Rogers v The Independent Liquor and Gaming Authority

Background

1. The first plaintiff is the current licensee of the Hotel. The second plaintiff is a former licensee and ceased to be licensee prior to February 2018.
2. The second plaintiff was a person to whom the first defendant (the Authority) continued to provide notice and issue notices. The third and fourth plaintiffs are the purchasers of the freehold and business of the Hotel, respectively. The foregoing purchase was effected by a contract executed on 7 September 2018, which was notified to the defendants on 10 September 2018. The second defendant was the applicant in the proceedings before the Authority that gave rise to the Decision. The application of the second defendant was that the Extended Trading Authorisation (hereinafter "the ETA") of the Hotel be entirely revoked.
3. It is relevant to note that the plaintiffs do not seek to challenge the validity of any legislation or regulatory framework, but, rather, challenge the process by which the Authority arrived at the Decision. The plaintiffs submit that the Decision is invalid and, in the substantive relief, sought orders in the nature of certiorari, pursuant to s 69 of the Supreme Court Act 1970 (NSW), setting aside the Decision, or orders declaring the Decision invalid.
4. At the time that the matter came before the Court, on 21 September 2018, the orders were to have effect on that date and the Decision of the Authority was made without the publication of reasons for that Decision. The plaintiffs also sought an interlocutory injunction against the Commissioner of the New South Wales Police, being the second defendant, restraining enforcement of the purported Decision.
5. It is unclear how the Court could restrain the Police from enforcing a decision that was operative or what the necessity for such a restraint would be, if a decision were not operative. Nevertheless, that formed part of the remedy sought at the interlocutory level.

Prejudice

1. The material before the Court establishes that it is more probable than not that the Hotel will lose takings of approximately $35,000 per week, from the bar alone, if the Decision is operative and enforced and/or obeyed. There had been a previous period during which the ETA was reduced in the manner decided by the Authority and now the subject of challenge, which established the loss in that respect.
2. In those circumstances, it is the finding of the Court that the prejudice to the plaintiffs would be at or about $35,000 per week. That is a real and substantial prejudice, if there be a triable issue on the question of the validity of the Decision and the Decision remains operative.
3. Apart from the loss to which the Court refers above, there would be other losses or adverse impacts associated with the operation of the Decision, including: the loss of wages by staff; the possible loss of qualified and trained staff who may move elsewhere because of a lack of earnings and/or work; the loss of future function bookings, where the potential client would desire to have the function continue after 1:00AM; and the loss of patterns of patronage, where customers may move to other venues in the area, which, on the evidence before the Court, have the extended trading hours that existed at the time of the hearing for the Hotel.
4. The plaintiffs submit that the defendants suffer no prejudice. In terms of financial issues, or direct prejudice, that submission must be accepted. However, the Police are required to keep the peace and there is a public interest aspect associated with offending, or the level of offending, for which, it is said, the Police have asked for shortened hours of operation, being the application before the Authority.

Adverse incidents

1. As earlier stated, the basis for the application before the Authority was the number and rate of incidents that occurred at or in the vicinity of the Hotel and the effect that those incidents had on public safety. The application before the Authority had been on foot for approximately one year, prior to the issue of the Decision.
2. The evidence before the Court demonstrates that, during that year, the number of adverse incidents had plummeted. According to the plaintiffs, they had fallen by approximately 80%. On the case, properly analysed, that the Police pursue, they had fallen by approximately 60%.
3. Further, on the material presented and before the Court for the purposes of the interlocutory proceedings, the level of adverse incidents at the Hotel was comparable to or lower than the adjacent hotels in the Hamilton entertainment precinct, which trade until 3:00AM or later. In the latest figures available to the Court, there had been only one assault alleged to have occurred in the vicinity of the Hotel in the last six months between the hours of 1:30AM and 3:00AM, being the hours affected by the Decision.
4. Additionally, the third and fourth plaintiffs, being the purchasers pursuant to the earlier mentioned sale, operate approximately 15 Hotels in New South Wales, not one of which is a declared premise pursuant to the terms of Sch 4 of the Liquor Act 2007 (NSW). The importance of that proposition is that at least part of the draft reasons issued by the Authority points to a lack of knowledge of the manner in which the new purchasers would operate the Hotel.

Principles

1. An application for a stay of a decision, in circumstances whether the decision is sought to be impugned in proceedings before the Court, is a necessary and inherent jurisdiction of the Court, at least pursuant to s 23 of the Supreme Court Act and otherwise as a consequence of the Court's status as a superior court of record. Such a power is necessarily incidental to the right of the Court to ensure that its jurisdiction is not rendered nugatory or otherwise not wholly effective and is otherwise part of the power of the Court to make such orders as are necessary to prevent injustice or for the upholding of the administration of justice in the State. See generally Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 and Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220; [1986] HCA 13.
2. While the Courts have expressed the test differently, depending upon the circumstances of the proceedings and the nature of the decision that is sought to be stayed, Dawson J in Myer Emporium, supra, required, in an appeal relating to a decision as to the tax payable by a taxpayer, that the power to stay a decision (albeit in those circumstances of the Supreme Court) should be exercised only where "special circumstances exist which justify departure from the ordinary rule that a successful litigant is entitled to the fruits of his litigation pending the determination of any appeal".
3. As earlier stated, special circumstances do exist where it is necessary to prevent the appeal, if successful, being rendered nugatory. Other statements of the principle require the Court to deal with a stay in the same way that it deals with injunctions. That requires the Court to determine that there is a "triable issue" in the proceedings and that the balance of convenience favours the grant of a stay.
4. In the current proceedings, it makes no difference which of the various tests is utilised. Nevertheless, because of the nature of the Decision and the issue of public interest, I will apply the test of exceptional circumstances as adumbrated by Dawson J in Myer Emporium, supra.

Conclusion

1. The evidence before the Court is, overwhelmingly, that the balance of convenience favours the grant of a stay. I bear in mind that in this area there is a need for certainty and draw the analogy from that which applies when courts have been requested to stay proceedings that pertain to industrial matters: see Re Moore; Ex parte Pillar (1991) 65 ALJR 683 at 685.
2. Again, the High Court, per Dawson J, referred to the requirement, in such circumstances, for there to be exceptional reasons. Those exceptional circumstances occur when it is necessary to preserve the subject matter of the litigation or where the refusal of the stay would make it difficult, in the determination of the proceedings in the Court, to grant the relief sought. His Honour relied on Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681 at 266; [1986] HCA 84 and Manfal Pty Ltd (in Liq) v Trade Practices Commission (1990) 65 ALJR 256 at 257.
3. If a stay were not granted, then the risk is that an invalid decision would be operating and, in the interim, criminal sanctions may apply in circumstances where the underlying regulation is held ultimately to be invalid or unenforceable.
4. Such a finding does not necessarily, although it may, undermine the criminal proceedings arising from an extant order, albeit invalid. Further, if any such breach occurred and criminal proceedings arose, it would be open to an accused to raise the validity of the Decision in those criminal proceedings: R v Commonwealth Industrial Court Judges; Ex parte Cocks (1968) 121 CLR 313; [1968] HCA 86.
5. As a consequence, notwithstanding the need to take into account the public interest associated with the issues with which the Authority was dealing, the level of uncertainty, coupled with the significant damage that would be occasioned to the plaintiffs as a result of the operation of the Decision, if it were invalid, led the Court to accept the proposition that exceptional circumstances exist or sufficiently strong circumstances exist to allow for the making of a stay.
6. The next issue that requires determination is whether there is a serious issue to be tried or, as it has otherwise been labelled, a "triable issue". The plaintiffs rely upon two fundamental issues in dealing with its claim that the Decision is invalid. Those issues are that there was a denial of procedural fairness and that the Decision discloses legal unreasonableness. I shall deal with the first issue.
7. The provisions of s 51(13) of the Liquor Act establish statutory conditions for the capacity of the Authority to make the Decision it did. The plaintiff submits that the Authority also had common law duties to procedural fairness, which required it to give affected parties a reasonable opportunity to be heard, before making a decision pursuant to s 51(9)(b) of the Liquor Act: Rogers v The Independent Liquor and Gaming Authority (No 2) [2018] NSWSC 1177 at [19].
8. It is a fundamental principle that each party to proceedings is entitled to natural justice. That requires two different criteria.
9. First, it requires fairness in procedure. Secondly, it requires fairness in hearing. It is sufficient for present purposes for the Court to repeat that a party to proceedings must have a reasonable opportunity to prepare and to present its case: Kioa v West; (1985) 159 CLR 550 at 582; [1985] HCA 81 and Sullivan v The Secretary, Department of Transport (1978) 20 ALR 323 at 343; [1978] FCA 48.
10. The allegation of fact, upon which the plaintiffs' submissions rest, is that the previous licensee was notified of certain requirements, but the current owners and/or the current licensee was not. It is said that, as a consequence of that non-service, and of the failure to allow the current licensee and/or owners to obtain information necessary for the presentation of the case (and its preparation), the current owners and/or licensee were denied natural justice.
11. One example suffices. By letter dated 22 August 2018, solicitors acting for the first and second plaintiffs requested that the Authority direct Police to produce to the first and second plaintiffs certain updated data relating to alleged incidents. By email dated 24 August 2018, the Authority directed the Police to provide certain COPS Reports recording adverse incidents from 12 November 2017 to 31 July 2018.
12. On 27 August 2018, Police provided the Authority and the first and second plaintiffs with 21 COPS Reports and a summary of those Reports or the relevant material therein. That summary discloses the fallacy in the notice from the Authority of 20 August 2018 that preceded the 22 August letter.
13. On 7 September 2018, the third plaintiff, as earlier stated, executed the contract to purchase the freehold on which the Hotel operates and the fourth plaintiff entered into a contract to acquire the business of the Hotel. Each of those defendants was aware of the existence of the application before the Authority.
14. On 10 September 2018, the third and fourth plaintiffs notified the Authority that they had exchanged contracts for the freehold and business and requested a reasonable opportunity to make submissions in relation to the Authority's proposed Decision, due to its adverse financial impact upon them.
15. Plainly the third and fourth plaintiffs, as the current owners of the freehold and/or business, were persons who would be seriously and adversely affected by the Decision if it were to reduce opening hours.
16. By email dated 10 September 2018, one of the administrative staff of the Authority wrote to the third and fourth plaintiffs to the effect that the issue was before a meeting on Wednesday and that it "would not be appropriate to remove it from consideration at Wednesday's meeting". That communication also required the third and fourth plaintiffs to make any submissions within 24 hours.
17. By email dated Tuesday, 11 September 2018, the third and fourth plaintiffs requested provision of the evidentiary material filed with the Authority in support of the Police application and further requested that they be given a reasonable opportunity to make additional submissions.
18. At its meeting on Wednesday, 12 September 2018, the Authority made the Decision and varied the opening hours of the Hotel, purportedly pursuant to s 51(9)(b) of the Liquor Act.
19. It is unnecessary for the Court to determine finally whether the Authority was required to give the third and fourth plaintiffs the reasonable opportunity to present submissions relating to their interest. Further, it is unnecessary for the Court to determine finally whether the provisions for notice under the Liquor Act is an exclusive code.
20. It is sufficient, for present purposes, to state that unless the statutory provisions expressly provide, or provide by necessary intendment, the rules of procedural fairness apply to every decision: Annetts v McCann (1990) 170 CLR 596; [1990] HCA 57.
21. As a consequence, the foregoing submission that the Decision is invalid by reason of a failure to accord natural justice is at least seriously triable and renders arguable that the third and fourth defendants have been denied natural justice and/or procedural fairness. Further, without expressing any opinion as to whether the plaintiffs have met the stringent test associated with legal unreasonableness, there is at least some material that establishes that, as earlier stated, the level of incidents that were occurring by the time that the Decision was made was no greater than the level of incidents that were occurring in other like Hotels in the environs.
22. Given the Court's conclusion as to the triable issue associated with the denial of procedural fairness and the conclusion as to the exceptional nature and/or balance of convenience associated with a refusal to grant a stay, a stay shall issue.
23. For the foregoing reasons, the Court issued a stay of proceedings in the terms announced, ex tempore, on 21 September 2018.

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: 14 May 2019