9 The Liquor Act was designed to reform the law relating to the supply and consumption of liquor. An object of the Liquor Act is to contribute to the responsible development of the liquor and licensed hospitality industries.[3] To this end the Liquor Act contains an extensive suite of provisions in relation to the licensing of premises to sell liquor. In order to ensure that these provisions operate satisfactorily Part 6 of the Liquor Act contains provisions as to inquiries and discipline. In the present context sections 90 to 92 are relevant. It is desirable that these provisions be set out in full.

(1) If a person referred to in sub-section (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

(b) has contravened a condition of any other approval or consent of the Director under this Act; or

(ba) has contravened section 118A or a regulation made under section 118B; or

(c) has been convicted of an offence under this Act; or

(d) has been convicted of an offence under Part 2 of the Food Act 1984 in relation to liquor supplied by him, her or it; or

(e) has been convicted of an offence under the Police Regulation Act 1958 relating to bribery of a member of the police force; or

(f) has been convicted, whether in Victoria or elsewhere, of an offence punishable by a maximum term of imprisonment of 3 years or more; or

(g) has knowingly assisted a person to breach a disqualification order made under section 92; or

(h) has paid a penalty for an offence for which an infringement notice under this Act has been issued; or

(ha) has altered the licensed premises in a way that would have prevented the granting of the licence under section 22 had the alterations been in place immediately before the licence was granted; 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 -

(d) the Council of the municipal district in which the licensed premises are situated.

(3) A reference in sub-section (1)(f) to the maximum term of imprisonment for an offence, in the case of an indictable offence that may be heard and determined summarily under section 53(1) of the Magistrates' Court Act 1989, is a reference to the maximum term of imprisonment for the offence if it were not dealt with summarily.

(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 -

(a) if section 90(1)(f) applies - must make an order -

(i) cancelling the licence or permit; or

(ii) suspending the licence or permit for the period specified by the Tribunal; or

(iii) endorsing the licence or permit under section 93;

(b) in any other case - 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).

(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) or any member of the committee or management or nominee of the licensee or permittee (if it is a club) or any person who, whether directly or indirectly, is concerned in or takes part in the management of licensed premises be disqualified -

(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.

(2) The Tribunal may disqualify a person in all or any of the ways listed in sub-section (1) and may make an order under this section even though it does not make any order under section 91.

(3) In imposing a disqualification, the Tribunal must specify the period for which the disqualification is to apply.

10 The tribunal is established by the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act") and certain provisions of this Act are also relevant. The tribunal has two types of jurisdiction: original jurisdiction and review jurisdiction.[4] Original jurisdiction is the jurisdiction of the tribunal other than its review jurisdiction.[5] Review jurisdiction is jurisdiction conferred on the tribunal by or under an enabling enactment to review a decision made by a decision maker.[6] Clearly an inquiry under Part 6 of the Liquor Act involves the exercise of the tribunal's original jurisdiction.[7] The original jurisdiction of the tribunal is invoked by a person who is entitled by or under an enabling enactment to do so by applying to the tribunal.[8] In exercising its original jurisdiction the tribunal has the functions conferred on it by or under the enabling enactment, as well as any functions conferred on it by or under the VCAT Act.[9]

11 Section 59 of the VCAT Act provides that the parties to a proceeding in the tribunal's original jurisdiction are (relevantly) the person who applies to the tribunal, the person who is the subject of the inquiry, any person joined as a party to the proceeding by the tribunal and any other person specified by or under the VCAT Act or the enabling enactment as a party.[10] The tribunal may order that a person be joined as a party to a proceeding if it considers that the person ought to be bound by, or have the benefit of, an order of the tribunal in the proceeding or the person's interests are affected by the proceeding or for any other reason it is desirable that the person be joined as a party.[11]

The nature of an inquiry under the Liquor Control Reform Act 1998

12 In the context of licensing provisions, it is common for parliaments to empower some form of tribunal to conduct an inquiry with a view to making orders about the licensee. Cases arising in such circumstances can be found in broadcasting law,[12] prostitution control,[13] and travel agents' licensing.[14]

13 In Tarson Pty Ltd v Holt[15] - a case concerning a travel agent's licence - Beach J of the Supreme Court of Victoria identified the following question for determination: whether an inquiry to be conducted by a travel agents' licensing authority was inquisitorial in nature, allowing the authority to follow the evidence called before it wherever it leads, or whether the proceedings are adversarial in nature, the outcome of which may determine the rights of a party to the proceedings and result in the imposition of some form of penalty on that party. Beach J answered this question by preferring the latter, observing that in arriving at its determination the authority should be confined to the material placed before it by the Director of Consumer Affairs, on the one hand, and the licensees, on the other hand. Beach J considered the various cases that had been decided under other legislation, particularly broadcasting licensing, but distinguished these cases, observing that the answer is to be found in the provisions of the relevant Act itself.

14 In Casey v Vietnamese Recreational & Cultural Club Inc Judge Dove reserved for future consideration whether Parliament intended an inquiry under section 90 of the Liquor Act to be adversarial or to be in the nature of an inquisition. As this question is relevant to the present proceeding and has significant implications for the ongoing business before the tribunal, I think it is desirable that I express my views on this matter at this stage.

15 In my opinion, it is a mistake to seek to characterise a section 90 inquiry as solely inquisitorial or solely adversarial. The proceeding contains elements of both.

16 The following matters point to the inquiry being adversarial in nature. An inquiry can only be initiated by certain specified persons (and not by the tribunal). An inquiry can only be initiated if a specified person considers that a licensee has engaged in some undesirable conduct or is otherwise not a suitable person to hold a licence. The initiation of an inquiry can result in significant penalties being imposed upon the licensee and those associated with the licensee. These factors are reinforced by the nature of the subject matter - being disciplinary in character - and the role of licensing inspectors in maintaining industry standards.

17 The following matters point to the inquiry being inquisitorial in nature. The Parliament has identified the nature of the proceeding as "an inquiry": a word that is usually reserved for proceedings having an inquisitorial element. The Parliament has given the task of conducting the inquiry to VCAT and not a court. VCAT is a body which is not bound by the rules of evidence but may inform itself on any matter as it sees fit[16] provided it acts fairly and according to the substantial merits of the case.[17]

18 In my opinion, the nature of the proceeding is both adversarial and inquisitorial - if you like, it is a hybrid. Thus the nature of the proceeding may be described as "an assisted inquiry". This has implications as to the appropriate procedure which should be followed in the conduct of such an inquiry.

19 Because the nature of the inquiry is hybrid, it is possible for the tribunal to follow the evidence called before it wherever it leads. Thus the tribunal may identify a person against whom an order might be made under section 92 of the Liquor Act. In this case, before any order is made, it would be essential that a fair process be followed in relation to such a person. However it is also entirely appropriate for the applicant to identify the persons against whom orders will be sought - and the nature of such orders - as this is consistent with the adversarial element of a section 90 inquiry. Indeed, this will usually be the preferable course. Moreover I do not see this as inconsistent with the undoubted truth that it is the tribunal, and not the applicant, that conducts the inquiry.[18]

20 The applicant is a party to a section 90 inquiry. As the inquiry is about the licensee, this person is also a party to a section 90 inquiry.[19] No other person is specified in the VCAT Act or in the Liquor Act as a party to such an inquiry.

21 Could it be said that a person, against whom an order might be sought under section 92, is also the subject of a section 90 inquiry? If this was the case then such a person would be a party to the inquiry by virtue of section 59 of the VCAT Act. Such a conclusion is tempting, but, in my opinion, it is not supported by the provisions of the Liquor Act. Section 90(1) makes it clear that a specified person may apply to the tribunal to conduct an inquiry "into the licensee". This expression is defined to mean the holder of a licence. Where the licence is held by a body corporate, this must mean that body corporate and not persons who control that body corporate. This is so even though an inquiry into a body corporate will necessarily involve consideration of the officers and employees of the body corporate. Further, section 53 of the Liquor Act, which provides (in substance) that the directors of a body corporate are severally liable as licensee, does not change this conclusion.[20] All that section does is make the directors liable for the conduct of the licensee; it does not make the directors the licensee.

22 For an order to be made under section 92, the tribunal must be satisfied that a ground exists for making an order under section 91; in turn, such an order under section 91 may only be made if the tribunal is satisfied that any of the grounds set out in section 90(1) exist. Thus sections 90, 91 and 92 are bound up together. This means that it is entirely appropriate for orders sought under section 92 to be identified when an application for an inquiry is made under section 90. Further it is open for an order to be made under section 92 on a section 90 inquiry, even though no order is made under section 91.[21]

23 However the comments in the previous paragraph do not alter my conclusion about the identity of the person who is the subject of the inquiry. Section 90(1)(k) of the Liquor Act, which permits an inquiry to be sought if an applicant considers that the licensee is not a suitable person to hold a licence, will often be the foundation for orders sought under section 92. But, even in relation to this provision, the inquiry is into the licensee, not those against whom orders may consequentially be made.[22]

24 The tribunal's powers under section 91 of the Liquor Act are confined to the making of orders affecting the licensee, and do not extend to the making of orders affecting other persons. By contrast, section 92 of the Liquor Act permits orders to be made affecting the interests of directors, the nominee and the like - persons loosely described as persons associated with the licensee. Clearly, having regard to the consequences of such orders, any person against whom an order is sought should be a party. It would be preferable if the Liquor Act so provided. However, in the absence of such a provision, it is desirable that all such persons be added as parties as soon as practicable after an application is made for the conduct of an inquiry. This is best achieved by the applicant seeking the joinder of such persons - with notice being given to the persons proposed to be joined - at the first directions held in relation to the inquiry. By reason of the hybrid character of an inquiry it is essential that a person against whom an order is sought be provided with a fair process: this will include notice of the order sought, particulars of the allegations relied on and an opportunity to be heard. Having regard to the rights that inhere in a party (such as the right to appeal), fair process would usually also involve being given an opportunity to be a party to the inquiry.

25 It will also be appropriate for the applicant to serve a copy of any application for an inquiry upon a person (not being the licensee) against whom no orders are sought, if that person has an interest in the matter. Examples may be the freehold owner or mortgagee of the licensed premises. This will give that person an opportunity to apply to be a party. However any such notice should not convey the impression that such a person is a respondent or is required to participate in the inquiry.

26 For the foregoing reasons, it is desirable that an application seeking an inquiry outline the orders the applicant will seek against the licensee (under section 91) and the orders the applicant will seek against any person associated with the licensee (under section 92). This will facilitate the conduct of the inquiry, result in appropriate parties being joined at the first directions hearing, and ensure that fair process is followed.

27 It is desirable that the tribunal hold a directions hearing soon after the making of a section 90 application. This will enable orders to be made about the parties to the inquiry and the subsequent procedure to be followed. This may include questions concerning the sufficiency of the particulars, although the tribunal will always have the power to add to, or alter these, at some future stage, subject to following fair process.

28 An applicant may only withdraw an application before it is determined by leave of the tribunal.[23] When leave is granted, it is the application that is withdrawn - that is, the whole proceeding, or, in this case, the whole inquiry - not just the proceeding against a named respondent. It is possible for an applicant to give notice that no orders (or no further orders) will be sought against particular respondents; and, in this circumstance, this step might be (loosely) thought to involve the withdrawal of the proceeding against those respondents. But, strictly, this would not be the case. In particular, where orders are still sought under section 92, this would not withdraw the application for an inquiry into the licensee.[24]

29 In the present case the order that the proceeding be withdrawn against the licensee and the freehold owner was inappropriately expressed. It should be understood, not as ending the inquiry, but as an indication that no orders (or further orders) will be sought against those respondents. The result is that the inquiry into the licensee is still on foot, even though no orders are now sought against the licensee.

30 Having regard to the nature of the tribunal's task and the hybrid nature of a section 90 inquiry, it is desirable that I comment on the possibility of a consent order. In my opinion, the applicable law is the same as that articulated and explained by the Planning Appeals Board in Dowling v City of Malvern.[25] The tribunal must consider the matters raised by the inquiry; it is not to be a mere rubber stamp. However the fact that the parties have reached agreement as to the appropriate orders that should be made will be a relevant and weighty consideration, such that it will be an unusual case where the tribunal rejects a proposed consent order.

31 In order to facilitate the making of a proposed consent order, it is desirable that the parties submit to the tribunal a written summary of facts and circumstances concerning the inquiry and why the proposed consent orders are desirable. Such a summary should not be skimpy, but, ordinarily, should be confined to be one or two pages in length. On the strength of such a summary, the tribunal will be in a position to make the consent orders after conducting an inquiry that is sufficient in the circumstances.

[1] [2006] VCAT 174 per Vice President Dove.

[2] [2005] VCAT 1592.

[3] Section 4(c) of the Liquor Control Reform Act 1998.

[4] See section 40 of the Victorian Civil and Administrative Tribunal Act 1998.

[5] See section 41 of the Victorian Civil and Administrative Tribunal Act 1998.

[6] See section 42(1) of the Victorian Civil and Administrative Tribunal Act 1998.

[7] This was the conclusion reached by Judge Dove in Casey v Vietnamese Recreational & Cultural Club Inc [2006] VCAT 174, at [10].

[8] See section 43 of the Victorian Civil and Administrative Tribunal Act 1998.

[9] See section 44 of the Victorian Civil and Administrative Tribunal Act 1998.

[10] See section 59 of the Victorian Civil and Administrative Tribunal Act 1998.

[11] See section 60 of the Victorian Civil and Administrative Tribunal Act 1998.

[12] R v Australian Broadcasting Tribunal; ex parte Hardiman (1980) 144 CLR 13,(1980) 29 ALR 289; Bond v Australian Broadcasting Tribunal (No 2) (1989) 89 ALR 185.

[13] Re Office of Fair Trading and Brcic [1999] VCAT 1988, 16 VAR 68.

[14] Tarson Pty Ltd v Holt (1991) 25 ALD 730.

[15] (1991) 25 ALD 730.

[16] See section 98(1) of the Victorian Civil and Administrative Tribunal Act 1998.

[17] See section 97 of the Victorian Civil and Administrative Tribunal Act 1998.

[18] Compare Casey v Vietnamese Recreational & Cultural Club Inc [2006] VCAT 174, at [46].

[19] An inquiry may also be about a permittee (that is, the holder of a BYO permit), but, for convenience, no further reference will be made to this possibility.

[20] I regret that I cannot agree with the analysis of Vice President Davis in Loison v Buzzo Holdings Pty Ltd [2005] VCAT 1592 at [21], although this does not mean that I disagree with her conclusion in that case. Section 86 (which applies in the case of administrators and the like) is worded differently: in that case the administrator or the like is liable under the Act "as if the person were the licensee".

[21] See section 92(2), which makes clear that the word "also" in section 92(1) does not require there to be an order under section 91 for there to be an order under section 92.

[22] By the use of the word "consequentially" I do not intend to exclude the possibility of an inquiry being conducted into a licensee with the intention of obtaining orders, not against the licensee, but against persons referred to in section 92.

[23] See section 74(1) of the Victorian Civil and Administrative Tribunal Act 1998.

[24] I regret that I cannot agree with the analysis of Vice President Dove in Casey v Vietmanese Recreational & Cultural Club Inc [2006] VCAT 174 at [38].

[25] (1983) 1 PABR 86.