For almost 10 years, Brothel Busters conducted surveillance on behalf of councils and the legal brothel industry. Its work  saw more than 60 brothel closure orders issued across 16 council areas. However, the agency's owner, Chris Seage, confirmed he had been forced to "call time" on the operation because there is now "no viable legal avenue" to shut parlours.

"I have made this decision in light of the election result last Saturday," he said. "Unfortunately it is just too hard to close illegal brothels when you are dealing with a government that doesn't care."

Mr Seage said although work was still "pouring in", he had told clients it would be wrong to continue accepting work when there was no legal framework to use the evidence.

"I hate to say it, but I've given up," he said.

A recent case where Hornsby Shire Council failed in court to shut down a massage parlour offering sexual services was the "straw that broke the camel's back", he said.

It was Mr Seage's dossier of evidence that sparked an ICAC investigation into corruption at Willoughby Council. The inquiry found the council's building inspector Edward Karkowski had been accepting free sexual services at the Chatswood-based Oriana Bath House in return for his ongoing silence about the true nature of the business.

In 2012, he was found guilty of five counts of corruptly receiving a benefit and sentenced to six months' jail, though he was deemed "suitable" to serve the term in home detention. The Land and Environment Court ordered the parlour be shut. However in September last year, The Sun-Herald found that an illegal vice den was again thriving at the same address under the guise of a "ladies only" Korean sauna, which was also offering private health insurance rebates on "remedial massages".

Before he was elected last week, Premier Mike Baird said he would ask the NSW Parliament to establish a "full parliamentary inquiry" into the regulation of brothels across the state. The announcement makes him the third consecutive NSW Premier to have made a pledge relating to the industry – and cleaning it up.  In 2011, the O'Farrell government promised, if elected, to introduce a "new licensing authority" as an "early priority". Nothing eventuated. And in 2007, then Labor premier Morris Iemma rolled out reforms that placed the onus on councils to govern the industry. He said courts would be able to shut premises down in less than a week. But in reality, the courts can no longer close them down at all.

Last year, it emerged that at least 10 Sydney councils were paying private investigators to have undercover sex, as a last resort to gain evidence that could convince a judge to close an illegal establishment down. But last month, one of those, Hornsby Shire Council, lost a landmark court case against an illegal operator, with a judge having ruled that council's evidence of sex being sold on the premises fell short of NSW's specific definition of the term "brothel", which requires more than one prostitute to be providing services on site. The outcome means Hornsby  –  and other councils  –  would have to fund multiple trips, by private investigators, inside suspect premises to have any chance of a result.

Mr Seage said: "These illegal vice dens are breeding grounds for crime and sexual exploitation. But what that court decision essentially now means is that anyone can open an illegal brothel, safe in the knowledge they will not be prosecuted."

Not everyone will be dismayed to learn of Mr Seage's retirement. Since 2007 he has been subjected to an ongoing backlash and social media trolling from sex industry personnel.

"I won't miss them," he said of his detractors. "And I know they won't miss me."

eduff@fairfaxmedia.com.au