Hamilton Island Enterprises Limited v Chief Executive , Department of Justice and Attorney-General
[2012] QSC 218
•17 August 2012
SUPREME COURT OF QUEENSLAND
CITATION:
Hamilton Island Enterprises Limited v Chief Executive , Department of Justice and Attorney-General [2012] QSC 218
PARTIES:
HAMILTON ISLAND ENTERPRISES LIMITED
(ACN 009 946 909)(Applicant)
v
CHIEF EXECUTIVE, DEPARTMENT OF JUSTICE AND ATTORNEY-GENERAL
(First Respondent)
and
HAMILTON ISLAND DEVELOPMENT CA LIMITED
(ACN 010 254 216) AND HAMILTON ISLAND DEVELOPMENT CB LIMITED (ACN 010 304 926)(Second Respondent)
FILE NO/S:
BS 719 of 2012
DIVISION:
Trial Division
PROCEEDING:
Trial
ORIGINATING COURT:
Supreme Court
DELIVERED ON:
17 August 2012
DELIVERED AT:
Brisbane
HEARING DATE:
20 April 2012
JUDGE:
Philip McMurdo J
ORDER:
1. The decision of the delegate of the first respondent made on 23 December 2011 to grant a liquor licence no. 137341 to the second respondents be set aside.
2. The second respondents’ application for that licence be referred to the first respondent for further consideration and decision by the first respondent or a delegate of the first respondent other than the delegate who made the decision of 23 December 2011.
CATCHWORDS:
LIQUOR LAW – LICENSING – WHO MAY APPLY FOR OR HOLD LICENCE - where the second respondents obtained a licence pursuant to a decision of the first respondent, to sell liquor in certain apartments which it lets to holidaymakers though a shareholder letting pool arrangement - where the applicant also holds a licence to sell liquor over a premises which it claims includes the apartments let by the second respondent - where s 58 of the Liquor Act 1992 provides that only one licence may be granted for premises or any part of premises – where the applicant claims that only the specific type of licence which it holds entitles the sale of liquor in the relevant area - whether the first respondent’s decision to grant to liquor licence to the second respondent was inconsistent with s 58 of the Liquor Act 1992 and should therefore be set aside
LIQUOR LAW – LICENSING – NATURE AND EXTENT OF LICENSEE’S RIGHTS - where s 153 of the Liquor Act 1992 prohibits a licensee from subletting part of the licensed premises – whether a sublease granted prior to the grant of the liquor license resulted in a contravention of s 153 – whether the second respondents otherwise contravened s 153
Liquor Act 1992(Qld), s 58, s 153, s 169, s 170
Good Earth Hotels Australia (Gold Coast) Pty Ltd v SPHC (Australia) Limited & Anor [2001] QSC 028, cited
COUNSEL:
J M Horton for the applicant
M Hinson SC with S McLeod for the first respondent
D O’Brien for the second respondent
SOLICITORS:
Norton Rose Australia for the applicant
Crown Law for the first respondent
Wilson Ryan Grose for the second respondent
On 23 December 2011, the first respondent through a delegate decided to grant a liquor licence to the second respondents to these proceedings. The licensed premises are the apartments located within two buildings, called the Whitsunday Apartments, on Hamilton Island. The licences were obtained so that these companies, which I will call the respondents, could supply liquor by stocking mini bars within the apartments.
Until early 2011, it was the applicant company (“HIE”) which sold liquor in these apartments in the same way. It wishes to continue to do so and maintains that the effect of the Liquor Act 1992 (Qld) is that in the circumstances which exist at Hamilton Island, only it can be granted a licence to do so. It holds a liquor licence over at least most of Hamilton Island, a licence which it says includes these two buildings.
By these proceedings, HIE seeks a statutory order of review of the decision to grant the respondents’ licence and associated declaratory relief. One of its grounds is that the respondents’ licence was granted inconsistently with s 58(2) of the Liquor Act which provides (save for an exception which is not relevant here) that only one licence may be granted or held for premises or part of premises. At the commencement of this hearing, that ground was conceded for the Chief Executive, for whom it was submitted that this application should succeed but with an order for reconsideration of the respondents’ application for that licence, although by a different delegate.
However, another ground which was argued for HIE, if successful, would have the consequence that no licence could be granted to the second respondents so that there is no occasion for a reconsideration of the application. And the respondents dispute the ground which is conceded by the Chief Executive, arguing for a more limited interpretation of the scope of HIE’s licence, so that there is no “overlap” of licences which would contravene s 58.
To discuss those arguments, it is convenient to go first to the particular structure of the ownership of Hamilton Island and of the two buildings. The whole of Hamilton Island is leased by the State of Queensland to HIE, which has granted numerous subleases. In 1984, HIE granted subleases to the respondents over these buildings together with some associated improvements and land. There are 168 apartments within the two buildings. The terms of the subleases expire in 2078, with an option to the sublessees to extend for a further period of 99 years.
The respondents were incorporated in 1981 and converted to unlisted public companies in March 1984. They issued shares in groups, each group entitling the holder to a sub-sublease of a certain apartment within one tower or the other for a term and with an option for a further term, corresponding to that of the sublease to the respondents. By 1985, all apartments were the subject of registered sub-subleases. The current shareholders of the respondent companies hold under those sub-subleases. According to the constitution of each company, shares can be dealt with only as the particular group which entitles the holder to its interest in a certain apartment.[1] Upon the transfer of the shares then, subject to certain requirements as to documentation, the new holder is entitled to occupy the apartment referrable to that share group under the same sub-sublease.[2]
[1]Clause 4.3.
[2]Clause 4.6.
From the outset, most of the apartments have been used as hotel accommodation and have been offered through something which could be described as a public letting pool. Until the beginning of 2011 that pool was managed by HIE. Originally most shareholders granted licences to HIE, in return for a licence fee paid by HIE which was the commercial equivalent of rent for the shareholder. This continued until about 1992 when HIE went into receivership. In 1995, a revived HIE made an agreement with the respondents, and also new individual licence agreements with their shareholders, which again permitted the use of the apartments for holiday accommodation through a letting pool. A similar structure remained in place, pursuant to a series of agreements between HIE, the respondents and shareholders until those agreements expired on 31 January 2011. From that point, HIE has had no right as against the respondents or, more importantly, the shareholders to the use of the apartments or to permit others to occupy them.
Between 1995 and 31 January 2011, HIE provided a mini bar service within the apartments under which it sold alcoholic beverages to guests by stocking the fridges. When the agreements between HIE, the respondents and shareholders expired, this mini bar business also ceased.
Since May 2011, the respondents have conducted a business of letting all but a small number of the apartments. Of the 168 apartments in the buildings, four are occupied by the relevant shareholders and a further four are not offered as accommodation through the letting pool now managed by the respondents. The others are let through that pool, under terms for which provision is made in the Constitutions of the respondents. Shareholders have a right to opt out at any time from the letting pool,[3] but with some limitations as to the date on which that opting out would take effect. Under this arrangement, the respondents are authorised by shareholders to use the apartments for the purposes of providing short or long term holiday or other accommodation or for other incidental purposes such as for staff accommodation.
[3]Clause 9.1(b)(ii).
The relevant provisions of the Constitution of each of the respondent companies, governing this letting pool, are as follows. The term “Letting Arrangement” is defined to mean:
“… an arrangement whereby:
(a)the Company arranges for letting or use of the Apartments in the Building; or
(b)the Company enters into an arrangement (which may include the grant of a licence or other right) by which a third party will manage or otherwise operate the letting or use of the Apartments, which arrangement may involve the pooling of income from the letting or use of the Apartments.”
Clauses 9.1-9.3 are as follows:
“9.1 Notice to Opt Out
(a)Subject to clause 9.3, unless a Member provides a notice to the Company in writing in accordance with this clause 9.1 that the Member’s Apartment is not to be included in a Letting Arrangement or is to be withdrawn from an existing Letting Arrangement (“Opt Out Notice”), then the Company is authorised by the Member to use that Apartment as part of a Letting Arrangement.
(b)Subject to clause 9.1(c):
(i)if a Member’s Apartment is not currently included in a Letting Arrangement and a Member provides an Opt Out Notice the Member’s Apartment is not to be included in a Letting Arrangement;
(ii)if a Member’s Apartment is currently included in a Letting Arrangement and a Member provides an Opt Out Notice, the following applies:
(A)if the existing Letting Arrangement allows for the withdrawal of a Member’s Apartment, the Company will cause the Member’s Apartment to cease to be part of the Letting Arrangement in accordance with the terms and conditions of the Letting Arrangement.
(B)if the existing Letting Arrangement does not allow for the withdrawal of a Member’s Apartment, the Member’s Apartment is to be excluded from any future Letting Arrangement, but will continue to be part of the existing Letting Arrangement until the existing Letting Arrangement, or any automatic extension or renewal of that Letting Arrangement, ends, as the case may be.
(c)Subject to clause 9.1(d), a Member is not entitled to give an Opt Out Notice within 12 months of the date that a Letting Arrangement is due to expire, and if such notice is given it will be void and ineffective.
(d)Despite clause 9.1(c), if the Board in its absolute discretion considers that there are extenuating circumstances (including any hardship that would be caused to the Member), the Board may consent to a Member giving an Opt Out Notice within 12 months of the date that a Letting Arrangement is due to expire.
(e)An Opt Out Notice may be revoked by a Member at any time by notice to the Company, in which case the Company will endeavour to include the Member’s Apartment the subject of such notice in a Letting Arrangement at the next reasonable opportunity.
9.2Right to enter into a Letting Arrangement
If a Member has not given an Opt Out Notice, or has revoked such notice, the Company may negotiate and enter into, effect a renewal of or otherwise terminate a Letting Arrangement in respect of the Member’s Apartment on such terms as the Board considers appropriate. Each Member hereby irrevocably appoints each Director and the Secretary of the Company jointly and each of them severally as the Member’s attorney for such purposes, and to do all other acts and to sign all documents as the attorney considers necessary or desirable in connection with such purposes.
9.3Permanent Residents
(a)Clause 9.1(a) does not apply to any Member that is a Permanent Resident.
(b)A Member that ceases to be a Permanent Resident may, by giving not less than 12 months written notice to the Company (or such shorter period as the Board may allow) request the Company to include the Member’s Apartment in a Letting Arrangement, in which case the Company will endeavour to include the Member’s Apartment the subject of such notice in a Letting Arrangement at the next reasonable opportunity.
(c)In the event that a new Member acquires an Apartment from a Permanent Resident, then the new Member may, by giving not less than 12 months written notice to the Company (or such shorter period as the Board may allow) request the Company to include the Member’s Apartment in a Letting Arrangement, in which case the Company will endeavour to include the Member’s Apartment the subject of such notice in a Letting Arrangement at the next reasonable opportunity.”
According to HIE’s argument, the effect of this Letting Arrangement is that the apartment owner (the shareholder) authorises the respondents to let the apartment upon his or her behalf, as HIE’s counsel described it, as “attorney for the individual members”.
In his opening, HIE’s counsel sought to impugn the letting arrangement also as a “management agreement” which was in contravention of s 153 of the Liquor Act. That argument had not been foreshadowed by the Application for Review or HIE’s outline of submissions and it was not pressed. What was argued, was that the letting arrangement inevitably led to what was said to be a “subletting” by the respondents to the holidaymaker occupants, involving a contravention s 153. I will return to this argument.
The Liquor Act
Section 3A expresses what it describes as an underlying principle of the Act, as follows:
“3A Principle underlying this Act for facilitating and regulating the liquor industry
(1)The underlying principle of this Act in relation to the sale and supply of liquor is -
(a)a person may obtain a licence to sell or supply liquor as part of conducting a business on premises; and
(b)liquor may only be sold or supplied on the licensed premises as part of the person conducting a business, on the licensed premises, that is the principal activity under the licence.
(2)This Act states the principal activity of a business that may be conducted under each type of licence. …”
The Act provides for different types of licences. A person must not sell liquor unless the sale is made under the authority of a licence or permit granted under the Act: s 169. A licensee must not sell or supply liquor from premises other than the premises to which the licence relates: s 170.
Section 58 sets out the categories of licence which may be granted and held. As noted already, s 58(2) provides that only one licence may be granted or held for premises or any part of premises. The relevant categories of licence here are a “commercial special facility licence”, which is held by HIE, and a “commercial other licence” which was granted to the respondents.
Section 63 provides that a commercial special facility licence may be granted to an entity which is to conduct a business, the principal activity of which is one of the following:
“(a)a casino;
(b)an airport;
(c)a convention centre;
(d)any other type of facility, other than a sporting facility, that makes, or is likely to make, a significant contribution to the tourism development of the State.”[4]
There is no question here that HIE’s business falls within the description in paragraph (d). On the other hand, it could not be thought that these two apartment buildings alone could satisfy that description. That is relevant, perhaps, because HIE submits that only a commercial special facility licence could authorise the sale of liquor through the mini bars in these apartments. If that is correct, it follows that only HIE could sell liquor by that means. It is willing to do so, under something of the arrangement which existed until 2011, which the respondents have rejected.
[4]Section 63(1).
Section 63(2) provides:
“The authority under a commercial special facility licence to sell or supply liquor does not apply unless a business is conducted on the licensed premises with the principal activity as mentioned in subsection (1).”
That requires the licensee to conduct a business on the licensed premises of the kind specified in the relevant paragraph of s 63(1). Section 153, which permits the licensee to sublet the licensed premises in some circumstances, may provide a qualification to that requirement. But it should be noted that at present, no business is conducted by HIE within these two apartment buildings. As already noted, HIE now has no right to use the apartments. It was submitted for HIE that it continues to conduct some business from those buildings, by providing a security service. Two things must be said about that submission. The first is that the underlying principle of the Act, according to s 3A, is that there should be a nexus between the conduct of a business on premises and the sale or supply of liquor from those premises as part of that business. The sale of drinks from a mini bar would not be part of a business of the provision of security services. Secondly, the evidence indicates that this security service is provided not by HIE but by a related company. The service provided pursuant to HIE’s obligation under s 9.1 of each of the subleases to the respondents, under which the parties agreed that HIE would cause Hamilton Island Services Pty Ltd to provide “a security and surveillance service in respect of the Demised Land and all buildings erected thereon of such nature, extent and frequency as may be decided from time to time by the Sub-Lessor”.
By s 66, there are several types of commercial licence. That which was granted to the respondents is of the kind described in paragraph (a) of the section, which is a “subsidiary on-premises licence”. For such a licence, there are relevantly these provisions:
“67 Principal activity of a business under a subsidiary on-premises licence
(1)The principal activity of a business conducted under a subsidiary on-premises licence is the provision of an activity, matter or service to which the sale of liquor for consumption on the licensed premises is a subsidiary aspect.
…
67BPrincipal activity is the provision of accommodation
(1)This section applies if the principal activity of a business conducted under a subsidiary on-premises licence is the provision of accommodation.
(2)The licence authorises the licensee to sell liquor on the licensed premises -
(a)at any time -
(i)to a resident on the licensed premises, or a guest of a resident in the resident’s company, for consumption on the premises; or
(ii)to a resident on the licensed premises in a quantity of not more than 9L on any day, for consumption off the premises; and
(b)during ordinary trading hours or approved extended trading hours, to any person, including a person not eating a meal, for consumption in a part of the premises stated in the licence as ordinarily set aside for dining.
(3)Liquor supplied under authority of the licence to a resident on the licensed premises or a guest of a resident in the resident’s company, for consumption on the premises outside ordinary trading hours or approved extended trading hours, must be consumed in a residential unit.
67CAuthority of subsidiary on-premises licence
(1)A subsidiary on-premises licence authorises the licensee to sell liquor in association with an activity, matter or service provided on the licensed premises, or on premises of which the licensed premises form part, which activity, matter or service is the primary purpose to be served by conduct of business under authority of the licence -
(a)for consumption on the licensed premises; and
(b)if the chief executive so stated in the licence - for consumption off the licensed premises;
during ordinary trading hours or approved extended trading hours. …”
There are other relevant provisions of the Act which it is convenient to discuss below in the context of the respective arguments. Before going to them it is necessary to refer to the terms of each of the relevant licences.
HIE’s licence
Its current licence dates from May 2009. The licensed premises are there described as follows:
“Licensed area description: Hamilton Island, Whitsunday Passage, Queensland, including guest accommodation (incorporating private residences which are being let to Hamilton Island guests through a public letting pool), restaurants, bars, bottle shops, associated staff and utility areas but excluding:
a)private, commercial or professional offices;
b)general retail outlets including convenience stores, super-markets, boutiques, hair salons and dive shops;
c)the church and school buildings;
d)the airport runway and apron;
e)roadways other than Front Street and One Tree Hill
f)private residences; and
g)beach areas below the Mean High Water Springs level. …”
One condition of the licence is in these terms:
“Liquor may be sold or supplied only whilst the premises adheres to its principal activity of provision of an activity, facility or presentation that proves enlightenment, entertainment or services to the public or forms part of the tourist development of the State.”
It is common ground that each of the 168 apartments is a “private residence” as that term is used in the description of licensed premises within HIE’s licence. But there are rival contentions as to whether these are residences “which are being let to Hamilton Island guests through a public letting pool”. HIE argues that the pool now being managed by the respondents is “a public letting pool”, just as it was when it was under HIE’s control. If HIE’s argument is correct, then these two apartment buildings remain licensed premises under its licence. But the respondents argue that this description in HIE’s licence is necessarily limited to residences which are being let through HIE.
The respondents’ licence
The licensed premises are here described as:
“All apartment rooms located within the Whitsunday Apartments”.
The licence was issued subject to a condition that “liquor may be sold and supplied only whilst the premises adheres to its principal activity of provision of accommodation”.
It can be seen that the licence does not distinguish between those apartments within the respondents’ letting pool and those, presently about eight in number, which are not within it.
The overlap argument
This turns upon the proper interpretation of the scope of the licensed premises under the HIE licence. If HIE’s contention, as set out above, is correct then the Chief Executive is right to concede that the respondents’ licence was granted contrary to s 58(2).
The respondents say that the HIE licence must be interpreted having regard to certain provisions of the Act, which require or assume a licensee to conduct business within its licensed premises. In particular, there is s 3A which specifies the “underlying principle”. They refer also to s 63(2) which is set out above, and s 148A which provides, relevantly, as follows:
“148A Obligations of licensees and permittees relating to the service, supply and promotion of liquor
(1)This section imposes obligations on licensees and permittees in the conduct of business on licensed premises or premises to which a permit relates for -
(a)maintaining a safe environment for patrons and staff of the premises; and
(b)ensuring liquor is served, supplied and promoted in a way that is compatible with minimising harm from the use of liquor and preserving the peace and good order of the neighbourhood of the premises.”
…
(4)The licensee or permittee must provide and maintain a safe environment in and around the premises. …”
The respondents submit that these provisions demonstrate that a liquor licence should be granted only to someone who plans to supply or sell liquor as part of a business operated by or through the licensee on the licensed premises, or at least where the licensee has some “element of control” over those premises. That may be accepted. But when HIE’s licence was granted, it was such a person in relation to, in particular, these apartments.
As the respondents argue, the HIE contention, if correct, has the potential to lead to several complications. One is that the inclusion or otherwise of private residences within HIE’s licensed premises could depend upon arrangements entirely outside the involvement of HIE, and, in particular, the existence of a public letting pool arranged or agreed between certain owners of residences. HIE would be subject to the obligations of a licensee in respect of those premises perhaps without being aware of all of the facts and circumstances relevant to whether those premises were within its licence. In addition, the result would be to prevent private residences, which are within a public letting pool, from being used for the supply or sale of liquor where the owners simply do not wish to deal with HIE.
Section 153(3) is relevant to this question, because it provides that with the Chief Executive’s approval, the holder of a commercial special facility licence may let or sublet part of the licensed premises. Such a licence is an exception to the general prohibition upon subletting part of licensed premises which is imposed by s 153(2). Section 153 provides:
“153 Letting or subletting of licensed premises
(1)A licensee must not, without the chief executive’s approval -
(a)let or sublet all of the licensed premises; or
(b)enter into a franchise or management agreement for all of the licensed premises.
Maximum penalty - 40 penalty units.
(2)A licensee must not -
(a)let or sublet part of the licensed premises; or
(b)enter into a franchise or management agreement for part of the licensed premises.
Maximum penalty - 40 penalty units.
(3)Subsections (1) and (2) do not apply to the holder of a commercial special facility licence who, with the chief executive’s approval -
(a)lets or sublets part of the licensed premises; or
(b)lets or sublets the right to sell liquor; or
(c)enters into a franchise or management agreement for part of the licensed premises. …”
It is difficult to see how a licensee could let or sublet part of the premises and yet continue to carry on business on that part. It appears that the Act thereby provides a specific qualification to the underlying principle expressed in s 3A. The Act does not provide that whenever there is an approved subletting of part of licensed premises, that part will become excised from the licensed premises. Subject to a variation of the licence made under s 111, the part which is sublet remains part of the licensed premises. The existence of this exception is against the proposition that any definition of licensed premises, within a licence, must by an implication be confined to refer only to those premises which are used by the licensee in the conduct of the business which is the “principal activity” under s 3A.
Ultimately I am unpersuaded to read HIE’s licence with the implied limitation for which the respondents contend. It is obvious to say that such a limitation could have been expressed. And HIE’s licence may have been granted in those terms upon a view that there would be a sufficient nexus between HIE’s conduct of the business of the resort and the supply of liquor to holiday apartments which, although not let through HIE, could be seen by the public as accommodation within that resort. The existence of the power of the chief executive to vary the licence, more specifically by varying the definition of its licensed premises, means that HIE’s interpretation of the licence need not result in HIE forever enjoying the exclusive right to sell liquor from premises to which it has no right of access vis-à-vis the owner.
It follows that until there is a variation of HIE’s licence, these apartments, insofar as they are available for letting through the respondents’ pool, are within the licensed premises under HIE’s licence. Section 58 precluded the grant of a licence over the same area as occurred here. At least for that reason the decision of the chief executive’s delegate to grant this licence must be set aside.
Subletting questions
HIE submits that each sublease from one or other of the respondents to a shareholder constitutes a subletting which is contrary to s 153(2). Further it submits that the respondents sublet apartments, contrary to that provision, in operating the letting pool. Therefore, it is contended, the respondents’ licence should not have been granted because inevitably it has caused a contravention or contraventions of s 153. Moreover, HIE made a further and alternative submission, which was that the effect of the grant of this liquor licence to the respondents was that each of the subleases from the respondents to their shareholders was rendered void for illegality. Just how that last submission would assist this present application for judicial review was not made clear, but perhaps it is said that such a drastic impact upon the property of the shareholders is a matter which the delegate should have considered.
The grants of subleases by the respondents to their shareholders, in each case, well predated the grant of the respondents’ liquor licence. The dealing which is proscribed by s 153(2) is a letting or subletting by “a licensee” which those respondents were not when they sublet the apartments. The effect of HIE’s submission is that an offence was committed against s 153(2) at the point when the licence issued and the offence has continued since then. That submission cannot be accepted. Once a lease is granted, the leasehold thereby created does not depend for its existence upon some further act of the lessor. Nor can the lessor act to terminate that interest, save in circumstances of breach, where the lease is for a fixed term. The submission for HIE would have it that an offence is committed against s 153(2) without any act or omission on the part of the offender, but instead simply from the circumstance of the existence of the lease which the offender is powerless to alter. In effect, the actus reus by which an offence would be committed in a case such as the present would be the holding of the liquor licence, because it is that act which would engage s 153(2). In my view, had the legislative intention been to proscribe the grant of a liquor licence to a person who had sublet part of the licensed premises but had a right still to relevantly use them, that intention would have been specifically expressed within the provisions of the Act which govern the grant of a licence. The grant of a lease or sublease prior to the grant of the licence does not engage s 153.[5]
[5]cf. Good Earth Hotels Australia (Gold Coast) Pty Ltd v SPHC (Australia) Limited & Anor [2001] QSC 028.
As I have noted, there is no fresh sub-sublease granted on the occasion of a transfer of a group of shares: rather the transferee becomes entitled to the same leasehold. However, it may be noted that the Constitution of each of the respondents refers to some circumstances in which the board of the respondent might become entitled to surrender the relevant sub-sublease and to enter into a new lease with a purchaser of the relevant shares: cl 5.3(b). If and when that occurs, there could be a contravention of s 153(2) if the company is then a licensee. But that possibility was not specifically addressed by the arguments and it was not submitted that this was a reason for impugning the delegate’s decision.
There is then the argument that there is a letting or subletting of an apartment when it is occupied by the holidaymaker. HIE submits that this is a letting by the licensee, although it does so as the agent of the shareholder. There are at least two reasons why that submission should not be accepted. The first is that if the apartment is “let or sublet” to the holidaymaker, in the sense in which those words are used in s 153, it is not a letting or subletting by the licensee. Rather, it is a letting or subletting by the party who, by holding the leasehold in the apartment, is able to sublet it. The respondents have no relevant interest in an apartment by which they could let or sublet it.
Secondly, the agreement with the holidaymaker would not constitute a letting or subletting in the sense of s 153. Were it otherwise, the result would be problematical for holders of subsidiary on-premises licences where the principal activity is the provision of accommodation. This would not be a problem resulting from the particular regime at Hamilton Island, but it would apply to any licence within s 67B. Each time a guest took a room or an apartment, there would be a subletting of part of the licensed premises which would contravene s 153(2) regardless of the attitude of the Chief Executive. The exception would be the holder of a commercial special facility licence, who nevertheless would have to obtain the Chief Executive’s approval. And it is far from clear that such an approval could be given in general terms, rather than specifically for each letting or subletting.
Therefore outside the case of a commercial special facility licence, the end point of HIE’s argument would be that the principal activity of a licensee, where it is the provision of accommodation, could not be conducted. It would not matter that all of the licensed premises was made available for holiday letting, because in the usual course of such a business, a contract would be made between the owner and the holidaymaker for an individual room or apartment and in each such case, only a part of the licensed premises would be thereby let. And if HIE’s submission is correct, it is difficult to see how its own business of managing the provision of accommodation in parts of the resort would not constitute the subletting of parts of its licensed premises for which, on each occasion, it would require the approval of the Chief Executive.
Therefore the expression “let or sublet” must be understood to refer to the grant of a lease or sublease, rather than letting in the sense of a mere licence as is granted to an occupant of a hotel room.
Other issues
I have concluded that the decision must be set aside, for the overlap point. I have also concluded that there is a power to grant such a licence to the respondents which would not result in the respondents contravening s 153. Therefore the application should be reconsidered. The other grounds argued by HIE impugned the manner in which this decision was made last December. They were not matters which, if accepted, would preclude the grant of such a licence upon reconsideration by the Chief Executive or his delegate. Therefore it is unnecessary to consider them except perhaps in a few respects.
HIE complained that it was denied procedural fairness because it was not given an opportunity, or a proper opportunity to make submissions to the decision-maker about the exclusion from the licensed premises under its licence of the two buildings to be the subject of the respondents’ licence. That ground had substance because HIE’s licence could be varied only by the Chief Executive following the procedure which is prescribed by s 112. That provision required the Chief Executive to cause written notice to be given to HIE of his proposal to vary its licence. Such a notice was in fact given, by a letter to HIE of 7 December 2011. That notice informed HIE of an intention to vary its licensed premises to exclude any area leased by the respondents. That was a more extensive area than the two apartment buildings. HIE argued that this difference deprived the notice of its effect under s 112. It is unnecessary to decide that point. Section 112 further provided that HIE should have 14 days from receipt of the notice to object to the proposed variation. I find that HIE did not receive the notice until at least 13 December 2011. Therefore the licence was granted to the respondents by a decision made within 14 days from that date.
The respondents say that s 112 is irrelevant because no change was made to the HIE licence. That is correct and it is that fact which has caused the overlap between the two licences, invalidating the decision to grant the licence to the respondents. Upon a reconsideration of the application, it will be necessary for the Chief Executive or his delegate to consider the exclusion of the relevant area from HIE’s licence. That will require the procedure set out in s 112 to be followed. I should add that the submission for HIE that it was denied an opportunity to object also to the grant of the licence to the respondents (beyond the impact upon its own licence) was not persuasive. But what did or did not occur in that respect will not affect the validity of the course which will be taken by the new decision-maker.
HIE argued that the delegate in this case had no power to make the decision because her authority did not extend to the granting of a subsidiary on-premises licence where an objection had been received. That limit upon her authority was established by her own affidavit. The respondents argued that HIE was not an objector in the relevant sense, which is a person objecting to the grant of an application in response to a publication of notice of an application under s 118 of the Act. The requirement for that publication can be waived by the Chief Executive or his delegate if satisfied that the publication is not necessary because of the remote location of the premises or other special circumstances: s 118(3)(a). In this case, that occurred, so that the application was not published and there could have been no person who objected as provided for in s 119(1). Again, it is unnecessary to express a concluded view on whether that was an effective answer to HIE’s argument.
A further argument was that the licence was granted without the delegate being satisfied, as she had to be satisfied, that the persons in positions of authority or influence in the respondent companies were fit and proper persons in the sense described in s 107 of the Act. This involved a question of fact as to whether the delegate had satisfied herself of these matters. In her affidavit, the delegate said that she was satisfied of those matters. In case it becomes relevant, I should record that I was not persuaded by that evidence. It was inconsistent with the contemporaneous documents. In particular, it was inconsistent with the specific condition imposed by the delegate, in the document which she issued on 23 December 2011, that “the sale and supply of liquor by the applicant/licensee is only approved on the basis that upon the return of the police checks on the directors of [the respondents], the Chief Executive is satisfied that the applicant is a fit and proper person to hold the licence”. It was also inconsistent with the fact that she received advice from someone within her department, dated 22 December 2011, to grant the licence but subject to that same condition.
Outcome
In consequence, the orders should be those which were proposed by counsel for the Chief Executive within their amended outline of submissions handed up during the hearing. The orders will be:
(a) the decision of the delegate of the first respondent made on 23 December 2011 to grant a liquor licence No. 137341 to the second respondents be set aside;
(b) the second respondents’ application for that licence be referred to the first respondent for further consideration and decision by the first respondent or a delegate of the first respondent other than the delegate who made the decision of 23 December 2011.
I will hear the parties as to costs.
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