[2005] VCAT 1592

1. The word "serious" is struck from Particular 1 of the Amended Application for Inquiry dated 23 June 2005, but the application by the Respondents for summary dismissal or strike-out of the proceeding pursuant to s.75 of the Victorian Civil & Administrative Tribunal Act 1998 is otherwise dismissed.

2. Costs of the strike-out application are reserved.

3. The proceeding is to be listed for directions hearing on a date in August 2005 to be notified by the Registrar.

1 By application dated 4 June 2004, the Licensing Inspector sought an inquiry under s. 90(1) of the Liquor Control Reform Act 1998 ("the Act"), in respect of Buzzo Holdings Pty Ltd ("the company"), which holds a General Licence at the Red Cliffs Hotel at Red Cliffs, its directors - John Buzzo, Sam Buzzo and Dawn Buzzo, as well as the wife of John Buzzo - Sophia Buzzo. John Buzzo manages the licensed premises.

2 The application relates to an incident which occurred at the public bar of the hotel on 3 February 2004, when, in response to an order for another beer from a patron, Daniel Scandolera, John Buzzo served him a pot glass filled not with beer, but with Schedule 6 Poison, Bracton "Twin" beer line detergent and glass soaker, a caustic line cleaner product. Mr Scandolera drank some of the fluid, and suffered a chemical burn to the mouth, which resulted in inflammation of his mouth, tongue and lips, for which he required medical treatment.

3 On 29 April 2004, John Buzzo was charged with 4 indictable offences under the Crimes Act arising out of this incident: negligently cause serious injury; recklessly cause serious injury; recklessly cause injury; recklessly engage in conduct placing a person in danger of injury. At the Magistrates Court at Mildura on 12 November 2004, he was found guilty of recklessly cause injury. The remaining charges were dismissed. He received a bond without conviction and was ordered to pay $1500.00 to the Court fund.

4 The proceeding in this Tribunal was listed for a number of directions hearings, which were adjourned by consent, and was listed for hearing on 17 June 2005. On that day, Senior Sergeant Eager, of the Liquor Licensing Unit, appeared on behalf of the Licensing Inspector and sought to file an Amended Application for Order whose particulars properly reflected the outcome of the Magistrates' Court proceeding against Mr Buzzo. There was no objection to that amendment by Mrs Morrish Q.C., who appeared on behalf of the respondents.

5 Senior Sergeant Eager also sought to amend the notice of potential orders under s.92 of the Act to reflect the Licensing Inspector's intention that orders be sought against Mr Buzzo alone, rather than against the licensee company. Mrs Morrish submitted that such an amendment, if permitted, would result in the Tribunal not having jurisdiction to deal with the matter. She submitted that the gateway to jurisdiction in this matter lies in s.90(1) of the Act, and that because Mr Buzzo's criminal matter had not resulted in conviction, sub-section (90)(1)(f) could not apply, and she wished to argue that s.90(1)(k) could also not apply against him. In those circumstances, she submitted, there was no basis upon which the licensing inspector could enliven the Tribunal's jurisdiction in this case.

6 Senior Sergeant Eager sought an adjournment in order to prepare a response to this jurisdictional argument. I granted the adjournment sought and made orders requiring the applicant to file and serve a final Amended Application for Inquiry which would be the subject of consideration at a preliminary hearing on the question of jurisdiction. The parties were then required to file and exchange written submissions on the preliminary issue.

7 The applicant filed and served an amended Application for Inquiry dated 23 June 2005. This amended Application alleged, pursuant to s.90(1)(k) of the Act, that the licensee was not a suitable person to hold the licence. The allegation was particularised as follows:

1. That on the 3rd of February 2004 John Thomas BUZZO supplied a patron with a glass containing a caustic detergent liquid which caused serious injury to the patron when he consumed the liquid.

2. That the licensee did on the 3rd of February 2004:

2.1 supply liquor to a person in a state of intoxication

2.2 fail to provide sufficient management and control over the licensed premises to ensure that the conditions of the liquor license and the Liquor Control Reform Act 1998 were complied with.

8 By letter dated 1 July 2005, the respondents' solicitor, Mr Lewenberg, filed submissions seeking orders striking out the proceedings pursuant to s.75 of the Victorian Civil & Administrative Tribunal Act 1998 ("the VCAT Act") on the basis that the proceedings lacked substance and/or were otherwise an abuse of process. The Victorian Government Solicitor filed submissions opposing the strike-out application and supporting the Tribunal's jurisdiction to hear the matter.

9 The preliminary hearing took place on 18 July 2005. Mrs Morrish made lengthy oral submissions in support of the strike-out application. She submitted that the proceedings constitute an abuse of process because they are doomed to failure, because they are for an improper purpose (that of collateral attack) and because the applicant lacked bona fides. She submitted that the proceedings were doomed to failure because, she argued, the Tribunal lacked jurisdiction under s. 90(1) of the Act. This was said to follow from the principles of statutory construction, in particular the application of the rule that an express reference to one matter indicates that other matters are excluded (Expressio unius est exclusio alterius), to sub-s.(90)(1)(f) of the Act. In particular, Mrs Morrish submitted that if the criminal conduct did not attract a conviction pursuant to sub-s. 90(1)(f), it could not be considered at all. Moreover, she submitted, there was no role in the legislation for vicarious liability, nor for accessorial liability.

10 In support of her submissions, Mrs Morrish referred me to a large number of authorities. None of these authorities specifically addressed the construction of s.90(1) of the Act.

11 Mr Lancy of counsel who appeared on behalf of the Licensing Inspector, relied upon s.53(2) of the Act, which provides for the several liability of directors of licensee companies, as evidence of Parliament's intention not to relieve directors of responsibility where the licence is held by a body corporate. He submitted that in the light of the several liability of Mr Buzzo as a director of the licensee company, the references in s.90(1) to "licensee or permittee" are to be read as references to the company or any of its directors.

12 Mr Lancy also submitted that sub-s.(90)(1)(f) did not cover the field of criminal conduct, and that it was open to the applicant to rely on sub-section 90(1)(k) in circumstances where there was no conviction of Mr Buzzo, provided there was a nexus between his conduct and his suitability as licensee or permittee or that of the company. Mr Lancy said the applicant did not allege vicarious liability of the company for the conduct of Mr Buzzo.

(1) If a licence or BYO permit is granted or transferred to two or more persons, those persons are severally liable as licensee or permittee.

(2) If a licence or BYO permit is granted or transferred to a body corporate, the directors of the body corporate are severally liable as licensee or permittee.

(3) If a club licence is granted to a person on behalf of an unincorporated club, the members of the committee of management of the club are severally liable as licensee.

(4) Sub-section (2) or (3) does not apply at any time when a nominee of the body corporate or club (as the case requires) is in place under section 54.

(5) Nothing in sub-section (4) affects or limits the application of Part 6.

(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

(fa) has failed to give notice to the Director as required by section 26G; 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

(i) has obtained the licence or BYO permit by fraud or false representations; 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.

15 Section 91(1)(a) of the Act provides that if satisfied that s.90(1)(f) applies, the Tribunal must make an order cancelling, suspending or endorsing the licence. If the Tribunal is satisfied that any other of the grounds in s.90(1) exists, S.91(1)(b) provides that the Tribunal may make similar orders cancelling, suspending or endorsing the licence, or may impose a maximum fine of $3,000 on the licensee or vary the licence.

16 Section 92 of the Act sets out the orders which can be made by the Tribunal in the event it is satisfied that a ground for making an order under s.91 exists. Section 92(2) provides that such orders can be made even though no orders are made by the Tribunal under s.91. Such orders can include disqualification for a specified period of licensees or directors of licensees from the activities set out in sub-sections 92(2)(a)-(f).

17 Section 75 of the VCAT Act provides for the summary dismissal or striking out of all or any part of a proceeding that, in the Tribunal's opinion, is frivolous, vexatious, misconceived, lacking in substance, or is otherwise an abuse of process.

18 The first question to be determined is whether, as a matter of law, the Tribunal has jurisdiction in this proceeding. If it does, on a "strikeout" application the Tribunal then considers whether other matters of fact or law render the proceeding hopeless, unsustainable etc: Re Boulton; ex parte Construction Forestry Mining and Engineering Union (1998) 73 ALJR 129; Latif Al-Hakim v Monash University (Supreme Court of Victoria, Court of Appeal, No 3707 of 2003, unreported, 28 March 2003)

19 I consider that the Tribunal has jurisdiction in this proceeding, for a number of reasons.

20 The scheme of the Act is to contribute to harm minimisation by providing adequate controls over the supply and consumption of liquor and ensuring as a far as possible that the supply of liquor does not detract from the amenity of community life. As s.4 of the Act makes clear, another objective of the Act is to contribute to the responsible development of the liquor and licensed hospitality industries. The structure and content of the Act reflect the dual concerns of protection of the public and the responsible development of the industry. There is no common law right to a liquor licence, nor any statutory right to be granted (even on uncontested applications) or to retain a licence, where the Director or the Tribunal considers that the applicant or licensee is not a suitable person to hold or carry on business under the licence (see s.44(2) of the Act).

21 Section 53(2) of the Act makes it clear that where a licence is held by a body corporate, the directors of the body corporate are severally liable as licensee or permittee. The sub-section (as well as the rest of s.53) is specific in its intention not to relieve directors of a body corporate from the burden of Part 6 of the Act. The sub-section therefore renders directors such as Mr Buzzo subject to the process of an inquiry and the consequences that may flow from it. Accordingly, wherever the word "licensee" appears in s.90 of the Act, it refers to any one of the following: a natural person holding the licence, the body corporate holding the licence, or a director of a body corporate which holds the licence.

22 Part 6 of the Act concerns inquiries and disciplinary provisions. Such inquiries are in the nature of civil proceedings, and the essence of such inquiries is to consider whether a licensee is a suitable person to hold a licence in the light of their conduct. The provisions under this Part do not establish criminal offences under the Act, as the criminal offences are set out in Part 8. Section 90(1) of the Act should be interpreted in the light of the dual scheme of the Act. It is to be noted that Parliament did not regard the civil and criminal aspects of the legislation as mutually exclusive, as s.139 of the Act enables the Director to make a decision under the Act even if proceedings have been brought elsewhere.

23 Given the objectives of the Act, and the twin concerns of protection of the public and the responsible development of the industry, it is not surprising that s.90(1) lists first among the matters, which each alone might suggest unsuitability to be a licence-holder, those which demonstrate breaches of the Act itself, breaches of related Acts (such as the Food Act), and breaches of the criminal law likely to detract from the efficacy of the Act (such as bribery of a member of the police force, fraud or dishonesty in obtaining a licence, and so on).

24 Sub-section 90(1)(f) is a little different in this regard, as there is no link to the Act or other related legislation. Presumably, Parliament intended that such convictions could, without more, given their inherent seriousness, enliven the concern of the licensing inspector. This intention is clearly expressed by s. 91(1)(a), which requires the Tribunal to make orders, if satisfied that s.90(1)(f) applies, either cancelling, suspending or endorsing the licence. This is contrasted with s. 91(1)(b), which gives the Tribunal the discretion to make such orders, as well as other, less onerous orders, such as the imposition of a fine or varying the licence, where satisfied that any of the other grounds in s.90(1) are made out.

25 It may well be that the reference in s.90(1)(f) to "convictions" means that sentencing dispositions not involving convictions cannot be considered as falling within s.90(1)(f). This is consistent with the requirement in s.91(1)(a) that the Tribunal make orders cancelling, suspending or varying the licence where satisfied that s.90(1)(f) applies. The question is whether the balance of criminal conduct not attracting the conviction required to satisfy sub-section 90(1)(f), can be considered by the licensing inspector under sub-section 90(1)(k) as putting in issue the suitability of the offender to hold a licence. Mrs Morrish submitted that it cannot.

26 Sub-sections 90(1)(ha)-(j) refer to conduct which is clearly not criminal in nature, but which relates to the manner in which a licence was obtained, any alteration of the premises after the grant of the licence, and with any conduct of the business in a manner detracting from the amenity of the area in which the premises are situated

27 I consider that consideration of s.90 in the light of the consequences spelled out in s.91, reinforces the conclusion that s.90(1)(k) can include consideration of unsuitability arising from conduct which, while criminal, did not attract a conviction, as well as any other relevant conduct.

28 Viewed in this way, sub-section 90(1)(a)-(j) is merely a list of a number of matters, each of which may alone prompt consideration of unsuitability, thereby grounding an application for inquiry by the licensing inspector, the Director, the Chief Commissioner or the Council, while sub-section 90(1)(k) provides a general basis for the initiation of an application for inquiry -that of concern about suitability arising from any other conduct or outcome not mentioned in the previous sub-sections. The word "otherwise" in sub-s. 90(1)(k) attaches to each of the previous sub-sections (a) to (j), and enables the licensing inspector to consider any conduct or convictions not mentioned in sub-sections 90(1)(a)-(j), including, for example, conduct which attracted criminal proceedings, but not a conviction, and conduct which raises the issue of suitability even though no criminal charges were laid.

29 The language of s.90(1) is clear, and its sub-sections are linked by the word "or", indicating that each sub-section is to be considered disjunctively or independently. Moreover, the references in sub-sections 90(1)(ba), (c), (d), (e) and (h) to "has been convicted" demonstrate that sub-s.90(1)(f) does not cover the field of criminal conduct, as was submitted by Mrs Morrish.

30 I do not accept that the narrow construction of s.90(1) contended for by Mrs Morrish is consistent with s. 91(1)(a) and (b), or with the objectives and scheme of the Act, which are, in my view, to give the licensing inspector the widest possible discretion to consider the conduct of a licensee and, regardless of the nature of that conduct, where satisfied that such conduct raises the question of the licensee's suitability to hold a licence, to bring the matter to the Tribunal for consideration.

31 The authorities counsel extreme caution in reliance upon the expressio unius est exclusio alterius rule as one which produces a result in itself: see, for example: Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 106 ALR 11 at 16-17; Riley v Commonwealth [1985] HCA 82; (1985) 62 ALR 497 at 505.

32 For these reasons, I do not consider that the expressio unius est exclusio alterius rule applies in the manner contended for by Mrs Morrish so as to deprive the Tribunal of jurisdiction to hold the inquiry sought by the applicant.

33 I consider that a plain reading of s.90(1) leads to the conclusion that the Tribunal has jurisdiction to entertain an application for an inquiry by the licensing inspector if the licensing inspector believes that as a result of his conduct on 3 February 2004, Mr John Buzzo, who is severally liable along with the company under the Act, is not a suitable person to be a licensee or a director of the licensee.

34 I therefore find that the Tribunal has jurisdiction to hold the inquiry sought by the amended Application for Inquiry dated 23 June 2005.

35 Mrs Morrish also submitted that in the event of a finding that the Tribunal has jurisdiction in relation to the inquiry sought, the proceeding constitutes an abuse of process and ought to be summarily dismissed or struck out pursuant to s.75 of the VCAT Act.

36 Mrs Morrish submitted that the proceeding has been brought for an improper purpose, that of collateral attack on the decision of the learned Magistrate who dealt with the criminal matter involving Mr Buzzo. In addition, she submitted that the respondent lacked bona fides in the manner in which it had sought to amend the Application for Inquiry. The lack of bona fides was said to flow from a letter dated 13 June 2005 to the respondents' solicitor by Senior Sergeant Eager in which the latter confirmed that at the hearing of the inquiry, disqualification orders would be sought only against Mr John Thomas Buzzo and not against the licensee company.

37 In relation to these matters, the effect of her submission was to bring attention back to what she submitted was the jurisdictional issue - that without a conviction against the company or Mr Buzzo under s.90(1)(f), there was no basis upon which the licensing inspector could apply for the inquiry. Similarly, it was submitted, Particular 2 should not be permitted to be pleaded in circumstances where no charges were laid against the licensee or Mr or Mrs Buzzo of supplying liquor to a person in a state of intoxication in breach of s.108(1) of the Act.

38 Dealing with these issues in turn, I agree that at the hearing of the inquiry, the Tribunal should not go behind the findings of the learned Magistrate in relation to the elements of the offence found proven against Mr Buzzo. In other words, if Particular 1 is intended to convey the substance of the offence found proven by the Magistrate, the word "serious" should be deleted from it.

39 Mrs Morrish did not address the authorities which deal with applications pursuant to s.75 of the VCAT Act, particular the decision of the Court of Appeal in State Electricity Commission of Victoria v Rabel and Ors [1998] 1 VR 102. There, the Court of Appeal held that an action should not be struck out unless it is absolutely hopeless, or so clearly untenable that it cannot possibly succeed.

40 I do not consider it appropriate, however, to strike out any part of Particular 2.1. The "summary of evidence" beneath that Particular refers the reader to paragraph 2 of the summary of evidence relied upon in relation to Particular 1. Paragraph 2 of that summary refers to an order for packaged liquor given by Mr Scandolera to Sophia Buzzo, and referred by her to Mr John Buzzo, who accepted payment from Mr Scandolera and put the liquor (a slab of 30 VB beer) on the counter for him to take with him when he left the premises.

41 It is clear that the finding of the learned Magistrate in relation to intoxication was made in the context of the charges before him, which related only to the provision by Mr John Buzzo to Mr Scandolera of the glass containing the caustic liquid, and not to any packaged liquor sold to him. In any event, the learned Magistrate said that on the night of the incident, Mr Scandolera "had drank at least 10, possibly more, pots of beer" and that he "was affected by alcohol to a certain extent, but not enough to substantial interfere with his memory". I do not consider that such a finding, even if it were relevant to Particular 2, renders absolutely hopeless the prospects of the applicant making out its case on Particular 2.

42 As I have already indicated, the inquiry and criminal provisions of the Act are not mutually exclusive, and an inquiry pursuant to s. 90(1) may be instigated where the licensing inspector - or the other persons referred to in s. 90(2) - considers that, by virtue of certain conduct, the licensee is not a suitable person to hold a licence. I am not satisfied that the allegation of unsuitability set out in Particular 2 is foredoomed to failure.

43 Nor am I satisfied that the Application for Inquiry is brought for any improper purpose, or that it involves any impermissible collateral attack on Mr Buzzo. The Act clearly contemplates the making of an application for an inquiry where the licensing inspector considers that conduct of a licensee has raised the issue of the licensee's suitability to be licensed under the Act, and there can be no question but that the conduct of Mr Buzzo on 3 February 2004 is intimately connected with the conduct by him of licensed premises as a director of the licensee company, and that his conduct squarely raises the issue of his suitability to continue as such.

44 Finally, I do not consider that the various requests by the Applicant for leave to amend the Application for Inquiry demonstrate an absence of bona fides which warrants the dismissal of the proceedings. The Tribunal is not a court of pleadings, and I consider that the Applicant has not sought to prevent the jurisdictional issue being considered, but rather has conducted itself in the genuine belief that the Tribunal has the jurisdiction to consider the matters which the applicant seeks to put before it.

45 For these reasons, the application pursuant to s.75 of the VCAT Act must be dismissed. I reserve the question of costs.

46 I note, however, that the word "serious" should be deleted from Particular 1 of the Application for Inquiry dated 23 June 2005. Otherwise, the proceeding should be listed for directions hearing so that it may be set down for hearing.