Darebin CC v Victorian Commission for Gambling and Liquor Regulation & Anor

Darebin CC v Victorian Commission for Gambling and Liquor Regulation & Anor - [2013] VCAT 1389 - VCAT 2013 case summary — Zoe

[57]

The Grandview Hotel is an imposing three storey building in the Victorian Italianate style located at the intersection of two busy roads, Heidelberg Road and Station Street, in Fairfield. It has served the local community and workforce for 125 years. It is the only public house in Fairfield. It is deserving of that much misused modern colloquialism-iconic.
The hotel is owned and operated by interests associated with the el-Fahkri family, long standing residents of Northcote. In recent years it has fallen into disrepair and currently presents a somewhat shabby appearance both externally and internally. As with any large 19th century building the cost of maintenance is high. The return from the hotel has been insufficient to defray this cost.
The present owners and occupiers of the hotel are proposing a substantial renovation project, details of which are set out above. An important element of the project, and the element which is central to these proceedings, is the establishment of a gaming room with 50 electronic gaming machines (EGMs). The cost of the project is estimated to be $2.9 million.
We were informed that the cost of the project could not be afforded without revenue from the gaming machines and entering into a joint venture agreement with the Dominion Hotel Group, an arrangement which is contingent upon approval of the gaming machines. The Dominion Hotel Group owns and manages a number of hotels with gaming rooms attached.
We have no reason to doubt this claim. Evidence was called from Mr Anthony Hood, a chartered accountant. He stated that without the renovation project the hotel was not a viable long term business operation. It would in due course be forced to close and the site would be redeveloped, presumably for apartments or some highway orientated use similar to adjacent uses in Heidelberg Road. The renovation would enable the hotel to survive, but the cost or debt could not be sustained without income from the EGMs, which he estimated at $3.9 million per annum based on the Richard Whitehouse model. This would result in a net income from gaming of $1.4 million in the 2015 financial year. With the gaming revenue the hotel could be a viable business returning a net profit margin of 9.6 percent, slightly above the average for hotels which is 7.4 percent.
The decision whether to approve the 50 gaming machines must therefore be made in an economic scenario in which if the renovations proceed the local community would enjoy the benefit of an improved entertainment and recreational facility. On the other hand if the renovations do not proceed the community will not simply be left with the present somewhat run down hotel. The hotel will likely close in due course and the facility will be lost to the community altogether. This loss would be exacerbated by the fact that there is no other hotel conveniently located to serve the local community.

[144]

When we come to consider the socio-economic data we find considerable differences between the profile of the City of Darebin as a whole and that of the postcodes/suburbs which make up the trade area of the hotel. The city has been identified, relative to all Victorian municipalities, as having a high level of disadvantage whereas the profile of the trade area of the hotel demonstrates significantly lower levels of disadvantage.
All parties used the SEIFA Index of Relative Socio-Economic Disadvantage to illustrate the differences in the profile of the municipality and the trade area of the hotel.
Mr Quick's evidence, which was supported by Ms Peterson, shows that the median score for Victorian municipalities is 993 (where scores below 1000 show increasing levels of disadvantage and scores above 1000 show decreasing levels of disadvantage). The City of Darebin has a score of 990 and is ranked 39th out of 79 Victorian municipalities (where 1st = a high level of disadvantage). This indicates that it is not significantly more or less disadvantaged than Victoria as a whole. By comparison the three other municipalities which form part of the trade area, Boroondara, Banyule and Yarra are ranked 79, 68 and 58 respectively.
When Statistical Local Areas (SLAs) are considered the difference between the northern part of the city and the south is marked. The Northcote SLA is ranked 156th out of 207 SLAs, (where 1st = high disadvantage and 207th = low disadvantage) whereas the Preston SLA is ranked 43.
A more accurate comparison is given by looking at postcodes. Ms Peterson, using the postcodes identified in the bistro survey as providing more than 2 percent of the patrons, demonstrated that only two postcodes, Preston (3072 with 8 percent of the trade) and Reservoir (3073 with 2 percent of the trade) had SEIFA scores of less than 1000. The postcodes of Fairfield (3078), Northcote (3072) and Heidelberg (3084), which together made up over 65 percent of the bistro trade, had SEIFA scores of 1068, 1047 and 1081 respectively.
In paragraphs 95-96 of her key findings in Section 4.3 of her statement of evidence Ms Rosen describes various groups which she suggested were at low, moderate or high risk of problem gambling. She concludes in paragraph 97 that, overall, the following groups of people are at risk of problem gambling
- Young people ages 18-24
- Males aged 25-49, 50-64, and females ages 25-64
- Older people and retirees aged 65 +.

[159]

Ms Rosen conceded that she had not, with one exception, made any direct enquiries of any of the above organisations to obtain a clearer identification of their operations or the nature of their clients. She had made one phone call to the Mental Illness Fellowship the day before she gave evidence from which she deduced that the organisation provided counselling services to clients who may be potential problem gamblers. She provided no direct evidence that the 'risky lifestyles' which she identified were particularly prevalent in the area.
We prefer Ms Jordan's evidence. She indicated that her contact with the Mental Illness Fellowship informed her that the building in Heidelberg Road provided a head office function for a statewide organisation that arranges the provision of a range of services to people with mental illness through a wide range of other bodies. Approximately 80 people were employed at that site but counselling was not offered on site. She referred us to the relevant web site which confirms her advice. A Tribunal site visit established that the office is only open during normal business hours Monday - Friday 9.00am to 5.00pm.
Mr Andrew Kerr, who appeared for Boroondara City Council, submitted that the site of the Kew Cottages in Boroondara provided accommodation for a number of residents who might be considered vulnerable to problem gambling. He was unable to provide us with any information as to numbers of residents, their state of health or the way in which care was provided. Again Ms Jordan was more helpful, indicating that her enquiries of the organisation showed that the residents required high levels of care and that they would not normally leave the site without the company of a carer.
Ms Jordan's enquiries of the Marjorie Oke Rooming House found that it provided long-term residential accommodation for women who were over eighteen, had suffered some form of domestic trauma, had limited income or assets and in 75 percent of cases relied on Centrelink benefits. We agree with Ms Brennan's submission that a more likely 'ant trail ' for Marjorie Oke residents would be towards the Fairfield Village Shopping Centre where the Fairfield RSL would provide a more 'convenient' gaming venue.
While we fully understand the need for client privacy, we agree with Ms Jordan and Ms Peterson that the other 'sensitive uses' such as chiropractic clinics, medical centres and the like cannot be described as 'sensitive uses' without more information about their operations.
Unlike the Exchange Hotel case[8], where evidence was given by support workers of the adjoining local community, no community groups and none of the organisations or businesses referred to in the Council's submission made a submission to the Tribunal, and no person associated with those groups or organisations was called to give evidence that approval of EGMs at the Grandview Hotel might have an adverse impact on persons to whom they provide a service.
Consequently, while there may be individuals who live in, or are clients of, some or all of the organisations identified above, we have no evidence that might lead us to a conclusion that there is any link between the 'sensitive uses' identified by Ms Rosen and the potential incidence of problem gambling at the Grandview Hotel.
It is disappointing that Council with the resources of its social planning department has been unable to provide more information about these 'sensitive uses'. It is really doing no more than advising the Tribunal to draw conclusions based on the name of the organisation.
In relation to the potential impact on hotel residents, the hotel currently provides twenty rooms on the first and second floors as low-cost accommodation for long-term residents and approximately nineteen of these rooms are currently occupied. The refurbishment of the hotel will reduce the number of rooms available to five.
Mr el-Fahkri gave evidence that the residents are very self-reliant and use the hotel as a base but do not frequent the current facilities. He indicated that the residents were well known to his staff who would be well-equipped to respond to any unusual behaviour. Letters were tabled from two of the residents supporting that view and indicating that the people involved were not interested in the 'pokies' and would be perfectly willing to sign a self-exclusion agreement if necessary.
Clearly the presence of the EGMs in the hotel does present a risk but we believe that the risk is small. Current residents are aware of the risk but do not frequent the hotel facilities and the management of the hotel is capable of dealing with the issue appropriately.
In dealing with this important issue of the relationship between gaming venues and 'sensitive uses' we feel a similar level of frustration to that experienced by Senior Member Byard in the Queensberry Hotel [9]case where he commented:

[165]

We do not accept that there can be a clear separation between 'convenience' venues and 'destination' venues. A more realistic classification would take the view that any venue will lie somewhere in a spectrum which at one extreme might include a location in the heart of a local shopping centre to the opposite extreme where a much more isolated location is used.
It is useful in this context to look at the characteristics of other gaming venues in the general vicinity of the Grandview. The Ivanhoe Hotel sits right in the middle of the Ivanhoe Shopping Centre. Similarly, Croxton Park Hotel in High Street, Thornbury also sits in the middle of a long shopping strip which includes a high proportion of convenience shopping and is directly served by a tram line outside the door. The Harp of Erin is located at the end of the Kew High Street shopping strip. By contrast, the Albion Charles Hotel, at the corner of Westgarth Street and St Georges Road, while closely surrounded by residential areas is not associated with any adjoining convenience shopping facilities.
While clubs may have a more selective entry process, the Fairfield and Alphington RSL is very 'conveniently' located immediately adjoining the Fairfield Village Shopping Centre with the Fairfield railway station exit only 20 metres from the front door. By contrast, the Furlan club, in the north of the municipality, is located in an industrial area well separated from any local shopping and more clearly represents a 'destination' venue.
In the case of the Grandview, the surrounding area is residentially zoned, and would probably be the most convenient hotel for residents in the small residential precinct between Heidelberg Road and the River Yarra. The hotel is 500 metres from the Fairfield Village Shopping Centre and its adjoining railway station which would be well-served by the Fairfield and Alphington RSL. Bus services are available on Heidelberg Road but these are not particularly frequent in the late evenings or weekends.
The uses adjoining the hotel along Heidelberg Road are basically service business and highway orientated uses. A site visit confirms that the neighbourhood includes two petrol filling stations with associated convenience shops, a Mercedes-Benz car showroom on both sides of Heidelberg Road, an architects' office, an outlet providing supplies for disabled people, an Iron Lace showroom and workshop, a tile gallery, two fabric and interior design showrooms, the Gestalt Therapy Training Centre, an office furniture supplies showroom, a bike shop and repair centre and a power tools supplier. These are hardly the sorts of uses that people would visit in the course of their everyday shopping.
We note that the zoning of the area is either Industrial 3 or Residential 1. This means that 'retail premises' is a prohibited use in the Residential 1 Zone and 'shop' is prohibited in the Industrial 3 Zone.
We understand that a permit has been granted by the Tribunal for a Hungry Jacks fast food establishment on the site of the Shell petrol filling station but this is essentially a 'take-away' operation with only eight seats inside the premises. No construction has as yet occurred on the site. It would be most unlikely that patrons of the Grandview gaming room would be permitted to bring in their take-away burger from Hungry Jacks!
Mr el-Fahkri's evidence was that a significant component of the hotel trade is derived from its speciality mid-week events, a comedy night, a trivia night and a poker night, when as he indicated "people come from everywhere".
When all these factors are considered we find that the Grandview should be placed much closer to the 'destination' end than the 'convenience' end of the spectrum. The hotel is on a corner that is unlikely to experience much pedestrian movement, and residents of Darebin would have no occasion to walk past the hotel other than for recreation.

[167]

This is an area where black and white conclusions are difficult to draw. Shades of grey predominate in terms of linkages between population groups and problem gambling and between the location of EGMs and the incidence of problem gambling.
We acknowledge that any gaming venue has the potential to attract potential problem gamblers, but from the evidence we have heard about this specific location we see a number of factors which would contribute to mitigating the potential level of problem gambling.
- As a gaming venue, the hotel is not in a 'convenient' location compared to competing venues such as the Ivanhoe Hotel, Croxton Park Hotel, the Harp of Erin Hotel and the Fairfield and Alphington RSL, all of which are closely associated with substantial local shopping and commercial centres and are readily accessible by public transport.
- The adjoining commercial premises and highway orientated uses can reasonably be described as service retail with a sprinkling of commercial and community services. None of these would generate significant pedestrian activity and the vast majority have no evening or weekend opening.
- Public transport is limited to bus services and late hours are not particularly well-served.
- The trade area of the existing hotel includes part of four municipalities, Darebin, Banyule, Yarra and Boroondara. This area, on the SEIFA scale is considerably less disadvantaged than Darebin as a whole and the northern area of Darebin (Preston) in particular. This is less likely to generate a significant problem gambling population.
- Any loss of revenue to existing gaming venues will be spread but this is consistent with overall Government policy to allow a competitive gaming environment. Any loss to other businesses has been, to our satisfaction, measured as insignificant.
- The evidence does not show any significant presence of 'sensitive uses'. Most are medical-related services which are common throughout residential areas. Major uses such as the Mental Illness Fellowship operate a head office function 9-5 Monday to Friday while the Gestalt Centre is a training centre for students seeking qualifications in the technique. The Marjorie Oke Rooming House is the nearest facility which could be considered sensitive but it is almost half-way between the existing Fairfield RSL and the Hotel. Its residents are limited in number and their selection criteria do not warrant the label of a 'community at risk'.
While in any summation of benefits and disbenefits we must see the risk of problem gambling at this venue as a negative, the above factors suggest that a low weight must be given to that issue in any decision.

[168]

Surveys of community attitudes to the installation of the EGMs were carried out by IPSOS ASI Australia on behalf of the applicant and by Ms Karen Linden, a council officer attached to the Community Planning Partnership and Performance Department of the Darebin Council.
Both surveys were criticised as having deficient methodological techniques, but ultimately there was little difference in the result. Ms Linden's survey explored the important question of community well being in the area within a 2.5 kilometre radius of the hotel. She advised that some 89 percent of residents had a 'high/very high' sense of well-being from living/working in the community and that 74 percent felt that the installation of the 50 EGMs at the Grandview would have a negative effect on that sense of well-being. However there was no question which allowed residents to define what they meant by 'the community' or what constituted 'well-being'.
While the IPSOS survey found support for specific aspects of the renovation such as an expanded bistro, better function rooms, etc, its overall findings on community attitude towards the installation of EGMs was similar to that of the Council Survey.
We note, however, that these views essentially echo the general views of the Victorian community as a whole as elicited in the 2003 Longitudinal Study. In other words, the 2003 studies found a general opposition to gaming machines, and these surveys display a similar sentiment, including specifically about this proposed venue.
It is also significant that this 'very high sense of well-being' indicated in the Council survey is being experienced by a community in which there are at present no less than 235 gaming machines in or just outside the survey area. Clearly these machines have little or no impact on this community's sense of well-being. It is difficult to see how the introduction of a further 50 machines could alter that community attitude.
It is also significant that the application for a planning permit, although extensively advertised, attracted only 34 objectors, and that only one resident objector, Ms Avtzoglu, appeared before us on grounds that had little to do with gaming machines. In the Tribunal's experience this is a very low level of opposition to a proposal to install gaming machines in any venue, particularly when compared to the reaction commonly experienced in non-metropolitan locations, for example, Romsey and Castlemaine.
In Castlemaine what was telling for Deputy President Dwyer was

[170]

The Grandview Hotel is a prominent landmark and recreational outlet which provides a range of facilities for local residents and visitors. The operators are attempting to make the venue lively and interesting by providing special events and themed evenings. However the hotel is tired and run down, and the trade is insufficient to support its ongoing viability.
Our conclusions can be summarised as follows.
- The hotel is a prominent social and physical landmark and its retention as a functioning venue will be of general benefit to the community. The restoration of the building will retain a significant local landmark which is of heritage value.
- There will be limited but positive short-term construction benefits to the local economy and in the longer term 13 full-time equivalent positions will be a useful contribution to the area.
- The upgraded venue will provide a much better range and quality of services to the local community and visitors.
- There may be some small loss of revenue by other existing gaming venues. This is consistent with a competitive market as promoted by Government policy.
- The developer has a sound reputation as an experienced venue manager and an enhanced package of 'Responsible Gaming Management Practices' is to be provided.
- A community contribution of $100,000 per annum in addition to the current $20,000 contribution is offered with indexation in accordance with CPI.
- Our conclusions in relation to the problem gambling issue have already been set out.
As required by the decision of the Court of Appeal in Romsey we have, in reaching our conclusion, given weight to the findings of the VCGLR in the light of its recognised expertise in the field of gaming regulation.
As will be clear from the summary above, we find, consistently with the decision of the VCGLR, that the approval of the premises as suitable for gaming will not have a net economic and social impact that is detrimental to the well-being of the community of Darebin or that part of the community of other municipalities within the trade area of the hotel. On the contrary we consider that the economic and social impact of approval will, on balance, be quite positive.
Accordingly the application for review will be dismissed, and the decision of the VCGLR is affirmed

[198]

The RGPPM must be audited twice annually by a person with suitable qualifications and experience in responsible service of gambling practices.
No more than 780 patrons are permitted on the Subject Land at any one time.
Prior to the use commencing, a report prepared by a suitably qualified acoustic consultant must be provided to the Responsible Authority demonstrating that noise from all equipment including mechanical services equipment, complies with the noise limits detailed in accordance with State Environment Protection Policy (Control of Noise from Commerce, Industry and Trade) No. N-1 (SEPP N-1).
All external plant and equipment must be acoustically treated and/or insulated to the satisfaction of the Responsible Authority to minimise noise and vibration and to ensure compliance with noise limits as determined by the State Environment Protection Policy (Control of Noise from Commerce, Industry and Trade) No. N-1.
Once the venue is operational, commissioning measurements must be performed to demonstrate that compliance with SEPP N-1 has been achieved. If noise emitted from the subject site exceeds SEPP N-1 noise limits, then additional noise control treatment will be required.
Noise levels emanating from the Premises must not exceed the noise levels as determined by the State Environment Protection Policy (Control of Music Noise from Public Premises) No. N-2.
No external sound amplification equipment or loud speakers are to be used for the purpose of announcement, broadcast, or similar purpose without the consent of the Responsible Authority.
Prior to the commencement of use, a report must be submitted to the satisfaction of the Responsible Authority outlining the following:
1. The applicable SEPP N-2 music limits for the day, evening and night-time periods
2. Details of allowable internal and external music noise levels in the hotel areas to enable the SEPP N-2 noise limits to be achieved.
Within 6 months of the commencement of use a report must be submitted to the satisfaction of the Responsible Authority outlining the following:

At a glance

Court

Decision date

Source

Judgment (215 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (1)

Darebin CC v Victorian Commission for Gambling and Liquor Regulation & Anor (Includes Summary) (Red Dot) [2013] VCAT 1389 (8 August 2013)