Wellington City Council acted unlawfully when it allowed the Lovely Lilly brothel in Mt Victoria to increase its number of prostitutes from three to five.

That was the finding of a High Court judgment made public yesterday which found in favour of the Mt Victoria Residents Association.

The decision could lead to the council closing the brothel because it contravened the District Plan.

Last year the association opposed an increase in the number of workers in the Pirie St bordello. It took High Court action after the council granted the consent.

The association said the expansion had led to an increase in the number of illegally parked cars in the area, intimidating men on the streets, and a client sleeping in his car.

The judgment found the council had not taken into account aspects of the Prostitution Reform Act when it decided not to publicly notify the resource consent application.

Section 15 of the PRA says that regard must be given if the brothel is likely to cause a nuisance or serious offence to the public, or is incompatible with the character of the area.

The resource consent was quashed by the High Court.

It means The Lovely Lilly can be run with only up to three workers who must live fulltime at the premises.

Residents association chairwoman Jessica Closson was delighted with the decision.

"It will go a long way to fixing the problems we have had here.

"We knew the council had to notify the consent but they didn't. They didn't even consider section 15 of the PRA. The court has said that was wrong."

The court awarded unspecified costs to the association for its proceedings against the council.

Ms Closson said the size of the payment would be discussed with council officers next week.

The judgment said the "the resource consent necessary for such [brothel] activity no longer exists and continuance of the activity becomes contrary to the provisions of the District Plan" but the consequences were "beyond the scope of the present judicial review".

Council spokesman Richard MacLean would not say whether that could lead to the brothel being forced to close.

"We're reviewing the decision as a matter of urgency in terms of its implications."

The Lovely Lilly co-owner Li Dan could not be contacted but her lawyer, Chris LaHatte, said the full impact of the decision was unclear.

"It doesn't necessarily close it down but they are now subject to whatever restrictions put on it by [the council].

Mr LaHatte would not comment on whether the brothel owners would seek damages from the council.

Family First NZ's Bob McCoskrie welcomed the court decision.

"This is a victory for families who have been victimised by the effects of the decriminalisation of prostitution including street prostitution, residential brothels, and brothels located near schools and preschools."

He called on the Government for a law change to protect residential communities from the impacts of brothels and prostitution.

WHAT IS LEGAL?

Before the Prostitution Reform Act 2003, it was illegal to run and earn a living from a brothel.

There were loopholes, however, with massage parlours able to obtain court licences to provide a "massage" service. The new law requires prostitutes to practise safe sex and gives them cover under employment relations law.

Since that time:

Hamilton introduced a bylaw to ban brothels from its suburbs

Upper Hutt is considering a bylaw to allow prostitutes to work from their homes

Manukau tried to make street prostitution illegal

Courts knocked back an attempt by Auckland to ban brothels from residential areas

- The Dominion Post