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[1988] NTSC 36
Supreme Court of the NT
1988-05-16
Kearney J
Original judgment source is linked above.
COURT IN THE SUPREME COURT OF THE NORTHERN TERRITORY OF AUSTRALIA Kearney J.(1) CWDS Liquor Licensing application - whether Commission may grant a "licence in principle" subject to construction of premises and determination of conditions
By summons filed on 29 April pursuant to the originating motion the applicant seeks the relief outlined above and also a declaration relating to the obligations and locus standi of the second respondent under its application, and the obligations, jurisdiction and powers of the Commission in relation to that application. The summons was returnable on 9 May; in the result the hearing commenced on 10 May. The proceedings before the Commission 3. The applicant relies on the affidavit of Mr Bill Ferguson sworn on 29 April and on the materials exhibited to that affidavit. The facts which are thereby established and not in dispute are as follows:-
(1) The second respondent applied on 22 September 1987 for the grant of a licence under the Liquor Act. It sought a "Take-Away" licence "for consumption (of liquor) away from premises" in association with a business of "Supermarket (Grocery Sales)" to be conducted under the registered business name of "Bradshaw Shoppingtown" and to be carried on at premises at the corner of Bradshaw Drive and Larapinta Drive, Alice Springs. In its completed form of "Application for grant of a licence" the second respondent nominated as its "nominee" one James Lawrence Watson. It proposed that "sales ... be limited to the prescribed hours". (2) Notice of the application was duly advertised in November 1987, as required by s.27 of the Liquor Act. The notice stated:- "WE, Northcorp Limited ... have applied ... for a licence to sell liquor on the premises ... which WE intend to keep as a Supermarket". (emphasis mine). I consider that this would be clearly understood by the public as a statement that the second respondent intended to conduct a supermarket at the premises and had applied for a licence to sell liquor therefrom. (3) The applicant and Egar Beavers Supermarket Pty Ltd and Woolworths (SA) Pty Ltd objected to the grant of the application. (4) The Commission fixed 19 April 1988 as the date on which it would commence to hear the application. It treated the application as an - "(a) Application for a liquor licence for consumption away from the premises (as described above". (5) By letter dated 23 September 1087 accompanying the completed application form the second respondent informed the Commission, inter alia, that it - "... proposes to develop a comprehensive regional commercial centre at (the premises described above)", including, inter alia, a "supermarket" which was - "... to include an attached area (of 375 square metres) that is licensed to sell packaged liquor during the 'prescribed hours' for consumption away from the premises". (6) The Commission convened on 19 April. All parties, including the objectors, were legally represented. Mr Reeves of Counsel for the second respondent tendered documents, copies of which comprise Exhibits B and C to Mr Ferguson's affidavit of 29 April. (7) These documents, in summary, show the location and detail of the proposed premises in question, the location of other licensed premises in Alice Springs, lay-out plans for the construction of the regional centre (including a proposed Ghan Tavern, supermarket and liquor store), material relating to the financial and managerial ability of the second respondent and to the construction of the proposed premises, certain census statistical material and projections, and statements of the needs and wishes of 22 residents in the Bradshaw/Larapinta area. Details were provided of anticipated saleable liquor to be stocked in the liquor store; it was a comprehensive range. The cost of Stage 1 of the regional centre was anticipated to be about $9,000,000: this was to be funded by a finance company. The company's letter of 23 February 1988 detailed amongst its requirements that:- "(b) Lease agreement with main tenant (supermarket operator) is to be executed and acceptable prior to loan funds being made available. "(c) Liquor Licence for the property to be approved and written confirmation held by (the finance company)". Mr Watson's statement (Exhibit B, Brief of Evidence, Section III, 3.1) read in part:- "2.1 This is an application for the granting of a licence in principle prior to construction being commenced.
"2.2 Whilst the nominee (that is, Mr Watson himself) is familiar with the provisions of the Liquor Act, he does not intend to hold these licences when the premises to which they apply become operational. "2.3 Prior to completion of construction the applicant expects to secure tenancy agreements with persons or firms whose financial capacity and managerial expertise will satisfy the requirements of the Commission. ... "6.2 Raine and Horne are the leasing agent for the supermarket. They have been negotiating with several major operators, all of whom have indicated that a licence to sell liquor from the premises is a prerequisite to them entering a lease agreement." (8) The Northern Territory Planning Authority on
13 April 1988 granted planning approval for the development of the land for the purpose of a shopping centre complex comprising a supermarket and up to twenty (2) speciality shops, a hardware store, autocare centre, homemaker centre, offices, service stations and two (2) fast food outlets, tavern and associated carparking. This approval noted that it did "in no way place the N.T. Racing, Gaming and Liquor Commission under obligation to issue a liquor licence". (9) During the course of his opening address Mr Reeves "... made it quite clear that the applicant, Northcorp, had no intention of operating the Supermarket, but merely intended to be involved in the building of the premises where the proposed licence was to operate. The nominee named in its application, Mr James Lawrence Watson, was a director of Northcorp and likewise he too would only be involved in the building of the Supermarket and would not be involved in the conduct of the Supermarket or bottle shop business associated with the take-away licence applied for. Mr Reeves stated that his client, Northcorp, was applying for a 'licence in principle' in accordance with the practice of the Commission." (Mr Ferguson's affidavit of 29 April, para.12). (10) At an adjourned hearing on 20 April Counsel for the objectors submitted that the application by the second respondent was misconceived. They relied on Mr Reeves' opening remarks (above), Mr Watson's statement set out in (7)(2.2) above, the finance company's preconditions to its provision of finance for the construction of the centre (set out in (7) above), Sections 25 and 32 of the Liquor Act, the fact that the second respondent's nominee was Mr Watson, and the indication in the public notice of November 1987 that the second respondent would conduct the supermarket. Their submissions, based on this material, were as follows:- (a) The second respondent, to comply with s.25(2) of the Liquor Act, by nominating "its manager of the licensed premises", had to nominate a person who would be "its manager of the licensed premises", and it was now clear that Mr Watson was a purely nominal or fictitious manager of those premises. (b) The application by the second respondent and its public notice of November were misleading in that they held out to the public that
the second respondent itself proposed to be the licensee and would manage and conduct the supermarket business associated with the proposed take-away liquor licence. (c) To carry out its duty of considering this application for a licence, the Commission had "to have regard to" the matters set out in s.32(1)(e) of the Liquor Act, namely, the financial and managerial capacity of the applicant to conduct the associated supermarket business. Since the second respondent by its own statement did not propose to conduct that business, the material submitted which related to its capacity to do so (and the managerial capacity of Mr Watson) was irrelevant, the Commission had no material before it relevant to the matters in s.32(1)(e), and had no power to consider the application. In effect, this submission highlighted by reference to the requirement of s.32(1)(e), the major submission in (d) below that the Liquor Act did not contemplate an application by a "fictitious" applicant. (d) The second respondent had no locus standi to make the application and the Commission had no power to hear, consider or grant that application. (11) The Commission ruled that it had power under the Act to entertain and grant an application for a "licence in principle"; and that, pursuant to s.41(2), it could have regard to the matters in s.32(1)(e) when the developer, the second respondent, had found a tenant to operate the supermarket and bottle shop, and that tenant sought to have the licence transferred to it under Division 5 of Part III of the Act. (12) Mr Watson then testified before the Commission to the effect that the second respondent was a developer and would not manage the property after it was constructed, but needed to know before it commenced construction, whether a liquor licence would be granted. It may be noted that in his statement in Exhibit B Section III, 6.1, Mr Watson stated that certain prospective tenants for shops in the centre would "not make a firm commitment until the head tenant for the supermarket is secured" and at 6.2 (p.6) that all of the major operators of supermarkets with whom negotiations were continuing for the taking up of the tenancy of the proposed supermarket "have indicated that a licence to sell liquor from the premises is a prerequisite to them entering a lease agreement". The finding of a tenant to conduct the supermarket was critical to the project proceeding, as Mr Watson pointed out to the Commission. It can be seen that the Commission was being faced with something of a "chicken and egg"
situation. Mr Watson was unable, of course, to say, what kind of liquor would be sold, or to give the quantities or different lines of liquor to be stocked, or to estimate the turnover of stock, or to answer questions relating to the conduct or management of the supermarket (see paras 17 and 19 of Mr Ferguson's affidavit of 29 April). (13) After Mr Watson had completed his evidence before the Commission on 21 April Counsel for the objectors reiterated their earlier submissions set out in (10)(a)-(d) above. The Commission adjourned to consider the arguments put before them. Later the same day, the hearing resumed and the Commission ruled for reasons delivered orally but recorded on tape and now in transcript before me, that it had power "to
grant what we have called conveniently a 'licence in principle'." The Commission's reasons were as follows. It had always had regard to the factors it was required by s.32(1) "to have regard to", both in "considering whether to grant an application for a licence and in determining the conditions of a licence pursuant to section 31"; sometimes these two aspects "run together, but they don't have to". It noted that sometimes applications for licences were in respect of "existing structures", but in projects such as this, where the premises had not yet been constructed - "...it is obviously a wrong way of going about things to build your (premises) and then go along for a licence ... a hotel without a licence would very much be a pub with no beer. So it is a fact of practicality ... that ... where a licence is looked upon as being a requirement and part of (a building) then the person who is controlling the project should properly have the opportunity to go the Commission and say - 'Look, if I build this to this requirement, will it be possible to get a licence?' "We have, for quite some years now, followed that thought. It seems to us the only practical way of going about such things. The expression 'licence in principle' has been used as a form of convenient verbal shorthand, perhaps. There is in fact no such thing in (the definition section) of the Act ... but it is a convenient way of saying ... in effect ... 'I want to know whether, subject to whatever conditions that shall apply, and subject to anything further that be required, and subject to such checks and inspections as be required, would the project which I put to you be one where we could expect to obtain a licence to sell liquor'. If there was no power to do this, "either no project of this nature would go ahead at all" or "it would go ahead without knowing whether or not there will be the ability to be granted a licence to sell liquor". The Commission referred to a situation in Western Australia where a developer built a building without first getting a licence and found, after he had built it, that he could not get a licence. It commented that - "... no commercial enterprise would enter into a thing like that now, with that warning always before it." So the Commission proceeded on the basis that there was no "practical alternative" and that by its approach the public was offered "at the earliest
"Mr Watson has been completely frank with
us ... his company is a developer and is not
necessarily going to be involved
in the running of the complex ... he does not believe his company will be involved in the running of the supermarket." The Commission considered - "... it is inappropriate that a building project of this kind should go ahead without the necessary assurances." The Commission then turned to consider the position which would obtain if it reached the conclusion that the - "... application is one which merits the issue, when ready, of the licence." It considered that "certain requirements and certain safeguards" were built into the Act. It is clear that the Commission considered that it could proceed with the hearing then before it and, if it thought fit, approve the grant of a licence "in principle", though the licence would not issue for some considerable time, that is, when the supermarket had been built. When that occurred the Commission would then require "up to date information". The Commission went on - "Now, obviously, were a licence then to issue it could well be to someone else who is the nominee and this has always been so." it seems that the Commission had in mind that at that time Mr Watson might no longer be the nominee; for example, he may have died in the meantime. The Commission considered that it should proceed with the hearing - "... so that we have the information which will enable us to assess properly the reaction to the project and assess, particularly the needs and wishes of the community in terms of section 32" (emphasis mine). The Commission considered that it could - "... at this time ... clearly sort out the important points, being section 32(1)(a), (b), (c) and of course (g)." It rejected the submission that it could not assess the matters in s.32(1)(e), "because we have already obtained a lot of information regarding Northcorp". (emphasis mine). The Commission added that it considered that s.31(1) was a "quite sufficient" head of power to enable it to grant a "licence in principle". It appeared that the Commission was of the view that if it decided to grant a licence "in principle", that grant - "... would be subject to such conditions as would require there to be a further check up by this Commission at the time of the taking up of the licence itself", which would only be when "the place concerned is ready for trading". The Commission noted s.41 of the Act relating to the transfer of a licence, an application for which would attract the provisions of ss.25 and 28. Clearly, the Commission considered that when it came to the time for the issue of a licence, the grant of which it had already approved "in principle", it would require to be first satisfied in terms of the matters referred to in s.31(2). It concluded that in such circumstances - "... the actual licence will not issue until we are quite clear that it is in accordance with what we know to be the needs and wishes of the community, and only after we have had proper regard to what we have to have regard to, that is to those points laid out in section 32(1) of the Act." (14) Mr Reeves for the applicant (the second respondent) had earlier submitted that the Commission should deal with the application on the basis that it was an application for the grant of a licence "in principle". Alternatively, if the Commission was persuaded that it should not do so, then it should rule on all matters except those referred to in s.32(1)(e), and then adjourn the hearing until a tenant of the proposed supermarket had been obtained for the purpose of considering the financial and managerial capacities of that tenant (that is, the matters referred to in s.32(1)(e)). It appears from para.22 of Mr Ferguson's affidavit that after the Commission ruled that it would proceed with the hearing, an application by Counsel for the objectors for a short adjournment was refused. The objectors then called a witness, Mr Cameron, who testified - "to the effect that a supermarket at the proposed site would not be financially viable." They also called - "a number of witnesses (who testified)
... to the effect that the community neither wished nor needed a take-away liquor outlet at the proposed site." 4. The Commission then adjourned the hearing until 24 May 1988. The application for judicial review - the submissions A. The applicant's submissions 5. Before me Mr McDonald of Counsel for the applicant did not seek to contend that the Act did not permit the grant of a "licence in principle". He had 6 submissions, viz:- (a) The inability of Mr Watson to testify as to the matters set out in (12) above meant that persons apprehensive about the effect of a new liquor outlet could not, by questioning him on those matters,
make up their minds whether or not to object to the application, or to decide on what grounds they would object. (b) The objectors were unable to cross-examine the person who was actually to run the supermarket to determine his financial and managerial capacity (s.32(1)(e)). (c) The uncontested evidence established that the second respondent, as applicant, had not complied with s.25(2), because it admitted that Mr Watson, its purported nominee, would not in fact be "its manager of the licensed premises". The Commission had acknowledge that this was so, but in its approach to the Act had misconstrued the effect of s.25(2), and had continued with the hearing although that provision had not been complied with. (d) The words "shall have regard to" in s.32(1) impose a mandatory duty upon the Commission when it is "considering whether to grant an application for a licence"; see R v Liquor Commission of the Northern Territory; ex p Pitjantjatjara Council Inc (1984) 31 NTR 13 at p.17 where Muirhead J. emphasised the word "shall", noted that it meant that the Commission was "required" to consider the matters set out from (a) to (g) in s.32(1), contrasted it with the permissive "may" in s.31(1) and (2), and at p 18 characterised the Commission's function in s.32(1) as "mandatory". (e) The community was denied the opportunity to be heard on its "needs and wishes" in terms of s.32(1)(d), since, as the applicant and its nominee were not in fact going to run the supermarket business and its associated bottle shop, the community was unable to ascertain how the supermarket would be managed, which product lines would be emphasised, and the managerial and marketing strategies which would be employed. The community's needs and wishes were related to an applicant's marketing strategies, about which Mr Watson was unable to testify. The time for the "needs and wishes of the community" to be expressed (s.32(1)(d)) and for the "financial and managerial capacity of the applicant" to be ascertained (s.32(1)(e)), is before a decision is made on the grant of the application. The Commission was required to "have regard to" these matters before making a grant, and could not decide not to do so on the basis that it would consider them later on when the real operator of the supermarket was ascertained, or on a transfer of the licence under s.41. (f) On the proposal as stated by Mr Watson, before the Commission could be approached for a grant the second respondent had to secure a tenant for the supermarket, and it was that tenant which had to make the application for a grant, and be named in the public notice under s.27. The present application was, on the materials submitted by the second respondent, clearly not an application by an applicant contemplated by Part III of the Act and the hearing of the application was accordingly a sham. 6. In essence, Mr McDonald's case was that the Commission had misconstrued the Act which was its only source of power, and as a result it had acted without jurisdiction. He relied in particular on 5 authorities, viz:- (1) R v War Pensions Entitlement Appeal Tribunal; ex p. Bott [1933] HCA 30; (1953) 50 CLR 228, a mandamus case, makes it clear at p.242 that an ostensible determination may be nugatory and void because it has not involved a real performance by a tribunal of its duty, since it has not applied itself to the questions (in the present case, the matters in s.32(1)(d) and (e)) which the law prescribes for it. (2) In R v Australian Stevedoring Industry Board; ex p. Melbourne Stevedoring Co. Pty Ltd [1953] HCA 22; (1953) 88 CLR 100, it was held that the Board's delegate had misconceived the scope of a statutory provision dealing with the unfitness of employers of stevedores to be registered, and had utilized the sanctions therein provided to enforce upon the employers a policy of the Board requiring the employers to supervise and discipline the stevedores. In discussing whether prohibition should go to the Board on the ground that the power lawfully to impose a sanction had not arisen, the majority of the High Court said at pp 118-119:- "If on the facts no basis could exist for exercising the power (to impose a sanction) it would be a proper exercise of this Court's jurisdiction to award a writ of prohibition ... ... prohibition ... is a writ which goes as of right when the prosecutor is directly affected by the course pursued by a tribunal to which the writ lies and the prosecutor shows satisfactorily that the tribunal is about to act to his detriment in excess of its authority"
The High Court noted that the Act in question contained a privative provision in s.52; the Liquor Act contains in s.56 a privative provision to similar effect. It had been argued that the application for prohibition was premature, but the High Court considered (at p 119) that the existence of the privative provision - "... supplies a strong reason for the prosecutor seeking the protection of (prohibition) before the Board ... (imposes a sanction) when it ... threatens to (do so) although the requisite basis for the exercise of the power is absent or the grounds upon which it is threatened are legally misconceived, and extraneous to the Board's authority." Mr McDonald's submission was that on the facts there was no basis for the purported exercise of the power relied upon by the Commission. (3) In R v Connell; ex p. The Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407, a regulation empowered an Authority to alter a rate of remuneration if it was "satisfied" that the rate was "anomalous".
The Act contained a privative provision. The High Court held that the Authority was not properly "satisfied" (and so was lacking in power) if its opinion was based upon a misconstruction of the regulation. At p 430 Latham C.J. said that the opinion must be such - "... that it can be formed by a reasonable man who correctly understands the meaning of the law under which he acts. ... A person acting under a statutory power cannot confer power upon himself by misconstruing the statute which is the source of his power." The majority held that evidence as to the rates being anomalous, in the sense of their being incongruous with an existing rule, was lacking, so the Authority was not properly satisfied, and prohibition lay. (4) In Paull v Munday (1976) 50 ALJR 551, the Governor was empowered under an Act to prohibit by regulation the emission of impurities from open fires. The High Court by majority held that this did not empower the prohibition without prior approval of the source of the impurities, the open fires, per se. It had been submitted that there was no practical way of preventing emission of impurities from an open fire without putting out the fire or preventing it from being lit; and so the practical effect of the regulation was to do no more than was empowered. Mr McDonald submitted that it was this type of error which the Commission had made in this case, in believing that it could consider the needs and wishes of the community when it came to the transfer of the licence. In Paull's case Gibbs J. at p 554 said - "This argument is at first sight attractive, but it pays too little attention to the words granting the power. It 'passes by the actual words' and seeks to give (the provision) an effect which is 'supposed to be something equivalent to the language used by the legislature', to adapt some words of the Earl of Halsbury L.C. in Gresham Life Assurance Society Ltd v Bishop (Surveyor of Taxes) (1902) AC 287 at p 291. A power to do one thing cannot be validly exercised by doing something different, even if the effect of what is done is the same as that which would have resulted from doing what was permitted ... where a statute allows certain means to be adopted, it does not permit the adoption of different means which happen to lead to the same end. At p 556 Stephen J. said - "... my real objection is that (the submission) ignores the carefully restricted scope of the relevant (provisions) and attributes to par.(c) a breadth of meaning which the paragraph itself does not call for and which the scheme of the section, viewed as a whole, negates. ... In Australian Boot Trades Employees' Federation v Whybrow and Co. [1910] HCA 53; (1910) 11 CLR 311 Isaacs J. pointed out at p 338 - 'Where both end and means are strictly marked out, there is no right ... to use other means to attain the specified end ...' ... and (it) is impermissible." Mr McDonald submitted that this was the type of error into which the Commission had fallen in this case: it had to determine whether an applicant for a grant of a licence was a "fit and proper person" in terms of s.28(1), and not simply whether a transferee under s.41 was so qualified. (5) In Anisminic Ltd v Foreign Compensation Commission (1968) 2 AC 147 the Commission reached an erroneous conclusion by misconstruing a provision and thereby addressing itself to a consideration
I consider that such an approach is permissible under the Act. It has much practical merit. As the Commission's reasons make clear (pp 11,12), it is necessary as a practical matter that before investment is made in the construction of a building, the entrepreneur knows that provided he meets the conditions required, he will obtain a licence upon completion. It appears to me that this is the approach which has been adopted by the Commission, when it has made the grant of a "licence in principle". It is a reasonable and sensible approach and one permitted by the Act when the applicant who proposes to construct the building also proposes to operate the business the subject of the proposed licence. Conclusions 14. However, I consider that this concept of the grant of a "licence in principle" does not meet the problem which arises when the person developing the project does not propose to operate the premises to be licensed. The Act simply does not make provision for that situation. It contemplates only that the applicant for a licence is a genuine applicant in the sense that it proposes to conduct the business on the licensed premises. All of the provisions of the Act proceed upon that basis. In the present case, once it became clear that the second respondent did not propose to conduct the business on the premises the subject of the application, it followed that the application was not by an applicant contemplated by the Act and the Commission ceased to have jurisdiction to entertain it. The Commission's ultimate function under s.24 is to "issue a licence ... to an applicant", its investigations under s.28(1) are directed to ascertaining "whether (that) applicant ... is a fit and proper person to hold a licence", and in considering whether to make a grant the Commission is to have regard under s.32(1)(e) to the financial and managerial ability of that applicant to conduct the business in question. All of these matters point to the applicant being the person who proposes to conduct the business on the premises when constructed. 15. I think it is clear that an amendment to the Liquor Act is required to cater for the situation revealed by this application. Mr Beazley drew my attention to s.64 of the Liquor Act 1985 of South Australia which institutes a certificate system where an application is made in respect of proposed premises; this provision appears to go part of the way, but may not meet the situation facing the developer which obtained here. What is required is a provision which provides for a "developer's licence", as Mr Beazley put it; it would be a "licence in principle" in the ordinary meaning of those words. I note that express provision is made in other jurisdictions (except Queensland) for the grant of some form of "licence in principle" for premises to be constructed, whether it be termed a "conditional grant" (NSW and Victoria), or a "provisional certificate" (Western Australia and Tasmania) or a "certificate" (South Australia). Note also para.307 of the Adams report of 28 June 1973. 16. The second possible approach to the grant of a "licence in principle" suggested by Mr Beazley was the actual grant of a licence subject to conditions even though the premises were not built. It appears to me that that lies outside the contemplation of the Act, and indeed of the Commission. 17. As the law presently stands, the only avenue available to the second respondent appears to be that indicated in para.(f) on p 21. There is no right "to use other means to obtain the specified end", as Isaacs J. put it in Whybrow's case (supra). 18. I am satisfied that the Commission has misconstrued its powers and, on the authorities cited by Mr McDonald, that certiorari and prohibition lies in the circumstances which obtain. It is unnecessary to make the declaration sought. 19. The application for certiorari and prohibition must be granted because the Commission has embarked upon a hearing of an application which, on the facts now established, it does not have power to entertain. I direct that certiorari issue to the Commission removing to this Court instanter the decision of the Commission of 21 April 1988 to continue with the hearing of the application of 22 September 1987 by the second respondent. The decision of 21 April is quashed. I also direct that prohibition issue to the Commission prohibiting it from proceeding further to hear the application of 22 September and from granting a licence in respect of that application.
R
Racing, Gaming & Liquor Commission and Northcorp Ltd, ex parte Tangentyere Council [1988] NTSC 36; 54 NTR 13; 91 FLR 50
(1910) 11 CLR 311
(1976) 50 ALJR 551
(1953) 188 CLR 100
(1935) 50 CLR 228
(1953) 50 CLR 228
(1953) 88 CLR 100
(1944) 69 CLR 407