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[2011] VSC 330
Supreme Court of Victoria
2011-07-21
KYROU J
Original judgment source is linked above.
ADMINISTRATIVE LAW - Application for leave to appeal from an order of the Victorian Civil and Administrative Tribunal cancelling a venue's liquor licence and disqualifying the corporate licensee and two of its directors from holding a licence for 18 months - Whether the VCAT misconstrued provisions of the Liquor Control Reform Act 1998 and took into account irrelevant considerations.
LIQUOR LICENSING - Meaning of 'the amenity of the area in which the licensed premises are situated' - Meaning of 'the continuation in force of a licence' - Whether licensee responsible for conduct of crowd controllers - Harm minimisation object - Whether sentencing considerations are relevant to the exercise of licensing powers - Whether a director's personal responsibility and culpability are relevant to determining the sanction to be imposed on the director - Liquor Control Reform Act 1998, ss 1, 3A, 4, 17, 90, 91, 92, 95, 96, 108.
1 This is an application for leave to appeal from an order made on 4 May 2011 by a senior member of the Victorian Civil and Administrative Tribunal ('VCAT') that cancelled the liquor licence of the first appellant, Planet Platinum Ltd ('PPL'), and disqualified PPL from holding a liquor licence for 18 months ('VCAT order').[1] The VCAT order also disqualified two directors of PPL, John Trimble and Dragon Micovski, from being involved in the management of licensed premises or any corporation that holds a liquor licence for 18 months.
2 PPL is the licensee of the premises at 46 King Street, Melbourne ('Premises') from which it trades under the name, 'Showgirls Bar 20' ('Bar 20'). The licence permits PPL to serve alcohol for consumption inside the Premises 24 hours per day and to conduct sexually explicit dancing ('Licence'). In addition to being directors of PPL, Mr Trimble and Mr Micovski hold managerial positions: Mr Trimble is the chief executive officer of PPL and Mr Micovski is the nominee and manager in charge of the Premises.
3 There were two proceedings before the VCAT that were heard concurrently.
4 The first proceeding, which was based on s 95(1) of the Liquor Control Reform Act 1998 ('Act'), was commenced on 22 January 2010 by Licensing Inspector Hodgkin ('S 95 proceeding'). Section 95(1) provides that, if a licensing inspector considers that the continuation in force of a licence would detract from or be detrimental to the area in which the licensed premises are situated, he or she may apply to the VCAT for an order cancelling or suspending the licence. Inspector Hodgson relied on 31 particulars that were said to demonstrate that the conduct of the Bar 20 business on the Premises had a detrimental effect on the amenity of the area in the vicinity of the Premises ('S 95 particulars').[2]
5 The second proceeding, which was based on s 90 of the Act, was commenced on 24 September 2010 by Licensing Inspector Ross ('S 90 proceeding'). Section 90(1)(j) provides that a licensing inspector may apply to the VCAT to conduct an inquiry into a licensee where he or she considers that the licensee 'has conducted the business under the licence ... or allowed it to be conducted ... in a manner that detracts from or is detrimental to the amenity of the area in which the licensed premises are situated'. Inspector Ross relied on 15 particulars of alleged misconduct by PPL and its management ('S 90 particulars'), 12 of which overlapped with the S 95 particulars. Mr Trimble and Mr Micovski were added as respondents to the S 90 proceeding on 8 November 2010.
6 The VCAT published one set of reasons for both proceedings.
(a) the expression, 'the amenity of the area in which the licensed premises are situated' includes the area inside the premises;
(b) section 95(1) is not dependent on proof of fault on the part of the licensee of licensed premises; it requires only a causal connection between the operation of the licence and the detrimental impact on the amenity of the area in which the premises are situated; and
(c) for the purposes of the Act, a licensee is responsible for the conduct of crowd controllers.
8 The VCAT made extensive findings of fact in respect of the incidents that gave rise to the S 90 particulars and the S 95 particulars. Those incidents were said to have occurred in the period from 1 June 2008 until 28 December 2010. The VCAT's findings are summarised in the appendix to this judgment and will be discussed in detail below. Set out below is a brief overview of the VCAT's findings:
(a) Thirty-four incidents were the subject of evidence before the VCAT. The VCAT held that the particulars relating to incident FF were not made out. For reasons that are not apparent, the VCAT's reasons did not address incident CC. Of the 32 remaining incidents, 17 formed part of the S 95 particulars exclusively, three formed part of the S 90 particulars exclusively and 12 formed part of both the S 95 particulars and the S 90 particulars. It follows that the VCAT made findings in relation to 29 S 95 particulars and 15 S 90 particulars.
(b) Of the 32 incidents in relation to which the VCAT made findings that were adverse to PPL, Mr Trimble or Mr Micovski ('applicants'):
(i) seven incidents - incidents G, N, R, U, X, DD and EE - were held by the VCAT to involve assaults or unruly behaviour by patrons solely inside the Premises;[3]
(ii) one incident - incident BB - was held by the VCAT to involve breaches of s 108 of the Act occurring inside the Premises without any finding by the VCAT that there was any detriment to the amenity of the area outside the Premises;
(iii) two incidents - incidents H and K - were held by the VCAT to consist of minor statutory breaches that did not involve amenity issues;
(iv) one incident - incident P - was held by the VCAT to consist of breaches of the Licence that did not involve amenity issues;
(v) ten incidents - incidents B, C, L, Q, W, Y, Z, AA, GG and HH - were held by the VCAT to involve assaults or unruly behaviour that were detrimental to the amenity of the area outside the Premises exclusively for the purposes of the S 95 proceeding;
(vi) seven incidents - incidents A, D, E, J, S, T and V - were held by the VCAT to involve assaults or unruly behaviour that were detrimental to the amenity of the area outside the Premises for the purposes of the S 90 proceeding and the S 95 proceeding as a result of the acts or omissions of PPL or its agents, without the VCAT finding that a specific provision of the Act or the Licence had been breached; and
(vii) four incidents - incidents F, I, M and O - were held by the VCAT to involve assaults or unruly behaviour that were detrimental to the amenity of the area outside the Premises for the purposes of the S 90 proceeding and the S 95 proceeding as a result of the acts or omissions of PPL or its agents, with the VCAT finding that alcohol-related provisions of the Act had been breached.
(c) The three incidents that fell exclusively within the S 90 proceeding - incidents H, K and P - did not involve any amenity issues. Accordingly, each of the 11 incidents that were held to satisfy s 90(1)(j) of the Act - incidents A, D, E, F, I, J, M, O, S, T and V - were also held to satisfy s 95(1) of the Act. I will refer to these 11 incidents as 'the 11 amenity incidents in the S 90 proceeding'.
9 For the reasons set out below, I have concluded that the VCAT erred in law in making the finding set out at [7](a) above, in taking into account irrelevant considerations, and in intermingling its findings for the purposes of the VCAT order; that leave to appeal should be granted; that the appeal should be allowed; and that the VCAT order should be set aside. The further hearing of the appeal will be adjourned to enable the parties to make submissions on the orders to be made by the Court in the light of this judgment.
10 It goes without saying that, in hearing an appeal on a question of law under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act'), this Court does not have jurisdiction to rule on the merits of the VCAT's decision. Accordingly, nothing in this judgment should be interpreted as indicating that the VCAT's order would not have been justified if the VCAT had applied the correct legal principles.
11 The following background facts were set out in the VCAT's reasons.
12 Bar 20 is located on the eastern side of King Street, between Collins Street and Flinders Lane. The Premises comprise three floors. The first floor consists of a dancing stage where female dancers perform, a viewing area around the stage, the main bar area, pool tables and a number of private rooms where dancers perform sexually explicit dancing for customers who hire the dancers for that purpose. The ground floor consists of an entrance, a counter where patrons pay to enter, an entertainment room, a bar, a stage and a smoking room whose windows face King Street. The basement consists of a bar, themed private rooms where sexually explicit dancing is performed and a booth for booking a private dance.
13 On Sunday to Wednesday, only the first floor is in operation. On Thursdays, two floors are in operation. On Fridays and Saturdays, all three floors are in operation.
14 There are five other establishments in close proximity to Bar 20 that conduct sexually explicit dancing, namely, Dallas Showgirls, Spearmint Rhino, The Men's Gallery, Kilkenny Inn Goldfinger, and The Centrefold Lounge. Bar 20 and these establishments, other than The Centrefold Lounge, are licensed to sell alcohol for consumption off the licensed premises from 7.00am until 11.00pm.
15 The area where Bar 20 and the other establishments operate has a history of patron drunkenness and misbehaviour, including violent assaults resulting in serious injury.
16 PPL is a public company with 1,000 shareholders. It owns the freehold of the Premises as well as being the licensee.
17 Female dancers who perform sexually explicit dancing at the Premises pay a fee to PPL for the right to do so.
18 At all relevant times, PPL engaged an independent company, Pro-Tech Security, to provide crowd controllers at the Premises.
19 In December 2008, the Director of Liquor Licensing ('Director') gave an official written warning to PPL, Mr Trimble and Mr Micovski. The warning referred to the first 10 incidents in the S 95 proceeding and gave notice that if there were any further breaches of the Licence, an application would be made under s 90 of the Act for cancellation or suspension of the Licence. The warning also gave notice of the possibility of an application being made under s 92 of the Act for an order disqualifying Mr Trimble and Mr Micovski from operating licensed premises.
20 The applicants filed their application for leave to appeal on 26 May 2011, 22 days after the VCAT order was made.
21 On 30 May 2011, an Associate Justice of this Court referred the application for leave to appeal, along with the appeal, to a judge for hearing and determination. On 1 June 2011, the Associate Justice ordered that the VCAT order be stayed pending the hearing and determination of the application for leave to appeal. As a result of these orders, the application for leave to appeal was listed for an urgent hearing before me on 14 June 2011.
22 The purpose of the Act is 'to reform the law relating to the supply and consumption of liquor'.[4] The objects of the Act are set out in s 4, which provides as follows:
4 Objects
(1) The objects of this Act are -
(a) to contribute to minimising harm arising from the misuse and abuse of alcohol, including by -
(i) providing adequate controls over the supply and consumption of liquor; and
(ii) ensuring as far as practicable that the supply of liquor contributes to, and does not detract from, the amenity of community life; and
(iii) restricting the supply of certain other alcoholic products; and
(iv) encouraging a culture of responsible consumption of alcohol and reducing risky drinking of alcohol and its impact on the community; and
(b) to facilitate the development of a diversity of licensed facilities reflecting community expectations; and
(c) to contribute to the responsible development of the liquor and licensed hospitality industries; and
(d) to regulate licensed premises that provide sexually explicit entertainment.
(2) It is the intention of Parliament that every power, authority, discretion, jurisdiction and duty conferred or imposed by this Act must be exercised and performed with due regard to harm minimisation and the risks associated with the misuse and abuse of alcohol.
17 Licence condition - extended hours
(1) Subject to subsection (2), it is a condition of every licence that authorises the supply of liquor outside ordinary trading hours that the licensee does not cause or permit undue detriment to the amenity of the area to arise out of or in connection with the use of the premises to which the licence relates during or immediately after the hours outside ordinary trading hours to which it relates.
24 Sections 90, 91, 92, 95 and 96 of the Act relevantly provide:
90 Application for inquiry
(1) If a person referred to in subsection (2) considers that a licensee or permittee -
(a) has contravened this Act, the regulations, the licence or BYO permit, or a condition of the licence or BYO permit; or
...
(j) has conducted the business under the licence or BYO permit, or allowed it to be conducted, in a manner that detracts from or is detrimental to the amenity of the area in which the licensed premises are situated; or
(k) is otherwise not a suitable person to hold a licence or BYO permit -
the person may apply to the Tribunal to conduct an inquiry into the licensee or permittee.
(2) The persons who may apply under this section are -
(a) the Director;
(b) the Chief Commissioner;
(c) a licensing inspector;
(d) the Council of the municipal district in which the licensed premises are situated.
...
91 What may Tribunal do on an inquiry?
(1) After conducting an inquiry under this Division and if satisfied that any of the grounds set out in section 90(1) ... exist, the Tribunal -
...
(b) ... may make any one or more of the following orders -
(i) an order cancelling the licence or permit;
(ii) an order suspending the licence or permit for the period specified by the Tribunal;
(iii) an order endorsing the licence or permit under section 93;
(iv) an order imposing a fine on the licensee or permittee not exceeding $30 000;
(v) an order varying the licence or permit.
(2) An order varying the licence or BYO permit may include -
(a) a variation of the times outside ordinary trading hours at which the licence or permit authorises the supply of liquor;
(b) a variation of the size or perimeter of the licensed premises;
(c) a variation of a condition of the licence or permit (other than a condition imposed by this Act);
(d) the imposition of a new condition on the licence or permit;
(e) the removal of a condition of the licence or permit (other than a condition imposed by this Act).
92 Disqualification
(1) If satisfied that a ground for making an order under section 91 ... exists, the Tribunal may also order that the licensee or permittee or any director or nominee of the licensee or permittee (if it is a body corporate) ... be disqualified -
(a) from holding a licence or BYO permit;
(b) from being a director in any body corporate that holds a licence or BYO permit;
(c) from being a partner in any partnership that holds a licence or BYO permit;
(d) from having a beneficial interest (whether directly or indirectly) in the shares of any body corporate that holds a licence or BYO permit;
(e) from in any way (whether directly or indirectly) taking part in, or being concerned in, the management of any licensed premises or any body corporate that holds a licence or BYO permit or any licensed club;
(f) from being employed by any licensed club or any person that holds a licence or BYO permit.
...
95 Application by others
(1) If a person referred to in subsection (2) considers that the continuation in force of a licence or BYO permit would detract from or be detrimental to the amenity of the area in which the licensed premises are situated, the person may apply to the Tribunal for an order cancelling or suspending the licence or permit.
(2) The persons who may apply under this section are -
(a) the Chief Commissioner;
(b) a licensing inspector;
(c) the Council of the municipal district in which the licensed premises are situated.
96 Cancellation or suspension by Tribunal
(1) If the Tribunal on an application under section ... 95 is satisfied that the grounds set out in the application exist, the Tribunal may make an order -
(a) cancelling the licence or BYO permit; or
(b) suspending the licence or permit for the period specified by the Tribunal; or
(c) varying the licence or permit.
(2) Section 91(2) applies for the purposes of subsection (1)(c).
25 The expression 'amenity' is defined in s 3A of the Act as follows:
3A What is amenity?
(1) For the purposes of this Act, the amenity of an area is the quality that the area has of being pleasant and agreeable.
(2) Factors that may be taken into account in determining whether the grant, variation or relocation of a licence would detract from or be detrimental to the amenity of an area include -
(a) the presence or absence of parking facilities;
(b) traffic movement and density;
(c) noise levels;
(d) the possibility of nuisance or vandalism;
(e) the harmony and coherence of the environment;
(f) any other prescribed matters.
(3) Nothing in subsection (2) is intended to limit the definition of amenity.
108 Offences by licensee and permittee
(1) A licensee or permittee -
(a) must not, except in accordance with the licence or BYO permit and this Act -
(i) supply liquor; or
(ii) permit or cause liquor to be supplied; or
(iii) permit liquor to be consumed -
on the licensed premises or on any authorised premises;
...
Penalty: 60 penalty units.
...
(4) A licensee or permittee -
(a) must not supply liquor to a person who is in a state of intoxication;
(b) must not permit drunken or disorderly persons to be on the licensed premises ...
Penalty: 120 penalty units.
(5) It is a defence to a prosecution for an offence under subsection (4)(b) for the defendant to prove that -
(a) the defendant did not know that drunken or disorderly persons were on the premises; and
(b) the defendant had taken reasonable steps to ensure that drunken or disorderly persons were not on the premises. ...
AMENITY
The licensee shall not cause or permit undue detriment to the amenity of the area to arise out of or in connection with the use of the premises to which the licence relates during or immediately after the trading hours authorised under this licence. The licensee shall ensure that the level of noise emitted from the licensed premises shall not exceed the permissible noise levels for entertainment noise as specified in the State environment Protection Policy (Control of Music Noise from Public Premises) No N-2.
...
1.6 At all times, the licensee must ensure that performers and other staff do not perform acts that condone the irresponsible consumption of alcohol.
1.7 The licensee must not enter into an agreement with a party bus operator (either licensed or unlicensed) whereby patrons of the party bus are offered cheap drinks or other inducements.[6]
...
2 Security and control
2.1 All doorways and windows are to be screened so as to prevent any viewing of the sexually explicit entertainment from outside the premises or from any part of the premises used for other purposes.
2.2 The licensee shall install and maintain a surveillance recording system able to clearly identify individuals, which shows time and date and provides continuous images of all entrances and exits, bars and entertainment/dance floor areas. The surveillance recording system must operate at all times when the venue is open to the public. A copy of the recorded images must be available upon request for immediate viewing or removal by Victoria Police or a person authorised by the Director of Liquor Licensing, or otherwise retained for at least one month. The positioning of cameras is to be to the satisfaction of the Licensing Inspector or Compliance Inspector. The surveillance recording system as described above must also be installed in any such other areas of the licensed premises as the Director of Liquor Licensing may require.
2.5 If the licensed premises are open to the public before 8:00pm, and there are at least 50 patrons in attendance at the venue, two crowd controllers, licensed under the Private Security Act 2004, for the first 100 patrons and one additional crowd controller for each additional 100 patrons or part thereof are required to be employed.
2.6 After 8:00pm, crowd controllers, licensed under the Private Security Act 2004 are to be employed at a ratio of 2 crowd controllers for the first 100 patrons and 1 crowd controller for each additional 100 patrons or part thereof. One such crowd controller is to be present at the entrance of the premises to monitor the behaviour of patrons arriving at or departing from the premises at all times when the venue is open to the public.
3.1 The licensee must take all reasonable steps to manage and supervise all aspect of the provision of sexually explicit entertainment so as to ensure that no offences under the Prostitution Control Act 1994 or Section 18(1)(d) of the Summary Offences Act 1966 occur on the licensed premises. This includes operating an escort agency as defined in the Prostitution Control Act 1994, from the licensed premises.
...
3.6 There shall be no sexually explicit entertainment provided in areas that are not visible from the public areas of that part of the licensed premises used for the provision of sexually explicit entertainment.
4.1 At all times, the licensee must abide by any guidelines relating to the responsible service of alcohol and intoxication issued by the Director of Liquor Licensing ...
4.2 The licensee must take all reasonable steps to adequately supervise and manage all staff to ensure the responsible service of alcohol in the licensed premises, at all times.
...
MAXIMUM CAPACITIES
Basement (100 patrons) Ground Floor (120 patrons) First floor (200 patrons) Total for whole premises (420 patrons).
TRADING HOURS
FOR CONSUMPTION OFF THE LICENSED PREMISES -
Sunday Between 10am and 11pm
Good Friday & Anzac Day Between 12 noon and 11pm
On any other day Between 7am and 11pm
FOR CONSUMPTION ON THE LICENSED PREMISES -
At any time on any day (excluding the period between 7am and 12noon on Good Friday and Anzac Day).
The purpose that I must bear in mind when making a determination is the protection of the public, deterrence, maintenance of proper standards of licensed venues and in maintaining the reputation and confidence in the liquor industry. Put another way, any determination I must make should be in the public interest, which I am bound to protect.
It was made clear by Murphy J in the Supreme Court in Inglese Pty Ltd v Estate Agents Board ... that in licensing matters, the public interest is a combination of protection of the members of the public and maintaining standards in the industry. The outcome is not to be punitive in nature although the respondent may perceive it as such.
Further, I must examine the fitness of the management and the respondents to continue to hold the licence. In Director of Consumer Affairs v Jay Jacq Pty Ltd ... his Honour Nathan J ... stated-
In considering the issue of the fitness or propriety of an applicant for a licence, the nature, number and date of those convictions must be relevant considerations to be borne in mind. In some circumstances, as this is one, those factors establish that a person, found to have behaved in such a way, could not be a person who could be seen as fit to deal with the members of the public or to hold a licence under the Act. The convictions and behaviour go to the very substance of the honesty, integrity and reliability of a motorcar trader.
The same may be said of those that hold and manage establishments such as Bar 20. These proceedings have uncovered a litany of incidents in the last three years which are quite disgraceful and which have had a serious effect on both the amenity of the area and the citizens and visitors to the City of Melbourne. The findings that I have made in relation to each particular are clear. ... [N]othing short of cancellation of the respondents' licence and suspension of its directors will fix the problem.
I am satisfied that no amount of fine or suspension are likely to make any difference to this particular venue conducting itself in the manner that it has or, those that manage it conducting themselves in a different way.
It is clear from the way the case was put on behalf of the respondents in both proceedings, that in most of the cases, the management of the venue do not believe that anything wrong has happened as a result of their management. They are unable to see how their management could have improved the situation. They have taken the course of blaming others, in particular the public themselves and the crowd controllers. In my view, that is not a reasonable course for a responsible licensee to adopt. I agree ... [that]:
To do nothing will mean that the incidents will continue. ...[E]ither the management of the venue will not change its style of management or alternatively it is the way the venue trades that is causing the trouble.
A strong message must be sent to other licensed operators that unless licensed premises are managed in a proper manner and do not create a detriment to the amenity of the area, a severe penalty will be given. In this case nothing short of cancellation of the respondents' licence and suspension of its nominee and directors will suffice. The management of this venue has put the safety of the people who visit the premises and those in the surrounding area at risk. It is a privilege to be allowed to serve liquor and it is required to be done with adherence to the laws and the licence and without adverse effect on the amenity of the area. Given the circumstances of this proceeding, nothing less than the penalties I propose would satisfy the collective conscience of the people of Victoria. [7]
30 The applicants filed a proposed notice of appeal dated 6 June 2011. At the hearing before me on 14 June 2011, I gave the applicants leave to file an amended proposed notice of appeal that reflected the submissions that had been made on that day. I also gave leave to the respondents to object to any part of the amended proposed notice of appeal that did not reflect those submissions.
31 The amended proposed notice of appeal relied on numerous grounds of appeal. Some of those grounds, such as the ground that the VCAT's reasons are inadequate, were not the subject of substantive submissions at the hearing on 14 June 2011. I will not deal with any grounds that were not the subject of substantive submissions at the hearing.
32 The alleged errors of law upon which the applicants rely in the amended proposed notice of appeal that were the subject of submissions at the hearing may be summarised as follows:
(a) The VCAT erred in law in deciding that the expression, 'the amenity of the area in which the licensed premises are situated' in ss 90(1)(j) and 95(1) of the Act includes the area inside the licensed premises.
(b) The VCAT erred in law in attributing to PPL the wrongful conduct of crowd controllers.
(c) The VCAT erred in law in deciding that s 95 of the Act can apply where the amenity of the area in which the Premises are located is affected by the conduct of PPL.
(d) The VCAT erred in law by taking into account irrelevant considerations as a result of intermingling the issues in the two proceedings.
(e) The VCAT erred in law in having regard to the harm minimisation object in s 4(2) of the Act to the exclusion of the other objects in s 4(1).
(f) The VCAT erred in law in determining the sanctions to be imposed on the applicants, including by inappropriately taking into account sentencing considerations and failing to take into account the different levels of responsibility and culpability as between Mr Trimble and Mr Micovski.
33 I will discuss these alleged errors of law in turn.
34 As I have already stated, the VCAT decided that the expression, 'the amenity of the area in which the licensed premises are situated' includes the amenity of the area inside the Premises. The VCAT's reasons were as follows:
It is clear that subject to the restrictions on the licence, any member of the public may, upon payment of the appropriate fee, enter the premises of Bar 20. These are premises that are open to the public. Therefore, it necessarily follows that the inside of the premises are part of the area referred to in both the Act and the licence. It follows that when I examine the allegations relating to both s 95 and s 90(1)(j) of the Act, I am required to consider both the amenity inside and outside the licensed premises. Further, if there is a disturbance inside the premises, it is very likely that that disturbance will spill outside. For example, if a fight breaks out inside the premises, those involved in the fight will more than likely be ejected from the premises, and thus are likely to create an unpleasant scene on the footpath in front of or near the Bar 20 premises.
Further, it should be noted that if members of the public wish to attend [the] Bar 20 premises, they should be able to do so in an atmosphere that, for example, is free from drunkenness and violence. It matters not, in my view, whether that violence is inside or outside the premises.[9]
35 The applicants submitted that the expression, 'the amenity of the area in which the licensed premises are situated' refers to the surrounding neighbourhood and is exclusive of the licensed area itself. They contended that events that cause a loss of amenity for patrons inside the licensed premises and have no impact on persons outside the premises cannot detract from or be detrimental to the amenity of the area outside the premises.
36 The applicants relied on the following statement in the second reading speech for the Liquor Control Reform Bill ('Bill'):
The Victorian government and the community have a concern about the level of underage drinking, violent and criminal behaviour as a consequence of drunkenness, drink-driving and any adverse effect on the amenity of communities in proximity to licensed premises.[10]
37 The respondents submitted that the expression, 'the amenity of the area in which the licensed premises are situated' includes the area inside the licensed premises because anything that takes place inside the premises will inevitably have an impact on persons engaged in lawful activities outside the premises. The respondents relied on the decision in Broad v Brisbane City Council[11] in which the Full Court of the Supreme Court of Queensland held that the concept of 'amenity' is wide and flexible, and may embrace not only the effect of a place on the senses but also on a resident's subjective perception of the location.[12] That decision was applied by Kellam P and Member Angell in Black v Liquor Licensing Victoria.[13] The respondents contended that the amenity of an area in which licensed premises are situated may be adversely affected if persons outside the premises learnt of activities that occurred inside the premises, without their having directly observed the activities themselves.
38 The respondents also contended that the words 'arise out of or in connection with' the licensed premises in s 17 are apt to include activities inside the premises.
39 In my opinion, the expression, 'the amenity of the area in which the licensed premises are situated' in ss 90(1)(j) and 95(1) does not include the area inside the licensed premises. Accordingly, activities that detrimentally affect only the amenity of patrons inside the licensed premises do not fall within those sections. In order for activities inside the licensed premises to affect detrimentally 'the amenity of the area in which the licensed premises are situated' for the purposes of ss 90(1)(j) and 95(1), those activities must have a sensory impact on persons in the area outside the licensed premises.
40 An example of an activity inside licensed premises that has a sensory impact on persons in the area outside the premises and can affect the amenity of that area is an assault that takes place inside the premises that can be seen by persons outside the premises through a window or an open door. Likewise, an assault that takes place inside licensed premises can affect the amenity of the area outside the premises if the victim of the assault runs on to the street covered in blood and is seen by passers-by.
41 An example of an activity inside licensed premises that does not have a sensory impact on persons in the area outside the premises and does not affect the amenity of that area is an argument between patrons that ceases following the intervention of crowd controllers and does not require the patrons to be ejected. Likewise, a break-down of facilities such as air-conditioning that causes discomfort and loss of amenity for patrons inside licensed premises would not have any adverse amenity impact on persons outside the premises. A further example is excessive noise inside licensed premises that cannot be heard outside the premises.
43 My conclusion is also supported by s 4(1)(a)(ii), which refers to 'the amenity of community life'. This expression strongly suggests that, for the purposes of ss 90(1)(j) and 95(1), 'the amenity of the area' refers to the area outside the licensed premises that is used by the public.
44 There are numerous provisions in the Act that draw a distinction between the licensed premises and the area in which the premises are situated. Those provisions include:
(a) section 35(1) and (2), which refers to applications relating to licences being advertised in newspapers 'circulating in the area ... in which the premises to which the application relates are or are to be situated';
(b) section 36, which refers to the giving of notice of applications to persons 'in a specified area' where the Director considers that the grant, variation or relocation of a licence 'may cause material detriment to the persons to be notified';
(c) provisions - including ss 90 and 95 - that confer certain rights on 'the Council of the municipal district in which the licensed premises are situated'. Those provisions indicate that the Act is concerned with the amenity of the area surrounding the licensed premises rather than the area inside the premises; and
(d) provisions in pt 8A that refer to 'designated areas' that are 'in a public place that is in the immediate vicinity of licensed premises within the area'. Section 147(3) states that a reference in that section to the immediate vicinity of licensed premises means a place that is within 100 metres of the licensed premises. Some of the provisions in pt 8A refer to 'a designated area' and 'the licensed premises' in mutually exclusive terms.[15]
45 The distinction between the activities inside the licensed premises and the amenity of the area outside the premises makes sense when one has regard to the process that must be followed for the granting of a licence under the Act. Before a licence can take effect, a town planning permit must be obtained from the local council.[16] An application for such a permit must be accompanied by drawings and specifications about the proposed licensed premises that satisfy town planning requirements. Those requirements deal with features of the physical premises that can have an impact on the amenity of persons using the premises. Section 16 of the Act imposes a condition on every licence that the use of the licensed premises must comply with the applicable planning scheme.
46 The activities inside the licensed premises with which the Act is principally concerned are the supply and consumption of liquor. The Act contains numerous provisions that regulate these activities directly and impose criminal and other sanctions on the licensee for breaches of those provisions. Compliance with those provisions enhances the amenity of persons using the licensed premises. In contrast, the amenity of persons outside the licensed premises is dealt with more generally under ss 90(1)(j) and 95(1).
47 There is nothing in s 17(1) which detracts from my conclusion at [39] above. That section imposes a condition on the Licence in terms that differ from the wording of ss 90(1)(j) and 95(1). In particular, s 17(1) refers to 'the area' rather than to 'the area in which the licensed premises are situated'.
48 My conclusion at [39] above was arrived at independently of the second reading speech for the Bill. The speech did not assist me.
49 The questions considered in Broad and Black, which concerned the meaning of 'amenity', differ from those with which I have dealt. My conclusions on the meaning of 'the area in which the licensed premises are situated' do not affect those cases.
50 I note, in passing, that the particulars in support of both the S 95 proceeding and the S 90 proceeding defined 'the area' as 'the area in the vicinity of the licensed premises'.
51 It follows that the VCAT erred in law in deciding that the expression 'the amenity of the area in which the licensed premises are situated' includes the area inside the licensed premises.
52 This error vitiated the VCAT's decision that eight incidents - incidents G, N, R, U, X, BB, DD and EE - detrimentally affected the amenity of the area in which the Premises are situated. Those incidents comprised particulars 7, 12, 15, 18, 21, 26, 28 and 29 of the S 95 particulars and particular 15 of the S 90 particulars, and represent 27.5 per cent of the 29 incidents in respect of which the VCAT held that there had been a detrimental effect on amenity.[17] In relation to the eight incidents, the VCAT took into account irrelevant considerations, namely, events that affected the internal amenity of the Premises, but did not affect the amenity of the area in which the Premises are situated.
PPL's responsibility for the conduct of crowd controllers
53 The VCAT decided that, for the purposes of ss 90(1)(j) and 95(1) of the Act, the wrongful conduct of crowd controllers that were engaged by PPL could be attributed to PPL. The VCAT's reasons were as follows:
The Act bestows upon the licensee the responsibility for meeting its obligations that are both referred to in the Act and in its licence. ...
It would also appear that crowd controllers are the agents of the licensee. ...
...
[T]he licensee nominee, manager and directors bear the responsibility for the management of the licensed establishment. The Act does not intend that any other persons, to whom I have referred, hide behind the actions of crowd controllers. If the crowd controller does the wrong thing insofar as the licensed premises is concerned, that is the responsibility of the licensee, nominee and directors.
The Private Security Act does not, in my view, provide any comfort for the liability that would befall the licensee, nominee or directors of the licensee. The Private Security Act sets out a scheme for the registration of crowd controllers and others. It does not impinge or remove any responsibility from the management of the licensee company. ...
Therefore, I take the view that the wrongful actions of a crowd controller, at the Bar 20 venue, are the responsibility of the licensee, its directors and nominee. The statute does not provide for an abrogation of responsibility.[18]
54 The applicants submitted that the wrongful conduct of crowd controllers cannot be attributed to a licensee for the purposes of proceedings under ss 90(1)(j) or 95(1) because crowd controllers are regulated under the Private Security Act 2004 ('PSA') rather than the Act. Under the PSA, only licensed crowd controllers can perform crowd control functions and only a licensed crowd control business can provide the services of other persons to perform such functions.[19] According to the applicants, as a licensee under the Act cannot direct crowd controllers licensed under the PSA on the performance of their functions, the conduct of a crowd controller cannot be attributed to the licensee for the purpose of establishing a breach of the Act by the licensee. It followed, so it was said, that the VCAT erred in finding that the applicants had failed in their managerial obligations by not providing a greater degree of oversight of the actions of crowd controllers and in attributing their conduct to PPL.
55 The applicants contended that the VCAT's findings about the degree of managerial supervision that was required of the activities of crowd controllers meant that management staff would be required to perform crowd control functions in breach of the PSA. While a licensee could not abrogate its responsibilities in favour of crowd controllers, so it was said, the PSA regulatory regime meant that crowd controllers, rather than the licensee, were predominantly responsible for the management of patrons in the licensed premises and for the screening of entry of patrons into the premises.
56 I reject the applicants' contentions. As the licensee, PPL is responsible for managing Bar 20 in a manner that ensures compliance with the Act and the Licence. As PPL is a corporation, compliance with the Act and the Licence can only be effected through the acts of its officers, employees and agents. Some of the officers, employees and agents will have specialist skills and may be regulated by statute or professional or industry regulations and rules. Examples include lawyers that are regulated by the Legal Profession Act 2004 and crowd controllers who are regulated by the PSA. For the purposes of determining whether an act or omission of an agent constitutes a breach by PPL of the Act or the Licence, it cannot matter whether the agent was subject to a separate regulatory scheme in the performance of his or her functions.
57 Contrary to the submission of the applicants, the existence of separate legislative schemes for regulating the liquor industry and the crowd control industry does not mean that the provisions of the PSA would be undermined if a licensee of licensed premises were held responsible for a failure of crowd controllers to perform their functions appropriately. Such a result would not preclude the taking of appropriate action against the crowd controllers under the PSA.
58 A licensee under the Act is responsible for ensuring that the licensed premises have adequate resources to ensure compliance with the Act and the relevant licence. Those resources include crowd controllers. The provisions in a licence about the number of crowd controllers who must be present at particular times and in particular parts of the premises are minimum requirements. If the orderly functioning of the premises requires additional crowd controllers, the licensee is responsible for procuring them and directing them to perform duties in particular parts of the premises. The licensee may direct a crowd controller to refuse entry to an intoxicated person or to eject an intoxicated patron, even though the licensee cannot direct the crowd controller on how he or she physically performs the task.
59 For the above reasons, the VCAT did not err in law in attributing to PPL the acts and omissions of crowd controllers engaged by PPL through Pro-Tech Security.
60 Before leaving the issue of PPL's responsibility for the acts and omissions of the crowd controllers, I should note that some of the VCAT's observations about the degree of supervision of crowd controllers and patrons, if taken literally, may require a large number of managers working in licensed premises.[20] As the legal correctness of these observations was not an issue on the appeal, I will not consider them.
Whether s 95(1) applies where amenity is affected by a licensee's conduct
61 As I have stated at [5] above, there was overlap between the S 90 particulars and the S 95 particulars. Some of the overlapping particulars involved alleged 'fault' on the part of one or more of the applicants. The VCAT decided that, even though s 95(1) does not require a finding of 'fault' on the part of t[21] licensee,21 the fact that an incident involved fault on the part of the licensee did not preclude that incident from being considered in determining whether there had been any detriment to the amenity of the relevant area for the purposes of s 95(1).
62 On the appeal, the applicants submitted that the VCAT erred in law in deciding that the conduct of the applicants, in so far as it affected the amenity of the relevant area, could be considered under s 95(1) of the Act as well as under s 90(1)(j). They submitted that such an interpretation would render s 90(1)(j) otiose because, unlike that section, s 95(1) does not require proof that the amenity was detrimentally affected by wrongful conduct on the part of the licensee.
63 The applicants contended that, on its proper construction, s 95(1) applies only where the continuation in force of a licence, independently of the conduct of the licensee, detracts from or is detrimental to the amenity of the area. It is the existence of the licence itself, so it was said, that is the subject of a s 95(1) application and not the conduct of the licensee. To illustrate their contention, the applicants referred to a situation where zoning changes in the relevant area subsequent to the granting of the licence rendered it inappropriate for the licence to continue irrespective of the licensee's conduct of the licensed premises.
64 The applicants relied on the following statements in the explanatory memorandum for the Bill:
Clause 90 provides the grounds upon which an application may be made to the Tribunal for an inquiry into the conduct of a licensee or permittee and who can make such an application.
...
Clause 95 provides that where the police or the local council consider that the continuation of a licence or a BYO permit would detract from the amenity of the area either may apply to the Tribunal for an order cancelling or suspending the licence or permit. This clause is to be contrasted with clause 90(1) which focuses on the conduct of the licensee or permittee. Clauses 94(1)(a) and 95(1) concern themselves with whether the continued existence of a licence or permit per se would detract from the amenity of the area.
65 I reject the applicants' contentions. Section 95(1) is not confined to circumstances that are independent of the licensee. The expression, 'the continuation in force of a licence' in s 95(1) does not refer to the continuation of a licence as a mere statutory instrument; rather, it refers to the continuation of the activities authorised by the licence. Those activities are obviously undertaken by the licensee through its officers, employees and agents.
66 There is nothing in the explanatory memorandum for the Bill that causes me to depart from the above interpretation.
67 Although, as the VCAT correctly concluded, s 95(1) does not require proof of 'fault' on the part of the licensee, it does require a causal connection between the operation of the licensed premises and the detrimental impact on the amenity of the relevant area. An incident in the vicinity of licensed premises that has a detrimental effect on the amenity of the relevant area cannot be relied upon under s 95(1) unless there is a causal relationship between the incident and the operation of the licensed premises.
68 Under s 95(1), the sole criterion is whether the continuation in force of a licence would detract from or be detrimental to the amenity of the relevant area. Section 95(1) does not require proof that the amenity of the area has already been adversely affected; it looks to what will happen in the future rather than to what has happened in the past. Logically, discontinued managerial practices that previously affected the amenity of the relevant area are not relevant under s 95(1). Where s 95(1) is satisfied, the powers conferred on the VCAT under s 96 are directed solely at the licence.
69 In contrast, s 90(1) contains 16 grounds for an application for an inquiry. An inquiry under s 90(1) is in relation to the licensee rather than the licence. All of the paragraphs in s 90(1), other than para (j), expressly involve wrongful conduct on the part of the licensee or its officers - such as the commission of an offence or a breach of the licence - or an assessment that the licensee is not a suitable person to hold a licence. Read in the context of the other paragraphs of s 90(1), the expression, 'has conducted the business' in para (j) must refer to conduct of the licensee which falls within one of the other paragraphs of s 90(1) or is otherwise wrongful. This interpretation is supported by the disciplinary nature of the consequences under ss 91 and 92 of a finding that the conduct of the licensee falls within s 90(1)(j). Those consequences and the gravity of the matters alleged must be taken into account in deciding whether any paragraph of s 90(1) is satisfied.[22]
70 Further, unlike s 95(1), s 90(1) is not enlivened unless the conduct of the licensee already detracts from or is detrimental to the amenity of the relevant area.
71 On the basis of the above interpretations of ss 90(1)(j) and 95(1), it is clear that, even though there is some overlap between the provisions, they each have a separate and distinct sphere of operation. Both involve a causal connection between the conduct of the licensee (in the case of s 90(1)(j)) or the operation of the licensed premises (in the case of s 95(1)) and the detrimental impact on the amenity of the relevant area. For the purposes of s 90(1)(j), the licensee's conduct must be wrongful. For the purposes of s 95(1), the operation of the licensed premises need not amount to anything more than the lawful carrying on of the activities authorised by the licence. Although the wrongful operation of the licensed premises by the licensee would ordinarily be expected to be relied upon for the purposes of s 90(1)(j), there is nothing in s 95(1) that prevents the conduct of the licensee from being considered under that section.
72 Where, as in the present case, a number of incidents are relied upon in support of applications under both ss 90(1)(j) and 95(1), it may be convenient for the applications to be heard concurrently and for any evidence that is adduced to be treated as being evidence in both applications. Nevertheless, each application remains distinct and the VCAT's reasons must clearly set out the findings of fact, and, where relevant, the findings of law, upon which its conclusions are based in respect of each application. Global findings which are not attributed to either application may result in error. A possible error is the failure to be satisfied that a condition precedent for the exercise of a power was met. Another possible error is the giving of reasons for the decision that are not adequate.[23]
73 As will be seen below, the manner in which the VCAT dealt with both proceedings concurrently led it into error.
Intermingling of the issues in the two proceedings
74 The applicants submitted that the VCAT's decision to rely upon identical particulars that were not the subject of individual deliberation and adjudication for each proceeding meant that it was unable to extricate the issues pertaining to the S 90 proceeding from those pertaining to the S 95 proceeding. They contended that the amalgamation of both applications effectively served to reinforce each application so that the VCAT erred by applying an incorrect test in each instance. This submission was linked to the applicants' submission that the VCAT had misconstrued the scope of s 95(1) of the Act.
75 When dealing with the amenity issues, the VCAT made separate findings in relation to the S 90 particulars and the S 95 particulars. The concurrent hearing of the two proceedings did not lead the VCAT to conflate the amenity issues arising under each proceeding. The VCAT was entitled to rely on the same evidence in finding that ss 90(1)(j) and 95(1) were satisfied.
76 The concurrent hearing of the two proceedings did, however, result in a failure by the VCAT to decide the orders to be made in each proceeding exclusively on the basis of its findings in that proceeding. It also led to some confusion about the VCAT's findings in the S 90 proceeding.
77 The application for an inquiry in the S 90 proceeding was based on s 90(1)(a), (j) and (k) of the Act. The VCAT made findings of breaches of the Act and the Licence that were capable of satisfying s 90(1)(a) of the Act. However, the VCAT did not make an express finding that s 90(1)(a) was satisfied. Likewise, although some of the evidence was relevant to the question of whether PPL was not a suitable person to hold a licence for the purposes of s 90(1)(k), the VCAT did not make any express finding that s 90(1)(k) was satisfied. The only express finding that the VCAT made in relation to s 90(1) was that para (j) was satisfied.
78 It must follow that the statement in para 4 of the VCAT's order[24] that the VCAT was 'satisfied that the grounds set out in s 90(1) of the [Act] exist' must refer solely to s 90(1)(j). This conclusion will be considered further below.
79 A licensee who conducts the business of the licensed premises in the manner set out in para (j) does not commit an offence. Although the conduct which satisfies para (j) may constitute an offence under another provision of the Act, the S 90 application did not seek the imposition of penalties for any offences that may have been committed under other provisions of the Act; rather, the application was confined to orders under ss 91 and 92 of the Act.
80 In the S 95 proceeding, the only issue before the VCAT was whether the continuation in force of the Licence would detract from or be detrimental to the amenity of the relevant area. The only orders that the VCAT could make under s 96 were cancellation of the Licence, suspension of the Licence or variation of the Licence. Conduct falling within s 95 does not constitute an offence and no criminal sanctions can be imposed. Some of the VCAT's findings in relation to the S 95 particulars did not involve findings of any wrongdoing on the part of the applicants.
81 As appears from [8] above, in the S 95 proceeding, the VCAT held that 21 incidents resulted in a detriment to the amenity of the area outside the Premises. In the S 90 proceeding, the VCAT held that 11 incidents resulted in a detriment to the amenity of the area outside the Premises, all of which were included in the 21 incidents that fell within the S 95 proceeding. The only findings that the VCAT could take into account in making orders under ss 91 and 92 of the Act were the findings in relation to the 11 amenity incidents in the S 90 proceeding.
82 The VCAT's reasons do not state that, in making the orders under ss 91 and 92, the VCAT confined itself to those findings. On the contrary, the VCAT appears to have taken into account all of its findings in relation to amenity in making the orders under ss 91 and 92. For the purposes of the S 90 proceeding, in so far as the VCAT took into account its findings on any of the incidents that fell exclusively within the S 95 proceeding, it erred in law on at least three bases. The first basis is that the VCAT made findings in relation to matters that fell outside the scope of the S 90 proceeding. The second basis is that, in relation to some particulars, the VCAT relied on detrimental impact on the amenity of the relevant area in the absence of a finding of wrongdoing on the part of the applicants. The third basis is that the VCAT took into account irrelevant considerations.
83 It follows that error of law has been demonstrated by the manner in which the VCAT failed to base the orders it made under ss 91 and 92 exclusively on its findings in the S 90 proceeding.
84 It will be recalled from [22] above that one of the objects of the Act set out in s 4(1)(a) is 'to contribute to minimising harm arising from the misuse and abuse of alcohol', and that s 4(2) of the Act provides:
It is the intention of Parliament that every power, authority, discretion, jurisdiction and duty conferred or imposed by this Act must be exercised and performed with due regard to harm minimisation and the risks associated with the misuse and abuse of alcohol.
It must be remembered that harm minimisation in relation to the sale of liquor is pivotal to the legislation. Section 4 makes it clear that Parliament was particularly concerned with minimising harm arising from the misuse or abuse of alcohol, community expectations, responsible development of liquor and licensed hospitality industries and the regulation of licensed premises that provide sexually explicit entertainment.
Mr Ribbands submitted that there is at this point an extensive congregation of late night licensed venues in King Street and that any action that may be taken in relation to these inquiries against the respondents will have no effect on the amenity of the King Street precinct. He stated that the King Street precinct commenced at the Casino south of the Yarra and moved north up to and including Lonsdale Street north of the Yarra. He said that Bar 20 was almost in the middle of the precinct. He said that the destination of Bar 20 patrons, is not Bar 20 in itself but the King Street precinct. He therefore concluded that any cancellation or suspension of the Bar 20 licence would have no effect on the amenity of King Street as patrons would merely transfer themselves to one of the other venues.
The evidence that King Street rather than Bar 20 being the destination of the patrons appears to be scant at best. Few of the incidents that I will deal with in the particulars gave any indication that the patrons considered King Street rather than Bar 20 the destination. There were examples where patrons had been to other establishments and moved on to Bar 20 or where other establishments had refused permission for patrons to enter that establishment and they had moved on to Bar 20 and vice versa. However, this does not mean that the patrons of Bar 20 would automatically attend the King Street precinct and use another venue if Bar 20 was shut down. Clearly, there are people who want to go to Bar 20 and if that was not operating, they would or would probably not attend King Street at all.
In any event, I take the view that patrons having a harmful effect on the amenity should be looked at on a place by place basis. That is, whether the certain acts complained of, which if proved, relate to Bar 20 or to some other establishments. If those acts are acts relating to amenity, and they arose because of the existence of Bar 20, it necessarily follows that it is Bar 20 that is having the harmful effect on the amenity and will continue to have a harmful effect on the amenity so long as Bar 20 maintains current operation and management procedure. It is not to the point to say that if those patrons were in some other venue, they would have a harmful effect on the amenity in and surrounding that venue. The other venues may have better management. The question to be asked is whether Bar 20 and its workings are having a harmful effect on the amenity. If the answer to that question is yes, the next question to be asked is whether the continuation of the Bar 20 licence would detract from or be detrimental to the amenity of the area? If the answer to that question is yes, the next question is what action should be taken by the Tribunal in an attempt to ameliorate that detraction or detrimental effect on the amenity.[25]
86 The applicants submitted that the VCAT erred in law by giving too much weight to the harm minimisation object in s 4 of the Act and to considerations that were specific to the Premises. They contended that, by overemphasising harm minimisation, the VCAT gave exclusive regard, rather than 'due regard', to harm minimisation and ignored other relevant considerations. According to the applicants, this approach resulted in the VCAT giving effect to the simplistic notion that the cancellation of the Licence will minimise harm without having regard to the nature of the nexus between the Premises and individual incidents.
87 In addition, the applicants tentatively submitted that, in the light of the fact that there were numerous other licensed premises in the vicinity of Bar 20, it was not open to the VCAT to conclude that the cancellation of the Licence would result in a lessening of the harmful effects of the misuse and abuse of alcohol in the relevant area or in an improvement in the amenity of the area.
88 The applicants' contentions must be rejected. It is clear from the VCAT's reasons that it took into account all the matters set out in s 4 of the Act and, as required by s 4(2), placed particular emphasis on the importance of harm minimisation.
89 Neither party submitted that the VCAT 's reasons are inconsistent with the principles relating to harm minimisation that are set out in Director of Liquor Licensing v Kordister Pty Ltd.[26] In the absence of such a submission, I cannot be satisfied that an error of law has been demonstrated in relation to the harm minimisation object in s 4 of the Act.
Errors in relation to the sanctions imposed on the applicants
90 The applicants submitted that, although the VCAT did not make any substantive findings of misconduct against the applicants, it nevertheless imposed severe sanctions on the basis of shortcomings in the managerial control of the Premises.
91 The VCAT made an order cancelling the Licence in each of the proceedings. In the S 95 proceeding, the order was made under s 95(2) on the basis that s 95(1) was satisfied. In relation to the S 90 proceeding, I have already concluded at [77] above that the only paragraph upon which the VCAT expressly relied was s 90(1)(j). This means that, in that proceeding, the Licence was cancelled under s 91(1)(b)(i) on the basis that s 90(1)(j) was satisfied. Likewise, the disqualification orders were made on the basis that s 90(1)(j) wa[27]satisfied.27
92 As I have held that, in deciding that s 90(1)(j) was satisfied, the VCAT inappropriately took into account its findings in relation to s 95(1) of the Act, all the orders that the VCAT made under ss 91 and 92 are vitiated.
93 The above conclusion renders it unnecessary for me to decide whether the VCAT otherwise erred in making the orders under ss 91 and 92. As the parties made submissions in relation to additional errors, however, I will consider those submissions briefly.
The VCAT's conclusions in relation to the applicants' wrongdoing
94 The VCAT reached the following conclusions about the applicants' wrongdoing:
the management was served a warning on 8 December 2008 which was in effect the first 10 incidents referred to in the s 95 particulars. In spite of this warning, the management of the venue did not appear to change the way they conducted business. As seen by the number of incidents that occurred after that time, it is apparent that the management of the venue were either incapable or unwilling to try and adopt better procedure that would stop the incidents from taking place. The only alteration in the procedure was after the incident in February 2009 relating to the second party bus incident (Particular 13 of s 95 and Particular 11 of s 90) was when party buses were stopped from attending. It was unclear as to the circumstances of this happening, however, it does appear that in the first licence renewal issued after these events, ie 1 January 2010, party buses were not permitted in accordance with the licence.
[C]omparing the number of incidents that have occurred at Bar 20 with other sexually explicit establishments, those incidents at Bar 20 are far out of proportion to the other venues. I do not accept the submission of Mr Ribbands that those extra incidents occurred because Bar 20 had more patrons. I am not satisfied that Bar 20 did have more patrons at the relevant time.
I am satisfied that if Bar 20 was a better managed venue, these incidents, although not ceasing altogether, would be considerably less. It is noted that the venue not only did not mend its ways after the warning, it did not mend its ways after the first proceeding was served or the second proceeding. To make this clear, the s 95 proceeding was originally issued in January 2010. The situation had not improved when further particular to the s 90 proceeding was issued on 24 September 2010. Then, the situation still not having improved, further particulars were issued on 7 December 2010 and 2 February 2011.
It is clear that the management of the venue has had many chances to improve its ways but has failed to do so. I find that it and its management are either unwilling or unable to manage this venue in a proper manner. Mr Trimble as Chief Executive of the respondent would or should have known about the warning, the issue of proceeding but did either nothing or not enough to improve the situation. Mr Micovski as manager seems to have taken little or no action to stop these litany of events continuing. Further, there seems to have been little discussion about these problems at Board level. The respondent being a public company surprisingly could not produce minutes of any such discussion. Mr Trimble offered, what I believe to be an unsatisfactory excuse, that board meetings were difficult because Mr Micovski worked at night and slept during the day.
I also find that the venue itself attracts people, many of whom seem to have a pugnacious character and are willing to indulge themselves in a fight both inside and outside the premises. The management has no plan to stop these people offending. This is a clear breach of the amenity of the area.
The venue has been run in a way, in my view, that clearly runs contrary to the objects of the Act contained in s 4. The objects of the Act are clearly harm minimisation. ...
In this particular instance, I must pay considerable attention to the purposes of the Act in minimising harm. This venue has appeared to cause a situation where there is considerable harm. On at least two occasions of the particulars to which I have referred, the injuries have been extremely serious, and there has been hospitalisation required in relation to a number of persons who are patrons at the venue. In my view, if this venue is allowed to continue operating, things will not improve. It is likely to continue on the same path of incidents that breach the Act or the licence.
As previously stated, Mr Ribbands has referred to the fact that a great deal of problems at the venue have arisen from the patrons themselves or from the conduct of crowd controllers. This may be, but for the reasons I have given, the respondents must bear considerable responsibility for this matter. In over 13 days of hearing this matter and hearing both Mr Trimble and Mr Micovski, I formed the view that they were both willing to minimise the incidents that have occurred and blame others, such as crowd controllers and the patrons themselves. They seem to have considerable difficulty in accepting that 'the buck stops with them'. This being the case, it is difficult to see the management taking any steps to improve the situation. In fact, no plan was outlined that would assist in curbing the detrimental effect that Bar 20 was having on the amenity of the area.
Further, it should be noted, as I have previously mentioned, that in relation to the s 95 proceeding, the proof of fault is not necessary. What needs to be shown is that the amenity of the area is affected. Outlining all the matters to which I have referred, I am satisfied that, 'the continuation in force of a licence or BYO permit would detract from or be detrimental to the amenity of the area in which the licensed premises are situated ..'. In this case, both proceedings have shown that there is little hope if this venue's licence is allowed to continue, of the type of incidents that have occurred, stopping. There is every reason to believe that they will continue.[28]
Inappropriate consideration of factors relevant to sentencing of offenders
95 It will be recalled from [28] above that, in its determination, the VCAT made the following observations:
The purpose that I must bear in mind when making a determination is the protection of the public, deterrence, maintenance of proper standards of licensed venues and in maintaining the reputation and confidence in the liquor industry. ...
[I]n licensing matters, the public interest is a combination of protection of the members of the public and maintaining standards in the industry. The outcome is not to be punitive in nature although the respondent may perceive it as such.
...
A strong message must be sent to other licensed operators that unless licensed premises are managed in a proper manner and do not create a detriment to the amenity of the area, a severe penalty will be given. ... Given the circumstances of this proceeding, nothing less than the penalties I propose would satisfy the collective conscience of the people of Victoria.[29]
96 The applicants submitted that, even though the VCAT stated that the purpose of the provisions of the Act dealing with the amenity of the relevant area was to protect the public interest rather than to punish a licensee and persons involved in its management, it nevertheless fashioned the VCAT order for the purpose of punishing PPL, Mr Trimble and Mr Micovski. The applicants further submitted that, in determining the nature of the punishment, the VCAT took into account irrelevant considerations, namely, factors that criminal courts apply in sentencing offenders.
97 The respondents submitted that the references to 'penalties' in the VCAT's reasons reflect the manner in which the parties argued the case before the VCAT. I was taken to the parties' written submissions in the VCAT proceedings, which discussed a range of 'penalties' that were said to be appropriate.
98 In my opinion, the references to 'deterrence', sending '[a] strong message ... to other licensed operators', 'severe penalty' and the satisfaction of 'the collective conscience of the people of Victoria' in the VCAT's reasons indicate that it was purporting to apply sentencing considerations. Such considerations were clearly irrelevant in the S 95 proceeding.
99 In the S 90 proceeding, the VCAT confined itself to determining whether para (j) was satisfied and the consequences for the Licence and the rights of Mr Trimble and Mr Micovski to occupy managerial positions in the liquor industry in the event that the VCAT found that the paragraph was satisfied. Sentencing considerations were not relevant to those issues. I need not decide whether sentencing considerations can be relevant to other provisions of s 90, including where a fine is imposed under s 91(1)(b)(iv) where a paragraph in s 90(1) is satisfied.
100 It follows that the VCAT erred in law in taking into account sentencing considerations in each proceeding.
Mr Trimble's and Mr Micovski's different levels of responsibility and culpability
101 It will be recalled from [2] above that Mr Micovski was the nominee and manager in charge of Bar 20 in addition to being a director of PPL and that Mr Trimble was the chief executive officer of PPL as well as being a director of the company.
102 In its reasons, the VCAT discussed the fact that Mr Micovski was on duty at Bar 20 when some of the incidents that formed part of the S 90 particulars or the S 95 particulars, or both of them, took place. The VCAT's findings that Mr Micovski failed to supervise the Premises properly were of a specific as well as of a general nature.
103 In contrast, the VCAT did not find that Mr Trimble was at the Premises when any of the incidents that formed part of the S 90 particulars or the S 95 particulars, or both of them, took place. The VCAT's findings that Mr Trimble failed to properly supervise the Premises were of a general nature.
104 On the appeal, it was submitted on behalf of Mr Trimble that, in imposing the same period of disqualification on Mr Trimble and Mr Micovski, the VCAT failed to take into account the different levels of managerial responsibility and culpability of the two individuals.
105 There is some merit in the proposition that the VCAT adopted a 'broad brush' approach to deciding the period of disqualification for Mr Trimble and Mr Micovski and that, in doing so, it failed to determine that period by reference to its findings of fact in relation to each individual. Having regard to my other conclusions, however, it is not necessary for me to decide whether the VCAT erred in law in determining the period of disqualification for Mr Trimble.
Was the VCAT order manifestly unreasonable or perverse?
106 Although the proposed notice of appeal alleged that, as the result of the VCAT's taking into account irrelevant considerations and failing to take into account relevant considerations, the VCAT order was 'manifestly unreasonable or perverse', the applicants did not make separate submissions based on Wednesbury unreasonableness.[30] Accordingly, I will not deal with this alleged error of law.
107 I have found that the VCAT made the following errors of law:
(a) the VCAT misconstrued the meaning of the expression, 'the amenity of the area in which the licensed premises are situated' in ss 90(1)(j) and 95(1) of the Act;[31]
(b) in making orders under ss 91 and 92 of the Act, the VCAT did not confine itself to the findings it made in the S 90 proceeding;[32] and
(b) the VCAT took into account irrelevant considerations, namely, matters relevant to sentencing in criminal proceedings.[33]
108 The respondents submitted that, even if I were to find that the VCAT made errors of law, I should not set aside the VCAT order because those errors would not have affected the VCAT's decision.
109 Ordinarily, if the VCAT makes an error of law, the Court will make an order setting aside the VCAT's decision and remitting the proceeding to the VCAT to be heard and decided again by the VCAT in accordance with the directions of the Court. Such an order will not be made, however, where it would be futile to do so. An example of where it would be futile to remit a proceeding to the VCAT is where, as a matter of law, the VCAT would be bound to make the same decision.
110 In the present case, the VCAT's order was made on the basis of the VCAT's findings that there were 29 incidents[34] involving a causal relationship between the conduct of PPL or the operation of the Premises and a detrimental impact on the amenity of the area in which the Premises are situated. If the VCAT had correctly construed the expression 'the amenity of the area in which the licensed premises are situated', the maximum number of incidents that could have been held to have satisfied that expression would have been 21.[35] In other words, 27.5 per cent of the incidents upon which the VCAT relied did not involve a detriment to the relevant area.[36] In these circumstances, I would be engaging in inappropriate speculation if I were to conclude that the VCAT would have made the same decision if it had disregarded eight of the 29 incidents.
111 Likewise, I would be speculating if I were to conclude that the VCAT would have made the same orders under ss 91 and 92 of the Act if it had confined itself to the findings it made in the S 90 proceeding or had not taken into account irrelevant sentencing considerations.
112 It follows from the above that the VCAT order must be set aside.
Adjourned hearing for submissions on the orders to be made by the Court
113 I will adjourn the proceeding to a time to be fixed to hear submissions from the parties on the form of the order to be made by the Court in the light of my reasons.
Three drunken persons became abusive towards crowd controllers after they were refused entry to the Premises. The crowd controllers followed them a short distance and became involved in a physical confrontation. One of the persons was kicked by a crowd controller and sustained cuts to the head.
S 95(1) is satisfied. The absence of fault by PPL is immaterial.
S 90(1)(j) is satisfied. PPL is responsible for the acts of its agents, namely, the crowd controllers.
A father and two sons were ejected from the Premises for fighting. They continued fighting outside the Premises in full view of crowd controllers who did not intervene. The father and one son were intoxicated. Police were called and arrested the son.
S 95(1) is satisfied. PPL breached s 108(4) of the Act. [Note: Particular 2 did not allege a breach of s 108(4)]
An unruly patron inside the Premises was ejected by crowd controllers. The patron remained outside and was assaulted by another patron who exited the Premises. The victim was intoxicated.
The assault in the street was directly related to the Premises, even if the victim was not intoxicated, and had a detrimental effect on the amenity of the area for the purposes of s 95(1).
Crowd controllers ejected a patron from the Premises without good reason. Once outside the Premises, the crowd controllers assaulted him, breaking his nose and causing other injuries.
S 95(1) is satisfied by the assault outside the Premises.
S 90(1)(j) is satisfied because management failed to observe 'the goings on on each floor at all times'.
Crowd controllers ejected an unruly patron from the Premises. He quarrelled with crowd controllers outside the Premises. When police arrived, he became abusive and was arrested for being drunk in a public place.
S 90(1)(j) is satisfied. PPL either admitted the patron while already drunk or served alcohol on the Premises resulting in him becoming drunk.
Crowd controllers ejected a patron from the Premises for causing a fight. Police found him loitering outside the Premises and being belligerent with crowd controllers. He was arrested for being drunk in a public place. 15 minutes later, police responded to a complaint of assault and recognised the victim (Snell) as a drunken male that had earlier been involved in a separate incident elsewhere in the CBD. Recently departed patrons - one of whom was arrested for being drunk in a public place - were implicated in the assault. Later, police identified two males waiting to enter the Premises as being argumentative and alcohol-affected.
PPL breached s 108(4)(b) of the Act because management permitted a patron (Snell) to be both drunk and disorderly on the Premises.
S 90(1)(j) is satisfied. Bar 20 was conducted in a manner that allowed Snell to detract from or be detrimental to the amenity of the area where the Premises are situated.
An intoxicated patron urinated on the back of another patron inside the Premises. This was followed by fighting inside the Premises.[37]
'[I]ncidents on the premises do affect the amenity [for the purposes of s 95].'
A drunken patron was stumbling inside the Premises and was unable to stand up without support when he was outside the Premises.
PPL breached s 108(4)(b) of the Act because management failed to take reasonable steps to ensure that a drunk was not on the Premises.
S 90(1)(j) is satisfied. Particulars alleging detriment to amenity are made out.
An off-duty crowd controller (Smith) argued with a person outside the Premises. When police approached, a crowd controller on duty told Smith that police had arrived and allowed him to enter the Premises.
S 90(1)(j) is satisfied. Fighting in the street affects the amenity of the area and it is incumbent on management to have control over those areas and know what is going on.
A crowd controller failed to sign the crowd controllers' register as required by the PSA.
Minor compliance issue; no adverse inference against Bar 20.
Patrons were fighting inside the Premises and three were ejected by crowd controllers.
Fighting could be observed from King Street through the open windows.
Drunken patrons arrived via a party bus and were permitted by crowd controllers to enter the Premises through a priority doorway. Two patrons were arrested by police for being drunk in a public place. Police arrested a number of other patrons inside and outside the Premises who were drunk and behaving in an aggressive and unruly manner.
PPL breached s 108(4)(b) of the Act by permitting drunken patrons to be on the Premises. Management is responsible for the failure of crowd controllers to detect intoxicated persons.
S 90(1)(j) is satisfied. Particulars alleging detriment to amenity are made out.
Four patrons were fighting inside the Premises. One patron's teeth were knocked out. Crowd controllers ejected the assailants.
The 'area' for the purpose of s 95(1) includes the area inside the Premises. Section 95(1) is satisfied even though PPL was not at fault.
A large number of drunken patrons from a party bus were outside the Premises and made abusive and derogatory comments to police and passers-by. Police arrested one person for being drunk in a public place. Three persons were arrested inside the Premises for being drunk in a public place.
PPL breached s 108(4)(b) of the Act by permitting drunken patrons to be on the Premises. Management is responsible for the failure of crowd controllers to detect intoxicated persons.
S 90(1)(j) is satisfied. Particulars alleging detriment to amenity are made out.
Police were initially stopped by crowd controllers from entering the basement where sexually explicit entertainment was taking place. Upon being granted entry, a female entertainer drew the curtains preventing police from having a clear view of the activities taking place within a private room.
The curtain incident was a minor breach of cl 3.6 of the Licence.
The crowd controllers should not have stopped police from entering the basement; management should have observed this but did not do so. This was a breach of the Licence. [Note: The VCAT did not specify the provision of the Licence that was breached.]
A large number of patrons were involved in a brawl inside the Premises. The brawl continued outside the Premises and involved non-patrons. Numerous police units attended. Some of those involved in the brawl remonstrated with police. A police officer was injured. Parts of King Street and the footpath were cordoned-off, affecting pedestrians and through traffic.
The incident occurred because of the operation of the Premises. The brawl was the direct result of the fight inside the Premises. Whether there was any fault by Bar 20 is immaterial.
A patron assaulted another patron inside the Premises.
'[A] fight inside the premises does affect the amenity and is detrimental to it [for the purposes of s 95(1)].'
A crowd controller assaulted a patron who was seeking entry to the Premises.
S 90(1)(j) is satisfied. Management is responsible for the acts of the crowd controllers.
A crowd controller refused entry to a drunken person (Lindroos) and subsequently assaulted him after he remonstrated with the crowd controller. A drunken patron (Hunter) was ejected by a crowd controller for fighting inside the Premises. The fight continued outside the Premises. Crowd controllers intervened. Hunter accidentally bumped into Lindroos. Hunter then punched Lindroos, causing a laceration to his head.
S 90(1)(j) is satisfied. Management did not exercise sufficient control over the Premises and is responsible for the acts of the crowd controllers.
A patron assaulted another patron inside the Premises.
Although the incident occurred within the Premises, there was a detriment to the amenity of the area for the purposes of s 95(1).
A drunken patron was ejected from the Premises after he was found vomiting in the toilets. 45 minutes later, he was found in a drunken state arguing with a friend outside The Rialto building in Collins Street and was arrested for being drunk in a public place.
S 90(1)(j) is satisfied. Management failed to detect the patron prior to his becoming sick from alcohol.
A drunken patron inside the Premises who appeared to be in a semi-conscious state was taken to hospital by ambulance.
'[The fact] that there was a drunk and semi-conscious patron in the venue that needed to be carried out and hospitalised ... of itself creates a detriment to the area [for the purposes of s 95(1)].'
A patron threw a glass across the first floor of the Premises and struck a crowd controller. The patron refused to leave the Premises and instead quarrelled and remonstrated with police. He was forcibly removed by police and crowd controllers.
'[The] behaviour of the male patron ... of throwing a glass and being quarrelsome and remonstrating with police, is sufficient to indicate that there is a detriment of the amenity in the area of the premises [for the purposes of s 95(1)].'
A drunken patron who had been ejected from the Premises caused a disturbance outside the Premises. He was arrested for being drunk in a public place.
The disturbance caused a detriment to the amenity outside the Premises for the purposes of s 95(1).
A drunken person was refused entry to the Premises. He behaved in an argumentative and aggressive manner and assaulted police when they approached him. He was arrested for being drunk in a public place.
'[T]he person ... was having a detrimental effect on the area and whether he was [previously] in the premises or not, it was the premises that attracted him to the position where he was. Therefore, it necessarily follows that the conduct of the premises ... was having a detrimental effect in the area [for the purposes of s 95(1)].'
Two persons were fighting in King Street near the entrance to the Premises. A crowd controller looked on without intervening.
S 95(1) is satisfied. '[H]aving patrons fighting in King Street in the area of the Bar 20 premises suggests that the patrons in fact were there as a result of the matters conducted in the premises of Bar 20.'
Police attended covertly and observed drunken patrons being served alcohol. Some patrons were ejected from the Premises by crowd controllers.
PPL breached s 108(1)(a)(i), s 108(1)(a)(iii), s 108(4)(a) and s 108(4)(b) of the Act.
S 90(1)(j) is satisfied. Management should have observed what was going on and must take responsibility for the actions of staff. 'These actions have led to a breach of amenity within the premises'.
A patron assaulted another patron inside the Premises.
'[O]ne patron assaulting another patron has considerable detriment to the amenity [for the purposes of s 95(1)].'
A patron touched the breast of a female dancer. He and two companions - all of whom were intoxicated - were asked to leave the Premises by crowd controllers. Outside the Premises, the patrons were argumentative and confrontational with police and were ordered to leave the area.
The incident - the touching of the dancer's breast - had a detrimental effect on the amenity of the area. However, it was a minor, one-off breach that was quickly acted upon.
Two recently departed patrons were shouting in an aggressive nature and fighting in the middle of King Street near the aquarium and were impeding traffic. Police arrested one of the patrons for trafficking cocaine in the Premises.
S 95(1) is not satisfied because there was no causal connection between Bar 20 and the events near the aquarium.
Two patrons that were ejected from the Premises engaged in a bloody fight outside the Premises. Crowd controllers did not intervene. An off-duty police officer stopped his vehicle in King Street and intervened, interfering with the free flow of traffic in the process.
Crowd controllers ejected a drunken patron from the Premises. Outside the Premises, he argued with crowd controllers and a minor physical altercation ensued. Another patron (Chris) became involved and drew the drunken patron away from the entrance to the Premises where he assaulted the drunken patron. Chris then re-entered the Premises unchallenged by crowd controllers. Chris argued with another drunken patron inside the Premises. Subsequently, while they were outside the Premises, Chris struck and seriously injured this drunken patron.
'[T]wo assaults occurring in King Street, in the vicinity of the premises, is something that certainly affects the amenity of the area [for the purposes of s 95(1)].'
[1] Hodgkin v Planet Platinum Ltd [2011] VCAT 725 (4 May 2011) ('Reasons'). The VCAT order is set out below at [29].
[2] Originally, there were 32 particulars, each relating to a separate incident. Particular 22 was not pursued before the VCAT.
[3] Although incident EE also involved unruly behaviour outside the Premises, the VCAT's reasons refer to amenity only by reference to the events inside the Premises.
[6] This clause was inserted in the Licence in 2010 after problems were experienced with patrons from tour buses entering the Premises.
[7] Reasons, [336]-[342] (citations omitted).
[10] Victoria, Parliamentary Debates, Legislative Assembly, 8 October 1998, 452 (Denis Napthine, Minister for Youth and Community Services).
[11] [1986] 2 Qd R 317 ('Broad').
[12] [1986] 2 Qd R 317, 319-20, 325-7.
[13] [2000] VCAT 459 (14 February 2000) ('Black').
[15] See, eg, ss 148B(1), (8), 148C, 148F(1), 148G(1), 148H(1), 148I(2), (5), 148J(1) and 148K(1).
[16] See pt 4 of the Liquor Control Reform Regulations 2009.
[18] Reasons, [71]-[72], [77]-[79].
[20] See, eg, Reasons, [137], [164], [180], [252], [318].
[26] [2011] VSC 207 (18 May 2011).
[29] Reasons, [336]-[337], [342].
[30] See Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] KB 223.
[36] The VCAT's reasons make it clear that, in deciding that s 95(1) of the Act was satisfied, the VCAT relied on all of the S 95 particulars: see Reasons, [334].
Planet Platinum Limited & Ors
Hodgkin & Anor [2011] VSC 330