Court of Appeal (WA)|1999-08-26|Before: Mr P, Kennedy J, Wallwork J, Anderson J

Western Australian Hotels Association (Inc) & Ors v Mad Dog Mexican Co Pty Ltd [1999] WASCA 149 (26 August 1999)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : WESTERN AUSTRALIAN HOTELS ASSOCIATION (INC) & ORS -v- MAD DOG MEXICAN CO PTY LTD [1999] WASCA 149

BETWEEN : WESTERN AUSTRALIAN HOTELS ASSOCIATION (INC)

Liquor licensing - Application for special facility licence for premises offering a variety of facilities - Application granted over objections - Grant justified

Appellants (Objectors) : Mr W S Martin QC & Mr P L Fraser

Respondent (Applicant) : Mr C J L Pullin QC & Mr D Mossenson

1 KENNEDY J: The appellants are appealing against the conditional granting by the Liquor Licensing Court of a special facility licence to the respondent for premises known as The Good The Bad and The Ugly Mexican Restaurant in Northbridge. Under the transitional provisions of the amending Act to the Liquor Licensing Act 1988, introduced in 1998, this appeal is to be determined under the provisions of the principal Act as in force immediately prior to the coming into force of the amending Act.

2 The respondent sought a special facility licence for the purpose of "a reception centre, tourism or as a unique meeting place, hospitality venue and multi-faceted theme venue for locals and tourists". It desired to trade from 12 noon until 12 midnight each weekday, and until 2.00 am on Saturday and Sunday mornings. It did not seek to sell liquor for consumption off the premises. An important feature of the proposal, which is reflected in the conditions which are referred to later, is that the business is intended to encourage people to come to the facility in groups, and to make prior bookings. It is not aimed at attracting individuals, other than tourists, to the premises.

3 At the time of the hearing of its application, the respondent was permitted to trade for 24 hours a day in its licensed restaurant, which constituted a part of the premises for which the special facility licence was being sought. However, in fact, it did not trade after midnight, because its restaurant licence was subject to a condition that liquor should not be consumed by a person on the licensed premises except ancillary to a meal supplied and eaten there, and there was little demand for meals after midnight. In this respect, it must be appreciated that any meal is required by the Act to be "substantial", and it must meet the other tests laid down in s 52(2) of the Liquor Licensing Act if the licence holder is to avoid being convicted of an offence under the Act. The respondent caters predominantly for the younger market. It claimed its patrons often desired to purchase liquor after midnight, without wishing to have a meal. The aim of the respondent is to continue to supply meals and to sell liquor for consumption on its premises, which it plans to extend substantially, but it claims that a condition that liquor should only be consumed ancillary to a meal supplied and eaten on the premises would not enable it to attain its purposes.

4 The nature of the objections of the objectors to the application, of whom there were originally five, related essentially to the respondent's proposed trading hours. The objectors contended that the respondent should not be permitted to trade before midnight under a special facility licence while some of the objectors traded under a tavern licence, and that the respondent should not be permitted to trade under a special facility licence after midnight while the objectors were only permitted to trade after midnight under an extended trading permit issued at the discretion of the Director of Liquor Licensing pursuant to s 60 of the Act.

5 The Act provides for Category A licences and for Category B licences. Category A licences consist of hotel licences (s 41), cabaret licences (s 42), casino liquor licences (s 44), special facility licences (s 46) and liquor store licences (s 47). Tavern licences are included in the category of hotel licences. The holders of hotel licences, other than tavern licences, are required to provide residential accommodation and breakfast and dinner for lodgers. A tavern licence carries no such requirements. The licensee of a hotel licence is authorized during permitted hours, and required during obligatory trading hours, to keep such part of the licensed premises open as is necessary to meet the requirements of the public and to sell there to any person liquor for consumption on the premises and, unless it is a restricted licence, the licensee is required to sell packaged liquor for consumption off the premises.

6 Category B licences comprise club licences (s 48), restaurant licences (s 50), producers' licences (s 55), wholesalers' licences (s 58) and occasional licences (s 59). By s 50(3), every restaurant licence is subject to the conditions that the business conducted at the licensed premises must consist primarily and predominantly of the regular supply to customers of meals to be eaten on the premises, and liquor must not be consumed by a person on the premises except ancillary to a meal supplied, or to be supplied, by the licensee to, and eaten by, that person on the premises.

7 Special facility licences are governed by s 46 of the Act, which relevantly provided as follows:

"46(1) The licensing authority may grant a special facility licence to provide for the needs of persons of a particular class or in particular circumstances, or for a particular purpose.

(2) The licensing authority shall not grant a special facility licence -

(a) where a licence of some other class would be reasonably adequate for the purpose; or

(b) unless conditions are imposed so as to ensure that, so far as is practicable, liquor is not sold for purposes other than those purposes which, in the opinion of the licensing authority, necessitated the grant of a special facility licence,

and a condition shall not be imposed, varied or cancelled on the application of the licensee unless the licensing authority is satisfied at the time of that application that the matter should still be dealt with by way of a special facility licence.

(3) The licensee of a special facility licence is, in accordance with the terms and conditions of the licence during permitted hours to be specified in that licence authorized, and during obligatory trading hours, if any are specified in that licence, required -

(a) to keep open for sale, and sell, liquor on the licensed premises, or at a location specified in the licence, for consumption there or, if the licence so provides, elsewhere; and

(b) to sell packaged liquor, if the licence so provides.

(5) The purposes for which a special facility licence may be granted include -

(c) a theatre, authorizing the sale of liquor to patrons of a cinema or other theatre at which entertainment is, or is to be, or has been held;

(d) a ballroom, authorizing the sale of liquor to persons attending the dancing;

(e) a reception centre, authorizing the sale of liquor to persons having a common interest attending a reception at premises the primary and predominant purpose of which is or is to be as a venue for receptions;

(g) historical or cultural preservation [in certain premises which at some time in the past have been licensed or used as a hotel] ...;

(h) tourism, authorizing the sale of liquor to persons likely to be attracted to or present at places or premises that, in the opinion of the licensing authority, are or will become -

(i) in themselves, or as part of a development or complex, a significant tourist attraction; or

(ii) a facility that significantly enhances the tourist industry in the State;

(j) post-secondary or tertiary educational institutions ...; or

(6) Nothing in subsection (5) precludes the licensing authority from granting a special facility licence for a purpose to which that subsection does not refer.

8 It is of some interest to observe that, when the Liquor Licensing Act 1988 came into force, a number of previously existing categories of licence were converted into special facility licences. Winehouse licences and Australian wine licences were converted under cl 11 of the transitional provisions in the Act. By cl 20, canteen, theatre, ballroom, reception lodge, packet and railway refreshment room licences were also converted into special facility licences. By cl 23, the current holder of a hotel licence, a tavern licence or a limited hotel licence was "enabled" to apply to the Director of Liquor Licensing for a special facility licence. The Director was empowered to grant such a licence, on terms and conditions which the licensee, after consultation with the Director, agreed, provided that the licensed premises were, and throughout the occupancy of the licensee had consistently been, of an exceptionally high standard, and the requirements of s 46 had been met. Special facility licences are not, therefore, the rarities which counsel for the appellants suggested. Furthermore, they cover a very wide range of activities.

9 Provision is made in South Australia for general facility licences, which are broadly similar in nature to this State's special facility licences, although the detail differs. In Trop Nominees Pty Ltd v Liquor Licensing Commissioner (1987) 46 SASR 255, the Full Court in South Australia had to consider s 44 of its Licensing Act, which provides that general facility licences can be granted "where special trading conditions are, in the opinion of the licensing authority, necessary" for any one or more of a number of designated purposes. King CJ said of this type of licence, at 258:

"The general facility licence is a new form of licence introduced into the licensing system of South Australia by the Liquor Licensing Act 1985. Three important points are to be noticed about the new licence. The first is that it is designed to enable the Licensing Court to prescribe "special trading conditions", that is to say trading conditions which differ from those applicable to other forms of licence under the Act. The purpose of the creation of the new form of licence is, as it seems to me from a consideration of the structure and provisions of the Act, to enable the Licensing Court to fashion trading conditions to meet special needs. The second point is that the licence can only be granted where the special trading conditions are necessary for one or other of the purposes specified in section 44(1). The third point is that the licence is a licence of last resort in the sense that it is not to be granted if some other licence would be reasonably adequate for the purpose."

10 In Rintag Pty Ltd v West Coast Hospitality Pty Ltd, unreported; FCt SCt of WA; Library No 990194; 20 April 1999, in which many of the matters which arise in the present case were dealt with, and which was decided after argument had been concluded in this case, Murray J, with whom the other members of the court agreed, having quoted the above passage from the decision of King CJ, said at 11 - 12:

"... I think it is the case that, consistently with the object of the Act stipulated in s 5(c) "to facilitate the use and development of licensed facilities reflecting the diversity of consumer demand", the special facility licence is one the use of which is justified under the Act where no other licence would be reasonably adequate to cater for a purpose identified as comprising the needs of persons of a particular class, or in particular circumstances, for liquor and related services, or where the licence is required to cater for some other identified particular purpose which may not adequately be provided for by a different form of licence. In that way, I suppose it may be useful to refer to the special facility licence as a licence of last resort, provided that description does not carry the connotation that the application for such a licence should only rarely be granted. The only requirement for any special quality within the special facility licence is, in my opinion, that it is designed to meet needs or provide for a particular purpose which may not reasonably adequately be met or provided for in any other form of licence for which the Act provides.

The diversity of the purposes for which a special facility licence may be granted as set out in s 46(5) and as extended even further in their mention in reg 9A, gives the flavour of the provision, and to my mind the provision in [s 46(6)] that nothing in [s 46(5)] precludes the licensing authority from granting a special facility licence for a purpose to which that subsection does not refer, reinforces the view that the terms of s 46 should not be read restrictively. In a real sense, the section is a "catch all" type of provision, designed to enable the Liquor Licensing Court, as the specialist tribunal which it is, to use this form of licence to cater for particular needs and circumstances, or a combination of such needs and circumstances, which are unable to be met by another form of licence provided for in the Act."

11 The statement that a special facility licence is a licence of last resort may be somewhat misleading. It is significant that both King CJ in Trop Nominees Pty Ltd v Liquor Licensing Commissioner, and Murray J in Rintag Pty Ltd v West Coast Hospitality Pty Ltd, qualified this description, King CJ referring to the general facility licence as being a licence of last resort "in the sense that it is not to be granted if some other licence would be reasonably adequate for the purpose" and Murray J suggesting that it might be useful to refer to the special facility licence as a licence of last resort "provided that description does not carry the connotation that the application for such a licence should only rarely be granted". In my view, the description is unhelpful, and it places an unnecessary gloss on the words of the statute. The words of s 46(2)(a) are clear enough in themselves, and they should be left to speak for themselves.

12 The premises the subject of the respondent's application are, if not unique, unusual. They contain a wide range of elements in a complex of buildings, rooms, and open areas. The elements are said to combine to create a "Western" village. Within these premises, patrons and guests may eat meals, drink liquor, watch a diverse range of live entertainment, participate in a variety of activities and games, including what is described as "riding a mechanical bull", dancing, playing darts, pool, snooker, electronic games and viewing videos. From the particulars provided by the respondent, and from the evidence, the Liquor Licensing Court Judge distilled the purpose for which the licence was sought as being to provide for the special needs of locals and tourists, using the premises as a pre-arranged meeting place, a venue for receptions, a theatre, a dance facility, a tourist venue and for the consumption of meals. The multiplicity of activities or uses was of the essence of the proposal.

13 The special facility licence was granted by his Honour under the general power conferred on the licensing authority under s 46(1) of the Act for a purpose other than one referred to in s 46(5). His Honour rejected the appellants' claim that the purpose for which the special facility licence was sought came within the description of either a "reception centre" (s 46(5)(e)) or "tourism" (s 46(5)(h)). Nevertheless, whilst not finding that the premises could properly be described as a reception centre, his Honour apparently acknowledged that one of its purposes was the provision of a venue for receptions. The respondent applied during the course of the hearing of this appeal for leave to file out of time a notice of cross-contention challenging his Honour's finding that the provision of the venue for receptions was not a primary and predominant purpose within the meaning of s 46(5)(e). That application was refused.

14 The learned Liquor Licensing Court Judge ruled that the premises did not satisfy the purpose of "tourism" in s 46(5)(h) of the Act, in that they were not, in themselves, a significant tourist attraction, they did not contribute to the general attractiveness of the city to those who visit for touring purposes and they did not significantly enhance the tourist industry in this State. There was no notice of cross-contention filed, or sought to be filed, challenging the finding that the purpose was not "tourism".

15 It was for the respondent to establish that the grant of the special facility licence was necessary to provide for the reasonable requirements of the public for liquor and related services in the affected area (s 38(1)). The absence of that necessity is a ground of objection under s 74(1)(d). His Honour found that the respondent had discharged the onus of proof which rested upon it, and there is no appeal against that finding.

16 His Honour considered whether a licence of some other class would be reasonably adequate for the purpose which he identified as previously set out, and which he amplified as being to supply groups of young people with relatively cheap food and liquor, together with entertainment appealing to them, primarily during the evening and into the early hours of Saturday and Sunday mornings, not necessarily ancillary to a meal. On the basis of the evidence before him, he found that the section of the public ("the youth market") upon which the respondent relied was significant and would find it convenient to purchase food and liquor at the proposed extended premises during the proposed hours, and that the licensed premises already serving the affected area did not offer the same mix of liquor, food and entertainment which the respondent proposed to offer. He accordingly held that the respondent had established that the requirement of the public for liquor and related services of the type proposed for the premises was objectively reasonable and that the proposed premises were capable of satisfying those requirements in whole or in part. He therefore concluded that the granting of a special facility licence was necessary to provide for the needs of the particular class of persons identified and for the particular purpose stated.

17 It was urged for the appellant that another type of licence under the Act, such as a tavern licence, a restaurant licence or a cabaret licence could be adapted to the requirements of the respondent, and was therefore reasonably adequate for the purpose within the terms of s 46(2)(a) of the Act, with the consequence that the Liquor Licensing Court Judge was precluded from granting a special facility licence. There are, however, a number of reasons why this argument cannot succeed.

18 By s 36 of the Act, for the present purposes, two or more licences are not permitted to be granted in respect of the same part of any premises, although licences may be granted in respect of defined separate parts of the same premises. It was of the essence of the respondent's proposal that patrons and guests should be encouraged to move around the whole of the complex, other than those rooms which, at the time, have been specifically booked by others. A special facility licence is clearly appropriate to a situation which would otherwise suggest that several different licences are necessary. A restaurant licence would not be appropriate for the premises because liquor may only be served as ancillary to a meal, a term which is defined in s 3(1) to mean "a genuine meal, not supplied in sandwich form, eaten or to be eaten by a person while seated at a dining table". And see also s 52(2), which is referred to above. The proposals of the respondent did not contemplate that everyone resorting to the premises will have a meal, and certainly not "a genuine meal", light snacks being contemplated.

19 A cabaret licence would not be satisfactory to the respondent because, although the provision of such a licence does not require the provision of any food, it does require the provision of continuous live entertainment. That was not contemplated by the proposal, although some live entertainment was contemplated. Furthermore, for the present purposes, permitted hours for a cabaret licence are between 6.00 pm and 6.00 am (s 97(2)(c)). A necessary feature of the respondent's proposal, however, was that the premises should be open much earlier in the day.

20 A tavern licence would not be suitable to the respondent because a tavern is open to the general public and the holder of a tavern licence is required to sell packaged liquor to any person for consumption off the premises. As the conditions proposed by the respondent, and accepted by his Honour, indicate, the respondent seeks to exercise control over who may be admitted to its premises. Furthermore, the permitted hours of trading for a tavern licence are 6.00 am to 12 midnight, whereas the respondent seeks to operate until 2.00 am on Saturday and Sunday mornings, up to which times the demand for the facilities which it has to offer is likely to be considerable.

21 It is true that an extended trading permit may be granted under s 60 of the Act, but that does not carry with it the security offered by a licence - see s 60(6) and s 60(7) which enable the licensing authority to vary or cancel the terms of a permit, and see also Palace Securities Pty Ltd v Director of Liquor Licensing (1992) 7 WAR 241, per Malcolm CJ at 248, and Rintag Pty Ltd v West Coast Hospitality Pty Ltd (supra), per Murray J at 9 - 10.

22 I am unable to accept that, in the circumstances of this case, the granting of a special facility licence resulted in a subversion of the provisions of the Act, as counsel for the appellants contended. On the contrary, it recognised and gave effect to the objects of the Act set out in s 5(c) and s 5(e) to facilitate the use and development of licensed facilities reflecting the diversity of consumer demand and to provide a flexible system, with as little formality and technicality as may be practicable, for the administration of the Act. See also Murray J in Rintag Pty Ltd v West Coast Hospitality Pty Ltd (supra), at 12.

23 The final argument advanced for the appellants related to the trading conditions proposed by the respondent to be imposed on its special facility licence, which were accepted by the learned Judge. They were as follows:

"1. Food shall be available for purchase at all times.

2. Entertainment or activity shall be available at all times.

3. Only persons with a linkage or association through work, recreation, invitation with others, travel or other common connections may be admitted to the premises.

4. No person coming to the premises alone, with the exception of any tourist, may be admitted unless that person, by pre-arrangement, is to join or to meet another or other persons who are included in the description contained in Condition 3.

5. Liquor may only be sold for consumption on the premises by patrons using the premises as a pre-arranged meeting place, venue for receptions, "theatre", dance facility, tourist venue or for a meal.

6. There shall be no sale of liquor for consumption off the premises."

24 By s 46(2)(b), the licensing authority is enjoined from granting a special facility licence unless conditions are imposed so as to ensure that, so far as practicable, liquor is not sold for purposes other than those purposes which, in the opinion of the licensing authority, necessitated the grant of a special facility licence. The emphasis is, of course, on the purposes for which the liquor is to be sold. His Honour indicated that, during the course of the hearing, he had some concerns as to whether the proposed conditions were sufficiently certain to be enforceable. However, having regard to the use of the words "so far as is practicable" in s 46(2), and having regard to his finding that most of the trade of the premises was currently pre-booked, and the evidence being that it was clearly intended that this practice should continue, his Honour considered that the proposed conditions were capable of operating in a way in which s 46(2) of the Act contemplates. In my opinion, that is a conclusion which his Honour was entitled to reach, and it is not one with which this Court can interfere.25 It was suggested for the appellants that, as the special facility was directed to the young, a condition as to age should have been included in the conditions which were imposed. But the fact that the facility is directed at the young does not require the imposition of some age limit. It is enough that the appeal of the facility will clearly be, and will be intended to be, to the younger market. With respect to the condition requiring that food is to be available for purchase at all times, it has been pointed out for the respondent that the great majority of licences do not require that any food be made available for purchase by patrons; but, in any event, there is nothing to indicate that it would be realistic to impose any conditions as to the nature of the food to be provided, which is, in any event, likely to vary in the course of trading hours, or as to the cost of the food. In my view, condition 1 is adequate for the purposes of s 46(2)(b).

26 Nor do I consider that any particular condition is necessary with respect to the type of entertainment to be provided. It is apparent that a wide variety of entertainment is intended to be provided, and it would not be a matter of simply identifying "live" and "non-live" entertainment. Certainly, on occasions, it is proposed to provide live entertainment, but not at all times, and, in my view, no special condition is required over and above condition 2. Read together, in my view, the above conditions, as his Honour found, sufficiently "ensure that, so far as is practicable, liquor is not sold for purposes other than those purposes which, in the opinion of the licensing authority, necessitated the grant of a special facility licence".

27 The conditions are not so broad as to inhibit the power of the court to take disciplinary action against the respondent in the event of their contravention. It is also to be observed that the conditions are open to be varied if experience should demonstrate that some variation is desirable - see s 64. Furthermore, as his Honour indicated, if, in the future, the Director determines that a special facility licence is no longer necessitated for the premises, subject to any order to the contrary by the Liquor Licensing Court, the licence may be terminated.

29 WALLWORK J: I agree with the reasons for judgment of Kennedy J and to the order proposed by his Honour.

30 ANDERSON J: I agree that this appeal should be dismissed for the reasons given by Kennedy J.

Western Australian Hotels Association (Inc) & Ors v Mad Dog Mexican Co Pty Ltd [1999] WASCA 149

At a glance

Court

Decision date

Before

Catchwords

Source

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Judgment (62 paragraphs)

Western Australian Hotels Association (Inc) & Ors v Mad Dog Mexican Co Pty Ltd [1999] WASCA 149 (26 August 1999)

Parties

Legislation Cited (2)

Cases Cited (2)