Meshlawn P/L & Anor v State of Qld & Anor

STATUTES - ACTS OF PARLIAMENT - STATUTORY POWERS AND DUTIES - EXERCISE - LIABILITY - NEGLIGENCE - PARTICULAR CASES - where appellants owned and operated nightclubs at Surfers Paradise - where appellants had consistently been granted 'extended hours permits' under the Liquor Act 1992 (Qld) to operate their nightclubs until 5.00 am - where, in March 2004, the chief executive refused each appellant's application to renew the permits - where appellants successfully appealed to the Commercial and Consumer Tribunal - where appellants commenced proceedings against the chief executive and the second respondent for damages for pure economic loss - where trial judge dismissed the claims - whether the relationship between the appellants and the chief executive was such as to give rise to a duty of care - whether the statutory right of appeal is consistent with the existence of a duty of care - whether the nature of the statutory power under s 121A is consistent with the existence of a duty of care - whether the chief executive breached the alleged duty - whether the trial judge erred in discounting his assessment of damages by 20 per cent

Liquor Act 1992 (Qld), s 3, s 3A, s 9(10)(b), s 21(1)(a), s 21(2), s 30, s 49, s 97, s 102, s 102B, s 116, s 117, s 118, s 118A, s 119, s 121, s 121(5)(g), s 121(6), s 121A, s 121A(3)

Brodie v Singleton Shire Council (2001) 206 CLR 512, [2001] HCA 29, distinguished

Chambers v Goldthorpe [1901] 1 QB 624, cited

Coshott v Woolhara MC (1988) 14 NSWLR 675, considered

Elford v FAI General Insurance Company Limited [1994] 1 Qd R 258; [1992] QCA 41, cited

Fingleton v The Queen (2005) 227 CLR 166; [2005] HCA 34, cited

Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54, applied

Jones v Department of Employment [1989] QB 1, considered

Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36, applied

Pyrenees Shire Council v Day (1998) 192 CLR 330; [1998] HCA 3, distinguished

Rowling v Takaro Properties Ltd [1988] AC 473; [1987] UKPC 2, considered

Stuart v Kirkland-Veenstra (2009) 237 CLR 215; [2009] HCA 15, applied

Sutherland Shire Council v Heyman (1985) 157 CLR 424; [1985] HCA 41, cited

**[1] McMURDO P: I agree with Chesterman JA that this appeal should be dismissed with costs.

[2] The appellants conducted nightclubs in Orchid Avenue, Surfers Paradise which, from 1996 until April 2004, held extended hours permits under the Liquor Act 1992 (Qld).[1] These permits enabled the appellants' clubs to sell alcohol to patrons between 3 am and 5 am. The second respondent was, at all relevant times, the chief executive of the first respondent's, the State of Queensland's, liquor licensing division and was responsible under the Liquor Act for granting or refusing the applications to renew their extended hours permits.

[3] Despite the 31 grounds of appeal set out over four pages in the notice of appeal, the appellants ultimately articulated three issues for determination. The first is whether the primary judge erred in finding the respondents did not owe the appellants a duty of care. The second is, if so, whether the primary judge erred in not finding that the respondents breached that duty in not renewing the appellants' extended hours permits effective from 1 April 2004. The third is whether the primary judge erred in discounting the appellants' claim for damages by 20 per cent.

[4] The first question is whether the respondents owed the appellants a common law duty of care so as to avoid economic loss in the chief executive's exercise of discretionary public power under the Liquor Act to renew or to refuse to renew the appellants' extended hours permits. The answer to that question is not straight forward.

[5] The respondents have referred us to persuasive 1988 authority tending to support their contention that they do not have a duty of care to the appellants: Coshott v Woolhara MC[2] and Rowling v Takaro Properties Ltd.[3] There are two factors which particularly support that view. The first is that the chief executive, in determining whether to renew the appellants' permits, was exercising a statutory power in the public interest. The second is that the appellants' claim is for economic loss only.[4] But this area of law has developed and evolved since 1988 and continues to do so, although incrementally and cautiously.[5] The fact that the chief executive is a repository of a statutory power which she has chosen not to exercise in favour of the appellants is no absolute bar to her liability to them in negligence.[6]

[6] A duty of care where, as here, the loss is purely economic, will usually only be found where there is reasonable foreseeability of injury to the claimant; there is a relationship of proximity between the tortfeasor and the claimant; and a consideration of identified competing salient features favour the finding of a duty of care: Perre v Apand Pty Ltd.[7] These salient features include whether the imposition of a duty of care would impose an unreasonable burden on the chief executive; whether the claimant is part of a determinate class rather than the general public; whether the appellants were vulnerable to loss from the chief executive's decision-making; whether the chief executive knew her decision-making could cause harm to the appellants;[8] and relevant public policy considerations.

[7] Since Perre, the High Court in Sullivan v Moody[9] has questioned the helpfulness of proximity in determining the question of duty of care.[10] Insofar as it is relevant, the close relationship between the chief executive who must, under the Liquor Act, grant or refuse the appellants' applications to renew their permits, and the direct impact on the appellants' businesses of the chief executive's grant or refusal to renew is consistent with the existence of a duty.

[8] In this case, the chief executive must or should have reasonably foreseen that economic loss of the kind suffered by the appellants could reasonably flow from a breach of any duty she owed to them in deciding to refuse their applications. But as Gleeson CJ explained in Graham Barclay Oysters Pty Ltd v Ryan,[11] reasonable foreseeability of harm, whilst a necessary condition for the existence of a duty of care is not in itself sufficient to establish a duty of care; public policy considerations may intrude in determining whether a duty of care exists:**

"Even where a statute confers a specific power upon a public authority in circumstances where mandamus will lie to vindicate a public duty to give proper consideration to whether to exercise the power, it does not follow that the public authority owes a duty to an individual, or a class of persons, in relation to the exercise of the power [Sutherland Shire Council v Hayman [1985] HCA 41; (1985) 157 CLR 424 at 465, per Mason J] ."

**[9] The recent High Court decision of Stuart v Kirkland-Veenstra[12] suggests that, in determining whether, in light of public policy considerations, the exercise of a public authority's power involves a duty of care, the most salient feature is the operation and purpose of the statutory scheme which gives rise to that power.[13] It follows that the determination of whether the chief executive owed the appellants a duty of care, in circumstances where there was a reasonably foreseeable risk of harm to them in the event of a breach, requires an examination of the statutory scheme under the Liquor Act at the relevant time. Any duty of care to the appellants must be consistent with the chief executive's public obligations under the Liquor Act. These considerations also determine whether the imposition of a duty of care would be an unreasonable burden on the chief executive.[14]

[10] I turn, therefore, to discuss the relevant provisions of the Liquor Act at the time of the chief executive's decision.[15] The objects of the Act were to facilitate and regulate the optimum development of Queensland's tourist, liquor and hospitality industries having regard to the welfare, needs and interests of the community and the economic implications of change;[16] to provide for a flexible, practical system for regulation of Queensland's liquor industry with minimal formality, technicality or intervention consistent with the proper and efficient administration of the Liquor Act;[17] to regulate the liquor industry in a way compatible with minimising harm arising from misuse of liquor[18] and the aims of the National Health Policy on Alcohol;[19] to regulate the sale and supply of liquor in particular areas to minimise harm caused by alcohol abuse and misuse and associated violence;[20] and to provide revenue for the State of Queensland.[21] The underlying principle of the Liquor Act for facilitating and regulating the liquor industry was that a person may obtain a licence to sell or supply liquor as part of conducting a business on premises;[22] and liquor could only be sold or supplied on the licensed premises as part of the person conducting a business, on the licensed premises, that was the primary purpose under the licence.[23]

[11] Part 4 of the Liquor Act dealt with "Licences and permits" and its Div 12 (s 102 - s 102C) with "Extended hours permit". Part 5 of the Liquor Act dealt with "Grant, variation and transfer of licences and permits". Division 1 of Pt 5 dealt with "Applications" (s 105 - s 128). Section 116 concerned the public interest relevant to applications, including applications for extended hours permits,[24] and relevantly provided as follows. An applicant for an extended hours permit had to satisfy the chief executive that it was in the public interest for the application to be granted.[25] In deciding the public interest relating to an application for an extended hours permit, the chief executive had to take into account information about the number and condition of licensed premises already existing in the locality; the distribution of licensed premises already existing throughout the locality; the extent and quality of services provided, or to be provided, by licensed premises already existing in the locality; and any other relevant information the chief executive asked the applicant to provide.[26] In addition, the chief executive had to take into account the existing and projected population and demographic trends in the locality; the number of people residing in, resorting to or passing through the locality and their respective expectations; the likely health and social impacts granting the application would have on the population of the locality; an assessment of the magnitude, duration and probability of the occurrence of the health and social impacts; the proximity of the proposed licensed premises to identified sub-communities within the locality including, for example, schools and places of worship, and the likely impact on those sub-communities; other information the chief executive considered relevant to the reasonable requirements of the public for liquor and related services in the locality; and the objects of the and the underlying principle of the .

[12] As soon as the chief executive received an application including an application for an extended hours permit, the chief executive had to inform the relevant local government[34] and the relevant assistant commissioner of police[35] who could provide comments and objections to the chief executive.[36] Applications, including applications for extended hours permits, had to be advertised.[37] A member of the public[38] could make a written submission to the chief executive about the matters to which the chief executive must have regard under s 116.[39] A member of the public could object to the grant of applications[40] on the grounds that there was likely to be "undue offence, annoyance, disturbance or inconvenience to persons who reside or work or do business in the locality concerned, or to persons in or travelling to or from an existing or proposed place of public worship, hospital or school"[41] or "the amenity, quiet or good order of the locality concerned would be lessened in some way".[42]

[13] If the chief executive received an objection to an application, the chief executive must invite the applicant and those who made the objection to a conference before making a decision on the application.[43] The chief executive could also invite a representative of the local government or the assistant commissioner of police to the conference.[44] If the applicant and other conferring persons reached agreement on issues about the application, the agreed terms had to be put in writing and signed and the chief executive had to have regard to them in making a decision on the application.[45]

[14] In deciding whether to grant an application for an extended hours permit, the chief executive had to have regard to whether it was in the public interest for the application to be granted;[46] the matters listed in s 116(3) and (4) (summarised in [10] of these reasons); any[47]bjections;47 comments from the local[48]overnment;48 and comments from the assistant commissione[49]of police;49 the impact on the amenity of the relevan[50]community;50 the previous conduct of the applicant in discharging their duties under the Liquor Act previously placed on the applicant, especially for the premises for which the extensio[51]is sought;51 the applicant's ability to control the noise and behaviour of the number of persons reasonably expected to be on and in the vicinity of the premises if the extension w[52]e granted;52 and the suitability of the premises and its facilities for the purpose for which the extensio[53]is sought.53 An extended hours permit beyond 3 am remained in force for a maximum period of six months and could be renewed only on application to the chie[54]executive.54

[15] When the chief executive received an application for renewal of an extended hours permit beyond 3 am, the chief executive had to inform the local government[55] and the assistant commissioner[56] who could comment on or object to the application.[57] The chief executive in considering the application had to have regard to such comments and objections;[58] the previous conduct of the applicant in discharging its duties under the Liquor Act, especially for the relevant premises; the applicant's ability to control the noise and behaviour of the number of persons reasonably expected to be on and in the vicinity of the premises if the extension were granted; the suitability of the premises and its facilities for the purpose for which the extension was sought;[59] and the impact on the amenity of the community concerned.[60]

[16] The chief executive, in determining whether the appellants' extended hours permits should be renewed, had to consider the public interest with particular emphasis on the matters listed in s 121A(3)(a)-(c) (summarised in the last sentence of the preceding paragraph), in the context of the objects[61] and the underlying principle of the Liquor Act[62] (summarised in [10] of these reasons).

[17] As the appellants contend, factors for the chief executive's consideration in deciding whether to grant or refuse the appellants' applications therefore included the optimum development of Queensland's tourist, liquor and hospitality industries.[63] The appellants' business for many years had complied with their obligations under the Liquor Act.[64] It follows that, if the refusal of the applications caused those businesses to fail, this was a factor inconsistent with those stated objects and one which favoured the renewal of the permits. Senior counsel for the respondents conceded as much in his oral submissions. Further, the fact that the appellants in the past had operated their businesses in a way which discharged their duties under the Liquor Act was a factor which directly favoured renewal of their permits.[65]

[18] But the chief executive, in deciding the appellants' applications had to balance those objects of the Liquor Act emphasised by the appellants as supporting the granting of their applications against the other at least equally important public interest objects of the Liquor Act emphasised by the respondents. These included regulating the liquor industry in a way compatible with minimising harm arising from misuse of liquor and associated violence.[66] The chief executive also had to consider the comments and objections of the local government and assistant commissioner[67] and the impact on the amenity of the local community.[68] Contrary to the appellants' contentions, the primary judge was right to note that "a principal object is 'the welfare, needs and interests of the community'" (my emphasis).[69] The judge did not describe this object (in fact, a precis of the effect of a number of objects) as the principal object. His Honour's statement did not demonstrate a lack of appreciation of the objects of the Liquor Act at the relevant time, some of which favoured the granting of the appellants' applications. His Honour's observation was clearly consistent with the terms and spirit of the Liquor Act[70] at the relevant time and was plainly right.[71]

[19] The existence of an appeal process from the decision of the chief executive in refusing or granting an application for an extended hours permit[72] was not, in my view, a factor weighing heavily against the chief executive's owing a duty of care to the appellants. There will ordinarily be some delay between the taking effect of the chief executive's refusal to grant an application and the determination of an appeal from it, as there was in this case.[73] Unless a stay is granted, the commencement of an appeal did not affect the orders made by the chief executive: Liquor Act s 37. Further, the terms of s 49 Liquor Act envisaged the prospect of actions in negligence against officers acting under the Liquor Act. Section 49 was contained in Pt 3 of the Liquor Act which was headed "Administration". Part 7 of the Liquor Act discretely concerned "Investigators and their powers". Contrary to the respondents' contentions, neither the placement of s 49 in the Act, nor its terms, suggested that it was intended to be limited to officers who were investigators. Rather, it tended to suggest the legislature envisaged that all persons engaged in giving effect to the , including the chief executive, may owe a duty of care to those applying for permits and licences under it. The legislature could easily have included a provision in the stating that claims in negligence could not be brought against the chief executive, but it did not.

[20] The chief executive must have reasonably foreseen that economic loss of the kind suffered by the appellants would reasonably flow from a breach of any duty she owed to them in deciding to refuse their applications. The close relationship between the chief executive and the appellants which arose under the Liquor Act further favoured the existence of a duty of care. The chief executive had the sole power to grant or refuse the appellants' applications so that, subject to the appellants' compliance with their obligations under the Liquor Act (which they met), they could do little to protect themselves from a breach of the chief executive's duty of care to them: they were vulnerable. The chief executive must have known that if she breached her duty of care to the appellants in the course of her decision-making as to their applications, they could suffer economic harm. These factors favour the existence of a duty of care even though the loss suffered by the appellants was wholly and solely economic.[74]

[21] On the other hand, it is arguable that the imposition of a duty of care might impose an unreasonable burden on the chief executive exercising the powers under the Liquor Act. In order to determine that question, it is necessary to understand the scope of any duty of care owed by the chief executive to the appellants. Any such duty of care must be consistent with the terms of the scheme imposed under the Liquor Act at the relevant time. The chief executive was required to carefully consider applications for licences and permits, together with all relevant material and the pertinent provisions of the Liquor Act, in determining whether to exercise the discretion to grant or refuse applications. That discretion had to be exercised consistently with the public interest expressed in s 3, s 3A and, in the present case, s 121A. The public interest nature of the chief executive's decision-making under the Liquor Act limited the scope of her duty to the appellants. It is no higher than a duty to honestly and carefully consider applications and all relevant material when exercising her power under and in accordance with the Liquor Act to grant or to refuse to grant their applications. It would be breached only where no reasonable chief executive, after carefully considering the relevant material and provisions of the Liquor Act, could have reached that decision. In the absence of any contrary legislative intent, the existence of such a limited duty of care is entirely consistent with the public interest. If a chief executive exercises the discretion to grant or refuse an application under the in a way which no reasonable chief executive would have done, causing reasonably foreseeable economic loss to those like the appellants who have conducted businesses for significant periods complying with their obligations under the , then the chief executive and the State of Queensland should be liable for that loss. On balance, after reviewing the competing salient features for and against the existence of a duty of care, I consider that the statutory scheme under the Act at the relevant time favours the conclusion that the chief executive owed the appellants a duty of care of the limited kind I have discussed.

[22] In the end it is unnecessary to finally decide this question because the appellants did not contend that the chief executive owed them a duty of care of this kind or that she breached such a duty of care in deciding their applications in a way in which no reasonable decision maker in her position could have done.[76]

[23] Even accepting that the chief executive owed the appellants a limited duty of care in the terms I have described, the primary judge correctly determined that the chief executive did not breach that duty.

[24] The primary judge considered that the chief executive adopted a conscientious approach to her responsibilities and did not simply rubber stamp recommendations without regard to the material upon which they were based, taking the time to read briefing notes.[77] His Honour found the chief executive was entitled to rely upon her officers' 15 March 2004 briefing notes which supported her decision not to grant the extended hours permit.[78] As the primary judge explained, there were ample reasons in the briefing notes of 15 March 2004 to allow the chief executive to conclude:**

"that there were significant problems in the immediate vicinity of the [appellants'] premises which resulted in unnecessary disturbance to the amenity, quiet and good order of the locality ... [and] that the [appellants] did not have the ability to control the behaviour of persons who could be expected to be in the vicinity of their premises ... and ... persons hoping to enter, or patrons who had left, those nightclubs contributed to it.[79]

[The] general problem of street disturbance and disorder in the vicinity of the [appellants'] nightclubs ... highlighted the lack of utility of information about where an intoxicated person was served his or her last alcoholic drink.[80]

[His Honour did] not consider that it was reasonable in the circumstances for the Chief Executive to undertake an investigation or analysis in an attempt to assess the relative contribution of persons who wished to enter, or who had left, the [appellants'] premises to the general problem of street disturbance and disorder in the vicinity. An analysis of incidents in the objections from the police demonstrated significant behavioural problems in and around the [appellants'] premises that could reasonably be attributed to alcohol consumption."[81]

**[25] His Honour's findings were consistent with the evidence. The chief executive was at the relevant time the Director-General of the Department of Tourism, Fair Trading and Wine Industry Development. She was clearly a busy public servant with wide-ranging responsibilities. There was no reason for her to question the reliability of the briefing notes of 15 March 2004. She was entitled to rely upon them. Even accepting that the chief executive owed a duty of care to the appellants of the type I have discussed, the appellants did not establish that the chief executive breached that duty in refusing to renew their extended hours permits. It follows that their appeal on liability must be dismissed.

[26] The appellants' third contention can be briefly dealt with. They contend that the judge erred in discounting his assessment of damages by 20 per cent.

"I find that had permits been granted they would have been subject, like other businesses, to a lockout condition.[83] Mr Garardi [director of Meshlawn] gave evidence that the plaintiffs 'learnt to live with the lockout', and that a lockout 'can also be a lock-in so that if you gain customers before 3 am, they are actually locked in.' However, I do not consider that this evidence, or any other evidence, suggests that the imposition of a lockout condition would have benefited the [appellants'] business. A lockout condition was resisted by the [appellants]. An offer of an extended hours permit subject to a lockout condition was rejected. One reason for this may have been some uncertainty about the impact which a lockout condition would have. However, it is clear that the [appellants] and other nightclubs regarded a lockout condition as likely to have an adverse financial impact on their businesses. Another nightclub unsuccessfully appealed against the imposition of such a condition and the Tribunal found that such a condition 'undoubtedly would be some degree of economic impact on all venues'.

[192] I find that the imposition of a lockout condition would have had an adverse impact upon the [appellants'] businesses. The effect of that impact cannot be assessed with any precision in the light of the evidence. The [appellants'] submissions do not specifically address the impact which a lockout condition would have had upon the loss and [expert witness] Mr Vincent's calculations did not bring into account any reduction on account of it.

[193] In the circumstances, I consider that a reasonable approach to assessing damages is to discount the loss assessed by Mr Vincent by 20 per cent on account of the likely adverse impact of a lockout condition."

**[28] The judge was right to conclude that the imposition of a lockout condition would have had an adverse impact upon the appellants' businesses. That was the only rational and common sense inference from the evidence. Had the chief executive granted the applications to renew the extended hours permits, it seemed inevitable they would have been subject to a lockout condition. That is because, as his Honour explained, lockout conditions were imposed on all businesses in the Surfers Paradise area which were granted a renewal of their extended hours permits at this time. Further, a lockout condition was ultimately imposed when the Tribunal subsequently renewed the appellants' extended hours permits following their successful appeal.[84] The evidence was imprecise as to the economic impact of a lockout condition on the appellants' businesses but their opposition to it suggested it was likely to have a significant adverse impact. As a matter of common sense, the imposition of such a condition must have caused a loss of income to the appellants. The judge was correct in discounting the assessment of damages to reflect this. The appellants have not referred this Court to any evidence to show that the appropriate discount was less than the 20 per cent broad brush approach taken by the judge. Once it is accepted that a discount was appropriate, it seems that his Honour's approach was the course most favourable to the appellants on the evidence. The appellants cannot succeed in challenging the judge's notional assessment of damages in these circumstances: cf Elford v FAI General Insurance Company Limited.[85] This ground of appeal must fail.

[29] For these reasons, the appellants' appeal must be refused with costs.

[30] CHESTERMAN JA: Each appellant is the owner and operator of nightclubs which are located in Orchid Avenue, Surfers Paradise. The first appellant's businesses were called "Cocktails and Dreams" and "The Party Nightclub". The second appellant's clubs were "Crazy Horse Nightclub", "Bourbon Bar" and "Micky's Café".

[31] Prior to March 2004 each appellant had been granted "extended hours permits" pursuant to the Liquor Act 1992 (Qld) ("the Act") which allowed their nightclubs to remain open for business until 5.00 am. On 18 March 2004 the second respondent ("the chief executive") refused each appellant's application to renew the permits. The result was that the appellants could not sell alcohol to their customers after 3.00 am as and from 1 April 2004.

[32] The appellants appealed against the chief executive's decision to the Commercial and Consumer Tribunal ("the Tribunal") which, on 13 August 2004 allowed the appeal and granted the permits subject to what was called a "lockout condition", the effect of which was that between 3.00 am and 5.00 am the appellants could sell alcohol only to customers already in the nightclub. No new customers could be admitted after 3.00 am, and any customers who left after 3.00 am could not re-enter.

[33] The chief executive was responsible for administering the Liquor Act. Both the Gold Coast City Council and the Queensland Police Service told her they opposed the renewals. By the time the Tribunal heard the appeals those bodies had withdrawn their objections if the "lockout" condition was imposed.

[34] The appellants commenced proceedings against the chief executive, and the State of Queensland as her employer, alleging that her decision to refuse to renew the permits gave rise to a number of causes of action entitling them to damages. The first appellant claimed $1,632,325. The second appellant's claim was for $1,150,952.

[35] Applegarth J dismissed all of the appellants' claims. His Honour, however, assessed damages: $252,589 for the first appellant and $159,143 for the second appellant.

[36] The only cause of action now in issue is negligence. In essence it was claimed that the chief executive failed to consider, or have proper regard to, the evidence relevant to the application to renew the permits, and that her conduct was negligent.

[37] By s 9(10)(b) of the Act the ordinary trading hours of licensed premises such as the appellants' were between 5.00 pm and 3.00 am the following day. By s 102:**

"An extended hours permit authorises the licensee who is the holder of the permit to sell liquor ... at the times, and subject to the conditions, specified in the permit".

**This is, by s 97, called "an extended hours permit".

[38] Section 121(6) of the Act provided:**

"If the chief executive grants an extended hours permit for extension of hours beyond 3 a.m., the permit remains in force for a maximum period of 6 months and may be renewed only on application to the chief executive".

Section 121A dealt with the renewal of extended hours permits. It provided:

"(1) As soon as practicable after the chief executive receives an application for renewal under section 121(6) of a permit for extension of hours beyond 3 a.m., the chief executive must tell the following about the application -

(a) the local government for the area to which the application relates;

(b) the assistant commissioner (of police) for the locality to which the application relates.

(2) The local government or assistant commissioner may comment on, or object to, the application by giving written comments or objections to the chief executive within 14 days of receiving ... advice about the application.

(3) In considering the application, the chief executive must have regard to -

(a) comments and objections received under subsection (2); and

(b) the matters mentioned in section 121(5)(g); and

(c) the impact on the amenity of the community concerned".

[39] Section 121(5)(g) provided:

"(5) Also, in deciding whether to grant the application, the chief executive must have regard to -

(g) for an extended hours permit for extension of hours beyond 2 a.m. -

(i) the previous conduct of the applicant in discharging any duties under this Act previously placed on the applicant, especially for the premises for which the extension is sought; and

(ii) the applicant's ability to control the noise and behaviour of the number of persons that could reasonably be expected to be on and in the vicinity of the premises if the extension were granted; and

(iii) the suitability of the premises and its facilities for the purpose for which the extension is sought".

[40] The manner in which the appellants pleaded their case in negligence against the respondents is important. As finally formulated in the Further, Further Amended Statement of Claim it read:

"60. Further, and in the premises ... the Second Defendant owed a duty of care ... in the exercise of her functions under the Act in respect of the renewal of the extended hours permits, to take reasonable care to avoid foreseeable risk of injury to the Plaintiffs. Particulars of the duty are:

(a) to read the comments and objections from the Gold Coast City Council and the Assistant Commissioner of Queensland Police and the Plaintiffs' responses thereto;

(b) to make enquiries of Michael Kelly, Mark Farrah or Wayne Briscoe, as to the evidentiary basis for the grant or refusal of the applications;

(c) to ascertain the attitude of the Licensing Division's investigating officers in respect of the applications for extended hours permits;

(d) to ascertain whether there was any comparative analysis of non-compliance or laxity on the part of other late-night venues in the vicinity or evidence as to the level of misconduct associated with other premises in the vicinity".

[41] Particulars of the breach of duty were given in paragraph 62(e):

"(e) particulars of the breach alleged in sub paragraph (d) herein are:

(i) failing to read the comments and objections from the Gold Coast City Council and the Assistant Commissioner of Queensland Police, and the Plaintiffs' responses thereto;

(ii) failing to make enquiries of Michael Kelly, Mark Farrah or Wayne Briscoe, as to the evidentiary basis for the objections and comments;

(iii) failing to ascertain the attitude of the Licensing Division's investigating officers in respect of the applications for extended hours permits;

(iv) failing to ascertain whether there was any comparative analysis of non-compliance or laxity on the part of other late-night venues in the vicinity, or evidence as to the level of misconduct associated with other premises in the vicinity;

(v) failing to enquire as to the two liquor infringement reports referred to by her investigators' comments in the Cocktails and dreams (sic) briefing note;

(vi) failing to have regard to the Liquor Licensing Division's assessment that patron behaviour at the applicants' premises was generally considered good, with clear evidence of RSA commitment;

(vii) failing to ascertain if there was evidence of a clear relationship between alcohol related street offences and the operation of the Plaintiffs' premises;

(viii) deciding the application without the matters referred to in subparagraphs (i)-(vii) herein;

(ix) refusing the permits when there was insufficient evidence to do so, and where there was no evidence of liquor infringement reports against the premises;

(x) the matters in subparagraphs 57(a), (b), (f), (g), (h), (i) and (j) hereof."

**[42] The matters alleged in paragraph 57 which were said to be particulars of the breach of duty were that the chief executive gave undue weight to the objections raised by the police to the renewal of the permits; took safety concerns into account when there was no evidence of a lack of safety in and around the appellants' businesses; failed to take into account relevant matters when considering whether to grant a permit pending the determination of the Tribunal; "singled out" the appellants' businesses while granting extended hours permits to other like businesses in Surfers Paradise; found "significant problems" in the appellants' businesses where there was no evidence of problems; found the appellants did not have the ability to control their patrons when it was unreasonable to expect them to be able to exercise such control.

[43] It will be observed that the alleged duty was limited to making what might be described as a thorough investigation of the evidence relating to the conduct of the appellants' nightclubs and any anti-social behaviour of their patrons. The appellants did not allege a duty on the part of the chief executive to renew their permits. There is good reason why such a duty would not be alleged. It would be incompatible with the express statutory duty to renew the permits only if satisfied it was appropriate to do so having regard to the factors specifically identified by s 121A. But performance of the more limited duty which was alleged would not necessarily have resulted in the renewal of permits. The result of the application for renewal would depend upon the more thorough investigation of the evidence. The appellants did not allege in their pleading that the performance of the duty would have led, or even would probably have led, to the renewals. This is a problem the respondents rely upon. It will be necessary to return to it.

[44] The trial judge gave these reasons for rejecting the appellants' case in negligence:**

[116] I have previously addressed the terms, scope and purpose of the Act. It is unnecessary to repeat my examination of it. I concluded that s 121A is part of a statutory regime that is principally concerned with the welfare of the community, not the welfare and protection of applicants for extended hours permits. The purposes of the Act may be advanced by the financial viability of licensees, and granting licences and permits to persons who are suitable to hold them and whose previous conduct demonstrates a record of discharging duties imposed upon them under the Act. Section 121A(3) requires the Chief Executive to have regard to, amongst other things, the previous conduct of the applicant in discharging any duties under the Act previously placed on it and the applicant's ability to control the noise and behaviour of persons that could reasonably be expected to be on or in the vicinity of the premises. An applicant whose previous conduct is good and who has the ability to do these things may justify, in the circumstances of a particular case, a favourable exercise of the power to renew a permit. However, these aspects of s 121A and the public interest in granting licences and permits to suitable applicants does not transform the Act into one that exists for the protection of licensees and their economic interests. The Act exists to regulate their conduct and the conduct of other participants in the liquor industry, having regard to the welfare, needs and interests of the community.

[117] Section 121A does not expressly require the Chief Executive to have regard to the economic and other consequences to an applicant of a refusal to renew an extended hours permit. The power to grant or refuse an application to renew such a permit is one that is exercised to promote the objects of the Act, and these are predominantly objectives that seek to minimise adverse social consequences arising from the misuse of alcohol and to promote the public interest.

[124] The more substantial point developed by the defendants in oral submissions about the vulnerability of the plaintiffs to economic loss from a refusal of an application was that it is addressed by the statutory appeal on the merits to an independent tribunal. In response, the plaintiffs contended that it was not to the point that they could appeal, since pending their appeal being heard they would be without their permits. I consider that the existence of an appeal is relevant to the existence of a duty of care.

[128] The recognition of a duty of care in this case would be inconsistent with the statutory regime that addresses the interests of aggrieved applicants by conferring upon them a statutory right of appeal. It is not a sufficient response to this consideration that the statutory appeal may not provide the same remedy by way of compensation as an action in tort. The issue is not whether the remedy by way of appeal provides the same financial result as a common law claim would. The issue is that the recognition of a common law claim is inconsistent with a statutory scheme that deliberately provides a form of remedy by way of an appeal.

[135] A duty of care to not cause economic loss to applicants for permits potentially conflicts with the public responsibilities of the Chief Executive in administering the Act and in achieving its objects. This is not a case in which the statutory power is conferred for the safety, welfare or protection of a class of persons of whom the applicants are members. It is a case in which the exercise of the discretionary power to refuse an application for renewal may be inimical to the economic interests of the plaintiffs. In the circumstances, the recognition of the duty of care contended for by the plaintiffs is not consistent with the terms, scope and purposes of the Act.

[141] The vulnerability of the plaintiffs to economic loss as a foreseeable result of the unfavourable exercise of the statutory power conferred upon the Chief Executive is insufficient to establish a duty of care. That vulnerability is a feature of a statutory regime that confers permits of limited duration on licensees and also confers a broad discretionary power upon the Chief Executive to not renew those permits. That vulnerability is ameliorated by a statutory appeal to an independent tribunal. Examination of the terms, scope and purpose of the relevant statutory regime leads me to conclude that it does not erect or facilitate a relationship between the Chief Executive and the class of persons of which the plaintiffs are members, namely applicants for renewal of extended hours permits, that displays sufficient characteristics to impose a common law duty of care. The power conferred on the Chief Executive is not conferred for the protection of applicants for permits and the proper exercise of the power may be inimical to their private interests. The duty of care contended for by the plaintiffs is not consistent with the terms, scope and purposes of the Act. Accordingly, I conclude that the plaintiffs have not established that the Chief Executive owed to them the duty of care which they allege". (footnotes omitted)

**[45] Although the trial judge discussed the question whether a duty of care arose in great detail, two major themes for his Honour's rejection of the existence of the duty emerge from these passages. The first is that such a duty is inconsistent with the exercise of the responsibilities of the chief executive when considering an application to renew the permits. She had to consider not only the interests of the appellants who wished to profit from selling alcohol during the extended hours, but also the safety of patrons in the nightclubs, and the interest of the public in not being subjected to boorish and sometimes violent behaviour by those patrons brought on by the excessive consumption of alcohol. (I should point out that the appellants dispute that the chief executive had any responsibilities to the public. It is a large part of their submissions that the public interest should not have intruded into her decision making process. I will return to that point later).

[46] The second theme is that the existence of the duty was inconsistent with the statutory right of appeal to the Tribunal. The existence of that remedy is said to be indicative that the Act did not intend there to be a separate right to recover damages for breach of a duty of care.

[47] In order to appreciate the trial judge's reasons and the appellants' submissions it is necessary to set out some more provisions from the Act.

"(a) to facilitate and regulate the optimum development of the tourist, liquor and hospitality industries of the State having regard to the welfare, needs and interests of the community and the economic implications of change; and

(d) to regulate the liquor industry in a way compatible with -

(i) minimising harm arising from misuse of liquor; and

(ii) the aims of the National Health Policy on Alcohol; and

(e) to regulate the sale and supply of liquor in particular areas to minimise harm caused by alcohol abuse and misuse and associated violence; and

(g) to provide revenue for the State to enable the attainment of the objects of this Act and for other purposes of government".

[49] Section 3A set out the "Principle underlying this Act ...". It provided:

"(1) The underlying principle of this Act in relation to the sale and supply of liquor is -

(a) a person may obtain a licence to sell or supply liquor as part of conducting a business on premises; and

(b) liquor may only be sold or supplied on the licensed premises as part of the person conducting a business, on the licensed premises, that is the primary purpose under the licence.

(3) This Act must be administered in accordance with the underlying principle ...".

[50] Section 116 deals with the "Public interest relevant to applications" for inter alia an extended hours permit. By subsection 2 the applicant must satisfy the chief executive that it is in the public interest that the application be granted. In order to so satisfy the chief executive the applicant must, by subsection 3,

"... give information to the chief executive about the following -

(a) the number and condition of licensed premises already existing in the locality;

(b) the distribution of licensed premises already existing throughout the locality;

(c) the extent and quality of services provided ... by licensed premises already existing in the locality;

(d) any other relevant information that the chief executive asks the applicant to provide".

[51] By subsection 4 the chief executive must take those matters into account when deciding the public interest relating to the application,

(b) the number of persons residing in, resorting to or passing through the locality, and their respective expectations; and

(c) the likely health and social impacts that granting the application would have on the ... locality; and

(d) an assessment of the magnitude, duration and probability of the occurrence of the health and social impacts; and

(e) the proximity of the proposed licensed premises to identified sub-communities ... including ... schools and places of worship, and the likely impact on those sub-communities; and

(f) other information the chief executive considers relevant ... ; and

(g) the objects of the Act as mentioned in section 3 and ... 3A".

[52] As soon as she receives an application for a permit the chief executive must inform the local government and the Assistant Commissioner of Police that the application has been made. Each of those may comment:

"on the reasonable requirements of the public in the locality"

"that the amenity, quiet or good order of the locality would be lessened".

[53] Section 118 requires applications for licences of various kinds, including extending hours permits, to be advertised. By s 118A, members of the public may address the chief executive:

"... about the matters to which the chief executive must have regard under section 116".

**[54] By s 119 a member of the public may object to an application on the grounds that the permit, if granted, would cause undue offence, annoyance, disturbance or inconvenience to those who work or live near the licensed premises, or to those travelling to or from a place of worship, hospital or school; and on the grounds that the amenity, quiet, or good order of the locality would be lessened. [55] I have already mentioned s 121(5) and (6), and s 121A, which are of particular relevance. The appellants point out that it is this last mentioned section which deals specifically with renewals of extended hours permits and it was an application to renew the permits which led to the chief executive's refusal and the subsequent appeal to the Tribunal. The appellants point out that the earlier sections which I have mentioned, in particular s 116, s 117, s 118 and s 119 regulate applications for the grant of permits. They do not apply to renewals. The point which the appellants make of this is that it is under those sections that the public interest must be taken into account by the chief executive. There is no such requirement, it is submitted, with respect to renewals.

[56] It is now necessary to draw attention to the Act so far as it provides an appeal against decisions of the chief executive. Section 21(1)(a) confers jurisdiction on the Tribunal to review decisions of the chief executive in relation to the refusal to renew an extended hours permit. By subsection 2 the Tribunal has all the powers and discretions of the chief executive "in respect of the matter under appeal", and also the duties imposed by the Act on the chief executive "in respect of the matter under appeal". By s 30(1) an applicant for a permit may appeal against the chief executive's decision.

[57] Lastly I need to mention s 49 of the Act which provides:**

(1) A person engaged in giving effect to this Act does not incur civil liability for an act done or omitted to be done honestly and without negligence under, or for the purposes of, this Act".

**This is said by the applicants to be some indication that a person engaged in giving effect to this Act who does an act or omits to do an act negligently does incur civil liability.

[58] The appellants' particular criticisms of the trial judge's reasons and their submissions in support of the existence of the duty of care may be summarised thus:**

(a) The trial judge wrongly emphasised the overall objects of the Act, which include the interests of the community in the responsible consumption of alcohol, instead of considering the particular requirements of s 121A which, importantly, did not require any consideration of the public interest in the renewal of an extended hours permit;

(b) The most recent decision of the High Court with respect to the existence of the duty of care owed by a public official in the context of statutory power or right is Stuart v Kirkland-Veenstra [2009] HCA 15; (2009) 237 CLR 215 which decided that the existence of a common law duty of care by a statutory authority "turns on a close examination of the terms, scope and purpose of the relevant statutory regime" to determine whether that regime gives rise to "a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence". There is a "three part test" to determine whether there is such a relationship. The parts are:

(i) an examination of the degree and nature of control exercised over the risk of harm which eventuated;

(ii) the degree of vulnerability of those who depend on the proper exercise of the power; and

(iii) the consistency or inconsistency of the asserted duty of care with the terms, scope and purpose of the relevant statute.

(c) The trial judge did not apply this test. The proper application of the test would have led to a finding that the chief executive owed the appellants a duty of care when considering their applications for renewal. The reasoning is as follows:

(i) The scope and purpose of the Act provides for a range of decisions respecting different types of permits and the Act specifies what is to be taken into consideration with respect to each decision. "It is inappropriate to blend the decisions", and not every decision requires a consideration of the Act's objects. In particular the renewal of an extended hours permit does not, like the grant of the permit in the first place, require the chief executive to consider whether it is in the public interest to grant the permit. The nature of the inquiry under s 121A is limited.

(ii) The trial judge therefore erred by importing into the renewal process a consideration of the "public interest considerations that appear in the Act's objects and the impact on the community and its amenity of renewing extended hours permits".

(iii) The renewal of a permit is an administrative or operational task of the chief executive which does not call for some assessment of the public interest. The objects of the Act are not "called into play". The chief executive may take into account any comments from the local authority or Assistant Commissioner but only if any adverse comment constitutes "sustainable evidence" of the objection.

(iv) The chief executive "was in control of the entire process of calling for the comments of the police and the local authority (and) having those comments assessed ...". She therefore had "total control over the decision making process".

(v) The trial judge erred in finding that the appellants were not relevantly vulnerable because of the existence of the right of appeal to the Tribunal. This analysis "misses the point ... that the period of vulnerability is between the date of the decision and the date of the review by the ... Tribunal".

(vi) There is no inconsistency between the terms, scope and purpose of the Act and the existence of a duty of a care because:

(A) the renewal process is much more constrained than the process for the initial grant of the permit;

(B) the renewal process does not involve the chief executive examining questions of the public interest;

(C) the length of time that a licensee has held a permit and the number of previous renewals creates an expectation of continued renewal unless there is "sustainable evidence" against the renewal;

(D) the Act confers on the chief executive power to revoke a permit in cases where the licensed business is not being operated in accordance with the Act or conditions of the permit;

(E) no section of the Act prohibits the existence of a duty of care. Section 49 allows for its existence; and

(d) The test was satisfied. The duty should have been found to exist.

**[59] Have the appellants correctly described the test for determining the existence of a duty of care with respect to the exercise of statutory powers, and correctly applied the test to the facts?

[60] Stuart was a case in which two police officers came across a man who had apparently made preparations to take his own life. Having spoken to him they formed the opinion that he had changed his mind. They offered assistance but he declined it. He said he wanted to go home. They let him go but he killed himself there. His widow claimed that the police officers had negligently failed to exercise the powers given by the Mental Health Act 1986 (Vic) to apprehend the man and take him to a suitable hospital. The High Court held that the statutory preconditions for the exercise of that statutory power had not arisen so that there could be no question of any negligent failure to exercise the power.

[61] The test formulated by the appellants is, I think, an accurate distillation of what was said by Gummow, Hayne and Heydon JJ in Stuart. Their Honours said (254):**

"There can be no duty to act in a particular way unless there is authority to do so. Power is therefore a necessary condition of liability but it is not a sufficient condition. Statutory power to act in a particular way, coupled with the fact that, if action is not taken, it is reasonably foreseeable that harm will ensue, is not sufficient to establish a duty to take that action. Rather, as was pointed out in Graham Barclay Oysters Pty Ltd v Ryan ... the existence or otherwise of a common law duty of care owed by a statutory authority ... 'turns on a close examination of the terms, scope and purpose of the relevant statutory regime'. Does that regime erect or facilitate 'a relationship between the authority ... and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence' ... ?

Evaluation of the relationship between the holder of the power and the person ... to whom it is said that a duty of care is owed will require examination of the degree and nature of control exercised over the risk of harm that has eventuated ..., the degree of vulnerability of those who depend on the proper exercise of the relevant power ..., and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute ... . Other considerations may be relevant ... ." (footnotes omitted)

[62] The test propounded may not be definitive. Crennan and Kiefel JJ said in their joint judgment (260-261):

"No guiding principle, by which an authority might be considered to be obliged to exercise its powers at common law, has been identified; the search continues ... . There is agreement that the statutory powers in question must be directed towards some identifiable class or individual, or their property, as distinct from the public at large ... .

Different factors have been identified, from time to time, as relevant to the existence of a duty of care. Not all have continued to be regarded as useful. Notions of proximity and general reliance are no longer considered to provide the answer to the question of whether an authority should be considered to have been obliged to exercise its powers. ...

The vulnerability of a plaintiff was referred to in Pyrenees Shire Council v Day ... as an aspect of the plaintiff's supposed reliance upon an authority to use its powers ... . A focus on vulnerability may in part explain the decision in Crimmins v Stevedoring Industry Finance Committee ... . It has not been universally accepted as a useful analytical tool ... . In Graham Barclay Oysters Pty Ltd v Ryan, Gummow and Hayne JJ treated the degree of a plaintiff's vulnerability as part only of an evaluation as to whether a relationship may be seen to exist between a statutory authority and the class of persons in question ... . Establishing the existence of a relationship between a plaintiff and a public authority has the advantage of coherence with the exceptions, already recognised by the common law, to the general rule that there is no duty of affirmative action". (footnotes omitted)

**[63] What is required then is an examination of the nature of the relationship, created by the statute in question, between the proponent of the duty who claims to have been damnified by its breach, and the exerciser of the power which is said to have been exercised, or not exercised, negligently. The relationship must be of a type which makes it appropriate to recognise the existence of a duty of care. The existence of the power to act is not by itself enough, even if it be recognised that without the exercise of the power damage will ensue. "Control" by the exerciser of the power, and "vulnerability" of the person damnified are indications of the requisite relationship. Probably more important is whether the propounded duty sits consistently with the statutory power. That in turn calls for an examination of the identity of those meant to be benefited by the power; the nature of the power, and the statutorily identified circumstances in which the power is to be exercised and the manner in which it is to be exercised.

[64] In undertaking the examinations it is, I think, helpful to bear in mind some remarks made by Gleeson CJ and by McHugh J in Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211 CLR 540. The Chief Justice said (557):**

"A conclusion that such a duty of care exists necessarily implies that the reasonableness or unreasonableness of the inaction of which complaint is made is a legitimate subject for curial decision. Such legitimacy involves questions of practicality and of appropriateness. There will be no duty of care to which a government is subject if, in a given case, there is no criterion by reference to which a court can determine the reasonableness of its conduct".

"The power given by s 189 (of the Fisheries Management Act 1994 (NSW)) is a power to protect the public, not a specific class of persons. Similar powers, covering a wide range of activities, are given to Ministers and government authorities in the interests of public health and safety. A legislative grant of power to protect the general public does not ordinarily give rise to a duty owed to an individual or to the members of a particular class ... ".

"A public authority has no duty to take reasonable care to protect other persons merely because the legislature has invested it with a power whose exercise could prevent harm to those persons. Thus, in most cases, a public authority will not be in breach of a common law duty by failing to exercise a discretionary power that is vested in it for the benefit of the general public ... . But if the authority has used its powers to intervene in a field of activity and increased the risk of harm to persons, it will ordinarily come under a duty of care ... . So also, if it knows or ought to know that a member of the public relies on it to exercise its power to protect his ... interests, the common law may impose a duty of care on the authority ... . If the authority comes under a duty of care, the failure of the authority to exercise a discretionary statutory power may give rise to a breach of the common law duty of care. But subject to these exceptions, ordinarily the common law will not impose an affirmative duty of care on an authority which would have the result that a failure to exercise a statutory power constitutes a breach of that duty". (footnotes omitted)

[66] The point made by Gleeson CJ in the first passage I set out, that some statutory duties do not lend themselves to the imposition of a duty of care in negligence with respect to their discharge, had been made in earlier cases. It has been said that where public authorities are performing functions of a "policy" nature as opposed to an "operational" measure there is no scope for tortious liability. Mason J made the distinction in Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424 at 469:

"The distinction between policy and operational factors is not easy to formulate, but the dividing line between them will be observed if we recognize that a public authority is under no duty of care in relation to decisions which involve or are dictated by financial, economic, social or political factors or constraints. Thus budgetary allocations and the constraints which they entail ... cannot be made the subject of a duty of care. But it may be otherwise when the courts are called upon to apply a standard of care to action or inaction that is merely the product of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness".

[67] Deane J preferred a different dichotomy. His Honour said (500):

"If the distinction between rights under public law and rights under private law ... be relevant ... the respondent's claim is propounded as an ordinary action in negligence for the alleged breach of their private law rights. The existence of liability on the part of a public governmental body to private individuals under those principles will commonly, as a matter of assumed legislative intent, be precluded in cases where what is involved are actions taken in the exercise of policy-making powers and functions of a quasi-legislative character ... ."

[68] The distinction between policy and operation has been much criticised. As a result an interesting article, "The Common Law Liability of Public Authorities: The Interface between Public and Private Law" by Chief Justice Doyle and Mr Redwood, 1999 7 Tort Law Review 30 at 44-45, suggests an alternative approach:

"... the troublesome and elusive dichotomy is one the law could do without. Rather than agonising over dubious conceptual classifications, the courts would be better served by focusing on whether the decision is of such a nature that, for the reasons indicated, judicial abstention is required. This would fasten attention on the rationale (separation of powers and institutional competence) for shielding certain administrative decisions from tortious judicial scrutiny. The Privy Council came closest to the correct approach in Rowling v Takaro Properties Ltd in recognising that the central issue is one of justiciability and the suitability of certain decisions to judicial resolution. It may be said that such a test is plagued by the same devils of indeterminacy as the policy/operational distinction. The search for precision is likely to prove fruitless. It seems better ... that the courts accept this fact and focus on the rationale for immunity in each particular case instead of wasting time over artificial distinctions ... that are difficult to draw ... ". (footnotes omitted)

[69] The authority referred to is Rowling v Takaro Properties Ltd [1987] UKPC 2; [1988] AC 473. The passage in the judgment of the Privy Council (Lords Keith, Templeman, Brandon, Mackay, Goff) appears at 501:

"Their Lordships ... are well aware of the references in the literature to this distinction (between policy and operation areas) (which appears to have originated in the United States of America), and of the critical analysis to which it has been subjected. They incline to the opinion ... that this distinction does not provide a touchstone of liability, but rather is expressive of the need to exclude altogether those cases in which the decision under attack is of such a kind that a question whether it has been made negligently is unsuitable for judicial resolution, of which notable examples are discretionary decisions on the allocation of scarce resources or the distribution of risks ... ".

**[70] The passages I have set out suggest that there are two questions the answers to which will help to determine whether a duty of care arises in the exercise of a particular statutory power. The first is whether the power can be seen, by reference to its legislative context, to produce a relationship between the exerciser of the power and the person who claims to have suffered loss by its exercise, such that it is appropriate to impose the duty. An important, perhaps a critical, component of this question is whether the power is to be exercised for the protection of individuals, or classes of persons, or for the public. The second question is whether the power is of such a nature that it is suitable for judicial scrutiny, or is a legitimate subject for curial decision. A negative answer to either question will mean that there is no duty of care in the particular case.

[71] The two questions are distinct and are suggested, obviously enough, by Stuart and Rowling. The first question is answered by an analysis of the statute and what it says about the circumstances in which the power is to be exercised. The second requires an assessment of the nature of the governmental activity involved in the exercise of the power to see whether courts may legitimately inquire into its reasonableness. The answers to both questions will tell whether a duty of care exists with respect to the exercise of the power or mode of conducting the activity.

[72] Logically the second question might be addressed first because if the nature of the power is such that its exercise is not a legitimate subject for judicial decision there cannot be the requisite relationship between the exerciser of the power and the plaintiff, and one need not embark upon a more detailed analysis of the legislation for signs of consistency or inconsistency with the existence of the duty.

[73] Notwithstanding the logic I will deal firstly with the first of the questions as I posed them.

[74] The appellants' position is that s 121A is intended for the protection of licensees to enable them to conduct their businesses and maximise profit. As I mentioned they criticise the trial judge for concluding that the exercise of the power to renew an extended hours permit involves questions of public interest.

[75] In my opinion the chief executive was obliged to consider not only the appellants' business interests when deciding whether or not to renew the permits but also the interests of that part of the community which might be adversely affected by the sale of alcohol during the extended hours, 3.00 am to 5.00 am. I do not see what else can be the purpose of requiring, by s 121A(3), the chief executive to have regard to any comments or objections made by the local government and/or the Assistant Commissioner of Police; the impact on the amenity of the community by extending the sale of liquor; and the applicant's ability to control the behaviour of persons who could reasonably be expected to be on and in the vicinity of the premises if the extension were granted.

[76] There was evidence before the chief executive, and the trial judge, that patrons of the appellants' nightclubs, and others, having drunk to 5.00 am, vomited and urinated in the streets and footpaths outside the nightclubs; they fought each other and fell over. It is nonsense to suggest that the chief executive must ignore the interests of members of the public who, going to work or the beach early in the morning, must pick their way through the detritus of drunkenness adjacent to nightclubs.

[77] As well as having to consider the interests of those whose amenity might be affected by the renewal of the permit, the chief executive had to take into account the safety of patrons in the nightclubs. They were a class of the public whose interests the chief executive had to consider. This obligation is made explicit by s 121(5)(g)(ii) and (iii). There was evidence that on not infrequent occasions the appellants' patrons became violent and engaged in criminal assaults, sometimes inflicting serious injury.

[78] The chief executive would not have discharged her statutory duty if she considered only the appellants' interests in maximising profits.

[79] The appellants' reliance on s 3(a) and s 3A is misplaced. Certainly the appellants' economic interests were important and had to be taken into account. But they were not the only interests to be regarded, nor were they predominant. The objects of the Act are twofold, and the conflict between the separate aspects is manifest. The Act aims to facilitate the optimum development of the liquor and hospitality industries for the economic advancement of the community but in a way compatible with minimising harm which can arise from the misuse of liquor, the aims of the National Health Policy and the minimisation of alcohol induced violence. The task of the chief executive was to assess those separate interests, to determine whether they conflicted, and if they did, weigh them to ascertain whether the balance was in favour of the renewal of the permit, or against it.

[80] The determination whether to renew a permit involved both social and financial considerations. The finances involved were public as well as private. There is a public cost in cleaning streets and policing unruly and violent behaviour. The rights of people to amuse themselves by drinking and the rights of others not to be annoyed or inconvenienced by drunks had to be balanced, if not reconciled.

[81] The power to renew extended hours permits to be exercised pursuant to s 121A is not a power exclusively for the benefit or protection of licensees. The power is conferred also for the protection of the public constituted by patrons of the premises for which an extended hours permit is requested and those whose amenity might be affected by the renewal of the permit. The fact that the power is to be exercised for the protection of the public has the consequence, on the authorities, that its exercise will not ordinarily give rise to a duty to take care to save an individual or class of persons from harm. The conclusion is, I think, more readily reached when the power is to be exercised for interests which will normally conflict, as they did here. The terms of the statute imposed contradictory obligations on the chief executive, in the sense that she had to consider conflicting interests. The legislative scheme is therefore inconsistent with the existence of a duty of care to the holders of one of those interests. The duty contended for is to take reasonable care to prevent a licensee from suffering the economic loss which would follow the refusal of a permit. The existence of such a duty would tend to favour applicants for permits and detract from the detached examination of the circumstances required by s 121A.

[82] If one turns to consider the relationship created by the Act between the appellants and the chief executive by reference to the questions of control and vulnerability one is no closer to finding a basis for the existence of the duty of care. What was meant by control was explained by Gaudron, McHugh and Gummow JJ in Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512 at 559:**

"... it has become more clearly understood that, on occasions, the powers vested by statute in a public authority may give it such a significant and special measure of control over the safety of the person or property of citizens as to impose upon the authority a duty of care. This may oblige the particular authority to exercise those powers to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from the danger. In this regard, the factor of control is of fundamental importance ... ". (footnote omitted)

[83] In Graham Barclay Oysters, Gummow and Hayne JJ said (598):

"In Brodie, the council exercised physical control over the condition of the roads which it was empowered by statute to maintain and which ... constituted the direct source of harm to road users ... . The council's measure of control over the safety of the person or property of citizens was 'significant and exclusive' ... . So, too, the fact of control over, and knowledge of, land or premises has been significant in identifying the duty of care owed to users of land or premises by a statutory authority which controls and manages that land or premises ... . Again, in Pyrenees Shire Council v Day ... , the Shire held a significant and special measure of control over the safety from fire of persons and property at the relevant premises. That degree of control was the touchstone of the Shire's duty to safeguard others from the risk of fire in circumstances where the Shire had entered upon the exercise of its statutory powers of fire prevention and it alone ... knew of, and was responsible for, the continued existence of the risk of fire ...". (footnotes omitted)

[84] Crennan and Kiefel JJ said in Stuart (261-263):

"The measure of control which may be provided by a statute, with respect to the safety of persons or property, has been considered to be indicative of a duty of care ... . ...

In Pyrenees Shire Council v Day ... Gummow J considered that the measure of control which the Council had with respect to the prevention of fire, and which included its knowledge of the risk to the plaintiff's property, was the touchstone of its liability ... . In Brodie v Singleton Shire Council ... it was said that, whatever be the significance now of the distinction between misfeasance and non-feasance, powers may give a public authority such a significant and special measure of control regarding the safety of persons as to impose a duty on the authority to exercise them ... . ...

Questions about the degree of a public authority's control over the risks to which a plaintiff was exposed will usually be answered by reference to the statute providing for those measures. Where a statute provides significant and special measures, which may be seen to be directed towards the risk of harm to a class of persons or property, attention is directed to the purpose for which the measures have been provided. If part of the rationale for excepting a public authority from the general rule of the common law, that no affirmative action is required, is the availability of statutory powers, their purpose must necessarily be considered. ...

... In Crimmins ... and again in Graham Barclay Oysters ... McHugh J observed that some powers are clearly enough conferred because the legislature intends that the power will be exercised, in appropriate circumstances, to protect the specific class of persons or property ... ". (footnotes omitted)

**[85] What is significant about these passages is their emphasis upon a local authority's powers with respect to structures likely to cause personal injury or property damage if the powers were not exercised carefully. This is what gave rise to the fact of control in those cases. The Council knew of defects in the chimney in Pyrenees and would have known of the defect in the bridge in Brodie if its inspection had not been deficient. Both were cases where the Council exercised its powers but did so inadequately by reference to what they knew, or should have known.

[86] The present case is of quite a different type. There are two points of distinction. It is not a case of an insufficient exercise of statutory powers, as were Brodie and Pyrenees. The chief executive fully exercised the power conferred on her by s 121A of the Act. The appellants' complaint is against the decision made, the result of the exercise of power. The second point of distinction is that this is not a case of personal injury or damage to property as to which there are well established principles for determining liability, at least in the circumstances where a duty of care exists. The appellants' loss is purely economic: the loss of profits from the sale of alcohol between 3.00 am and 5.00 am. The principles with respect to such claims are less clear.

[87] We were not referred to any case remotely like the present by which we might proceed by way of analogy. The tests which the cases have laid down with respect to control over structures with respect to personal injury or property damage are not necessarily appropriate for economic loss.

[88] It is difficult to understand how the chief executive can sensibly be said to have been in control of the risk of harm to the appellants. They argue that she was in control of the decision making process, and the materials looked at in the process, but that seems a pointless observation. Of course she made the decision by reference to the materials she looked at. The Act required it of her. What the cases mean by control in this context is, I apprehend, the power and ability to avert the risk of harm which eventuates from the failure to act, or the careless acting.

[89] To determine whether the chief executive was in control of the risk of harm to the appellants one must first have to identify what the risk was. If one identifies it as the risk that the permit would not be renewed one is asserting that the permit had to be renewed. There is no other way of averting the risk. But that is to say the chief executive had a duty to renew the permit, and such a duty is in clear conflict with s 121A which obliges the chief executive to renew it if, having regard to the statutory criteria, it is appropriate to do so. It will be remembered that the appellants did not plead or undertake proof of an allegation that a consideration of the evidence necessarily had to lead to a decision to renew the permits.

[90] That the control in question is control over the risk of harm appears from the judgment of Gummow, Hayne and Heydon JJ in Stuart (254-255). Their Honours said:**

"It was not the officers who controlled the source of the risk of harm to Mr Veenstra; it was Mr Veenstra alone who was the source of that risk. ...

... it was not the officers who put Mr Veenstra in harm's way. They came upon the scene which Mr Veenstra had created".

**[91] Realistically the risk that their permits might not be renewed was under the control of the appellants. They could determine how many patrons they would allow into their premises at any one time, and how much liquor to sell them, and whether to continue selling liquor to those who appeared intoxicated or might become troublesome. It was factors such as these which determined the behaviour of patrons in and in the vicinity of the nightclubs which gave rise to the countervailing public interest against renewal. Of course to sell less alcohol would reduce profits. To sell more gave rise to the risk that misbehaviour among patrons might lead to the permits not being renewed. The balancing of those competing factors was entirely the appellants' concern, well beyond the control of the chief executive.

[92] Much the same analysis applies to the question of vulnerability. The trial judge thought the appellants were not vulnerable to the exercise of power by the chief executive because of their right of appeal to the Tribunal. His Honour referred to Jones v Department of Employment [1989] QB 1 and Coshott v Woollahra Municipal Council (1988) 14 NSWLR 675 for that proposition.

[93] In Jones Glidewell LJ (with whom Slade LJ and Caulfield J agreed) said (22):**

"Having regard to the non-judicial nature of the adjudication officer's responsibilities, and in particular to the fact that the statutory framework provides a right of appeal which, if a point of law arises, can eventually bring the matter to this court, it is my view that the adjudication officer is not under any common law duty of care. ...

Indeed, in my view, it is a general principle that, if a government department or officer, charged with the making of decisions ... is subject to a statutory right of appeal against his decisions, he owes no duty of care in private law. Misfeasance apart, he is only susceptible in public law to judicial review or to the right of appeal provided by the statute under which he makes his decision".

**[94] In Coshott, Wood J thought that the right of appeal against a local authority's deemed refusal of a development application was inconsistent with any general duty of care that the Council would process such applications promptly.

[95] I agree with Appelgarth J that those authorities indicate that the existence of a right of appeal against a bureaucratic decision is inconsistent with the existence of a duty of care in negligence and removes any vulnerability a citizen might have in relation to the decision maker. By legislating for a right of appeal, in this case on the merits and by way of a hearing de novo, the Act both specifies what remedy is available to an aggrieved party by reason of the erroneous exercise of power by the chief executive and indicates that the statutory remedy is sufficient for the purpose. The right of appeal obviates the need for a cause of action in negligence.

[96] The appellants submit that a right of appeal does not preclude the existence of the duty of care with respect to the harm that might befall an unsuccessful applicant for renewal between the rejection of the application and a successful appeal. I think it an unlikely view of the Act that it creates a relationship between the chief executive and applicants for permits such that the former must act with reasonable care to avoid economic loss to the latter in the period between decision and appeal.

[97] Vulnerability was said by Crennan and Kiefel JJ in Stuart to be of doubtful utility in determining the existence of a duty of care. Their Honours noted that the condition had been said to arise by reason of reliance on bureaucratic behaviour. If the point were free of authority I would have thought it was an aspect of control, being its obverse. One is vulnerable at the hands of another because the other is in control of the relevant circumstances. The circumstances showing that the chief executive was not in control of the risk of harm to the appellants showed that they were not vulnerable to the chief executive's exercise of statutory power. Rights of appeal apart, they could have so conducted their business as to prevent objection to the renewal. If vulnerability depends on reliance the appellants cannot show they were vulnerable. They did not rely, to their detriment, on the chief executive exercising her powers. She did exercise them and decided not to renew the permits. If there was reliance it can only have been on the chief executive making a decision in their favour, but they could never rely on such a proposition, for the reasons I explained earlier.

[98] Independently of its role in disproving vulnerability the presence in the Act of the right to appeal to the tribunal is separately an indication that the scheme of the Act is adverse to the existence of duty of care in determining an application to renew an extended hours permit. The provision of that complete remedy is a plain indication that the statute does not intend the chief executive whose decision might be reviewed to be liable in negligence.

[99] The answer to the first question is in the negative.

[100] The second question posed is whether the duty imposed on the chief executive pursuant to s 121A, to decide whether to renew an extended hours permit, is the exercise of a power which is suitable for judicial resolution or, a legitimate subject for curial decision.

[101] A notable feature of the judgment in Rowling is the absence of any criteria in the judgment which might assist one to determine what is, and what is not, a suitable subject for judicial oversight. The formulation is attractively simple but difficult to apply without indications of what makes a power unsuitable, or illegitimate, for courts to scrutinise.

[102] It may be this feature of the judgment which explains why Rowling has not been influential in this aspect of the law of negligence. As far as I can see, the judgment, although referred to with some frequency, has not been considered in detail by the High Court, nor by any intermediate appellate court. There has been no attempt, that I have found, to describe what attributes governmental activity must have for the activity to be relevantly "unsuitable". There is general agreement that "quasi-legislative activity of public authorities such as zoning prescriptions and ... inter-governmental dealings" are in that category. That point was made, and the authorities reviewed, by Gummow J in Pyrenees Shire Council v Day [1998] HCA 3; (1998) 192 CLR 330 at 393-394. His Honour cited Rowling as authority for the proposition that:**

"... the class of case to which Deane J referred in Heyman is not cognisable by the tort of negligence ...".

**See also McHugh J in Crimmins at 37 and Gleeson CJ in Graham Barclay Oysters at 557.

[103] The Privy Council itself thought that "notable examples" of cases of administrative decision "unsuitable for judicial resolution" were discretionary decisions on the allocation of scarce resources or the distribution of risks. There is, however, disagreement about the first category of activity. In Brodie, Gaudron, McHugh and Gummow JJ (580-581) accepted that a court when formulating a duty of care may have to decide whether the priorities of a local council in dealing with road repairs within its area were reasonable. Gummow J repeated the proposition in Pyrenees (at 394) observing that:**

"... questions of resource allocation and diversion, and budgetary imperatives should fall for consideration ... when determining what should have been done to discharge a duty of care".

**Gleeson CJ's opinion expressed both in Brodie and Graham Barclay Oysters was to the same effect as the Privy Council's.

[104] Gleeson CJ's observation in Graham Barclay Oysters, which I have set out earlier, that there can be no duty of care to which a government is subject if in a given case there is no criterion by reference to which a court can determine the reasonableness of the conduct in question provides, a criterion. It is, however, general and allows for disagreement as to whether it is or is not possible to judge the reasonableness of the conduct in question, as is evident from the debate with respect to the allocation of resources.

[105] Nevertheless, and proceeding cautiously in the absence of established criteria, I think one may safely conclude that the manner of exercise of the power conferred by s 121A on the chief executive is not suitable for judicial resolution.

[106] I say this because the task which s 121A imposes on the chief executive is analogous to judicial or arbitral decision making. The chief executive was not, of course, exercising judicial power, nor was she functioning as an arbitrator. She was not determining a dispute brought before her by competing parties. It may, however, be relevant to recall that in the formative years of administrative law before its statutory codification the decision making process in s 121A would have been amenable to the prerogative writs because the chief executive would have been obliged to afford what used to be called natural justice to an applicant for the reason that she would have been regarded as exercising "quasi judicial" power.

[107] Though neither judge nor arbitrator, the chief executive had to weigh options between two different courses of action each supported by different interests, private financial on the one part, and public, social and financial, on the other. The decision called for an exercise of judgment, based upon the evidence, assessing where, in the circumstances, that balance should be struck.

[108] Neither judges nor arbitrators may be sued for negligence in the discharge of their functions. The bases for the immunity may be different. Gleeson CJ explained the rationale for judicial immunity in Fingleton v The Queen [2005] HCA 34; (2005) 227 CLR 166 at 186 as follows:**

"[38] This immunity from civil liability is conferred by the common law ... for the protection of judicial independence in the public interest. It is the right of citizens that there be available for the resolution of civil disputes ... an independent judiciary whose members can be assumed with confidence to exercise authority without fear or favour. As O'Connor J, speaking for the Supreme Court of the United States, said in Forrester v White ..., that Court on a number of occasions has 'emphasised that the nature of the adjudicative function requires a judge frequently to disappoint some of the most intense and ungovernable desires that people can have'. She said that '[i]f judges were personally liable for erroneous decisions, the resulting avalanche of suits ... would provide powerful incentives for judges to avoid rendering decisions likely to provoke such suits'".

[109] A century earlier Lord Esher MR said in Anderson v Gorrie [1895] 1 QB 668 at (670-1):

"The ground alleged from the earliest times as that on which this rule rests is that if such an action would lie the judges would lose their independence, and that the absolute freedom and independence of the judges is necessary for the administration of justice. ... The public are deeply interested in this rule, which indeed exists for their benefit, and was established in order to secure the independence of the judges, and prevent their being harassed by vexatious actions."

**[110] The immunity of arbitrators is now statutory. See e.g. International Arbitration Act 1974 (Cth) s 28, Commercial Arbitration Act 1990 (Qld) s 51 and Arbitration Act 1996 (UK) s 29, all of which express the pre-existing common law. The rationale for the immunity seems to have several strands. Perhaps the dominant one is that the parties to an arbitration impliedly agree to accept the arbitrator's decision as final and conclusive and to be bound by the award, each taking the risk that the award may be touched by error. See for example Tharsis Sulphur v Loftus (1872) 8 LRCP 1 per Keating J 7-8; Pappa v Rose (1871) LR 7 CP 32 at 39 per Brett J and at 42 per Bovill CJ.

[111] A second strand approaches the rationale for judicial immunity. It is "the inconveniences that would arise if an arbitrator were liable to an action for negligence", a reason given by Bovill CJ in Tharsis Sulphur at 7.

[112] The third strand has particular relevance to the present appeal. It is that the nature of the arbitral function does not lend itself to the imposition of a duty of care to the parties to the arbitration because it is incompatible with the obligation to decide the conflict with strict impartiality. In Chambers v Goldthorpe [1901] 1 QB 624 Collins LJ said (638-639):**

"Can (the arbitrator) address himself to his duty in the matter of giving that certificate free from any obligation towards that other party, or is he placed in a position in which it is his duty to exercise his judgment impartially as between the parties to the contract? It appears to me that he is placed in the last-mentioned position. That being so, the case seems to come exactly within the law as laid down in Stevenson v Watson."

**Stevenson v Watson (1879) 4 CPD 148 decided that arbitrators are under no duty to the disputants other than one of honesty.

[113] For the reasons why the judges and arbitrators do not come under any duty of care to the parties before them I consider that the chief executive, exercising the powers contained in s 121A, has no duty of care to the permit seeker. The nature of the discretionary judgment the chief executive must make, identifying and balancing conflicting interests, means the exercise of the power is unsuitable for judicial scrutiny. The existence of such a duty of care would be inimical to the impartial exercise of a power which must balance those conflicting and competing interests. It would provide an incentive to favour applicants, to avoid acrimonious and/or vexatious suits by powerful litigants.

[114] The second question should be answered in the negative.

[115] The respondents submit there is a further reason why the appellants' case had to fail. It is the point I have mentioned already, that the appellants did not plead or prove that had the chief executive exercised reasonable care in the decision making process she would have renewed the permits. They have pleaded only that the chief executive should have, but did not, look at all the evidence relevant to the applications. Without the further step the respondents submit the appellants could not prove that their loss of trading hours was caused by the chief executive's negligence.

[116] The point appears to have been taken at trial. Applegarth J noted when discussing whether the alleged duty had been breached:**

"[142] ... Two matters should be mentioned ... . The first is that the (appellants) do not plead or contend that in the circumstances ... the Chief Executive was bound to approve the applications. For instance, they do not plead that no reasonable decision-maker in the Chief Executive's position would have made the decisions that she did".

**[117] It is doubtful therefore whether there was any utility in deciding whether the chief executive was under a duty of care to the appellants. In the absence of proof that breach of the duty caused loss the existence of the duty was of no consequence. It would not have helped the appellants had they proved only that the chief executive did not look at evidence she should have. The point, though noted by the trial judge, appears to have gone largely by default at the trial. It does not seem to have been the focus of particular attention or discussion. Despite the considerable force in the respondents' argument I do not think it can be accepted fully. In written submissions at trial the appellants argued that there was a breach of duty (paragraph 48(i)) in refusing the permits when there was insufficient evidence to do so and where there was no evidence of liquor infringement reports against the nightclubs, and (paragraph 90) from a proper assessment of the evidence it would have been apparent that there was no truly cogent evidence on which to refuse the renewal.

[118] This argument falls short of saying that a reasonable decision maker, on the evidence, could only have decided in favour of the renewal. It was limited to asserting that there was insufficient evidence to justify a refusal to renew the permits. The argument would be answered by evidence in favour of refusal.

[119] There was, in fact, such evidence. It is contained in the lengthy and apparently comprehensive briefing note provided to the chief executive by her departmental officers. The note said, in part, with respect to the Crazy Horse Nightclub:**

"The Assistant Commissioner ... objects to the renewal of the ... extended hours permit ... based on:

• Liquor-related incidents directly involving the applicant's staff and patrons;
• Video recordings of anti-social and violent behaviour in the Orchid Avenue/Cavill Avenue locality;
• Queensland Fire and Rescue Authority incidents ...; and
• Queensland Ambulance Service incidents.

The Assistant Commissioner attributes these incidents to a combination of:

• excessive numbers of patrons on premises;
• the intoxicated state of patrons seeking to enter premises, on premises, and leaving premises; and
• the relative condition of the premises which constitute a risk to patron and general public safety in and around the premises.

• 34 reported incidents associated with Crazy Horse between 27 January and 22 November 2003, with

(a) 6 considered most serious (assault occasioning bodily harm, serious assault);

• 91% of all incidents occurred either on the premises or in the vicinity and involved patrons from the nightclub
• 44% ... occurred between 3:00 a.m. and 6:00 a.m.
• ...

The police objections contain a large amount of data and incidents that directly relate to the applicant's ability to control the behaviour of patrons in and around the licensed premises. The information is considered to be cogent and it is considered that it does establish an adverse case against the applicant.

The police evidence, especially the number of drunk arrests and liquor-related incidents, clearly demonstrates:

(i) there are significant problems on the applicant's premises, and in the immediate vicinity, which result in unnecessary disturbance to the amenity, quiet and good order of the locality; and

(ii) the applicant does not have the ability to control the behaviour of the number of persons that could reasonably be expected to be on or in the vicinity of the premises if the applicant's extended hours permit to trade beyond 3:00 a.m. was renewed".

**[120] A similar report was made with respect to the Cocktails and Dreams Nightclub. The figures, of course, differed. In its case between 27 January and 22 November 2003 there were 41 reported incidents of criminal misbehaviour, 13 considered most serious, 10 serious, and 18 less serious. Ninety five per cent of the incidents occurred in or near the nightclub, and involved its patrons.

[121] There was, therefore, evidence in favour of not renewing the permits. The respondents' case on this aspect therefore fails as a matter of fact.

[122] I do not overlook the point that the argument was that there was "insufficient" evidence to support a decision adverse to the appellants; and no "cogent" evidence in support of the decision. The use of those adjectives calls for an assessment of the calibre of the evidence. The appellants' submissions could only be accepted if there were either no evidence at all or if no reasonable decision maker could have regarded the evidence as sufficient or cogent. There was evidence. The appellants did not undertake the task of proving unreasonableness in that respect. Indeed as I understood the arguments on appeal the task was expressly disavowed.

[123] The consequence is that the appellants' action was rightly dismissed because, even had the alleged duty been established, no relevant breach of it was proved.

[124] The trial judge considered in detail each of the other alleged breaches of duty and concluded they had not been made out. It is not necessary to consider those breaches, or the criticisms of the trial judge's finding with respect to them, because they cannot have any bearing on the result of the action for the reason that neither alone or in combination, if made out, would they establish a cause of action. Duty and breach are not enough. The appellants lacked proof of loss caused by breach, among other things.

[125] There was a complaint about the assessment of damages, but it was not pressed and may be ignored.

[127] FRYBERG J: Most of the facts and all of the relevant statutory provisions in this appeal are set out in the reasons for judgment of Chesterman JA. His Honour's labours have spared me the need to repeat them, for which I am grateful.**

**[128] I acknowledge also with gratitude his Honour's interesting analysis of the law relating to the existence of a duty of care. Although on this point I have reached a different conclusion from his Honour in the circumstances of this case, I have gained considerable assistance from that analysis.

[129] The provisions of the Liquor Act 1992 are not designed to confer benefits on vendors of alcohol. The broad scheme of the Act is to restrict severely the common law freedom of trade by confining to licensed persons the right to sell liquor, and by circumscribing the manner in which such persons may carry on business. This is done in the public interest, and I agree that that interest was a relevant consideration in the present case. It is therefore not appropriate to analyse the question of duty by adopting the approach in Stuart v Kirkland-Veenstra.[86] The plaintiffs are not members of a class intended to benefit from the exercise of the statutory power.

[130] That may explain the manner in which the appellants pleaded their case. I agree with Chesterman JA's observations about the nature of the duty alleged.[87] The appellants did not allege a duty to renew their permits. For that reason, this is not a case where questions of conflict of duties arise.[88] It is not a case where imposing a duty on a statutory agency to be careful would place it under an additional burden; there is no inconsistency between a duty to be careful imposed under the law relating to negligence and the statutory duties undertaken by Ms Ringrose. There is nothing novel in allegations of the negligent exercise of powers by a statutory agency. If through negligence an agency causes personal injury or property damage, it will generally (and subject to any relevant statutory provision) be liable. Such liability is envisaged in s 49 of the Act. Any novelty in the present case derives from the nature of the power, the fact that the alleged damage was pure economic loss and perhaps from the seniority of Ms Ringrose.

[131] With respect I disagree with his Honour's treatment of the decisions in Jones v Department of Employment[89] and Coshott v Woollahra Municipal Council.[90] In my judgment those cases do not indicate that the existence of a right of appeal against a bureaucratic decision is inconsistent with the existence of a duty of care in negligence. Jones is distinguishable on at least two grounds:**

• Section 117 of the Social Security Act under consideration in that case provided that "the decision of any claim or question in accordance with this Act shall be final". That section was held to prohibit a common law action because such an action would involve a challenge to the finality of the decision.
• The appeal tribunal in that case was empowered to award the plaintiff everything which he could have obtained by the bureaucratic decision. The plaintiff was only temporarily deprived of his money. In the present case the plaintiff suffered a substantial loss irrecoverable on appeal.

Quite apart from the question of duty, it is difficult to see how a plaintiff who had not exercised his right of appeal could prove causation in circumstances such as those in Jones.

**[132] It is true that the dictum contained in the last paragraph quoted by Chesterman JA from the reasons for judgment of Glidewell LJ[91] is very widely expressed. I note that Slade LJ was not prepared to employ that language.[92] With the utmost respect, I do not think that paragraph represents the law in Australia.

[133] In Coshott, Wood J held that the existence of a duty in the terms alleged by the plaintiff was inconsistent with the relevant Act. The case is not in my judgment authority for any wider proposition.

[134] Subject to the foregoing remarks, I agree generally with the President on the question of duty of care. I see no inconsistency between the duty alleged and the Liquor Act 1992.**

[135] At first instance Applegarth J made an extensive and careful analysis of the facts. He described the process by which Ms Ringrose's decision was taken in considerable detail. He related those facts to each of the particulars of negligence alleged by the appellants. He also made findings on credit favourable to the Chief Executive and her officers. The appellants raised three challenges to the findings:

"(a) The Trial Judge made findings about the Second Respondent relying on the assessment of others in reaching her decision [RJ155] (AB1039), yet such finding is contrary to the Second Respondent's evidence at T:3-29 line 13 (AB 145), where she accepted that 'there needed to be more specific information'. Despite holding that concern, she didn't read the objections. Had she done so, she would have ascertained that the police objections related to the period prior to the extensive compliance monitoring program. Upon making enquiries of her Department, she would also have ascertained that the Division's subsequent assessment of the Appellants' businesses that their compliance was good;

(b) The Trial Judge found that the Briefing Notes accurately conveyed the substance and content of the comments and objections [RJ155] (AB 1039), yet that is not supported by an examination of the relevant document in evidence;

(c) The Trial Judge found that the 15 March 2004 Briefing Note effectively advised the Chief Executive that the objections had been substantiated [RJ74] (AB 1013), and that the 'police objections were substantial and substantiated' [RJ88] (AB 1019), yet such finding is inconsistent with the Briefing Note dated 23 December 2003 (which the Trial Judge found had been provided to the Second Respondent and discussed with her [RJ57] (AB 1009). It is submitted that it is apparent on a reading of the 15 March 2004 Briefing Note and its annexures that it contained no new substantiation (AB 649-787)."

**[136] I would reject each of those challenges. What Ms Ringrose said at T3-29 line 13 was, "With the council evidence and the Queensland Police Service I felt that there needed to be more specific information." However she placed her reliance not directly on those objections, but on the briefing notes of 15 March 2004 and recommendations from the Liquor Licensing Division. The Acting Executive Director of that division, Mr Briscoe, advised her that there was sufficient evidence of a relationship between offences in the vicinity of the plaintiff's premises and the premises to justify refusal of the applications. It was not suggested by anyone that there was insufficient information for her to make the decision she did. She testified that she relied on the experts and her evidence was accepted. The volume of her work did not permit her to read every document on the file. I see no inconsistency between the judge's findings and the evidence quoted above.

[137] It is irrelevant to the question of breach of duty whether the briefing notes accurately conveyed the substance and content of the comments and objections. She was entitled to rely upon them.

[138] The third challenge assumes that Ms Ringrose should have remembered what was in the December 2003 briefing notes when she came to consider those of March 2004. I would reject that assumption. Unless there was something in the March 2004 briefing notes which ought to have caused her to go back to the earlier notes and associated documents, I do not think she was negligent in failing to do so. The later notes characterised the information in the police objections as cogent and reasonable and warranting considerable weight in the decision-making process, albeit not beyond contradiction. The only document which arguably might have caused her to dig deeper was a letter from the solicitors for the appellants making submissions about the police objections. After some hesitation I have come to the conclusion that this was not sufficient to require her to go behind her officers' recommendations.

[139] Subject to the above, I agree with what the President has written under this heading.**

[140] For the respondents, the Solicitor-General (who did not appear in the action at first instance) submitted:

"For ... two reasons at least it would be necessary for a plaintiff to prove that a favourable decision was inevitable or, at a minimum, probable. The first reason is - and I'll develop this - in order simply to prove causation of loss one would need to prove that ... Had the document been read the application would have been granted or would probably have been granted."

**[141] The appellants accepted that as their case was framed, it was necessary for them to show on the balance of probabilities that had the applications been properly considered, the permits would have been granted. They did not suggest that the case was run as one involving the loss of a chance. They submitted that causation in this sense was not a live issue at first instance, pointing to the fact that they had twice previously been granted permits in the face of opposition.

[142] The appellants are correct in saying that the point was not live at first instance. Ms Ringrose was not cross-examined about what she would have done had she read the relevant documents (including the December briefing note and the criticisms of the appellants' solicitors) and appreciated the true position. There seems to have been no attempt to find out why she and the police changed their positions when the matter came before the tribunal. (I accept that they did change their positions because the tribunal said so in its reasons for judgment. The submissions made to the tribunal do not seem to bear this out.) Causation was in issue at first instance only in the sense that there was a challenge to the quantum of the appellants' claim; it was suggested that the drop in income was caused at least in part by other factors such as the ban on smoking. The point now raised was not referred to in written submissions, nor in the parties' oral addresses; and it is not mentioned by the trial judge.

[143] The appellants submit that these omissions were the result of the way in which the matter was pleaded. The statement of claim alleged:**

"64. As a result of the acts of the Second Defendant as set out in paragraph 57 above ..., and until the Decisions were set aside by order of the Commercial and Consumer Tribunal, the Plaintiffs were unable to trade between 3.00 am and 5.00 am each day.

1. By making the Decisions in the manner set out in paragraph 63 above ... , the First and Second Defendants have caused loss to the Plaintiffs."

[144] To those paragraphs the respondents pleaded:

"64. The Defendants admit paragraph 64 of the Amended Statement of Claim, save for the allegation of negligence, which is denied. for the reasons pleaded in paragraphs 60A and 63A herein.

1. The Defendants deny paragraph 65 of the Amended Statement of Claim and repeat and rely on paragraphs 56 to 63 herein."

Paragraphs 56 to 63 of the defence dealt with numerous matters of fact, but did not include the point now raised.

[145] In my judgment it is not open to the respondents to raise the causation point at this stage. It is true that the appellants' pleading was elliptical; but the respondents did not challenge it in any relevant manner at first instance. Had the point been alive, the judge would most certainly have referred to it in his extensive and careful reasons for judgment. The point does not stand in the way of success for the appellants.

"His Honour in assessing damages, as the common law permits, ruled at somewhat of a broad brush. May I make it clear there's nothing wrong with that. However, in our submission it was far too broad a brush ... the 20 per cent, in our submission, is arbitrary without any substantiation by reference to the evidence of anything on that scale."

[147] On this question I agree with what the President has written.

[148] I agree with the order proposed by Chesterman JA.

[1] See Liquor Act, s 97(b), s 102, s 102B and Pt 6 Div 12 esp s 102.

[2] (1988) 14 NSWLR 675, Wood J at 681-682.

[3] [1987] UKPC 2; [1988] AC 473 at 501-503; [1988] 1 All ER 725.

[4] Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad [1976] HCA 65; (1976) 136 CLR 529, Gibbs J at 555; Bryan v Maloney (1995) 182 CLR 609, Brennan CJ, Mason, Deane and Gaudron JJ at 617-619; Hill v Van Erp (1997) 188 CLR 159, McHugh J at 211, Gummow J at 220.

[5] Perre v Apand Pty Ltd [1999] HCA 36; (1999) 198 CLR 180, Callinan J at 325, [405].

[6] Stuart v Kirkland-Veenstra [2009] HCA 15; (2009) 237 CLR 215, French CJ at 238.

[7] [1999] HCA 36; (1999) 198 CLR 180. See also Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2003] VSC 27, Gillard J at [745] and Marc Rich & Co AG v Bishop Rock Marine Co Ltd [1996] AC 211; (1995) UKHL 4, Lord Steyn at 236.

[8] Perre [1999] HCA 36; (1999) 198 CLR 180, Gaudron J at 231.

[9] (2001) 207 CLR 562.

[11] [2002] HCA 54; (2002) 211 CLR 540 at 554-555, [8] and [9]. See also Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515, Gleeson CJ, Gummow, Hayne and Heydon JJ at 530.

[12] [2009] HCA 15; (2009) 237 CLR 215.

[13] Above, French CJ at 237-239, [53]; Crennan and Kiefel JJ at 213 [139]-[140]. See also Crimmins v Stevedoring Committee [1999] HCA 59; (1999) 200 CLR 1, McHugh J at 20 and 34, [49], [79].

[14] Perre [1999] HCA 36; (1999) 198 CLR 180, Gaudron J at 181.

[15] The Liquor Act has been relevantly twice amended since the chief executive's decision from which this appeal stems: Liquor and Other Acts Amendment Act 2008, s 4, s 5, Act 2008 No. 48; Queensland Civil and Administrative Tribunal (Jurisdiction Provisions) Amendment Act 2009, Act 2009 No 24, s 620.

[16] Liquor Act s 3(a).

[17] Liquor Act s 3(c).

[18] Liquor Act s 3(d)(i).

[19] Liquor Act s 3(d)(ii).

[20] Liquor Act s 3(e).

[21] Liquor Act s 3(g)

[22] Liquor Act s 3A(1)(a).

[23] Liquor Act s 3A(1)(b).

[24] Liquor Act s 116(1)(c).

[25] Liquor Act s 116(2).

[26] Liquor Act s 116(3) and (4).

[27] Liquor Act s 116(4)(a).

[28] Liquor Act s 116(4)(b).

[29] Liquor Act s 116(4)(c).

[30] Liquor Act s 116(4)(d).

[31] Liquor Act s 116(4)(e).

[32] Liquor Act s 116(4)(f).

[33] Liquor Act s 116(4)(g).

[34] Liquor Act s 117(1)(a).

[35] Liquor Act s 117(1)(b).

[36] Liquor Act s 117(2) and (3).

[37] Liquor Act s 118, esp s 118(1)(c).

[38] The term "member of the public" is defined as "any adult individual or body of persons that in the chief executive's opinion has a proper interest in the locality concerned and is likely to be affected by the grant of the application": Liquor Act s 119(5).

[39] Liquor Act s 118A.

[40] Liquor Act s 119(1) and (2).

[41] Liquor Act s 119(3)(a).

[42] Liquor Act s 119(3)(b).

[43] Liquor Act s 121(1).

[44] Liquor Act s 121(1A)(a).

[45] Liquor Act s 121(4).

[46] Liquor Act s 121(5) and s 116(2).

[47] Liquor Act s 121(5)(b).

[48] Liquor Act s 121(5)(c).

[49] Liquor Act s 121(5)(d).

[50] Liquor Act s 121(5)(f).

[51] Liquor Act s 121(5)(g)(i).

[52] Liquor Act s 121(5)(g)(ii).

[53] Liquor Act s 125(g)(iii).

[54] Liquor Act s 121(6).

[55] Liquor Act s 121A(1)(a).

[56] Liquor Act s 121A(1)(b).

[57] Liquor Act s 121A(2).

[58] Liquor Act s 121A(3)(a).

[59] Liquor Act s 121A(3)(b) and s 121(5)(g).

[60] Liquor Act s 121A(3) (c) and s 121(5)(f).

[61] Liquor Act s 3.

[62] Liquor Act s 3A.

[63] Liquor Act s 3(a).

[64] Admitted facts, paras 7-11, 26, 28, 32, 33,

[65] Liquor Act s 3(a), (c), (g); s 121(5)(g); s 121A(3)(b).

[66] Liquor Act s 3(d) and (e).

[67] Liquor Act s 121A(2) and (3)(a).

[68] Liquor Act s 121A(3)(c).

[69] Meshlawn Pty Ltd & Anor v State of Queensland & Anor [2009] QSC 215, [25].

[71] Although this is not something I have taken into account in concluding that his Honour's observation was correct, I note that since the enactment of the Liquor and Other Acts Amendment Act 2008, s 4, the first of the listed objects of the Liquor Act (s 3(a)) is now "to regulate the liquor industry in a way compatible with minimising harm caused by alcohol abuse and misuse."

[72] Liquor Act Pt 2.

[73] The chief executive refused the appellants' applications for a renewal of their extended hours permits on 18 March 2004 effective from 1 April 2004. The Commercial and Consumer Tribunal heard the appeal on 23 July 2004 and delivered its reasons and orders granting the extended hours permits commencing on 18 August 2004, subject to 14 conditions.

[74] See Perre [1999] HCA 36; (1999) 198 CLR 180, Gaudron J at 231, Gummow J at 201.

[75] Cf Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] KB 223; [1947] EWCA Civ 1.

[76] Meshlawn Pty Ltd & Anor v State of Queensland & Anor [2009] QSC 215 at [142].

[83] A "lockout condition" required that new patrons were not permitted to enter or patrons leaving to re-enter the night clubs to which the "lockout condition" attached after 3 am.

[84] See fn 73, condition 14.

[85] [1994] 1 Qd R 258 at 264-265.

[86] (2009) 237 CLR 215; [2009] HCA 15.

[87] Paragraph [43].

[88] Compare Wilburg, H: "Defensive practice or conflict of duties? Policy concerns in public authority negligence claims", (2010) 126 LQR 420.

[89] [1989] QB 1.

[90] (1988) 14 NSWLR 675.

[91] Paragraph [93].

[92] [1989] QB 1 at p 23.