Tocoan Pty Ltd v Commissioner of Police - [2013] WASC 318

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: TOCOAN PTY LTD -v- COMMISSIONER OF POLICE [2013] WASC 318

CORAM: LE MIERE J

HEARD: 20 MARCH 2013

DELIVERED : 23 AUGUST 2013

FILE NO/S: GDA 12 of 2012

BETWEEN: TOCOAN PTY LTD
Appellant
AND
COMMISSIONER OF POLICE
Respondent

ON APPEAL FROM:
Jurisdiction : THE LIQUOR COMMISSION OF WESTERN AUSTRALIA
Coram :MR J FREEMANTLE (CHAIRPERSON)

MR E WATLING (MEMBER)
MR G JOYCE (MEMBER)

File No :LC 25 of 2012

Catchwords:

Liquor - Licence - Imposition of additional conditions - Liquor Control Act 1988 (WA) s 28 - Denial of procedural fairness - Errors of law

Legislation:

Liquor Control Act 1988 (WA), s 28, s 95, s 96, s 103A
Liquor Control Regulations 1989 (WA), reg 14AD

Result:

Decision of the Liquor Commission set aside and sent back for reconsideration

Category: B

Representation:

Counsel:

Appellant: Mr A D Wilson
Respondent: Mr J F Bennett

Solicitors:

Appellant: Frichot & Frichot
Respondent: State Solicitor for Western Australia

Case(s) referred to in judgment(s):

Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576
Hancock v Executive Director of Public Health [2008] WASC 224
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259
Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149
O'Sullivan v Farrer (1989) 168 CLR 210
Stead v State Government Insurance Commission (1986) 161 CLR 141

LE MIERE J: The appellant is the licensee of Zelda's Nightclub. The night club consists of two separate areas contained within the same address, each with a separate entrance. Zelda's Nightclub, a strip or adult entertainment club, operates on the ground floor. Vibe Nightclub, a mainstream night club, operates on the first floor.
On 23 March 2012 the respondent, the Commissioner of Police, made a complaint to the Liquor Commission (Commission) under s 95 of the Liquor Control Act 1988 (WA) (the Act) against the appellant. The complaint alleged that pursuant to s 95(4) of the Act there was proper cause for disciplinary action on the following grounds:
1.the continuation of the licence is not in the public interest (s 95(4)(j)); and
2.the safety, health or welfare of persons who resort to the licensed premises is endangered by an act or the neglect of the licensee (s 95(4)(k)).
The particulars subjoined to the complaint appeared under four headings: background, grounds of complaint, summary and remedy sought. The background material referred to two previous complaints by the respondent to the Commission against the appellant for disciplinary action pursuant to s 95 of the Act. The first was heard on 17 August 2011. The Commission found all grounds of complaint were made out and imposed a monetary penalty and additional conditions on the licence. The second was awaiting hearing.
The grounds of complaint referred to six matters. The first three matters were incidents on 4 December 2011 in the Vibe Nightclub part of the premises. The fourth matter was an incident at the Vibe Nightclub on 17 December 2011. The fifth matter was an incident outside the front of the Vibe Nightclub on 26 November 2011. The sixth matter was that in relation to each of the incidents, no calls were made to police requesting assistance, except for a call made by a nightclub customer on 17 December 2011.
The summary referred to the previous complaints by the respondent and conditions imposed upon the appellant's licence by the Director of Liquor Licensing on 21 January 2012. The summary further referred to the Vibe Nightclub being frequented by members, nominees and associates of the Rebels Outlaw Motor Cycle Gang (ROMCG), and the management and staff of the nightclub permitting their attendance and having little control over their actions. The summary concluded that the reluctance of staff to contact police for assistance demonstrates their reluctance to operate the licence in accordance with its conditions and the Act, raising serious concerns regarding the licensee's suitability to operate licensed premises.
The remedy sought was cancellation of the appellant's liquor licence (s 96(1)(d)(ii)), a monetary penalty (s 96(1)(m)) and any other order as the Commission sees fit (s 96(1)(n)).
The appellant and respondent were each legally represented at the hearing of the complaint by the Commission. The Commission found that each of the two grounds of the complaint were made out.
The Commission did not cancel the appellant's licence nor impose a monetary penalty. The Commission imposed additional conditions on the licence. After stating that ground 1 of the complaint, that the continuation of the licence is not in the public interest, is made out, the Commission stated:
A logical progression of this conclusion would be cancellation of the licence. However, the Commission believes that by imposing a range of conditions on the licence, the operation of the licensed premises could be sufficiently improved to avoid the more drastic step of cancellation, thereby ensuring a safe continuation of catering to the requirements of consumers for liquor and related services [91].

This appeal

The appellant now appeals pursuant to s 28(1) of the Act against the decision of the Commission. The appeal lies only on a question of law. The order sought by the appellant is that the Commission's decision be quashed, alternatively that the Commission's decision be varied by setting aside five of the conditions imposed by the Commission, and further alternatively that this court send the decision back to the Commission for reconsideration. There are 18 grounds of appeal.

Appeal grounds 1, 2 and 3

Counsel for the appellant dealt with grounds 1, 2 and 3 together. Ground 1 is, in effect, that the Commission erred in law in holding that the acts or neglect of the crowd controllers are acts or neglect of the licensee. The respondent concedes that the Commission made that finding and that it is an error of law. Grounds 2 and 3 are, in effect, that the Commission erred in law in finding that s 165 of the Act applies to the complaint and hence that the appellant, as licensee, is liable for the acts or neglect of the crowd controllers. The respondent concedes that the Commission made that finding and that it is an error of law.
The respondent makes two submissions in relation to grounds 1, 2 and 3. First, the respondent submits that the Commission's errors of law did not affect its decision and the appeal should be dismissed notwithstanding the errors of law made by the Commission. Secondly, the respondent submits that on the evidence before it, it was open to the Commission to find that the complaint was made out notwithstanding the errors of law made by the Commission.

Decision to impose conditions not affected by errors

I find that the errors of law made by the Commission did not affect its decision to impose additional conditions on the licence. The errors of law were made by the Commission in the course of determining ground 2 of the complaint and did not affect the Commission's determination that ground 1 was made out. The Commission's decision to impose additional conditions on the licence was made as a result of its finding that ground 1 of the complaint was made out.
The scheme of the Commission's reasons for decision is as follows. The Commission set out the grounds of the complaint, a description of the licensed premises and some historical facts concerning the licence and the complaint under the heading 'Introduction'. Under the heading 'Submissions on behalf of the Commissioner of Police' the Commission described the events that occurred at the nightclub on 4 December 2011 and 17 December 2011. The matters there set out were established by witness statements and CCTV footage and were not in dispute. They are findings of fact made by the Commission. Next, the Commission addressed matters under the heading 'Submissions on Behalf of the Respondent'. Those submissions concerned matters of law, evaluation of the conduct of the approved manager and licensee disclosed by the evidence, and arguments in opposition to the complaint. The next part of the Commission's reasons is headed 'Determination'. The Commission addressed the statutory framework and then the grounds of complaint. The Commission addressed ground 2 of the complaint first. It is in the course of that consideration that the Commission erroneously construed s 100(1), s 100(8), s 100(9) and s 165 of the Act and found that the acts or neglect of the crowd controllers are the acts or neglect of the licensee, and that the licensee is liable for the acts and neglect of the crowd controllers. The Commission concluded that the safety and welfare of patrons resorting to the premises had been endangered because of the acts and neglect of the approved manager, the crowd control staff and the licensee and therefore ground 2 had been made out.
The Commission then turned to consider ground 1. After addressing the objects and content of the Act the Commission made the following findings.
1.In spite of their reputation, the licensee permitted the ROMCG members and associates onto the licensed premises.
2.The licensee did not demonstrate a high level of vigilance and care in conduct of the premises. The licensee did no more than the bare minimum to address security and behavioural issues at and in the venue.
3.The licensee should not have left Ms Overton, the approved manager, who was overwhelmed by the situation, to manage on her own in the critical post‑midnight period.
4.Notwithstanding numerous complaints being lodged against the licensee, the knowledge of Mr Mann, the managing director of the licensee and an approved manager, of the difficulties of the vicinity in which the premises are situated, since the determination of the Commission in Commissioner of Police v Toucan Pty Ltd (LC52/2011) very little has been done and much less than the Commission would have expected in the circumstances.
5.The Commission has lost confidence in Mr Mann as a director of the licensee company and as an approved manager.
6.The Commission considered the extent of the list of complaints and actions taken against the licensee over a long period of time including:
a)a section 95 complaint lodged by the Commissioner of Police and heard by the Commission on 17 August 2011 wherein a penalty of $15000 was imposed along with several conditions being imposed on the licence (LC52/2011);
b)a section 95 complaint lodged by City of Rockingham and heard by the commission on 24 February 2012 and dismissed on grounds of insufficient evidence (LC20/2012);
c)a section 117 application made by the City of Rockingham and referred to the Commission by the Director, dismissed on grounds of insufficient evidence on 29 June 2012 (LC22/2012);
d)a section 95 complaint lodged by the Commissioner of Police and heard on 4 May 2012 wherein a penalty of $5000 was imposed (LC23/2012).
7.The incidents of 26 November 2011, 4 December 2011 and 17 December 2011 reflect serious shortcomings in the licensee's management of the premises.
8.There are significant shortcomings in the management structure and approach to the operation of the licence.
9.The licensee has taken little action over a period of two years to respond to the issues raised and has not demonstrated a preparedness to introduce preventative measures to avoid a repetition of the problems that have occurred.
The Commission concluded that ground 1 of the complaint, that the continuation of the licence is not in the public interest, is made out. After reaching that conclusion, the Commission stated that by imposing a range of conditions on the licence, the operation of the licensed premises could be sufficiently improved to avoid the more drastic step of cancellation. The Commission then determined the additional conditions that should be imposed on the licence. The Commission considered that imposition of a further monetary penalty was not appropriate as the economic loss resulting from the earlier suspension of the licence was sufficient.
The Commission's decision to impose additional conditions on the licence was based upon its finding that ground 1 of the complaint, that the continuation of the licence is not in the public interest, was made out. It was not dependent upon its finding that ground 2 was made out. Accordingly, even if the Commission's finding that ground 2 was made out was affected by the errors of law referred to, that did not affect the decision of the Commission that ground 1 was made out and to impose additional conditions on the licence.

Decision on complaint ground 1 was affected by errors

I do not accept the respondent's alternative submission that the Commission's finding that ground 1 was made out, that is that the safety, health or welfare of persons who resort to the licensed premises is endangered by an act or neglect of the licensee, was not affected by the Commission's errors of law referred to.
As I have said, the respondent's grounds of complaint to the Commission referred to incidents on 4 December 2011, 17 December 2011 and 26 November 2011. The Commission found that the events occurred as set out in [7] to [19] of the Commission's reasons for decision. The Commission there states:
On 4 December 2011 at about 1.30 am a number of known members of the Rebels OMCG were present in the premises. On the removal of one patron; Todd Raymond Bradshaw (who was wearing a black shirt with the insignia 'REBELS NOMINEE'), the Rebels OMCG members departed the premises through a fire and emergency exit, as is evidenced by CCTV footage.
CCTV footage also reveals that, at approximately 1 am one Christopher Gakis was present on the premises in company with members of Rebels OMCG.
After purchasing drinks Gakis made an unprovoked attack on a patron into whom he had bumped when returning from the bar. Another person Matthew Kratiuk, a nominee of the Rebels OMCG, joined the attack against the patron who suffered facial injuries from the assault. Crowd controllers escorted the injured patron from the premises but made no attempt to remove the offenders Gakis and Kratiuk or seek assistance from the police.
A short time later on the 4 December 2011 CCTV footage reveals that Gakis attacked one Middlebos Manolito who at the time of the attack was talking with Mark Rogers, a known member of the Rebels OMCG. The victim (Manolito) was carried, apparently unconscious, from the premises by the crowd controllers who subsequently stated to police that Manolito was drunk and had fallen over and hit his head.
Ms Cassia Overton, the approved manager stated to the police that she had not seen anything as she was on another floor, however CCTV footage reveals Ms Overton watching crowd controllers taking Mr Manolito down the stairs.
No attempt was made by either crowd controllers or the approved manager to remove Christopher Gakis from the premises or seek police assistance.
On 17 December 2011 at about 1.30 am a large brawl occurred in the Vibe area of the premises between 7 persons known to be members or associates of Rebels OMCG, and Richard, Elton and Santana Hokianga as a result of which serious injuries were sustained by Richard Hokianga and to a lesser extent by Santana and Elton Hokianga.
A witness to the incident was told in answer to her enquiry as to whether staff were going to call the police, that it wasn't their job and they didn't have a phone anyway. The witness summoned the police and an ambulance.
The attackers were permitted to drag the victims outside and continue the assault and were then allowed re‑entry to the premises.
During the course of the assault on the Hokiangas, crowd controllers did not intervene and in fact held back those who were going to the victims aid.
Approved manager Ms Overton passed off the incident as 'minor' when contacted by police. At no stage did she attempt to contact police.
Statements by Police Officers Galbraith and Vredenbregt were lodged as were statements by Richard, Elton and Santana Hokianga and the witness.
CAD reports covering incidents from 1 September 2011 to 10 December 2011 were also lodged as evidence.
The Commission's conclusion in relation to ground 2 is:
The Commission is convinced that the safety and welfare of patrons resorting to the premises had been endangered because of the act and neglect of the approved manager, the crowd control staff and the licensee [60].
I am not satisfied that the errors of law made by the Commission could not have affected the Commission's decision that ground 2 of the complaint was made out. I am not satisfied that the errors did not affect the Commission's decision or that the Commission would have found ground 2 of the complaint was made out if it had not made the errors of law. In its conclusion, the Commission did not distinguish between the acts and neglect of the approved manager, the crowd control staff or the licensee. The acts and neglect of the crowd control staff which endangered the safety and welfare of patrons, or contributed to that endangerment were substantial and serious. I am not satisfied that the Commission found that the safety and welfare of patrons resorting to the premises had been endangered because of the acts and neglect of the approved manager and the licensee without having regard to the acts and neglect of the crowd control staff.

Appeal grounds 1, 2 and 3 not made out

I have found that the Commission's decision that ground 1 of the complaint was made out was not affected by the relevant errors of law and the Commission's decision to impose additional conditions does not rest in whole or in part on ground 2 of the complaint. The errors of law established by grounds 1, 2 and 3 of the appeal do not justify the court varying or quashing the decision appealed against or sending it back to the Commission for reconsideration. Grounds 1, 2 and 3 are not made out.

Appeal grounds 4, 5 and 6

Counsel for the appellant submitted that grounds 4, 5 and 6 are related. As I have said, in considering ground 1 of the complaint the Commission referred to four previous decisions of the Commission: LC52/2011, LC20/2012, LC22/2012 and LC23/2012. In LC52/2011 the Commission imposed a penalty and additional conditions on the appellant's licence. In LC23/2012 the Commission imposed a monetary penalty. In LC20/2012 and LC22/2012 the Commission dismissed the complaints on the grounds of insufficient evidence. The appellant contends that the Commission took those previous complaints into account in reaching its decision that ground 1 of the complaint was made out. The appellant says that in doing so the Commission erred in three ways. First, it impermissibly had regard to irrelevant considerations, namely the evidence in the previous proceedings. Secondly, the Commission denied the appellant procedural fairness by relying on and taking into account the evidence in its previous decisions without affording the appellant any opportunity to make submissions on them. Thirdly, in taking into account evidence in the dismissed complaints, LC20/2012 and LC22/2012, the Commission erred in that no reasonable decision maker would rely on evidence in complaints which were dismissed on grounds of insufficient evidence.

Commission did not have regard to irrelevant considerations

The first matter to be considered is whether it is impermissible for the Commission to have regard to previous complaints against the appellant or the decision of the Commission on previous complaints. Ground 1 of the complaint is that the continuation of the licence is not in the public interest. Section 95(4)(j) of the Act provides that there shall be proper cause for disciplinary action if the continuation of the licence is not in the public interest or the licence has not been exercised in the public interest. In O'Sullivan v Farrer (1989) 168 CLR 210, 216 ‑ 217 Mason CJ, Brennan, Dawson and Gaudron JJ said, in relation to the expression 'in the public interest' in the Liquor Act 1982 (NSW):
The public interest considerations which may ground an objection under s 45(1)(c) are, in terms, confined to considerations 'other than the grounds specified in paragraphs (a) and (b) and sub-sections (2) and (3)'. But, these limits aside, the Act provides no positive indication of the considerations by reference to which a decision is to be made as to whether the grant of an application would or would not be in the public interest. Indeed, the expression 'in the public interest', when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only 'in so far as the subject matter and the scope and purpose of the statutory enactments may enable … given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view': Water Conservation and Irrigation Commission (NSW) v Browning, per Dixon J at 505. See the discussion of the expression 'in the public interest' in the context of liquor licensing legislation by Neasey J in Re Thompson's Application [1964] Tas SR 129 at 143‑4.

Having regard to the provisions of the Act taken as a whole, including the primary and secondary objects of the Act, and sections 33(6), 37(1), 37A, 95(4), and 100, the factors that may be relevant to an assessment whether the continuation of a licence is not in the public interest cover a broad range of matters. Such matters may include the previous conduct of the licensee in conducting a nightclub, the manner in which the nightclub has been conducted and events which have occurred in or at the nightclub. The previous complaints referred to by the Commission related to the licensed premises and to matters occurring within a relatively short period before the complaint being considered by the Commission. I am not satisfied that the previous complaints referred to by the Commission, or the subject matter of those complaints, is irrelevant to a determination whether the continuation of the licence is not in the public interest.

Commission denied appellant procedural fairness in finding ground 1 made out

The appellant further complains that by having regard to the previous complaints, and the evidence accepted by the Commission in those previous complaints, the Commission denied the appellant procedural fairness in that the Commission did not afford the appellant any opportunity to make submissions in relation to those matters.
It is common ground that the Commission is obliged to comply with the requirements of procedural fairness. Procedural fairness requires that the appellant be afforded a fair hearing before the Commission made a decision. The appellant must be given an opportunity to be heard. Procedural fairness does not normally require decision‑makers to disclose their thinking processes or proposed conclusions: see Aronson and Groves 'Judicial Review of Administrative Action' (5th ed) at [8.230] and the cases cited at footnote 300. There is no general requirement that decision‑makers disclose their proposed conclusions because the critical issues will have been identified and the materials relied on disclosed. Uncertainty as to the possible range of conclusions available to the decision‑maker is limited in adversarial proceedings because decision‑makers are normally precluded from addressing issues not raised by the charges, pleadings and submissions of the parties at the hearing: Aronson and Groves at [8.230] and the cases cited at footnote 306.
In Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 Northrop, Miles and French JJ observed that procedural fairness may require that a party be given the opportunity of ascertaining the relevant issues and making submissions on them. The court said:
It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material: Dixon v Commonwealth (1981) 61 ALR 173 at 179.
…
1.The subject of a decision is entitled to have his or her mind directed to the critical issues or factors on which the decision is likely to turn in order to have an opportunity of dealing with it: Kioa v West, supra, at 587 (Mason J); Sinnathamby, supra, at 348 (Burchett J); Broussard v Minister for Immigration, Local Government and Ethnic Affairs (1989) 21 FCR 472 (Burchett J).
…
Where the exercise of a statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision‑maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. Subject to these qualifications however, a decision-maker is not obliged to expose his or her mental processes or provisional views to comment before making the decision in question (590 – 592).
In Hancock v Executive Director of Public Health [2008] WASC 224 Martin CJ upheld an appeal from the Commission on the ground, amongst others, that it had denied the appellant procedural fairness. Martin CJ said:
Procedural fairness requires that a decision maker contemplating making a finding adverse to a party whose interests are likely to be affected by the decision, put that party on notice of that prospect on terms which provide the party with a reasonable opportunity to make submissions in response. Consequently, procedural fairness does not require the party against whom such a finding might be made to conduct their own inquiries or investigations, or form speculative views as to the subjects upon which adverse findings might be made, or the materials that might be relied upon to make adverse findings. Sometimes the nature of the proceedings themselves will be sufficient to provide adequate notice of the prospect of an adverse finding. So, the exchange of submissions by interested parties, or the pursuit of a line of questioning in cross-examination may, in appropriate circumstances, put a party on notice as to the risk of an adverse finding. However, it cannot be contended that the mere fact that there is a document on a file in the possession of the licensing authority, to which an applicant might have access upon request, is a sufficient basis for concluding that procedural fairness was provided, or that an applicant was given a reasonable opportunity to present its case in opposition to an adverse finding based upon that document [42].
The hearing rule was not breached by the Commission having regard to the previous complaints by the respondent: LC52/2011 and LC23/2012. Those complaints, the grounds of the complaints, and in the case of LC52/2011 the Commission's decision on the complaint, were specifically referred to in the initiating complaint under the headings 'Background' and 'Summary'. Those complaints were also referred to in the respondent's (complainant's) outline of submissions to the Commission dated 24 May 2012 and in his opening submissions to the Commission by counsel for the respondent.
In its written submissions to the Commission the appellant specifically referred to the Commission's determination in LC52/2011. The appellant had notice that the respondent relied upon its previous complaints and the Commission's findings on those complaints and had a reasonable opportunity to make submissions to the Commission in relation to those complaints and the Commission's findings on those complaints.
The Commission's references to the previous complaints by the City of Rockingham, LC20/2012 and LC22/2012, are different. There was no reference to those complaints in the initiating complaint in this matter. There is no reference to those complaints in the respondent's (complainant's) written outline of submissions. There is no reference, express or implied, to them in the materials before the Commission or at the hearing before the Commission. The appellant arguably ought to have anticipated that the Commission might have regard to any previous complaint to the Commission in which the Commission had found the complaint made out and had made findings which adversely reflected on the appellant's management and control of the nightclub, or which called for improved management and control of the nightclub. However, the complaints to the Commission by the City of Rockingham were dismissed on the ground of insufficient evidence. There is no evidence before this court that those complaints resulted in any findings by the Commission which reflected adversely on the management and control of the nightclub or called for improved management and control. In those circumstances there was no reason for the appellant to anticipate that the Commission would have regard to those complaints in making its decision. The Commission should have drawn the appellant's attention to the complaints by the City of Rockingham and invited the appellant to make submissions in relation to those complaints. In failing to do so the Commission denied the appellant procedural fairness.
Not every departure from the rules of procedural fairness will entitle an appellant to a new hearing. Where there has been a denial of procedural fairness affecting the entitlement of a party to make submissions on issues of fact, or the weight to be given to matters in the exercise of a discretion, or the making of an evaluative judgment, it is difficult for a court of appeal to conclude that compliance with the requirements of procedural fairness could have made no difference to the outcome. All that an appellant needs to show is that the denial of procedural fairness deprived him of the possibility of a successful outcome: Stead v State Government Insurance Commission (1986) 161 CLR 141, 147. To negate that possibility it is necessary for the appeal court to find that the outcome of a properly conducted hearing would inevitably be the same. I am unable to find that the decision of the Commission would inevitably be the same if the appellant had the opportunity to make submissions in relation to the complaints by the City of Rockingham. One difficulty is that the Commission did not expose its thinking processes which led it to conclude in [89] of its reasons that the matter the subject of those complaints supports or contributes to a finding that there are significant shortcomings in the management structure and approach to the operation of the licence, and that the licensee has taken little action over a period of two years to respond to the issues raised. In those circumstances I am unable to find that it would have made no difference if the appellant had been given an opportunity to make submissions in relation to the complaints by the City of Rockingham and the matters the subject of those complaints.
Ground 5 of the appeal is made out in so far as it relates to LC22/2012 and LC23/2012. In view of my finding that ground 5 is made out, it is unnecessary to consider related ground 6.

Appeal grounds 7 to 17

Grounds 7 to 17 relate to six of the additional conditions imposed on the appellant's licence. Those additional conditions are as follows.
1.The trading hours of the licence are varied by, in effect, reducing the licences permitted trading hours from 5.00 am to 2.00 am (the trading hours condition).
2.Liquor sold and supplied is restricted to one bottle of wine not exceeding 750 ml or a maximum of four alcoholic drinks per person at any one time.
•No liquor is to be sold or supplied for consumption on the premises in any vessels with a measurement capacity exceeding 750 ml, except vessels containing premixed drinks (eg RTDs) which shall not exceed 375 ml.
•No spirits are to be sold or supplied for consumption on the premises in any non‑standard measure (ie no more than 30 ml of spirits is permitted in any vessel).
•The licensee is prohibited from selling and supplying beverages in such a way that would encourage rapid consumption of liquor, for example, drinks known as 'laybacks', 'shots', 'shooters', 'test tubes', 'jelly shots', 'blasters', 'bombs' or any other emotive title.
•No liquor is to be supplied with energy drinks. (For the purposes of this condition energy drinks has the same meaning as formulated caffeinated beverage within Australia New Zealand Food Standards Code with a composition of 145 mg/l of caffeine or greater.)
•No liquor is to be consumed on the licensed premises after the end of the permitted hours
(service of liquor condition).
3.Adult entertainment is, in effect, prohibited by the imposition of conditions that the licensee or manager or agent of the licensee or manager shall not:
•be immodestly or indecently dressed on the licensed premises;
•take part in, undertake or perform any activity or entertainment on licensed premises in a lewd or indecent manner; or
•cause, suffer or permit any person employed or engaged or otherwise contracted to undertake any activity or perform any entertainment on the licensed premises to be immodestly or indecently dressed on the licensed premises
(adult entertainment condition).
4.The licensee will no longer be permitted to be trade under the two names of 'Zelda's Nightclub' and 'Vibe Nightclub'. The licensed premises will only be known by one name, 'Zelda's Nightclub', and will have only one entry to the premises (one nightclub condition).
5.Crowd controllers, licensed under the Securities and Related Activities (Control) Act 1996, are to be employed at a ratio of four crowd controllers for the first 100 patrons, and two crowd controllers for each additional 100 patrons or part thereof, from 8 pm (or the time of opening of the premises if after 8 pm). (crowd controller's ratio condition)
6.All security personnel will be required to undertake fresh RSA training prior to commencement of the trading at the licensed premises (RSA training condition).
The grounds of appeal allege a number of errors of law in relation to the imposition of these additional conditions. First, the appellant says that the Commission failed to afford the appellant procedural fairness by failing to give the appellant an opportunity to be heard in respect of the imposition of the additional conditions. Secondly, the appellant says that there was no evidence that the safety, health or welfare of persons resorting to the premises was endangered by the absence of the condition and there was no rational basis for determining that the imposition of the condition would reduce the endangerment of the safety, health or welfare of persons who resort to the licensed premises or is in the public interest. Thirdly, the appellant says that the Commission erred in law by failing to provide reasons for its decision to impose the additional conditions.

Commission denied appellant procedural fairness in imposing conditions

The Commission has power to impose additional conditions on the licence. Section 96 of the Act provides that on hearing a complaint under s 95, if it is satisfied that the complaint is made out, the Commission may, amongst other things, impose a condition to which the licence is to be subject or otherwise limit the authority conferred by the licence and vary the licence accordingly.
The imposition of additional conditions if the complaint was made out was agitated before the Commission. In its written submissions to the Commission dated 28 May 2012 the appellant submitted that the appellant's licence should only be cancelled if the Commission comes to the view that in the future it is more probable than not that the licensee will fail to adequately safeguard the safety, health or welfare of persons who resort to the premises or that there are no conditions which could be imposed to achieve that result [91].
In his opening submissions to the Commission, counsel for the respondent, whilst pressing for cancellation of the licence, observed that s 96 of the Act conferred upon the Commission a discretion to impose a lesser sanction.
In its written submissions the appellant proposed conditions which could be imposed on the continued operation of the licence to minimise harm or ill health: [78], [93]. Those proposed conditions included earlier closing at 4.00 am and an additional crowd controller. The appellant's submissions to the Commission included the submissions made to the director dated 30 April 2012 which referred to a number of conditions, including restricting entry to any person wearing clothing that indicates membership or association with OMCG [6]. The material before the Commission included the statement of evidence of Mr Mann made in May 2012 in which he said, amongst other things, that he was prepared to install Scantech at the premises as a condition of being allowed to re‑open and that he was prepared and willing to close the premises at 4.00 am. In his oral submissions to the Commission, counsel for the appellant submitted that if the complaint was made out, a lesser sanction than cancellation of the licence should be imposed. Counsel submitted that the appellant had suggested a few measures which it would have no difficulty with if the suspension was lifted.
In the course of the hearing one of the members of the Commission referred to conditions that might be imposed on the licence and that Mr Mann had offered to close at 4.00 am. Mr Mann confirmed that and was invited to refer to other conditions which might be imposed. Mr Mann referred to putting on an extra security guard above the numbers that were required under the current policy. The member of the Commission referred to 'some form of lock‑out imposed for a period prior to the ultimate closure of the premises' and Mr Mann responded to that. The member of the Commission then invited counsel for the respondent to suggest conditions which might reasonably be imposed. Counsel referred to revisiting the lock out condition and 'a condition imposed upon the licence that there be a staggered or staged drink reduction by way of volume and type of alcohol towards closing, so there is a staggered segue out of people as opposed to filling them to the gills and then tipping them out at 4 o'clock'. There was then discussion between members of the Commission and Mr Mann concerning the current opening hours of the nightclub. Counsel for the appellant submitted to the Commission:
… there doesn't seem to be any basis for the reduced or the restriction on what can be sold in the waning hours of the night; no evidenced based reason for that restriction to be imposed [ts 37].
After that submission a member of the Commission observed:
I was just sort of looking for some suggestions as to what the licensee and/or the police may think were appropriate conditions that may help the situation in every one's interests.
There may be a breach of procedure fairness where a person does not receive an adequate hearing in relation to the imposition of discretionary penalties following a finding of guilt in disciplinary proceedings. The requirements of fairness do not require a separate hearing on penalty if the relevant issues can be addressed adequately at the main hearing. In this case the imposition of additional conditions was addressed at the hearing. The appellant ought reasonably to have apprehended that if the Commission found the complaint made out it might impose additional conditions on the licence. Indeed, the respondent proposed some conditions itself. The Commission raised with both parties the imposition of conditions instead of cancellation of the licence and invited submissions concerning what conditions might be imposed.
Where the complaint and the parties have defined the issues and the material to be relied upon by the decision‑makers is known to the parties, the parties may reasonably anticipate the range of orders that might be made and make submissions in relation to them. However, where a tribunal is considering the imposition of a penalty that has not been agitated in the materials before it or at the hearing and which the parties ought not reasonably have anticipated as a possible outcome then fairness may require the tribunal to draw the attention of the parties to the possible penalty and give them an opportunity to make submissions in relation to it. That may be particularly so where the tribunal considers the imposition of a penalty that goes beyond the range of penalties identified by the parties or the tribunal at the hearing or is likely to take a party by surprise.

The question of trading hours was expressly addressed by the Commission and counsel for the appellant. The appellant offered a reduction of trading hours to 4.00 am. Counsel for the respondent referred to a closing time of 4.00 am and did not refer to any earlier closing time. The Commission should have invited the parties to make submissions on a reduction of closing hours to a time earlier than 4.00 am.
The Commission did not invite the appellant to make submissions about the crowd controller's ratio condition. The appellant addressed the Commission on the subject of an additional crowd controller. However, the Commission should have invited the parties to make submissions in relation to a possible condition varying the crowd controller ratio generally or in a way more onerous than referred to by the appellant.
Counsel for the respondent referred to a condition that there be a staged drink reduction by way of volume and type of alcohol towards closing, but neither the Commission nor the parties made any reference to a restriction on the volume or type of alcohol that might be sold at other times. Having regard to the manner in which the matter was conducted before the Commission, the appellant had no reason to anticipate that the Commission might impose a condition such as the service of liquor condition. The Commission should have given the respondent an opportunity to make submissions in relation to the imposition of a condition such as the service of liquor condition.
The parties did not raise any issue concerning the provision of adult entertainment at the nightclub. The materials before the Commission did not raise any issue in relation to adult entertainment. The Commission did not raise any issue in relation to adult entertainment or the possible imposition of the adult entertainment condition. It was not submitted by the respondent that there was any connection between the appellant providing adult entertainment and the incidents that occurred on 26 November 2011, 4 December 2011 or 17 December 2011 or the management and control of the licensed premises. The material before the Commission did not raise such a connection. In those circumstances the Commission should have given the appellant an opportunity to make submissions in relation to the issue before imposing the adult entertainment condition.
The same considerations apply to the imposition of the one nightclub condition. The Commission should have given the appellant an opportunity to make submissions in relation to that matter before imposing the one nightclub condition.
The appellant could not reasonably have anticipated the imposition of the RSA training condition, or a condition of that sort for two reasons. First, neither the parties nor the Commission referred to the matter and the material before the Commission did not raise it. Secondly, security personnel and crowd controllers are not required to be trained in Responsible Service of Alcohol (RSA): Act s 103A, Liquor Control Regulations 1989 (WA) reg 14AD. There may be substantial benefits of RSA training for all bar staff, including security personnel and crowd controllers. However, crowd controllers are not engaged in the service of liquor and are not required to have this training.
Whether the proposed additional conditions should have been raised with the appellant for the purposes of a further hearing depends on the circumstances of the case. A further hearing may be required if penalties of the sort imposed could not reasonably be anticipated. That is this case. There was a breach of procedural fairness in relation to the additional conditions imposed.

No evidence ground not made out

The appellant also challenges the imposition of the additional conditions on the ground that there is no evidence to establish that the imposition of the conditions is in the public interest or that the safety, health or welfare of persons who resort to the licensed premises is less endangered by the imposition of the conditions. It is not necessary to consider these additional arguments. In any event the alleged errors are not errors of law. They are a backdoor means of invoking a merits review. The imposition of the conditions is a matter of discretion.
The imposition of the conditions may amount to an error of law if they are unreasonable in the sense of Wednesbury unreasonableness. I am not satisfied that the imposition of the conditions by the Commission amounted to unreasonableness constituting an error of law. Section 96 of the Act confers upon the Commission a wide discretion to, amongst other things, impose conditions on a licence where a disciplinary complaint has been made out. The discretion is conferred on the Commission as a specialist body. The conditions imposed by the Commission all relate to the operation of the nightclub. There is nothing about the additional conditions which make them inherently incapable of being in the public interest or incapable of making the safety, health or welfare of persons who resort to the licensed premises less endangered by the imposition of the conditions. It is not appropriate for this court to substitute its subjective sense of what are appropriate conditions for that of the Commission.
Counsel for the appellant contended that the Commission erred in law by failing to provide reasons for its decision to impose the additional conditions in the course of his submissions in relation to ground 18. I will consider that argument in the course of considering appeal ground 18.

Appeal ground 18

Ground 18 is that the Commission erred in law by failing to provide any reasons for the finding that the continued operation of the premises in their present form is not in the public interest and that ground 1 of the complaint is made out. The argument advanced by the appellant in its written and oral submissions largely does not address that ground of appeal. The arguments advanced by the appellant focus on the contention that none of the additional conditions imposed by the Commission has any relationship or connection with the events of 26 November 2011, 4 December 2011 or 17 December 2011, and that the Commission failed to articulate any evidence‑based reason for imposing those conditions, or why the continuation of the licence in its then present form is not in the public interest. The appellant submitted that the events of 26 November 2011, 4 December 2011 and 17 December 2011 have no demonstrated relationship with the provision of adult entertainment on the ground floor, the provision of a different style of entertainment on the first floor, the existence of two rather than one points of ingress and egress, the ability to trade past 2.00 am or the use of liquor supplied by the licensee.
The Commission is obliged to give reasons for its decision: Hancock v Executive Director of Public Health [2008] WASC 224 [64]. The content of reasons where there is a right of appeal was considered by the Court of Appeal in Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149. The court elaborated upon the requisite content of a statement of reasons, by a judge, and upon the consequences of inadequacy of reasons in the following passages:
27.Where there is a right of appeal, the reasons must be sufficient to give effect to that right. The basis for the decision must be apparent, as otherwise the losing party cannot know whether there has been a mistake of law or of fact. Just what that will involve depends upon the nature of the case. Some cases turn upon a simple contest of credibility between two witnesses. Others involve detailed and complex factual and legal issues requiring close reasoning and analysis.
28.Reasons need not be lengthy and elaborate: Re Powter; Ex parte Powter (1945) 46 SR (NSW) 1 at 5; Beale, at 443; nor do they need to refer to all the evidence led in the proceedings: Mifsud v Campbell (1991) 21 NSWLR 725 at 728. However, relevant evidence should be referred to (albeit not necessarily in detail) and, where there is conflicting evidence of significance to the outcome, both sets of evidence should be referred to. Where one set of significant evidence is preferred over another, the trial Judge should set out findings sufficient to explain why: Beale, at 443. Similarly, where a dispute involves a form of 'intellectual exchange, with reasons and analysis advanced on either side', the judge 'must enter into the issues canvassed before him and explain why he or she prefers one case over the other': Flannery, at 382.
29.Inadequacy of reasons does not necessarily amount to an appealable error. An appeal court will only intervene when no reasons have been given in circumstances in which they were required, or when the inadequacy is such as to give rise to a miscarriage of justice: Beale, at 444. Nor does an appealable error arising from inadequate reasons necessarily result in a new trial. The appeal court is entitled to consider the matter and, if it can do so (where, for example, only one conclusion is reasonably open on the available evidence), it may itself decide the matter: Beale, at 444.
I respectfully agree with the observation of Martin CJ in Hancock at [59] that although these requirements were enunciated in the context of the performance of a judicial function, at least where there is a right of appeal, they should be applied to an administrative decision by the Commission.
The reasons for decision must be read as a whole. They must be considered fairly. It is erroneous to adopt a narrow approach, combing through the words of the decision‑maker with a fine appellate toothcomb, against the prospect that a verbal slip will be found warranting the inference of an error of law: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 [291] (Kirby J).
The Commission must set out the material on which it has relied, the findings of fact which emerge from those materials and the process of reasoning from those facts to its conclusion: Hancock at [73].
I find that the reasons given by the Commission for its decision to find ground 1 of the complaint made out and to impose the additional conditions are not adequate. I will first deal with the Commission's finding that ground 1 of the complaint was made out. The Commission found (at [89]) that whilst the police grounds of complaint based on the incidents of 26 November 2011, 4 December 2011 and 17 December 2011 reflect serious shortcomings in the licensee's management of the premises they do not, on their own, necessarily demand the maximum penalty of a licence cancellation. The Commission then found that when taken into consideration in conjunction with the matters the subject of the complaints listed in [88] of its reasons, it is clear that there are significant shortcomings in the management structure and approach to the operation of the licence. The complaints listed in [88] include the two complaints by the City of Rockingham that were dismissed on the grounds of insufficient evidence as well as the previous complaints by the Commissioner of Police. The only observations by the Commission in [88] of its reasons about the complaints by the City of Rockingham are that they were dismissed on grounds of insufficient evidence. There is no other reference to complaint LC22/2012 in the reasons. In [85] of its reasons the Commission said that whilst finding in LC20/2012 that the complaint had not been properly made out:
[i]t was not so naive as to determine there were no issues with Zelda's. This determination (LC20/2012) should not in any way be construed as a validation of the manner in which the nightclub is operated.
The Commission did not state what evidence or findings in LC20/2012 and LC22/2012 led to, or contributed to, its finding that there are significant shortcomings in the management structure and approach to the operation of the licence.
The appellant also contends that the Commission failed to give reasons for the imposition of the six additional conditions which I have referred to earlier in these reasons. At [92] the Commission said that by restricting the hours of operation and imposing a 60 minute lock out condition, the premises will not be trading at the time most of the problems at, in and around the premises regularly occur. There is no evidence that the incidents which occurred on 26 November 2011, 4 December 2011 and 17 December 2011 occurred after 2.00 am. To the contrary, the incidents of 4 December 2011 and 17 December 2011 occurred at about 1.30 am.
At [93] the Commission said that better training of the managers and security staff and an increased number of security personnel should prevent the occurrence of the sort of incident on which this complaint is based and if such incidents do occur, deal with them more expeditiously. The Commission did not explain the link between the incidents which occurred on 26 November 2011, 4 December 2011 and 17 December 2011 and the need for additional crowd controllers. The Commission appears to have found that the crowd controllers made no or insufficient attempts to stop or remove the offenders or seek police assistance, not that there were insufficient crowd controllers to deal with the situation. In relation to RSA training, the crowd controllers do not serve liquor and the Commission did not explain how RSA training for security personnel enhanced the safety, health or welfare of persons who resort to the premises or was in the public interest.
The Commission found at [94] that restrictions of alcohol and in the manner liquor is supplied will in some way discourage rapid intake of alcohol by patrons. The Commission did not explain the link between the incidents that occurred on 26 November 2011, 4 December 2011 and 17 December 2011 and the rapid intake of alcohol by patrons. The aggressors on those occasions appear to have been members of or those associated with ROMCG but the Commission did not make any finding that their conduct was caused or contributed by the rapid intake of alcohol.
At [95] the Commission found that prohibiting the style of entertainment provided, particularly the adult entertainment, will assist in offering a more sober and safer entertainment to patrons. The Commission did not explain why that is so or on what evidence that conclusion was based. The incidents on 26 November 2011, 4 December 2011 and 17 December 2011 did not occur in the adult entertainment part of the nightclub and do not appear to have been related to the adult entertainment.
At [96] the Commission found that conducting the premises as one rather than two distinctive areas and confining ingress and egress to one point should assist in significantly reducing the poor behaviour too often evident in these premises. The Commission did not explain why that is so or what findings or evidence led it to that conclusion.
Accordingly, the reasons given by the Commission fall short of the requirements to be implied into the Act. Ground 18, and the other grounds of appeal in so far as they allege that the Commission failed to give adequate reasons for the imposition of the additional conditions, are made out.

Conclusion

In deciding that ground 1 of the complaint was made out and that the additional conditions should be imposed, the Commission denied the appellant procedural fairness. The respondent has not established that the denial of procedural fairness could not have affected the outcome or that if the appellant had been afforded procedural fairness the outcome must have been the same. The Commission also erred in law by failing to give adequate reasons for its decision. The Commission's decision must be set aside.
The court may quash the decision appealed against, make any decision that the Commission could have made instead of the decision appealed against or send the decision back to the Commission for reconsideration. It was open to the Commission to find that the safety and welfare of patrons resorting to the nightclub had been endangered because of the acts and neglect of the approved manager and the licensee and to find that the continuation of the licence is not in the public interest. Accordingly, the court should make the decision that the Commission should have made or send the decision back to the Commission for reconsideration. It is not appropriate for the court to make its own decision because the decision is a discretionary one, or one which involves an evaluative judgment, which the legislature has reposed in a specialist body.
The appropriate course is to set aside the decision of the Commission and send it back to the Commission for reconsideration. It will be a matter for the Commission to decide how it should approach its task on reconsidering the complaint. If the Commission intends to have regard to the previous complaints by the City of Rockingham or considers the imposition of the conditions such as the additional conditions which are the subject of appeal grounds 7 to 17, then the Commission should give the parties an opportunity to make submissions in relation to those matters before reaching its determination.