McGuinness v State of New South Wales - [2009] NSWSC 40

Reported Decision:
73 NSWLR 104

New South Wales

Supreme Court

CITATION: McGUINNESS & ANOR v STATE OF NEW SOUTH WALES & ORS [2009] NSWSC 40

HEARING DATE(S): Wednesday 3 December 2009

JUDGMENT DATE :
17 February 2009

JURISDICTION: Administrative Law

JUDGMENT OF: Hall J at 1

DECISION: The amended summons is dismissed.

CATCHWORDS: ADMINISTRATIVE LAW – Cabinet decision to impose special conditions on liquor licenses in respect of certain hotels including that of the first plaintiff – announcement of proposed government reform measures – proposals to reduce alcohol-related violence - LIQUOR LAW – Liquor Act 2007 – power to impose conditions on licences under provisions of the Act – by regulations made under the Act or by virtue of provisions of the Act – special conditions initially imposed by regulation to give effect to proposed reform measures and subsequently by amendments to the Act imposing conditions on licences listed in a Table to the amending provisions – Cabinet decision to implement reform measures announced publicly by Premier – decision of Cabinet to include plaintiff’s hotel on a list of 48 hotels to be the subject of new conditions – STATUTORY POWERS - whether decision subject to the requirements of procedural fairness – statutory amendments made under s.11(1)(b) of the Act imposing special conditions on the first plaintiff’s licence accepted as validly enacted – whether decision of Cabinet an incident of the exercise of the statutory power to impose conditions or an aspect of it – decision involved social and policy elements – interests of licensees, hotel staff, hotel patrons relevant to the decision to impose new measures – statutory power to amend Act and impose special conditions not subject to requirements of procedural fairness nor was the publicly announced Cabinet decision to place the first plaintiff’s hotel on the list subject to such requirements – whether decision of Cabinet “irrational” or “unreasonable” – Cabinet entitled to rely upon statistics produced by the Bureau of Crime Statistics and Research – not irrational or unreasonable

LEGISLATION CITED: Liquor Act 2007
Liquor Act 1982
Liquor Act 1975 (ACT)
Liquor Act 1978 (NT)
Liquor Act 1992 (Qld)
Liquor Amendment (Special Licence Conditions) Act 2008
Liquor Control Act 1988 (WA)
Liquor Control Reform Act 1998 (Vic)
Liquor Licensing Act 1997 (SA)
Liquor Licensing Act 1990 (Tas)
Liquor Regulation 2008

CASES CITED: Ainsworth v Criminal Justice Commission (1991-1992) 175 CLR 564
Annetts v McCann (1990) 170 CLR 596
Castle v Director General State Emergency Service [2008] NSWCA 231
Harvey v Minister Administering the Water Management Act 2000; Tubbo Pty Limited v Minister Administering the Water Management Act 2000 [2008] NSWLEC 165
Hoani Te Heuheu Tukino v Aotea District Maori Land Board [1941] AC 308
Kioa v West (1985) 159 CLR 550
Labrador Co v The Queen [1893] AC 104
Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381
Murrumbidgee Ground Water Preservation Association Inc v Minister for Natural Resources [2005] NSWCA 10
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1
Save the Showground for Sydney Inc v The Minister for Urban Affairs and Planning (1997) 95 LGERA 33
State of South Australia v O’Shea (1987) 163 CLR 378
State of Victoria v Master Builders' Association of Victoria [1995] 2 VR 121
Tennant Creek Trading Pty Limited v Liquor Commission of the Northern Territory (1995) 126 FLR 136
Twist v Randwick Municipal Council (1976) 136 CLR 106
Vanmeld Pty Limited v Fairfield City Council (1999) 46 NSWLR 78
Wayne Lawrence Pty Limited v Hunt & Ors [1999] NSWSC 1044
Wik Peoples v Queensland (1996) 187 CLR 1

PARTIES: McGUINNESS, Malcolm Alexander & ANOR
v STATE OF NEW SOUTH WALES & ORS

FILE NUMBER(S): SC No 30136 of 2008

COUNSEL: P: M J Leeming/K J Taylor
D: S Lloyd SC/K Richardson/M Nagy

SOLICITORS: P: J D K Legal
D: I V Knight

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HALL J

TUESDAY 17 FEBRUARY 2009

No 30136 of 2008

MALCOLM ALEXANDER McGUINNESS & ANOR v STATE OF NEW SOUTH WALES & ANOR

JUDGMENT

1 HIS HONOUR: These proceedings arise out of the announcement by the Premier of New South Wales of new measures directed at controlling alcohol related violence. The reforms were subsequently introduced by the Liquor Regulation 2008 and shortly thereafter by amendments to the Liquor Act 2007 (“the Act”) - amending Act No 102 of 2008, the Liquor Amendment (Special Licence Conditions)Act 2008.

Commencement of Proceedings

2 In an amended summons which, by leave, was filed in Court on 3 December 2008, the plaintiffs, Malcolm Alexander McGuinness and Scruffy Murphy’s Pty Limited, commenced proceedings against the defendants, being the State of New South Wales (“the State”), the Casino, Liquor & Gaming Control Authority (“the Authority”), the New South Wales Office of Liquor, Gaming & Racing and the New South Wales Commissioner of Police. Mr McGuinness, is the licensee of the licensed premises known as “Scruffy Murphy’s Hotel” situated at 43-49 Goulburn Street, Sydney. The second plaintiff is the owner of the hotel business.

3 The plaintiffs were represented by Mr Mark Leeming SC and Ms Julie Taylor of counsel. The defendants were represented by Mr Stephen Lloyd SC who appeared with Ms Kate Richardson of counsel and Ms Miranda Nagy of counsel. On 3 December 2008, the Authority entered a submitting appearance.

4 The plaintiffs relied on two affidavits of Malcolm Alexander McGuinness, the first sworn on 25 November 2008, the second sworn on 27 November 2008.

5 In addition, Mr Leeming tendered a copy of a Strategic Enforcement Branch Report dated 24 November 2007 (Exhibit A) and a document being New South Wales Recorded Crime Statistics July 2007 to June 2008 “Assault Incidents occurring in specified licensed premises” (Scruffy Murphy’s) based on NSW Bureau of Crime Statistics and Research (Exhibit B).

6 The plaintiffs also relied upon incident reports for the period 9 June 2008 to 3 July 2008 (Exhibit C) and an incident report concerning an incident on 26 August 2007 (Exhibit D).

7 On 28 November 2008, Mr Leeming SC called on notices to produce dated 26 November 2008 addressed to each of the defendants under which production of documentation from which a list of hotels (which included Scruffy Murphy’s Hotel) was compiled or which was relied upon for their inclusion in the list.

8 Mr Lloyd, in answer to the notice to produce, confirmed that the “BOCSAR list” was a “source” document within paragraph 1 of the above notices. It related to 100 licensed premises in which assault incidents are recorded as having occurred in the period July 2007 to June 2008. Mr Lloyd relied upon the affidavit of Leigh Rae Sanderson, Deputy Director General of the Premier’s Department, affirmed on 2 December 2008 to support a claim of public interest immunity in respect of other documents falling within the notices.

9 The defendants relied upon the affidavit of Don James Weatherburn affirmed on 3 December 2008 and the affidavits of Kay Anne-Marie Sato affirmed on 2 and 3 December 2008.

Facts

(1) The hotel

10 The “Scruffy Murphy’s Hotel” is a Sydney hotel and is licensed to trade 24 hours a day, seven days a week. According to Mr McGuinness’ evidence, a voluntary lock-out commencing at 3.00 am was imposed in and from November 2007 in respect of the hotel’s Irish-themed bar area.

(2) The Premier’s Announcement

11 On 30 October 2008, the Premier of New South Wales, Mr Nathan Rees, published a News Release outlining the state Government’s proposed “new measures to get tough on alcohol related violence”. A copy of the release was tendered and became Exhibit 1 in the present proceedings. The two page release was accompanied with a one page “List of Premises”. The plaintiffs’ hotel was listed on it amongst a total list of 48 hotels.

12 The control aspects of the proposed measures were directed towards combating alcohol related violence and, according to the announcement, were to be implemented by way of “new standard licensing conditions” to apply to the identified “venues” from 1 December 2008.

13 The News Release was in the following terms:-

“NEW MEASURES TO GET TOUGH WITH ALCOHOL-RELATED VIOLENCE

30 October 2008

Premier Nathan Rees today unveiled a package of new measures to crack down on anti-social drinking and alcohol-related violence.

Mr Rees said the Government would target known alcohol violence hotspots, introduce a freeze on new twenty-four hour licenses and force anti-social drinkers to take responsibility for their behaviour.

‘Alcohol related assaults are one of the few categories of crime on the increase and we know that historically, these incidents tend to increase over the summer’, Mr Rees said.

‘We also know that these episodes primarily occur late at night in and around certain licensed venues and drinking precincts.

‘Our new measures are not targeted at drinkers who do the right thing or venues that are currently providing a safe drinking environment.’

Mr Rees said the Police Commissioner had provided him with a list of problem venues across the state, which is based on information supplied by BOCSAR, known to be the source of much alcohol related violence.

‘From December 1, new standard licensing conditions will apply to these venues, including:

• Mandatory 2am lock-outs (with the exception of existing members wishing to enter registered clubs);

• Cessation of alcohol service 30 minutes before closing time;

• Plastic or polycarbonate glasses for beer service after midnight;

• No shots and drink purchase limits after midnight; and

• Ten minute alcohol sale time-outs every hour after midnight.

‘We’ll also review security arrangements in each of these venues and work with them to provide extra security, drink marshals, security at nearby taxi ranks and additional transport options.

‘To complement this work, the Government will provide targeted and high visibility policing in alcohol violence hot-spots and conduct a targeted advertising campaign in high-risk venues.’

Mr Rees said the 2am lock-out could also apply to neighbouring premises in certain high-density drinking spots, like the Sydney CBD.

‘Additional venues may be added to the 2am lockout if Police observe that a local ‘spillover’ effect is occurring’, he said.

Mr Rees said a high level implementation team would oversee the new arrangements and advise the Government where and when changes needed to be made.

‘If new problems arise over the summer, then we can add to these conditions or apply them to new venues’, he said.

The Premier said that over coming months, the Office of Liquor, Gaming and Racing would work with the liquor industry to replace these targeted conditions with a state-wide graduated sanctions scheme for licensed venues where violent incidents occur.

‘A graduated scheme could start with mandatory conditions like lock-outs for first-time incidents, going right up to license revocation for repeat occurrences’, Mr Rees said.

‘We will also develop a safety star rating system that rewards safe practices and good records’.

Mr Rees also said the Government would introduce legislation to implement a freeze on all new twenty-four hour licenses.

‘New licensees will be limited to eighteen hour trading and existing licensees will have their conditions reviewed to improve safety at twenty-four hour venues.’

Mr Rees said the Government would also provide police statistics that link violent criminal incidents to licensed venues to the Bureau of Crime Statistics and Research so they can be made publicly available.

‘Licensed premises and the Government both have roles to play in dealing with this problem, but so do the idiots who engage in this reckless behaviour’, he said.

‘That’s why I’ll introduce into Parliament new laws to deal with minors who use fake Ids and give police new alcohol ‘tip-out’ powers in Alcohol Free Zones.’

Mr Rees said the NSW Sentencing Council, chaired by Justice James Woods

, would also undertake a review of sentencing related to alcohol violence and provide advice to the Government on whether changes are needed to deal with glassing.”

14 The information supplied by the Bureau of Crime Statistics and Research of the Attorney General’s Department (“BOCSAR”) related to the number of assault incidents recorded as occurring at licensed venues across New South Wales. The source of the information was BOCSAR’s report (“NSW Recorded Crime Statistics – Annual Report”) within which there was a “list” entitled “NSW Recorded Crime Statistics July 2007 to June 2008” recording the “Number of assault incidents occurring in the top 100 (approximate) ranked licensed premises”. The ranking was in order of frequency of such incidents.

15 The information within the BOCSAR list was used by the NSW Police Commissioner to compile a shorter list of “high risk” venues. It was those venues referred to as 48 “high risk” venues and appearing on the shorter second list that, according to the News Release, were to be the subject of a new set of licensing conditions.

16 On 7 November 2008, Mr McGuiness received a letter from the Director of Liquor and Gaming, informing him that the hotel was on a “list” of hotels identified by the Commissioner of Police “as having high rates of alcohol related assaults”. A copy of the letter was annexed to Mr McGuiness’ affidavit sworn on 25 November 2008. It was in the following terms:-

“7 November 2008

New Measures to Get Tough with Alcohol Related Violence

Dr Mr McGuinness

I refer to Premier Rees’ announcement on 30 October 2008 outlining important new measures to combat alcohol related violence (please see attached media release ‘New Measures to Get Tough with Alcohol Related Violence’).

I am writing to you because your premises, Scruffy Murphy’s, is on a list provided as part of that announcement, of high-risk venues identified by the Commissioner of Police as having high rates of alcohol related assaults based on crime data in the period July 2007 to June 2008.

The Government has announced that from 1 December 2008, new standard conditions will apply to the listed premises. To achieve this, the Liquor Act and the Liquor Regulations are in the process of being amended. Amendments to the Regulations will be finalised over the coming weeks and are expected to be Gazetted on 28 November 2008.

It is important that you now make appropriate management decisions that will facilitate compliance with the new conditions. This should include arrangements, for example, the acquisition of non-breakable containers, and preparation for the training of staff.

I remind you that the measures announced by the Premier do not detract from other or righter controls now in place at your venue either voluntary, individually or through any agreed arrangements or conditions by way of an existing liquor accord.

During the fortnight commencing 17 November your premises will be visited by an inspector from the Office of Liquor, Gaming and Racing to assist with the smooth implementation of the new conditions, and to provide guidance on best practices, where necessary. This action will also consider any existing controls on your premises.

On 28 November 2008, I will write again providing details of the new standard conditions.

…”

17 On 12 November 2008, Mr McGuiness’ solicitors wrote to the Director of Liquor and Gaming in which, inter alia, it was stated:-

“Our client disputes in the strongest possible terms that his Hotel in any way qualifies to be on that list.”

18 The first plaintiff’s solicitors asked for the “source and primary documents from which the test was compiled”. A copy of the letter was sent to the Commissioner of Police.

19 Dr Weatherburn is the Director of the New South Wales Bureau of Crime Statistics and Research. His evidence was that the data for the top 100 licensed premises in terms of assaults was drawn from the COPS database which contains a record of every criminal incident recorded by New South Wales Police. It also contains a list of locations at which criminal incidents are said to have taken place. Dr Weatherburn explained that each incident recorded in COPS includes information on the type of offence involved, premises type at which the incident in question took place and the date and time of the incident. Each offence type and premises type has a unique code.

20 The programme that produces the top 100 list reads through the list of incidents, selects assault incidents recorded as having occurred at licensed premises in the appropriate date range and then tabulates the number of assault incidents according to location name.

21 Dr Weatherburn explained that for BOCSAR’s collection, the police are only interested in events which, on the basis of the relevant entries, appear to involve breaches of the law. He emphasised that the crucial point to note was that one event can involve several incidents and each incident can give rise to several charges. The top 100 list is, accordingly, based on a count of incidents, not events or charges.

22 Dr Weatherburn stated that the top 100 premises list for the period January to September 2007 was added to BOCSAR’s website on 11 March 2008 and the top 100 for the period July 2007 until June 2008 was added to BOCSAR’s website on 10 October 2008. He annexed copies of the lists to his affidavit (Annexures A and B).

23 Dr Weatherburn further explained that with limited resources it is impossible for there to be any independent source of information against which police crime incident reports can be checked. Additionally, consulting with people affected by crime statistics, he stated, is not part of the method used to compile crime statistics. The method used by BOCSAR involves the collation and analysis of data collected by others.

24 Dr Weatherburn went on to explain the various strategies that are employed to check the reliability of police crime trend information (paragraph 15 of his affidavit).

25 In relation to the release of detailed crime information, Dr Weatherburn acknowledged that such information can affect people and influence household or business real estate prices. However, he stated that crime prevention would be impossible without information on the location, date, time and character of each claimed offence as recorded by police. Information of that kind is used to measure trends in relation to various types of crime, to identify crime “hotspots” (locations where unusually large numbers of offences occur) and to investigate the factors which might be associated with crime and to allocate crime prevention resources to various types of crime problem.

26 Dr Weatherburn further explained that if BOCSAR withheld such information, citizens would be less well equipped to make decisions concerning their own safety and Government, business and community organisations would be less well equipped to design crime prevention strategies or policies. He expressed his opinion that the fact that someone might be adversely affected by the release of crime information, therefore, provided no justification for withholding that information. If BOCSAR were legally obliged to consult with everyone who might be adversely affected by the release of crime information prior to its release, the release of crime statistics, he claimed, would, for all practical purposes, become impossible.

The Regulation

27 On Friday 28 November 2008, the State Government gazetted the Liquor Amendment (Special Licence Conditions) Regulation 2008 (hereafter referred to as the Regulation), giving effect to the measures foreshadowed in the Premier’s News Release.

28 The Explanatory Note accompanying the Regulation stated that it had been made pursuant to “the Liquor Act 2007, including sections 11(1)(b) (Licence Conditions – general provisions and s.159 (the general regulation-making power)” of that Act.

29 The Regulation purported to impose special licence conditions on “declared premises”, these being the premises whose names appeared in Schedule 3 of the new Regulation. The names of the licensed premises in that Schedule reflected those on the NSW Police Commissioner’s list of supposedly high risk venues. It, as earlier noted, included the plaintiffs’ hotel.

30 The new Regulation inserted clause 53B into the Liquor Regulation 2008. This clause provided for the imposition of special licence conditions. It was in the following terms:-

53B Special licence conditions

(1) A relevant licence is subject to the conditions specified in this Division …

(2) The conditions specified in this Division are in addition to any other conditions to which a relevant licence is subject. If there is an inconsistency between any such other condition and any condition specified in this Division, the condition that is, in the opinion of the Authority, more onerous prevails to the extent of the inconsistency ...”

31 The Regulation also inserted new clauses 53C to 53G which provided, in respect of declared premises, for lock-outs between 2.00 am to 5.00 am (clause 53C), a prohibition on the supply of drinks in glass or breakable plastic containers during the restricted service period (clause 53D); a prohibition on the supply of certain drinks, such as “shots”, during the restricted service period (clause 53E), 10 minute “time-outs” during the restricted service period (clause 53F), and a cessation on the service of alcohol 30 minutes prior to closing time (clause 53G). The Regulation also inserted clause 53H which provided that the Director may exempt declared premises from specified provisions of the Division (as amended) on satisfaction of certain requirements.

The Liquor Amendment (Special Licence Conditions) Act 2008

32 The Liquor Amendment (Special Licence Conditions)Act 2008 was enacted on 3 December 2008. It was assented to and commenced on that date: s.2. By s.4 of the Amending Act, Division 3 of Part 5 and Schedule 3 of the Regulation was omitted. The relevant amendments were set out in Schedule 4 entitled “special licence conditions for declared premises”. Clause 1 contained definitions of “declared premises” meaning premises to which a relevant licence relates and “relevant licence” is defined as meaning a licence specified in the Table at the end of the clause. Scruffy Murphy’s is identified in the Table by licence number and name, and location.

33 Clause 1 of Schedule 4 defines “restricted service period”, in relation to declared premises, as meaning:-

(1) the period between midnight and such later time (if any) at which the premises are required to cease trading, or

34 Clause 5 deals with “lockouts” for declared premises, clause 4 imposes conditions in respect of “glasses and breakable plastic containers prohibited during restricted service period”, and clause 5 is directed to “certain drinks prohibited during restricted service period”.

35 Clause 6, “time-outs” during restricted service period, provides that the sale or supply of liquor on declared premises must cease for a continuous period of 10 minutes during each hour of the restricted service period.

36 Clause 7 is directed to “service of alcohol to cease 30 minutes before closing time”.

37 Clause 5, Exemptions, provides:-

“(i) The Director may cover by order in writing served on the licensee of declared premises, exempt the declared premises from any specified provision in this Schedule.

(ii) The Director may exempt declared premises only if the Director:-

(a) Is satisfied that conditions other than the specified provision to which the exemption relates will be more effective in reducing the risk of alcohol-related violence in or about the declared premises concerned, and

(b) Imposes other conditions on the licence for the premises under any relevant provision of this Act.

(iii) Any such relevant provision applies except to the extent that it prevents the imposition of conditions that are inconsistent with this Schedule.

(iv) An exemption under this clause has effect only while the other conditions imposed by the Director to replace the specified provision to which the exemption relates remain in force.”

38 Finally, clause 9 provides for a review by the Minister of Schedule 4 to determine whether the policy objectives remain valid and whether the terms of the Schedule remain appropriate for securing those objectives.

The initial listing of the proceedings

39 On 25 November 2008, in anticipation of the gazettal of the proposed Regulation, a number of licensees of hotels (six in all) commenced proceedings which were placed in the common law Duty Judge list. Initially, they indicated their intention to seek interlocutory relief pending the enactment of the Regulation. The proceedings were adjourned to 28 November 2008 with arguments concerning interlocutory relief to be heard on that date.

40 On the morning of 28 November 2008, the Regulation was gazetted. Later on that same day and following discussion between the parties, agreement was reached and an order made that there should be a final hearing on an expedited basis, on 3 December 2008. The plaintiffs in all matters indicated their intention of challenging the validity of the Regulation made and promulgated on that date. The hearing of all proceedings was accordingly expedited.

Relief sought

41 In general terms, all plaintiffs sought declaratory relief to the effect that the defendants were subject to a duty to act fairly towards each of the plaintiffs and that they each had been denied procedural fairness and that the Regulation was invalid.

42 The plaintiffs, in the present proceedings in the amended summons filed by leave on 3 December 2008, sought relief as follows:-

“1. A declaration that the plaintiffs were entitled to be afforded procedural fairness before their licensed premises were included in the list of ‘declared premises’ to which special licence conditions are proposed to be attached, as described in the memorandum dated 21 November 2008 annexed to this summons.

2. A declaration that the plaintiffs have not been afforded procedural fairness in the process by which their licensed premises were included in the list of ‘declared premises’ to which special licence conditions are proposed to be attached.

2A. A declaration that the decision to include the plaintiffs’ licensed premises in the list of ‘declared premises’ to which special licence conditions are proposed to be attached was irrational, illogical and lacking a basis in finding or inferences of fact supported on logical grounds.

3. An order that the decision to include the plaintiff’s premises in the list of ‘declared premises’ be set aside.

3A. A declaration that the Liquor Amendment (Special Licence Conditions) Regulation 2008 (

2008 Regulation

) is invalid, as beyond the regulation-making power conferred by section 159 of the Liquor Act 2007 (NSW).

3B. In the alternative to 3A above, a declaration that the 2008 Regulation is invalid insofar as it purports to apply to the plaintiff’s premises.

…”

43 On 3 December 2008, proceedings by all the abovementioned plaintiffs, other than these proceedings brought by Mr McGuinness and Scruffy Murphy’s Pty Limited, were discontinued.

Events relating to the proceedings

44 On 3 December 2008, when the proceedings were listed for hearing Mr Leeming indicated that, in light of the removal from the Regulation of the provisions in Division 3 of Part 5 and Schedule 3 of the Regulation, there was no utility in challenging the validity of the Regulation. Accordingly, he stated that the relief sought in prayers 3, 3A and 3B of the Amended Summons would not being pursued.

45 Mr Leeming also indicated that, in terms of prayer 1 in the Amended Summons relating to the claimed right of the plaintiffs to procedural fairness before the announcement on 30 October 2008, two bases were relied upon. The first was “reputation”. The second was “legitimate expectation”. Subsequently, the second of these two bases was no longer pressed (transcript, 3 December 2008, p.14). In relation to reputation, the plaintiffs relied upon the principles enunciated and applied in Ainsworth v Criminal Justice Commission (1991-1992) 175 CLR 564 and Castle v Director General State Emergency Service [2008] NSWCA 231.

46 Mr Leeming contended that one could “ignore the Act which has just come into effect … there is real utility in my clients being vindicated for the common law wrong which they say that they have suffered”: transcript 3 December 2008 at p.4).

47 Mr Leeming clarified the basis upon which his clients pursued their claim based on procedural fairness when he stated (transcript 3 December 2008 at p.8):-

“… What we seek to challenge is the inclusion of my clients' premises in a list published to the world on 30 October, part of the process. There would be no case on procedural fairness had there just been enacted a law, as happened this morning, these 48 will have these extra conditions imposed upon them. That's in the heart of the legislative exemption to procedural fairness. What is a little bit unusual about this case is that instead of merely implementing policy through legislation or regulations, first of all, we have this announcement. Now that's the heart of the difference …”

The decision of Cabinet

48 The nature and significance of the decision to include the plaintiff’s hotel in the list of 48 venues is discussed below. The following are the basic facts relating to it.

49 The decision was made by Cabinet, it appears, on 29 October 2008. Ms Sanderson’s abovementioned affidavit throws some light on the chronology of events.

50 Mr Sanderson is the Deputy Director General (General Counsel) of the Department of Premier and Cabinet. She has been the Cabinet Secretary since 27 October 2008. Her affidavit was read in support of a claim of public interest immunity in relation to a notice to produce: see transcript at p.22. In paragraph 3, Ms Sanderson stated:-

“3. The only documents which went to Cabinet reflecting the News Release of Premier Rees dated 30 October 2008 was a Cabinet Minute dated 29 October 2008 and a Cabinet Decision Paper dated 29 October 2008. In particular, no document comprising a list of the type annexed to the amended summons in these proceedings was considered by the Cabinet.”

51 Mr Lloyd stated (transcript 3 December 2008, p.23):-

“The defendants case in any event is that the decision maker was in substance the cabinet, announced by the premier …”

52 In summary, the two matters following the Premier’s announcement on 30 October 2008 to which I have earlier referred, were:-

(1) The decision and action to impose the special conditions by the Regulation gazetted on 28 November 2008.

Liquor Act

53 The decision of Cabinet on 29 October 2008 as also indicated above was based on published BOCSAR crime statistics and the consequent listing of hotels, which included the plaintiffs’ hotel, by BOCSAR based on those statistics.

54 There was no challenge to the validity of the amendments made to the Liquor Act on 3 December 2008, including the listing of the 48 hotels in the Table to Schedule 4 introduced by them. The amendments, which introduced the “new measures” announced by the Premier and which imposed special conditions on the licences relating to those hotels have, in other words, been accepted in these proceedings as having been validly imposed by the above amending legislation.

55 The plaintiff’s premises, Scruffy Murphys, were described by the Director as a “high-risk venue” having “high rates of alcohol related assaults” (Annexure A to Mr McGuinness’ affidavit sworn 25 November 2008). The plaintiffs relied upon the fact of “widespread” publicity in the media given to these assertions. They were formally advised to the same effect by letter dated 7 November 2008.

56 The plaintiffs’ case was that there appear to have been two steps involved in the listing of Scruffy Murphy’s Hotel: a process, firstly, of identifying a larger list of premises based on COPS reports, followed by a decision to refine that list to a list of 48 premises.

57 Mr McGuinness’ evidence was that the accuracy of the assertions leading to the decision to include the premises in the list is strongly disputed. There is, however, no elaboration in evidence of the basis for this dispute. He referred to his concern that the inclusion of the premises would damage “his Hotel’s good reputation” and he caused his solicitors to write in terms of letters, copies of which are Annexures A, B, C, D and E to his affidavit. They expressed his concern as to the accuracy of the data upon which the list had been compiled. He also requested copies of incident reports. That request was subsequently refused.

Plaintiff’s submissions

58 The plaintiffs contend that their reputation has been affected by the above events and that by reason of the damage they claimed they have and will suffer, they have sufficient standing to seek the relief claimed: Ainsworth (supra).

59 In support of the claim for relief, they relied upon the established common law principle that, where executive power is exercised in a way which deprives a person of some right or interest or the legitimate expectation of a benefit, he or she is entitled to know the case sought to be made against him or her or it: Kioa v West (1985) 159 CLR 550, 582.

60 Mr Leeming contended that there was no clear exclusion of the obligation to afford procedural fairness by the provisions of the Liquor Act. In particular, the provisions of s.53(4) and s.54(3) were relied upon as disclosing in clear statutory language that the power to impose or change license conditions can only be exercised after the relevant licensee has been given a reasonable opportunity to be heard and his or her submissions considered. I, however, note in this respect that the power to impose conditions by regulation or by amendments to the Act is conferred by terms of the Act that differ substantially from s.53(4) and s.54(3). The relevant provisions are considered in the discussion below.

61 Mr Leeming also relied upon the fact that this was not a case in which there was any urgent need which would tell against there being a duty to afford procedural fairness.

62 The plaintiffs further contended that this is a case in which there is an exercise of a power that affects the rights of the plaintiffs in a “direct and immediate way”: Mason J in Kioa (supra). It was argued in that respect that the number of hotel licenses affected being relatively few in number (48 in all) and readily identified, the licensees who would be affected were able to be contacted in advance for the purpose of consultation.

63 It was argued that the content of procedural fairness was as follows:-

“25.

Content of duty to afford procedural fairness

In the present case, procedural fairness required:-

(a) advising the licensees that the previous management practices recommenced by licensing officers would count against them;

(b) affording the opportunity to see, and comment on, the material which would form the basis for the decision;

(c) consideration by the government of any submissions made.”

64 The plaintiffs’ case was that no procedural fairness at all had been afforded to them. Accordingly, it was contended, the decision to include them in the list was one made in breach of procedural fairness principles.

65 In addition to claiming that they had been denied procedural fairness, the plaintiffs additionally argued that the “decision” in question was an “irrational” one. On that basis relief was claimed in terms of paragraph 2A of the Amended Summons. I will examine the issues concerned both grounds below.

Relief claimed

66 It was contended that there was utility in granting declaratory relief given the claimed failure to afford procedural fairness and the fact that the evidence supports a conclusion as to the likelihood of damage to reputation. In that respect, the plaintiffs relied upon the High Court’s decision in Ainsworth (supra).

67 The principle in that case, it was contended, applied here, notwithstanding the fact that the amendments to the Act imposing the conditions on the licence were validly made on 3 December 2008. Mr Leeming relied upon the provisions in the recent amendments to the Liquor Act, which permits the Director to exempt persons under the “new regime”. A declaration as sought, if made, would, he argued, be a relevant matter on an application for exemption.

Defendants’ submissions

68 In the Defendants’ Outline of Submissions (paragraph 16), the factual background is summarised in the following terms:-

“(a) There is a business unit within the Attorney-General’s portfolio known as the Bureau of Crime Statistics and Research (BOCSAR). Its role … is to provide the public, the Government, the media and Parliament with statistical information on the spatial distribution of and trends in crime as recorded by the NSW Police.

(b) There is a database known as the COPS Database. It contains a record of every criminal incident recorded by NSW Police. It also contains a list of locations at which the criminal incident(s) took place. Each criminal incident recorded in COPS includes information on types of offence(s) involved, premises-type at which the incident took place and date and time of the incident. Each offence type and premises-type has a unique code.

(c) BOCSAR periodically produces data for the top 100 licensed premises in terms of number of assaults, which is drawn from the COPS database. This is produced by a computer programme that reads through the list of incidents in the database, selects assault incidents that are recorded by code as having occurred at licensed premises in the appropriate date range and then tabulates the number of assault incidents according to location name.

(d) There are 1.3 million crimes recorded annually on COPS, including more than 73,000 assaults.

(e) The lists concerning the incidents of assault at licensed premises prepared by BOCSAR has been published on a number of occasions. Most recently, it was published in the BOCSAR Annual Report and also on the BOCSAR web site on 10 October 2008.

(f) On 30 October 2008, the Premier of New South Wales issued a New Release announcing new measures including new license conditions proposed to be introduced for some licensed premises from 1 December 2008. The release provided a list of 48 venues proposed to be covered by the new conditions and indicated that the list was based on information supplied by BOCSAR.

(g) By letter dated 7 November 2008, the Director of Liquor of Gaming of the NSW Office of Liquor, Gaming and Racing (OLGR) wrote to the plaintiffs and advised them individually of the Premier’s announcement, providing each with a copy thereof. It also advised that the Liquor regulations were in the process of being amended and that it was expected that they would be Gazetted on 28 November 2008.

(h) On 28 November 2008, the 2008 Regulation were

gazetted. They commenced on 1 December 2008.

(i) It may be observed that the 48 venues contained in the list announced by the Premier and the 2008 Regulation represent the top 50 licensed premises on the BOCSAR list, save for two premises that have been removed.”

69 In the Defendants’ Outline of Submissions, it was also contended:-

(1) That the plaintiffs’ submissions failed to properly recognise the process of policy-making preceding the development of legislation.

(2) That the Premier’s announcement reveals that the Government perceived a need to address an increase in alcohol-related assaults.

(3) That it is logical and obvious that in seeking to address and prevent a particular category of crime, it is necessary to obtain information which identifies the locations where crimes of that kind commonly occur. The BOCSAR collated data, inter alia, on the location of crimes and it was able to provide data that identified licensed premises with the highest incidence of assaults in the recent past.

(4) A decision was taken by Cabinet representing the highest level of Government to address alcohol-related violence that occurs at such venues by a number of measures. There was to be additional security at nearby taxi ranks and additional transport options. The Government also announced that it intended to impose new licensing conditions on the relevant venues, which were designed to reduce-alcohol related violence in or about the venues.

(5) The owners of the venues were notified a week later individually of the Government’s proposal to introduce regulations to impose the proposed new conditions.

(6) That the 30 October list cannot be considered to be a “decision” in abstract. It had no legal effect on its own. It did little more than identify the venues at the top of the BOCSAR list, which had already been published prior to the Premier’s announcement. It was very different, it was argued, to the “black list” that was used directly as part of a coercive measure by the Victorian Government in State of Victoria v Master Builders’ Association of Victoria [1995] 2 VR 121, a case not involving reforms implemented by regulation or statutory amendment. It is also not a report prepared pursuant to a form of statutory inquiry, as was the position in Ainsworth (supra). There is no evidence that the Government’s reliance on the BOCSAR data, which referred to the hotel in question, caused any damage to reputation above what had occurred (if anything) as a result of the publication of the BOCSAR data itself.

(7) If there is no obligation to provide procedural fairness in making legislative reforms, there can be no obligation to do so simply in announcing the intention to make such reforms. The 30 October list was evidently prepared for the purpose of the reforms that were effected by the 2008 Regulation.

(8) The question, accordingly, was whether there was any duty to accord procedural fairness in the process of developing policy for the purpose of making regulations and, in particular, the 2008 Regulation.

70 The defendants additionally contended that the circumstances in which the 30 October list came into existence is to be seen in the context of the provisions of the Liquor Act. The Act, it was argued, distinguishes between cases where conditions are imposed by administrative means to individual licenses where natural justice is expressly required (by reason, in particular, of the provisions of s.11(1)(a) and s.53 and s.54) and other cases where conditions are legislatively imposed upon classes of licenses there being no provision made in the Act for either consultation or natural justice. In that latter respect, reliance was placed on the provisions of s.11(1)(b) and s.159(1). It was argued that it was necessary for the Act to have a power to impose conditions without consultation “… for cases of urgency” (Written Submissions, paragraph 52).

71 The fundamental position taken by the defendants was that there are no procedural fairness constraints in making statutes (and none in relation to the making of regulations). In that regard, I note it is a well-accepted principle that it is not open to a court to go behind what has been enacted by the legislature and to inquire how the enactment came to be made: Labrador Co v The Queen [1893] AC 104 at 123 (PC) referred to in Hoani Te Heuheu Tukino v Aotea District Maori Land Board [1941] AC 308 at 322. See also Wik Peoples v Queensland (1996) 187 CLR 1 at 98 to 99 per Brennan CJ and at 256 to 257 per Kirby J.

72 If the Governor (in relation to the Regulation) or Parliament had power to include named licensed premises in legislation without giving procedural fairness, then it was argued that it was absurd to think that there must be procedural fairness before the proposed content of that legislation is to be announced: Defendants’ Supplementary Submissions, paragraph 6:-

“… On the plaintiffs’ argument, they would have had nothing to complain about if the content of the reforms were not announced but the regulation merely promulgated. It is difficult to see any cogency behind such an approach.”

73 Accordingly, the defendants contended that, if there was no duty to provide procedural fairness in the making of the 2008 Regulation, there could be no duty to afford procedural fairness separately in the making of an announcement about reforms that include aspects of the contents of those Regulations: paragraph 7.

74 In support of the submission that the “reform” initially sought to be introduced by the 2008 Regulation was an aspect of a “high level Government decision”, the defendants relied upon the proposition that such reform was (Defendants’ Supplementary Outline of Submissions, paragraph 12):-

“… one part of a raft of proposed measures to crack down on anti-social drinking and alcohol-related violence”, including, in addition to the new license conditions:-

• provision of security at taxi ranks;

• provision of additional transport options;

• high visibility policing;

• advertising campaigns;

• new laws to deal with minors using fake identification;

• new police powers to “tip out” alcohol in Alcohol Free Zones.”

75 The defendants’ also contended that the reforms that were initially sought to be introduced by the 2008 Regulation, would affect (directly or indirectly) sections of the community that included, not only the hotel licensees, but also the hotel staff and patrons, local residents and the community more generally.

76 By analogy with town planning proposals, reliance was placed upon the observations of Mason P in Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381 at [264].

77 The defendants further contended that, where policy questions are involved in decision-making by Government, decisions about them may be determined free from procedural constraints: State of South Australia v O’Shea (1987) 163 CLR 378 at 411. In support of this contention, it was argued that the decision to impose new licence conditions would produce effects on different groups in different ways. The balance, it was argued, was undertaken by Government at the highest level: Defendants’ Supplementary Outline of Submissions, paragraph 17.

Plaintiffs’ closing submissions

78 In the Plaintiffs’ Closing Submissions dated 10 December 2008, the central issues in the proceedings were identified in the following terms:-

(1) Natural justice applies under the common law, and so extends to the decision to include Scruffy Murphy’s on the list of 48 “high risk venues” and not only where a decision is made pursuant to a statutory instrument.

(2) Whether the right to natural justice is excluded where a decision is made by Cabinet and/or the decision is one relating to policy (and if so, whether the decision in question related to policy so that there was no right to natural justice).

(3) Whether damage to reputation is an interest that gives rise to a right to natural justice.

(4) What standard of proof is required of a party seeking natural justice and what inferences may be drawn against the defendants, where they claim public interest immunity over all documents relating to the decision and do not call evidence of the basis on which the decision was made.

79 In relation to (1) above, it is sufficient to record that I accept the submissions set out in paragraphs 3 to 8 of the Plaintiffs’ Closing Submissions.

80 In relation to (2) above, the issue of the nature of the decision and its public interest implications are discussed below. It is sufficient to record here that, in general terms, the requirements of procedural fairness may apply in respect of a decision that impacts upon an individual even though it is a decision involving policy issues. However, the question is one to be decided on the facts of the particular case. In this case, a relevant matter is the legislative scheme. This is discussed below. I accept in general that the principle as applied in O’Shea (supra) can apply even though more than one person may be immediately affected by the decision.

Consideration

The power to impose conditions

81 The specific object of the plaintiffs’ challenge on the grounds of procedural fairness and irrationality is the Cabinet decision and its announcement by the Premier on 30 October 2008. The issue, it was stated, concerns “the validity of the decision to include the plaintiff’s premises on the list of 48 ‘high-risk’ venues communicated to them on 7 November 2008 (‘the list’)”: Plaintiffs’ Submissions, 1 December 2008, paragraph 1(a).

82 The question, accordingly, is whether the New South Wales Cabinet and the Premier were subject to a duty to act towards the plaintiffs in accordance with procedural fairness principles before adding Scruffy Murphy’s Hotel to the list that, in due course, was incorporated into the schedule to the Regulation and a short time later, in the Table forming part of the amendments to the Liquor Act.

Procedural fairness principles

83 There was general agreement on the principles. The dispute centred on their application in the circumstances of this case.

84 It is a fundamental principle that the common law duty to act fairly attaches to an exercise of public power affecting an individual’s rights, interests or expectations in a direct and immediate way, subject to a clear manifestation to the contrary: Kioa (supra) at 584.

85 The authoritative test for the application of the requirements of procedural fairness is whether the exercise of the power may destroy, defeat or prejudice a person’s rights, interests and legitimate expectations: Kioa (supra); Vanmeld Pty Limited v Fairfield City Council (1999) 46 NSWLR 78 at [53] per Spigelman CJ citing Annetts v McCann (1990) 170 CLR 596 at 598. See also Ainsworth (supra) at 576.

86 In certain circumstances, the duty to accord procedural fairness may apply to a group or body of persons: Save the Showground for Sydney Inc v The Minister for Urban Affairs and Planning (1997) 95 LGERA 33, 57 per Beazley JA. However, her Honour also observed that it has often been held that matters within the area of policy or political decisions within the discretion of Government do not attract a duty to observe natural justice. Her Honour added:-

“It is important in this area to draw a distinction between the making of a policy decision (including a change in policy) and the application of a policy to the circumstances of an individual. The courts have been astute to afford procedural fairness in the latter situation to safeguard the interests and legitimate expectations of individuals detrimentally affected by policy or change in policy …”

87 It has also been observed that there is a significant distinction between decisions that directly and immediately affect a person individually and decisions that affect a person simply as a member of the public or class of the public:-

“… The legislature is more likely to intend that the exercise of power of an executive, administrative or quasi-judicial nature be conditioned on the observance of procedural fairness if it ‘singles out individuals by affecting their interests in a manner substantially different from the manner in which the interests of the public at large are affected’ (

Kioa v West

at 620) …”

Harvey v Minister Administering the Water Management Act 2000

Tubbo Pty Limited v Minister Administering the Water Management Act 2000

88 Similarly, in O’Shea (supra), Mason CJ, at 386, stated that a decision that principally or exclusively is made by reference to considerations that relate to an individual is more likely to attract a duty to act fairly than one where general policy considerations are present. See the discussion of such matters in O’Shea (supra) at 386 per Mason CJ.

89 Whether it can be said that the “decision” of Cabinet in the present case to include licensed premises in the list was one made by reference to considerations or issues of general policy, accordingly, raises a question in determining whether or not the power to make the decision was subject to a duty to act fairly and, if so, that can tell against its existence. This question is discussed below.

90 The fact of Cabinet participation in the decision-making process is also a matter that may, depending upon the facts, point against the existence of a duty to act fairly in relation to it. Mason CJ observed in O’Shea (supra), that if the decision is within an area that falls within the ambit or scope of Cabinet concern and decision-making, then procedural fairness may not apply. Certainly, decisions that truly involve political judgments are in a special category and, generally speaking, will not be amenable to challenge on grounds of procedural fairness considerations.

91 On the other hand, the fact that a particular decision is made by Cabinet may not preclude procedural fairness. This is so where the decision in question is concerned or is related to justice to the individual.

92 In determining the application of the principles of procedural fairness in the present case, the relevant circumstances concerning the decision include:-

• The statutory framework established by the Liquor Act , the objects of the legislation, and the particular provisions in the Act that empower or authorise the imposition of conditions on licenses.

93 The following matters are noted:-

(1) The provisions of the Liquor Act (s.11) include a power to amend the Act in order to impose by force of statute special conditions upon licences.

(2) The power under s.11(1)(b) of the Act to impose license conditions either by amending the Act or by delegated legislation, unlike the powers conferred by the Act upon the Authority or Director, is not one that is expressed as subject to any procedural fairness requirements. As the plaintiffs do not challenge in these proceedings the exercise of that power by which the amendments made on 3 December 2008 came into existence, they have been accepted in this case as validly imposing the special conditions upon the licences specified, including that held by the first plaintiff.

(3) Notwithstanding, the plaintiffs contended that the Cabinet decision on 29 October 2008 to legislate those conditions was subject to procedural fairness requirements. If that contention is correct, then such requirements would, in effect, operate as a constraint upon the power to impose conditions by statutory amendment. The plaintiff carries the onus of establishing that such an apparent contradiction can arise.

(4) Expressed slightly differently, if the statutory power under s.11(1)(b) is a power that is not subject to the duty to act fairly, how can it be that the decision of Cabinet to exercise that power was subject to such a duty?

94 I note at this point, that the Liquor Act does not, by its terms, require an inquiry or a consultative process to be engaged before special conditions are imposed either by amendment to the Act or as may be prescribed by regulation.

95 Before examining the decision of Cabinet, I note that the statutory power conferred by s.11(1)(b) may properly be considered an exceptional one. The Liquor Act 1982, which preceded the enactment of the Liquor Act 2007, contained provisions empowering the former Licensing Court to impose conditions subsequent to the grant of a licence. Such conditions were to be consistent with that Act and licenses were subject to the specified conditions prescribed by s.20(2), whether or not endorsed on the licence.

96 The 1982 Act did not, however, contain a provision in terms or to the effect of s.11(1)(b) of the 2007 Act. Indeed, according to my own research, there is not to be found any comparable provision to s.11(1)(b) in any liquor licensing legislation of another State or Territory. I note that the relevant provisions authorising the imposition of conditions in such legislation are: Liquor Act 1975 (ACT), s.33; Liquor Act 1978 (NT), s.31; Liquor Act 1992 (Qld), s.107C(1); Liquor Licensing Act 1997 (SA), s.43; Liquor Licensing Act 1990 (Tas), s.43; Liquor Control ReformAct 1998 (Vic), s.16, s.17, s.18 and s.18B; and Liquor Control Act 1988 (WA), s.31 and s.64.

97 The parties’ submissions raised a discrete issue as to the nature of Cabinet’s decision. The defendants contended that the Cabinet decision was a policy decision. The relevant public interest was identified as the stated need, as evaluated by Cabinet, for the control of alcohol-related violence in specified licensed hotels. The defendants contended that there are several interests necessarily affected by or involved (or at least potentially so) in the decision apart from those of the plaintiffs. These include those identified in paragraph [75] and generally governmental concern in the maintenance of social order on licensed premises.

98 Generally speaking, where a decision is a policy decision designed to serve the public interest, the relevant Minister or other decision maker is not bound to hear an individual who will be affected adversely by it. In O’Shea (supra), Brennan J stated at 411:-

“… The public interest in this context is a matter of political responsibility … and the Minister is not bound to hear an individual before formulating or applying a general policy or exercising a discretion in the particular case by reference to the interests of the general public, even when the decision affects the individual’s interests. When we reach the area of ministerial policy giving effect to the general public interest, we enter the political field. In that field, a Minister or a Cabinet may determine general policy of the interests of the general public free of procedural constraints; he is or they are confined only by the limits otherwise expressed or implied by statute …”

99 In support of their contentions, the plaintiffs principally relied upon the judgments of the High Court in Ainsworth (supra) and in O’Shea (supra) to support the proposition that Cabinet, in relation to its decision, was bound by principles of procedural fairness.

(1) Ainsworth

100 The nature of the decision in Ainsworth (supra) was examined by the High Court having regard, in particular, to the functions and responsibilities of the former Criminal Justice Commission under the Criminal Justice Act 1989 (Q) including its duty of impartiality and the duty to act in the public interest as prescribed by s.3.21(2)(a) of the latter Act, the nature of the proceedings conducted by the Commission under the Act together with its obligation to report in accordance with s.2.14(1) of the Act.

101 In the joint judgment (at p.574), it was observed that a body such as the Commission, established for the purposes stated in the legislation and with powers and functions of the kind conferred upon it would ordinarily be construed as subject to an implied general requirement of procedural fairness, save to the extent of clear contrary provision.

102 In accordance with s.2.18(3) of the Criminal Justice Act, a report of the Commission was required to be furnished, inter alia, to the Chairman of the Parliamentary Committee.

103 The report of the Commission in Ainsworth (supra) made specific adverse findings as well as a recommendation that adversely affected the appellants.

104 The damaging material amounting to findings of fact, being findings directly affecting the reputation of the appellants in the report, included the following finding:-

“Any examination of the evidence leads to questions about relationships between AINSWORTH, his executives and associates and suspect former N.S.W. Police, criminal identities and former senior N.S.W. Police. It would appear from the evidence that investigations into the AINSWORTH organisation were fully warranted. This Commission is aware of other matters of complaint in relation to AINSWORTH where the course of investigation has been unusual.”

105 The recommendation was that the Ainsworth group of companies not be permitted to participated in the gaming machine industry in Queensland.

106 The High Court observed that the process of the Commission which led to the report was one of inquiry and investigation. What was said to have been decisive was the nature of the power, not the character of the proceeding which attended its exercise (at p.576). The Court acknowledged that that was not to deny that provision may be made by the legislature permitting or requiring procedures which are wholly inconsistent with the requirements of procedural fairness.

107 The question is whether, in light of Ainsworth, the decision of Cabinet in the present case was subject to a duty to act fairly and whether the inclusion of Scruffy Murphy’s Hotel and the public announcement by the Premier of the Cabinet decision or the intention of Government to legislate for the imposition of special conditions without first informing the plaintiffs and providing them with the opportunity of being heard constituted a breach.

108 It has not been contended in the present proceedings that the Cabinet decision to exercise the power under s.11(1)(b) was subject to procedural fairness constraints only by reason of the fact that it was the subject of a public announcement. The plaintiff’s contention, to a significant extent, rested on the basis that the nature and effect of the decision was analogous or comparable to that of the report publicised in Ainsworth. The validity of that argument, however, to a significant extent rests upon an examination of the statutory scheme in that case and the nature of the Commission’s decision. The statutory scheme and the nature of the decision in the present case are markedly different to those in Ainsworth. It is, accordingly, necessary to examine the statutory scheme considered in that case and the regime established by the Liquor Act.

109 In the present case, Cabinet was not either engaged in or acting under a similar or comparable statutory regime. Further, it did not make factual findings against any individual or entities but made its decision based on published Departmental data. Nor did it exercise functions and responsibilities of a body such as the Commission in Ainsworth. Cabinet was engaged in considering whether or not it should exercise a statutory power which the Act provides, namely, the power in s.11(1)(b), being a power, as noted earlier, the defendants accepted was not itself subject to the requirements of procedural fairness.

110 It is evident from the Premier’s announcement that matters of public concern (the minimisation of the risk of alcohol-related violence) were the motivation or purpose of the decision.

111 Public interest issues, restrictions, conditions and controls over licensed premises have long been a feature of statutory licensing schemes in this State. They are directed, inter alia, to protecting or safeguarding the public interest by minimising the risk associated with alcohol related violence. That, of course, is a legitimate and important concern of Government. In particular, the questions as to what might be considered to be an acceptable level of risk and what are the appropriate measures or means required to achieve that result are matters within the sphere of Government responsibility. They may be considered as involving elements of policy and social and political judgment.

112 The objects of the Liquor Act are set out in s.3(1). The specified means for securing those objects include a requirement that licensees (and others) are, inter alia:-

“… required to have due regard to:-

(a) the need to minimise harm associated with the misuse and abuse of liquor (including harm arising from violence and other anti-social behaviour) …”

113 The authorisation conferred by a licence operating under the Liquor Act and held in accordance with Part 3 of the Act, is not fixed or immutable from the date upon which the license was granted. A licence may, inter alia, be made subject to conditions that are subsequently imposed by amendments to the Act or by Regulations made and prescribed under the Act: s.11(1)(b) of the Liquor Act. Such conditions may impose requirements or restrictions arising under a provision of the Act or in relation to a licence, a licensee or licensed premises: s.11(3) of the Liquor Act.

114 The power to impose conditions on a licence by the Authority or by the Director is a circumscribed power. Section 53(4) subjects the power to an obligation on the Authority to give a licensee a reasonable opportunity to make submissions and such submissions are then to be taken into account. The Act does not, however, impose any similar requirement with respect to the power under s.11(1)(b) to impose conditions by force of provisions amending the Act or as may be prescribed by regulation.

115 The regulation and control of licensed premises under Part 5 of the Act amongst other things is specifically directed to preventing “violent and quarrelsome conduct”: s.73(1)(b) and s.77(2)(a). A number of provisions of the Act are designed to control “intoxication” as defined in s.5 of the Act. See also the provisions in s.73 and s.99 of the Liquor Act in this respect. Division 4 of Part 5, Closure Orders, makes provision, inter alia, with respect to “circumstances in which there may be a significant threat or risk to the public interest”. These include circumstances in which there is:-

“…

(a) a threat to public health of safety …”

116 Section 86 provides a statutory power in the Local Court to close premises if “… the Court is satisfied that there is or is likely to be a breach of the peace in the neighbourhood of the licensed premises”.

117 Further, under Part 9 of the Act, disciplinary action may be taken against a licensee, inter alia, upon the ground that acts involving violence have frequently been committed on or near licensed premises: s.139(3)(h).

118 The Act, accordingly, reflects a strong emphasis upon the management and control of risks associated with intoxication in general and with circumstances conducive to alcohol-related violence in particular. Clearly, the regulation and control of licensed premises under the Act is a matter of significant public interest. The provisions of the Act confirm that the imposition of conditions on a license may be considered an important mechanism by which risk-management may be advanced. So far as the interests of licensees are concerned, clause 8, Exemptions, in the Liquor Amendment (Special Licence Conditions) Act 2008 provides for a process by which exemptions on a case by case process can be made and, in that sense, that provision may be seen as supplementing the statutory rights of licensees.

119 Whether the decision by Cabinet to impose special conditions on a class or group of hotels by the power under s.11(1)(b) may be considered to be a policy or social one based upon public interest considerations, it is clearly one that involves a number of interests earlier identified, namely, those of licensees, hotel staff, hotel patrons, as well as attention generally to law and order and community considerations.

120 The decision of Cabinet had as its purpose or objective the minimisation of the risk of violence on certain licensed premises as identified by statistical analysis based on police reporting of incidents. That decision was not in the nature of a report of investigation concerning a particular person’s reputation or suitability made pursuant to the exercise of powers and functions such as those that were in the Commission in Ainsworth. The decision of Cabinet was clearly a necessary incident to the exercise of the statutory power itself. That power, as earlier noted, is conferred by the Act in terms that differ markedly from those empowering both the Authority and the Director. Further, the decision of Cabinet was made under a statutory regime established by the Act that differs significantly from that under which the former Crime Justice Commission acted in the exercise of its specialist functions and responsibilities in the investigation of Mr Ainsworth and his company.

(2) O’Shea

121 It is also necessary to consider the nature of this “decision” challenged in the present proceedings in light of the reliance placed by the plaintiffs upon the High Court’s observations in O’Shea’s (supra).

122 In O’Shea (supra), Mason CJ (at p.387) observed that the nature of the decision in that case concerned considerations personal to Mr O’Shea rather than with issues of general policy. In particular, the decision concerned his personal liberty, being a decision concerning either his release or for the continuation of his preventative detention.

123 The outcome of the appeal by the State of South Australia in O’Shea (supra) turned on the question as to whether the Governor in Council’s decision not to release Mr O’Shea was subject to a duty to act fairly. The answer to that question hinged, to a large extent, on the relevant statutory framework.

124 Section 77(a) of the Criminal Law Consolidation Act 1935 (SA) provided for a regime of preventative detention. In accordance with specific provisions, it provided for periodic examinations of the offender, the making of a report to the Director-General of Medical Services and upon a recommendation by the Parole Board. The Board, in turn, was required to act in accordance with the scheme set out in the Correctional Services Act 1982 (SA). That Act proscribed procedures whereby the Board was permitted to interview a prisoner before preparing a report and was required to conduct an interview at a prisoner’s request.

125 In the course of his decision, Mason CJ observed that the procedure set out in s.77(a) endeavoured to resolve the tension between protection of individual liberty and the need to protect the community from offenders who, because they were unable to control their sexual impulses, were likely to constitute a menace or a risk to society. The particular provisions which sought to achieve the appropriate balance between the two competing interests, were the subject of close examination by the Court.

126 Recommendations to the Governor in Council, it was noted, were based on a Cabinet decision, not on a decision by the responsible Minister. Mason CJ noted that, in some circumstances, Cabinet is called upon to decide questions:-

“… which are much more closely related to justice to the individual than with political, social and economic concerns. The fact that Cabinet ordinarily directs its attention to concerns of this kind is not a reason for denying the existence of a duty to act fairly in a matter which turns not on such concerns, but on considerations peculiar to the individual. A Minister is, to some extent, like Cabinet, concerned to make political judgments. Yet in appropriate cases he will be subject to a duty to act fairly.”

127 It was ultimately determined that the hearing before the recommending body (the Parole Board) provided a sufficient opportunity for a party such as Mr O’Shea to present his case so that the decision-making process, viewed in its entirety, entailed procedural fairness (see, in particular, Mason CJ at p.389).

128 The decision of Cabinet in O’Shea (supra), as noted earlier, was closely related to justice to the individual rather than with political, social and/or economic concerns, although the community interests were, as noted above, a relevant consideration. The position in the present proceedings was, firstly, that the decision of Cabinet concerned the exercise of the statutory power under s.11(1)(b) which, though impacting on a specified group of licensees, was concerned with social and policy objectives within the Act, namely, the issue of violence on licensed premises and the control over circumstances which Cabinet considered were associated with, or conducive to, the incidence of violence established by the BOCSAR statistics.

129 The evidence further supports the conclusion that Cabinet formed the view that the issue of alcohol related violence in some hotels during trading in the early hours of the morning was a matter of pressing concern. The incidence of assaults and alcohol related violence, in particular, potentially involved members of the public and other interests referred to earlier.

130 The statutory scheme, the statutory powers and the subject matter for decision in this case are clearly distinguishable from those involved in O’Shea (supra). The licence rights held by the plaintiffs are statutory in nature. They are held subject to the provisions of the Liquor Act. They are materially different from the right of the citizen to individual liberty which “is deeply rooted in common law tradition …” (Mason CJ at 385), and which was the subject of O’Shea’s case. The Liquor Act makes it plain that a licence under the Act is subject to limitations. By s.10(3) it provides:-

“The authorisation conferred by a licence is subject to this Act and the regulations.”

131 Specifically , by s.11(1) of the Act, a licence is, as discussed earlier, also expressly subject to the power to impose conditions under s.11(1)(b) of the Act.

132 The statutory power under the latter provision is, as also discussed above, an exceptional power in that it permits Government to impose conditions on licenses as, for example, where it determines there exist pressing or urgent circumstances, thereby reserving to it a power of control by legislating special conditions. In Kioa (supra), Brennan J stated at 620 to 621:-

“It does not follow that the principles of natural justice require the repository of a power to give a hearing to an individual whose interests are likely to be affected by the contemplated exercise of the power in cases where the repository is not bound and does not propose to have regard to those interests in exercising the power. If the repository of the power were authorised to exercise the power in his absolute discretion without taking account of individual interests and he proposed so to exercise the power, the repository might exercise it without hearing the individuals whose interests are likely to be affected: cf

Coutts v The Commonwealth

… but that would be an exceptional case.”

133 It has long been accepted that natural justice applies to every situation where people’s rights are affected, except where the legislature has by very plain and clear provisions, ruled it out: Annetts v McCann (supra) and Twist v Randwick Municipal Council (1976) 136 CLR 106. In the latter case, Barwick CJ (at 109) stated, inter alia, that the common law rule that a statutory authority, having power to affect the rights of a person is bound to hear him before exercising the power, is both fundamental and universal. However, the stated qualification was that the legislature may displace the rule and provide for the exercise of such a power without any opportunity being afforded to an affected person to oppose its exercise. Such a legislative intention must be made unambiguously clear.

134 The only reported case in which, according to my own researches, consideration has been given to similar issues to those arising in the present case is that in Tennant Creek Trading Pty Limited v Liquor Commission of the Northern Territory (1995) 126 FLR 136. There, the Northern Territory Liquor Commission issued a notice of intent proposing variations of the conditions of a number of liquor licenses in Tennant Creek. The notice was issued pursuant to s.33(1) of the Liquor Act. However, those provisions specified procedural fairness obligations. Section 33(1) provided:-

“33(1) Subject to this section, the Commission may, from time to time by notice in writing vary the conditions of the licence held by a licensee.

(2) A licensee may, within 28 days of the date on which the licensee receives a notice of a description referred to in sub-section (1), by notice in writing lodged with the Registrar, request that the Commission conduct a hearing in relation to the conditions of his licence.

(3) Where, under sub-section (2), a licensee requests that the Commission conducts a hearing, the Commission shall conduct a hearing in relation to the conditions of the licence of the licensee.

…”

135 The provisions of s.11(1)(b) authorising the imposition of conditions by statute are clearly very different and, in my opinion, may be properly regarded as exceptional and stand in contrast to the administrative powers to impose conditions on licences conferred elsewhere by the Act. The decision of Cabinet to invoke the power to impose conditions by way of statutory provision in the Act itself and to do so by including Scruffy Murphy’s Hotel on the list of 48 hotels was not, in my opinion, for the reasons I have given, a decision that was subject to procedural fairness constraints.

136 On the above analysis, the following propositions relevant to the present case may be formulated:-

(1) An authorisation under a licence granted and held under the Liquor Act may be altered by the imposition of conditions at any later time after the grant.

(2) The Act provides that conditions must not be imposed on existing licences by the administrative exercise of the statutory powers under s.53 and s.54 without compliance with the procedural fairness requirements specified in those sections.

(3) The Act, however, also provides that existing licences may be made subject to conditions imposed by legislative means, namely, by statutory provisions in the Act or by delegated legislation (namely, by regulation).

(4) The power to impose conditions on an existing licence or licenses referred to in (3) is an exceptional power and is free of the injunctions in s.53 and s.54 that apply to the imposition of conditions by administrative processes.

(5) The power to impose conditions by provisions of the Act or by regulation is expressed in broad and unconditional terms. It may be exercised with respect to any one or more of the types of licences referred to in s.10(1) of the Act. It may be exercised with respect to one or any number of licenses. Its exercise is not expressed as confined by particular reasons or to particular circumstances. The power is available to be employed in order to advance the objects of the Act and do so by regulating matters of public interest with which it is concerned.

(6) The fact that the legislature has imposed procedural requirements upon the power of the Authority and the Director to impose conditions under, respectively, s.53 and s.54, but not upon the power to do so by legislation or delegated legislation, in my opinion, reflects, and is consistent with, the proposition that, in general terms, procedural fairness constraints do not restrict the power of government to make statutes.

(7) The decision of Cabinet to utilise the power conferred on it by the Act to impose the special conditions on the 48 licenses was integral to the exercise of the power and not independent of it. There is no valid basis for the contention that the decision to impose those conditions was subject to the requirements of procedural fairness even though the power to do so was not.

Remaining procedural fairness issues

137 The plaintiffs’ case may be examined for the purpose of analysis upon the assumption that Cabinet was required to act fairly towards the plaintiffs. They have contended that procedural fairness required that they be advised as to the material to be relied upon in identifying the Scruffy Murphy’s Hotel as one with a relatively high incidence of alcohol related assaults and given the opportunity to examine and respond before the hotel was listed and the reforms implemented.

138 The evidence establishes that Scruffy Murphy’s Hotel had been listed by BOCSAR and ranked, according to the statistics, as one falling within the top 100 hotels in terms of incidence of assaults, the listing being in order of frequency. The statistics for the period January to September 2007 were published on the BOCSAR website on 11 March 2008. On the same date, the Sydney Morning Herald published the BOCSAR statistics.

139 There is no evidence in the present proceedings which would establish, had the first plaintiff been aware of those matters or had he received notice of the Cabinet decision, that material or information was available to the plaintiffs that would have demonstrated that the statistics reported by BOCSAR were inaccurate or that the rankings given were fallacious.

140 Even if an opportunity to make submissions had been accorded to the plaintiffs by Cabinet, there is, accordingly, no evidence as to the utility or benefit of having done so. This is an aspect relevant to the issue of procedural fairness on the assumption that Cabinet was required to extend it to the plaintiffs: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at 13 to 14 per Gleeson CJ.

141 Moreover, in terms of damage to reputation, it is clear from the evidence that Scruffy Murphy’s Hotel had been publicly identified on a number of occasions as licensed premises with an allegedly high incidence of assaults. That is a fact that is relevant to the issue of damage alleged to have arisen by reason of the claimed breach of procedural fairness requirements.

142 In his evidence in cross-examination, Mr McGuiness stated that many times in various newspaper articles and on television Scruffy Murphy’s Hotel had been “… shown wrongfully as a hotel of violence …”. He was asked:-

“Q. So you have mentioned there has been many articles in the paper which you say wrongly characterise your hotel as a violent hotel, is that correct?

A. Exactly. That’s exactly right, and I have written to newspapers to that effect, and also to the TV stations, also spoken to them about footage they have shown on television and which they acknowledge does not relate to my hotel but has been shown on a number of occasions, and they used prior to the TV news sessions, and they have agreed that the footage they have used did not relate to my hotel but they have used it on a number of occasions. And even last night I spoke to a Mr Harry Potter, a journalist from Channel 10, and he acknowledged and apologised for the footage they had been using which did not refer to my hotel but they have used for their own purposes which he also distributed to the other networks.

Q. These sort of TV and newspaper reports, have they taken place over the past one or two years?

A. Probably, yeah, the last 18 months I would think, yes.”

143 There is no evidence that supports a conclusion or inference that the Premier’s announcement caused or added any particular “damage” to the plaintiff’s reputation beyond any damage that may have occurred over the previous 18 months of adverse publicity. Indeed, beyond the first plaintiff’s assertion of damage having occurred, the evidence did not seek to establish that any such “damage”, commercial or otherwise, had in fact been sustained in any particular or material respect.

144 Further, the issue of damage or potential damage is to be viewed in light of the fact that within a very short time of the Cabinet meeting of 29 October 2008, the hotel had been validly incorporated by name in the Schedule to the 2008 Regulation and, as from 3 December 2008, in the Table set out in clause 1 of Schedule 4, Special Licence Conditions for declared premises in amending Act No 102 of 2008.

145 In the above circumstances, I do not consider that the evidence establishes a basis for an inference that any material damage to reputation has been occasioned to the plaintiffs or will potentially result to them from the list referred to in the Premier’s announcement of 30 October 2008.

146 Finally, the plaintiffs identified as an issue in the proceedings the question of the drawing of inferences against the defendants where they have claimed public interest immunity (see paragraph [78(4)] above).

147 The principle that applies where such a claim is validly made and is not disputed (as in the present case) is that stated in Wayne Lawrence Pty Limited v Hunt & Ors [1999] NSWSC 1044 per Hodgson CJ in Eq (as his Honour then was), namely,:-

“It appears to be the law that where legal professional privilege or other privilege is claimed, that of itself cannot be the basis of an adverse inference being drawn against the party claiming that privilege. However, in my opinion, where a party is claiming to make out a case, and that party bears the onus of proof, and where that case could be given positive support by calling evidence of legal advice or lack of legal advice, the failure of that party to call that evidence can be taken into account in deciding whether that party has discharged the onus of proof which it bears.”

148 In the present case, no adverse inference, in my opinion, can be drawn against the defendants based upon the claim for public interest immunity.

Irrationality

149 The plaintiff’s written submissions dated 1 December 2008, record the following:-

“26. Last Friday afternoon, Mr McGuinness learned, for the first time, when the documents he had been seeking were provided under curial process, that the whole of the primary data on which the decision to include his premises on the list was based was the document annexed to these submissions. That document had these features:-

(a) It records 19 rows of data over the period from July 2007 to June 2008;

(b) Of those figures 19 rows, two are, ex facie, double counting (21 July 2007 and 18 May 2008);

(c) There is the important disclaimer:

‘The incidents counted here may or may not have been flagged as alcohol related by the NSW police force.’

(d) All save 4 are more than 10 months old, and half pre-date the changes introduced by Mr McGuinness in October 2007.

27. If, as the defendants assert, that is the sole data on which the decision to include Mr McGuinness’ premises on the list was based, no rational decision-maker could have made that decision.

28.

Legal propositions

. Where a decision is irrational, illogical and not based on findings or inferences of fact supported by logical grounds, it may be set aside. See Murrumbidgee Groundwater Preservation Association Inc v Minister for Natural Resources [2005] NSWCA 10 at [129]:

‘Both parties accepted that judicial review on such a basis was permissible. Nothing appeared to turn on the particular formulation of the test in the case law. Perhaps the most appropriate formulation is whether the decision is ‘illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds’: Minister for Immigration and Multicultural Affairs Ex parte Application S20/2002 (2003) 77 ALJR 1165 at [52] and [37], [173]; see also Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 at [38].’

29. Formerly this was considered as an aspect of Wednesbury unreasonableness, but is now better characterised as distinct: see per Spigelman CJ in Dowe v Commissioner for NSW Crime Commission [2007] NSWCA 296 at [63]:

‘… there is authority to suggest that ‘unreasonableness’ is a term applicable to the exercise of a discretionary power and that the ‘irrationality’ formulation is applicable in other contests, such as the finding or judgment implicit in s.7(1)(b).’”

150 The following observations as to the relevant test Murrumbidgee Ground Water Preservation Association Inc v Minister for Natural Resources [2005] NSWCA 10 at [129] were relied upon in support of the “irrationality” ground:-

“Both parties accepted that judicial review on such a basis was permissible. Nothing appeared to turn on the particular formulation of the test in the case at law. Perhaps the most appropriate formulation is whether the decision is ‘illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds’:

Minister for Immigration and Multicultural Affairs Ex parte Applicant S20/2002

(2003) 77 ALJR 1165 at [52] and [57], [173]; see also

Minister for Immigration and Multicultural and Indigenous Affairs v SGLB

(2004) 78 ALJR 992 at [78].”

151 It was contended for the plaintiff in the written submissions formulated in support of his case:-

“30. Before making a decision which would directly and necessarily affect the plaintiff’s reputation and income, a rational, logical decision maker would have reviewed the small number of readily accessible COPS reports summarised on the table (1) eliminate the double counting, (2) assess whether there was any connection between conduct in the licensed premises and the incidents recorded, (3) assess whether any or all of the incidents were alcohol related and (iv) assess whether altered licence conditions might reduce alcohol related violence. A rational decision-maker would also have turned his or her mind to why there has been a falling-off of incidents linked to the premises in the last 10 months; that cannot be done from the document alone.”

152 In evaluating the “irrationality” ground, the plaintiff’s case was essentially based upon a supposed insufficiency in the material relied upon by the Premier and/or Cabinet to justify the decision to include Scruffy Murphy’s Hotel on the list.

153 In this regard, it is necessary to bear in mind the fact that the legality/merits dichotomy is at the heart of Australian administrative law and the boundary between the two is policed rigorously: Murrumbidgee Ground Water Preservation Association Inc v Minister for Natural Resources (supra) per Spigelman CJ at [127].

154 In the written submissions for the defendant, it is contended that many of the points relied upon in support of the “irrationality” ground involved matters of merit rather than matters of law.

155 In essence, the plaintiffs contended that the decision of the Premier or of Cabinet as announced on 30 October 2008 was manifestly arbitrary in being essentially based on crime statistics. Those statistics, they argued, may be shown to be deficient in certain aspects.

156 The Premier’s News Release on 30 October 2008 referred to the fact that he, the Premier, had been provided with a “… list of problem venues across the State …” and that this was “… based on information supplied by BOCSAR”.

157 The Premier’s statement indicated, firstly, that he had been provided by a responsible officer (the Commissioner of Police) with a list that included the plaintiffs’ hotel. Secondly, that the list had, as its foundation, statistical data published by BOCSAR.

158 The issue of “irrationality” or “unreasonableness” is not concerned with the determination as to the level of accuracy of the data that had been reported, researched and formulated by BOCSAR. It is concerned with determining whether the BOCSAR statistics provided a basis or an analysis upon which it was open for Cabinet to rely upon for the purposes of making the decision in question.

159 The evidence of Dr Weatherburn established that the purpose and utility of “crime statistics” is that they record information concerning incidents that involve a breach of the law and from which statistical trends are derived.

160 The BOCSAR statistics plainly are not based upon factual findings following investigation or inquiry into the “crime incidents”. The COPS database, as noted earlier, contains a record of every criminal incident recorded by NSW Police, together with a list of locations at which each incident took place, the type of offence involved, premises-type and the date and time of each incident. It is on the basis of such data that statistics on “assault incidents” at licensed premises (and other locations) are recorded.

161 The reported crime statistics do not purport to be a definitive record or chronicle of fact based upon an evidentiary analysis of information from all relevant sources of information. The data derived from COPS, the evidence establishes, provides information “… that is vital in gauging the relative risk posed by various types of crime and the location and the suburbs that are most at risk” (Dr Weatherburn’s affidavit affirmed on 3 December 2008, paragraph 2).

162 The identification and the measurement of “risk” is a common element in risk management strategies in many fields of human activity. The relative “risk” of a “location” is, on the evidence, a matter that is capable of statistical assessment. Even accepting the possibility that certain data used in the compilation of the statistics may not be completely accurate, Dr Weatherburn’s evidence indicates that the COPS data is nonetheless considered to be sufficiently reliable for the purpose of measuring both the distribution and the trends in crime and relevant risk.

163 The evidence established that there is some control over the information derived from incident reports in that the police are required to see them through “to an accountable outcome” in particular cases where a breach of the law is indicated (Dr Weatherburn’s affidavit, paragraph 8).

164 Dr Weatherburn further stated:-

“12. It is not within the capacity of BOCSAR to read the narrative accounts associated with each of the more than 1.3 million crimes (including more than 73,000 assaults) recorded annually by the NSW Police. For this reason, BOCSAR relies to a very considerable extent on individual police officers to faithfully record the details of crime they believe to have occurred. In this regard, BOCSAR is no different from the Australian Bureau of Statistics (which publishes national crime data) or statistical agencies that release crime statistics in other countries (eg, the UK Home Office Research and Statistics Directorate, the US Bureau of Justice Statistics).

13. It is impossible within BOCSAR’s limited resources to examine every criminal incident recorded by Police. Even if BOCSAR’s resources were adequate to the task, there is no independent source of information against which police crime incident reports can be checked.

14. Further, consulting with people affected by crime statistics is not part of the method used to compile crime statistics. As noted above, the method used by BOCSAR involves the collation and analysis of data collected by others.

15. Various strategies are employed to check the reliability of police crime trend information. For example, BOCSAR has developed a computer programme that examines the trend in every offence and every Local Government Area to see whether there has been an ‘unusual’ change. Details of any anomalies detected by this means are sent to the NSW Police for clarification. BOCSAR also cross-checks police information on crime trends with information gathered from other sources (eg, hospital admissions, crime victim survey data).

16. These strategies do not involve checking or verification of details recorded on individual crime records.”

165 Whilst, in cross-examination, Dr Weatherburn acknowledged the possibility that some information recorded in the COPS database may contain inaccuracies, it is clear from his evidence, which I generally accept, that that does not mean that COPS is a flawed source of data for the purpose for which information is gathered. Plainly, on the evidence, it is a valuable source of information for the purposes of determining particular types of risk in relation to specific locations. Specifically, on Dr Weatherburn’s evidence, COPS contains both relevant and useful material and, in this respect, he stated:-

“18. Crime prevention, however, would be impossible without information on the location, date, time and character of each offence recorded by police. Information of this sort is used to measure trends in various types of crime, to identify crime ‘hotspots’ (locations where unusually large numbers of offences occur), to investigate the factors that might be associated with crime and to allocate crime prevention resources to various types of crime problem. If BOCSAR withheld such information, citizens would be less well equipped to make decisions concerning their own safety and Government, and business and community organisations would be less well equipped to design crime prevention strategies or policies …”

166 I do not consider that the evidence establishes that the Premier or Cabinet acted on an irrational or unreasonable basis in reaching the decision referred to in the News Release on 30 October 2008 based upon COPS data and BOCSAR crime statistics. Such information provided a basis for establishing a distribution and trend and hence an assessment of risk and, as such, provided a factual basis for the decision in question. In particular, notwithstanding the criticisms of the material as referred to in the written submissions of the plaintiff, it has not been established that the BOCSAR material in general was either based on a statistical fallacy or was the product of a statistically flawed formula. In the circumstances to which I have referred, the challenge to the decision based on irrationality or unreasonableness must, in my opinion, fail.

167 I am accordingly of the opinion that the plaintiffs have failed to establish a basis for the relief sought in paragraphs 1, 2, 2A, and 3. In those circumstances the amended summons is dismissed.

168 In the event that the parties are unable to agree on the appropriate orders as to costs I grant leave to apply to have the proceedings re-listed by arrangement with my associate.

**********

CITATION:	McGUINNESS & ANOR v STATE OF NEW SOUTH WALES & ORS [2009] NSWSC 40
HEARING DATE(S):	Wednesday 3 December 2009
JUDGMENT DATE :	17 February 2009
JURISDICTION:	Administrative Law
JUDGMENT OF:	Hall J at 1
DECISION:	The amended summons is dismissed.
CATCHWORDS:	ADMINISTRATIVE LAW – Cabinet decision to impose special conditions on liquor licenses in respect of certain hotels including that of the first plaintiff – announcement of proposed government reform measures – proposals to reduce alcohol-related violence - LIQUOR LAW – Liquor Act 2007 – power to impose conditions on licences under provisions of the Act – by regulations made under the Act or by virtue of provisions of the Act – special conditions initially imposed by regulation to give effect to proposed reform measures and subsequently by amendments to the Act imposing conditions on licences listed in a Table to the amending provisions – Cabinet decision to implement reform measures announced publicly by Premier – decision of Cabinet to include plaintiff’s hotel on a list of 48 hotels to be the subject of new conditions – STATUTORY POWERS - whether decision subject to the requirements of procedural fairness – statutory amendments made under s.11(1)(b) of the Act imposing special conditions on the first plaintiff’s licence accepted as validly enacted – whether decision of Cabinet an incident of the exercise of the statutory power to impose conditions or an aspect of it – decision involved social and policy elements – interests of licensees, hotel staff, hotel patrons relevant to the decision to impose new measures – statutory power to amend Act and impose special conditions not subject to requirements of procedural fairness nor was the publicly announced Cabinet decision to place the first plaintiff’s hotel on the list subject to such requirements – whether decision of Cabinet “irrational” or “unreasonable” – Cabinet entitled to rely upon statistics produced by the Bureau of Crime Statistics and Research – not irrational or unreasonable
LEGISLATION CITED:	Liquor Act 2007 Liquor Act 1982 Liquor Act 1975 (ACT) Liquor Act 1978 (NT) Liquor Act 1992 (Qld) Liquor Amendment (Special Licence Conditions) Act 2008 Liquor Control Act 1988 (WA) Liquor Control Reform Act 1998 (Vic) Liquor Licensing Act 1997 (SA) Liquor Licensing Act 1990 (Tas) Liquor Regulation 2008
CASES CITED:	Ainsworth v Criminal Justice Commission (1991-1992) 175 CLR 564 Annetts v McCann (1990) 170 CLR 596 Castle v Director General State Emergency Service [2008] NSWCA 231 Harvey v Minister Administering the Water Management Act 2000; Tubbo Pty Limited v Minister Administering the Water Management Act 2000 [2008] NSWLEC 165 Hoani Te Heuheu Tukino v Aotea District Maori Land Board [1941] AC 308 Kioa v West (1985) 159 CLR 550 Labrador Co v The Queen [1893] AC 104 Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381 Murrumbidgee Ground Water Preservation Association Inc v Minister for Natural Resources [2005] NSWCA 10 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 Save the Showground for Sydney Inc v The Minister for Urban Affairs and Planning (1997) 95 LGERA 33 State of South Australia v O’Shea (1987) 163 CLR 378 State of Victoria v Master Builders' Association of Victoria [1995] 2 VR 121 Tennant Creek Trading Pty Limited v Liquor Commission of the Northern Territory (1995) 126 FLR 136 Twist v Randwick Municipal Council (1976) 136 CLR 106 Vanmeld Pty Limited v Fairfield City Council (1999) 46 NSWLR 78 Wayne Lawrence Pty Limited v Hunt & Ors [1999] NSWSC 1044 Wik Peoples v Queensland (1996) 187 CLR 1
PARTIES:	McGUINNESS, Malcolm Alexander & ANOR v STATE OF NEW SOUTH WALES & ORS
FILE NUMBER(S):	SC No 30136 of 2008
COUNSEL:	P: M J Leeming/K J Taylor D: S Lloyd SC/K Richardson/M Nagy
SOLICITORS:	P: J D K Legal D: I V Knight