Royal Granville Hotel v Independent Liquor and Gaming Authority - [2022] NSWSC 1408 - NSWSC 2022 case summary — Zoe

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Royal Granville Hotel v Independent Liquor and Gaming Authority

[2022] NSWSC 1408

Supreme Court of NSW|2022-10-11|Before: Schmidt AJ

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2022-10-11

Before

Schmidt AJ

Catchwords

[1981] HCA 26 Mills v Meeking (1990) 169 CLR 214 [1990] HCA 6 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362

Source

Original judgment source is linked above.

Catchwords

[1981] HCA 26 Mills v Meeking (1990) 169 CLR 214 [1990] HCA 6 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362

Judgment (17 paragraphs)

[1]

JUDGMENT

The Royal Granville Hotel seeks judicial review of the Independent Liquor and Gaming Authority's 15 September 2021 refusal of its application under s 40 of the Gaming Machines Act 2001 (NSW) to have its gaming machine shutdown period reduced from 6 hours on weekends and public holidays. Grant of the application would have permitted the Hotel to operate its gaming machines from 10:00am Fridays to 6:00am Saturdays; 9:00am Saturdays to 6:00am on Sundays; 10:00am to midnight on Sundays; and 9:00am to 6:00am on public holidays.
The Authority accepted that the Hotel was a member of a local liquor accord whose Gaming Plan of Management would be adequate to address responsible gaming at its venue: s 40(3)(b). But it did not consider that the application fell within one of the circumstances provided for in cl 1 of the applicable Minister's Guidelines and so it was refused: s 40(3)(a).
Reasons for the decision were not given by the Authority until 11 March 2022, but there is no complaint about this, or the way in which the application was considered or determined. The Authority is a statutory corporation whose functions are regulated by the Gaming and Liquor Administration Act 2007 (NSW): s 6. By s 9, amongst other things, it is empowered to arrange for the use of the services of any staff or facilities of a Public Service agency or a public or local authority and to engage consultants it requires to exercise its functions.

[2]

[3]

The agreed facts

In order to resolve these issues, it is convenient to begin with the agreed facts. They were: "1. On 20 August 2020, the plaintiff lodged an application under s. 40(1) for a 3-hour shutdown period on weekends and public holidays (6am - 9am) (Ex AA-1, p 22). 2. On 6 June 2021, a briefing paper concerning the application was submitted to the Board of the defendant for consideration (Ex AA-1, p 22-34). The recommendation was that the application ought to be granted and for the plaintiff to be subject to the 3-hour shutdown period on Saturdays only (Ex AA-1, p 22). 3. On 16 June 2021, the defendant convened a board meeting where the application was considered (Ex AA-1, p 67-81). The defendant resolved to defer consideration of the application pending the outcome of a risk assessment (Ex AA-1, p 73). 4. On 12 July 2021, a briefing paper was submitted to the defendant regarding gaming machine shutdown variations and managing gambling related harm (Ex AA-1, p 37-48). The briefing recommended that the definition of "area" within the Guidelines include other hospitality or entertainment venues that are located within one kilometre of the venue, or within the same suburb, or SA2 (Ex AA-1, p 37). 5. On 14 July 2021, the defendant convened a board meeting where the application and the July briefing were considered (Ex AA-1, p 82-95). In respect of the July briefing, the defendant resolved to endorse the definition of "area" in the briefing when interpreting the Guidelines. In respect of the application, the defendant determined that it was not satisfied that cl 1.1 or 1.2 of the Guidelines had been met by the plaintiff. This was on the basis that: a. In respect of cl 1.1, only one tourist venue was within the relevant area the Valvoline Raceway but that had not been operating since April 2021; and b. In respect of cl 1.2, only one other hospitality and entertainment venue was open to 6:00am within the relevant area - the Vaxhaull Inn. 6. The defendant deferred consideration of the application to allow the plaintiff to provide evidence that it satisfied cl 1.3 of the Guidelines - ie, that it had a history of remaining open past 4:00am (Ex AA-1, p 88). 7. On 27 July 2021, the defendant invited the plaintiff to make submissions and provide evidence about the Hotel's historical trading hours and, on 25 August 2021, the plaintiff provided submissions to the defendant (Ex AA-1, p 35). The plaintiff was unable to produce evidence concerning the opening hours of the Hotel prior to 2 April 2002 because the current owners only purchased the Hotel in February 2020 (Ex AA-1, p 6). 8. On 15 September 2021, the defendant convened a board meeting where the application was considered (Ex AA-1, p 96-112). The defendant determined that the application did not satisfy the Guidelines and refused the application (Ex AA-1, p 108). 9. On 13 December 2021, the plaintiff commenced these proceedings and on 11 March 2022, the defendant filed a statement of reasons for the decision in accordance with orders made on 15 February 2022 (Ex AA-1, p 1-14)."
There was no issue about how the Authority had defined the area which had to be considered on the Hotel's application, or the process by which it considered the application.

[5]

The process

The application was made by a form entitled "change gaming machine shutdown period - weekends and public holidays". It did not refer to the 3-Hour Shutdown Guidelines issued by the Minister under s 40, but gave advice that: "Approval will only be given where: the licensed premises is located in an area that usually attracts tourists; or the licensed premises is located in an area where other hospitality and entertainment venues are open until 6.00AM on Saturdays or Sundays or public holidays; or before April 2002, the license premises remained open after 4.00AM on Saturdays, Sundays or public holidays. Also, approval will only be given where: the licensee has adopted and can demonstrate that all harm minimisation measures required by the Gaming Machines Act 2001, the Gaming Machines Regulation 2019, the Liquor Act 2007 and the Liquor Regulation 2018 have been implemented the licensee can demonstrate participation in the local liquor accord (if an accord is in place) the licensee can indicate that the licensed premises will usually be trading during the hours for which the approval is sought if the licensee is a club that earns more than $1 million annually from gaming machine revenue, the licensee can demonstrate participation in the ClubGrants Local Committee (if a committee is in place)."
The form did require answers to be given to questions which reflected cl 1 of the Minister's Guidelines. Applicants were also provided with Guidelines issued by the Authority in respect of such applications: Guideline 16 Late-night gaming applications. They also did not refer to the Ministerial Guidelines, but explained that they had been developed in response to an increase in such applications and had regard to the NSW Gambling Survey 2019, which had identified, amongst other things that: "a late-night gaming machine shutdown period is more likely to impact problem gamblers than moderate or low risk gamblers. More than half of problem gamblers would choose to go home following EGMs shutting down at a venue, rather than migrate to another venue".
The Authority's Guidelines also advised of its obligation to have "due regard to the need for gambling harm minimisation and the fostering of responsible conduct in relation to gambling" and the need for gambling harm minimisation to be considered for determining "what is or is not in the public interest". Further, that on applications under s 40, applicants had to satisfy the Authority that granting the application was in the public interest, having regard to the objects specified in s 3 of the Gaming Machines Act. Matters to which the Authority might have regard were disclosed and applicants advised that it would look more favourably on applications where a venue had implemented or proposed to implement strategies to prevent and reduce gambling harm beyond minimum legislative requirements. A fact sheet explaining the minimum requirements was also provided.
The form also contained a declaration by which applicants acknowledged that the Authority was collecting information to enable processing of the application.
At the relevant time the responsible Minister was the Minister for Customer Service and the information which the Authority obtained about the application, was provided by NSW Customer Service, which provided two briefing notes on the application, which made various recommendation to the Authority, both about the construction of the Ministerial Guidelines and the application.
Answers to the questions posed in the application form were provided by the Hotel by way of an attachment, which addressed the matters dealt with in the Minister's Guidelines. The Hotel also made submissions and corresponded with the Authority, about matters raised.

[6]

The Authority's reasons

In its reasons the Authority disclosed the material it had considered, outlined the legislative framework and quoted the Minister's Guideline 1, explaining at 10 that it did not consider that the Hotel's application fell within that guideline. It then observed that "While the Act does not necessarily mandate refusal in such a case, for the reasons outlined below the Authority does not consider it appropriate to exercise its discretion in s 40 of the Act to grant an approval."
The matters explained included matters which arose from the obligations imposed on the Authority by s 3 of the Gaming Machines Act.
The reasons then turned to the "Key Findings", where noted were the Hotel's submissions, material lodged with the application in relation to the Minister's Guideline 1 and correspondence from the Hotel in relation to the requirements of Guideline 1.3, in relation to its trading history before April 2002.
The Authority explained how it had construed the undefined term "area" used in the Minister's Guidelines 1.1 and 1.2, by reference to 2018 amendments to the legislative scheme: at 12. The Hotel took no issue with that approach, even though it had the result that some of the venues on which it had relied in its application were considered by the Authority not to be within the relevant area: at 13-14.
The result was that the Authority concluded that there were only four other licensed clubs and hotels within the relevant area, three of which were licensed to trade until 6 am on Saturdays and Sundays, but only one of which advertised as trading until 6 am on these days. That was the Vauxhall Inn. It was also the only venue licensed to operate under a reduced gaming shutdown period from 6 am to 9 am Saturday, Sunday and public holidays.
The Authority then turned to the construction of cl 1.2 of the Ministerial Guidelines, to which it will be necessary to return. It then dealt with the requirements of cll 1.1 and 1.3, about which no issue was finally taken by the Hotel in these proceedings. The Authority then turned to the requirements of the objects of the Act and the material before it relevant to them, both generally and in relation to gaming activities at the Hotel's premises: at 23.
The Authority explained that applicant's submissions on those matters and noted that: "The Authority considers that gaming venues should be supportive of harm minimisation initiatives in the interests of the well-being of their patrons. In relation to this Application, the Authority notes that: a. the Applicant is a member of the local liquor accord and does not have an adverse compliance history in gaming-related matters; b. the Authority has considered the GPOM provided for the Premises, which the Applicant proposed to implement should the Application be granted; c. the GPOM lists a number of gaming harm minimisation measures or strategies that have been fully implemented at the Premises to meet minimum legislative requirements; d. the Applicant also proposes to fully implement a further five foundational, six intermediate and three advanced strategies or measures above and beyond legislative requirements to prevent and reduce gambling harm, as identified in the Office of Responsible Gambling fact sheet titled "Going above and beyond. Responsible conduct of gambling for venues"; e. the Authority considers that in this case, if the Application were to be approved, the GPOM would, on balance, be adequate to address responsible gaming at the Premises. However, the Authority considers that, despite the acceptability of the GPOM, for the reasons given above it is not appropriate to exercise the Authority's discretion under section 40 to grant the application."
The Authority concluded at 25-27 that: "The Authority notes that the Premises is currently permitted to operate its gaming machines from 10:00 am until 4:00 am Monday to Saturday, and from 10:00 am to 12:00 am (midnight) on Sunday; and that nothing prevents the hotel from continuing to offer its non-gaming services to its members during gaming machine shutdown hours as provided by the Applicant's liquor licence XXXXX The Authority notes that while gaming venues may apply for approval of a varied or reduced gaming machine shutdown period under section 40, a reduced or varied gaming machine shutdown period is to be understood as an exemption. It is certainly not an automatic entitlement. In this instance, the Authority considers that the Application does not fall within the circumstances described in clause 1 of the Minister's Guidelines. The Authority does not consider it appropriate to exercise its discretion to approve the Application, despite the submissions made on behalf of the Applicant and the gambling harm mitigation measures proposed."

[8]

The statutory requirements

Section 40 of the Gaming Machines Act must be understood in the context of the objects of the legislative scheme, specified in s 3 of the Act, which also imposes express obligations relevant to both the making of the Ministerial Guidelines and the Authority's exercise of its functions. That includes determining applications such as that here in issue.
The section provides: (1) The objects of this Act are as follows - (a) to minimise harm associated with the misuse and abuse of gambling activities, (b) to foster responsible conduct in relation to gambling, (c) to facilitate the balanced development, in the public interest, of the gaming industry, (d) to ensure the integrity of the gaming industry, (e) to provide for an on-going reduction in the number of gaming machines in the State by means of the tradeable gaming machine entitlement scheme. (2) The Authority, the Minister, the Secretary, the Commissioner of Police and all other persons having functions under this Act are required to have due regard to the need for gambling harm minimisation and the fostering of responsible conduct in relation to gambling when exercising functions under this Act. (3) In particular, due regard is to be had to the need for gambling harm minimisation when considering for the purposes of this Act what is or is not in the public interest.
Section 39(1) of the Gaming Machines Act required hoteliers to ensure that each of their approved gaming machines kept on their premises were "not operated for the purpose of gambling between 4am and 10am on each day of the week", that being "the general 6-hour shutdown period". That obligation was subject to ss 40, 40A and 41 of the Gaming Machines Act.
Section 40(1) of the Gaming Machines Act empowered the Authority to approve an application for a 3-hour shutdown period. The section provided: (1) The Authority may, on application by a hotelier or club, approve of the hotel or the premises of the club having, with effect on and from 1 May 2003 or from any time after that date, a shutdown period of between 6 am and 9 am on each day that is a Saturday, Sunday or public holiday (the 3-hour shutdown period). (2) If the 3-hour shutdown period on a Saturday, Sunday or public holiday is approved for the time being in respect of a hotel or the premises of a club, the hotelier or club must ensure that each approved gaming machine that is kept in the hotel or on the premises of the club is not operated for the purposes of gambling between 6 am and 9 am on that day. Maximum penalty - 100 penalty units. (3) The Authority's approval of a hotel or club premises having the 3-hour shutdown period may be given only if - (a) the Authority has taken into consideration such guidelines as may be approved by the Minister for the purposes of this section, and (b) the Authority is satisfied that the hotelier or club has complied with such harm minimisation requirements as are prescribed by the regulations for the purposes of this section. (4) (Repealed)

[9]

The proper construction of the statutory scheme

Given the relevant provisions of this statutory scheme, as was the Authority's case, approval of a s 40 application does not depend solely on satisfaction of the requirements of the Ministerial Guideline.
Not only does s 40(3)(b) of the Gaming Machines Act require the Authority to be satisfied that the applicant has complied with the various harm minimisation requirements prescribed by the regulations for the purposes of the section, when exercising the s 40 function, the Authority must also adhere to the requirements of ss 3(2) and (3) of the Act. That is, to have due regard to the need for gambling harm minimisation and the fostering of responsible conduct in relation to gambling and in particular, to the need for gambling harm minimisation when considering, for the purposes of the Gaming Machines Act, what is or is not in the public interest.
It follows that the Authority has the power to refuse an application brought under s 40 by an applicant which had, for example, so failed to adhere to the conditions of its license and the requirements of the Act, that the Authority considers either that granting the application would be inconsistent with the need for gambling harm minimisation and the fostering of responsible conduct in relation to gambling, or that its grant would be contrary to the public interest, given the need for gambling harm minimisation.
Refusal of an application on either of those bases would not require or depend on consideration of the Guidelines. Compliance with them would in such a case be immaterial to the refusal of the application, whether or not it complied with the Guidelines.
But in this case the Authority had no such concerns, as it explained, and so it considered the requirements of the Guidelines in determining the Hotel's application, which had addressed the matters raised by the Authority's application form, which were directed to such matters.
That was the correct approach, given the statutory task which s 40(3)(a) necessarily required the Authority to undertake, there being no reason for it to refuse the Hotel's application arising as a result of the considerations flowing from either s 3 or s 40(3)(b) of the Gaming Machines Act. The latter, it will be remembered, is concerned with an applicant's compliance with applicable regulations.
In my view, s 40(3)(a) of the Gaming Machines Act simply does not envisage that an application which is not refused for reasons flowing from either of those provisions, could nevertheless be refused by the Authority without consideration of whether the applicable Ministerial Guidelines are satisfied.
That would require a reading of this statutory scheme, inconsistent with its plain words and its obvious statutory purpose.
As explained in SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362; [2017] HCA 34 at [14], s 40 must be construed by beginning with its text while, at the same time, having regard to its context and purpose. Context must be regarded at this first stage and not some later stage and in its widest sense. In this case that requires proper regard to be paid to the obligations imposed by ss 3(2) and (3) and the entirety of s 40 of the Gaming Machines Act.
In that context, the natural and ordinary meaning of all of the words used in ss 3 and 40, that is, how they are ordinarily understood in discourse, are also important to this process of construction.
Such considerations of context and purpose recognise that, understood in its statutory, historical or other context, some other meaning may be suggested by the words used in these statutory provisions and that if their ordinary meaning are not consistent with the statutory purpose, that meaning must be rejected.
But I am satisfied that the ordinary meaning of the words which have been used in ss 3 and 40 must result in a construction which permits the Authority to reject an application for reasons which flow from ss 3(2), (3) or 40(3)(b) of the Gaming Machines Act, without first giving consideration to the requirements of the Ministerial Guidelines. But if not so dismissed, the Guidelines must be considered when the Authority is determining whether to approve the application, even if the result of that consideration is refusal.

[11]

The proper construction of the Guidelines

The application which the Authority had to consider relied on cl 1.2 of the Ministerial Guideline. Guideline 1 provided: "Circumstances Under Which Authority Approval May Be Given Authority approval may be given if the Authority is satisfied that: 1.1 The venue falls within an area that usually attracts tourists; or 1.2 The venue falls within an area where other hospitality and entertainment venues are open to 6am on Saturdays or Sundays or public holidays; or 1.3 Prior to 2 April 2002, the venue had a history of remaining open past 4am on Saturdays or Sundays or public holidays."
There was no issue that like legislation, the Guidelines have to be construed to give effect to the "natural and ordinary" meaning of the undefined words used, in the context in which they appear: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26 at 305 (Gibbs CJ); Mills v Meeking (1990) 169 CLR 214; [1990] HCA 6 at 223 (Mason CJ and Toohey J).
The term "an area" used in Guidelines 1.1 and 1.2 was not defined in the Act or Guideline and so also takes its ordinary meaning. The Hotel takes no issue with the Authority's approach to the determination of what the relevant area was, which had regard to other aspects of the statutory scheme, or with the Authority's factual findings.
It found that "four other licensed hotels and clubs are located in the Applicant's suburb SA2, or within a one-kilometre radius of the Premises. Three of these venues are licensed to trade until 6:00 am on Saturdays and Sundays. Only one venue (Vauxhall Inn) advertised as actually trading until 6:00 am during this weekend period. Vauxhall Inn is also the only premises licensed to operate under a reduced gaming shutdown period from 6:00 am to 9:00 am on Saturdays, Sundays and public holidays": at 14.
The Hotel's case was that the Authority had, however, fallen into two relevant errors. The first, not accepting that the existence of the Vauxhall Inn within its area was sufficient to satisfy cl 1.2, given that it is a hospitality venue open to 6:00 am within that area. The second, failing to take necessary account of the fact that other venues within the area were licensed to trade up to that time.

[14]

The existence of only one other relevant venue is not sufficient to satisfy the requirements of the Guidelines

In the Second Reading Speech for the Gaming Machines Amendment (Shutdown Periods) Bill 2003, the Minister for Gaming and Racing explained the new requirement for a 6-hour per day shutdown of gaming machines, following a phasing in period when a 3-hour shutdown was introduced. While applications for a shorter shutdown were to be permitted to be made under guidelines to be developed in consultation with industry and community, it was expected that the 6-hour shutdown would apply for the vast majority of clubs and hotels.
The concern being addressed was there identified to be minimising the harm associated with problem gambling. Other measures being pursued to address that concern were explained, as well as ongoing research to help tackle the issue of problem gambling, which was to be pursued. This was reflected in the statutory objects and the Guidelines later developed by the Minister and the Authority.
Matters of that kind were referred to in the Authority's reasons, the information to which it paid regard coming from ongoing research conducted into gambling and the problems that it can result in, which the Authority explained.
I consider that the better view of the words used, is that the Minister intentionally used the plural "venues" in Guideline 1.2, when providing that approval for a shorter trading period could be granted to an applicant whose venue is within an area where other hospitality and entertainment venues are open to 6:00 am. Such venues are not ones which fall within Guideline 1.1. located in areas that attract tourists.
That the Minister did not envisage the Authority approving an application in other areas, where there is only one other venue operating on the basis the applicant seeks, is consistent with the concern of the statutory scheme to minimise the recognised harm associated with the misuse and abuse of gambling. The propensity for such harm is logically increased whenever the number of venues able to operate for longer periods per day in a particular area is increased.
While use of the plural in Guideline 1.2 is grammatical and could conceivably have been intended to include the singular, that the Minister could also easily have said that such approval could be granted if there was another venue in the area which was already open to that time, but did not, needs to be considered.
If the Guideline had simply said that approval could be granted if there was another venue in the area which was open to 6 am, there would have been no necessity to use the plural at all and this controversy could not have arisen. That would also not have required the use of the phrase "one or more venues", as the Hotel also submitted could have been used, if the plural had been intended.
Instead the plural was used in the phrase "other hospitality and entertainment venues". A particular venue may be one or the other, or both. That the word "venues" must be pluralised to be grammatically correct, irrespective of whether it comprehends only the plural or both the singular and the plural and that it would not make any sense to say, "the venue falls within an area where other hospitality and entertainment venue are open to 6 am…" , I do not consider properly leads to the conclusion for which the Hotel contended, given this statutory scheme.
Not permitting approval of applications when there is only one other venue operating for longer hours in the applicant's area, is also consistent with a consideration of fostering responsible conduct in relation to gambling and facilitating the balanced development, in the public interest, of the gaming industry. There is no public interest in the development of the gaming interest in a way that encourages problem gambling.
To the contrary, it is consistent with the legislative history and the objects and obligations specified in s 3 of the Gaming Machines Act, that cl 1.2 does not envisage the introduction of a second venue permitted to operate with a shorter shutdown period, when only one other venue is already operating during such hours in the area. That explains why the Guideline does not refer to the presence of "another venue", but "other venues".
Permitting a second venue would then provide a platform for even more applications. That does not appear to be consistent with the balanced development, in the public interest, of the gaming industry, or harm minimisation, if there is presently either no, or only one venue operating on that basis.
The result of the approach for which the Hotel contended would be to permit problem gamblers moving to another venue or venues permitted to operate longer, late at night, rather than going home, when those venues which were not permitted so to trade had to cease that aspect of their operations.
The possibility of the Authority approving a further application when more than one other venue was already able to trade longer is, as the Authority submitted, consistent with a recognition that in such areas it is likely that there are people other than problem gamblers socialising. That this does not heighten significantly the risk that grant of the application would increase harm to problem gamblers may be debatable, but provides an explanation for the use of the plural in the Guideline, rather than the singular.
In the result I am satisfied that the construction to the Guidelines for which the Hotel urges is not open on the words used, a contrary intention to the plural used in Guideline 1.2 including the singular, being evinced in the Guidelines.

[15]

What does the term "open to 6am on Saturdays or Sundays or public holidays" mean?

Relevant to the resolution of the issue as to the meaning of the There was no issue that under this statutory scheme, while venues may be licensed to operate at particular times, they are not required to operate at all those times. That is a matter for them. Decisions about when to operate are impacted no doubt by many commercial considerations which arise from time to time, including profitability and availability of staff, as will decisions about what opening times are conveyed to the public.
The effect of the Hotel's case, that "open to" the specified times means permitted to open, is that the word 'open" means "licensed", which it was submitted "should be the yardstick for the purposes of" cl 1.2. Further, that it was also relevant that it was not necessary for a venue to hold out to the public that it was open until the specified time.
I am satisfied that this also cannot be accepted.
Being licensed to trade is not part of the ordinary meaning of the word "open", even understood as it must be in the context of this statutory scheme. It rather connotes when a particular venue is actually trading.
I am thus not satisfied that the Authority misconstrued the Guideline, concerned as it is with when other venues are open, rather than with when they are permitted to be open, if they wish to be.
Proof of when venues in the area were open could obviously be obtained in various ways.
In its application the Hotel only relied on licensing, but the Authority looked to when other venues advertised their opening hours. That provides some evidence of when a venue at least intended at the time of advertising to be open. The Hotel did not suggest that actual opening hours differed, although of course they conceivably could have, consistent with licensing restrictions not requiring venues to be open at all times that they are licensed to operate their gaming machines.
In the result the Hotel also did not establish this error of construction on which its case also depended.

Royal Granville Hotel v Independent Liquor and Gaming Authority

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (17 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (6)

Cited By (1)