Stuart v O'Connor as Acting Deputy Secretary of the Department of Justice and State of New South Wales

The statutory scheme

1. Section 3 of the Act provides as follows "(1) The objects of this Act are as follows: (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."
2. "Licensed premises" is defined in s 4 of the Act to mean "the premises to which a licence relates and "Secretary" is defined as the "Secretary of the Department of Trade and Investment, Regional Infrastructure and Services".
3. Section 54 of the Act grants a general power to the Secretary to impose, vary or revoke conditions on a licence. It, relevantly, provides as follows: "(1) Without limiting the power of the Secretary to impose conditions on a licence under any other provision of this Act, the Secretary may impose conditions on a licence for such reasons, or in such circumstances, as the Secretary considers necessary or appropriate. (1AA) The Secretary may, on application by the licensee, impose conditions of the kind imposed on a licence under section 116A or 116I in respect of a licence relating to premises in the Kings Cross precinct or a prescribed precinct, respectively. Subsection (3) does not apply to such an application. (1A) The conditions that may be imposed by the Secretary on a licence include, but are not limited to, conditions: (a) prohibiting the sale or supply of liquor on the licensed premises before 10 am or after 11 pm (or both), and (b) restricting the trading hours of, and public access to, the licensed premises. (2) The Secretary may, on application by the licensee or the Commissioner of Police or on the Secretary's own initiative: (a) vary or revoke a licence condition that has been imposed by the Secretary under this section or any other provision of this Act, or (b) vary or revoke a licence condition: (i) relating to the trading hours of any licensed premises, or (ii) relating to licensed premises situated wholly or partly in the precinct to which a precinct liquor accord applies or in an area to which a community event liquor accord applies, or (iii) relating to licensed premises situated wholly or partly in the Kings Cross precinct or a prescribed precinct, that has been imposed (or taken to have been imposed) by the Authority."
4. Part 6, Division 4 of the Act sets out the relevant provisions pertaining to "prescribed precincts". Contained within that Division are ss 116B - 116I. Section 116B(2) is in the following terms: "(1) In this Division: high risk venue - see subsection (2). long-term banning order means an order under section 116G. prescribed precinct means a precinct prescribed by the regulations under section 116C. relevant licensed premises means any licensed premises situated in a prescribed precinct or precinct adjacent to a prescribed precinct, but does not include a licensed restaurant that is not authorised to trade after midnight on any day of the week unless it is a high risk venue. temporary banning order means an order under section 116F. (2) A high risk venue is a venue situated in a prescribed precinct comprising: (a) licensed premises: (i) on which liquor may be sold for consumption on the premises, and (ii) that are authorised to trade after midnight at least once a week on a regular basis, and (iii) that have a patron capacity (as determined by the Secretary) of more than 120 patrons, or (b) licensed premises specified by, or of a class specified by, the regulations, or (c) licensed premises that are designated by the Secretary under subsection (4). (3) The regulations may create exceptions to subsection (2) (a). (4) The Secretary may, with the concurrence of the Commissioner of Police, designate any specified licensed premises (or licensed premises of a specified class) in a prescribed precinct as a high risk venue if the Secretary is satisfied that there is a significant degree of alcohol-related violence or other anti-social behaviour associated with the premises. (5) The designation of licensed premises as a high risk venue is to be made by order in writing given to the licensee. Any such order takes effect on the date specified in the order (being a date that is not earlier than 6 weeks from the date the order is given)."
5. Section 36A of the Gaming and Liquor Administration Act 2007 (NSW) provides that a decision of the Secretary to designate licensed premises as a high risk venue under s 116B(4) of the Act is reviewable by the Independent Liquor and Gaming Authority ("ILGA").
6. Section 116C(1) of the Act provides that the regulations may declare an area described in the regulations to be a "prescribed precinct" for the purposes of the Act. Section 116D provides for a "prescribed precinct ID scanner system" and s 116E provides that the licence for a high risk venue is subject to certain conditions including "ID scanning." Section 116F provides a police officer with the power to issue "temporary banning orders" and s 116G provides the Authority power to issue a "long term banning order" not exceeding 12 months. Section 116H(1) provides that a person subject of a long-term banning order may apply to the Civil and Administrative Tribunal for administrative review.
7. Section 116I is the only remaining section of the Division. That section of the Act is of particular relevance in this determination. It is in the following terms: "(1) The regulations may prescribe conditions to which a licence relating to premises situated in a prescribed precinct is subject. (2) Without limiting the matters to which any such conditions may relate, the conditions prescribed by the regulations under this section may: (a) prohibit or restrict the use of glass or other breakable containers on the licensed premises, or (b) prohibit or restrict the sale or supply of certain types of liquor on the licensed premises (including liquor with a high alcohol content or liquor that is intended to be consumed rapidly such as a shot), or (c) prohibit or restrict the sale or supply of liquor on the licensed premises in certain circumstances or at certain times (including in circumstances or at times otherwise permitted by or under this Act), or (d) prohibit patrons from entering the licensed premises at certain times, or (e) require the implementation of security or public safety measures in respect of the licensed premises, or (f) require incident registers to be kept, or (g) require the exclusion from licensed premises of persons of a specified class (including persons who are wearing any clothing or article displaying the name of, or other matter associated with, a particular organisation), or (h) require the licensee of any premises situated in the prescribed precinct to contribute towards the costs associated with measures to minimise or prevent alcohol-related violence or anti-social behaviour or other alcohol-related harm in the precinct, or (i) require the appointment of a person, as approved by the Secretary, who is to be present in a high risk venue during such periods, or in such circumstances, as may be specified or determined by the regulations (an approved manager), or (j) require records to be kept of the times when an approved manager is present in a high risk venue, or (k) require records to be kept of the amount of liquor sold or supplied on the licensed premises and require the production of such information. (3) The conditions that may be prescribed by the regulations under this section may, without limitation, apply to a specified class of licensed premises or to specified licensed premises. (4) The regulations may authorise the Secretary to exempt the licensee of any premises situated in a prescribed precinct from any of the conditions prescribed by the regulations under this section. The regulations may also provide that any such exemption is subject to conditions specified in the exemption. (5) In approving a person to be present in a high risk venue as required by licence conditions imposed by the regulations under subsection (2) (i), the Secretary must, after obtaining the consent of the person concerned, conduct a criminal record check in relation to the person and be satisfied that the person has the experience and capacity to have responsibility for the high risk venue during the relevant periods. It is the duty of the Commissioner of Police to assist in any such criminal record check. (6) Any conditions prescribed by the regulations under this section are in addition to any other conditions to which a licence relating to premises in the prescribed precinct may be subject. (7) Regulations may be made under this section regardless of whether any licensee who is likely to be affected by the regulation has been given an opportunity to make submissions in relation to the proposed regulation." [emphasis added]
8. Section 159(1) of the Act is in the following terms: "The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act."
9. Turning to the Regulation, cl 3 defines the "liquor sales cessation period" as meaning "the period on any day of the week between 3am and the commencement of the standard trading period referred to in s 12(1)(a)(i) of the Act." That clause also defines the "lock out period" as meaning "the period on any day of the week between 1:30 am and the commencement of the standard trading period referred to in s 12(1)(a)(i) of the Act." The standard trading period as defined in s 12(1)(a)(i) is 5am.
10. The phrase "tourist accommodation establishment" ("TAE") is defined in cl 3 of the Regulation as follows: "(a) premises operating under an on-premises, hotel or club licence that relates to accommodation premises, and (b) that provides accommodation in at least 20 rooms or self-contained suites (other than accommodation on a bed or dormitory-style basis rather than in separate rooms), and (c) that provides beverages, meals and other associated services to temporary residents and their guests, but does not include any tourist accommodation establishment bar area on the premises that permits entry or exit (including by way of a vestibule) directly to a public street."
11. The phrase "tourist accommodation establishment bar area", is then defined in cl 3 as follows: "in relation to a tourist accommodation establishment, means any part of the establishment in which liquor is ordinarily sold or supplied for consumption in the establishment, but does not include: (a) a dining area in the establishment, or (b) any part of the establishment in which liquor is, otherwise than as authorised under section 17 (6) of the Act, sold or supplied exclusively to residents."
12. There is no definition of "Secretary" in the Regulation.
13. Part 5B of the Regulation pertains to "prescribed precincts". Clause 53V provides that the "Sydney CBD entertainment precinct" is declared to be a prescribed precinct for the purposes of the act. That clause commenced on 24 February 2014. A plan is set out in Schedule 1A to the Regulation indicating the area defined as the "Sydney CBD entertainment precinct". There was no dispute in the proceedings that the Coronation Hotel is situated within that area.
14. Clause 53X of the Regulation confers a power on the Secretary, by order published in the Gazette, to apply any provision of the Division to subject premises specified in the order subject to conditions set out in cl 53X(5). Clause 53X is in the following terms: "(1) This Division prescribes, for the purposes of section 116I of the Act, conditions to which a licence relating to premises situated in the Sydney CBD Entertainment precinct is subject. Any such premises are referred to in this Division as CBD subject premises. (2) This Division applies to CBD subject premises only if liquor is authorised to be sold for consumption on the premises. However, clauses 53ZC, 53ZE and 53ZF apply in relation to all CBD subject premises. (3) This Division does not apply to or in respect of the sale or supply of liquor to a resident of CBD subject premises that is a tourist accommodation establishment if liquor is sold or supplied for consumption only in the room in which the resident is residing or staying. (4) Despite any other provision of this Division, the Secretary may, by order published in the Gazette, apply any provision of this Division prescribing a condition to, or exclude the application of any such provision to, subject premises specified in the order. (5) An order under sub clause (4) may be made only if the Secretary is satisfied that: (a) in the case of an order applying a provision to subject premises - the order is necessary to reduce the risk of alcohol-related violence or anti-social behaviour in or about the premises, and (b) in the case of an order excluding the application of a provision to CBD subject premises - there is a negligible risk of alcohol-related violence in or about the premises or that a condition other than the specified provision will be more effective in reducing such a risk."
15. The two clauses of the Regulation the validity of which is challenged by the plaintiff in these proceedings are cls 53Y(1)(d) and 53Z(1)(d). Clause 53Y is in these terms: "(1) In this clause: CBD subject premises means the following CBD subject premises: (a) premises (other than a tourist accommodation establishment) to which a hotel licence (including a general bar licence) applies, (b) premises (other than a tourist accommodation establishment) to which a club licence applies, (c) premises to which an on-premises licence relating to a public entertainment venue (other than a cinema or theatre) or karaoke bar applies, (d) on and from 15 March 2014 - so much of a high risk venue (within the meaning of section 116B of the Act) as is declared by the Secretary by an order in writing to be CBD subject premises for the purposes of this clause, (e) declared premises to which a level 2 licence (within the meaning of Schedule 4 to the Act) relates. (2) The licensee of any CBD subject premises must not permit patrons to enter the premises during the lock out period. (3) For the avoidance of doubt, patrons already present in the CBD subject premises immediately before the start of the lock out period may: (a) leave the premises at any time, or (b) remain on the premises while the premises are authorised to trade, but are not permitted to re-enter the premises during the lock out period. (4) This clause does not prevent a resident of the CBD subject premises from entering the premises during the lock out period. (5) This clause does not require the licensee of CBD subject premises to prevent patrons from entering the premises on 1 January in any year." [emphasis added]
16. Clause 53Z is in the following terms. 1) In this clause: CBD subject premises means the following CBD subject premises: (a) premises (other than a tourist accommodation establishment) to which a hotel licence (including a general bar licence) applies, (b) premises (other than a tourist accommodation establishment) to which a club licence applies, (c) premises to which an on-premises licence relating to a public entertainment venue (other than a cinema or theatre) or karaoke bar applies, (d) on and from 15 March 2014 - so much of a high risk venue (within the meaning of section 116B of the Act) as is declared by the Secretary by an order in writing to be CBD subject premises for the purposes of this clause, (e) declared premises to which a level 1 or level 2 licence (within the meaning of Schedule 4 to the Act) relates. (2) Liquor must not be sold or supplied on the CBD subject premises in the liquor sales cessation period. (3) Sub-clause (2) does not in itself prevent the continued provision, or making available, of other services and facilities on the CBD subject premises (such as food and non-alcoholic beverages, entertainment and the use of the premises for conferences or meetings and for gambling activities that are otherwise permitted on the premises). (4) Despite section 103 (1) of the Act, a bar area or other part of a hotel referred to in that subsection may remain open for the sale and supply of non-alcoholic beverages, or food, only during the period when liquor is not permitted to be sold or supplied under this clause. [emphasis added]

Factual background

1. At the hearing of the application an affidavit of Jonathan Carrick Martin affirmed 28 July 2016, with exhibits, and two affidavits of Gary Ronald Gillespie sworn 2 August 2016 and 11 August 2016, the former with exhibits, were read. The evidence disclosed the following.
2. The Coronation Hotel is a licensed hotel within the "Sydney CBD entertainment precinct" as defined in the Regulation. It is a "high risk venue" because it falls within the definition in s 116B(2)(a) and for that reason it appears in Schedule 1B to the Regulation.
3. The particular area of the Coronation Hotel to which this matter relates is the "Smoking Panda Bar", formerly called the "Mezz Bar". The Smoking Panda Bar is located on level one of the Hotel and may only be accessed via a private lift or stairway; it does not open directly onto a public street. The licensed premises on the ground floor open directly onto Park Street and are subject to the lockout laws.
4. In the course of the hearing I was taken to photographs of portions of the interior of the Coronation Hotel in Exhibit JCM-1 of the affidavit of Jonathan Carrick Martin affirmed 28 July 2016. Two photographs show signs advertising the opening hours of the Smoking Panda Bar on each day of the week. On Thursday, Friday and Saturday, the closing time is advertised as 5am. A third photograph shows a red-carpeted staircase leading up to the Smoking Panda Bar on level one. The opening hours sign is visible next to the staircase.
5. On 11 February 2014, shortly before the enactment of the amending legislation on 24 February 2014, the plaintiff wrote to the then Acting Executive Director of the OLGR. The letter sought to confirm that the Coronation Hotel is a TAE as defined in cl 3 of the Regulation (set out above at [16]). The only area of the Hotel in respect of which the TAE exemption from the new statutory requirements was claimed was a bar and dining room area on level one, which was said predominantly to service temporary residents. The letter confirmed that the bar area on level one does not permit entry or exit directly to the public street and must be accessed either by a private lift in the hotel or by negotiating to staircases and separate landings. The letter concluded with these words: "On 24 February 2014 we intend to rely on the fact that our level one bar area and dining room is [sic] exempt from both the 1:30 am lockout and the prohibition on sale and supply of liquor after 3 am. If you do not agree that we are able to operate in this way, we would be grateful if you could contact us as soon as possible and, in any event before 24 February 2014, so there is no misunderstanding or disturbance when the new rules commence."
6. On 13 June 2014 Inspector Peter Vromans, Duty Officer - Systems and Licensing, Sydney City LAC, wrote to Mr Gary Gillespie, who is the owner of the Coronation Hotel, by email and indicated the following: "Just confirming our meeting in discussions regarding the operation of the Mezz Bar. I agree the Mezz Bar bar [sic] appears to meet the definition of a tourist accommodation establishment and therefore is exempt from the lockout and cease service provisions of the 2014 liquor amendments. In my view to keep up with the intent of the legislation the Mezz Bar needs to be available to and patronised by hotel accommodation guests. If the situation develops whereby the Mezz Bar is not patronised by hotel accommodation guests or is used for functions which exclude hotel guests (eg. exclusive booking to say a bucks night or hens night) I will need to consider an application to have the bar declared "CBD subject premises" which, if granted, would make the Mezz Bar subject to lockouts and cease service requirements. Similarly if unacceptable levels of violence or antisocial behaviour are attributed to the Mezz Bar, similar recourse may be considered. For this reason I would encourage caution regarding the nature of any events promoted and caution regarding patrons admitted to the Mezz bar between 1:30 am and 5 am."
7. I interpolate here that the above letter records the attitude of police at that time concerning the Smoking Panda Bar. That attitude was that so long as the bar "was available to and patronised by" guests, was not used for functions which excluded hotel guests, and did not become subject to unacceptable levels of alcohol related violence or antisocial behaviour then it would not attract the application of the lockout laws.
8. Following receipt of the above letter, Mr Gillespie wrote to the Acting Director of Compliance, Mr Anthony Keon at the OLGR 26 June 2014. That letter was, relevantly, in the following terms: "I thought it would be prudent to let you know that, like OLGR, the police have now acknowledged that the Mezz Bar of Hotel Coronation is exempt from the lockout and 3am cease service of alcohol provided access to the Mezz Bar after 1:30am is restricted to the lobby. Whilst we could have opened earlier, we wanted to make sure we had the support of the regulators before proceeding. Now that we have reached that point, we intend to operate the Mezz Bar as exempt on and from tonight."
9. The next communication received by the plaintiff from the OLGR was nearly 18 months later on 3 November 2015. On that date, Mr Keon sent the plaintiff a further letter that included the following: "It would appear that you are artificially creating an alternate access to the first floor bar in an attempt to circumvent the operation of clauses 53Y and 53Z in this area. This was recently observed during a covert audit by inspectors from this Office who gained access to the "Smoking Panda Bar" on Sunday 18 October 2015 after the 1.30am lockout period. The same inspectors observed patrons purchasing alcoholic beverages after the 3am liquor sales cessation period. In addition, inspector observations concluded that the Smoking Panda Bar was operating to service the needs of the general public, and not patrons using the accommodation facilities of the hotel."
10. The letter went on to state: "While it could be argued that operation of the Smoking Panda Bar continues to meet the definition of a tourist establishment bar area, in order to remove any doubt, I am proposing to declare, by order in writing under clauses 53Y(d) and 53Z(d), that this area is subject to the requirements of clauses 53Y and 53Z of the Regulation. I note that the hotel is listed as a high risk venue in Schedule 1B of the Regulation. In this respect, I have formed the preliminary view that the current operation of the Smoking Panda Bar, in allowing the general public to access the venue after 1.30 am and continue to serve liquor after 3.00am, by closing off the direct access to the bar and creating an alternate ingress mechanism, is inconsistent with the spirit and intent of requirements that apply to Tourist Accommodation Establishments and the Objects of the Act."
11. The letter went on to invite submissions within 14 days of the date of the letter. Attached to the letter was a typed file note made by the covert inspectors on 18 October 2015. The lengthy file note is extracted in parts as follows: "At about 1:35 am on 18 October 2015, inspectors Robinson and Player positioned themselves on the footpath outside the Coronation Hotel, located on Park Street in Sydney, and commenced covert observations in relation to persons entering and exiting the hotel. The main entrance to the hotel appeared to be complying with the lockout provisions. Two security guards were positioned at the front on Park Street noticeably turning persons away. On a number of occasions persons were observed to approach security and engage in some sort of conversation before being escorted to a side entry, which is also on Park Street approximately 5m east of the main entrance. Inspectors observed the security guard swipe an object against the door and open it. Persons were then seen to enter the premises. At 1:46 am inspectors Robinson and Player approached to security guard at the main bar entrance and engaged in the following conversation: Robinson said, "Hello mate, can we go upstairs?" Security said, "Where have you come from?"" Robinson said, "I just finished work" Security said, "Where?" Robinson said, "I am a glassy at [named bar]" Security said, "Where?" Robertson said, "The [named bar]". Security said, "Okay"."
12. The note goes on to describe inspectors Robinson and Players being allowed entry into the Coronation Hotel by a security guard and then walking down a narrow corridor. There is a lift at the end of the corridor that appears to be for hotel guests and to the right of the lift there is a set of stairs leading to the first floor.
13. The file note states that, at the top of the stairs on the first floor, there is door with a sign reading "Smoking Panda Bar". The inspectors entered the bar. They observed approximately 50 patrons, five bar staff and one security guard. The patrons were mostly well-dressed and aged in their twenties and thirties. Inspectors Robinson and Player attempted to purchase a whiskey on the rocks and a double whiskey and coke. Bar staff refused to serve the drinks on the basis that it was unlawful to serve such drinks in the CBD entertainment precinct.
14. Inspectors Robinson and Player then entered the smoking room of the bar and spoke to four patrons who identified themselves as employees of an establishment in Darling Harbour. Their conversation was extracted as follows: "Robinson said, "Hello mate, would you have a light?" Male said, "Sure" Robinson said, "Thanks mate, I'm Anthony and this is Laura." Male said, "You guys out for the night?" Robinson, "Yeah out for a few drinks after work. Are you guys staying upstairs?" Male said, "Didn't even know you could stay here. Where do you guys work?" Robinson said, "I am a cleaner." Player said, "I am a hairdresser." Male said, "My dad was a cleaner." Robinson said, "What about you?" Male said, "We just finished work, you know [named bar]." … Robinson said, "So are you out for the night?" Male said, "Yeah we come here after work quite a bit." Robinson, "Is that right, why here?" Male said, "It's the only place in the city that will let us in." Robinson said, "What do you mean?" Male said, "Because of the lock outs you know, they let us in here when we finish work." …"
15. The note then states that the inspectors determined that the intoxication level of patrons at the Smoking Panda Bar was "at the lower end of the scale". They left the premises at approximately at 2:15am. They returned to the premises at 2:50am and were again allowed access to the Smoking Panda Bar. There were more patrons in the bar than at the time of the first inspection. Again, most of the patrons were well-dressed and aged in their twenties and thirties. There did not appear to be any dancing. The inspectors observed alcoholic beverages being prepared and served after 3am.
16. Following receipt of the letter extracted at [31]-[32] and attached file note, the plaintiff's solicitor wrote to the OGLR on 24 November 2015. The letter contains various annexures and comprised nearly 60 pages in total. Annexed to the letter and labelled Appendix 1 was a detailed summary of all relevant correspondence between the plaintiff and the OGLR and police pertaining to the operation of the Smoking Panda Bar. It is not necessary to set out that material in detail; suffice it to say that the history of the correspondence shows that the operation of the bar was approved and that there had been no adverse reports in relation to it concerning alcohol-related violence or antisocial behaviour.
17. I note that on 1 February 2016, Liquor & Gaming NSW ("L&GNSW") replaced the OLGR. L&GNSW forms part of the Department of Justice.
18. On 31 March 2016 Samantha Torres, Acting Executive Director of L&GNSW, wrote to the plaintiff's solicitor indicating that his response of 24 November 2015 had been considered, but that it was nevertheless proposed that the Smoking Panda Bar would be made subject to the lockout and cease trading provisions contained in cls 53Y and 53Z of the Regulation. A draft copy of the final decision bearing Ms Torres' name as the author but unsigned by her was attached to the letter. The plaintiff was given the opportunity to make further submissions within 21 days.
19. On 20 April 2016, the plaintiff's solicitor replied to the above letter and submitted, inter alia, that if the proposed declaration were made the plaintiff would commence proceedings in the Supreme Court challenging any such declaration on the basis that it was made without power. Again, it is unnecessary to set out the submissions contained therein in detail; suffice it to say that they reflect the submissions made in this Court concerning the invalidity of the relevant clauses.
20. On 19 July 2016, the first defendant wrote to the plaintiff's solicitor informing him that the first defendant had decided to declare the Smoking Panda Bar subject to cls 53Y and 53Z of the Regulation. He attached signed reasons for decision. Those reasons were largely the same as those that were sent to the plaintiff in draft form under the hand of Ms Torres.

The reasons of the first defendant

1. The reasons of the first defendant for the decision to declare the Smoking Panda Bar as subject to the lockout laws are dated 19 July 2016. The decision is said to be made under cls 53Y and 53Z of the Regulation.
2. After setting out the relevant sections of the Act and Regulation, the reasons detail the factual circumstances. Paragraphs [10]-[14] are in the following terms: "[10] The Coronation Hotel (the Hotel) is a hotel licence and is a 'high risk venue' for the purpose of the Act, although it has not been declared in part or in its entirety to be subject to the lock out or cease service conditions. Ordinarily, a hotel would be subject to the lock out and cease service conditions, however the licensee of the Hotel asserts that it meets the requirements of a TAE and, therefore, is not subject to the cease service and lockout conditions in certain parts of the Hotel. [11] The Hotel comprises of a public bar and gaming room on the ground floor which is accessible directly from Park Street Sydney; a bar and dining room on level 1 (now known as the Smoking Panda Bar); and 21 accommodation rooms. [12] From February 2014 (when the legislation was being implemented to June 2014), various correspondence was exchanged between the licensee and L&GNSW around the issue of the application of the TAE provisions to the area now known as the Smoking Panda Bar. [13] On 18 October 2015, inspectors from L&GNSW attended the venue to conduct covert observations as part of a review of the hotel's operations. During the observations, inspectors observed that the Smoking Panda Bar appeared to be operating in a way that was not consistent with a TAE venue and appeared to be marketed, positioned and operated as a late night bar open to the general public. [14] On 3 November 2015, the Director Compliance & Enforcement wrote to the licensee proposing to declare the Smoking Panda Bar area as being subject to clauses 53Y and 53Z of the Liquor Regulation 2008. This was a result of a review of the Hotel's operations which raised concerns that the operation of the Smoking Panda Bar was effectively subverting the lock out and cease service conditions and was not operating as a genuine TAE exemption."
3. The reasons then make reference to the submissions made on behalf of the licensee, including acknowledging their submission that sub-cls 53Y(1)(d) and 53Z(1)(d) are void. The reasons go on to set out the first defendant's consideration and findings, including the following: "[20] The discretion to declare a 'high risk' venue as a CBD subject premises and subject to the lock out or cease service conditions is not narrowed by the legislation other than to qualify that it must be by order in writing. There is not a qualifying statutory threshold test and the Secretary's discretion is not fettered or dependent on the existence of actual harm to demonstrate that venue is high risk as is asserted by the licensee. [21] The legislation itself recognises the venue as 'high risk' and the Secretary's decision need only focus on declaring which parts of the venue should be subject to the lock out and cease service conditions. In considering whether to exercise his power, the delegate must have consideration of the Objects of the Act, but there is no requirement that a risk needs to have manifested in actual harm." [22] In the absence of an expressly stated statutory test, it is necessary to have regard to the objects of the Act to more fully inform an assessment on whether an order should be made. Section 3 (1) of the Act requires the regulation and control of the sale, supply and consumption of liquor to be consistent with the expectations, needs and aspirations of the community. This must be balanced with the objective 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. [23] It is appropriate in the circumstances to consider the broader precinct and the importance of the successful operation of the lock out and cease service conditions in general. Any 'work around' or subversion which weakens or undermines the intended effect of the cease service or lock out conditions impinges on the overall effectiveness of the precinct conditions. [24] It is evident from the inspector's observations that the Smoking Panda bar is not a typical TAE where accommodation guests enjoy a drink in an accommodation venue bar which is clearly part of the broader accommodation establishment. The Smoking Panda Bar is quite evidently set up as a distinct area that resembles a nightclub style bar and is marketed to the general public as a late trading bar, rather than a bar within an accommodation venue."
4. The reasons go on to provide a comment on how effective the lockout and cease service provisions have been and to note the high rates of compliance before stating: "[25] … There are specific exemption provisions which provide a mechanism for carefully considered exemptions to be approved, in the context of a consideration of the potential harm which may arise within the precinct should the application be granted. I consider that it is necessary to take appropriate action to protect from any subversion of conditions that should otherwise apply to the operation of the licensed premises within the CBD precinct. [26] Further, notwithstanding that there is no requirement that an actual risk be present to enliven the power to make an order declaring a venue subject to clause 53Y or 53Z, I consider that the mode of operation of the Smoking Panda Bar poses a significant risk of an increase in alcohol-related harm and anti-social behaviour within the precinct."
5. The reasons describe the physical layout of the bar and to observe that it is the only bar in the precinct with an offer of alcohol past 3am. The second defendant then notes that there is a risk of violence and antisocial behaviour due to the potential for patrons to migrate there in varying states of intoxication. The reasons then conclude: "[29] The fact that the venue is accessible, and targeted to, the general public during the lockout period creates an unacceptable risk of alcohol-related violence, antisocial behaviour and other alcohol-related harm within the Sydney CBD precinct. While I note the representations from the licensee that the venue is well run and does not have a history of violence, I am not persuaded that the risks identified above do not exist or that appropriate measures are in place at the venue to deal with these risks. [30] While the licensee's submission argues that the current operation of the venue is lawful and has been approved by L&GNSW in various correspondence (by virtue of the fact that no objections had been made to the ongoing operation of the venue until these considerations commenced) I do not accept that this a reason to not act."
6. The area specified in the instrument was "the area comprising of a bar and dining room on level 1 of the Coronation Hotel - LIQH400101465 currently known as the "Smoking Panda Bar." The declaration was expressed to take effect 28 days from the date of the decision, which was 16 August 2016. In circumstances where the Court had no power to grant a stay of that declaration given the nature of the relief sought, the Smoking Panda Bar has been subject to the lockout laws since 16 August 2016.
7. It is to be noted that, despite having been put on notice by the plaintiff that the validity of the relevant clauses was challenged, the first defendant did not address this argument at all in his reasons. The only reference to the submission in the reasons was to acknowledge that it had been made.
8. It is further noted that the material before the first defendant in making his decision in this matter shows that there was no evidence of any alcohol-related violence or antisocial behaviour on the premises. There was no evidence that the Smoking Panda Bar was not being made available to temporary residents at the Hotel. There was no evidence that persons were able to access the bar directly from the street. It was not in dispute that as at 13 June 2014 both the police and the then OLGR agreed that the Smoking Panda Bar could continue to operate after the lockout laws commenced on terms that included serving members of the public. Nothing in the correspondence indicates that there was any condition stipulated by either police or the OLGR that the bar could only permissibly service residents of the Hotel's accommodation facilities.

Grounds of review

1. The declarations sought in the Summons are in the following terms: "RELIEF CLAIMED (1) A declaration that the decision of the first defendant, in his capacity as delegate of the Secretary of the Department of Justice, determining that it was appropriate to declare the "Smoking Panda Bar" area of the Coronation Hotel to be specified premises the purposes of s 53Y and s 53Z [sic] of the Liquor Regulation 2008 was void or otherwise of no legal effect because:- (a) The said determinations purported to be made pursuant to 53Y(1)(d) and 53Z(1)(d) respectively of the Liquor Regulation 2008; (b) Each of 53Y(1)(d) and 53Y(1)(d) purport by their terms to confer upon the Secretary of the Department of Justice a power to declare by order in writing so much of a high risk venue within the CBD precinct to be CBD subject premises for the purposes of Clauses 53Y and 53Z respectively; (c) The imposition of conditions upon licensed premises in the CBD precinct pursuant to 53Y and 53Z of the Liquor Regulation was an exercise of the power conferred under s 116I of the Liquor Act 2007 to prescribe conditions to which a licence relating to premises within a prescribed precinct may be subject and by regulations to prescribe a specified class of licensed premises, or specified licensed premises to which the conditions may apply. (d) Section 116I(1) did not confer upon the Secretary of the Department of Justice a power to specify the class of licensed premises or to specify licensed premises to which the conditions prescribed under s 116I applied. (e) The specification of a class of licensed premises, or of individual licensed premises, to which the conditions under s 116I may apply were only capable of being prescribed by regulation, namely by an instrument made by the Governor pursuant to s 159 of the Act. (f) Consequently, Clause 53Y(d) and 53Z(d) of the Liquor Regulation 2008 are ultra vires void of no effect and did not therefore confer upon the Secretary of the Department of Justice any power to make the declarations purportedly made. (2) Further and alternatively a declaration that the determination by the first defendant that the premises known as the Smoking Panda Bar area of the Coronation Hotel be subject to clauses 53Y and 53Z of the Liquor Regulation is void on the ground that the determination was made for an improper purpose and/or that no reasonable decision maker could have made such decision in the circumstances known to the decision maker namely :- (a) There was no evidence of alcohol related violence at the premises; (b) There was no evidence suggesting that there was any elevated risk of alcohol-related violence at the premises; (c) That the licensee of the premises had altered the means of access to the Smoking Panda Bar area to ensure that the bar area was not a CBD subject premises for the purposes of regulation 53Y and 53Z was not a relevant or proper justification for the declaration; (d) It was an improper purpose or reason for the making of the determination that would neutralise the conduct of the licensee in altering the access to the bar so as to ensure that the bar area was not a CBD subject premises."
2. In written submissions and at the hearing of this application both counsel approached the matter on the basis that the application was, in effect, based upon two grounds. These were: 1. That sub-cl (1)(d) of each of cls 53Y and 53Z of the Regulation 2008 is an invalid attempt to confer upon the Secretary power to declare premises or a part of premises "CBD subject premises". Such declarations can only be effected by a regulation made by the Governor (Ground 1). 2. Further, or in the alternative, the decision of the first defendant to apply the relevant sub-clauses to the premises was not for a proper purpose, namely the reduction of alcohol-related violence, because a substantial purpose was that the decision-maker disapproved of the fact that the premises were apparently not otherwise subject to the regulations and wished to end their exceptional status (Ground 2).
3. It is convenient to recount the respective submissions of the parties and my consideration of them by reference to these same two grounds.

Ground 1 - ultra vires

1. Mr Birch SC appeared for the plaintiff at the hearing of this application. His primary submission was that the relevant declaration was made without power because the sub-clauses relied upon are ultra vires. In support of this primary contention he relied upon a number of submissions.
2. He first turned to the proper construction of s 116I of the Act and submitted that the effect of s 116I(1) is that regulations may be made with respect to licensed premises in prescribed precincts and may prescribe the conditions to which a licence is subject. Those regulations may provide that the conditions apply to a specified class of licensed premises or to specified licensed premises. He noted that s 159 of the Act provides that regulations are to be made by the Governor.
3. It was submitted that s 116I(3) "fleshes out" the nature of the regulation-making power found in s 116I(1). Whereas the regulation-making power is to make conditions, it also concerns the application of those conditions to particular licensed premises. As to what the words "without limitation" mean in s 116I(3), Mr Birch submitted that they pertain to the permissible extent of conditions or the application of conditions. In reply to the second defendant's submissions, he clarified that the words "without limitation" characterise the regulation-making power of the Governor.
4. Mr Birch further noted that s 116I(4) expressly confers upon the Secretary the power to exempt the licensee of any premises situated in a prescribed precinct from any of the conditions prescribed by the regulations. This express provision of power to exempt suggests, it was submitted, that there is no other power reposed in the Secretary to add to the effect of regulations prescribed under the s 116I.
5. The flaw in cls 53Y(1)(d) and 53Z(1)(d), Mr Birch submitted, is that those sub-clauses do not specify premises. Rather they empower the Secretary to specify premises or classes of premises. All of the other sub-clauses in cls 53Y(1) or 53Z(1 pick out specified classes of premises.
6. It was submitted that, as a matter of statutory construction, the terms of s 116I read with s 159 require the regulations to specify the respective classes of premises to which the conditions apply. In light of this, it is not a proper exercise of the regulation-making power conferred by the Act to bestow that power upon the Secretary instead. To put it another way, the Act conferred power upon the Governor to make regulations to, inter alia, specify certain classes of premises or specific premises. In purporting to allow the Secretary to specify such premises or parts of such premises, the Governor has delegated a portion of his regulation-making power. This offends the principle of delegatus non potest delegare.
7. In support of the contention that cls 53Y(1)(d) and 53Z(1)(d) provide for impermissible subdelegation to the Secretary, Mr Birch relied upon the decision of the High Court in Racecourse Co-operative Sugar Association Ltd v Attorney-General (Qld) (1979) 142 CLR 460 ("Racecourse") at 481 and upon the decision of the Full Court of the Federal Court in Turner v Owen (1990) 26 FCR 366. Mr Birch noted that the decision of Hollingworth J in Clarke v Elias [2008] VSC 427 provides a useful summary of the relevant principles as articulated in Racecourse, O'Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1, Turner v Owen and Grunt Labour Services Pty Ltd v Work Health Authority [2006] NTSC 6 ("Grunt Labour").
8. Mr Birch compared cls 53Y(1)(d) and 53Z(1)(d) with the provisions under scrutiny in Racecourse and Turner v Owen and submitted that sub-delegation of this nature is easily distinguishable from a power to, for example, prescribe a form. By contrast, Clarke v Elias provides an example of the delegation of discretionary power to a departmental secretary that is permissible because expressly authorised by the enabling statutory provisions.
9. Finally, Mr Birch submitted that the present case is analogous to that considered by the Supreme Court of the Northern Territory in Grunt Labour. He submitted that, although Grunt Labour is necessarily concerned with a different legislative context, the principles therein are relevant to this case. In both cases there has been an impermissible sub-delegation of power that is legislative in nature. Further, the decision-maker has exercised the power having formed its own view about the desirability of certain statutory exemptions; in this case the TAE exemption and in Grunt Labour the exemption from the need to take out workers' compensation insurance. The latter submission also goes to the second ground of review.

Ground 2 - unreasonableness and improper purpose

1. Mr Birch's primary submission in support of Ground 2 was that the history of the matter shows that the dominant concern of compliance officers was the "artificiality or contrivance" in the operation of the Smoking Panda Bar. He submitted that this concern was why the declaration was sought. The improper purpose was the attempt by the first defendant to circumvent the Regulation in order to exercise his power in a fashion that amounted to a de facto amendment of the Regulation. Even if that were not the sole purpose, it was a "substantial" purpose that will be sufficient to invalidate the exercise of power.
2. It was submitted that the definition of a TAE in the Regulation represents an attempt to reconcile conflicting policy imperatives. The plaintiff's contention is that the compliance authorities realised that the Regulation was drafted so as to exempt his licence, so they exercised a discretionary power to exclude bars that fell within the TAE exception. The purpose of the circumvention was an improper purpose. It was not for the first defendant to decide that the Smoking Panda Bar, which was otherwise operating in compliance with its licence, was nonetheless doing so in a manner "inconsistent with the spirit and intent of the requirements." The fact remains that it was operating in a manner legally available.
3. As for the relevant test for determining whether an administrative act has been for an improper purpose when more than one purpose can be identified, Mr Birch submitted that, although there is no definitive High Court authority, the weight of judicial statements tends towards a test of substantiality where more than one purpose for the decision can be identified.
4. Mr Birch referred to the decision of the High Court in Thompson v Corporation of the Municipality of Randwick (1950) 81 CLR 87 at 106: "The evidence established that one purpose at least of the Council is to appropriate the betterments arising from its construction. In our opinion it is still an abuse of the council's power if such a purpose is a substantial purpose."
5. Similarly, in the decision of Western Australian Planning Commission v Temwood Holdings Pty Ltd (2001) 221 CLR 30; [2004] HCA 63 at [58], McHugh J observed: "A condition attached to a grant of planning permission may be invalid although its ulterior purpose is not the sole purpose. If the ulterior purpose is a substantial purpose for which the authority is exercising its power, the condition is invalid."
6. Mr Birch also noted that High Court in R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603 at 622 and 631 discussed, obiter, the test to be applied when considering improper purpose. However, it was not necessary for the Court to express a concluded view as to whether the test was one of "substantial", "dominant", or "sole" purpose: at 636.

Ground 1 - ultra vires

1. Ms Heger of counsel appeared on behalf of the second defendant at the hearing. She approached the matter on the basis that the validity of the delegated legislation depends upon its proper construction and that of the empowering statute.
2. Ms Heger advanced a different construction of s 116I(3) of the Act than that advanced by the plaintiff. She agreed that the power conferred by 116I(1) is a power to make regulations prescribing licence conditions and noted that a regulation made under section 116I(1) must identify in some way the licensed premises to which the conditions apply. Her contention was that s 116I(3) gives an indication of how that might be done. Her submission was that s 116I(3) contemplates that one way of identifying the premises to which the conditions apply for the purposes of 116I(1) is to identify a specified class of licensed premises or specified licensed premises, but that example is given "without limitation".
3. She submitted that, even if the Secretary's power is considered to involve the exercise of legislative power conferred by s 116I(1), the exercise of such power is permitted by s 116I(3). Her argument proceeded this way: although one way of identifying the premises to which the prescribed conditions apply is to name the class or name the particular premises, the words "without limitation" in s 116I(3) indicate that this may be done in other ways and the terms of section 116I(3) are sufficiently broad to encompass the Secretary being vested with the power to identify the premises to which lockout conditions apply. Central to Ms Heger's submission was a contention that, on its proper construction, s 116I(3) recognises that one way of identifying premises is by way of declaration by the Secretary.
4. Ms Heger accepted that cl 53Y(1)(d) gives the Secretary a discretion to determine the particular parts of high-risk venues that are to be made subject to the lockout conditions but, she submitted, that is not a delegation of the legislative power found in s 116I(1). Rather, it is an administrative power being delegated. She cited the decision of the High Court in Commonwealth v Grunseit (1943) 67 CLR 58 at 82 per Latham CJ as to the distinction between legislative and executive power: "The general distinction between legislation and the execution of legislation is that legislation determines the content of a law as a rule of conduct or a declaration as to power, right or duty, whereas executive authority applies the law in particular cases."
5. Ms Heger submitted that the power given to the Secretary under cls 53Y(1)(d) and 53Z(1)(d) is not to prescribe a general rule of conduct but rather to declare that a particular part of particular licensed premises is subject to the relevant condition or conditions. Such a power is more in the nature of an administrative function than a legislative one.
6. It was further submitted that s 116I(4) of that Act, set out at [13] above, envisages that the Secretary may, by the regulations, become the donee of a significant statutory power. Section 116I(4) provides that the regulations may authorise the Secretary to exempt the licensee of any premises situated in a prescribed precinct from any of the conditions prescribed by the regulations under that section. She accepted that s 116I does not repose an explicit "mirror" power in the Secretary to impose conditions on a particular premises, but submitted that that power subsists by virtue of the combination of sub-ss 116I(1) and (3). An express power to exempt is necessary, Ms Heger submitted, to alleviate the breadth of the conditions that may be imposed under sub-s (1).
7. Ms Heger distinguished cl 53Y(1)(d) from the provision considered in Turner v Owen. The power under consideration in that case was one that required the Governor to prohibit. Rather than exercising that power, the Governor wholly delegated the power to prohibit to the Minister. Ms Heger submitted that the facts of the present matter are more analogous to those of Dainford Ltd v Smith (1985) 155 CLR 342 ("Dainford"). In both the present case and in Dainford, it was submitted, conditions attached to particular locations (in Dainford, to parking spaces) by virtue of an administrative process of notification or declaration that was exterior to the regulations.
8. As for the proposition that decisions by the Secretary under cls 53Y(1)(d) and 53Z(1)(d) are not internally reviewable, Ms Heger submitted that, although the plaintiff may prefer to have the right to review available under s 54 of the Act, the absence of such a right of review under cls 53Y(1)(d) and 53Z(1)(d) does not provide a basis for concluding that those clauses are invalid. This is because s 116I specifically envisages that the rights of the licensee in respect of regulations made under that provision are limited: see s. 116I(7).

Ground 2 - unreasonableness and improper purpose

1. In support of her contention that the relevant decision was not unreasonable, Ms Heger submitted that the objects of the Act are broad and that the first defendant's reasons disclose that his primary purpose was to avoid the risk of alcohol-related violence.
2. She relied upon the history of the Regulation and noted that a TAE was formerly an exception to cls 53Y(1)(d) and 53Y(1)(d) but that it no longer is. Accordingly, the bar's status as a TAE bar area did not constrain the Secretary's power. Even if the first defendant thought that the bar was operating as a TAE bar area within the meaning of cl 3 of the Regulation, he still had the power to make the declaration on the basis of the evidence that was before him.
3. Ms Heger noted there is nothing in the Regulation that suggests that the bar's status as a TAE bar area was an objective jurisdictional fact in the sense that this Court could on review form its own view as to whether the bar was in fact a TAE bar area. On this basis, she objected to those parts of the affidavit evidence filed by the plaintiff seeking to prove that the bar was operating as a TAE bar area on the basis of relevance if the material was not before the decision-maker.
4. Even if the first defendant did exercise the power because he disapproved of the fact that the premises were apparently not otherwise subject to the lockout law, that does not mean, it was submitted, that the decision was unreasonable in circumstances where he considered the bar's operations to pose a risk. The mere fact that the first defendant chose to subject the bar to those conditions does not evidence an improper purpose. The question of risk was assessed having regard to the particular way in which the bar was marketed and operated and having regard to the broader context of the CBD entertainment precinct and migration from one bar to another and the like.
5. Ms Heger accepted that nowhere in the definition of "tourist accommodation establishment bar area" was there any mention that the bar was only to be frequented by residents and their guests. She further conceded that the absence of any history of alcohol-related violence or antisocial behaviour was a relevant consideration, but submitted that it could not be said that no reasonable decision maker could have made the decision.
6. In relation to the relevant test to apply to ascertain "improper purpose", Ms Heger referred to the decision of the High Court in Thompson v Council of the Municipality of Randwick in support of the submission that the test of substantiality is a stringent one. She submitted that the Court (at 106) effectively posited a "but for" test: "All that we mean is that the Council is not exercising its powers for the purposes for which they were granted but for what is in law an ulterior purpose. It is not necessary that this ulterior purpose should be the sole purpose…But in our opinion it is still an abuse of the Council's powers if such a purpose is a substantial purpose in the sense that no attempt would have been made to resume the land if it had not been desired to reduce the cost of the new road by the profit arising from its resale." [emphasis added]
7. Ms Heger submitted that the test of substantiality as posited in Thompson v Council of the Municipality of Randwick was not satisfied in this case. She distinguished the Northern Territory case of Grunt Labour, upon which the plaintiff relied, from the facts of the present case. She submitted that there was very clear documentary evidence in that case that the relevant department revoked an exemption for which the statute provided because it had formed an opinion that the exemption should not exist. It could not be said, it was submitted, that the reasons of the first defendant in this case reveal an intention to eliminate TAE status. Nor does the correspondence between L&GNSW and the plaintiff's solicitor bear out that complaint, to the extent that it is permissible to have regard to extraneous material when considering improper purpose. Consideration

Ground 1: validity of clauses 53Y(1)(d) and 53Z(1)(d)

1. The resolution of this matter turns on whether s 116I(1) of the Act provides a source of the powers to specify which premises will be made subject to the lockout laws that cls 53Y(1)(d) and 53Z(1)(d) of the Regulation purport to confer upon the Secretary. It was common ground that if the power conferred upon the Secretary in those sub-clauses could not be found in s 116I of the Act then they were made without power and are hence invalid.

Relevant law

1. It is convenient to commence determination of this ground by considering some of the relevant authorities.
2. The enabling statute in Racecourse provided that the regulations were to fix the price of sugar; the regulations in turn provided that the price of sugar was to be fixed by the Sugar Board. The observations of Gibbs J (as his Honour then was) at 481 state the relevant principles: "When a discretionary power is conferred by statute upon the Executive Government, or indeed upon any public authority, the power can only be validly exercised by the authority upon whom it was conferred. Its exercise cannot be delegated to someone else, unless the statute, upon its proper construction, permits such delegation. Some cases which illustrate this proposition, such as Allingham v Minister of Agriculture; may perhaps be regarded as applying the maxim delegatus non potest delegare, whereas others, such Ratnagopal v Attorney-General (Ceylon), may simply provide authority for the obvious proposition that a statute which on its proper construction confers a power on A does not permit the power to be exercised by B." (citations omitted)
3. Other cases in which courts have considered the validity of sub-delegated powers are useful by way of comparison and illustration. In Turner v Owen, the Full Court of Federal Court considered the validity of regulations made under the Customs Act 1900 (Cth). The Customs Act conferred upon authorised persons a power of seizure of "forfeited goods". Section 229(1) provided that "all prohibited imports" would be forfeited to the Crown. The Customs (Prohibited Imports) Regulations 1956 (Cth) were made pursuant to s 50, which provided for the making of regulations to prohibit the importation of goods into Australia. Item 18 of Schedule 2 to the Regulations, read with Regulation 4(1), prohibited the importation of goods "which, in the opinion of the Minister, are of a dangerous character and a menace to the community" (emphasis added).
4. By majority (French and Pincus JJ, Jenkinson J in dissent), the Court held that the combination of Regulation 4(1) and Item 2 effected an impermissible sub-delegation to thet Minister of the Governor-General's power to prohibit. French J (as his Honour then was) relied upon the decision of the High Court in Racecourse in support of the proposition that delegated authority must be exercised as contemplated by the empowering statute: Turner v Owen at 389.
5. In Grunt Labour, the plaintiff asked that the Court quash the decision of the defendant revoking its approval of the plaintiff as a labour hire agent for the purposes of Regulation 3A(3) of the Work Health Regulations 2000 (NT). The classification of the plaintiff as a labour hire agent exempted it from requirements relating to workers' compensation coverage. Considering that labour hire agents should not be so exempt, the defendant simply revoked its approval for the exemption.
6. At [49] of Grunt Labour, Southwood J found that: "[The decision-maker's] decision was not a decision made for an administrative purpose it was a decision made for a legislative purpose. He made a decision that labour hire personnel should be included in the definition of worker for the purposes of the provisions of the Work Health Act relating to compensation and rehabilitation. A decision about who should be a worker for the provisions of the Work Health Act relating to compensation and rehabilitation is a legislative decision."
7. The relevant enabling provision in Dainford was s 30(7) of the Building Units and Group Titles Act 1980 (Qld). It provided for the making of by-laws that conferred exclusive use or special privileges in respect of the common property on a lot owner. The relevant by-law provided for proprietors' exclusive use of car spaces, the identifying numbers of which the vendor was to notify the Council. By majority, the High Court in Dainford held that the designation of the portions of the common property to which certain proprietors had exclusive use by notification to the Council did not involve sub-delegation of the legislative power conferred by s 30(7). Gibbs CJ observed at 349 that the by-law did not give the vendor the power to make another by-law, but to give notice upon which the by-law would operate. Thus, it was submitted on behalf of the second defendant, even if the power exercised by the Secretary be characterised as legislative in nature, the words of s 116I(3) are sufficiently broad to permit the specification of premises by declaration of the Secretary in this way.
8. Gibbs CJ also observed in Dainford at 349 that the invocation of the principle delagatus non potest delegare is unhelpful: "I am not convinced that recourse to the maxim delagatus non potest delegare is of much assistance in deciding upon the validity of an exercise of statutory powers. It is simpler to ask directly whether the power has been exercised by the person upon whom it has been conferred and whether it has been exercised in the manner and within the limits laid down by the statute conferring the power."
9. None of the above authorities relied upon by the parties are sufficiently similar to the language of the Act and Regulation to be determinative of the question whether the relevant sub-clauses in the Regulation are invalid. They are nonetheless helpful in establishing the approach to be taken in determining the validity of delegated legislation generally.
10. The second defendant relied upon the observation by Gibbs CJ in Dainford at 349 extracted above at [92] and submitted that the principle delegatus non potest delegare is of little assistance in this matter given that there is no general principle that delegated legislation cannot sub-delegate legislative power. That is no doubt the case. As the authors of Delegated Legislation in Australia have observed, the principle does not often arise in Australia. [1] They note: "The pattern has been to determine whether or not the legislation is supported by the empowering provision and, in reaching this conclusion, maxims or approaches have been eschewed." As French J observed in Turner v Owen at 388 the validity of delegated legislation that is said to have sub-delegated a legislative power turns on its proper construction and that of the empowering statute.
11. The task of determining the validity of the relevant clauses in this matter is a threefold one. First, the meaning of the words used in s 116I of the Act to describe the delegated legislation that the Governor is authorised to make must be determined. Second, the meaning of cls 53Y(1)(d) and 53Z(1)(d) of the Regulation must be determined. Finally, the question of whether those clauses comply with the description in s 116I must be determined: McEldowney v Forde [1969] 2 All ER 1039 at 1068 per Lord Diplock, as cited in Vanstone v Clark (2005) 147 FCR 299 at 331 and O'Connell v Nixon [2006] 16 VR 440 at [85]. Section 116I of the Act
12. Section 116I is to be found in Part 6, Division 4 of the Act, which sets out the relevant provisions pertaining to "prescribed precincts". Section 116C(1) provides that the regulations may declare an area described in the regulations to be a "prescribed precinct" for the purposes of the Act. The reference to "regulations" in that provision picks up and applies s 159 of the Act which provides, inter alia, that regulations are to be made by the Governor.
13. In this context s 116I(1) provides that the regulations "may prescribe conditions to which a licence relating to premises situated in a prescribed precinct is subject." Section 116(2) goes on to provide an inclusive list of the sort of conditions that the regulations may prescribe.
14. The submissions of both parties focussed particular attention on the meaning of s 116I(3) of the Act and in particular the phrase "without limitation" therein. Given the competing interpretations advanced as to the meaning of that sub-section, it is convenient to extract it again for ease of reference. It provides that: "The conditions that may be prescribed by the regulations under this section may, without limitation, apply to a specified class of licensed premises or to specified licensed premises" [emphasis added].
15. The construction advanced on behalf of the second defendant is that the words "without limitation" in s 116I(3) condition the exercise of the regulation making power under sub-s (1) in that they indicate that the particular premises to which the conditions apply may either be specified in the regulations or they may be specified in other ways such as by a declaration by the Secretary
16. I am unable to accept the second defendant's construction. The wording of s 116(3), even when read in conjunction with s 116I(1), is insufficiently clear to confer such a power. The construction advanced requires the extraction from the words "without limitation" a power permitting the Governor to confer a power of prescribing specified classes of premises or specified premises to the Secretary. I am not satisfied those two words achieve this.
17. Nor do I accept the construction advanced on behalf of the plaintiff that the words "without limitation" characterise the Governor's authority to make and impose conditions. Section 116I(2), which list examples of the types of conditions that may be imposed, commences with the words "without limiting the matters to which any such conditions may relate." The words "without limitation" in sub-s (3) would have no work to do if they were ascribed the meaning advanced on behalf of the plaintiff.
18. Rather, I am of the view that the words "without limitation" in s 116I(3) mean that the application of the conditions to either specified premises or a specified class of premises is unlimited in the sense that once the premises or class of premises have been specified, there is no limitation as to which conditions may then be applied to them. Such a situation could arise in circumstances where, although some of the conditions might not appear to be applicable to either a specified class of premises or specified premises, they nonetheless can be applied without limitation.
19. Section 116I(3) provides that the conditions may apply to "a specified class of licensed premises or to specified licensed premises." Although there are no words in s 116I of the Act that expressly provide that the "specification" of a class of licensed premises or licensed premises must also be by regulation, I am satisfied that when sub-s (3) is read in the context of s 116I, that is its effect.
20. The word "specified" is not defined in either the Act or the Regulation. The word appears repeatedly throughout the Act: some examples include ss 4A(1) and (2), 6(1A)(c),(7),(8)(a) and (12)(a), 11(A)(5)(b), 12(2)(a)(b) and (3), 13(2) and (3), 14(6), 19, 23, 38, 39 and 40. Read in its statutory context, the meaning of the word "specified" as used in the Act is to identify something with precision. This is consistent with the Macquarie Dictionary definition of "specify" as "to mention or name specifically or definitely." The word is a general one that should be given its plain and ordinary meaning. There is nothing about the context in which it is found in s 116I(3) that suggests that it should bear some other meaning.
21. In light of the above, I am of the view that the delegated legislation that the Governor was authorised to make under s 116I of the Act is to be described as a power to make conditions that could apply to either a class of licensed premises specified in the Regulation or to particular licensed premises as specified in the Regulation. Clauses 53Y and 53Z of the Regulation
22. The second step is to ascertain the meaning of the relevant sub-clauses the validity of which is challenged.
23. Clauses 53Y(1)(d) and 53Z(1)(d) are to be found in Part 5B of the Regulation, which deals with "prescribed premises". The "Sydney CBD entertainment precinct" in which the Coronation Hotel is situated, is a prescribed precinct as declared by cl 53V of the Regulation.
24. Clause 53X(1) expressly provides that Division 2 to Part 5B of the Regulation prescribes, "for the purposes of section 116I of the Act, the conditions to which a licence relating to premises situated in the Sydney CBD Entertainment precinct is subject." It goes on to provide that "any such premises are referred to in this Division as 'CBD subject premises'."
25. Turning to cls 53Y and 53Z, there was no dispute that sub-cl (2) of each clause prescribes conditions to which a licence relating to premises situated in a prescribed precinct is subject, as permitted by s 116I of the Act. Clause 53Y(2) provides that "the licensee of any CBD subject premises must not permit patrons to enter the premises during the lockout period" and cl 53Z(2) provides that "liquor must not be sold or supplied on the CBD subject premises in the liquor sales cessation period".
26. The issue in dispute was as to the meaning of sub-cl (1) in the two clauses. It is noted that sub-cl (1) of each clause is in the same terms and both sub-clauses identify which premises are to be included in the phrase "CBD subject premises". The definition is exclusive and includes five types of premises. The five classes of premises included in the definition in cls 53Y(1) and 53Z(1) are: "(a) premises (other than a tourist accommodation establishment) to which a hotel licence (including a general bar licence) applies, (b) premises (other than a tourist accommodation establishment) to which a club licence applies, (c) premises to which an on-premises licence relating to a public entertainment venue (other than a cinema or theatre) or karaoke bar applies, (d) on and from 15 March 2014 - so much of a high risk venue (within the meaning of section 116B of the Act) as is declared by the Secretary by an order in writing to be CBD subject premises for the purposes of this clause, (e) declared premises to which a level 2 licence (within the meaning of Schedule 4 to the Act) relates."
27. The Smoking Panda Bar does not fall within any of the four specified classes in (a), (b), (c), or (e) of cls 53Y(1) or 53Z(1). It does not fall within sub-cl (c) as it is not a public entertainment venue or karaoke bar and it does not fall within (e) as it is not either of the two bars in the CBD specifically declared in Schedule 4 to the Act. It does not fall within either (a) or (b) because of its TAE status.
28. The history of the relevant clauses shows that TAEs were initially exempted completely from the definitions in cls 53Y(1) and 53Z(1). That exception was removed from 4 April 2014 when cls 53Y and 53Z were amended by the Liquor Amendment (Sydney CBD Entertainment Precinct) Regulation 2014 (NSW) and cls 53Y(1)(d) and 53Z(1)(d) in their current form were made. There was no material before me on this application as to why this exemption for TAEs was removed from those clauses.
29. The power provided to the Secretary in cls 53Y(1)(d) and 53Y(1)(d) to declare certain premises as "CBD subject premises" is a broad one, although the premises must first be a high-risk venue within the meaning of s 116B(2) of the Act. The Coronation Hotel is such a venue because it falls within the definition in s 116B(2)(a) and is therefore listed in Schedule 1B to the Regulation. Otherwise, the only fetter on the discretion as set out in the relevant sub-clauses is that the declaration has to be in writing. In addition, the actions of the Secretary or his delegate are subject to the objects of the Act as set out in s 3. There is no requirement for a declaration under either cls 53Y(1)(d) or 53Y(1)(d) to be gazetted.
30. The power provided in sub-cl (1)(d) of each clause would appear to be one that permits the Secretary to declare that the lockout laws apply to bars which are otherwise covered by the TAE exemption. I accept that there is nothing in the terms of sub-cl (1)(d) in either cl 53Y or cl 53Z which provides that the Secretary's power in those sub-clauses is conditioned by whether a particular "high risk venue" is a TAE. Despite this, having regard to the other specified classes of licensed premises in those sub-clauses, it is difficult to see which other licenced premises, or more specifically "so much of a high risk venue," would not otherwise already fall within the classes of premises specified in (a) (b)(c) or (e).
31. When I asked counsel for the second defendant during the hearing of this application to identify what sort of venues could be the subject of a declaration under cls 53Y(1)(d) or 53z(1)(d) besides TAEs, the only example provided was establishments that might look like a TAE but were not. The difficulty with this submission is that if an establishment is not in fact a TAE it does not come within the exemption in the first place.
32. In any event, although it may well be the case that sub-cls 53Y(1)(d) or 53Z(1)(d) were made in order to overcome the TAE exemption, it is not necessary for me to reach a concluded view on this point in order to determine the meaning of the relevant sub-clauses. Nor is it necessary for me to determine in my consideration of Ground 1 whether or not the Smoking Panda Bar was operating within the definition of TAE bar area in the Regulation as at the date of the decision of the first defendant. The question for determination is the proper meaning of the relevant sub-clauses.
33. Of the five categories of premises enumerated in cls 53Y(1) and 53Z(1) which comprise the definition of "CBD subject premises", four specify a class of licensed premises as provided for in s 116I of the Act. Sub-clause (d) does something different; it provides the Secretary with the power to specify premises to which the lockout laws are to apply. Are clauses 53Y(1)(d) and 53Z(1)(d)1161 validly made under s 116I of the Act?
34. Section 116I of the Act enables regulations to be made pertaining to licensed premises in prescribed precincts. Such regulations may prescribe the conditions to which the licence is subject and may also provide that such conditions apply to a specified class of licensed premises or to specified licensed premises. Clauses 53Y and 53Z reflect the power conferred on the Governor under that enabling provision, except for sub-clauses (1)(d) in each of those clauses. Those clauses go beyond what is set out in s 116I and are not a proper exercise of the regulation-making power conferred by s 116I. I am satisfied that s 116I of the Act does not enable the Governor to delegate to the Secretary the broad discretionary power found in cls 53Y(1)(d) and 53Z(1)(d) of the Regulation. To do so is beyond the ambit of s 116I.
35. I note that elsewhere in the Act in ss 80(7)(a) and 136F(6), the phrase "specified by the Secretary" is to be found. One might have thought that if the legislative intention in enacting s 116I of the Act was to permit the Secretary, rather than the Governor, to specify which premises, or indeed part of premises, were to attract the lockout laws similar language would have been used.
36. A further textual consideration is that s 116I(4), which is found in Division 4 of Part 6 of the Act, expressly provides that, "The regulations may authorise the Secretary to exempt the licensee of any premises situated in a prescribed precinct from any of the conditions prescribed by the regulations under this section." There is no corresponding express power for the Regulations to authorise the Secretary to include the licensee of any premises situated in a prescribed precinct as being subject to any of the conditions prescribed by the regulations under s 116I. For the reasons stated above, I cannot accept the submission on behalf of the second defendant that the explanation for this is that the Secretary already has that power when s 116I(3) is read with s116I(1).
37. Section 116B(4) of the Act, which is also in Division 4 of Part 6, confers an express power on the Secretary to prescribe premises as a high-risk venue. That power can only be exercised with the concurrence of the Commissioner of Police and is reviewable by the ILGA. There is also an express power provided to the Secretary under s 54 of the Act to impose conditions on a licence, including conditions of a kind referred to in ss 116A or 116I. Again, that power is reviewable by the ILGA.
38. Whereas I accept the submission made on behalf of the second defendant that the absence of any right of internal review of a decision is not determinative of the validity or otherwise of the relevant clauses, it is a further relevant matter to take into account in determining whether s 116I of the Act confers upon the Secretary the broad power to be found in cls 53Y(1)(d) and 53Z(1)(d).
39. I have considered the submission made on behalf of the second defendant that the relevant sub-clauses only confer upon the Secretary a discretion to determine that a "particular part" of a high-risk venue is to be subject to the lock out laws. This power is thus said to be an administrative rather than a legislative power because, following what Latham CJ observed in Commonwealth v Grunseit at 83, the content of the law has not been altered. It was submitted that the relevant sub-clauses do not prescribe a general rule of conduct; rather, they simply make the conditions prescribed under the Regulation applicable in certain cases as occurred in Dainford.
40. I am not persuaded by the argument advanced on behalf of the second defendant that the powers provided to the Secretary in cls 53Y(1)(d) and 53Z(1)(d) could be described as administrative rather than legislative in nature. I accept that, if the power provided to the Secretary in those clauses could be described as administrative, the impugned sub-delegation may be permissible. I also accept that identifying what is an administrative, as opposed to a legislative power, is not always a straightforward task.
41. I am not satisfied that the content of the law is not changed by cls 53Y(1)(d) and 53Z(1)(d). Each of them has the effect of making a bar with a TAE exemption within high-risk premises, which would otherwise not fall within the definition of "CBD subject premises" in cls 53Y(1) and 53Z(1), liable to be declared by the Secretary as falling within that definition.
42. There are examples elsewhere in the Regulation of administrative powers being conferred on the Secretary. One such example is cl 53ZE, which provides that the incident register should be kept in a form "approved by the Secretary". This is to be contrasted with the power conferred on the Secretary in cls 53Y (1)(d) and 53Z(1)(d) to determine whether particular premises are to be declared subject to the lock-out laws. By virtue of s 9 of the Act, a breach of a licence condition is a criminal offence. This lends further weight to my conclusion that what is being conferred is in fact a legislative power. Conclusion
43. I have concluded that cls 53Y(1)(d) and 53Z(1)(d) are not a proper exercise of the regulation-making power conferred upon the Governor by s 116I of the Act. As a consequence, there is no need for me to go on to consider whether the decision was unreasonable.
44. I am satisfied that the relevant sub-clauses are invalid. I am also satisfied that the plaintiff has a real and substantial interest in the matter to be decided and that the first declaration sought has sufficient practical utility in resolving a dispute between the parties.
45. It was suggested during the hearing of the application that the delegate of the Secretary could have exercised the power under s 54 of that Act to impose conditions on the plaintiff's licence that would have the same effect as making declarations under cls 53Y(d) and 53Y(d). The fact that the Secretary may have been able validly to achieve the same result by virtue of a provision in the Act does not militate against the grant of the relief sought.
46. Nor are any alterative avenues of appeal or review available to the plaintiff, given the terms of relevant clauses. The only remedy available to the plaintiff was to seek judicial review of the decision in this Court
47. There being no discretionary reason not to do so, I propose to allow the relief sought in relation to the first ground. The declarations that I propose to make differ in their terms from the declarations sought in the summons. ORDERS
48. I make the following orders: (1) Declare that sub-clauses 53Y(1)(d) and 53Z(1)(d) of the Liquor Regulation 2008 (NSW) are ultra vires. (2) Declare that the decision of the first defendant on 19 July 2016, in his capacity as delegate of the Secretary of the Department of Justice, to declare the "Smoking Panda Bar" area of the Coronation Hotel to be CBD subject premises for the purposes of clauses 53Y and 53Z of the Liquor Regulation 2008 (NSW) is invalid. (3) The second defendant is to pay the plaintiff's costs.

Endnote

1. Dennis Pearce and Stephen Argument, Delegated Legislation in Australia (LexisNexis Butterworths, 4th ed, 2012) 23.20.

Amendments 29 August 2016 - Correct typographical errors in paragraphs [15], [19], [66], [86], [88]. [92] and [94]. 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: 29 August 2016