Rogers v The Independent Liquor and Gaming Authority

Supreme Court of NSW|2018-07-12|Before: Schmidt J, Hulme J

Judgment

In June 2018 the Independent Liquor and Gaming Authority refused an application made by the Commissioner of Police for the revocation of the extended trading authorisation of the Sydney Junction Hotel at Beaumont Street Hamilton, but acting on its own initiative the Authority varied the authorisation to reduce its trading hours after midnight, Monday to Saturday. Now in issue is whether the Authority's decision was invalid because of its alleged failure to comply with requirements imposed upon it by s 51(13) of the Liquor Act 2007 (NSW), before it made its decision.

Issues

There is no issue that: 1. Mr Rogers is the owner of the Hotel and Mr Boland its licensee and that they both thus having standing to bring these proceedings; 2. Under the Liquor Act standard trading hours are specified to be 5 am to midnight Monday to Saturday and 10 am to 10 pm Sunday: s 12; 3. Before the Authority's disputed decision, the Hotel's extended trading authorisation issued under s 49 of the Liquor Act permitted it to trade until 5 am Monday to Saturday and until midnight Sunday, but it actually traded only until 3 am Monday to Saturday, because of other applicable regulations; 4. It was in October 2017 that the Commissioner made an application to have the Authority revoke the Hotel's extended trading authorisation, exercising its powers under s 51(9)(b). That application included the submissions the Commissioner advanced in support of the application; 5. Advice of that application was given to Mr Boland by the Authority on 27 October, when evidence and submissions were invited; 6. In November 2017 Mr Boland's solicitors provided submissions to the Authority, opposing the Commissioner's application; 7. Further submissions were made by the parties in December; 8. By letter of 24 April 2018 the Authority advised Mr Boland's solicitors: 1. that it had considered the Commissioner's application and all submissions it had received, but had yet to finalise its deliberations on whether to "revoke, vary or take no action in relation to the extended trading authorisation"; 2. of its proposed findings in relation to events on which the Commissioner had relied and invited further submissions on those findings, before finalising its decision under s 51(9)(b); and 3. it also invited evidence and submissions as to economic prejudice, if the Hotel's authorisation was varied, rather than revoked, so that trade would cease at 12.30 am, 1.00 am, 1.30 am, or 2.00 am. 1. Mr Boland's solicitor provided further evidence and submissions in May 2018, as did the Commissioner, with a response to those submissions being provided in June; 2. By letter of 14 June the Authority notified the Commissioner of its 13 June decision not to revoke the Hotel's authorisation, but to act of its own initiative to vary the authorisation under s 51(9)(b), so that licensed trading at the Hotel could not extend beyond 1.30 am Monday to Saturday; 3. The advice given to Mr Boland was not in evidence, but on 18 June an application for a merits review and interim stay of the Authority's decision was made under s 13A of the Gaming and Liquor Administration Act 2007 (NSW) to NCAT. That section provides for administrative review under the Administrative Decisions Review Act 1997 (NSW) of a "prescribed application" under reg 7 of the Gaming and Liquor Administration Regulation 2016 (NSW); 4. By letter of 25 June the Authority gave reasons for its decision; 5. On 26 June the Authority appeared at the NCAT hearing and submitted that the Tribunal had no jurisdiction to entertain the review application, it having acted of its own initiative to vary the Hotel's extended trading authorisation; and 6. NCAT dismissed the review application, but reasons for that decision have not been published.
It was also common ground between the parties that under s 51(13) of the Liquor Act, the Authority could have determined that the Commissioner's revocation application should be dealt with by variation of the Hotel's extended trading authorisation, rather than the Authority acting of its own initiative, as it did.
In issue is: 1. whether, in order for the Authority to validly exercise its s 51(9)(b) powers, acting of its own initiative to vary the Hotel's extended trading authorisation, it first had to comply with the requirements imposed upon it by s 51(13) of the Liquor Act; 2. whether the Authority complied with the requirements imposed upon it by s 51(13), before it made its decision to vary the Hotel's extended trading authorisation; 3. if it did not do so, the consequences, given the Commissioner's contention that no practical injustice had resulted from the Authority's approach; and 4. whether Mr Boland had rights to merit review of the Authority's decision, of which he had been deprived by its decision to act on its own initiative.

Conclusions

For the reasons which follow, I am satisfied that the Authority failed to comply with mandatory prerequisites to the exercise of its s 51(9)(b) powers imposed upon it by s 51(13), which renders the disputed decision invalid, this legislative scheme not giving it unfettered powers under s 51(9)(b), in the circumstances to which s 51(13) applies, even when it has decided to act on its own initiative.
In the result the relief sought must be granted.

Is the consequence of a failure to comply with the requirements imposed by s 51(13) of the Liquor Act that the Authority's decision is invalid?

Contrary to the case advanced for the Commissioner, I am satisfied that s 51(13) cannot be read as "not denying power", if the prerequisites there imposed on the Authority's exercise of the powers granted by s 51(9)(b) are not adhered to, as the legislature intends the Authority to do. Nor can the issue of statutory construction which arises to be resolved be approached by a consideration of whether common law requirements of procedural fairness were adhered to by the Authority before it made the disputed decision, or questions of "practical injustice".
To support the Commissioner's case, reliance was placed on what was observed in Boyce v Allianz Australia Insurance Ltd [2018] NSWCA 22: "93 Gageler and Gordon JJ in WZARH dealt expressly with the observations of Gleeson CJ in Ex parte Lam at [58] and [60]. Read in their context, those observations were as follows: "[55] The concern of procedural fairness, which here operates as a condition of the exercise of a statutory power, is with procedures rather than with outcomes. It follows that a failure on the part of an assessor or reviewer to give the opportunity to be heard which a reasonable assessor or reviewer ought fairly to give in the totality of the circumstances constitutes, without more, a denial of procedural fairness in breach of the implied condition which governs the exercise of the Minister's statutory powers of consideration. … [57] That approach to the determination of the existence and consequence of a breach of an implied condition of procedural fairness governing the exercise of a statutory power is wholly consistent with the often-repeated observation of Gleeson CJ in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam that the concern of procedural fairness is to 'avoid practical injustice', and with his Honour's conclusion in that case that there was no denial of procedural fairness where '[n]o practical injustice ha[d] been shown'. The absence of practical injustice in Lam lay in the fact that '[t]he applicant lost no opportunity to advance his case', it was not 'shown that he lost an opportunity to put any information or argument to the decision-maker, or otherwise suffered any detriment'. [58] Contrary to the submission of the Minister in this appeal, and as has repeatedly been recognised in the Full Court of the Federal Court. Lam is not authority for the proposition that it is incumbent on a person who seeks to establish denial of procedural fairness always to demonstrate what would have occurred if procedural fairness had been observed. What must be shown by a person seeking to establish a denial of procedural fairness will depend upon the precise defect alleged to have occurred in the decision-making process. … [60] Where, however, the procedure adopted by an administrator can be shown itself to have failed to afford a fair opportunity to be heard, a denial of procedural fairness is established by nothing more than that failure, and the granting of curial relief is justified unless it can be shown that the failure did not deprive the person of the possibility of a successful outcome. The practical injustice in such a case lies in the denial of an opportunity which in fairness ought to have been given. " [footnotes omitted]
The difficulty with the Commissioner's case, so advanced, was that neither Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 366; [2015] HCA 40 nor Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6, were concerned with questions of statutory construction of the kind which here arise to be determined. They were rather concerned with the claimed invalidity of administrative decisions as the result of alleged failures to comply with common law requirements as to procedural fairness, they being an implied condition which governed the exercise of the statutory powers there in question.
In WZARH, invalidity flowed from a failure to provide an opportunity to be heard. In Lam, it was a failure to adhere to an advised course of conduct which was unsuccessfully claimed to have given rise to procedural unfairness, because there was a legitimate expectation that the administrative decision maker would adhere to that course. That claim failed because it was not established that any practical injustice had resulted.
In this case, while the parties addressed submissions to the Authority's obligations at common law to provide procedural fairness before making its decisions, what arises to be resolved must commence with the proper construction of the legislative scheme and whether a failure to comply with express requirements imposed upon the Authority by s 51(13) in a case to which it applies, renders a decision made under s 51(9)(b) invalid, if those requirements are not complied with before the decision is made.

The words used in s 51(13)

The statutory construction question must be resolved by the meaning of s 51(13) being ascertained from the words there used, the language actually employed being "the surest guide to legislative intention": Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27; [2009] HCA 41 at [47]. It provides: "(13) The Authority must not impose a condition on an authorisation, or revoke or vary an authorisation, other than a variation made on application by a licensee, unless the Authority has: (a) given the licensee to whom the authorisation relates a reasonable opportunity to make submissions in relation to the proposed decision, and (b) taken any such submissions into consideration before making the decision."
Those words must be considered in their statutory context, including the general purpose and policy of the provision: Thiess v Collector of Customs (2014) 250 CLR 664; [2014] HCA 12 at [22]-[23]. It should thus immediately be noted that what s 51(13) does not do, is to impose common law obligations of procedural fairness on the Authority.
As discussed in Kioa v West (1985) 159 CLR 550; [1985] HCA 81 at 585, consideration must be given to whether s 51(13) displaces the common law duty to accord procedural fairness in the making of the administrative decisions to which it applies, the power granted the Authority under s 51(9)(b) affecting as it does rights, interests and legitimate expectations arising under the Liquor Act. Given the requirements which s 51(13) imposes on the Authority, it is apparent that it departs from the common law duty to accord procedural fairness which it was common ground between the parties otherwise applies to the Authority. What that duty requires in a particular case, will depend on the nature of the administrative decision which the Authority is called on to make.
In such a case there must then be a fair exercise of the Authority's power, in accordance with "procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations": Kioa at 585.
There is thus no question that the Authority has common law duties as to procedural fairness which it must apply in the circumstances to which s 51(13) does not apply, including in this case, in relation to the Commissioner, the applicant. Those duties require that the Commissioner be given an opportunity to be heard, before the Authority's decision on the application is made.
By way of contrast, what is imposed on the Authority by s 51(13) involves notification being given to the licensee of the Authority's "proposed decision", and an opportunity to be heard on that decision, before its final decision is made, whether it is acting under s 51(9)(b) on application, or on its own initiative. By way of contrast, there are no such obligations imposed on the Authority in respect of an applicant, in this case the Commissioner.
The term "proposed decision" is not defined, but in this statutory context it is apparent that it does not mean the decision which an applicant like the Commissioner seeks to have the Authority make, given that the s 51(13) requirements are also imposed when the Authority acts on its own initiative. It follows that the "proposed decision" is that which the Authority proposes to make, whether in response to an application made to it, or in circumstances where it has decided to consider acting on its own initiative.
The use of the introductory words in s 51(13) that (emphasis added) "[t]he Authority must not impose a condition on an authorisation, or revoke or vary an authorisation, other than a variation made on application by a licensee, unless the Authority has" on their face thus suggest that the requirements which follow are prerequisites, which must be adhered to, if the powers granted the Authority by s 51(9)(b) are to be validly exercised, in the circumstances to which s 51(13) applies. The statutory language is prohibitive and does not permit of the conclusion that the Authority is there given any discretion, in relation to adherence to the requirements there imposed upon it.
After all, as discussed by Sheppard J in Commissioner of Taxation v Comcorp Australia Ltd (1996) 70 FCR 356 at 363, the use of the word "must" is "prima facie … intended to be emphatic and to indicate that there is a positive obligation on those affected by the provisions to comply strictly with them." No different conclusion is available in respect of the even more emphatic term "must not".
The conclusion that the Authority's s 51(9)(b) powers are not available to be exercised in the circumstances to which s 51(13) apply, unless it first adheres to the prerequisites there imposed upon it, with the result that any purported exercise of the power without such adherence is invalid, is also supported by the nature of the steps which s 51(13) requires the Authority to take, before it imposes a condition on an authorisation, or it is revoked or varied.
What is first required by s 51(13) is not the giving of notice of an application under s 51(9) to the licensee, or of the Authority's decision to consider acting on its own initiative, but rather notice of its "proposed decision". By that time the Authority will already have been obliged to adhere to the common law principles of procedural fairness, by which it is otherwise bound.
Secondly, s 51(13) requires that the licensee be given a reasonable opportunity to make submissions in relation to the Authority's "proposed decision". Thirdly, that any such submissions be taken into account by the Authority, before making "the decision".
The conclusion that a failure to comply with the requirements of s 51(13) renders the Authority's decision invalid, rather than resulting in an obligation on the licensee to show that thereby the licensee has been "deprived of a successful outcome", as was contended for the Commissioner, is also supported by the consideration that in arriving at its "proposed decision", the Authority is required by other parts of the Liquor Act, to take other specified matters into account, apart from the cases which the licensee and other interested parties have advanced by their submissions. It will be necessary to return to these requirements.
All of these aspects of the statutory scheme must considered in accordance with the approach discussed in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, where it was observed: "91 An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. … … 93 ... A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute". [footnotes omitted]
In Forrest & Forrest Pty Ltd v Wilson (2017) 346 ALR 1; [2017] HCA 30 it was noted at [62] that the majority in Project Blue Sky were strongly influenced in reaching the conclusion that the act there in question was not invalid: "… by the consideration that the requirement in question regulated the exercise of functions already conferred on the agency, rather than imposed essential preliminaries to the exercise of those functions. Their Honours were also influenced by the circumstance that the provisions did not have "a rule-like quality which [could] be easily identified and applied", many of the obligations relevant in that case being "expressed in indeterminate language". Also important to the decision was the consideration that "public inconvenience would be a result of the invalidity of the act", especially if those affected by non-compliance were neither responsible for, nor aware of, the non-compliance." [footnotes omitted]
Invalidity was found in Forrest, however, because: "63 … A consideration of "the language of the statute, its subject matter and objects, and the consequences for the parties of holding void" acts done in breach of the Act, reveals that ss 74(1)(ca)(ii), 74A(1) and 75(4a) imposed essential preliminaries to the exercise of the power conferred by s 71 of the Act. That this was so was made clear by both the express terms and the structure of the provisions as sequential steps in an integrated process leading to the possibility of the grant of a mining lease by the Minister. These provisions were not expressed in indeterminate terms: they imposed rules which could be easily identified and applied. In addition, any inconvenience suffered by treating the requirements of the Act as conditions precedent to the exercise of the Minister's power would enure only to those with some responsibility for the non-observance, whereas (as will be explained) the contrary view would disadvantage both the public interest and individuals who were within the protection of the Act. Finally, and importantly, Project Blue Sky was not concerned with a statutory regime for the making of grants of rights to exploit the resources of a State."
Like the provision which arose for consideration in Forrest, s 51(13) of the Liquor Act, which regulates the exercise of powers granted the Authority by s 51(9)(b) in specified circumstances, also has a "rule like" quality, expressed as it is in directory language to apply to the situations specified.
The requirements thereby imposed on the Authority are not only easy to identify as essential prerequisites to the exercise of the s 51(9)(b) powers in such cases, expressed as they are in precise language, but they are also easy to apply before the Authority makes its final decision. This also supports the conclusion that in the circumstances to which s 51(13) applies, the Authority is not empowered to impose a condition on, or to revoke or vary an authorisation, other than a variation made on application by a licensee, unless it complies with the statutory prerequisites thereby imposed upon it.
Nor does the statutory scheme encompass a concept that some "technical" breach of the requirements imposed by s 51(13) would not result in invalidity, contrary to the case advanced for the Commissioner. There are very obvious difficulties with such an approach to the construction of s 51(13). They begin with what would and would not be properly categorised as merely a "technical" breach of the statutory requirements, falling within an unidentified exception to the rules which s 51(13) creates. No authority was referred to which embraced such an approach to statutory construction and it appears to me to be one which departs impermissibly from that discussed in Project Blue Sky and Forrest.
The consequence of holding a failure to comply with the requirements expressly imposed on the Authority in the situations specified in s 51(13) as rendering the Authority's purported decision to impose a condition on, or to revoke or vary an authorisation void, is that valuable statutory rights which the Authority had earlier granted are not interfered with, if the Authority does not adhere to the prerequisites to the exercise of the s 51(9)(b) powers imposed upon it by the legislature.
The public interest may undoubtedly be affected by that conclusion. Given all that the Authority is required to consider, before deciding whether to impose a condition on an existing authorisation, or to revoke or vary such an authorisation, there will no doubt be some members of the community who may thereby be disadvantaged. That would include those who would support the Authority's decision to impose a condition on, or to revoke or vary the authorisation. Those who would oppose such a decision being made would, however, be likely to be in a different position
These consequences of the conclusion that the Authority's failure to comply with the statutory prerequisites imposed by s 51(13) on the exercise of its s 51(9)(b) powers renders its decision invalid must be considered, however, in the context of the entire statutory scheme. It deals at various points with matters of public interest and imposes other obligations on the Authority to take certain matters into account, before making a decision, including when it decides to act on its own initiative.
It is also relevant to take into account that having done so, it is only in limited situations to which I will return, that the Authority's decisions are made subject to merits review. That, too, supports the conclusion that a failure to comply with the prerequisites s 51(13) imposes, renders the Authority's decision invalid.

The Liquor Act and Liquor Regulations

This conclusion flows from a consideration of the statutory scheme which commences with the objects of the Act specified in s 3 to be: "(a) to regulate and control the sale, supply and consumption of liquor in a way that is consistent with the expectations, needs and aspirations of the community, (b) to facilitate the balanced development, in the public interest, of the liquor industry, through a flexible and practical regulatory system with minimal formality and technicality, (c) to contribute to the responsible development of related industries such as the live music, entertainment, tourism and hospitality industries. (2) In order to secure the objects of this Act, each person who exercises functions under this Act (including a licensee) is required to have due regard to the following: (a) the need to minimise harm associated with misuse and abuse of liquor (including harm arising from violence and other anti-social behaviour), (b) the need to encourage responsible attitudes and practices towards the promotion, sale, supply, service and consumption of liquor, (c) the need to ensure that the sale, supply and consumption of liquor contributes to, and does not detract from, the amenity of community life."
The Act deals separately with the grant of liquor licences of various types, including hotel licences; the conditions which may be imposed upon licenses; authorisations of various kinds which may be obtained for licenced premises, including for extended trading hours; and the conditions which may be imposed on such authorisations. The principal statutory offences dealing with the unlicensed sale of liquor are to be found in ss 7, 8 and 9.
Part 3 of the Act deals generally with licences, sub-ss 10(2) and (3) providing that: "(2) A licence authorises the licensee to sell or supply liquor in accordance with this Act and the conditions of the licence. (3) The authorisation conferred by a licence is subject to this Act and the regulations."
Section 11 reveals that the Act itself imposes certain conditions on licences, for example in the case of hotels, the miscellaneous conditions specified in s 17 in relation to matters such as cash advances and supply of food. Other conditions may be imposed by the Authority, or by the Secretary of the Department of Industry. In the case of the Authority, it may for example, under s 52 impose conditions prohibiting or restricting activities such as promotions or discounting that could encourage misuse or abuse of liquor.
Trading hours for consumption of liquor on licensed premises are specified by s 14(2), with specific exceptions elsewhere provided, to be authorised during "the standard trading period" or at other times authorised by "an extended trading authorisation". The standard trading period is specified in s 12 generally to be 5 am to midnight Monday to Saturday and 10 am to 10 pm Sundays. Licensees are not, however, required to sell or supply liquor during such period: s 15A(1).
It is Division 2 of Part 3 which deals with hotel licences. Section 14(1) provides that such a licence authorises the licensee to sell liquor by retail on the licensed premises for consumption on or away from the premises.
The Authority's regulatory role includes acting on applications which may be contested, as well as on its own initiative.
Licences are granted on application made to the Authority, in accordance with the requirements of s 40, which appears in Division 1 Licence applications and granting of licences of Part 4 Licensing procedures and related matters. In this Part of the Act appear other requirements for the making of license applications and how they are to be dealt with by the Authority. Provision is made for "any person" to make submissions about the application to the Authority, which it must consider: s 44. The circumstances in which a licence may be granted are specified in s 45, which also refers to regulations which may be made under s 159, which can impose mandatory or discretionary grounds for refusing the grant of a licence: s 45(4).
Regulations 7 and 8 of the Liquor Regulation 2008 (NSW) regulates those who must be notified of applications, including licence applications and applications by a licensee for the revocation or variation of a condition of the licence or a condition of a licence-related authorisation (other than a revocation or variation that would result in reduced trading hours). There is no similar regulation for applications made by the Commissioner, or when the Authority is considering acting on its own initiative. Those who must be notified include occupiers of neighbouring premises, police and the local consent authority. Regulation 12 deals with submissions to the Authority about such applications, which may be made by "any person".
Section 48, however, is expressed to facilitate the Authority's consideration of the impact of the granting of certain licences, authorisations and approvals, including extended trading authorisations for hotels, on the local community. A process by which the Authority is made aware of views of the local community and the results of any discussions between the applicant and the community about issues and concerns the community may have about the application, is thereby imposed. Applications must also be accompanied by community impact statements: s 48(3). Section 48(5) provides that (emphasis added): "(5) The Authority must not grant a licence, authorisation or approval to which a relevant application relates unless the Authority is satisfied, after having regard to: (a) the community impact statement provided with the application, and (b) any other matter the Authority is made aware of during the application process (such as by way of reports or submissions), that the overall social impact of the licence, authorisation or approval being granted will not be detrimental to the well-being of the local or broader community."
Section 49 regulates extended trading authorisations. In the case of a hotel licence, on application of the licensee the Authority may authorise trade for "a specified period between midnight (other than midnight on a Sunday) and 5 am on any day of the week (other than a Monday)": s 49(2). The Authority's power to grant such authorisations is restricted by s 49(8), which provides (emphasis added): "The Authority must not grant an extended trading authorisation in respect of licensed premises unless the Authority is satisfied that: (a) practices are in place, and will remain in place, at the licensed premises that ensure as far as reasonably practicable that liquor is sold, supplied or served responsibly on the premises and that all reasonable steps are taken to prevent intoxication on the premises, and (b) the extended trading period will not result in the frequent undue disturbance of the quiet and good order of the neighbourhood of the licensed premises."
In La La Land Byron Bay Pty Ltd v The Independent Liquor and Gaming Authority [2014] NSWSC 1798, Adamson J considered at [17] that s 49(8) had the effect that the Authority's functions were only available to be exercised, if it was satisfied of those matters. The appeal from her Honour's decision was dismissed in La La Land Byron Bay Pty Limited v The Independent Liquor and Gaming Authority [2015] NSWCA 254.
It is s 51 which regulates the grant of authorisations by the Authority, including for extended trading. Applications for authorisations must be dealt with by the Authority in the same way as applications for licenses: s 51(3). "Any person" may make submissions on such applications, in accordance with the regulations: s 51(5). If submissions are made they are to be taken into consideration by the Authority "before deciding whether or not to grant the authorisation": s 51(6).
The Authority may specify requirements that are to be complied with before the authorisation takes effect: s 51(8). It may also impose conditions on such authorisations and they may also be imposed by Regulation: s 51(9)(a). Any such condition on an authorisation is taken to be a condition of the licence to which the authorisation relates: s 51(11).
It is s 51(9)(b) which provides for variation or revocation of an authorisation on the Authority's own initiative, or on application by the licensee, the Secretary or the Commissioner. Section 51(9) provides: "(9) An authorisation: (a) is subject to such conditions: (i) as are imposed by the Authority (whether at the time the authorisation is granted or at a later time), or (ii) as are imposed by or under this Act or as are prescribed by the regulations, and (b) may be varied or revoked by the Authority on the Authority's own initiative or on application by the licensee, the Secretary or the Commissioner of Police."
It is s 51(13) which regulates the exercise of the power granted by s 51(9)(b), in the situations there specified.
It is s 53 which deals with the Authority's power to impose, vary or revoke license conditions, including as to restricted trading hours, on application of the Secretary, the Commissioner, or acting on its own initiative. Section 53(4) contains a similar provision to s 51(13), providing (emphasis added): "(4) The Authority must not impose a condition on a licence after it has been granted, or vary or revoke a condition that has been imposed (or taken to have been imposed) by the Authority, unless the Authority has: (a) given the licensee a reasonable opportunity to make submissions in relation to the proposed decision, and (b) taken any such submissions into consideration before making the decision."
The Secretary is given similar powers by s 54, including on application by a licensee. Section 54(3) also provides (emphasis added): "(3) The Secretary must not impose a condition on a licence under this section, or vary or revoke a condition otherwise than on the application of the licensee, unless the Secretary has: (a) given the licensee a reasonable opportunity to make submissions in relation to the proposed decision, and (b) taken any such submissions into consideration before making the decision."
Section 57 provides that the Authority may establish administrative policies and procedures for administering the statutory licensing scheme. The parties did not, however, refer to any such policies.
Part 5 of the Act deals with the regulation and control of licensed premises, creating various offences which licensees may commit; providing a complaint mechanism; establishing a scheme under which the Authority may make closure orders; empowering the Authority to regulate the conduct of licensed premises in other ways; and imposing a range of other general obligations on licences. Other offences are provided in Part 6 and Part 10 deals with criminal proceedings and related matters. Part 9A establishes a 3 strike disciplinary action system for licensed premises, when licensees and managers commit prescribed offences.
Part 7 makes special provisions for minors. Part 8 establishes a system of "Local liquor accords", which provide for codes of practice, memoranda of understanding or other arrangements affecting the supply of liquor; the opening hours of licensed premises; and other aspects of the management of such businesses for the purpose of eliminating or reducing alcohol-related violence, anti-social behaviour and other alcohol-related harm.
It is apparent from these statutory provisions that a licence and the conditions which attach to it, are different statutory creatures to authorisations and conditions which may be attached to them. Such authorisations, including as to extended trading, can be obtained only after a license is granted. Authorisations may also be made subject to conditions, either on grant or later exercise of the powers given the Authority by s 51(9)(b). They thereupon are treated as if they are conditions of the licence, for the purposes of the Act: s 51(11).
Authorisations which permit extended trading are not, however, themselves "conditions" of a license to which reg 7(c) of the Gaming and Liquor Administration Regulation attaches, which regulates the limited rights available to merit reviews of the Authority's decisions. This will be necessary to return to.
As was submitted for Mr Rogers and Mr Boland, however, when acting of its own initiative the Authority is acting as the administrative organ of government in which is entrusted responsibility for liquor licensing in accordance with the scheme established by the Liquor Act and the Gaming and Liquor Administration Act. It is thus also relevant to take into account that the legislature has provided for a merits review of the Authority's decisions in only limited circumstances, which do not include cases where the Authority decides to act of its own initiative, as it did in this case

A failure to comply with the requirements of s 51(13) renders the Authority's decision invalid

It is thus apparent from this statutory scheme that the Liquor Act does not grant the Authority the unfettered right to exercise the powers it is granted by s 51(9)(b) to impose conditions on, or to vary or revoke authorisations, once they have been granted. Section 51(13) limits the Authority's exercise of those powers, in the circumstances to which it applies, whether the Authority is acting on application, or of its own initiative.
As Davies J discussed in Duffy v Independent Liquor and Gaming Authority [2016] NSWSC 1062 at [34], this aspect of the statutory scheme reflects no doubt that once granted, licences and authorisations may have considerable value. The evidence as to the Hotel's revenue and how they and its overall value have been adversely affected by the impact of the Authority's decision, sheds considerable light on why it was that the legislature regulated this aspect of the exercise of the Authority's powers, by requiring it to take the steps specified in s 51(13) in the circumstances to which it applies, before the powers conferred by s 51(9) are exercised, potentially to a licensee's considerable detriment.
The statutory objects and the requirements imposed on the Authority by ss 48(5) and 49(8), reflect that the legislative scheme is concerned not only with the regulation of these valuable statutory rights, but also with matters of considerable public interest, which the Authority must also take into account, before making its decisions. These are other fetters imposed on the Authority's exercise of its powers.
It is in this context that it must be concluded, it seems to me, that s 51(13) is a part of the balance which the legislature sought to achieve between potentially competing interests, by prohibiting the Authority from making decisions in the circumstances to which it applies, until it complies with the prerequisites there imposed upon the exercise of its s 51(9)(b) powers. That approach does more than ensure that licensees receive procedural fairness, before adverse decisions are made by the Authority, as the Commissioner contended. It rather renders invalid decisions which the Authority purports to make without adherence to the limitations deliberately imposed upon it by the legislature by s 51(13), when exercising its s 51(9)(b) powers.
That conclusion flows not only from the directory words used in s 51(13) and the nature of the prerequisites there imposed on the exercise of the Authority's powers, but also from the purpose for which they are imposed; from the other provisions of the Act, where other relevant limitations are imposed on the Authority's exercise of its powers, by which the legislative balance I have discussed is sought to be achieved; and by the limited merits reviews provided for the Authority's decisions.

Were the mandatory prerequisites imposed by s 51(13) complied with?

I am also satisfied that the evidence establishes that in this case, the Authority did not comply with the prerequisites to the exercise of the s 51(9)(b) powers imposed by s 51(13), rendering its decision invalid.
This was not a case of a simple failure to take a procedural step, which resulted in the loss of an opportunity to make representations, of the kind dealt with in Lam, where no practical injustice resulted. Rather, the Authority's failure to adhere to the mandatory statutory requirements imposed upon it were such that its decision was invalid, because it was not empowered in the circumstances in which it made its decision to vary the Hotel's extended trading authorisation, to make any decision at all.
It is settled that "the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error": Minister for Immigration and Ethnic Affairs v Liang (1996) 185 CLR 259; [1996] HCA 6 at [30]. It was also there held "that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed.": at [31].
The letters by which the Authority conveyed its decisions should be read in accordance with this approach.
In its April 2018 letter the Authority advised that: "The Authority has carefully considered the Application and all submissions made in relation to the Application made by the business owner and premises owner of the hotel. It has yet to finalise its deliberations on whether to revoke, vary or take no action in relation to the extended trading authorisation under section 51(9)(b) of the Liquor Act 2007 (the Act). Before finalising the matter, the Authority has decided to communicate its proposed findings on the 124 events attributed by the Applicant to the exercise of the extended trading authorisation that are recorded in Computerised Operational Policing System reports (COPS Reports) prepared by NSW Police, so that it may receive further and final submissions on the proposed findings and consider the submissions before finalising its decision under section 51(9)(b) of the Act."
What the Authority thus sought was: "The business and premises owners have contended that economic prejudice will be suffered by them should the authorisation be revoked. In order to better assess this aspect of the respondents' case, the Authority invites the respondents to provide any further evidence, supported by a statutory declaration from an accountant on the basis of trading records for month of February 2018, indicating the extent of economic prejudice that would flow in the event that the authorisation was varied rather than revoked so that the authorisation ceased at 12.30 am, 1:00 am, 1:30 am 2:00am, with a breakdown of the proportion of lost revenue in the three categories of liquor, gaming and other (non- liquor or gaming) goods and services. The premises owner may also wish to provide further submissions concerning economic loss and diminishment in the value of the property in the event that the authorisation was varied as set out above, and is invited to do so if it wishes. The Authority invites the business and premises owners to provide the above further information concerning economic prejudice / loss, together with any submissions that they have in relation to the proposed findings, no later than 21 days after the date of this letter. The Applicant may make a final submission in reply no later than 28 days from the date of this letter."
Fairly read, it is apparent that by its 24 April letter the Authority advised Mr Boland that it had not yet decided how the Commissioner's revocation application was to be resolved. It thus did not communicate its "proposed decision" in this letter. Rather, it firstly advised of its "proposed findings on the 124 events" recorded in the COPS system which the Commissioner had attributed to the exercise of the Hotel's extended trading authorisation, inviting submissions on those findings. Secondly, it invited further evidence and submissions about the extent of economic prejudice, if the Hotel's authorisation was varied rather than revoked "so that the authorisation ceased at 12:30 am, 1:00 am, 1:30 am, 2:00 am".
Thus it was that the Authority sought further submissions on the Commissioner's application, as well as information about the consequences of a range of possible variations, but it did not give the required advice as to its "proposed decision". That was presumably, as is implicit in its letter, because when it sent this letter the Authority had not yet determined what its "proposed decision" would be and it was then still considering the available options.
It was common ground between the parties that those options included granting the Commissioner's revocation application; refusing that application; on that application, varying the authorisation; or, acting of its own initiative varying the Hotel's authorisation. That latter possibility was not, however, raised by its letter and thus understandably was not addressed in the submissions advanced for Mr Boland, in response.
The 24 April letter thus could not satisfy the requirement which s 51(13) imposed on the Authority, to inform the licensee of its "proposed decision" and to take the other steps there imposed upon it, before making its final decision.
In the result, even if what the Authority did by its 24 April letter satisfied its common law obligations to give procedural fairness, when the Authority made its decision on 13 June to vary the Hotel's authorisation, it had not given the licensee the advice s 51(13) required it first give of its "proposed decision" and an opportunity to make submissions about that decision. It follows that even if took account of the information and submissions which were provided in response to its 24 April letter, that could not satisfy the requirements imposed upon it by s 51(13).
Thus it was that the Authority failed to adhere to the mandatory requirements which s 51(13) imposed upon it. All that it had sought was submissions on a number of proposed findings in relation to the Commissioner's application and evidence and submissions about a variation of the Hotel's authorisation, on a number of possible bases.
As was conveyed in the 14 June letter, the decision which the Authority actually made was to reject the Commissioner's application and to act on its own initiative to vary the Hotel's authorisation, by permitting extended trade only until 1.30 am Monday to Saturday.
What s 51(13) required before it made that decision was that the Authority formulate its "proposed decision", having taken into account all of the other matters it was obliged by other provisions of the Liquor Act to take into account; that it communicate this "proposed decision" to the licensee, before its final decision was made, so that it could give the licensee a reasonable opportunity to make submissions in relation to that "proposed decision"; and that it take any submissions about the "proposed decision" into account, before its final decision was made.
On the evidence, had it acted in accordance with s 51(13), the Authority would have received submissions contending that it should not act of its own initiative to vary the authorisation in the way it ultimately decided, for reasons including that thereby, a merits review would be denied.
But the conclusion that the Authority's decision is invalid does not depend upon an examination either of what might have been submitted in respect of the proposed decision, had it been communicated as s 51(13) required, or how the Authority might have responded to the submissions it would then have received.
As discussed in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57, it cannot be concluded that the denial of the opportunity s 51(13) required Mr Boland to be given, before the proposed decision was made, made no difference to the outcome of the Authority's consideration of the variation of the Hotel's extended trading authorisation.
Before NCAT the Authority accepted that the result of its decision to act of its own initiative was that there could be no merits review, as would have been the case, had it acted to vary the authorisation, in response to the Commissioner's application. In these proceedings the Commissioner contended that this was an incorrect view of the statutory regime.
Nevertheless, given the view which the Authority took before NCAT, it is not apparent that any submissions which Mr Boland might have advanced to it, had it given notice of its proposed decision as it was bound to do, would have been incapable of swaying the view which the Authority took, had it had the benefit of his submissions about its proposed decision.
It is undoubtedly possible or perhaps even likely, given the evidence and submissions which the Authority did seek and was provided with, that even if the Authority had complied with s 51(13) and had received and considered Mr Boland's submissions about its proposed decision, its ultimate conclusion would have been the same.
But, as was discussed in Aala at [4], no one can be sure of that. Section 51(13) imposed a mandatory procedure on the Authority. Even at common law the concept of procedural fairness is concerned with procedures, not outcomes and relief is warranted if there is a possibility that a person entitled to such fairness may have been deprived of a successful outcome: WZARH at [55]-[56].
Further, unlike the circumstances which arose for consideration in Aala, this was not a case where it is apparent that the Authority was bound by the Liquor Act to reject any submissions which could have been made by Mr Boland about its proposed decision, if he had been given the opportunity which the legislature required that he be given: see at [58].
Not unlike the circumstances recently considered in Boyce at [94], in this case the Authority failed to notify its proposed decision as it was obliged to do; it failed to give the licensee an opportunity to make submissions about that decision and so could not take them into account, in arriving at its final decision; and thereby, the opportunity to put the case on the proposed decision fully, which s 51(13) required the licensee be given, was lost and the opportunity which the legislature required he be given, was denied. Contrary to the case advanced for the Commissioner, this was not merely a "technical" breach of s 51(13).
Any assumption that this opportunity which the legislature required the Authority to give the licensee would not have affected the outcome, is "fraught with difficulty", notwithstanding the conclusions which I have otherwise reached as to the availability of a merits review of the Authority's decision: Boyce at [74].
It follows that the relief which Mr Rogers and Mr Boland seek must be granted.

Was the licensee wrongly deprived of a merits review?

Despite these conclusions, given the cases which the parties advanced, I should also deal with this question.
The significance of a failure to reveal that the Authority was considering acting of its own initiative to vary the Hotel's extended trading authorisation was identified to be that thereby, Mr Rogers and Mr Boland had been wrongly deprived of the opportunity to pursue a merits review of its decision. That was submitted to flow from s 13A of the Gaming and Liquor Administration Act.
Before NCAT the Authority apparently accepted that while under this legislative scheme a review of its decision to vary the licence would have been available, if it had been made on the Commissioner's revocation application, because it had made the decision acting of its own initiative, there was no such right. The Commissioner did not appear before NCAT, but in these proceedings contended that there was no right to a merits review, in either case.
This depends upon the proper construction of provisions of the Gaming and Liquor Administration Act and the Gaming and Liquor Administration Regulation.
The objects of this Act are specified in s 2A to be: "2A Objects of Act The objects of this Act are as follows: (a) to ensure the probity of public officials who are engaged in the administration of the gaming and liquor legislation, (b) to ensure that the Authority is accessible and responsive to the needs of all persons and bodies who deal with the Authority, (c) to promote fair and transparent decision-making under the gaming and liquor legislation, (d) to require matters under the gaming and liquor legislation to be dealt with and decided in an informal and expeditious manner, (e) to promote public confidence in the Authority's decision-making and in the conduct of its members."
The term "gaming and liquor legislation" is defined in s 4 to include the Liquor Act and s 9 specifies that the Authority's functions are those conferred or imposed upon it by such legislation. This Act itself imposes various functions on the Authority, for example review of certain decisions made by the Secretary: s 36A.
It is s 13A which provides for limited reviews of decisions made by the Authority. It provides: "13A Review by NCAT of certain decisions of Authority (1) A relevant person who is aggrieved by a decision of the Authority in relation to an application made under a provision of the gaming and liquor legislation prescribed by the regulations for the purposes of this section (a prescribed application) may apply to NCAT for an administrative review under the Administrative Decisions Review Act 1997 of that decision."
Regulation 7 relevantly provides: "7 Administratively reviewable decisions For the purposes of section 13A of the Act, the following applications made on or after 1 March 2016 are prescribed: (a) an application for the granting or removal under the Liquor Act 2007 of: (i) a hotel licence, or … (b) an application for an ongoing extended trading authorisation in relation to a licence referred to in paragraph (a) that would result in trading after midnight, (c) an application to vary or revoke a condition of a licence imposed by the Authority that would result in trading after midnight, in relation to a licence referred to in paragraph (a) (i)-(iii), …"
The language used in this regulation is admittedly awkward, as the parties both submitted. It is not necessary, however, to resolve all of the questions which they addressed as to the proper construction of this regulation.
What is immediately apparent is that reg 7, like the Liquor Act, draws a distinction between licences, conditions of a licence and extended trading authorisations. But under this regulation, a "condition of a licence" does not include either an authorisation, or conditions which may be imposed on an authorisation. That is because s 51(11) of the Liquor Act provides only that it is for the purposes of that Act, that any condition to which an authorisation is made subject, is taken to be a condition of the licence.
Regulation 7(b) is concerned with applications for an ongoing extended trading authorisation and reg 7(c) with applications to vary or revoke a licence condition, which in either case, "would result" in trading after midnight. In understanding what this term means, it is apparent that the regulation is concerned with applications which, if granted, would have the specified result. That is because account must be taken of the fact that under the Liquor Act, the grant of an authorisation or condition which permits trade to be pursued after midnight, does not require a licensee to exercise the permission to trade so given.
It is apparent that the merits review of the Authority's decisions which reg 7(b) and (c) permit are in respect of applications which, if granted, are valuable and the regulation thus assumes that they would be availed of by the licensee, if granted. That explains the use of the words "would result" in trade after midnight.
Under s 13A NCAT is not expressly empowered to review decisions of the Authority, when acting of its own initiative, even if trade at such times results. It is empowered, however, to review decisions which the Authority makes under the Liquor Act, in the case of a hotel, "in relation to" applications specified in reg 7, namely those made in relation to: 1. its licence; 2. an ongoing extended trading authorisation that would result in trading after midnight; and 3. variation or revocation of license conditions imposed by the Authority which would result in trading after midnight.
From what was advanced at the hearing by the Commissioner, "on instructions" from the Authority, albeit no appearance was entered for the Authority, its decision to act on its own initiative was made "in relation to" the Commissioner's application. That is because that term is wide enough to encompass the circumstances which arose in this case, where the Authority took the view that while under s 51(9)(b) it could have resolved the Commissioner's application by varying, rather than revoking the Hotel's extended trading authorisation, because there was some doubt about that construction of the Liquor Act, it was preferable for it to act on its own initiative, there then being no question as to its power to vary the Hotel's authorisation.
The bona fides of the Authority acting in that way were questioned, it being submitted for example in written submissions, that the distinction between dealing with applications and acting of its own initiative was "one which the Authority carefully sought to exploit in the present case".
The criticism should not be too readily accepted. It is not apparent that in proceeding as it did that the Authority sought, wrongly, to preclude Mr Rogers and Mr Boland from exercising a right of review which the legislature intended them otherwise to have, when the Authority dealt with the application made to it by the Commissioner, for revocation of the Hotel's extended trading hours authorisation.
Regulation 7 is concerned with "applications". On its face the Commissioner's application was not one, however, that "would result in trading after midnight", if granted and so it did not fall within the regulation.
Contrary to the case advanced for the Commissioner, had the application been for a variation of the Hotel's authorisation for extended trading, so that it would still cease after midnight, but at some earlier time than was permitted under the existing authorisation, the application would undoubtedly have been one that "would result in trading after midnight", if granted. That under the existing authorisation, later trading after midnight was permitted, would not alter the nature of the variation application. Such an application would thus have fallen within reg 7. But that was not the application which the Commissioner made.
What the Authority did when it decided not to revoke the Hotel's authorisation, but to vary its extended trading hours acting on its own initiative, certainly resulted in trade after midnight, that being what the varied authorisation permitted. Given why the Authority acted of its own initiative so to vary the authorisation, that the Authority's decision was one which it made "in relation to" the Commissioner's revocation application, is also apparent. That follows from the wide import of those words and what the Authority in fact did, as the result of its consideration of that application.
What, however, the course which the Authority pursued did not alter was, contrary to the case advanced for Mr Rogers and Mr Boland, the nature of the Commissioner's application, which resulted in the Authority deciding to act of its own initiative. That application sought the revocation of the Hotel's authorisation to trade after midnight. It was thus not an application which "would result" in such trade, if it was granted. If it failed, the Hotel's existing authorisation was left unaffected. If it succeeded, the authorisation would be brought to an end.
It follows that even if the Authority's decision to vary the authorisation had not been made on its own initiative, it was not reviewable by NCAT under s 13A, because the Commissioner's application did not come within reg 7.
Despite this, for the reasons I have already explained, the Authority's decision being invalid the relief sought must be granted.

Costs

The usual order as to costs is that they follow the event. In this case that would be an order in favour of Mr Rogers and Mr Boland, as agreed or assessed. Unless the parties approach within 7 days, that will be the Court's order.

Orders

For these reasons I order that: 1. The 13 June 2018 decision of the Independent Liquor and Gaming Authority varying the extended trading authorisation of the Sydney Junction Hotel is invalid and accordingly, set aside. 2. Unless the parties approach within 7 days the Commissioner of Police is to bear Mr Rogers and Mr Boland's costs, as agreed or assessed.

Amendments 01 August 2018 - [30] - typographical error in quote 'ensure' changed to 'enure' [69] - deleted word 'that' in second sentence DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 August 2018

Gaming and Liquor Administration Regulation 2016(NSW)

Liquor Regulation 2008(NSW)

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