Winners Circle Pty Ltd v Liquor Administration Board

Supreme Court of NSW|2007-04-13|Before: Brereton J, Mr J

CITATION : Winners Circle Pty Ltd v Liquor Administration Board [2007] NSWSC 442

HEARING DATE(S) : 13 April 2007 JURISDICTION : Equity Division Duty Judge List

CATCHWORDS : LIQUOR AND GAMING - Poker machine entitlements - Poker machine authorisations - social impact assessment - whether requirements of Gaming Machines Act s 33(2)(a) and (b) are cumulative or alternative - whether transferee hotel must be licensed when SIA provided - whether there must be pending application to transfer PMEs when SIA provided - whether person who has neither applied for nor been granted licence of subject premises has standing to provide SIA.

(NSW) Gaming Machines Act 2001 ss 4, 15, 19, 20, 32, 33, 34, 36, 56, 57 LEGISLATION CITED : (NSW) Gaming Machines Regulation 2002 cl 33 (NSW) Liquor Act 1982

CASES CITED : Minister for Immigration & Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476

Winners Circle Pty Ltd (plaintiff) PARTIES : Liquor Administration Board (defendant) Attorney General of NSW (amicus curiae)

COUNSEL : Mr S B Austin QC w Mr A Hatzis (plaintiff) Mr J R Clarke (amicus curiae)

SOLICITORS : Black Schwartz Vaughan (plaintiff) I V Knight, Crown Solicitor (amicus curiae)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

2053/07 Winners Circle Pty Limited v Liquor Administration Board JUDGMENT (ex tempore) 1 HIS HONOUR: The plaintiff Winners Circle Group Pty Limited is the holder of an hotelier's licence issued under (NSW) Liquor Act 1982, relating to premises at shop 3.11, 28 Harbour Street, Sydney, in respect of which licence fifteen poker machine entitlements have been allocated under (NSW) Gaming Machines Act 2001. Winners Circle proposes to conduct the business of an hotelier from new premises at 4-10 Goulburn Street, Sydney, some sixty-seven metres from its existing licensed premises at 28 Harbour Street. In order to do so, it proposes to apply to the Licensing Court for removal of the hotelier's licence from the existing licensed premises to the new premises, but it has not yet made that application. Winners Circle also proposes to apply for an authorisation for the keeping of poker machines - or, more correctly, "approved gaming machines" - in respect of the new premises, for which purpose it will be necessary for the poker machine entitlements allocated in respect of its licence also to be transferred to the new premises. 2 Part 5 of the Gaming Machines Act is concerned with administrative controls in relation to gaming machines. Division 1 of that Part governs authorisations to keep or dispose of gaming machines. By s 56(1)(a), an hotelier must not keep an approved gaming machine, unless the keeping of the machine is authorised by the Liquor Administration Board. By subsection (2), the Board may authorise an hotelier to keep approved gaming machines. By subs (3), such an authorisation is one that relates to the total number of approved gaming machines kept in the hotel, as well as to the keeping of a particular approved gaming machine. By subs (4)(a), the total number of approved gaming machines that the Board may authorise to be kept in an hotel from time to time consists of the number of approved poker machines that correspond to the number of poker machine entitlements allocated for the time being in respect of the hotelier's licence, together with certain other numbers of machines. That an authorisation to keep an approved gaming machine depends on the existence of a corresponding poker machine entitlement suggests that the poker machine entitlement must have been allocated in respect of, or transferred to, the relevant hotelier's licence, before an authorisation under s 56 can be granted.

3 By s 57(1)(a), an application to the Board by an hotelier for authorisation to keep an approved gaming machine is to be in a form approved by the Board and accompanied by such documents as comply with the requirements of the form. That subsection identifies the relevant hotelier as "the applicant", and contemplates that an s 57 application will be made by an hotelier. By the definition in s 4, "hotelier" is given the same meaning as in the Liquor Act; the Liquor Act defines "hotelier" as the holder of an hotelier's licence. Accordingly, s 57 contemplates an application by a person who holds an hotelier's licence. As an s 57 application is one for authorisation to keep (or dispose of) an approved gaming machine, it is implicit that s 57 contemplates, as the applicant, the person who holds an hotelier's licence in respect of the premises to which the application relates. Accordingly, the existence of a poker machine entitlement allocated in respect of the relevant hotelier's licence - that is, the licence in respect of the premises to which the authorisation application relates - is a precondition to the grant of an authorisation to keep an approved gaming machine in that hotel.

4 The allocation and transfer of poker machine entitlements is dealt with by Part 3 of the Gaming Machines Act. By s 15(2)(a), poker machine entitlements are allocated in respect of the hotelier's licence. By s 19(1), a poker machine entitlement allocated in respect of an hotelier's licence is transferable, albeit only subject to the approval of the Board by reason of subs (2). By s 20(1), poker machine entitlements allocated in respect of an hotelier's licence may be transferred only to another hotelier's licence, and by subs (1A), where an hotelier's licence is removed under the Liquor Act to other premises, the removed licence is, for the purposes of the Gaming Machines Act, taken to be another hotelier's licence to which poker machine entitlements allocated in respect of the hotelier's licence may be transferred. Accordingly, if an hotelier's licence is removed to proposed new premises, the removed licence is taken, for the purposes only of the Gaming Machines Act, to be another licence to which the poker machine entitlements can be transferred. As poker machine entitlements can only be transferred to another hotelier's licence, the removal of the liquor licence would have to be completed before the poker machine entitlements could be transferred to the removed licence.

5 Part 4 of the Gaming Machines Act is concerned with gambling harm minimisation measures. Division 1 provides for the social impact assessment of gaming machines in connection with certain applications for authorisations to keep approved gaming machines on premises. By s 32(1), the Division applies to certain applications under Part 5 of the Act; that is to say, certain categories of application under s 57 for authorisations to keep gaming machines. One of those categories to which Part 5 is made applicable is, by s 32(c)(i), in the case of a new hotel, an application that would, if granted by the Board, initially authorise the keeping of approved gaming machines in the hotel. A "new hotel" is defined by s 4 to mean an hotel that became, or becomes, licensed for the first time under the Liquor Act on or after 26 July 2001, or in respect of which the liquor licence was, or is, removed after that date to other premises. It is clear enough that Winners Circle's new premises will, upon becoming licensed, fall within at least the first part of the definition of "new hotel", if not the second also.

6 By s 33(1), a social impact assessment (SIA) must be provided to the Board in connection with an s 57 application to which Part 4 applies. Such assessment may be provided before the s 57 application is made, or at the same time as that application is made. Subsection (2) requires that an SIA comply with Division 1 of Part 4, and with the Gaming Machines Regulation. Subsection (3) provides as follows: Despite s 57, a social impact assessment may be provided by: (a) a person who has applied for, but has not yet been granted, a hotelier's licence under the Liquor Act 1982, or (b) ... even though an application to which this Division applies has not yet been made by the person...

7 By s 34(1), a social impact assessment is to be either a Class 1 SIA or a Class 2 SIA, as determined in accordance with the Regulations. A Class 2 SIA requires more thorough investigation and preparation and receives more rigorous and protracted examination than a Class 1 SIA. Section 34(2) provides that, subject to the Regulations, a Class 1 SIA is required if the application relates to the keeping of a number of approved gaming machines less than the prescribed number, or if the s 57 application is made in connection with the transfer of poker machine entitlements from another hotel within one kilometre of the hotel to which the application relates. Although cl 33 of the Regulations now makes provision in substitution for s 34(2), the subsection is of some remaining interest in illustrating that what Parliament had in mind was that a Class 1 SIA would be required where one would not anticipate a significant social impact, either because only a relatively small number of machines for a limited period was involved, or because there was a transfer of poker machine entitlements within the same area with no net increase in the area.

8 The Gaming Machines Regulation, by cl 33(2), provides as follows: (2) A class 1 social impact assessment is required to be provided if: (a) the application for authorisation to keep approved gaming machines is made in connection with: (i) the removal of a hotelier's licence to other premises situated within 1 kilometre of the previous premises, or (ii) the removal of a registered club to other premises situated within 1 kilometre of the previous premises, and the number of approved gaming machines that are proposed to be kept in the other premises is no more than the number kept in the previous premises, or (b) the application is made in connection with the transfer of poker machines entitlements from another hotel, or from other premises of a registered club, and the other hotel is, or the other premises are, situated within 1 kilometre of the hotel or club premises to which the application relates. 9 By subclause (2)(a), that provision is made applicable in place of s 34(2)(b) of the Act. By subclause (1), for the purposes of s 34(2)(a), the prescribed period is ten years and the prescribed number of machines is eleven.

10 Section 34 specifies the information that must be included in a Class 1 SIA, including details of the measures that the hotelier proposes to take to ensure that gambling activities in the hotel will be conducted in a responsible manner. Section 36 of the Act provides for the advertising of an SIA. Subsection (1) commences with the words "After the applicant has provided the Board with a social impact assessment in connection with an application to which this Division applies ...", indicating that the application of which the subsection speaks is an application under s 57, and the applicant is the applicant under s 57. It also indicates that it is "the applicant" who is to provide the Board with a social impact assessment.

11 Section 36(2) provides that, if the premises to which the application relates are not yet erected or occupied by the applicant, the advertising requirements are complied with if the application is dealt with in accordance with the Regulations. This appears to contemplate that an s 57 application can be made in respect of premises not yet erected or occupied, by the applicant, and thus premises to which no licence could yet attach.

12 Section 37(1) provides that an application (that is to say, an s 57 application), to which Part 4 of Division 1 applies, cannot be granted unless the Board has approved the SIA in connection with the s 57 application. Subsection (3) provides that the Board may approve the SIA only if it is satisfied of four matters, the first of which is that the SIA "complies with the requirements of this Division and the Regulations in relation to the social impact assessment". Section 37A provides that the Board may not approve a social impact assessment that relates to the keeping of an approved gaming machine in an hotel that is part of a retail shopping centre; the potential significance of this is that "hotel" is unlikely to have been used in this section as referring only to already licensed premises, since it can hardly be supposed that the Board could approve an SIA in respect of a proposed hotel that, upon being licensed, would be part of a retail shopping centre, but was not yet "an hotel" because it did not then have a licence.

13 Clause 39 of the Gaming Machines Regulation provides that, if an SIA is approved by the Board under s 37 of the Act, the hotelier has a period of ten years from the date of the approval in which to acquire poker machine entitlements in respect of the number of gaming machines to which the approval relates, but that if at the end of that period the hotelier has not acquired the poker machine entitlements in respect of that number of machines, a new SIA is required before the hotelier can acquire further poker machine entitlements.

14 On 29 September 2006, Winners Circle provided to the defendant Liquor Administration Board a social impact assessment in relation to the proposed transfer of poker machine entitlements from its existing licensed premises to the new premises. It was a Class 1 SIA. On 14 November 2006, the SIA having been duly advertised in accordance with the requirements of the Act and Regulation and no contrary submission having been received by the Board by that time, the Board approved the SIA. On 22 November 2006, Winners Circle, in reliance upon that approval, entered into an agreement to lease the new premises for a term of seventy years, conditional upon removal of the hotelier's licence but not conditional upon the removal of the attached poker machine entitlements.

15 On 23 November 2006 Triple Eight Hotels Pty Limited, a commercial competitor of Winners Circle, made a submission to the Board to the effect that a Class 2 SIA rather than a Class 1 SIA was required in the circumstances of the proposed application. If that contention were correct, then considerable delay would be imposed on Winners Circle, as far more detailed preparation of the SIA and for more rigorous examination by the Board would be required.

16 Following a preliminary advice by email on 1 December 2006, the Board, by letter dated 4 December 2006, informed Winners Circle that it had formed the preliminary opinion that its approval of the SIA was in excess of power, a mistake, and in contravention of the Act and Regulations. The apparent basis of this view, reflecting the submissions that had been made on behalf of Triple Eight, was that the approval was contrary to cl 33(2) of the Regulation, which defines the circumstances in which a Class 1 as distinct from a Class 2 SIA is required. In that behalf Triple Eight's submission, upon which the Board presumably formed its view, was that the requirements of cl 33(2)(a) were not satisfied.

17 The Board invited Winners Circle to make submissions against the revocation of the approval within fourteen days. Winners Circle sought, and was granted, two extensions of time in which to do so, the second of them expiring on 30 March 2007. Instead of making such submissions, Winners Circle, by summons filed on 29 March 2007, claimed, inter alia: (6) a declaration that the defendant's approval of the social impact assessment given on or about 14 November 2006 was not contrary to the Gaming Machines Act 2001 or Gaming Machines Regulation 2002, was not a mistake and was not in excess of the defendant's power to give such approval.

(7) an order restraining the defendant from revoking or purporting to revoke its approval of the social impact assessment given on or about 14 November 2006. 18 The Board, as defendant, has filed a submitting appearance. The Attorney General sought leave to appear as amicus curiae, which leave was unopposed, and was granted. Mr Clarke, who appeared for the Attorney, made clear that the Attorney did not appear to oppose the relief sought but to provide neutral assistance, by drawing the Court's attention to submissions which might be made, whether for or against the plaintiff's case, but which were not advanced by the plaintiff. I have been much assisted by the submissions made on behalf of the Attorney by Mr Clarke, as indeed I have also by the submissions made by Mr Austin SC and Mr Hatzis on behalf of Winners Circle.

19 The Board's preliminary view did not involve revisiting its approval on account of any change of mind or circumstances since the approval was granted, or for any error within jurisdiction, but for an excess of power; that is, for jurisdictional error. Section 37(3) of the Gaming Machines Act makes clear that satisfaction that the SIA complies with the requirements of Part 4 of Division 1 and the Regulations is a precondition to the validity of an approval of an SIA, and thus that an approval given, where the Board has not been satisfied of compliance with Part 4 of Division 1 or the Regulations - including s 34 and Regulation 33, which stipulate when a Class 1 as opposed to a Class 2 SIA is required - would involve an excess of jurisdiction. In such circumstances, there would have been no exercise of the statutory power conferred on the Board and no decision made under the legislation, so that the Board can "revoke" the void "decision" and make another one - in truth and in law the first and only one - in its place [Minister for Immigration & Multicultural Affairs v Bhardwaj (2002) 209 CLR 597, 614-615, 646; Plaintiff S157/2002 v The Commonwealth (2003) 211 CLR 476, 506]. I do not understand the contrary to have been suggested by Mr Austin SC.

20 Accordingly, the issue is narrowed to whether, in granting the approval of the SIA, the Board acted in excess of its jurisdiction. The basis on which Triple Eight submitted to the Board - and the Board was apparently inclined to think - that there was jurisdictional error, was that a Class 2 SIA was required in the circumstances by the Regulation, by reason that regulation 33(2)(a) was not satisfied.

21 The short answer to that proposition is that cl 33(2)(a) and (b) are alternatives, and if either one of them is satisfied, only a Class 1 SIA is required. Winners Circle relied on para (b), not (a). The SIA referred to the removal of poker machine entitlements from the existing licensed premises to the new premises, and the existing licensed premises were within one kilometre of the new premises. Paragraph (a) is concerned with an actual or prospective application under s 57 for authorisation to keep approved gaming machines, where that application is made in connection with the removal of an hotelier's licence to "other premises" within one kilometre of the previous premises and the number proposed to be kept on the new premises is no more than those which had been kept on the previous premises. Paragraph (b) is concerned with an actual or prospective application under s 57 for authorisation to keep approved gaming machines, where that application is made in connection with the transfer of poker machine entitlements from another hotel situated within one kilometre of the hotel to which the application relates; it appears in that respect seems to contemplate an existing hotel to which the application relates.

22 Triple Eight's objection, which the Liquor Administration Board was apparently inclined to accept, was that Winners Circle's prospective s 57 application was not within paragraph (a), because Winners Circle had kept no approved gaming machines in its existing licensed premises, so that, under the contemplated s 57 application, the number of machines proposed to be kept in the new premises would necessarily exceed the number that had been kept in the previous premises. Winners Circle did not dispute that that circumstance prevents it from relying on paragraph (a). The question is whether the circumstances fell within paragraph (b).

23 The answer to that question is informed, at least to some extent, by the comparison of paragraphs (a) and (b), which I have just undertaken. The Attorney General draws attention to the circumstance that paragraph (a) speaks of removal of an hotelier's licence to other "premises", whereas paragraph (b) speaks of a transfer of poker machine entitlements from another hotel to the subject hotel. Use of the concept of "premises" in paragraph (a) as distinct from "hotel" in paragraph (b) lends some support to the view that, for the purposes of paragraph (a), at the time of the SIA, the new premises will not necessarily yet be licensed and will, therefore, not be an hotel but merely "premises"; whereas paragraph (b) assumes that the transferee premises will already be an hotel and thus have a license, as "hotel" in the Gaming Machines Act has the meaning it is given in the Liquor Act, namely premises to which an hotelier's licence relates.

24 However, there are other indications in the Gaming Machines Act, some of which I have already mentioned, that "hotel" is not always used in that context. Section 37A is one such indication.

25 Clause 34 of the Regulation applies to a removal covered by cl 33(2)(a), as well as to any other case in which a Class 1 SIA is required, and, therefore, contemplates that an "hotelier" must provide details of measures proposed to be taken to ensure that gambling activities in "the hotel" will be conducted in a responsible manner - even though in the case to which cl 33(2)(a) applies there will not yet be an hotel or an hotelier in respect of it.

26 It is important to bear in mind that the application referred to in both paragraphs (a) and (b) of cl 33(2) is not an application for approval of the SIA, but an application under s 57, either concurrent or prospective, for authorisation to keep approved gaming machines. When that application is made, it must then be an application in respect of an hotel, if paragraph (b) is relied upon, but it is the s 57 application that must have the connection with the transfer of poker machine entitlements from another hotel to "the hotel ... to which the application relates", and that judgment has to be made in respect of the actual or prospective s 57 application, not the SIA. It does not follow that the contemplated s 57 application must have already satisfied that requirement at the time that the SIA is provided, since it is clear that the SIA can be provided before the s 57 application is made. All that is necessary is that, when the s 57 application is made, the SIA which has previously been provided can then be said to have been provided in connection with the s 57 application. That requirement is imposed not by clause 33 (2) (b) but by s 33 (1) of the Act.

27 Accordingly, although I accept that the transferee hotel must be licensed at the time when an s 57 application for authorisation to keep approved gaming machines is made, if cl 33(2)(b) is to be relied upon, I do not accept that that condition must apply when the SIA is provided, which may be before the s 57 application is made.

28 The Attorney General also suggested that the phrase "in connection with" in cl 33(2)(b) may require an actual existing application to transfer poker machine entitlements. I do not agree. The phrase "the application" referred to in cl 33(2)(b) is, as I have said, not the application for approval of the SIA, but the actual or prospective application under s 57 for authorisation to keep approved gaming machines. When that application is made in due course, a Class 1 SIA approval will suffice if that application is one made in connection with the transfer of poker machine entitlements from an hotel within one kilometre of the new premises. On the face of the SIA, that is what is presently contemplated. Accordingly, I do not accept that cl 33(2)(b) requires an actual existing application to transfer poker machine entitlements at the time of provision of the SIA. Similarly, the circumstance that poker machine entitlements cannot be transferred to the new premises until after the removal of the hotelier's licence to those premises does not mean that an SIA provided prospectively cannot be one provided in connection with a later s 57 application. A similar point might have been raised based on the Gaming Machines Act, s 33, but it is plain, from the words of s 33(1), and for that matter s 33(3), that a social impact assessment can be provided before any s 57 application is made.

29 The result is that a Class 1 SIA only is required for the purposes of cl 33(2) in two circumstances. The first is where the s 57 application in connection with which it is provided is itself in connection with the removal of a licence to new premises within one kilometre and the number of approved gaming machines kept will not increase; and the second is where the s 57 application in connection with which the SIA is provided is itself in connection with the transfer of poker machine entitlements to the subject hotel from another located within a radius of one kilometre.

30 The s 57 application which the present SIA contemplates is one that relates to the new premises, which, when the s 57 application is made, will be an hotel, and that s 57 application will then be one made in connection with the transfer of poker machine entitlements from the existing licensed premises to the new premises. It follows that, as that is the application which the SIA contemplates, a Class 1 SIA could be approved. However, if the s 57 application ultimately made does not then satisfy the requirements of cl 33(2)(b), then a Class 1 approval will be of no avail, because the requisite (Class 2) SIA will never have been provided. Nonetheless, it follows that the basis upon which Triple Eight contended, and the Board appears to have formed the view, that it exceeded its jurisdiction, is incorrect, and that, subject to the question of whether the SIA was provided by a person entitled to provide it, to which I must come, the Board was within jurisdiction in approving a Class 1 as distinct from a Class 2 SIA in the circumstances.

31 However, the other matter raised by the Attorney General is the question whether Winners Circle may not have had standing to provide an SIA in respect of the new premises. Section 57 of the Act, as I have already indicated, contemplates an application by an hotelier, and implicitly by the hotelier in respect of the premises to which the application relates. It contemplates, therefore, that there is a person who holds a licence in respect of the premises to which the application relates. This is all the clearer by reason of s 56, which prohibits an hotelier from keeping, or disposing of, approved gaming machines without the relevant authorisation.

32 Section 33, which imposes the obligation to provide an SIA in connection with applications to which Part 4 of Division 1 applies, does not itself impose that obligation specifically on any particular person, and does not itself identify who has standing to provide the SIA to the Board. However, there are indications elsewhere that it is the s 57 applicant who must do so, of which the clearest is s 36(1). Accordingly, and subject to s 33(3), what is contemplated is an application by the hotelier in respect of the premises to which the application relates.

33 Section 33(3) extends the class of persons who may make an application to persons who have applied for, but not yet been granted, an hotelier's licence, even though an s 57 application has not yet been made by that person. While I have observed that s 36(2) appears to contemplate an application in respect of premises which are not yet erected or occupied (and therefore could not be the subject of a licence), that accommodates, and does work in, the situation of an application for removal of a licence from licensed premises to proposed new premises in respect of which the applicant for removal will have, for the purposes of s 33(3)(a), applied for, but not yet been granted, an hotelier's licence for the new premises. The words of s 33(3) make clear that Parliament thought that it was thereby broadening the class of persons who could provide an SIA to those who did not already hold an hotelier's licence in respect of the subject premises, but at the same time limiting the widened class to those who had already applied for, but not yet been granted, such a licence.

34 Thus Part 4, Division 1 has the effect of requiring that an SIA be provided by the actual or intending s 57 applicant. Section 33(3) extends the classes of those who may provide an SIA from the current licence holder in respect of the subject premises to a person who has applied for, but not yet been granted, a licence in respect of the subject premises. Standing to provide an SIA is thus conferred on the current licence holder (under s 36(1), in conjunction with s 57), and on a person who, although not a current licence holder, has applied for a licence in respect of the subject premises (s 33(3)). That would include a person who has made an application, which has not yet been granted, for removal of a licence to the subject premises. However, standing is not conferred on a person who is neither the current licence holder, nor an applicant for a licence in respect of the subject premises.

35 This result is not without some policy sense. The alternative view is that any hotelier - that is any person holding a licence in respect of any premises wheresoever - could provide an SIA in respect of the subject premises, and would have the consequence, as I forecast in argument, that a competitor could, without the consent of the licensee of the subject premises, provide an SIA in respect of them and have it approved - or perhaps even more significantly from a commercial perspective, rejected. The purpose of s 33(3), in conjunction with s 57, is to require that there be at least some connection between the person who provides the SIA and the actual or potential licence of the subject premises. It requires that there be an actual or prospective connection between the provider of the SIA and the licence of the subject premises.

36 Accordingly, in my view, it is a requirement of Part 4 of Division 1 that any SIA be provided by the existing licence holder of the premises to which the application relates, or by a person who has applied for a licence in respect of those premises. Winners Circle does not yet satisfy either of those requirements. It follows that, when the SIA was provided to and purportedly approved by the Board, it did not comply with the requirements of Part 4 Division 1, because it was not provided by the existing licence holder, or a person who had applied for a licence in respect of the premises to which it relates.

37 Accordingly, although not for the reasons which Triple Eight advanced, and on which the Board presumably acted, I am not satisfied that the Board considered or was satisfied that the SIA complied with the requirements of Part 4 Division 1 and, in those circumstances, I am unable to make the declaration sought in paragraph 6 of the summons.

38 It follows that my order must be that the summons be dismissed. In circumstances where the defendant has filed a submitting appearance and the Attorney has appeared as amicus curiae, there should be no order as to costs.

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