Land and Environment Court of New South Wales CITATION : Vassallo v Council of the City of Sydney [2010] NSWLEC 1030 APPLICANT J Vassallo PARTIES : RESPONDENT Council of the City of Sydney FILE NUMBER(S) : 10673 of 2009 CORAM: Moore SC KEY ISSUES: DEVELOPMENT APPLICATION - DEVELOPMENT CONTROL PLAN :- Swingers club South Sydney City Local Environmental Plan LEGISLATION CITED: City of Sydney Adult Entertainment and Sex Industry Premises Development Control Plan 2006 South Sydney Development Control Plan 1997 Marechal v South Sydney Council (Brown C - unreported - 14 December 2000) CASES CITED: Segal & Anor v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177 Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 115 LGERA 373 DATES OF HEARING: 29 January and 1 February 2010 EX TEMPORE JUDGMENT DATE : 2 February 2010 APPLICANT Mr A Pickles, barrister INSTRUCTED BY LEGAL REPRESENTATIVES: Craig Milne & Company RESPONDENT Mr A Seton, solicitor Marsdens Law Group JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES MOORE SC 2 February 2010 09/10673 J Vassallo v Council of the City of Sydney JUDGMENT This decision was given as an extemporaneous decision. It has been revised and edited prior to publication. 1 SENIOR COMMISSIONER: Some planning documents contain generic terms such as "shop" or "commercial premises". Within such genera, planning documents also contain a variety of species. That is the case in this instance, where the application being dealt with is for a use of a premises for the purposes of being a "sex industry premises". That term is not defined in the relevant Local Environmental Plan, being the South Sydney City Local Environmental Plan (the LEP) – now administered by the Council of the City of Sydney (the council), but is defined in the City of Sydney Adult Entertainment and Sex Industry Premises Development Control Plan 2006. The relevance of the particular species within the genus to which I have referred will become relevant later in this decision. 2 The present proposal seeks approval for the use of premises in Elizabeth Street at Surry Hills, being 481 Elizabeth Street, premises that have located on each side of them in an approved brothel, and an approved brothel at the rear across a laneway (Little Buckingham Street) and fronting Buckingham Street. Each of these premises is a "brothel", being one of the species defined as forming part of the genera of a sex industry premises within the terms of the Adult Entertainment and Sex Industry Premises DCP. The use for which the present application is made is not for a brothel, but is for a "swingers' club", being a separately defined species of sex industry premises within the general genus discussed in the Development Control Plan. 3 The site is zoned Zone 10 Mixed Uses by the LEP. Clause 10 of the LEP requires that, standing in the shoes of the council, I am obliged to be satisfied that the proposal is consistent with the objectives of the zone within which the land is located. The objectives that are set out for this zone are contained in cl 21 of the LEP. All uses of any type are permitted provided they are either exempt development, not relevant in this case, or compliant with the objectives of the zone. 4 The council raises three zone objectives with which it says the present application for a swingers' club is inconsistent. They are objectives (a), (g), and (h). Several of them can be dealt with, in my view, in comparatively short compass. 5 The first of the zone objectives pleaded, objective (a), is an objective to allow, in appropriate circumstances, a mixture of compatible land uses such as residential, retail, commercial, light industrial, and industrial development. Each of those, in my view, constitutes a genus rather than a species because within the purposes of retail, commercial, and the like, a variety of separate species can emerge such as this proposed use – it being a separate species of commercial development. 6 The fact that the premises have already been approved for use as a brothel in conjunction with the adjacent premises at 483 Elizabeth Street by Brown C in proceedings Marechal v South Sydney Council (an unreported decision given on 14 December 2000) causes me to conclude that the present application falls within a genus amongst the genera in the zone objective 1(a) that has been satisfied by that previous decision, and therefore satisfied that that zone objective does not constitute any impediment to approving the present application. 7 The second of the zone objectives that is raised by the council is zone objective (g), to minimise any adverse impact on residential amenity by devising appropriate design assessment criteria and applying specified impact mitigation measures required by the use of development control plans. 8 The council raises two development control plans in these proceedings with respect to each of which the council says the application is unsatisfactory. 9 The first of those is the general development control plan of the former South Sydney Council, being the South Sydney Development Control Plan 1997, and in particular the design criteria for specific types contained in Part F, which in Sub-part 4 deal with mixed use development, a matter to which I will return briefly, and secondly the non-compliance, as the council puts it, with the City of Sydney Adult Entertainment and Sex Industry Premises Development Control Plan 2006. I will also return to that in detail. Thirdly, with respect to the zone objectives, the council says that the proposal does not satisfy zone objective (h) to ensure that the nuisance generated by non-residential development such as that relating to operation hours, noise, loss of privacy, vehicular and pedestrian traffic or other factors is controlled so as to preserve the quality of life for residents in the area. Both Development Control Plans earlier adverted to are pleaded in this regard, as I understand it. 10 I turn first, in brief, to mention the provisions of the South Sydney Development Control Plan 1997. In the preamble to Part F, Sub-part 4 dealing with mixed use development in the introduction at the foot of the first column on p 135, this DCP makes it clear, in my view, in these words of the Development Control Plan, that specific built form controls are set out in this section. These controls complement Part E design criteria for environmental planning of this Development Control Plan. Mixed use development is also to be designed and operated in accordance with E 6.0, Operational Issues. 11 The council raises what it says is non-compliance with the planning intent and land use criteria for mixed use transitional development in Precinct 2, those describing both the location and zoning designation of the present proposal. The planning intentions set out on p 138 of this Development Control Plan, in my view, also make it clear that this Part of the Development Control Plan is designed to regulate the design, form and layout of built form in such a location. 12 There are no substantial alterations to the built form as it would be observed from the public domain in these proceedings that warrant assessment against the matters that are therein contained. The changes to the built form in the public domain at the front of the premises comprise the building of a small privacy wall akin to that located in the front of the brothel immediately to the south. This not something that impacts other than in an entirely de minimis fashion on the public domain. 13 With respect to the rear, it is proposed that there will be an access area and a screened upper level deck together with air conditioning equipment and control measures for the off street parking. Those changes, given that they are at the rear of the building; facing the rear of other buildings; and are small in nature, in my view, are also so minor not as to trigger any of the relevant provisions in Part F of this Development Control Plan. 14 For these reasons, I do not consider that I need undertake any assessment of the proposal against Part F as there are no matters calling it up for consideration. 15 That position, however, is not the case with respect to the City of Sydney Adult Entertainment and Sex Industry Premises Development Control Plan 2006 – to which I will from now refer to as the Sex Industry DCP. 16 The Sex Industry DCP applies to the premises and the objectives of the DCP are set out in cl 2.1 to which I will refer shortly. 17 However, at this stage, I return to the question of the various species of sex industry premises within the genus that over-arches them. The definition of the genus contained in cl 2.6 of the Sex Industry DCP is in the following terms: "Sex industry premises are: (a) Premises where sexual acts or sexual services are provided (such as brothels, safe houses, safe house brothels for street based sex workers, bondage and discipline parlours) or, (b) Premises used for sex between clients but where sex services do not take place in exchange for payment (such as sex on premises venues, swingers clubs)." 18 The list of species that are brought within the definition of sex industry premises includes, amongst other things, these separate matters – "brothels" and "swingers clubs" – and makes it quite clear that, within that genus, "brothels" and "swingers clubs" are quite separate species. These are defined and, at least in terms of a brothel, making it clear that a brothel comprises premises where payment is made for sexual services, thus falling within the first half of the definition of sex industry premises with swingers clubs expressly nominated as falling within the second part of the definition. 19 That is a relevant matter for my consideration when I turn to the matters raised concerning the alleged intensification of use, a matter discussed in cl 2.4 of the Sex Industry DCP. Clause 2.4 of the Sex Industry DCP is in the following terms: "When an existing adult entertainment or sex industry premises seeks to intensify its use through the introduction of" and then lists a number of matters, the various provisions of the Sex Industry DCP including the location controls are called up for consideration. 20 Given that the approved use, approved by Brown C in December 2000, is for a brothel in conjunction with the adjacent premises to the south, that which is proposed in this application comprises an entirely separate use or species of use within the overall genus. I am satisfied that this cannot constitute an intensification of its use as defined in cl 2.4 and therefore the provisions called up by that provision of the Sex Industry DCP are irrelevant and do not apply as a specific consequence of the words contained in it. 21 I turn therefore to the objectives of the Sex Industry DCP on the basis that this is a fresh application for a new use (although a different use within the umbrella of "sex industry premises"). The objectives of the Sex Industry DCP in cl 2.1 contain a number of matters that apply to any such application. 22 That which is of particular relevance, in my view, in these proceedings is that which is contained in the third dot point of the objectives of the Sex Industry DCP. That objective is in the following terms: "To ensure that the design and location of adult entertainment and sex industry premises will minimise any adverse impact on the character or amenity of the area or neighbouring properties." 23 That objective has a number of matters that are called up. In general terms, it poses two tests – the question of minimisation of adverse impact on the character of the area or neighbouring properties and the question of minimisation of any adverse impact on the amenity of the area or neighbouring properties. 24 In pursuit of that general objective a series of specific matters including locational tests are raised by the Sex Industry DCP and I will return to those shortly. 25 The first of the tests is the test relating to an adverse impact on the character of the area. This area is characterised, at the present time, by the fact, in sex industry premises terms, of four premises being approved for permitted use as brothels with the first of those comprising two adjoining terraces run as a combined operation apparently as a single brothel or two nominated brothels immediately to the north of the premises. 26 The second is the approved brothel immediately to the south of the present premises. The third brothel is immediately to the west with a frontage, at its rear, to Little Buckingham Street immediately behind the premises that are the subject of these proceedings. The fourth is the premises themselves. 27 The approval given by Brown C in December 2000 is for the operation of the premises as an adjunct to the brothel immediately to the south. The premises were used in the past for this purpose, as was shown during the course of the site inspection, by internal linkages to the premises at the north. 28 Whilst I do not have a copy of the approved plans to which consent was given by Brown C in December 2000, it is clear from the terms of his decision that the use was adjunct rather than independent. However, during the course of those proceedings, Brown C was obliged to deal with the question of character and whether or not the change that would be occasioned, in those proceedings, by the approval of 481 Elizabeth Street to be used as sex industry premises (an adjunct to a brothel) would create a red light district. Brown C concluded that they would not for reasons that are set out in his decision. 29 As a consequence of the decision of the Court of Appeal in Segal & Anor v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177, I am obliged if I were to depart from that conclusion of Brown C, his conclusion having been made a central element of the applicant's case in these proceedings, I would need to express significant and cogent reasons for such a departure. I am not satisfied on the basis of any of the material put to me over the two days of this hearing that any basis has been provided upon which I could conclude that the character of the area would be altered in any fashion compared to the character of the area that was derived following the application of Brown C's decision. 30 I am satisfied that, as a consequence of his decision, in the area there would have been four premises in a row (comprising the two of the brothel to the north, the premises the subject of this application and the brothel immediately to the south) that fell within the genus of "sex industry premises" defined in the Sex Industry DCP and that that genus rather than the specific species defines the immediate character of the area. As a consequence, I find that there is no basis with the first of the tests in 2.1 of the Development Control Plan's general objectives, that is, any adverse impact on the character of the area, upon which I could found a refusal of the present application. 31 I therefore turn to the second test – that is that which relates to the amenity of the area. It is in this context that the council raises the objectives and controls contained in Part 3 of the Sex Industry DCP where Objective B is to ensure that adult entertainment and sex industry premises are located in appropriate areas where they do not have an adverse impact on the character or, I emphasise, amenity of the area and neighbouring properties, in particular upon residential and sensitive land uses. 32 There is, I note parenthetically, no sensitive land use pleaded as being in the area or amongst the neighbouring properties for the purposes of this objective. 33 It is therefore relevant for me to test the possible amenity impacts on the area of the present proposal compared to that of the presently approved use. There are a number of controls that are raised in this regard. Particularly raised by the council are those in 3.1.2 of the Sex Industry DCP where control 1 relevantly deals with a prohibition on locating such premises directly opposite land developed for residential purposes, this being the case in these proceedings, and a locational requirement in the third of the controls requiring a 75 m radius from any existing approved adult entertainment or sex industry premises. It is acknowledged (and not contested in these proceedings) that each of those controls is breached by the present application. 34 The decision of the Court of Appeal in Zhang v Canterbury City Council [2001] NSWCA 167; (2001) 115 LGERA 373 makes it clear that I am obliged to commence or use as a focus for my consideration any relevant Development Control Plan. In this case, as there is an acknowledged non-compliance, for me to set aside the provisions of the Sex Industry DCP there lies a persuasive responsibility on the applicant to demonstrate to me that the objectives of the Sex Industry DCP have not been breached. 35 I turn in dealing with this issue to the nature of the approval given by Brown C in December 2000. As earlier noted, the approval was for an adjunct use with a brothel immediately to the south. The link, at least as far as the Elizabeth Street frontage was concerned, was an entirely internal one. 36 It is clear from the Commissioner's decision that that which was approved was for an increase of the number of permitted sex workers on the combined premises by two. The evidence that was given in the case on behalf of the applicant was as set out in para 25 of Brown C's decision – being that there was likely to be an increase in patronage from approximately two clients per hour to three clients per hour and this was described as a minimal cumulative impact. 37 At para 34, Brown C deals with the question of amenity impacts and concluded, in that paragraph and in a number of following paragraphs, that there would be no amenity impacts warranting his refusal of the application. It is in terms of that conclusion – dealing with the operation of the premises within the genus of sex industry premises – that I turn to consider whether I can be satisfied that there will be no impact on the amenity of the area by this specific species of sex industry premises. 38 I turn now to the proposed plans. The plans show that, at the Elizabeth Street frontage, the premises will be entered by the present front door screened by a privacy wall. There will be a lounge with a number of tables contained inside. On the ground floor, there will be a change room, a locker and laundry facilities together with ablution facilities attached to the change room. 39 As I understand the application it is not proposed that there will be any sexual activity taking place on the ground floor. 40 On the first floor, there is proposed to be one significant building change to the layout of the premises and that is the incorporation of an outdoor smoking terrace over the traditional return passageway in such terrace designs. There would also be three rooms (described as activity rooms) together with ancillary lounges, sauna and spa areas and an ensuite bathroom. 41 The front section of the premises, as is customary in such terrace houses, is at a slightly different level to that of the rear return rooms and is accessed by going down the stairs and back up the stairs to the rear section. All of the upstairs area within the fabric of the building, that is excluding the smoking terrace, is to be devoted to sexual activity areas. 42 If I were required to determine it, which I am not, I am satisfied that the sanitary facilities provided by the ensuite bathroom at the rear satisfies the overall relevant provision of the Sex Industry DCP, contained in the specific requirement in A14.1, relating to additional health standards for sex on premises venues and swingers' clubs. 43 Having described those activities, it is also appropriate to describe the nature of the application. The application proposes, in the final form following multiple, cascading amendments to the proposed plan of management, that there would be no more than 35 persons on the premises at any one time – with no more than 25 persons being permitted on the premises after midnight with what Mr Pickles, counsel for the applicant, described as a lock-in provision, that is no new patrons would be admitted after midnight. Presumably those who left after midnight would be required to stay away. There would also be an overall limit of 45 patrons to be admitted to the premises on any day. 44 The proposed hours of operation of the premises (originally proposed to be from 10am to 2am the following day, Monday to Sunday) were amended to 10am to 1am the following day, the now proposed concluding hour being consistent with the present approved brothel use which is an approved use that continues to attach to these premises (having been taken up with respect to them). 45 A detailed plan of management was prepared by Mr Kennan, the applicant's planner, and it was a plan of management which underwent a significant variety of changes during the course of the hearing. 46 At the present stage, it is not necessary for me to deal with that plan of management in great detail – save to say that it contained a variety of operational controls including one which is an aspirational control that the receptionist at the premise would use his or her best endeavours to ensure that no more than four patrons exited the premises at any time. There was no ability to control that save the suggestion that there might be some holding back of lockers keys from the changing areas. However, the relevance of that is a little unclear as I have been provided with no detailed information about how such premises in fact operate apart from that which can be inferred from the plans for which approval is sought. 47 The applicant proposes, by this application – if approved, to relocate an existing business operated as a swingers' club at 414 Bourke Street at Surry Hills. I have in evidence a copy of the plans for those premises which appear to show that there is to be a significantly larger area and a significant variation to the facilities by the incorporation of a spa to the possible activities that might be conducted at the premises (simply from the physical nature of that which is proposed for the present premises). 48 I have also in evidence a copy of a council Minute Paper from April 2000 that deals with a modification application for the hours of operation of these premises at 414 Bourke Street. That refers, in the Minute, to a plan of management that was provided to the council as part of that application and was described in the Minute Paper as satisfactorily addressing a number of enumerated concerns together with a variety of other matters. 49 In the present proceedings, the evidence that I have concerning possible impacts of an approval comes from the statement of evidence of Mr Kennan (who, as I earlier noted, is the planner who gave evidence on behalf of the applicant). He provided a written Statement of Evidence dated 12 December 2009 and he also gave oral evidence concurrently with Mr Reid, the council's planner in these proceedings. His oral evidence provided some (but limited) illumination concerning a number of matters in his Statement of Evidence. 50 The relevant paragraphs in his Statement of Evidence that relate to possible amenity impact matters – to which he gave consistent support and, at least in one respect, minor expansion in his oral evidence – are contained initially in paras 2.11, 12 and 13 and 2.16 of his Statement of Evidence. 51 The first portion of this reads as follows: "2.11. I am instructed that he applicant currently operated a swingers club at number 414 Bourke Street, Surry Hills and that the proposed development involves the relocation of that use to the subject site. 2.12. I have undertaken a site inspection of the existing premises at number 414 Bourke Street during operating hours and have not seen any activity associated with that land use which would lead to a conclusion has an adverse impact on the amenity of the area within which it is located and I am instructed that there have no complaints regarding the operation of that facility. 2.13. Having made site inspections of the subject site and its locality I am of the opinion that the locality of the subject site is similar to that of number 414 Bourke Street in that there is a mix of land uses consistent with the zone". 52 I interpolate, here, that during the course of his oral evidence, Mr Kennan indicated that he had made two inspections of the external area of these premises during operating hours on Saturday nights and that he had seen, on one occasion, limited number of persons entering the premises and, on the other occasion, no persons entering the premises. 53 Mr Kennan did not undertake an internal inspection of the premises, nor was he present, at least as I understood his evidence, at the closing time (whatever that might have actually have been) of those premises on each of those occasions. The only information Mr Kennan had about the number of persons who may have been on those premises was those who he observed (or, in a metaphysical sense, did not observe on one occasion) entering the premises. 54 That is a matter of relevance, it is my opinion, in assessing what might be the impact of premises where there might be twenty-five persons exiting the proposed premises at 1 am at the time of closure – there not being any flexibility, on my reading of the proposed conditions, if there were twenty-five persons on the premises at 1 am in forcing them to leave in smaller groups. The premises would be obliged to close and those on it at that hour would be obliged to leave. 55 The next matter in this element of Mr Kennan's Statement of Evidence is contained in 2.16 which reads as follows: "The site is located in close proximity to a number of public transport facilities and it is unlikely that the use of the site as a swingers club would generate any additional traffic or pedestrian activity in the locality which would adversely impact on the amenity of the locality." 56 That is a breathtakingly sweeping statement unsupported by any evidence relating to the methods of arrival by or departure from the existing premises by patrons of the existing premises. Whilst the first part of the statement – that is, the proximity to public transport facilities – is undoubtedly correct, it is encumbent on any expert not merely to provide some factual basis and some assumption but also to provide the chain of logic that leads from the facts to the conclusion, particularly the assumptions that underlie those conclusions. There is no such chain of reasoning provided here. 57 The same assertion in general terms is made in 2.23 of his Statement of Evidence, under the heading Traffic Generation where he adds the availability of taxi services in addition to the availability of public transport but provides no appropriate change of reasoning. 58 I turn to his final conclusion and that is at 3.2: "On the basis of information provided to me and the information gained during my inspection of both the site at No 414 Bourke Street Surry Hills I am, for the reasons provided in this statement of evidence, of the view that there is not sufficient justification to form the conclusion the use of the site as a swingers club should be refused." 59 That in itself is an unusual formulation – in that it clearly implies that there is some justification to form the conclusion that it should be refused but not sufficient justification to do so. In my view that is an inappropriate framing of the test that I am obliged to address in these proceedings. Given what the Court of Appeal says to me in Zhang and given the objectives contained in the relevant provisions of the LEP, particularly the final objective for the zone, that is, to ensure that nuisance generated by non-residential development such as that related to operating hours, noise, loss of privacy, vehicular, pedestrian traffic and other factors is controlled, it seems to me, given that there is clearly a breach of controls 1 and 3 and 3.1.2 of the Sex Industry DCP, the applicant has a persuasive responsibility to demonstrate to me that there would be no reasonable likelihood of any impact on the amenity of residential properties in the surrounding area. 60 I cannot be satisfied, on the inadequate evidence that has been provided to me, that that is the case. 61 I am therefore of the view that the application is not consistent with objective (h) of the zoning controls for Zone 10, the mixed industry uses zone. The application must therefore fail on that basis. 62 If I were to be wrong in reaching that conclusion, I had put the proposition to Mr Pickles that I might contemplate the imposition of a trial period for twelve months and I asked him to seek instructions from his client about the appropriateness or otherwise of such a trial period. He informed me, on proper instructions, that such a trial period would be unacceptable for economic reasons and would, at least on my understanding of what he said to me, mean me making a constructive refusal of the application. If I am wrong about the overall non-compliance, I am satisfied that it would be appropriate to impose a trial period to cure any elements of uncertainty; as the imposition of such a trial period would, as I understand it, constitute constructive refusal – that would provide a second basis upon which to refuse the application. 63 The consequences of the foregoing are that the orders of the Court are: 1. The appeal is dismissed; 2. Development Application D/2009/1121 for alterations and additions at 481 Elizabeth Street, Surry Hills, and the use of these premises as a swingers club is determined by the refusal of development consent; and 3. The Exhibits are returned. Tim Moore Senior Commissioner DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.