Kordister Pty Ltd v Director of Liquor Licensing and the Chief Commissioner of Police
[2012] VSCA 325
•19 December 2012
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2011 0087
| KORDISTER PTY LTD | Applicant |
| v | |
| DIRECTOR OF LIQUOR LICENSING and THE CHIEF COMMISSIONER OF POLICE | Respondents |
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| JUDGES | WARREN CJ, TATE and OSBORN JJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 21 June 2012 |
| DATE OF JUDGMENT | 19 December 2012 |
| MEDIUM NEUTRAL CITATION | [2012] VSCA 325 |
| JUDGMENT APPEALED FROM | Director of Liquor Licensing v Kordister Pty Ltd & Anor [2011] VSC 207 (Bell J) |
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APPEAL ON QUESTION OF LAW – Refusal by Victorian Civil and Administrative Tribunal to reduce the hours of a 24-hour bottle shop selling packaged liquor for off-premises consumption – Whether decision was wrong at law – Interpretation of Liquor Control Reform Act 1998.
STATUTORY INTERPRETATION – Whether object of harm minimisation is the primary purpose of the Act – Circumstances where harm minimisation principle requires decision-maker to determine that a licensee’s extended trading hours is a direct cause of the harm to be minimised – Distinction between general evidence, locality evidence and evidence of specific incidents – Black and Cooke v Liquor Licensing Victoria [2000] VCAT 459, Nardi v Director of Liquor Licensing [2005] VCAT 323 considered – Liquor Control Reform Act 1998, ss 4(1) and 4(2), s 29(1).
ADMINISTRATIVE LAW – Relevant considerations – Whether Tribunal failed to give ‘full consideration’ to the Panel’s recommendation – Liquor Control Reform Act 1998, s 47(1).
ADMINISTRATIVE LAW – No evidence – Tribunal expressed opinion that decrease in sales would impact viability of business and viability of liquor industry – Whether Tribunal can make findings about the general impact of a decision upon a business or industry with no evidence or material before it – Whether findings were critical to the Tribunal’s ultimate decision to refuse the application for variation – Victorian Civil and Administrative Act 1998, s 98.
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| Appearances: | Counsel | Solicitors |
| For the Applicant | Mr C J Canavan QC with Mr J D Pizer | Bazzani Scully Brand |
| For the Respondents | Mr P J Hanks QC with Mr C J Horan | Victorian Government Solicitors Office |
WARREN CJ
OSBORN JA:
We have had the considerable advantage of reading the reasons of Tate JA in draft. We agree with her Honour as to the appropriate disposition of this appeal. We arrive at that conclusion in significant part for the same reasons as her Honour. Nevertheless, our path of reasoning and intermediate conclusions are in some respects different.
The background to this appeal and the course of the proceedings below are comprehensively set out in Tate JA’s reasons and it is unnecessary to repeat them in full.
In summary, in May 2009 a licensing inspector applied to the first respondent (‘the Director’) on behalf of the second respondent (‘the Chief Commissioner’), to vary the trading hours of a packaged liquor licence held by the applicant (‘Kordister’). The application sought to restrict the 24 hour trading hours of Kordister’s bottle shop at the Exford Hotel by requiring it to close at 11:00pm.
A liquor licensing panel (‘the Panel’) was appointed pursuant to the provisions of the Liquor Control Reform Act 1998 (‘the Act’) then in force and recommended that the application be accepted. The Director accepted this recommendation and granted the application.
Kordister then applied to the Victorian Civil and Administrative Tribunal (‘the Tribunal’) for review of the Director’s decision. After a five day hearing, the Tribunal ordered that the Director’s decision be set aside.
On 18 May 2011, a judge of the Trial Division allowed an appeal by the respondents on questions of law, set aside the Tribunal’s orders and remitted Kordister’s application for review of the Director’s decision for reconsideration by the Tribunal.
In the proceeding before the judge, the respondents alleged that the Tribunal made three errors of law:
(a) It asked itself the wrong question and failed to have regard to relevant considerations under the Liquor Control Reform Act 1998, including by its failure to give due and proper regard to the harm minimisation objects of the Act.
(b) It failed to give ‘full consideration’ as required by the Act to the recommendation of the Liquor Licensing Panel that had been appointed to make recommendations to the Director in respect of the proposed variation to the Hotel’s liquor licence.
(c) It made findings of fact for which there was no evidence.
The judge held that the Tribunal had erred in each of the manners alleged.
The issues on appeal now are:
(a) whether the judge erred in concluding that the Tribunal did not properly consider or evaluate whether ending late-night trading at the Hotel’s bottle shop would contribute to the minimisation of harm arising from the misuse and abuse of alcohol;
(b) whether the judge erred in inferring that the Tribunal failed to give full consideration to the Panel’s recommendation;
(c) whether the judge erred in concluding that the Tribunal's failure to give full consideration to the Panel’s recommendation was a vitiating error;
(d) whether the judge erred in concluding that it was not open to the Tribunal to make findings of fact in relation to the damage that the variation to the licence would have on the profitability and viability of the Exford Hotel and other liquor outlets in Victoria; and
(e) whether the judge erred in finding that the Tribunal’s making of those findings played a vitiating role in the Tribunal’s decision.
The relevant statutory framework
Section 4 of the Act provides:
(1)The objects of this Act are—
(a)to contribute to minimising harm arising from the misuse and abuse of alcohol, including by—
(i)providing adequate controls over the supply and consumption of liquor; and
(ii)ensuring as far as practicable that the supply of liquor contributes to, and does not detract from, the amenity of community life; and
(iii)restricting the supply of certain other alcoholic products; and
(iv)encouraging a culture of responsible consumption of alcohol and reducing risky drinking of alcohol and its impact on the community; and
(b)to facilitate the development of a diversity of licensed facilities reflecting community expectations; and
(c)to contribute to the responsible development of the liquor and licensed hospitality industries.
(2)It is the intention of Parliament that every power, authority, discretion, jurisdiction and duty conferred or imposed by this Act must be exercised and performed with due regard to harm minimisation and the risks associated with the misuse and abuse of alcohol.
The Tribunal exercised the powers of the Director upon review and was explicitly required by s 4(2) to have regard to these objects in the exercise of its discretion.
The notion of harm minimisation referred to s 4(1)(a) is defined inclusively. We respectfully agree with the judge that the essence of the ordinary meaning of the
concept of harm minimisation has come to be understood in the following way: [1]
Harm minimisation is a concept which has been central to the National Drug Strategic Plan (1993-1997) which guided the development and implementation of alcohol and drug policies across Australia through the 1990s. The concept was defined as an approach that aims to reduce the adverse health, social and economic consequences of alcohol and other drugs by minimising or limiting the harms and hazards of drug use for both the community and the individual without necessarily eliminating use … The approach includes preventing anticipated harm and reducing actual harm.
[1]Director of Liquor Licensing v Kordister Pty Ltd [2011] VSC 207 (‘Reasons’), [119], quoting from evidence given by Dr Roche in Avery v Director of Liquor Licensing Victoria [2001] VCAT 2455, [38].
Thus, in the context of intravenous drug use, the provision of containers for sharps, needle exchanges, and safe injecting rooms may all be regarded as measures reflecting a policy of harm minimisation. Harm minimisation is directed to the practical reduction of harm resulting from the consequences of alcohol and other substance misuse. It is not a synonym for a form of prohibition. Rather, it responds to the reality that prohibition has proved, and continues to prove, a very blunt and ineffective tool for the control of the use of addictive substances and their consequences.
In turn, as the Tribunal has held, the general concept of harm minimisation does not mean that every application for a liquor licence should be refused[2] nor would it, of itself, justify every application for a variation of licence which reduces trading hours.
[2]Black and Cooke v Liquor Licensing Victoria [2000] VCAT 459; Avery v Director of Liquor Licensing Victoria [2001] VCAT 2455; Nardi v Director of Liquor Licensing [2005] VCAT 323.
As Ipp J has put it in considering the harm minimisation object contained in the Western Australia liquor licensing legislation, the relevant object is:
to ‘minimise’ harm or ill-health, not to prevent harm or ill-health absolutely. The word ‘minimise’ is consistent with the need to weigh and balance all the relevant considerations.[3]
[3]Executive Director of Health v Lily Creek International Pty Ltd (2000) 22 WAR 510, 515.
In turn, s 4(1)(a) both contemplates mechanisms by which harm may be minimised (s 4(1)(a)(i) and (iii)), and states relevant objectives (s 4(1)(a) (ii) and (iv)). It is significant for present purposes to note that the objectives are stated in very broad terms. They relate in the first place to ‘the amenity of community life’, which to our minds is necessarily a broader concept than ‘the amenity of the area’, a concept utilised elsewhere in the Act. They also relate to the impact of risky drinking of alcohol on the ‘community’, a concept which is broad enough to encompass the community of Victoria.
On the other hand, the objectives recognise that the manner of supply and consumption of liquor may positively contribute to the amenity of community life and may encourage a culture of responsible consumption of alcohol. It follows that the notion of harm minimisation is not simply one of limiting the supply of alcohol. Rather, it is concerned with regulating supply of alcohol so as to ensure, as far as practicable, net community benefit.
In turn, sub-ss 4(1)(b) and (c) state objects which may favour the grant or maintenance of a liquor licence. Section 4(1)(b) recognises the legitimacy of community expectations relating to a diversity of licence facilities and s 4(1)(c) recognises the legitimacy of the liquor industry. Ultimately, the Tribunal was required to balance each of the objects and arrive at an appropriate synthesis in the particular circumstances of the case by the way of a discretionary judgment.
Section 4(2) emphasises that in making the relevant discretionary judgment the decision maker must have due regard to harm minimisation and the risks associated with the misuse and abuse of alcohol. For the reasons explained by Tate JA, we accept that the text, context and purpose of s 4(2) lead to the conclusion that harm minimisation is a fundamental principle of the Act and can properly be regarded as ‘the primary regulatory object of the Act and therefore the primary consideration in liquor licensing decisions’, as the judge concluded.[4]
[4]Reasons, [173].
So to say, however, does not detract from the potential complexity of the concept of harm minimisation. In particular, as we have said, s 4(1)(a)(ii) and (iv) explicitly recognise that the supply of liquor in an appropriate way may positively contribute to the amenity of community life and the encouraging of a culture of responsible consumption of alcohol.
Nor does the primacy of the concept of harm minimisation make irrelevant the other express objects of the Act, including, in particular, the development of a diversity of licensed facilities reflecting community expectations.
The notions of amenity found in s 4(1)(a)(ii) and of reduction of risky drinking of alcohol and its impact on the community found in s 4(1)(a)(iv) are further reflected in more specific provisions of the Act. Thus, s 44(2)(b) of the Act provided at the relevant date that the Director may refuse to grant an uncontested application for a liquor licence on grounds which included:
(i) that the granting of the application would detract from or be detrimental to the amenity of the area in which the premises to which the application relates are situated; and
(ii) that the granting of the application would be conducive to or encourage the misuse or abuse of alcohol.
In turn, at the relevant date, the Director might refuse to grant a contested application on the same grounds pursuant to s 47(2).
Section 38 also granted rights to any person to object to the grant, variation or relocation of a licence, on the ground that the grant, variation or relocation would detract from, or be detrimental to, the ‘amenity of the area in which the licensed premises or proposed licensed premises are situated’. In addition, any person may object on the ground that ‘the grant variation or relocation would be conducive to or encourage the misuse or abuse of alcohol.’ Specific rights to object on the same basis were granted to local councils by s 40 and to licence inspectors by s 41. It follows that the Act contemplates that the Director will, in an appropriate case, specifically consider these factors in having regard to harm minimisation and the risks associated with the misuse and abuse of alcohol in accordance with s 4.
A question raised before the judge was whether s 44(2)(b)(i) and (ii) could apply in the present case because the terms of the subsection refer to the refusal and not the grant of an application on the grounds referred to.
It seems to us that the better view is that the criteria are concerned with grounds for refusal and not grant,[5] but they conveniently identify considerations which give effect to the harm minimisation objects to which the Director was obliged to have regard pursuant to s 4. Moreover, it is upon these factors that the parties joined issue before the Tribunal.
[5]Contrary to the view of Bell J, [102], but nothing turns on this point.
The concept of amenity of an area is elaborated by the definition contained in s 3A:
(1)For the purposes of this Act, the amenity of an area is the quality that the area has of being pleasant and agreeable.
(2)Factors that may be taken into account in determining whether the grant, variation or relocation of a licence would detract from or be detrimental to the amenity of an area include—
(a) the presence or absence of parking facilities;
(b) traffic movement and density;
(c) noise levels;
(d) the possibility of nuisance or vandalism;
(e) the harmony and coherence of the environment;
(f) any other prescribed matters.
(3) Nothing in subsection (2) is intended to limit the definition of amenity.
The Act further deals with the concept of amenity of an area by way of the imposition of mandatory licence conditions. By s 11(3), a packaged liquor licence is subject to among other things:
(aad)a condition that the licensee comply with the code of conduct (if any) determined by the Minister under sub-section (5) as in force from time to time; and
(a)the condition set out in section 16 (compliance with planning scheme); and
(b)if the licence authorises the licensee to supply liquor outside ordinary trading hours, the conditions set out in section 17(1).[6]
[6]See also s 11A(5) relating to late night licences.
Section 17(1) provides:
(1)Subject to subsection (2), it is a condition of every licence that authorises the supply of liquor outside ordinary trading hours that the licensee does not cause or permit undue detriment to the amenity of the area to arise out of or in connection with the use of the premises to which the licence relates during or immediately after the hours outside ordinary trading hours to which it relates.
It follows that, in considering whether to grant or vary a licence, the decision maker will ordinarily consider whether the s 17(1) condition will be adequate to prevent detriment to the amenity of the area. The potential impact of the supply of liquor during the hours in question must be considered within the framework of relevant licence conditions. Compliance with any relevant code of conduct and with conditions in any relevant planning scheme might also bear upon the management and regulation of relevant amenity impacts.
The evidentiary issues in the present case
As the Tribunal correctly recognised, its task was not a disciplinary one. It also accepted the further submission of counsel for the Director that:
There is no requirement to prove that the licensee has committed any breach of the provisions of the Act, any criminal offence or engaged in any wrongdoing. The only question which needs to be determined by the decision maker is whether the grant of the application would be consistent with the objects of the Act and would strike an appropriate balance between the need to minimise harm arising from the misuse and abuse of alcohol and the interests in developing a diversity of licensed facilities reflecting the community expectations.
As the judge twice stated in his decision,[7] the main issue on the appeal before him was whether the Tribunal went beyond merely stating to actually address this question.
[7]Reasons, [75] and [85].
The enquiry the Tribunal was required to make was essentially a prospective one directed to a predictive conclusion. The question was ultimately whether future trading hours should be varied and not whether past trading hours had resulted in adverse impacts. The historical evidence might form a satisfactory predictive basis upon which to answer the ultimate question in some cases but in others it might not. The respondent’s case was in part put expressly on the basis that change had occurred and was continuing to occur in the context within which the bottle shop opened. Accordingly, the Tribunal had to assess the respondent’s case not on the basis that the bottle shop operated within a static context, but rather within one which was subject to change and to changing understanding.
Further, as the Tribunal constituted by Judge Bowman recognised in Nardi v Director of Liquor Licensing,[8] because the concept of harm minimisation is itself anticipatory there may be cases in which a conservative approach should be adopted.[9] In this context, a conservative approach may mean a precautionary approach leading to the conclusion that if an appreciable risk of harm is identified, harm minimisation favours avoiding such potential risk unless it can be positively justified.
[8][2005] VCAT 323.
[9]Ibid [51].
As Tate JA explains, the respondent’s case before the Tribunal was put at three levels. The first level comprised evidence in support of the proposition that there were frequent incidents of antisocial conduct and alcohol misuse directly or indirectly connected with the sale of packaged alcohol from the bottle shop after 11:00pm. The respondent’s opening written submission put this contention as follows:
9It is submitted that the weight of the evidence in this case will support the conclusion that a significant proportion of the packaged liquor which is sold at the Hotel bottle shop after 11:00pm will be ultimately consumed in circumstances which are:
(i)likely to contribute to harm and to the misuse and abuse of alcohol;
(ii)likely to impact adversely on the amenity of the area in and around the Hotel; and
(iii)likely to contribute to anti-social and undesirable behaviour.
10. The Applicant's case relies heavily upon two propositions namely:
(a)that a reduction in trading hours will adversely impact upon the economic viability of the Hotel; and
(b)that it cannot be blamed for incidences of anti-social or harmful conduct which may result from the sale of alcohol from the Exford Bottleshop after 11:00pm.
11.The tribunal will need to assess the evidence in support of these propositions. But even if the first proposition is established, it does not follow that the individual, commercial interests of the applicant must take precedence over the interests of the community. A licence to sell alcohol is a privilege; not a right. The Act allows for licences to be modified and amended in response to changing circumstances, or to respond to or reflect the needs of the wider community. This is such a case.
12.As to the second point, the position of the Director is that issue as to who is to blame for the consequences of the misuse of alcohol, sold at late night from the Exford bottleshop, ought not be determinative of this application.
13.The Director accepts that evidence will be lead that will seek to demonstrate that the Applicant has sought to minimise impacts on the community and to mitigate the harm that late-night trading causes. To this extent, it may be open to the Tribunal to conclude that the Applicant has done its best.
14.However, even if this is the case, if the evidence also demonstrates that there are frequent incidents of anti-social conduct, harmful behaviour (particularly by young people) and the abuse of alcohol, which are directly or indirectly connected with the sale of alcohol from the Hotel after 11:00pm, this provides justification to vary the licence.[10]
[10]Emphasis added.
The Tribunal rejected this aspect of the respondent’s case. It accepted Kordister’s submission that only nine of the incidents which had occurred in a two year surveillance period could conceivably justify ending late night trading at the bottle shop. Of those incidents, the Tribunal found those which were said to be linked to the operation of the bottle shop did not appear to be very serious. It held that, despite the extensive period of surveillance, only minor breaches of the law had been established and it found the hotel was ‘taking its responsibility as a liquor supplier very seriously and had done almost all that could be expected of it.’
The second level at which the respondent’s case was put related to probable impact upon the general misuse of alcohol in the locality of the hotel. It sought to identify the context in which more general evidence (to which we shall next turn) should be applied and the probable harm which would result from continued late night sales of packaged liquor in that context. The respondent’s opening written submission put this contention as follows:
19.The Hotel is situated in an undesirable location for 24 hour packaged liquor trading. This is because it is located in an area:
(i)which is used heavily by pedestrians;
(ii)which attracts significant numbers of young people;
(iii)where there is a significant concentration of late-night drinking venues; and
(iv)where there are many opportunities for street drinking to occur (and where surveillance is difficult due to the number of laneways, alleys and secluded spaces).
20.The Director will invite the tribunal to find on the evidence that a significant amount of the packaged liquor sold from the Exford Hotel after 11:00pm at night is either being misused, or is likely to have adverse impacts on the community. In this respect, ‘significant’ does not mean a majority or even a substantial minority of liquor sold. Rather it means such an amount that has anti-social impacts.
21.It is true that anti-social impacts will need to be weighed against convenience to the public. But we will invite the finding that there are very moderate benefits in terms of convenience to customers.
The Tribunal’s reasons for decision did not expressly reject the Director’s submissions that anti-social behaviour was occurring in the streets near the hotel. Rather, the Tribunal found that there was ‘little or nothing to link the conduct of the bottle shop’ to such behaviour, save perhaps for street drinking. It found that the behaviour was more likely to be caused by the many other licensed premises and nightclubs which were nearby. It further took the view that if a definite causal connection could not be established between the operation of the bottle shop and such behaviour, it could not provide a proper basis for variation of the licence.
The third level at which the respondent’s case was put related to the general relationship between the availability of alcohol and social harm. The respondent’s opening written submission put this contention as follows:
15.The Director intends to lead evidence that will establish that the majority of alcohol related harm in central Melbourne occurs between 11:00pm and 3:00am.
16.The Director intends to lead evidence that the level of social harm caused by the misuse and abuse of alcohol is significant and that this has led to significant increases in:
(i) hospital admissions;
(ii) domestic violence; and
(iii) street violence.
17.The Director will invite the tribunal to draw the inference that one of the factors that influences, and encourages, high levels of alcohol consumption is availability. The Director will invite the tribunal to draw the inference that packaged liquor, which is bought in the central city after 11:00pm at night, is significantly more likely to cause harm than packaged liquor bought and consumed at other hours.
18.The evidence will support a finding that it is more probable that packaged liquor bought after 11:00pm is bought (or, more commonly, consumed) by intoxicated people, or people likely to become intoxicated, or underage persons.
The Tribunal found such evidence to be of difficult relevance and that it should be treated with considerable caution.
The case put to the Tribunal on behalf of the respondents was a significantly more sophisticated case than that articulated by the licensing inspector in the written reasons he gave for his initial decision. Those reasons focussed principally upon amenity impacts caused in a direct sense by incidents arising out of the supply of packaged liquor by the bottle shop.
In making my decision, I formed the view that the evidence provided by Victoria Police in support of this application demonstrated that incidents had occurred on or around the premises late at night and more particularly early in the morning which had contributed to the detriment of amenity. In addition, patrons who were intoxicated had been supplied or had been involved in incidents in or around the premises.
The continued operation of a poorly run 24 hour bottle shop is inconsistent with the objectives of the Act particularly the objective of harm minimisation by means of providing adequate controls over the supply and consumption of alcohol.[11]
[11]Kordister Pty Ltd v Director of Liquor Licensing [2010] VCAT 277 (‘Tribunal’s Reasons’), [3].
It may fairly be said that Kordister effectively challenged and substantially answered the case relating to the first level of evidence. Nevertheless, the respondents were entitled to put their case on the further bases articulated by them. In our view, the judge was correct to conclude that the Tribunal did not respond adequately to this further case and to the combined effect of the evidence put forward on behalf of the respondents.
For the reasons explained by Tate JA, each of the three levels of evidence which she identifies, and to which we have referred, was potentially relevant to the application of the concept of harm minimisation to the application in issue.
In turn, the judge was correct to conclude that the Tribunal misconceived and impermissibly narrowed the frame of reference bearing on the case before it. Further, and more particularly, the Tribunal was wrong to exclude evidence sought to be called by the respondents in support of the second level of argument.
As Tate JA explains, while a case directed to proof of specific incidents as supporting a licence variation must necessarily establish a causal nexus between the operation of a bottle shop and the occurrence of the incidents, it does not follow that evidence cannot be called as to the nature of the local context within which a bottle shop operates and as to general connections between the conditions of the supply of alcohol and social harm falling to be considered in that context. We agree with her Honour that, so far as such locality evidence is concerned, it may be sufficient to show that it demonstrates that the object of harm minimisation would not be well-served by permitting 24 hour trading of packaged liquor.
It is convenient to further address the critical evidentiary issues in the order in which the judge did so. His Honour dealt first with the manner in which the Tribunal approached the relevance of the general evidence before it.
The respondent called evidence from Pier de Carlo. Mr de Carlo is the Director of Policy, Planning and Strategy, Mental Health and Drug Division, Department of Health. He gave evidence of government policy and the efforts that have been made to reduce community problems resulting from the consumption of alcohol.
There is also a particular issue with packaged liquor licences, where customers can purchase alcohol to consume off premises. Such sales account for approximately 75% of all alcohol consumed, and contribute significantly to alcohol-related harms across the population, such as chronic alcohol-related illness and drink driving.[12]
[12]Ibid [35].
Mr de Carlo produced a policy document entitled ‘Restoring the Balance – Victoria’s Alcohol Action Plan 2008-2013’. He also produced a report by The Allen Consulting Group entitled ‘Alcohol – related harm and the operation of licensed premises.’ As the Tribunal noted this report concluded in part:
The results of this analysis must be interpreted carefully. The results do not suggest that the alcohol-related harm associated with packaged liquor licensees is low; rather, that the alcohol-related harm that occurs in or near premises with a Packaged Liquor Licence is low. The actual harm may occur some distance away from these premises and is not able to be linked back to the licensee using currently available data.[13]
[13]Ibid [49].
Mr de Carlo further produced a report by Marsden Jacob Associates ‘Identifying a framework for packaged liquor retailing’. Mr de Carlo concluded, as the Tribunal noted, that:
In terms of packaged liquor outlets, it has been found by research sponsored by the World Health Organization that there is strong evidence linking the reduction of hours or days when alcohol can be purchased to significant reductions in overall harm. A report by Marsden Jacob Consultants discussed findings that restricting hours of trading for packaged liquor outlets are likely to have the greatest impact on persons who do not keep a ready supply of alcohol.[14]
[14]Ibid [50].
The Tribunal addressed the submissions of the parties with respect to this evidence and ultimately concluded as follows:
The authorities make it clear that it is difficult to place generalised reports - such as the Allen Report and the Marsden Jacob Associates Report - in a position where they can be relevant to site specific situations such as the Exford. Further, Mr de Carlo’s evidence does not go so far as to be site specific in relation to the Exford either.[15]
[15]Ibid [53].
We agree with the judge that the Tribunal misread the effect of prior Tribunal decisions. It also discounted impermissibly the potential relevance of Mr de Carlo’s evidence. The prior decisions of the Tribunal did not state that in applying the concept of harm minimisation it is always necessary to determine by site specific evidence whether a licensee was or would be individually responsible for harm arising from the misuse or abuse of alcohol.[16] Nor did those decisions reject the relevance of general evidence relating to risky drinking and associated problems of harm to the community.[17]
[16]Reasons, [117].
[17]Reasons, [118].
In particular, in Black and Cooke v Liquor Licensing Victoria,[18] Kellam J and Angell M held, when considering an application for a packaged liquor licence at a supermarket, that it was necessary to determine whether the licence would be contrary to the object of harm minimisation in the sense of whether ‘the object of harm minimisation stands out as being poorly served by reason of particular local, social, demographic and geographic circumstances’. That approach involved evaluation of general evidence led before the Tribunal concerning the nature of potential alcohol misuse and its possible social impacts and its application to the local context.
[18][2000] VCAT 459.
Likewise, in Nardi v Director of Liquor Licensing,[19] to which the Tribunal specifically referred,[20] and upon which it relied in this context, Judge Bowman again had to consider an application for a packaged liquor licence at a supermarket. His Honour heard general evidence relating to the consequences of probable increased consumption of alcohol and alcohol abuse. He was not persuaded that this general evidence should be determinative in that case and held that it should be evaluated in the light of evidence as to the relevant local context. The Tribunal in the present case was however wrong to find: ‘His Honour made it clear that the expert evidence in relation to harm minimisation needs to be treated with considerable care.’[21] In turn the Tribunal was wrong to adopt this approach.
[19][2005] VCAT 323.
[20]Tribunal’s Reasons, [54].
[21]Tribunal’s Reasons, [54].
The next issue related to the Tribunal’s treatment of evidence concerning the locality of the bottle shop and the amenity of the area. The Director’s case was in part that because the bottle shop was the only one trading late at night in the Melbourne CBD, a reduction in the supply of liquor would contribute to the minimisation of harm.
The harm in issue was constituted by the misuse of alcohol and anti-social behaviour generally in the locality, which, as Tate JA shows, was both the subject of evidence and an issue in respect of which the Tribunal improperly excluded further evidence.
The Tribunal took the view that it was necessary to demonstrate that the supply of liquor from the bottle shop was causally connected to the anti-social behaviour in issue before it could be a relevant consideration.
We agree with the judge that this was not necessarily so. The evidence as to existing problems in the locality provided a context in which conclusions might be drawn from the general evidence as to the potential contribution of a reduction in trading hours to harm minimisation.
While it was necessary to consider whether anti-social behaviour was being caused by people leaving other establishments, the question for the tribunal was whether ending late-night trading at the bottle shop, being the only one so trading in the Melbourne CBD, would contribute to minimising harm which, on the evidence, was actually or likely occurring. That question was not fully addressed by the finding that the harm was not ‘linked to the conduct of the bottle shop’ … or could not be blamed on the hotel. The question was, if people could not buy alcohol late at night from the bottle shop, how likely and to what degree was it that the anti-social behaviour would diminish and what contribution would that make to minimising harm? The conclusion in that regard then had to be balanced with the benefits that late-night trading brought to the community.[22]
[22]Reasons, [197].
Counsel for Kordister submitted to this Court that if no causal nexus was established between the bottle shop and anti-social behaviour in the locality then it must be open to the Tribunal to find as a fact that it was not satisfied harm minimisation would be furthered by limiting the bottle shop’s hours of trade. The difficulty with this submission is that the case for the respondents is not that there is no logical pathway of reasoning in the Tribunal’s decision or that its ultimate conclusion was not open on the evidence but rather that the Tribunal did not respond properly or at all to the way the case for the respondents was put by reference to general and locality evidence. Further, the Tribunal discounted as necessarily lacking probative force evidence which did not crystallise in a direct causal link between the bottle shop and anti-social behaviour when such evidence was properly regarded as being contextually relevant to the Tribunal’s decision.
His Honour also took the view that the Tribunal erred in its view of the significance of evidence of on-street drinking.[23] As Kordister’s counsel submitted, this issue ventured into merits review and it is unnecessary for present purposes to resolve it.
[23]Reasons, [198]-[199].
The judge next pointed to the Tribunal’s treatment of the High Court decision in CAL No 14 Pty Ltd v Motor Accidents Insurance Board[24] as indicative of a fault or blame based approach to the matter before it, rather than one centred on the concept of harm minimisation. Again, we agree with his Honour. CAL was concerned with a widow’s claim in tort against the proprietor of a hotel which sold alcohol to a drunken patron who subsequently died as a result of negligent driving. The Tribunal quoted the following passage as relevant to responsibility for alcohol use:
It is not against the law to drink, and to some degree it is thought in most societies – certainly our society – that on balance and subject to legislative controls public drinking, at least for those with a taste for that pastime, is beneficial. As Holmes J, writing amidst the evils of the Prohibition era, said : ‘Wine has been thought good for man from the time of the Apostles until recent years’. Almost all societies reveal a propensity to resort to alcohol or some other disinhibiting substance for purposes of relaxation. Now some drinkers are afflicted by the disease of alcoholism, some have other health problems which alcohol caused or exacerbates, and some behave badly after drinking. But it is a matter of personal decision and individual responsibility how each particular drinker deals with these difficulties and dangers. Balancing the pleasures of drinking with the importance of minimising the harm that may flow to a drinker is also a matter of personal decision and individual responsibility. It is a matter more fairly to be placed on the drinker than the seller of drink.[25]
[24](2009) 239 CLR 390 (‘CAL’).
[25]CAL, [54] (Gummow, Heydon and Crennan JJ).
The Tribunal went on to observe:
In my view, it is quite wrong to blame the purveyor of alcohol when the alcohol that is purveyed is misused by the ultimate consumer. It may be different if the seller was able to find out or knew that the alcohol was going to be misused. In this situation, there is little or no evidence that the applicant was aware that any alcohol purchased from its bottleshop would be misused by the purchaser.[26]
[26]Tribunal’s Reasons, [65].
This line of reasoning is not consistent with the concept of harm minimisation, which seeks to address the issue of alcohol misuse and abuse from the point of net community impacts. Notions of individual fault from the law of torts could not assist in the resolution of the issues before the Tribunal.
Lastly, the judge took the view that the Tribunal erred in the way it utilised the reasons given for the original grant of the extended hours licence in 1997. With respect to his Honour, it seems to us that this was an evidentiary matter going essentially to a question of merits rather than law.
It follows, however, from the matters we have canvassed above that the judge was correct to conclude the Tribunal’s decision should be set aside because the Tribunal misdirected itself as to the concept of harm minimisation and in consequence misapprehended the relevance of material aspects of the evidence before it.
The Panel’s recommendation
At the relevant time, the Director was required by s 45 of the Act to refer a contested application to an independent Panel for consideration and report. In turn, the Panel was required to give the applicant and any objector a reasonable opportunity to be heard and to report its findings to the Director. In its report, the Panel was required to make a recommendation as to whether or not the application should be granted and to make any other recommendations it thought fit concerning the application. The report was also required to contain reasons for the recommendations. Section 47(1) of the Act provided:
(1)Subject to Division 3, the Director must grant or refuse to grant a contested application after giving full consideration to the recommendations of the Panel under section 46(4).[27]
[27]Emphasis added.
The Tribunal recorded the Panel’s recommendations in its decision.
4In making her decision to reduce the trading hours of the bottleshop, the Director took into account the decision of the Panel who was appointed to make recommendations to the Director. The Panel recommended that the application of Inspector Duthie to reduce the trading hours of the bottleshop at the Exford be accepted. That is, that the bottleshop should shut at 11:00pm each evening. In coming to that decision, the Panel considered the amenity of the area and the benefit of service. In relation to the street amenity, at paragraph 41 of the Panel decision, the Panel stated as follows:
... the Panel considers that it is still reasonable that people should be able to congregate or pass through this area without the risk of being subject to people drinking liquor in the street (in contravention of a local law enacted by the City of Melbourne) or violent, threatening or anti-social behaviour that may result from such consumption. While such behaviour and amenity impacts may not be solely or directly related to the operation of the subject premises during the hours in contention, its presence and operation, particularly the late night/early morning hours, arguably do have the potential to contribute to a noticeable reduction in the amenity and safety of nearby street areas. This reduction in amenity is supported by the list of incidents submitted by the applicant recorded in a 21 day period earlier this year.
5It should be noted that it would appear that the incidents referred to by the Panel as taking place ‘in a 21 day period’ should in fact read ‘in a 2 year period’.
6In balancing the benefits and detriments to the community by the bottleshop trading after 11:00pm, the Panel stated as follows :
While the Panel recognises that the proposed premises would offer some benefits for consumers, it considers that those benefits should not be realised at the expense of what may be unacceptable adverse physical and other impacts on the amenity of particular areas or members of the community.
The Panel considers that existing and potential disbenefits on amenity for the wider community of extended hours of the subject premises outweigh the benefits of the continued extended trading hours. The Panel notes the objector’s contention that a large proportion of the bottle shop takings occur in the hours between 11pm and 7am. However, the Panel considers that any adverse economic impact on the licensee should be considered through the prism of consistency with the objects of the Act and the wider disbenefits of the abuse and misuse of alcohol that may be assisted by the current trading hours of the Exford Hotel.[28]
[28]Tribunal’s Reasons, [4]-[6].
We are not satisfied that it can be inferred the Tribunal failed to give full consideration to the recommendations of the Panel. The issues raised by the Panel were the subject of evidence and elaboration by the parties before the Tribunal.
There is no satisfactory reason for concluding that the Tribunal disregarded the Panel’s recommendation, given that the terms of that recommendation and the reasons given for it were integrally relevant to the debate between the parties. The recommendations of the Panel were, however, distanced from the Tribunal first by the decision of the Director, who gave somewhat different reasons for her decision than those of the Panel and secondly by the evidence called on behalf of the respondents at the hearing before the Tribunal which articulated and evidenced the basis for the same conclusions as those reached by the Panel in a more developed and detailed way.
In our view, the Tribunal’s error was not that it failed to consider the recommendations of the Panel to which it referred, but that it failed to apprehend the relevance of the respondent’s case as a whole in respect of the issue of harm minimisation.
The economic issue
We agree with Tate JA with respect to the Tribunal’s conclusions relating to the economic consequences of the proposed variation.
In summary, the judge was correct to conclude that the Tribunal arrived at conclusions upon the economic consequences of variation of the licence which were simply not open to it.[29]
[29]S v Crimes Compensation Tribunal [1998] 1 VR 83, 90; ISPT Pty Ltd v Melbourne City Council (2008) 20 VR 447.
There are some additional observations. The Tribunal found that cutting late night trading would have ‘a serious effect on the economic viability’ of the bottle shop.[30] Justice Bell held that there was no evidence to support that finding because the bottle shop failed to produce books of account but only gave turnover figures.[31]
[30]Tribunal’s Reasons, [69].
[31]Reasons, [252].
Kordister led evidence from Dr Chau and Mr Brooker. Dr Chau is a member of the Chau family, who are the Kordister’s shareholders. Because of the elderly state of his parents, he has taken a role in looking after the hotel. Mr Brooker is the hotel manager. The evidence of both of them was that approximately 60 per cent of the turnover from the entire premises came from the bottle shop and that 50 to 60 per cent of the bottle shop takings were taken after midnight. The witnesses said that if the bottle shop was forced to close at 11:00pm, it would have a serious effect on the viability of the hotel.[32] There was also evidence that the bottle shop charges premium prices for its liquor, far in excess of the prices that would be charged by a liquor shop trading in suburban Melbourne.[33]
[32]Tribunal’s Reasons, [66].
[33]Tribunal’s Reasons, [70].
Kordister also led evidence from Mr Hart, who said in his witness statement:
40.1I am a qualified account and I am a registered [sic] with Australian Society of Certified Practicing Accountants. I have viewed partial accounts relating to the business and have found that the bottle shop has its highest levels of trading between midnight and 3 a.m.
40.2The Bottle shop represents 60% of the turnover of the business. To lose the late night income from the bottle shop will make the business marginally viable. The owners have informed me that a cut back on the bottle shop hours will lead to a loss of jobs and possibly the closure of the hotel.
Of course, the Tribunal was not bound by the rules of evidence.
The Tribunal also held that reducing the trading hours in this case may damage financial viability of other liquor outlets. Justice Bell held that there was no evidence for this finding.[34]
[34]Reasons, [263].
The Tribunal’s reasoning was as follows:
75… Clearly, a hotel without a liquor licence would be worth far less than a similar hotel with a liquor licence. By the same token, a bottleshop or supermarket with a licence would be worth considerably more than a similar premise without a licence. It necessarily follows that if the profit that is earned from a business is decreased by the removal of a liquor licence then, the value of that business will be decreased. That will, in turn, have an effect on the ability of proprietors of such a business to renew finance commitments or obtain finance in future. It would not be surprising that if s 29 was used to restrict the hours of business of licensed premises generally, the value of the business being conducted on those premises would be decreased. Even the possibility of a s29 application such as this being made, would make it far more difficult for any operator or prospective operator of a licensed premises to obtain finance or to obtain finance at the level at which they could be obtained at the moment. Put in another way, lenders would be ‘scared off’.
76It necessarily follows that if the scenario, which I have outlined above, were to happen, there could be serious effects on the liquor industry in Victoria. Many liquor purveyors, who are providing a positive benefit to their communities, may be forced out of business or the viability of their business would be reduced to such an extent that the facilities which they provide the public would also be reduced.
77I was told that this was only the second application made by the Police in relation to restriction of a licence pursuant to s 29 of the Act. The other application was settled before it was heard. Therefore, it is likely that if the applicant was to fail in this application, prospective lenders would make obtaining finance for liquor businesses more difficult and more restrictive and, as a result, the amenities provided by purveyors of liquor may be reduced.
Justice Bell held that ‘there was no evidence about the businesses of other liquor licensees, or about their ability to obtain finance. There was no evidence about the effect which varying a licence of a particular licensee would have on the viability, profitability or value of the businesses of other licensees. There was no evidence about the financial arrangements which were common in the industry and how varying the hotel’s licence might affect those arrangements. There was no evidence about how other licensees and their financiers might respond to such a variation.’[35]
[35]Ibid.
It might be thought that commonsense would support the approach of the Tribunal. Yet, matters such as the risk to other licences, profitability, borrowing capacity and business valuations are necessarily relevant and inherently individualistic topics, often requiring expert or specialist evidence. This is particularly so in the context of a legislative regime devoted to social harm minimisation. Furthermore, the Director, before the Tribunal, put the capacity of Kordister to rely on the evidence it elicited as to profit matters squarely in issue.
Conclusion and disposition
We agree with Tate JA that the grounds of appeal to this Court which relate to the harm minimisation and economic evidence issues should be rejected. On the other hand, we take the view that the grounds relating to the failure to consider the Panel’s recommendation are made out.
We would grant leave to appeal given the public importance of the issues raised by the appeal.
We would allow the appeal in part, but we agree with Tate JA as to the disposition of this matter.
For the reasons we have explained, the order of the judge setting aside the decision of the Tribunal should remain of full force and effect.
We are of the view, however, that the order of the judge remitting the matter to the Tribunal (differently constituted) for reconsideration according to law, should be set aside. We are also of the view that an order should be made for the permanent stay of the decision of the Director of Liquor Licensing, dated 3 September 2009, granting the application made by Inspector Duthie dated 25 May 2009, pursuant to s 29(1)(b) of the Liquor Control Reform Act 1998, for a variation to the existing trading hours for consumption off the licensed premises of the Exford hotel, without prejudice to the right of Inspector Duthie or the Chief Commissioner of Police to make such fresh application as is seen fit. We also consider that there should be a permanent stay of the application made by Inspector Duthie dated 25 May 2009, pursuant to s 29(1)(b) of the Liquor Control Reform Act 1998, for a variation to the existing trading hours for consumption off the licensed premises of the Exford hotel.
Since the commencement of the application for variation, the Act has been materially amended, the continuing history of the operation of the bottle shop has
necessarily progressed, the local context of the bottle shop’s operations has changed, community expectations may be thought to have altered, and both relevant research and government policy have, in all probability, progressed. The convenient course is for the respondents to consider whether a fresh application for variation should be made in the light of current circumstances. Counsel for the respondents did not seek to dissuade the Court from the view that this course may be appropriate when this possibility was raised with them during the course of argument.
TATE JA:
This proceeding raises the question of whether the decision made by the Victorian Civil and Administrative Tribunal (‘the Tribunal’) to refuse to reduce the hours of a 24-hour bottle shop selling packaged liquor for off-premises consumption was wrong at law. The judge of the trial division of the Supreme Court held that the decision was wrong at law, principally because the Tribunal misconstrued its statutory function and the primacy to be given to the object of harm minimisation. In my view, he was correct to so hold.
Introduction
The applicant, Kordister Pty Ltd, (‘Kordister’), holds a licence to sell liquor from the Exford Hotel bottle shop (‘the bottle shop’) for off-premises consumption on a 24-hour basis in Melbourne’s Central Business District.[36] It is the only bottle shop with a 24-hour licence in the Melbourne CBD.
[36]Licence No 31905376, with the exceptions of Sundays, Good Friday and Anzac Day where more limited trading hours applied.
On 25 May 2009 an application was made by a liquor licensing inspector, Inspector Duthie, under the Liquor Control Reform Act 1998[37] (‘the Act’), to vary the bottle shop’s licence so as to reduce its trading hours to the period from 7:00am to 11:00pm. Kordister objected to the application and the matter was referred to a
Liquor Licensing Panel (‘the Panel’), which recommended to the first respondent, the Director of Liquor Licensing (‘the Director’), that the variation be granted.[38] The Director granted the application.[39] The Tribunal, on a review of the Director’s decision, set aside the variation of the licence, with the effect that the 24-hour sale of liquor from the bottle shop could continue.[40] On an appeal by the Director to the trial division of the Supreme Court,[41] the judge held that the orders of the Tribunal should be set aside and remitted the matter to the Tribunal (differently constituted) for its reconsideration according to law.[42]
[37]Act No 94 of 1998. The application was made under s 29(1)(b) in Part 2 of the Act.
[38]The Panel’s recommendation to the Director to grant the variation was made on 24 August 2009.
[39]The Director’s decision was made on 3 September 2009. Reasons were given on 23 September 2009.
[40]Kordister Pty Ltd v Director of Liquor Licensing [2010] VCAT 277 (Mr Davis) (the ‘Tribunal’s reasons’). The orders were made on 9 March 2010. It had previously granted a stay of the Director’s decision on 11 December 2009.
[41]The appeal was brought under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (‘the VCAT Act’): See Director of Liquor Licensing v Kordister Pty Ltd [2011] VSC 207 (‘Reasons’).
[42]The judgment and orders were made on 18 May 2011.
Kordister now applies for leave to appeal the judgment and orders of the judge.[43] The hearing of the application for leave to appeal was heard at the same time as the appeal.[44]
[43]Leave is required pursuant to s 17A(3A) of the Supreme Court Act 1986.
[44]For convenience, I refer below to the application for leave to appeal together with the appeal as simply ‘the appeal’.
The application to reduce the bottle shop’s trading hours
The Exford Hotel (‘the hotel’) is located on the corner of Little Bourke Street and Russell Street, in the heart of Chinatown and the Melbourne CBD. It has operated for over 100 years. Kordister has held a liquor licence in respect of the hotel for about 25 years. The hotel is comprised of a 60-bed back-packers hostel, an historic pub, and the bottle shop. The bottle shop is located at ground level facing the intersection.
The hotel has been described in these terms:[45]
The Hotel is a relatively modest sized premises. It provides a bottleshop on the corner of Russell and Little Bourke Streets. There is also a main bar behind the bottleshop that is accessible via a separate entrance from the bottleshop. On the second floor is a lounge which is now mainly utilised as a function room and sometimes as a casual lounge on busier evenings. The second floor also has a dedicated smoking balcony. The third and fourth floors are utilised as residential accommodation, with approximately 35 rooms. The Hotel also has a downstairs cellar which is used for storage and as an office and common room. This area is not accessible to the public.
[45]See the Tribunal’s reasons, [13] referring to a witness statement of Mr Brooker.
The bottle shop is located in an area with high levels of both pedestrian and motor vehicle traffic throughout much of the day and night, close to a ‘Hungry Jacks’ take-away fast food outlet, an amusement arcade, two car parks, and nightclubs including at least one, the Billboard nightclub, which remains open throughout the night until 7:00am.
In May 1997 Kordister was granted extended trading hours with respect to the hotel and the bottle shop, for the consumption of liquor both on and off the licensed premises, between 7:00am and 7:00am the following day, with exceptions for restricted hours on Sundays, Good Friday and Anzac Day. That grant had been made under the Liquor Control Act 1987[46] (‘the 1987 Act’), a predecessor to the Act. At the core of the 1987 Act was the promotion of economic and social growth in Victoria by encouraging the development of the liquor, hospitality and related industries.[47] The objects of the 1987 Act did not include harm minimisation.[48]
[46]Act No 97 of 1987.
[47]Section 5 (a) of the 1987 Act as at 1 July 1997.
[48]The objects of the 1987 Act are set out below at [107].
As a result of concern about late night drinking on the street and anti-social behaviour arising from the misuse and abuse of alcohol, Inspector Duthie issued a warning notice to the hotel on 29 April 2009. The warning notice contained a list of 18 incidents that occurred in the immediate vicinity of the hotel over the period of 25 March 2008 to 14 April 2009 that had attracted police attention, as well as other matters relating to the operation of the hotel and the bottle shop.
Inspector Duthie also relied on these 18 incidents in his application to the Director made on 25 May 2009 for variation of Kordister’s bottle shop licence. The incidents included allegations of attacks on crowd controllers after persons had been refused entry to the bottle shop; the purchase of alcohol in breach of the restrictions on trading hours on Anzac Day; and intoxicated persons entering the bottle shop and purchasing liquor. These incidents were more fully explored before the Tribunal. Before the Panel, Inspector Duthie spoke of people who were already intoxicated seeking to buy more liquor from the bottle shop:[49]
The operation of the licensed premises trading to 7 a.m. attracts patrons from other city venues that have ceased trading. The number of incidents where intoxicated persons and drunken persons have been involved is indicative of a premises that is operating poorly. The issues are compounded with a bottle shop that operates until 7:00 a.m. and attracts patrons from other venues who wish to continue consuming alcohol. These patrons who have been consuming liquor for a period of time attempt to purchase more liquor and if refused entry become frustrated and aggressive.
[49]Liquor Licensing Panel: Report and Recommendations to the Director of Liquor Licensing (24 August 2009) (‘Panel’s reasons’), [17].
Inspector Duthie also spoke of the effects of patrons of the bottle shop consuming liquor in the street. He described a practice known as ‘pre-loading’ whereby people buy liquor from the bottle shop, drink it quickly in the street or elsewhere before queuing to obtain admission to nearby nightclubs (or while queuing) to avoid having to buy more expensive drinks at those clubs. It was argued that, as a result of drinking quickly, those persons cause problems in the street and in other licensed premises. The other bottle shop in the CBD that is licensed to sell liquor after midnight is only open until 3:00am. Four other premises in inner Melbourne sell packaged liquor after midnight but not in the CBD.[50]
[50]Tribunal’s reasons, [27]; Reasons, [73].
Kordister submitted before the Panel that the bottle shop provides a unique service in the Melbourne CBD and it would be detrimental to the amenity of the area to reduce its hours.[51]
[51]By reference to s 38 of the Act. It was also argued that it would be contrary to the objects of the Act under s 4(1)(a) and (b) in that the positive benefit to the amenity of community life resulting from the provision of the service would be lost.
The term ‘amenity’ is defined in s 3A of the Act broadly and not exhaustively as follows:
(1) For the purposes of this Act, the amenity of an area is the quality that the area has of being pleasant and agreeable.
(2) Factors that may be taken into account in determining whether the grant, variation or relocation of a licence would detract from or be detrimental to the amenity of an area include-
(a) the presence or absence of parking facilities;
(b) traffic movement and density;
(c) noise levels;
(d) the possibility of nuisance or vandalism;
(e) the harmony and coherence of the environment;
(f) any other prescribed matters.
(3) Nothing in subsection (2) is intended to limit the definition of amenity.
Kordister emphasised that the bottle shop is located in a commercial/retail precinct in which there are many premises associated with the liquor and hospitality industry and there is limited residential accommodation in the area. There had been no complaints about noise or other amenity issues from the back packers.
Kordister also submitted before the Panel, and repeated this submission before the Tribunal, the Supreme Court, and on appeal, that it was necessary to find a causal link between the extended opening hours of the bottle shop and any detriment to the amenity of the area if that detriment was to be relied on to support a reduction in trading hours:[52]
Disorderly conduct caused by the respondent is a relevant consideration, however conduct by persons who are in this section of the CBD during the relevant periods is not, per se, the responsibility of the respondent. There must be a nexus between the conduct complained of and the operation of the bottle shop.
[52]Panel’s reasons, [37] recording submissions made by Kordister, (original emphasis).
The Panel rejected Kordister’s submission on the need for a causal link, preferring to adopt a more general approach based on the notion of ‘a potential to contribute’. It made no findings on each of the incidents relied on by Inspector Duthie. With respect to street amenity, the Panel said this:[53]
The Panel acknowledges that the amenity of the street environs during the operation of the subject bottle shop between 11 pm and 7 am may be different (such as greater levels of noise associated with people congregating in the street) to that experienced in the same area during day time hours or in other parts of the CBD or suburbs where there are few if any licensed premises. However, the panel considers that it is still reasonable that people should be able to congregate or pass through this area without the risk of being subject to people drinking liquor in the street (in contravention of a local law enacted by the City of Melbourne) or violent, threatening or anti-social behaviour that may result from such consumption. While such behaviour may not be solely or directly related to the operation of the subject premises during the hours in contention, its presence and operation, particularly in the late night/early morning hours, arguably do have the potential to contribute to a noticeable reduction in the amenity and safety of nearby street areas. This reduction in amenity is supported by a list of incidents submitted by the applicant recorded in a 21 day period earlier this year.
[53]Ibid [41] (emphasis added).
It is common ground that the reference to the incidents recorded as having occurred in a ’21 day period’ was a mistake and that the reference was rather to the incidents alleged to have occurred between 25 March 2008 and 14 April 2009.
The Panel was not convinced that there was a strong community demand to purchase packaged alcohol between 11:00pm and 7:00am and ultimately concluded that the reduction in trading hours ‘has the potential to reduce alcohol-related incidents in the vicinity of the subject premises … without substantial adverse impact on those consumers who currently wish to purchase alcohol between 11:00pm and 7:00am in the Melbourne CBD’.[54]
[54]Ibid [58].
The Director, in accepting the Panel’s recommendation to grant the application for variation,[55] concluded that this was to ‘ensure that detriment to the amenity of the area in which the premises are located is mitigated and that it would assist in reducing the misuse and abuse of alcohol’.[56]
[55]Pursuant to s 44(2)(b)(i) and (ii) of the Act, applicable to contested applications by reason of s 47(2), which included the following grounds …
(b)in any case-
(i)that the granting of the application would detract from or be detrimental to the amenity of the area in which the premises to which the application relates are situated;
(ii) that the granting of the application would be conducive to or encourage the misuse or abuse of alcohol; …
[56]Application for a Variation of a General Licence: Statement of Reasons (23 September 2009) (‘Director’s reasons’) 2.
The Director based his view upon: (1) the evidence of the incidents from Victoria Police ‘on or around the premises late at night and more particularly early in the morning which had contributed to the detriment of amenity’[57] in addition to the fact that ‘patrons who were intoxicated had been supplied or had been involved in incidents in or around the premises’;[58] and (2) the inconsistency of a ‘poorly run 24 hour bottle shop’[59] with the objectives of the Act ‘particularly the objective of harm minimisation by means of providing adequate controls over the supply and consumption of alcohol’.[60]
[57]Ibid 2.
[58]Ibid 2.
[59]Ibid 2.
[60]Ibid 2.
To understand the force of the Director’s reliance on the harm minimisation object of the Act it is necessary to understand the legislative history of the Act and the statutory scheme.
The legislative history
The 1987 Act, under which Kordister was granted extended trading hours, was introduced to replace the Liquor Control Act 1968[61] (‘the 1968 Act’). In the context of a concern by the then State Government that the 1968 Act was overly regulatory, difficult to interpret and not conducive to a vibrant and dynamic metropolitan lifestyle, it commissioned Dr Nieuwenhuysen to review the 1968 Act. The Nieuwenhuysen Report heralded in a ‘shift of emphasis away from regulation of the industry to other means of countering alcohol abuse’.[62] This was reflected in the objects of the 1987 Act, which stated:[63]
The object of this Act is to respond to community interest by –
(a) promoting economic and social growth in Victoria by encouraging the proper development of the liquor, hospitality and related industries; and
(b) facilitating the development of a diversity of licensed facilities reflecting consumer demand; and
(c) providing adequate controls over the sale, disposal and consumption of liquor; and
(d) contributing to the effective co-ordination of the efforts of government and non-government agencies in the prevention and control of alcohol abuse and misuse.
[61]Act No 7695.
[62]Victoria, Parliamentary Debates, Legislative Assembly, 29 April 1987, 1588 (Robert Fordham, Minister for Industry, Technology and Resources).
[63]Section 5.
The 1987 Act made liquor licences easier to obtain, and saw the regulatory burden on licensees eased. A new Liquor Licensing Commission was established and the 1987 Act was intended to bring a European-style food and drinking culture to Melbourne and Victoria, with a relaxation on the regulation of trading hours, food service, and limitations formerly applicable to ownership of licences.
In the following years Melbourne and Victoria’s liquor industry grew substantially. In October 1998, Dr Napthine, the then Minister for Youth and Community Services, noted that there were over 9000 licensed premises and over 2050 BYO establishments throughout Victoria.[64] It was apparent to the community that the increase in the availability of liquor had the unwanted consequence of increasing the ‘level of underage drinking, violent and criminal behaviour as a consequence of drunkenness, drink-driving as well as having an adverse effect on the amenity of communities in proximity to the licensed premises’.[65] As a result the Act was introduced, with Minister Napthine stating that ‘[m]inimisation of harm resulting from the sale and supply of liquor is to be the principal purpose of the [A]ct’.[66]
[64]Victoria, Parliamentary Debates, Legislative Assembly, 8 October 1998, 452 (Dr Denis Napthine, Minister for Youth and Community Services).
[65]Ibid 452.
[66]Ibid 452.
The concept of harm minimisation has been summarised in the following way:[67]
Harm minimisation is a concept which has been central to the National Drug Strategic Plan (1993-1997) which guided the development and implementation of alcohol and drug policies across Australia through the 1990s. The concept was defined as an approach that aims to reduce the adverse health, social and economic consequences of alcohol and other drugs by minimising or limiting the harms and hazards of drug use for both the community and the individual without necessarily eliminating use … The approach includes preventing anticipated harm and reducing actual harm.
[67]Reasons, [119], quoting from evidence given by Dr Roche in Avery v Director of Liquor Licensing Victoria [2001] VCAT 2455, [38].
The Act created the position of Director of Liquor Licensing and established the Panel[68] with the function, described above, of making recommendations to the Director on whether specific licences should be granted, revoked, or varied. The Act also allowed for objections to be made by members of the general public.[69]
[68]While there is a permanent pool of members of the Panel (the term of each member not exceeding five years), the Chairperson determines which members are required for a hearing: See Part 9, Division 2 of the Act.
[69]Under s 42(a) of the Act the Director may refuse to accept an objection (made under s 38) if the person is not affected by the application.
The Act has been amended several times. The Liquor Control Reform (Packaged Liquor Licences) Act 2002[70] (‘the 2002 Amending Act’) had as its aim the balancing of the principle of harm minimisation against the promotion of competition in the industry, together with greater opportunity for community participation in the licensing process.[71] Mr Brumby, the then Minister for State and Regional Development, in his Second Reading Speech, said:[72]
The [B]ill provides for greater community involvement and scrutiny in liquor licence applications and minimises the potential for abuse and misuse of alcohol within the community. The new arrangements deliver significant benefits to small liquor retailers and ensure that Victorians continue to enjoy a competitive, but fair, liquor industry.
[70]Act No 39 of 2002. By 2002 the Act had already been amended by the Liquor Control Reform (Amendment) Act 2001 (Act No 21 of 2001) and the Liquor Control Reform (Prohibited Products) Act 2001 (Act No 88 of 2001), and various other miscellaneous amendments had been made.
[71]It was introduced in response to the Australia-wide national competition policy legislative review undertaken in 1998. It also introduced, for the first time, a non-exhaustive concept of ‘amenity’. See the 2002 Amending Act, s3A. On the concept of ‘amenity’, see [98] above.
[72]Victoria, Parliamentary Debates, Legislative Assembly, 16 May 2002, 1652.
In 2006 the Act was amended by the Liquor Control Reform (Amendment) Act 2006[73] (‘the 2006 Amending Act’). Mr Rob Hulls, the then Attorney-General, in delivering the Second Reading Speech, said it ‘will promote amenity and community safety in and around licensed premises, thereby enhancing the reputation of the liquor industry for the benefit of all Victorians’.[74] The 2006 Amending Act increased the powers of the Director, including conferring on the Director the power to make, vary, or revoke, late hour entry declarations (declarations that patrons are not permitted to enter certain licensed premises during certain hours)[75] for an area or locality. Patrons could thus be prohibited from entering or re-entering licensed venues after a specified time. It also allowed the Director to set prescribed minimum standards for surveillance equipment in licensed premises.[76]
[73]Act No 8 of 2006. The Act was also amended in 2004 by the Liquor Control Reform (Underage Drinking and Enhanced Enforcement) Act 2004 (Act No 92 of 2004).
[74]Victoria, Parliamentary Debates, Legislative Assembly, 16 November 2005, 2195.
[75]Section 58B of the Act. Licensees can object to a late-hour declaration made by the Director, and the Director must give the licensee reasonable time to prepare written or oral submissions. A late hour declaration does not come into effect until after the Director has received submissions from the licensee, within a reasonable time, and considered any submissions made by the licensee. See s 58D(4)(a) and s 58D(4)(b) of the Act.
[76]Section 18B of the Act.
The reforms were designed to reduce anti-social behaviour, such as public drunkenness, property damage, vandalism, and violence in and around licensed premises, while balancing the community’s need for safety against the licensees’ commercial interests. They sought to address the problems associated with underage drinking by enhancing the powers available to Victoria Police and increasing substantially the penalties for supplying alcohol to underage persons.
Further amendments were passed in 2007 by the Liquor Control Reform Amendment Act 2007[77] (‘the 2007 Amending Act’) aimed at reducing the level of violence, and promoting community safety, in and around licensed premises by giving police the power to ban persons suspected of committing certain specified offences from entertainment precincts for up to 24 hours and conferring on courts the power to make exclusion orders for a period of up to one year.[78]
[77]Act No 73 of 2007.
[78]Sections 148B and s 148I of the Act respectively. See Victoria, Parliamentary Debates, Legislative Assembly, 1 November 2007, 3821-2 (Mr Tony Robinson, Minister for Consumer Affairs). The duration of a banning notice was extended to up to 72 hours by Act No 18 of 2010: Justice Legislation Amendment (Victims of Crime Assistance and Other Matters) Act 2010.
The 2007 Amending Act also conferred upon the Director the power to make a temporary late hour declaration,[79] allowing the Director to bypass the notification requirements to licensees if certain conditions were met, if he or she believed on reasonable grounds that: (1) alcohol-related harm or disorder had occurred in the area or locality to which the order was to apply; and (2) the declaration was reasonably likely to be an effective means of reducing or preventing the occurrence of alcohol-related violence or disorder in the area or locality. It also granted senior police members the power to suspend immediately a licensee’s licence for up to 24- hours in prescribed circumstances.[80]
[79]Section 58CA of the Act.
[80]Section 96A of the Act.
In 2009, the Liquor Control Reform Amendment (Enforcement) Act 2009[81] (‘the first 2009 Amending Act’) and the Liquor Control Reform Amendment (Licensing) Act 2009[82] (‘the second 2009 Amending Act’) were passed.[83]
[81]Act No 8 of 2009.
[82]Act No 59 of 2009.
[83]There was also a third Act passed in 2009 which amended the Act, the Liquor Control Reform Amendment (Party Buses) Act 2009 (Act No 88 of 2009).
The first 2009 Amending Act was introduced against the background of a Ministerial Taskforce on Alcohol and Public Safety established by the Premier reflecting a national concern about alcohol abuse considered as part of the Council of Australian Governments (COAG) process. The result of the Taskforce was the Restoring the Balance: Victoria’s Alcohol Action Plan 2008-2013 (‘Victorian Alcohol Action Plan’).[84] The Victorian Alcohol Action Plan gave particular emphasis to the impact of alcohol-fuelled violence and anti-social behaviour on public safety and treated as a significant issue the sale of liquor late at night for off-premises consumption.
[84]May 2008.
The powers introduced by the first 2009 Amending Act included a power conferred on the Director to suspend a licensee’s licence for a period of up to five days if the Director believed on reasonable grounds that the licensee had engaged in conduct that would constitute grounds for an application to the Tribunal to conduct an inquiry into the licensee and there was a danger that a person may suffer substantial harm, loss or damage in consequence of the licensee’s conduct unless the licence was suspended.[85] The Director’s ability to prosecute licensees for allowing drunken or disorderly persons on licensed premises was strengthened by requiring that the licensee show both that: (1) it did not know that drunk or disorderly persons were on the premises; and (2) it had taken reasonable steps to prevent such persons from being on the premises, rather than being required to satisfy only one limb, as before.[86]
[85]Section 96B of the Act.
[86]See the Act, s 108(5)(a) and (b) amended by Act No 8 of 2009 s 16. Victoria, Parliamentary Debates, Legislative Assembly, 4 December 2008, 5004 (Mr Tony Robinson, Minister for Consumer Affairs).
The powers of the Director to inquire into activities regulated by the Act were enhanced.[87] The first 2009 Amending Act also ‘augment[ed] the director’s investigatory role by enabling the director to undertake a broad-based inquiry into any matter relevant to the operation of the [A]ct, including an inquiry into the activities regulated by the [A]ct or in any area or locality of the state’.[88] This power was to enable the Director to address particular areas or hotspots that required additional conditions to be placed on licensees to protect community safety.
[87]Victoria, Parliamentary Debates, Legislative Assembly, 4 December 2008, 5004 (Mr Tony Robinson, Minister for Consumer Affairs).
[88]Ibid 5004.
An example of the Tribunal’s failure to take into account the locality evidence is the Tribunal’s exclusion of the statement of Constable Sharp, which recorded an incident of assault, on the ground that it was concerned only with the environment surrounding the bottle shop and therefore had ‘nothing to do with the bottle shop’.[182] By treating allegations of violence and alcohol abuse as relevant if and only if they could be causally attributed to the bottle shop, the Tribunal failed to recognise that their probative value (if established) lay in what they revealed about the local, social, demographic and geographic circumstances surrounding the premises, the very circumstances identified as of considerable importance in Black and Cooke and Nardi.
[182]The ruling of the Tribunal is set out above, [136].
The Tribunal was unable to see that its observations about people staying in nightclubs until the early hours of the morning and leaving them in a drunken state likely to engage in anti-social behaviour on the surrounding streets was pertinent to the Director’s application despite the bottle shop not being causally responsible for that behaviour. The fact that the nightclubs opened until late and patrons left them drunk should have been treated as relevant to the question of whether packaged liquor should be made available in that vicinity for off-premises consumption throughout the night, rather than, as it was, treated as irrelevant to that question. The observations the Tribunal made about the opening hours of the nightclubs, and the behaviour of their patrons, should have been tested against the proposition that the object of harm minimisation would be advanced if the bottle shop was not licensed to sell packaged liquor throughout the night in the vicinity of a late-night club from which drunken patrons regularly spill out onto the streets. Instead, the Tribunal wrongly treated the observations it made about the nightclubs as irrelevant to the object of harm minimisation because of its conclusions about the absence of any causal link of the anti-social behaviour to the bottle shop. In doing so, the Tribunal failed properly to apply the balancing test required under the Act, and, in particular, failed properly to comply with the declaratory statement under s 4(2) that the exercise of its functions must be performed with due regard to harm minimisation and the risks associated with the misuse and abuse of alcohol. The judge was correct in identifying that the Tribunal had erred in these respects.
At the hearing of the appeal, Kordister submitted that the judge was wrong to infer from his reading of the Tribunal’s evidence that there was uncontradicted evidence of anti-social behaviour in the streets surrounding the bottle shop, or that the Tribunal accepted that evidence (while treating it as irrelevant). In particular, Kordister argued that the allegations of vomiting or urinating in the streets were not established, either because the evidence relied on was retracted or because it was acknowledged to have been exaggerated. In response, the Director relied upon the evidence of Leading Senior Constable John Bourke whose statement included the following:
On the 14th September, 2008, … [a]t 12:45 am I attended in Waratah Place at the rear of the Exford Hotel due to some persons smashing stubbies and urinating in the laneway. …
[I] found no adverse issues or persons misbehaving until we approached Little Bourke Street at the rear of the Exford Hotel. At this location the Exford Hotel has windows that can be opened onto Waratah Place. There was a group of youths outside the windows drinking stubbies, some were sitting in the lane and some were standing. Near this group there was smashed glass stubbies and damp wet spots consistent with persons urinating. The glass from the stubbies was the same as the brand the persons were drinking. At the time I observed a male jump out of the window of the Exford Hotel Lounge area into the laneway, he began mixing with this group. I believe the group had been there for some time due to the broken glass and the amount of urination, and the way these persons were behaving, yelling and behaving in an unruly manner.
… it was clear … that the group were also using the Exford Hotel and moving in and out of the Hotel via the laneway without being challenged by staff or Management.
… I observed the Exford Hotel bottle shop also having a detrimental impact as the patron line ran out towards the traffic lights which blocked pedestrians walking north/south along Russell Street and persons walking west on Little Bourke Street. Police requested the Management to implement controls to insure further undue detriment was not caused by the bottle shop patrons blocking the footpath and patrons jumping out of the Venue’s windows.
A penalty notice was issued for breach of amenity in relation to the bar and paid. Kordister submitted in its Closing Address before the Tribunal that the penalty notice was not justified and it was paid ‘in the interest of good police relations’. The notice referred to patrons of the hotel entering and exiting by a rear window together with an amenity issue for the rear lane and did not include the queuing incident relating to the bottle shop.
In Kordister’s Closing Address before the Tribunal it also claimed that the Chief Commissioner, in her submissions before the Tribunal, had embellished a statement of another police officer, Sergeant Tharle, by ‘adding in urine and vomit’. It is true that the statement of Sergeant Tharle does not refer to either urinating or vomiting;[183] however, the statement of Constable Bourke does refer to urinating but not to vomiting. Furthermore, in cross-examination, while Constable Bourke acknowledged that the penalty notice did not relate to the operation of the bottle shop and conceded that, since he had made the statement, security had been introduced to realign patrons to the bottle shop with the wall of the hotel to avoid crowding on the footpath, he did not retract any part of his statement and there was no cross-examination about the assertions made in Constable Bourke’s statement that he had observed signs of urination.
[183]Sergeant Tharle’s statement of 25 April 2008 is principally concerned with patrons of the bottle shop opening the liquor as soon as they left, his observations of people who were intoxicated within the immediate vicinity of the hotel and his observations of many empty cans and bottles of alcohol lying in gutters, footpaths and doorways particularly in Little Bourke Street. An additional statement of his observations of 26 April 2008 recorded his observations of people who were intoxicated in the immediate area drinking from open liquor cans or bottles.
With the exception of the Director’s reliance on vomiting in the streets in the environment around the bottle shop, there was ample evidence before the Tribunal of anti-social behaviour in the locality of the bottle shop including street violence;[184] public drinking[185] including pre-loading and side-loading after 11 pm;[186] groups of people congregating in the street[187] including arguments in the street;[188] property damage and vandalism;[189] theft;[190] and the evidence of Constable Bourke with respect to public urinating in the vicinity of the bottle shop.
[184]The Director relied upon the evidence of: Sergeant Murray Trudel; Senior Constable Castles-McKeown; Sergeant Ian Earle; Constable David Brockway; Senior Constable Susan Franklin; Constable Joel King, and Senior Constable Lisa Bolton.
[185]The Director relied upon the evidence of: Constable David Malloch; Senior Constable Arthur Markridis; Constable Josh Coombs; Sergeant Brian Ward; A/Senior Sergeant Russell Tharle; Detective Sergeant Russell Anderson and Sergeant Bruce Rigoni.
[186]The Director relied upon the evidence of: RACV Inspectors Neil Woolley; Cheryl McInerney; and Darren Smith, and Sergeant Brian Ward.
[187]The Director relied upon the evidence of: RACV Inspector Neil Wooley; Sergeant Murray Trudel; Sergeant Brian Ward; and Sergeant Ian Earle.
[188]The Director relied upon the evidence of: Sergeant Murray Trudel.
[189]The Director relied upon the evidence of: Sergeant Brian Ward; A/Senior Sergeant Russell Tharle; Senior Constable Lisa Bolton.
[190]The Director relied upon the evidence of: RACV Inspector Darren Smith; Senior Constable Lisa Bolton.
This evidence was tested under cross-examination before the Tribunal for the purpose of establishing either that it was not proved or it was not relevant to the operation of the bottle shop. In this sense, it was not entirely accurate for the judge to describe this evidence as ‘uncontradicted evidence’ because this might suggest that Kordister never sought to attack the factual foundation of the locality evidence, which it clearly did. This gave rise to a difficulty in the appeal because, given the failure of the Tribunal properly to appreciate the primacy of harm minimisation as an object of the Act; the failure properly to apply the balancing test between the need to minimise harm arising from the misuse and abuse of alcohol and the interests in developing a diversity of licensed facilities reflecting the community expectations; the failure to appreciate the general evidence; and the erroneous rejection of the evidence about the environment and locality of the bottle shop as largely irrelevant; it follows that the Tribunal failed to make the necessary findings about the prevalence of anti-social behaviour in the locality of the bottle shop. As explained above, those findings need not have involved any conclusion about whether there was a causal relationship between the bottle shop and the anti-social behaviour in the locality of the bottle shop, but there was a need for findings about whether that behaviour had occurred. This is relevant to the ultimate disposition of the appeal.
However, I consider that the judge was correct to conclude that the Tribunal had misconstrued its statutory function and failed to give the object of harm minimisation under the Act the primacy it required. I consider that grounds 1 and 2 of the appeal should be rejected.
(2) Consideration of the Panel’s recommendations
Kordister submitted that the Tribunal did not err by failing to give ‘full consideration’ to the Panel’s recommendation because it set out the recommendation of the Panel and extracted part of the Panel’s reasons. The obligation under s 47(1) of the Act is to give full consideration to the recommendation of the Panel but this does not require that the recommendation be accepted or, it was argued, that reasons be produced which in their terms reveal that the decision-maker gave that recommendation ‘proper, genuine and realistic consideration upon the merits’.[191] The Tribunal gave full consideration to whether the trading hours should be reduced and this was what lay at the heart of the case before the Panel and before the Tribunal.
[191]Zentai v O’Connor (No 3) (2010) 187 FCR 495, 596-8, [396]-[397].
The Director responded by submitting that the Tribunal had to do more than simply mention the Panel’s report and recommendation; it was not enough to give them ‘cursory attention only in order to put them to one side’.[192] It was necessary, as the judge recognised, for the Tribunal actively to engage with the recommendation and evaluate it.[193] The Tribunal’s failure to do so was argued to be manifest from its failure to explain why it disagreed with the Panel’s recommendation or why it adopted a different and narrower approach to deciding the application. The fact that it addressed itself to the same question as that posed for the Panel, namely, whether the trading hours of the bottle shop should be reduced, does not itself demonstrate that it gave full consideration to the Panel’s recommendation on that question. I agree.
[192]Telstra Corporation Limited v Australian Competition and Consumer Commission (2008) 176 FCR 153, 181-2 [106]-[107].
[193]Reasons, [238].
Early in its reasons, the Tribunal described the nature of the Panel’s recommendation and extracted some statements made by the Panel but it does so as no more than part of the background to the hearing before the Tribunal. At no further point in its reasons is any mention made of the Panel or the approach it took or any explanation as to why that approach was flawed. It is unnecessary to decide whether the obligation to give ‘full consideration’ under the Act is tantamount to the requirement to proper, genuine and realistic consideration upon the merits because here the Tribunal’s consideration of the Panel’s recommendation was little more than token.
Moreover, the Tribunal’s error in failing to give full consideration to the Panel’s recommendation vitiated its decision either because the obligation under s 47(1) was a condition precedent to the valid exercise of power such that the failure to comply with it amounted to jurisdictional error, or because that failure otherwise detracted from its determination. Indeed, the failure of the Tribunal actively to engage with, or evaluate, the Panel’s recommendation clearly contributed to the Tribunal’s misconstruction of its statutory functions under the Act and the role that harm minimisation was intended to play in the exercise of those functions.
In my view, grounds 3, 4, 5 and 6 should be rejected.
(3) Findings of fact - no evidence grounds
The Tribunal was not bound by the rules of evidence[194] and it may inform itself on any matter it thinks fit.[195] Kordister submitted that the Tribunal was here entitled to rely upon its own very considerable expertise in liquor licensing to make findings of fact that ending late-night trading at the bottle shop would damage the profitability and viability of the hotel and other liquor outlets in Victoria, especially in a context in which it gave the parties a reasonable opportunity to be heard on the question. It also relied upon a letter of Kordister’s accountant which was before the Tribunal that expressed the opinion that a 60 per cent decrease in sales from the bottle shop would have a devastating impact upon the viability of the business, as well as evidence given by a former police officer, Edward Hart, to the effect that to lose the late night income from the bottle shop would make the ‘business marginally viable’.
[194]VCAT Act, s 98(1)(b).
[195]VCAT Act, s 98(1)(c).
The Director submitted that having considerable expertise in liquor licensing did not confer on the Tribunal the relevant expertise to make the findings it did. The relevant expertise required would have been knowledge of the economic viability and profitability of the hotel, of which it had no specific knowledge, the findings it made being based solely on evidence about the turnover of the hotel and not about its profitability, or more generally its economic viability. Furthermore, it took no steps to inform itself about the businesses of other licensees, its findings about lenders being ‘scared off’ throughout the industry as a result of a reduction in the trading hours of the bottle shop not being based on any evidence or material before it. Such findings went well beyond the Tribunal’s expertise.
The Tribunal made reference to the material Kordister relied upon with respect to the profitability of the bottle shop. However, it did so by dismissing that evidence as incomplete without the books of account, saying:[196]
The [Director] and joined party correctly stated that if [Kordister] was to rely on this type of economic evidence, the accounts of the hotel should have been produced and they were not.
[196]Tribunal’s reasons, [67].
Following the dismissal of the accountancy evidence, the Tribunal sought to arrive at the conclusions it did on the basis of its own expertise. In my view, the Director is correct to submit that findings about the viability of a business, or, more particularly, findings about the general impact of a decision upon an industry are not to be made by an administrative tribunal in the absence of any evidence or material before it. The authorisation under statute for a tribunal to inform itself as it thinks fit is not an invitation for a tribunal to speculate in the absence of any proper factual material before it.
Kordister argued that, even if the Tribunal erred in basing its findings of economic impact upon no evidence, those issues were considered after the Tribunal had already stated that the late closing of the bottle shop was more beneficial to the amenity of the area than any harm that occurred from its extended hours[197] and thus the findings were not critical to the Tribunal’s ultimate decision to refuse the application.
[197]Tribunal’s reasons, [65].
However, the Tribunal made it clear that its ultimate decision was reached ‘taking into account all the matters that I have referred to above’,[198] and those matters expressly included the economic impact of the decision. Indeed, the Tribunal appeared to make separate preliminary findings, the first on social impact where it said, after analysing the incidents and Government policy:[199]
At this point, I accept that late closing of the bottleshop (up to 7:00 am) is more beneficial to the amenity of the area than any harm that occurs from its extended hours.
[198]Ibid [82].
[199]Ibid [65] (emphasis added).
After analysing the economic impact of a reduction in trading hours on the profitability and economic viability of the hotel and the liquor industry, the Tribunal made a second preliminary finding, saying:[200]
Taking these matters into account, I find that to refuse the applicant’s application [to review the decision of the Director] would have a serious detrimental effect on the economic viability not only of the applicant but of many other liquor outlets in Victoria.
[200]Ibid [80].
Those two preliminary findings were then taken into account as part of ‘all the matters’[201] on which the Tribunal’s decision rested.
[201]Ibid [82].
I consider that it would be wholly artificial to conclude that the Tribunal had already made its determination to reject the proposed reduction before it embarked upon the economic analysis. That analysis being flawed, by reason of having been based upon no evidence, the error vitiated the ultimate decision of the Tribunal.
I consider that grounds 7, 8, 9 and 10 should be rejected.
Conclusion and Disposition
The judge was correct to conclude that the Tribunal failed to appreciate the primacy of the object of harm minimisation under the Act and, as a consequence, it failed to apply correctly the test of whether the grant of the application for reduction of trading hours of the bottle shop would be consistent with the objects of the Act and would strike an appropriate balance between the need to minimise harm arising from the misuse and abuse of alcohol and the interests in developing a diversity of licensed facilities reflecting the community expectations.
The judge was also correct to conclude that the Tribunal failed to appreciate the general evidence (including the statistical evidence) about the misuse of alcohol. The Tribunal also erroneously rejected as irrelevant the important evidence relating to the local, social, demographic and geographic circumstances of the bottle shop, when that evidence required assessment and evaluation.[202]
[202]The judge’s reading of the Tribunal’s decision was that it accepted the uncontradicted locality evidence but considered it to be irrelevant because no causal connection could be established. I consider that the Tribunal did not accept the locality evidence and that it is not accurate to describe it as ‘uncontradicted’.
The judge did not err in concluding that the relevance of the general evidence, and the locality evidence, did not depend upon there being established a causal connection or ‘link’ between the bottle shop and the anti-social behaviour in the locality. It was not a matter of determining if the bottle shop was responsible for all the harm arising from the anti-social behaviour in its locality. As the judge recognised, for evidence of locality to assume some significance it would be sufficient to find that a reduction in the extended trading hours of the bottle shop would advance the object of harm minimisation, for example, by decreasing the availability of alcohol throughout the night in an environment in which people who are intoxicated (perhaps from drinking at the nightclubs) congregate and drink on the street and sometimes engage in street violence, assaults, property damage, vandalism, and theft.
However, I consider that the judge was wrong to conclude that an evaluation of the specific incidents did not depend upon a causal connection to the bottle shop being established. In my view, before evidence of specific incidents reflecting on the operation of the bottle shop could be given due weight, it was necessary for a finding to be made that the bottle shop was a material cause of the particular socially offensive behaviour.
In my view, the judge was correct, however, to find that the Tribunal did not give full consideration to the Panel’s recommendation, as it was required to do, and this vitiated its decision. Moreover, he was also correct to conclude that the Tribunal made findings with respect to the economic impact of the decision that were based upon no evidence or material before it.
I consider that the application for leave to appeal brought by Kordister should be granted.
I would dismiss the appeal.
However, it is now three and a half years since the application was brought and much of the information upon which it was based will be stale. The delay in the resolution of this matter together with the somewhat difficult legal path it has had in a protracted and multi-stage process confirm in my mind that while the order of the judge setting aside the decision of the Tribunal[203] should remain of full force and effect, I consider that the order of the judge remitting the matter to the Tribunal (differently constituted) for reconsideration according to law,[204] should be set aside. I consider that the circumstances here would justify the grant of a permanent stay of the decision of the Director, dated 3 September 2009, granting the application made by Inspector Duthie dated 25 May 2009, pursuant to s 29(1)(b) of the Act, for a variation to the existing trading hours for consumption off the licensed premises of the hotel.[205] I also consider that the circumstances justify a permanent stay of the application made by Inspector Duthie dated 25 May 2009.
[203]Paragraph 2 of his Honour’s orders dated 18 May 2011.
[204]Paragraph 3 of his Honour’s orders dated 18 May 2011.
[205]Walton v Gardiner (1993) 177 CLR 378, 392-6.
The failure of the Tribunal to make any findings in relation to the anti-social behaviour (however caused) that made up the locality evidence reinforces me in the view that, if necessary, a fresh application would be preferable to what would be in effect the re-commencement of a hearing that had led only to partial findings and had adopted a focus that was inconsistent with the Act. In those circumstances, a reconvened hearing set against the background of erroneous rulings and uncertain findings could be unfair to Kordister and serve little public interest.
The Chief Commissioner or a licensing inspector is at liberty to bring a fresh application under s 29(1) of the Act. If either of them was to do so, the evidence to be relied upon could include the high-level general evidence about alcohol abuse as well as locality evidence about the currently prevailing local, social, demographic, and geographic circumstances of the bottle shop, as well as any evidence of particular incidents of anti-social behaviour for which the bottle shop was directly responsible. The application should be determined in accordance with law and, most particularly, in accordance with the primary purpose under the Act, namely, that the Act is to contribute to minimising harm arising from the misuse and abuse of alcohol, together with an understanding that, in the exercise of every power and function conferred under the Act, due regard is to be paid to harm minimisation and the risks associated with the misuse and abuse of alcohol.
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Administrative Law
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Statutory Interpretation
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Appeal
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Judicial Review
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Natural Justice & Procedural Fairness
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