Primewest (Lot 4 Davidson Street Kalgoorlie) Pty Ltd v Broadwater Hospitality Management Pty Ltd
[2009] WASC 304
•13 OCTOBER 2009
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: PRIMEWEST (LOT 4 DAVIDSON STREET KALGOORLIE) PTY LTD -v- BROADWATER HOSPITALITY MANAGEMENT PTY LTD [2009] WASC 304
CORAM: McKECHNIE J
HEARD: 9 SEPTEMBER 2009
DELIVERED : 13 OCTOBER 2009
FILE NO/S: CIV 2143 of 2009
BETWEEN: PRIMEWEST (LOT 4 DAVIDSON STREET KALGOORLIE) PTY LTD (ACN 124 866 646)
Plaintiff
AND
BROADWATER HOSPITALITY MANAGEMENT PTY LTD (ACN 097 743 130)
Respondent
Catchwords:
Liquor licensing - Transfer of lease on sale of freehold - Whether void under Liquor Control Act - Inconsistency of statutory provisions - Whether later Act impliedly repeals earlier Act - Whether general provision read subject to special provision
Legislation:
Liquor Control Act 1988 (WA), s 104
Property Law Act 1969 (WA), s 77
Result:
Plaintiff's claim succeeds
Category: A
Representation:
Counsel:
Plaintiff: Mr G J Douglas
Respondent: Mr G M Abbott
Solicitors:
Plaintiff: Hotchkin Hanly
Respondent: Griffin Hilditch
Case(s) referred to in judgment(s):
Butler v Attorney‑General of Victoria (1961) 106 CLR 268
Dossett v T K J Nominees Pty Ltd (2003) 218 CLR 1
Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130
Goodwin v Phillips (1908) 7 CLR 1
Saraswati v The Queen (1991) 172 CLR 1
McKECHNIE J: Can the Liquor Control Act 1988 (WA) allow a tenant to avoid a clause in a lease for additional rent (based on the operations at licensed premises) if the landlord takes the benefit of the lease under the Property Law Act 1969 (WA) when he bought the premises? That is the short but interesting question posed. The answer is no.
Broadwater leased 21 Davidson Street, Kalgoorlie from Kareelya Investment Ltd. The lease had two variations. In the varied lease Broadwater agreed to pay Kareelya additional rent calculated on a sliding scale. Broadwater also agreed to give Kareelya an audited profit and loss statement each year. The varied lease was approved by the Director under the Liquor Control Act s 104.
On 5 June 2007 Primewest bought the premises from Kareelya and claimed all the benefits under the lease: Property Law Act s 77.
Broadwater has not paid Primewest any additional rent or given it the audited profit and loss statement.
The contentions of the parties
The Liquor Control Act s 104 prohibits profit sharing if a licensee enters into an agreement under which another person can participate in the licensed business: s 104(1)(b).
Primewest contends that the lease was approved when it was entered into and it can enforce the lease.
Broadwater argues that the Liquor Control Act s 104 is a later and specific enactment that overrides the Property Law Act s 77. There has been no approval of any agreement between it and Primewest so the profit sharing arrangement is void.
Broadwater contends that the Property Law Act s 77 should be read as limited to covenants under a lease that are not profit‑sharing arrangements and must be read in light of and consistent with the Liquor Control Act s 104.
The relevant principles of statutory interpretation
In Goodwin v Phillips (1908) 7 CLR 1 the High Court had to determine whether a provision of the Crown Lands Act 1895 impliedly repealed a provision of the Crown Lands Act (1884). The hot topic in 1908 was ringbarking. The court held that the latter Act overruled the earlier. After dealing with a specific circumstance, Griffiths CJ held that where sections of an act dealing with the same subject matter are wholly inconsistent with an earlier Act dealing with the same subject matter, then the earlier Act is repealed by implication [7].
Barton J agreed with the Chief Justice but cautioned that the court must be satisfied about inconsistency. If a construction of the later Act which does not repeal the earlier Act is fairly open, that construction is to be adopted [10].
O'Connor J applied a different principle, that if a general provision is inconsistent with a special provision the special provision prevails [14]. Both principles are relevant here.
Is there an inconsistency?
Clearly the Liquor Control Act does not expressly repeal the Property Law Act s 77. Implied repeal is comparatively rare: Butler v Attorney‑General of Victoria (1961) 106 CLR 268 at 275 per Fullagar J; Dossett v T K J Nominees Pty Ltd (2003) 218 CLR 1 per Gummow, Hayne and Hayden JJ at 43: Saraswati v The Queen (1991) 172 CLR 1 per Gaudron J at 17.
There must be very strong grounds to support implied repeal. There is a general presumption that the legislature intended that provisions should operate.
There must be close attention to the particular provisions: Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at [18].
Under the Liquor Control Act s 104, an offence occurs on entry into any agreement or arrangement (s 104(b)). Primewest's argument is that it has not 'entered' into an agreement with Broadwater. An authorised agreement was entered into between Kareelya and Broadwater. Primewest has not entered into a new agreement. It claims the benefit of that agreement: Property Law Act s 77.
Broadwater concedes that the benefit of the agreement is neither the arrangement under s 104 nor a new arrangement. Broadwater's submissions centre on the structure and purpose of the Liquor Control Act.
The long title to the Liquor Control Act includes 'to provide for orders that may prohibit persons from being employed at … licensed premises'.
The primary and secondary objects include providing adequate controls over persons directly or indirectly involved in the liquor trade: s 5(d).
The Liquor Control Act requires approval for the sale of alcohol and for people associated with the trade in liquor to be both fit and proper persons and approved. A licence vests personally. Licensees, managers and persons of authority in corporations of licensed premises must be approved as fit and proper. Everyone directly or indirectly interested in the profits or proceeds of the business, carried on under a licence or permit must be a fit and proper person: s 37(d). Within s 104 a person who is remunerated to act, and is an unlicensed agent must be a fit and proper person.
Broadwater's submission, with which I agree, is that anybody directly or indirectly involved in the liquor trade must be a fit and proper person.
However, although I accept this submission, I do not accept the consequence that s 77 of the Property Law Act is overridden. No assessment of Kareelya, or its officers, was carried out at the time the lease was approved. The principal purpose of the lease is to provide a formula for the calculation of the rent payable based on profit. Primewest is not involved in the sale, disposal and consumption of liquor: s 5(2)(d). It is a landlord. Although Primewest participates in the proceeds of the business, it is clear from the lease that Primewest has no power to be directly or indirectly involved in Broadwater's business and can take no steps under the lease to influence any decision by Broadwater. If an approved lease is a profit sharing arrangement with no power to influence the liquor business, there is no reason to have the landlord approved as a fit and proper person.
Also, the Property Law Act s 77 is not in conflict with the Liquor Control Act s 104.
If Primewest sought to vary the terms of the lease the new arrangement would require approval. However, as Primewest has not entered into a new arrangement but is simply taking the benefit of an approved arrangement it has not breached s 104.
Statutes cannot be construed according to particular situations. There is textual inconsistency or there is not. But context is relevant to a degree.
My construction of the Liquor Control Act allowing concurrent operation of the Property Law Act achieves the purposes of each Act without repeal of one. It does not cut down control of liquor because there must be in existence an approved profit sharing arrangement before a new owner can take any benefits under it.
There is no overriding effect. The Liquor Control Act s 104 has a wider reach than covenants under a lease, although it may include them. Importantly, s 104 does not forbid or void a profit sharing arrangement absolutely because the Director may approve it.
Where an approved arrangement forms part of a lease the Liquor Control Act s 104 is satisfied. The special provision has done its work leaving the general provision in the Property Law Act s 77 to operate in full force.
Primewest is entitled to enforce the lease.
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