Fahey & Ors v David Jones (Australia) Pty Ltd

[1989] HCATrans 125

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A7 of 1989

B e t w e e n -

NOEL KIERON FAHEY

IAN PHILLIP HORNE

S.A. & H.T. RAPHAEL INVESTMENTS

PTY LTD and

PETER WHALLIN

Applicants

and

DAVID JONES (AUSTRALIA) PTY LTD

Respondent

Application for special

leave to appeal

MASON CJ
BRENNAN J

Fahey

DAWSON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 1 JUNE 1989, AT 12.36 PM

Copyright in the High Court of Australia

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MR B.R.M. HAYES, QC: May it please the Court, I appear

with my learned friend, MR J.L. FIRTH, for the

applicant. (instructed by Kelly & Co)

MR T.R. ANDERSON, QC: If the Court pleases, I appear with

my learned friend, MR S.N. ROBSON, for the

respondent. (instructed by Hume Taylor & Co)

MASON CJ:  Yes, Mr Hayes.

MR HAYES: If the Court pleases, this case involves the

grant of what is called a general facility licence.

The application involves the grant of a general

facility licence under the LIQUOR LICENSING ACT

of South Australia. The application for special

leave involves one important point and that is
the role of the supreme court - the Full Court -

on the hearing of an appeal pursuant to

section 23 of the LIQUOR LICENSING ACT.

We say, with respect, that the Full Court

erred in its approach to hearing and looking

at the evidence which was before the licensing

court and then substituting its view of that

evidence when section 59 of the LIQUOR LICENSING

ACT invests the licensing court with a very wide

discretion. The licensing court, we say, in

this case, exercised that discretion and exercised

it properly and the majority of the Full Court

interfered with that discretion on the basis

of saying, in effect, "On our view of the evidence
the discretion ought not to have been exercised

in the way in which the licensing court did so."

MASON CJ:  Did not the Full Court conclude that the licensing

court had erred in law in terms of the interpretation

that it had placed upon one and, I think,

two sections of the Act. That being so, there

was an error in the exercise of the discretion.

Are you complaining that the matter should have

been sent back to the licensing court for

re-exercise of the discretion? (Continued on page 3)

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Fahey
MR HAYES:	No, with respect, our answer to that is this:	the

Full Court, whilst it says in parts of its judgment

that the licensing court erred in law in its

interpretation of section 44 and section 63 of

the Act, that decision was in fact based on the

view that the Full Court took of the evidence. That

is the first point,that we say and that is an

erroneous approach by the Full Court. But even if

that were so, and even if the licensing court erred

as a matter of law in its interpretation of those

two sections and concluded wrongly, as a matter of

fact, that there was no need or demand in that

locality or on the premises, the licensing court

went further than that and then turned to its overall

and very wide discretion under section 59, and said

even if the court was wrong on its approach under the

two sections it, in the exercise of its discretion -

which is quite a separate discretion - would not

have granted the licence for the reasons it gave.

Your Honour, if I - - -

MASON J: If you could just demonstrate that for us at this

stage, Mr Hayes.

MR HAYES:  Yes. If I can take Your Honour to page 17 of the

appeal book.	At the second penultimate paragraph
on that page:

There is one aspect which does disturb me

and would have led me to refuse this application

if my decision as to Section 44 and 63 had

been affirmative.

Now that is where I say the licensing court then

goes on to say:

In truth -

and what the licensing court was saying was:

In truth this is a "bottleshop" application.

And deals with - I will not go through all the

details as to why.

MASON J:	No, there is no need to.
MR HAYES:	The point that we make, with respect, is that there the licensing court says, as a matter of fact, having
seen the evidence,  knowing as a specialist
court, as the learned acting judge says further
down towards the end of the judgment at page 20,
where he talks of "this 'balance in the industry'"
and of his years of -

"to-ing and fro-ing" in this jurisdiction

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Fahey

and seeing and assessing -

the liquor industry "from the outside" -

at the end of all of that he has concluded, as a

specialist tribunal, that in the exercise of what

the Parliament gives as a very wide discretion,
he has chosen to exercise it against the grant of

the licence.

(Continued on page 5)

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Fahey

MR HAYES (continuing): Now we say, with respect, in those

circumstances and quite apart from whether or not

he was right or wrong in the interpretation of

sections 44 and 63, the Full Court ought not

to substitute its views over those of an experienced

and specialist tribunal such as the licensing

court and that is the special leave point which

we say, because under section 23 of the Act the
role of the Full Court, in our respectful submission,

is to hear the appeal as a strict appeal and,

when it comes to the exercise of discretion,

is not to interfere unless it can point somewhere

to an erroneous exercise of that discretion.

MASON CJ: Well, now, as to that, if you look at pages

84 to 86 of the application book, you will see

that that is where, I think, Mr Justice Prior

detects an error of law in that exercise of discretion.

MR HAYES:  Yes. I will deal with that. With respect,

he says in the middle of that page - and Your Honour

will see that he says:

I think the evidence called for a finding of inadequate provision for the needs of those -

Perhaps I will go up:

It must be construed consistently with it

and against that fact that the general

facility licence is designed "to meet

particular needs and circumstances". I

think the evidence called for a finding of

inadequate provision for the needs of those

attracted to the premises.

He goes on:

After this the learned judge referred particularly to the terms of sub-s. (3)

of s. 44 -

Now, may I pause there. There that was concerned,

again, with section 44 and the impact on the

trade of people within the vicinity. It is not

his discretion under section 59. He goes on:

The Licensing Court judge then indicated

that there was an aspect which "disturbed"

him -

and then the quote. Then, he says, at page 86:

Here, I think, a significant error

appears.

Now, if Your Honour would just look at what he

defines or what he finds to be the significant

error -

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The languasge of subsection (2) of s. 44 makes it plain that the general facilities

licence is not to be granted if some other

licence would be reasonably adequate for

the purposes for which the general facility

licence is sought.

(Continued on page 7)

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Fahey

MR HAYES (continuing):

It is already apparent from the decision of the Licensing Court that the so called "bottleshop application" was not appropriate because of the terms of s.38

· itself. The splitting of the application

into two possible licences does not seem

to me to be a proper course within the

language of sub-s.(2). Indeed, I cannot

read the language of sub-s. (2) to

extend to a number of licences, separately

pursued, as being a basis for a refusal

of a general facility licence. The
differing conditions referred to in

s.38 were not relevant to the s.44

application.

Now, none of that, with respect, is dealing with -

in fact, what the j 1 udge was saying was, ''I am

now going on to deal with my general discretion

under section 59, but I find, as a matter of

fact, not as a matter of law, that this application fell within section 38 as a

"bottleshop application", but what I am saying" -

in our respectful submission, this is what the

judge said,"is having seen all of the evidence, having looked at the locality, having seen what

is available there and having heard how

David Jones proposes to operate this operation,

it appears to me, as a matter of fact·, it is

a bottleshop licence, and as a matter of policy,

if that is the case, then having regard to

my experience in that area, I would not allow it to be granted. 11

Now he is not saying, with respect, that

you have made the wrong application, he is

saying you have made the right application,

but because of the character of the section 44

application, it falls more within what is

commonly thought and understood to be a

bottleshop, is not statutorily a bottleshop,
because it is not split up and that is when

His Honour goes over the page to 87 to say,

in the middle of that page:

In my view, the evidence before the Licensing Court judge established a proper basis for the grant of a general

facilities licence under s.44. There

was error in identifying the application

as in truth just a bottleshop application.

The consideration of factors arising

under s.38 of the Act to deny a licence

under s. 44 was wrong.

7

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Fahey

Now, we say, with respect that that is simply

not what the 1icensing CQUrt judge did. He

did not say, with respect, that this is a
section 38 application and he did not apply
any of the factors applicable to section 38

for the purposes of judging the application.

He did not do any of that. He recognized

that it was a section 44, but what he said

was as a matter of fact, he then went on to

say, well, what does this look like on

the evidence. It looks like a bottleshop

application.

(Continued on page 9)

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MR HAYES (continuing):	It, of course, is not, but that is

what it, for all intents and purposes, factually

amounts to, and then His Honour says:

The unqualified discretion to grant

or refuse the application was exercised

under misapprehensions and by reference

to marginal profitability as a general

experience despite evidence described as

"too nebulous" in the particular

circumstances then before the court to

justify refusal under subsection (3) of s.44.

DAWSON J:  If what you say is right, then he could have

refused the application, or should have perhaps

refused it under section 44(2).

MR HAYES:  No, Your Honour, with respect, because he, because of

the nature of the application made by David Jones

he recognized that the way in which they wanted tb

operate put them outside of the other type of

licence which might have been suitable, namely a

bottle shop licence, that is a section 38 licence.

DAWSON J:  Then it was not, in effect, a bottle shop

application.

MR HAYES:  No, it was not, but it had - from a factual point

of view what he was saying is it had all the indicia

of a bottle shop application. He was bringing to

bear his judgment, we say with respect, having

regard to all of the evidence before him and what

David Jones had said they wished to do and all of

that had the indicia of a bottle shop application

but, of course, from a statutory point of view it

was not a bottle shop application. It was indeed

an application under section 33 for general

facility licence.

DAWSON J:	But it was in truth, according to the licensing court, a bottle shop application which means that a
bottle shop licence would have been adequate for
the purposes for which the facility was sought and
that brings in subsection (2).
MR HAYES:	We would submit, with respect, that when the learned

licensing judge was saying, "In truth this is a

bottle shop application", and when Your Honour reads

what he then said as to why he thought it was a bottle

shop application, it was for determining from the

nature of the activities proposed from a general
exercise of his discretion under section 59 whether,

even though it fell within the category of section 44,

because it was not a bottle shop licence in the strict

sense because it was not separated under section 38,

even though it fell within the proper application

procedure he was not going to grant the licence

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Fahey

because from a factual point of view he said,

"It is bad from the industry's point of view".

He was not saying, we say, with respect, "This 1s

a bottle shop licence and you should have made an

application under section 38 for a bottle shop

licence". He was not saying that because he had

found they could not make the application under

section 38 because it was not separate premises.

He had already found that to be the case.

(Continued on page 11)

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Fahey

BRENNAN J:  Mr Hayes, it was an application under 44, was it

not?

MR HAYES: It was.

BRENNAN J: Therefore, subsection G)applied.

MR HAYES:  Yes.

BRENNAN J: And those matters which were referred to in

subsectionO)had to be considered. And they were

considered.

MR HAYES:  Yes. They were.

BRENNAN J: And, then, when it comes section 59, were any

matters considered under 59 which did not truly

fall within 44(3)?

MR HAYES: Yes, with respect, and that is when His Honour deals

with that. I can only put it now, I cannot point to

any specific matters other than to say His Honour

viewed his general discretion under section 59 in

terms of the liquor industry and maintaining the

checks and balances within the industry. He looked

at 44(3) as saying, well, there is not any concrete

evidence to show that so-and-so down the road is

going to go broke if this application is granted.

But, none the less, I know enough about this

industry and I know enough about the locality in

which it is situated to know that it is not

generally, as he says there, "consistent with the underlying policy of the legislation to allow it".

Now, he may well have been wrong in that,

with respect, but we say,that nothing has been

shown, it has not been pointed to certainly in the

judgment of the Full Court which says he erred

there, other than to say, well, he erred because

he had already looked at section 44(3) and that

he looked at it as in truth a bottle shop application,

which it was not.

BRENNAN J: It seems to me that, before we get to 59, if we were

to consider that on appeal to this Court, we would
have to be able to find that there was something

distinct between the factors that fell for consideration

under 59 and those which fell for consideration under

44(3). That does not appear, at least with transparent

clarity, from the judgments below.

MR HAYES:	I can only direct Your Honour's attention to page 18
of the appeal book where he sets out in some detail the nature of the - - -

BRENNAN J: Oh, yes, I appreciate that, but it seems to me that

all of those things, even if he puts it in terms of policy and nice adjustments and so forth, the nice

adjustments and the matters of policy all relate

to the questions of effect on other licences.

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MR HAYES:	Yes.

BRENNAN J: Is that not a section 44(3) problem?

MR HAYES:  With respect, it may in some cases be a section 44(3)

2roblem. In other cases we say the section 44(3),

from an objector's point of view, they may not be

able to get to the threshold of section 44(3)

by saying, "Look, that's the concrete effect it's

going to have on adjoining licensees". That, of

itself, does not preclude the licensing court

because it is a specialist court from then bringing

to bear other considerations such as policy

considerations under the Act in the exercise of

its wide jurisdiction.

BRENNAN J:  I can understand that very readily in some cases

you may be able to come and say, "Well, here is

the Full Court interfering with a section 59

discretion which is at large not constrained

in any way", but, in this case, it seems to me

that you would have to be able to identify

that there is something under section 59 which

arose for consideration thatwas not under

section 44(3). It may be that you are right,

but it certainly does not appear very clearly

from the jud~ments below.

MR HAYES:	Yes.
BRENNAN J:	And that seems to me to be the difficulty

in the way of making it a suitable vehicle to

raise the problem that you wish to agitate.

MR HAYES:  Yes. Your Honour, at page 19 - I do not want

to read too much - His Honour, at the bottom of

that page, says:  ·

It is true that many of the objections to

the "supermarket - bottleshap" enterprise

(I regard David Jones in the same light) are

met by what the witnesses have said. Yet I

feel all of this is rather open ended.

Whilst I might be able to accent present

assurances in the various areas of concern

I still ask myself - "what is there to prevent a change in policy?" At least one

witness agreed that in general retailing it

is not unusual to see altered marketing

techniques being introduced. The answer to

that question in my view is - "absolutely nothing."

I have considered the potential impact of this

type of operation on licensees who do not
have the considerable resources available to

this Company. There is a very real risk of

such an operation affecting adversely the
balance in the industry in the area and the

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Fahey

policy enshrined in Section 38 as I interpret it.

These considerations would have led me to
refuse this application whether or not the

applicant had "met" the provisions of Section 44

and Section 63.

(Continued on page 14)

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MR HAYES (continuing):  There, Your Honour, are the

considerations which he took into account which

we say he was perfectly entitled to take into
account. Indeed, he was obliged by the terms of
the specialist jurisdiction he was exercising to do
so, and then he goes on after that to point to his
experience in the industry and the checks and

balances and the like.

We say, with respect, that that is a classic

example of not being able to reject an application
because you have not shown concrete evidence that

so-and-so is going to go broke or he is going to

actually suffer in this particular way - that is the

section 44(3) test - but here is sufficient
open-endedness in the nature of the evidence given,
for example, David Jones said, "We won't do this, we
won't do that", but there were no guarantees that

they ultimately would not, and he recognized that,

that is a matter that he was able to judge having

seen and heard the witnesses and, similarly, his
concerns about the policy which we say he was

entitled to take into account.

That is a classic example of the exercise of

discretion and the Full Court substituting its own

views without identifying an error in his approach. With respect, that is the basis upon which we seek

special leave and we would invite the Court to grant
special leave in this case because it does raise

the issue about section 23 - the wording of section 23

and section 19 which tells the licensing court to

inform itself in whatever way it sees fit, is a fairly
common provision these days in lots of legislation
of a specialist kind, and we say that would justify

the grant of special leave. If the Court pleases.

MASON CJ:  Thank you, Mr Hayes. The Court will adjourn

now and resume sitting at 2 o'clock.

AT 1.00 PM LUNCHEON ADJOURNMENT

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Fahey

UPON RESUMING AT 1.59 PM:

MASON CJ:  The Court need not trouble you, Mr Anderson.

Application for special leave is sought on

the ground that the Full Court wrongly

substituted its discretion for that of the

specialist tribunal, the licensing court.	We
are not persuaded that in the particular
circumstances of this case the Full Court's

conclusion that the exercise of discretion by
the licensing court miscarried was attended

with sufficient doubt to warrant the grant of

special leave to appeal.	The application is
therefore refused.

MR ANDERSON: If the Court pleases, I apply for costs.

MASON CJ:	You do not resist that, Mr Hayes?
MR HAYES:	No, Your Honour.
MASON CJ:	The application is refused with costs.

AT 2~00 PM THE MATTER WAS ADJOURNED SINE DIE

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