October 2014
Jurisdiction:	Class 4
Before:	Biscoe J
Decision:	(1) Declaration that the respondent has not complied with Brothel Closure Order No 2587 issued by the applicant on 27 September 2013 to cease using the land at 218/1 Katherine Street, Chatswood (the Premises) as a brothel or for any related sex uses and, accordingly, is in breach of the Environmental Planning and Assessment Act 1979. (2) Declaration that the respondent has carried out development in breach of s 76A of the Environmental Planning and Assessment Act 1979 being use of the Premises as a brothel without development consent in circumstances where such development is permitted with consent by the Land Use Table of the Willoughby Local Environmental Plan 2012. (3) Order that the respondent by herself, her employees, servants or agents be restrained from using, causing or permitting the use of the Premises: (a) as a brothel; or (b) for related sex uses. (4) Order that the respondent by herself, her employees, servants or agents is to remove within one month of the date of these Orders the partition walls in the premises constructed without development consent and otherwise not in accordance with Development Consent DA 2003/0173 (as modified), and return the Premises to the maximum extent possible to the condition they were in prior to the unauthorised development being undertaken. (5) Order that the respondent pay the applicant's costs of these proceedings. (6) The exhibits may be returned.
Catchwords:	CIVIL ENFORCEMENT - failure to comply with a statutory brothel closure order issued by a council - carrying out unauthorised development at the subject premises - whether declarations should be made in addition to injunctions - principles relating to declaratory relief.
Legislation Cited:	Environmental Planning and Assessment Act 1979 ss 4, 76A, 96, 121B, 124(1) Land and Environment Court Act 1979 ss 20(2)(c), 71 Restricted Premises Act 1943 s 2 Supreme Court Act 1970 s 75 Willoughby Local Environmental Plan 2012 cl 6.19
Cases Cited:	Council of the City of Sydney v Mae [2009] NSWLEC 84 Cutcliffe v Lithgow City Council [2006] NSWLEC 463, (2006) 147 LGERA 330 Director-General, Department of Environment, Climate Change and Water v Venn [2011] NSWLEC 118 Great Lakes Council v Lani [2007] NSWLEC 681, (2007) 158 LGERA 1 Marrickville Council v Tanwar Enterprises Pty Ltd [2009] NSWLEC 127 Massoud v NRMA Insurance Ltd (1995) 8 ANZ Ins Cas 61-257 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28, (1988), 194 CLR 355 Ulan Coal Mines v Minister for Mineral Resources (No 2) [2008] NSWCA 251 Willoughby City Council v Chen [2014] NSWLEC 92 Willoughby City Council v Spa and Beauty Relaxation Centre Pty Ltd [2011] NSWLEC 101
Category:	Principal judgment
Parties:	Willoughby City Council (Applicant) Xiao Yan Wu (Respondent)
Representation
- Counsel:	COUNSEL: N Eastman and N Hammond (Applicant) N/A (Respondent)
- Solicitors:	SOLICITORS: King & Wood Mallesons (Applicant) N/A (Respondent)
File Number(s):	40598/14

EX TEMPORE JUDGMENT

1. These are civil enforcement proceedings in the Court's Class 4 jurisdiction brought by the applicant, Willoughby City Council (Council) against the respondent, Xiao Yan Wu. The applicant seeks a declaration that the respondent has not complied with a Brothel Closure Order issued by Council pursuant to s 121B of the Environmental Planning and Assessment Act 1979 (EPA Act) on 27 September 2013, and a declaration that the respondent has carried out unauthorised development. The applicant also seeks orders requiring compliance by the respondent with the Brothel Closure Order, and orders restraining the use of the relevant premises as a brothel or related sex uses, and an order that the respondent is to remove the partition walls in the premises and return the premises to the condition it was in prior to the unauthorised development being undertaken. The respondent consents to the proposed orders but did not appear at the trial.

2. The proceedings concern Lot 218 in Strata Plan 62325 located at 218/1 Katherine Street, Chatswood (Premises), where the respondent operates a business. The Premises are within a 23-storey part residential part commercial building between Chatswood railway station and the Pacific Highway, and within 150 metres of Chatswood Public School, in the heart of the Chatswood non-retail commercial area.

3. The Premises do not have development consent to operate as a brothel or for related sex uses. Such a use is only permitted with consent under the Willoughby Local Environmental Plan 2012 (LEP).

4. The respondent has not complied with the Brother Closure Order.

5. The evidence discloses that the Premises are advertised (inter alia) as "Pretty Baby Massage" and used as a brothel and for related sex uses, and that the respondent has carried out unauthorised development in breach of s 76A of the EPA Act, being use of the Premises as a brothel.

STATUTORY AND FACTUAL BACKGROUND

1. The Premises are zoned B3 Commercial Core pursuant to the LEP. A brothel or related sex uses are permissible with consent in the B3 zone (subject to an additional range of considerations in cl 6.19 of the LEP).

2. The term "brothel" is defined in the LEP to have the same meaning as it does in the EPA Act, which in s 4 defines it to mean:

   brothel means a brothel within the meaning of the Restricted Premises Act 1943, other than premises used or likely to be used for the purposes of prostitution by no more than one prostitute.

3. The Restricted Premises Act 1943 s 2 provides:

   brothel means premises:

   (a) habitually used for the purposes of prostitution, or
   (b) that have been used for the purposes of prostitution and are likely to be used again for that purpose, or
   (c) that have been expressly or implicitly:
   (i) advertised (whether by advertisements in or on the premises, newspapers, directories or the internet or by other means), or
   (ii) represented,
   as being used for the purposes of prostitution, and that are likely to be used for the purposes of prostitution.

   Premises may constitute a brothel even though used by only one prostitute for the purposes of prostitution.

   related sex uses means the following:

   (a) the use of premises for the provision of sexual acts or sexual services in exchange for payment,
   (b) the use of premises for the provision of massage services (other than genuine remedial or therapeutic massage services) in exchange for payment,
   (c) the use of premises for the provision of adult entertainment involving nudity, indecent acts or sexual activity if the entertainment is provided in exchange for payment or if the entertainment is ancillary to the provision of other goods or services.

4. Also defined in the LEP are:

   sex services means sexual acts or sexual services in exchange for payment.

   sex services premises means a brothel, but does not include home occupation (sex services).

5. On 25 February 2003, Council issued Development Consent DA 2003/0173(D) for the use of the Premises for remedial massage and Chinese body therapy clinic. On 18 October 2004, Council issued under s 96 of the EPA Act Consent DA 2003/173/a(D), modifying DA 2003/0174, for the use to include acupuncture.

6. There has been no development consent issued (nor any application made) for the use of the Premises for the purposes of a brothel or for related sex uses.

7. Since February 2013, Council has received 11 complaints that the Premises have been used as a brothel and/or for related sex services without consent, being:

   (a)On 20 February 2013, Council received a complaint via email alleging that a very popular massage shop at the Premises provides sexual services such as body to body, blow jobs, full service and happy ending;

   (b)On 1 March 2013, Council received a telephone complaint that the massage business at the Premises is also offering sex services;

   (c)On 4 March 2013, Council received a telephone complaint that an adult massage parlour is operating from the Premises;

   (d)On 8 November 2013, Council received a complaint that an illegal brothel is operating as Pretty Baby Massage at the Premises;

   (e)On 23 January 2014, Council received a complaint referring to an illegal brothel operating as Pretty Baby massage on the ground floor of the Premises;

   (f)On 20 February 2014, Council received a complaint reporting that sexual services were offered by staff of Pretty Baby Massage to the caller's husband when he went for a massage;

   (g)On 10 March 2014, Council received a complaint that the Premises are operating as a sexual massage parlour;

   (h)On 30 March 2014, Council received a complaint referring to the Premises and one other premises within the same building operating as illegal brothels;

   (i)On 22 April 2014, a Councillor advised Council that residents were reporting that illegal brothels are operating in the Bentleigh building in Chatswood and that inappropriate advertising signs were on the street outside the businesses;

   (j)On 29 April 2014, Council's Development Enforcement Officer, Steven Balafas, received a phone call from a man who identified issues with the operation of the Premises as a brothel and about measures being taken to make that use more difficult to detect by a regulatory authority;

   (k)On 13 June 2014, Council received a complaint from a local resident who attended the Premises seeking a "good massage" after a session at the gym. The complaint details that the resident met with the woman behind the reception desk and was told to pay for the massage upfront, which included "extra". The resident said he didn't want extra and that he would pay for massage only. A disagreement ensued and the resident was told to leave and to go elsewhere.

8. Over a period of 11 months, Mr Balafas carried out internet searches which indicated advertising and references to the use of the Premises as a brothel and for related sex uses. Details of those internet searches are as follows:

   (a)On 20 August 2013, Mr Balafas conducted an internet search of the website for the business operating at the Premises. The website made reference to "Pretty Baby Massage" and contained several pictures under the title "Chatswood Massage Massagists" depicting various women dressed in revealing clothing and posing in a provocative and sexual manner exposing legs and cleavages. The location provided on the website was Suite 218,1 Katherine St Chatswood. Contact phone numbers were provided;

   (b)On 21 August 2013, Mr Balafas conducted an internet search for advertising referring to Pretty Baby Massage, the name of the business operating at the Premises. The search revealed an advertisement on under Massage Therapist in Chatswood NSW and references "Pretty Baby Massage" with one of the phone numbers referred to in (a) above. The advertisement makes reference to "Pretty Baby Japanese Massage is a renowned Asian Massage centre located in Chatswood NSW. Our team of Massage specialise in Full Body Massage, Erotic Massage and Remedial Massage". The location provided in the advertisement was "Suite 218/1 Katherine Street, Chatswood NSW".

   (c)On 18 September 2013, Mr Balafas reviewed the Adult Services section of the classifieds in the North Shore Times published that day and observed an advertisement relating to the Premises;

   (d)On 19 September 2013, Mr Balafas carried out an internet search of adult websites hosting reviews and blogs posted by customers of sex services premises. He observed a number of reviews/blogs posted by customers of the business operating at the Premises;

   (e)On 30 September 2013, Mr Balafas carried out an online search of adult websites hosting reviews and blogs posted by customers of sex services premises. He observed a number of reviews/blogs posted by customers of the business operating at the Premises after his inspection of the Premises on 19 September 2013 and before the Council issued Brothel Closure Order No 2587;

   (f)On 25 November 2013, Mr Balafas carried out an online search of advertising referring to the Premises. The search revealed advertisements on and 27 November 2013, Mr Balafas carried out an online search of adult websites hosting reviews and blogs posted by customers of sex services premises. He observed a number of reviews/blogs posted by customers of the business operating at the Premises;

   (h)On 31 January 2014, Mr Balafas carried out an online search of advertising referring to the Premises. The search revealed advertisements relating to the business on and The advertisements made reference to "erotic massage" and "body-to-body massage";

   (i)On 22 April 2014, Mr Balafas carried out an online search of advertising and adult websites hosting reviews and blogs posted by customers of sex service premises. The search revealed advertisements relating to the Premises on and He observed a number of reviews/blogs posted by customers of the business operating at the Premises;

   (j)On 9 July 2014, Mr Balafas carried out an online search of advertising referring to the Premises and adult websites hosting reviews and blogs posted by customers of sex service premises referring to the Premises, showing a number of advertisements for "Pretty Baby Massage" and "Princess Massage" that suggest the provision of sexual services at the Premises on various websites including adult themed websites as well as a number of recent reviews/blogs posted by customers of the Premises on adult website >

   After receiving the initial complaints, Mr Balafas and other Council officers inspected the Premises and spoke with the respondent on a number of occasions. Mr Balafas formed the view that the Premises were operating as a brothel and issued Brothel Closure Order No 2587 pursuant to s 121B of the EPA Act on 27 September 2013. Council also issued a General Penalty Notice No 3049259703; payment was received on 10 October 2013.

9. On 9 December 2013, the applicant received an undertaking not to use the Premises as a brothel or for related sex uses. In the undertaking, the respondent is described as the owner and operator of the business known as Pretty Baby Massage at the Premises. Despite the undertaking, the advertising and complaints listed above continued.

10. The evidence of a private investigator is that he twice attended the Premises, in May and in June 2014, and in exchange for payment, received sexual services.

11. Section 76A of the EPA Act provides that:

    (a)Development which requires consent can only be carried out if such a consent has been obtained and is in force: s 76A(1)(a); and

    (b)Development for which a consent has been obtained, must be carried out in accordance with that consent: s 76A(1)(b).

12. The respondent is operating in breach of s 76A(1)(a) and s 76A(1)(b). The breaches are:

    (a)Carrying out development in breach of s 76A, being use of the premises as a brothel without development consent in circumstances where such development is permitted with consent by the Land Use Table of the LEP;

    (b)Carrying out a use in breach of a Brothel Closure Order issued under the EPA Act.

13. The most direct evidence of those breaches is that of the private investigator who obtained sexual services in exchange for payment, and the advertising. The other evidence in relation to fit out, complaints, the media article and the respondent's own conduct provide inferential evidence of those breaches. On the basis of that evidence, the respondent is in breach. On the basis of those breaches, the Council seeks the orders in its summons, to which the respondent consents.

14. During the course of his inspection, Mr Balafas observed that non-structural partition walls at the Premises have been put in place in breach of the development consent. These walls allow for segregation and are consistent with the purpose of maximising the number of customers utilising the services for which no consent is in force.

DISCRETION AS TO RELIEF

1. The respondent consents to the orders sought including the declarations, but it remains for the Court to be persuaded to make the declarations, which will not be granted by consent: Cutcliffe v Lithgow City Council [2006] NSWLEC 463, (2006) 147 LGERA 330 at [18]-[19] per Biscoe J where the authorities are reviewed.

2. I am satisfied that the respondent has committed breaches of the EPA Act and will, unless restrained by order of the Court, continue to commit such breaches. That being so, the Court is empowered and has a discretion to make such order as it sees fit to remedy or restrain the breach: s 124(1) EPA Act. This Court has the same civil jurisdiction as the Supreme Court would have, but for s 71 of the Land and Environment Court Act 1979, to make declarations of right in relation to any right, obligation or duty conferred or imposed by a planning or environmental law: s 20(2)(c) Land and Environment Court Act. The Supreme Court (and therefore this Court within its jurisdiction) may make binding declarations of right whether any consequential relief is or could be claimed or not: s 75 Supreme Court Act 1970. The power of the Court to make a declaration is only limited by its own discretion. A party seeking a declaration has the burden of satisfying the Court of facts which would justify the grant of a declaration and of any matter which is a necessary element of the declaration: Massoud v NRMA Insurance Ltd (1995) 8 ANZ Ins Cas 61-257 at 75,876 per McLelland CJ in Eq.

3. A declaratory judgment pronounces upon a legal state of affairs whereby the controversy is determined and is res judicata. But it does not contain any order that can be enforced against the respondent. As a declaration decis non-coercive, it is a relatively unaggressive form of relief. However, in the sphere of civil enforcement of planning and environmental law it has come to be seen as an emphatic way for the Court, in appropriate circumstances, to mark the community's disapproval of the respondent's conduct. Declaratory relief is often coupled with an enforceable injunction. An advantage of seeking both is that if the coercive claim fails, a declaration may still be obtained. There may be circumstances where a declaration is appropriate but an injunction is not: for example, see Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28, (1988) 194 CLR 355 at [100]-[101]. Conversely, there may be circumstances where an injunction is appropriate but a declaration is not: for example, see Great Lakes Council v Lani [2007] NSWLEC 681, (2007) 158 LGERA 1 at [16]-[26] per Preston CJ of LEC.

4. A declaration must serve some useful purpose: Ulan Coal Mines v Minister for Mineral Resources (No 2) [2008] NSWCA 251 at [9]. A declaration that resolves a factual claim that a breach of the law has occurred cannot be described as being of no utility. A declaration serves a useful purpose if it is in the public interest to make it. The planning laws are enforced in the protection of the public interest. Generally, strong countervailing circumstances are required before a Court would fail to enforce a planning consent: Willoughby City Council v Spa and Beauty Relaxation Centre Pty Ltd [2011] NSWLEC 101 at [30] per Biscoe J, and Willoughby City Council v Chen [2014] NSWLEC 92 at [11] per Sheahan J (both brothel cases in which declarations and injunctions were made). A purpose of civil proceedings for enforcement of the planning laws is for there to be a finding by the Court and through its judgment a public pronouncement that a breach of the law has occurred by the respondent, but that does not necessarily require the Court to make a declaration: Great Lakes Council v Lani at [25] per Preston CJ of LEC. It is in the public interest, in appropriate circumstances, for the Court make a declaration of breach of the planning laws to publicly expose and denounce the unlawful behaviour in which a respondent has engaged, thereby to mark the community's disapproval and to deter and educate: Director-General, Department of Environment, Climate Change and Water v Venn [2011] NSWLEC 118 at [281] per Preston CJ of LEC.

1. A declaration as well as an injunction were granted where a respondent made significant structural alterations to premises without development consent and ignored a council emergency order made under s 121B of the EPA Act: Council of the City of Sydney v Mae [2009] NSWLEC 84 at [29], [45] per Sheahan J. So too where there was repeated and continual breach of conditions of a development consent relating to hours of operation of a business: Marrickville Council v Tanwar Enterprises Pty Ltd [2009] NSWLEC 127 at [30]-[37] per Pepper J. It was held to be in the public interest to grant a declaration as well as an injunction where a respondent did not admit the breach and put in issue its critical elements, there was a threat or apprehension of continuing breach, the respondent had acted defiantly, his conduct had caused environmental harm, and there was a broader public interest in his unlawful conduct in picking plants of endangered ecological communities: Director-General, Department of Environment, Climate Change and Water v Venn at [278]-[284], [348].

2. In the present case, the respondent has been operating and deriving income from her brothel business in repeated or continual breach of the planning instrument and the statutory Brothel Closure Order for more than a year, and in repeated or continual breach of her own undertaking to desist given to Council almost a year ago. The level of public interest is shown by the significant volume of complaints about this use in a partly residential complex, and by evidence of media commentary concerning such illegal brothels. In the circumstances of this case, a declaration would serve the public interest in ensuring compliance with the law.

3. For these reasons, I propose to make the orders sought, including the declarations.

ORDERS

1. The orders of the Court are as follows:

   (1)Declaration that the respondent has not complied with Brothel Closure Order No 2587 issued by the applicant on 27 September 2013 to cease using the land at 218/1 Katherine Street, Chatswood (the Premises) as a brothel or for any related sex uses and, accordingly, is in breach of the Environmental Planning and Assessment Act 1979.

   (2)Declaration that the respondent has carried out development in breach of s 76A of the Environmental Planning and Assessment Act 1979 being use of the Premises as a brothel without development consent in circumstances where such development is permitted with consent by the Land Use Table of the Willoughby Local Environmental Plan 2012.

   (3)Order that the respondent by herself, her employees, servants or agents be restrained from using, causing or permitting the use of the Premises:

   (a) as a brothel; or
   (b) for related sex uses.

   (4)Order that the respondent by herself, her employees, servants or agents is to remove within one month of the date of these Orders the partition walls in the premises constructed without development consent and otherwise not in accordance with Development Consent DA 2003/0173 (as modified), and return the Premises to the maximum extent possible to the condition they were in prior to the unauthorised development being undertaken.

   (5)Order that the respondent pay the applicant's costs of these proceedings.

   (6)The exhibits may be returned.