Brandon Lynch v Independent Liquor and Gaming Authority

[2017] NSWSC 513

Supreme Court

New South Wales

Medium Neutral Citation:	Brandon Lynch v Independent Liquor & Gaming Authority [2017] NSWSC 513
Hearing dates:	26 April 2017
Decision date:	03 May 2017
Before:	Sackar J
Decision:	See para [32]
Catchwords:	Statutory construction; relationship between section 59 and section 61 of the Liquor Act 2007 (NSW); meaning of dispossessed licensee.
Legislation Cited:	Liquor Act 2007 (NSW)
Cases Cited:	Alcan (NT) Alumina v Commissioner of Territory Revenue (2009) 239 CLR 27 Federal Commissioner of Taxation v Consolidated Media Holdings (2012) 250 CLR 503 Project Blue Sky v Australian Broadcasting Authority (1988) 194 CLR 355
Category:	Principal judgment
Parties:	Brandon Bernard Lynch (first plaintiff) Helen Catherine Lynch (second plaintiff)   Independent Liquor & Gaming Authority (first defendant) State of New South Wales (second defendant)
Representation:	Counsel: Ms B Nolan (plaintiffs) J S Emmett (second defendant) Ms C Lin (third defendant)     Solicitors: Koutzoumis Lawyers Crown Solicitor (second defendant) Gregory Falk & Associates (third defendant)
File Number(s):	2016/289603
Publication restriction:	n/a

Judgment

1. By an amended summons of 19 December 2016 the plaintiffs seek an order in the nature of certiorari setting aside the decision of the first defendant to refuse the first plaintiff’s application made pursuant to section 59 of the Liquor Act 2007 (NSW) (the Act) to transfer the hoteliers licence LIQH 4001060776 relating to the Town and Country Hotel to alternative premises in Marrickville (Section 59 Application). Further the plaintiffs seek an order in the nature of mandamus that the first defendant decide the Section 59 Application according to law.

Procedural History

2. The proceedings were first fixed before me for three days commencing on 13 February 2017. As a result of discussions that occurred on that day the parties decided to have discussion amongst themselves. I listed the matter again for four days commencing 24 April 2017.

3. In the interim the plaintiffs and the third defendant resolved all issues between them.

4. The only question remaining for the court to determine was whether the first defendant had erred in law in the approach that it took in determining the first plaintiff’s Section 59 Application. For the reasons which follow I am of the view that it did so err and I advised the parties when they appeared before me on 26 April 2017 and made orders accordingly. I also indicated to the parties I would give my reasons. These reasons now follow.

Legal Principles

5. The question arising for determination in this case involves a construction of various provisions of the Act.

6. With any statute, the task of construction must begin and end with the statutory text itself: Alcan (NT) Alumina v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]; Federal Commissioner of Taxation v Consolidated Media Holdings (2012) 250 CLR 503 at [39].

7. When reconciling two provisions of an act, one provision may be read down so as not to apply in the context of another provision. The court will generally endeavour to ensure the provisions work together according to their terms on the presumption the legislation is designed to give effect to harmonious goals: Project Blue Sky v Australian Broadcasting Authority (1988) 194 CLR 355 at [70].

Background Facts

8. As at 3 July 2015 the first plaintiff (Mr Lynch) held a liquor licence for premises at 2 Unwins Bridge Road, St Peters (St Peters premises).

9. On 3 July 2015 Mr Lynch sold the St Peters premises to the third defendant. From that date Mr Lynch occupied the St Peters premises and operated a licensed business pursuant to leave granted to him by the third defendant.

10. On 16 November 2015 Mr Lynch filed his Section 59 Application with the first defendant, the Independent Liquor & Gaming Authority (the Authority) for the removal of his licence from the St Peters premises to his new premises at 220 Marrickville Road, Marrickville (Marrickville premises).

11. The third defendant initially objected to this transfer.

12. On 26 February 2016 the third defendant issued Mr Lynch with a notice to vacate the St Peters premises by 31 March 2016. Mr Lynch vacated the St Peters premises as required by the notice.

13. On 7 April 2016 the third defendant made an application under section 61 for the transfer of Mr Lynch’s licence to itself.

14. On 12 October 2016 the Authority rejected Mr Lynch’s Section 59 Application. According to the Authority’s Statement of Reasons:

[50]…the Applicant, Mr Brandon Lynch, is no longer the licensee of the Premises at the time of determining this Application.

[51] In circumstances where the Applicant no longer holds the license that is the subject of the Application, the Application is refused under section 59 of the Act, as it cannot proceed.

15. In summary, the effect of the reasons given by the Authority was that as a consequence of Mr Lynch’s dispossession of the premises and by reasons of the operation of section 61(3) and 61(4) of the Act, he was no longer the licensee of the premises at the time of the determination of the Section 59 Application. Consequently, it was reasoned, where Mr Lynch no longer held the licence subject to the Section 59 Application, the Application had to be refused and could not proceed.

Consideration

16. Both the plaintiffs and the first defendant in the hearing before me submitted for a slightly different reason that the better view of the Act was that although the Authority’s approach to the interaction between sections 59 and 61 was understandable, it had fallen into error in refusing Mr Lynch’s application.

17. Following careful examination of the provisions of the Act in question, I take a similar view to the parties and am satisfied the Authority did err in refusing Mr Lynch’s Section 59 Application.

18. In short, the Authority’s decision is premised on two false assumptions – first, to make an application under section 59 you have to be a licensee at the time the application is determined, and secondly, a licensee who is dispossessed is no longer a licensee for the purposes of the section 59 application. In my view, an applicant need only be a licensee at the time of making a section 59 application, and in any case, a licensee who, like Mr Lynch, has been dispossessed, is still a licensee for the purposes of the Act, including section 59.

Does a person have to be a licensee to have a section 59 application determined?

19. Certainly, on its terms section 59(1) only permits a person to apply for removal of a licence to another premise if that person is a licensee. However, there is nothing in section 59 which requires the applicant to remain a licensee at the time that application is determined.

20. In other words, if the applicant’s licence ceases to be in force after the applicant has made a section 59 application but before that application has been determined, there is no basis under section 59 for the Authority to deny the application. Indeed if, following the application, the licence has ceased to be in force by reason of section 46, the Authority may have other grounds for refusing the application, for example under section 59(5). However, once a licensee has a section 59 application on foot, the licensee has, at the least, a statutory interest to have the application determined by the Authority in accordance with the Act, regardless of their status following the application.

21. On these grounds, Mr Lynch clearly satisfied the requirement of being a licensee at the time of the section 59 application (being 16 November 2015), and the Authority should not have refused his application on the grounds of him supposedly losing the status of a licensee following his Section 59 Application.

Is a person who was a licensee but has been dispossessed still a licensee?

22. In any case, I am also satisfied Mr Lynch never lost his status as a licensee as, in my view, a person who was a licensee but has been dispossessed is still a licensee under the Act, and therefore able to make section 59 applications.

23. First, the act of a licensee being dispossessed does nothing to enliven section 46 and thereby cause the licence to cease to be in force. Under section 46, except during any period of suspension, a licence continues to be in force until such times as it is surrendered to the Authority, cancelled or otherwise ceases to be in force, or in the case of a licence that is granted for a specified term, when the term expires (section 46(1)). A licence may be suspended or cancelled by reason of a late payment of a period licence fee (section 58B) or by reason of some disciplinary action (section 141 (1A)(a) and (b). Nowhere, however, does the Act provide by reason of a licensee becoming dispossessed the licence ceases to be in force. Thus as long as section 46 is not engaged, the licence will continue to be in force.

24. Further, a person who was a licensee but has been dispossessed is still expressly referred to as a licensee under section 61 dealing with ‘applications for transfer of licence on dispossession of licensee’. Specifically, section 61(5) refers to such person as a ‘dispossessed licensee.’ ‘Licensee’ is defined as a holder of a licence, and ‘Licence’ is defined as a licence under the Act (section 4). It follows that a licensee making a section 59 application but who has been dispossessed of their licensed premises is still a licensee, albeit a dispossessed one.

25. Such a finding is consistent with the fact a dispossessed licensee still holds rights in relation to the licence. For example, if an application is made under section 61(2) by the owner of the licensed premises or the business owner, the dispossessed licensee must be given a reasonable opportunity to make submissions in relation to the section 61 application. In my view, it would be quite wrong to construe this Act on the basis that, once dispossessed, an application made by that licensee prior to dispossession can simply be put to one side and ignored because of the licensee’s new status. In creating a licence of this particular character, especially when the Act does not seek to extinguish that licensee’s rights and entitlements (as may well be the case if the licence were otherwise said to be cancelled for example), the Act clearly intends to allow a dispossessed licensee to retain their rights as a licensee.

26. Further, there are valuable statutory rights that attach to a licence being removed from one place to another rather than leaving the licensee to apply for a fresh licence. In particular section 21(1A) of the Gaming Machines Act 2001 (NSW) specifically carves out the removal of a hotel licence or a club licence from the provisions that otherwise require the forfeiture of gaming machine entitlements whenever they are transferred, provided the removal is to premises in the same local government area. Mr Lynch’s position as conceded by the first defendant is a case in point – the St Peters premises and the Marrickville premises are in the same local government area.

27. In addition, the recognition of a deemed licensee under section 61(3) shows the Act contemplates more than one class of licensee. Section 61(3) deems or takes to be the owner or the person entitled to possession as the licensee. Section 61(2) expressly contemplates that such a person needs to change their deemed status for one of actuality. Once that occurs and if the application is granted for a transfer the owner or the person entitled to possession may well become the licensee. However, before such an application is determined, the Act clearly contemplates the co-existence of both the deemed licensee and the dispossessed licensee concerning the same licence. They are licensees of a different species with different rights and obligations, but they can and do co-exist under the same scheme.

28. Indeed, it would be entirely unexceptional for the Authority to be confronted with two applications – one under section 59(1) for the removal of the licence to new premises and another under section 61(2) for the transfer of a licence to a new licensee. In relation to the former, the Authority is expressly empowered to refuse the application if it adversely affects the premises owner (section 59(4)). In relation to the latter, the Authority is required to ensure the dispossessed licensee has notice of the application and to take into consideration any submissions made by the dispossessed licensee (section 61(5)(a)). The scheme of Act is the Authority, in the ordinary exercise of its discretion, will consider both such applications if they are made and grant one or the other, or perhaps refuse them both.

29. The preferable interpretation therefore, in my view, is that section 61(4) should be read down so that it does not apply to applications under section 59. It seems to me perfectly open for both applications not only to co-exist but to be considered at the same time or consecutively, depending on the Authority’s wishes.

30. This construction is consistent with the objects of the Act, in particular section 3(1)(b) which identifies an object of the Act as facilitating the balanced development in the public interest of the liquor industry through a flexible and practical regulatory system with minimal formality and technicality.

31. On these grounds, Mr Lynch, as a dispossessed licensee, is still a licensee for the purposes of the Act. Thus, even if the Authority was correct in holding an applicant must be a licensee at the date of their section 59 application determination, Mr Lynch would satisfy this criterion.

Summary of findings

32. Accordingly, as I indicated in the course of argument, the Authority’s decision should be set aside as containing jurisdictional error or error of law in the face of the record.

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Decision last updated: 03 May 2017