Starwest Management Pty Ltd v The Director of Liquor Licensing
[2003] WASCA 271
•17 NOVEMBER 2003
STARWEST MANAGEMENT PTY LTD & ANOR -v- THE DIRECTOR OF LIQUOR LICENSING [2003] WASCA 271
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASCA 271 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:167/2001 | 17 OCTOBER 2003 | |
| Coram: | MALCOLM CJ STEYTLER J PULLIN J | 17/11/03 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | STARWEST MANAGEMENT PTY LTD LAXON PTY LTD THE DIRECTOR OF LIQUOR LICENSING |
Catchwords: | Liquor licensing Whether person in a position of authority in company holding a licence a fit and proper person Turns on own facts |
Legislation: | Liquor Licensing Act 1988, s 96 |
Case References: | Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Hughes and Vale Pty Ltd v The State of New South Wales [No 2] (1955) 93 CLR 127 Maxwell v Dixon [1965] WAR 167 R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190 Cooper v Director of Liquor Licensing, unreported; FCt SCt of WA; Library No 990109; 16 March 1999 Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 Douglas-Brown v Commissioner of Police (1995) 13 WAR 441 Industrial Equity Ltd v Blackburn (1977) 137 CLR 567 Liquorland (Australia) Pty Ltd v Austie Nominees Pty Ltd (1999) 20 WAR 405 Liquorland (Australia) Pty Ltd v Hawkins (1997) 16 WAR 325 Liquorland (Australia) Pty Ltd v Porton Pty Ltd, unreported; FCt SCt of WA; Library No 950287; 8 June 1995 Macleod v The Queen (2003) 197 ALR 333 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Quintex Australia Finance Ltd v Schroders Australia Ltd (1991) 9 ACLC 109 R v Alley; Ex parte NSW Plumbers & Gasfitters Employees Union (1981) 153 CLR 376 Re Arthur (1995) 15 SR (WA) 49 Re Hodge's Case (1838) 2 Lew 227 Re Saffron, unreported; Licensing Court of NSW; 18 December 2002 Ruhamah Property Co Ltd v Federal Commissioner of Taxation (1928) 41 CLR 148 Salomon v Salomon [1897] AC 22 Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 Shepherd v The Queen (No 5) (1990) 170 CLR 573 Walker v Wimborne (1976) 137 CLR 1 Waterford v Commonwealth (1987) 163 CLR 54 Wimborne v Brien (1997) 15 ACLC 793 Woolworths (WA) Ltd v Liquorland (Australia) Pty Ltd; unreported; FCt SCt of WA; Library No 940553; 7 October 1994 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : STARWEST MANAGEMENT PTY LTD & ANOR -v- THE DIRECTOR OF LIQUOR LICENSING [2003] WASCA 271 CORAM : MALCOLM CJ
- STEYTLER J
PULLIN J
MATTER : The Liquor Licensing Act 1998 BETWEEN : STARWEST MANAGEMENT PTY LTD
- First Appellant (First Respondent)
LAXON PTY LTD
Second Appellant (Second Respondent)
AND
THE DIRECTOR OF LIQUOR LICENSING
Respondent (Complainant)
Catchwords:
Liquor licensing - Whether person in a position of authority in company holding a licence a fit and proper person - Turns on own facts
(Page 2)
Legislation:
Liquor Licensing Act 1988, s 96
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
First Appellant (First Respondent) : Mr M T Trowell QC &
Mr P G Laskaris
- Second Appellant (Second Respondent) : Mr M T Trowell QC &
Mr P G Laskaris
- Respondent (Complainant) : Mr R M Mitchell &
Ms K Y Loh
First Appellant (First Respondent) : Granich Partners
Second Appellant (Second Respondent) : Granich Partners
Respondent (Complainant) : State Crown Solicitor
Case(s) referred to in judgment(s):
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Hughes and Vale Pty Ltd v The State of New South Wales [No 2] (1955) 93 CLR 127
Maxwell v Dixon [1965] WAR 167
R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190
(Page 3)
Case(s) also cited:
Cooper v Director of Liquor Licensing, unreported; FCt SCt of WA; Library No 990109; 16 March 1999
Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135
Douglas-Brown v Commissioner of Police (1995) 13 WAR 441
Industrial Equity Ltd v Blackburn (1977) 137 CLR 567
Liquorland (Australia) Pty Ltd v Austie Nominees Pty Ltd (1999) 20 WAR 405
Liquorland (Australia) Pty Ltd v Hawkins (1997) 16 WAR 325
Liquorland (Australia) Pty Ltd v Porton Pty Ltd, unreported; FCt SCt of WA; Library No 950287; 8 June 1995
Macleod v The Queen (2003) 197 ALR 333
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611
Quintex Australia Finance Ltd v Schroders Australia Ltd (1991) 9 ACLC 109
R v Alley; Ex parte NSW Plumbers & Gasfitters Employees Union (1981) 153 CLR 376
Re Arthur (1995) 15 SR (WA) 49
Re Hodge's Case (1838) 2 Lew 227
Re Saffron, unreported; Licensing Court of NSW; 18 December 2002
Ruhamah Property Co Ltd v Federal Commissioner of Taxation (1928) 41 CLR 148
Salomon v Salomon [1897] AC 22
Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219
Shepherd v The Queen (No 5) (1990) 170 CLR 573
Walker v Wimborne (1976) 137 CLR 1
Waterford v Commonwealth (1987) 163 CLR 54
Wimborne v Brien (1997) 15 ACLC 793
Woolworths (WA) Ltd v Liquorland (Australia) Pty Ltd; unreported; FCt SCt of WA; Library No 940553; 7 October 1994
(Page 4)
1 MALCOLM CJ: In my opinion, this appeal should be dismissed for the reasons to be published by Pullin J with which I am in complete agreement. There is nothing I could usefully add.
2 STEYTLER J: I have had the advantage of reading the judgment of Pullin J. I agree with it. There is nothing I wish to add.
3 PULLIN J: This is an appeal by the appellants against an order of the Liquor Licensing Court, pursuant to s 96 of the Liquor Licensing Act 1988, that Abraham Gilbert Saffron ("Mr Saffron") be placed on a bond for a period of three years, to be forfeited in the circumstances mentioned in the order.
4 The order was made by his Honour Judge Greaves following complaints by the respondent against the appellants. The first appellant is the licensee of the Raffles Motor Hotel, and the second appellant is the licensee of the Hilton Park Tavern.
5 Each of the two complaints alleged that proper cause for disciplinary action existed on the ground that a person holding a position of authority in each licensee company, namely Mr Saffron, was not a fit and proper person to hold that position. The complaint was made pursuant to s 95(4)(h) of the Liquor Licensing Act 1988 ("the Act"), which provides that there shall be proper cause for disciplinary action if:
"A person holding a position of authority in a body corporate that holds the licence, or who is interested in the business or the profits or proceeds of the business, is or becomes not a fit and proper person to hold that position or to be so interested."
6 The particulars in support of each complaint, as amended at trial, were identical, save in respect of par (a). In the case of the first appellant, par (a) of the particulars read:
"(a) Abraham Saffron has been a director of Starwest Management Pty Ltd between 16 February 1998 and 30 April 2001. The sole shareholder of Starwest Management Pty Ltd is Marshin Holdings Pty Ltd as trustee for The Marshin Trust. Abraham Saffron is a shareholder in Marshin Holdings Pty Ltd. Abraham Saffron has been a director of Marshin Holdings Pty Ltd since 16 October 1995."
(Page 5)
7 In the case of the second respondent, par (a) of the particulars read:
"(a) Abraham Saffron has been a director of Laxon Pty Ltd between 23 August 1998 and 30 April 2001 and was previously a director of that company between 4 July 1980 and 23 October 1987. Arcadia Securities Pty Ltd holds half of the shares of Laxon Pty Ltd. Abraham Saffron is a shareholder in Arcadia Securities Pty Ltd. Abraham Saffron has been a director of Arcadia Securities Pty Ltd since 10 June 1996 and was also a director of that company until 23 October 1987."
8 The remaining particulars to each complaint were identical and contained a number of allegations, including allegations that Mr Saffron had been convicted of offences against liquor licensing legislation in Australia and that he had been convicted of conspiracy to defraud the Commonwealth. In addition, it was alleged in the particulars that:
(c) Abraham Saffron:
(i) was a director and/or shareholder of companies that were convicted of: or
(ii) was a director and/or shareholder of companies that were interested in licensed premises in circumstances where the licensee has been convicted of; or
(iii) benefited from interests in licensed premises in circumstances where the licensee has been convicted of
105 offences against liquor licensing legislation or other related legislation in Australia.
…
(h) That in respect of an application by Laxon Pty Ltd under the Liquor Licensing Act 1988 (WA) Abraham Gilbert Saffron completed a form LLD5 Personal Particulars, dated 27.6.96, in which the particulars provided by him in answer to questions 3(a) & (c), 4(a), (c) & (d) and 5(b), were incorrect.
(Page 6)
- (ha) That in respect of an application by Starwest Management Pty Ltd under the Liquor Licensing Act 1988 (WA), Abraham Gilbert Saffron completed a form LLD5 Personal Particulars, dated 28 March 1998, in which the particulars provided by him in answer to questions 3(a) & (c), 4(a), (c) & (d) and 5(b), were incorrect.
(hb) That in respect of an application by Arcadia Securities Pty Ltd under the Liquor Licensing Act 1988 (WA), Abraham Gilbert Saffron completed a form LLD5 Personal Particulars, dated 24 February 1997, in which the particulars provided by him in answer to questions 3(a) & (c), 4(a), (c) & (d) and 5(b), were incorrect."
9 As the learned Judge correctly stated, there are two elements to the complaints. First, that Mr Saffron was a person holding a position of authority in each corporation, and secondly that Mr Saffron was not a fit and proper person to hold that position. The learned Judge found that both elements had been established to the required standard.
Ground 1A
10 The first ground of appeal is in terms that the learned Judge erred because he made no finding that Mr Saffron was a person holding a position of authority in those companies. Alternatively, the ground alleges there was no evidence to support that finding.
11 Before discussing that ground further, I should mention that the phrase in s 95(4)(h) "position of authority in a body corporate" is given meaning in s 3. Section 3(4) reads:
"For the purposes of this Act, a person occupies a position of authority in a body corporate if that person –
…
(b) exercises or exerts, or is in a position to exercise or exert, control or substantial influence over the body corporate in the conduct of its affairs …"
12 I will deal first with the part of the ground asserting that no finding was made that Mr Saffron was a person holding a position of authority in the two appellate companies. This part of the ground must be
(Page 7)
- dismissed. The learned Judge did make such a finding in par 15 of his reasons for decision. He said:
"It was not in issue before me that, since Mr Saffron is a director and shareholder of Marshin Holdings Pty Ltd and that company wholly owns Starwest Management Pty Ltd, Mr Saffron is a person in a position of authority in relation to Starwest Management Pty Ltd within the meaning of the Act. Likewise, it was not in issue before me that, since Mr Saffron is a director and shareholder of Arcadia Securities Pty Ltd and that company owns 50 per cent of the shares in Laxon Pty Ltd, Mr Saffron is a person in a position of authority in relation to Laxon Pty Ltd within the meaning of the Act. Upon the evidence contained in the respective historical company extracts Exhibits 26 and 27, I find the first element as alleged in particular (a) to each complaint established."
14 The appellants did not dispute that Mr Saffron was a director and shareholder of Marshin Holdings Pty Ltd and that Marshin Holdings Pty Ltd was the holding company of the first appellant. Nor was it in dispute that Mr Saffron was a director and shareholder of Arcadia Securities Pty Ltd and that that company owned 50 per cent of the shares in the second appellant.
15 In my opinion, the findings made by the learned Judge about Mr Saffron's position as sole shareholder and one of two directors of Marshin and Arcadia, was evidence to support the finding that Mr Saffron was "in a position to exercise or exert, control or substantial influence over" the two appellants in the "conduct of [their] affairs". As the owner of all of the shares of the holding company of the first appellant, he was certainly in that position. In relation to the second appellant, Mr Saffron was the controller of the company which held a fifty per cent interest in the second appellant. Furthermore, he employed the person who held the other share. That person was
(Page 8)
- Mr Dharmalingam. Mr Dharmalingam was also a director of the second appellant, and he was the sole director of the first appellant. In his evidence, Mr Dharmalingam said that he had known Mr Saffron for about 25 years and that he "worked for Mr Saffron's companies". He said in his statement:
"I was aware of Mr Saffron's involvement in all his Hotels in Western Australia over the last 25 years as I was his accountant, his company secretary, and director of all his companies in Perth."
"I am the accountant for the Raffles group of hotels operated by Mr Abe Saffron in Perth".
17 In my opinion, the evidence to which I have just referred also provided support for the learned Judge's finding. A person who controls a company which owns all of the shares in a subsidiary may dismiss or remove directors of the subsidiary company, and by that means may exert control over the subsidiary company, and by the very presence of that power may exert influence over the subsidiary company by informing the directors of the subsidiary company what he would like to achieve. That was Mr Saffron's position in relation to the first appellant. In relation to the second appellant, his ownership of Arcadia and the employer/employee relationship he had with Mr Dharmalingam was evidence in support of a finding to be made that Mr Saffron was in a position to exercise or exert control or substantial influence over the second appellant.
18 I should add that it is not necessary for this Court to consider all of the evidence that was available. As soon as it is shown that there is some evidence to support the finding, the contention in the ground of appeal that there was none, must fail. An appeal is only permitted under s 28 of the Act on a question of law. No error of law has been revealed.
19 It was submitted for the appellants that the question about whether Mr Saffron was in a position of authority or not, was a jurisdictional fact and that, in consequence, this Court was obliged to decide for itself whether this fact had been established or not. I disagree. In R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190 at 214, Gibbs J said:
(Page 9)
- "A legislature, in conferring jurisdiction upon a court, may make the existence of a state of facts a condition upon which the jurisdiction of the court depends, and in that case the court cannot give itself jurisdiction by erroneously deciding that the facts exist. On the other hand the legislature may entrust the court with the power to determine whether such a state of facts exists, and if so the court has jurisdiction to determine all the facts, including the preliminary facts on the existence of which the jurisdiction depends."
20 Whether or not a person has a position of authority in a company which holds a licence and whether that person is a fit and proper person to hold that position, are facts which must be established before the power in s 96 of the Act may be exercised. The legislature has, however, in s 95, entrusted the Liquor Licensing Court with the power to determine the facts.
Ground 2
21 This ground alleges that the learned Judge erred in having regard to convictions of companies associated with Mr Saffron or employees of those companies, and it is said that this was an error because:
(a) these convictions did not have to be disclosed to the Director of Liquor Licensing, and
(b) nor were these matters to be considered in deciding whether or not Mr Saffron was a fit and proper person.
22 To help understand those submissions, I must refer again to particulars (h), (ha) and (hb). I refer to just one of them by way of example; particular (h). This particular alleges that in respect of an application under the Act by the second appellant, Mr Saffron completed a form, dated 27 June 1996, in which particulars provided by him were incorrect. Mr Saffron did sign and submit such a form. This form was a form which required Mr Saffron to give details to the Director of Liquor Licensing of any conviction "under any legislation against a company when you were a director or shareholder, whether or not in Western Australia". There was a place on the form which called for the insertion of the names of companies in which the applicant was a director, along with details of the place and year of conviction and the penalty and details of the offence. A similar space was provided for the same details in relation to companies in which he was a shareholder. In the spaces provided, the letters "N/A" (meaning not applicable) had been written in. The answer which should have been given to the
(Page 10)
questions was that companies in which Mr Saffron was a director or shareholder had been convicted of a great many offences. Details should have been provided. The evidence revealed that the forms had been filled in by Mr Dharmalingam and given to Mr Saffron to sign. Mr Dharmalingam's evidence was that he did not know about convictions outside of Western Australia because he had not been told about them. Mr Saffron in his evidence said that he was "careless in not examining the form. I did not pay enough attention to the document at the time to notice my answers to [this question] … were incomplete and incorrect".
- 23 The learned Judge noted in his reasons for decision that Mr Saffron:
"Acknowledged that he had not taken sufficient care in 1996, 1997 and 1998 in so far as he had failed to provide the complainant with information about his personal convictions in South Australia and New South Wales and the convictions against companies in New South Wales of which he was a Director or shareholder".
24 I now turn to the submission that Mr Saffron was not obliged to disclose the details of these convictions to the Director of Liquor Licensing. This submission is based on the premise that the form which Mr Saffron filled in was not one of the prescribed forms in the Act or Regulations. In my opinion, that is irrelevant. Section 68(1)(c) states that in relation to applications to the licensing authority, the notice "shall be supported by such further or other documentation or information as the Director may in a particular case require". The form which Mr Saffron signed revealed by its terms that the Director of Liquor Licensing did require the disclosure of the information about the convictions, and as a result there is no merit in the appeal insofar as it contends that these convictions did not have to be disclosed to the Director of Liquor Licensing.
25 The second aspect to this ground of appeal is that the convictions were not matters to be considered in deciding whether Mr Saffron was a fit and proper person to hold the position of authority in the appellant companies. The expression "fit and proper person" allows a wide scope for judgment and involves an inquiry about a person's honesty, knowledge and ability: Hughes and Vale Pty Ltd v The State of New South Wales [No 2] (1955) 93 CLR 127 at 156-157 and Maxwell v Dixon [1965] WAR 167 at 169. The convictions in question ranged from 1970 to 1992. They were convictions in relation to liquor
(Page 11)
licensing laws and some municipal laws. There were over 100 convictions. In my opinion, the fact that a person is a director or shareholder of a company which has committed many offences under liquor licensing legislation in other States, is a fact which is relevant to the enquiry about both the honesty of the person in question and about that person's ability to conduct business in accordance with liquor licensing laws. If a private company commits an offence, it may well reflect upon either the honesty of the director or controlling shareholder, and it may certainly reflect on that person's ability to comply with licensing legislation requirements. As a result, the submission that the convictions were not relevant to the enquiry about whether Mr Saffron was a fit and proper person must be dismissed.
- Ground 3
26 The third ground of appeal is that the learned Judge erred in finding "that culpability arose on Saffron's part because he had 'constructive knowledge' of that misconduct" (ie the convictions of the companies in which he was a director or shareholder).
27 As to this ground, I refer to evidence on the point given by Mr Saffron. At AB150, he was asked in relation to the conviction of companies in which he was a director:
"If you're a director of a company that appoints a nominee, you can dismiss that nominee if you should so wish?---Yes.
I think you also said that in relation to these matters the company would pay the fine where its nominee was convicted?---Yes.
…
(AB159)
I will rephrase the question, perhaps, to make it a little – you were aware that some of the premises your companies were operating were attracting convictions in the late seventies and early eighties?---Yes, in most cases.
And you were aware of those charges coming up at the time that they actually were laid and went to court, weren't you? You were informed that these incidents had occurred?---In most cases, yes.
(Page 12)
Some of the charges and convictions would have caused you some concern, wouldn't they, as a director of a company operating a business?---Yes.
And even as a landlord of premises?---As landlord, I would be concerned of tenancy, yes.
Yes. As a director of the business, you do have, as you have said, the capacity to get involved to deal with the managers of the business, don't you, with the licensees, speak to them?---Could be – I could instruct the licensee in certain respects, yes.
Yes?---But of course that was limited because a licensee in Sydney must have full and unfettered control of the business.
As long as they remain licensee, but those licensees were nominees of your company, weren't they? They were employed as - - -?---Yes. Yes, if they were employed by the company as licensee manager, they would still have to have full and unfettered control.
If you were not satisfied with their performance, you could dismiss them couldn't you?---I could, the company could."
- 28 This evidence, in conjunction with evidence that he was a director of the companies, provided some evidence that Mr Saffron "permitted" these offences to be committed.
29 In my opinion, the finding of the trial Judge that:
"I find Mr Saffron shut his eyes to the obvious and took no steps to prevent the recurrence of such offences. In this context, the evidence of Mr Saffron that the companies paid the fines imposed on their employees is also relevant."
- and the finding that:
"Accordingly, I find the evidence for the complainant is sufficient to establish on the balance of probabilities Mr Saffron … permitted the companies and individuals named … to commit the offences of which they were convicted."
were findings made in the course of determining the merits of the case, and are based on evidence led in the case. In my opinion, there is no
(Page 13)
demonstrated error of law. On an appeal on a question of law, this Court may not embark on an enquiry into the correctness of a decision on the facts if there is some evidence which may reasonably support the finding: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356.
- Ground 7
30 The last ground is that the learned trial Judge failed to have any, or sufficient, regard "to the reasons for" the omission by Mr Saffron to disclose the fact of the convictions of the companies in which he was a director or their employees, and the omission to disclose interests in other licenses held in Western Australia. This ground does not raise any question of law insofar as it complains about insufficient regard or weight being given to the evidence unless (perhaps) this results in the decision being manifestly unreasonable. The weight to be given to evidence is a matter not reviewable by this Court for the reasons given above.
31 The other aspect of this ground is the allegation that the learned Judge made no finding at all as to whether these omissions were deliberate or not. In my opinion, there was no obligation on the Judge to make that finding. He merely found, as alleged in the particulars, that there had been a failure by Mr Saffron, due to a lack of care, to disclose what I consider to be highly relevant material. That fact, along with other facts found by the learned Judge, led him to conclude that Mr Saffron was not a fit and proper person to hold the position of authority in the appellant company.
32 I should add that even if the second, third and fourth grounds succeed, there remain other unchallenged findings made by the learned Judge which provided support for a conclusion that Mr Saffron was not a fit and proper person to hold such a position of control. There was no ground of appeal contending that those other findings did not provide support for such a conclusion.
33 The appeal should be dismissed.
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