Duffy v Independent Liquor and Gaming Authority

1. [1]

   On 24 February 2015 the licensee of the Lakemba Hotel, Christopher Bourke completed and signed a document entitled “Surrender extended trading authorisation” and forwarded it to the Independent Liquor and Gaming Authority. As the document makes clear the form, which was a standard form of the Authority available on its website, was “for a licensee to apply to surrender an authorisation that extends standard trading hours”. (The authorisation to trade extended hours is hereafter referred to as an ETA.)

2. [2]

   The Lakemba Hotel had been permitted to trade 24 hours a day since application was made in 1992 to the Licensing Court of New South Wales to do so. However, during at least 2014 the hotel generally closed at or before midnight.

3. [3]

   Sometime early in 2015 Mr Bourke received a letter from the Authority saying that liquor licence fees would be payable from May 2015. The letter directed recipients to the Authority’s website which made clear that the liquor fee would be $500 if the hotel did not trade beyond midnight but $5,500 if it traded beyond midnight.

4. [4]

   Mr Bourke spoke to his grandfather Neville Duffy who, with his wife Noeline, owned the freehold of the hotel. Mr Bourke suggested to his grandfather that they should only pay $500 because they were not trading past midnight. Mr Duffy agreed.

5. [5]

   In the middle of 2015 Mr and Mrs Duffy decided to sell the hotel. They engaged a real estate agent who, after doing some research, informed them that the hotel’s ETA had been surrendered permanently.

6. [6]

   Mr Bourke thought that he was only giving up the right of the hotel to trade past midnight for the year in respect of which he paid the fee of $500. He said he did not take legal advice before signing the form.

7. [7]

   On 10 July 2015 solicitors for Mr and Mrs Duffy wrote to the Authority pointing out the mistake that Mr Bourke had made and asking for the reinstatement of the hotel’s ETA. They attached their trust account cheque for $5,000. The letter claimed that notice ought to have been given by the Authority to the owners of the freehold because of their interest in the matter which was undoubtedly affected by the surrender of the 24 hour licence. It was asserted in that regard that procedural fairness had been denied to Mr and Mrs Duffy.

8. [8]

   The Authority initially replied by saying that it needed to seek legal advice on what was asserted. It then sent a substantive reply on 23 September 2015 in these terms:

9. [9]

   Mr and Mrs Duffy thereafter filed a Summons on 1 December 2015 seeking the following relief:

10. [10]

    At the outset of the hearing an Amended Summons was sought to be filed which added as Plaintiffs the purchasers of the land and business of the hotel from Mr and Mrs Duffy. This was not opposed and the Amended Summons was filed.

11. [11]

    The Summons apparently contained 16 grounds of appeal but all except five of those were factual assertions in the form of a pleading. The five grounds asserting bases for relief were these:

12. [12]

    Although the grounds directed attention solely to “the decision”, being the acceptance by the Defendant on 9 March 2015 of the surrender of the ETA (ground 6), Mr Robinson of Senior Counsel for the Plaintiffs said that there were two decisions, being the acceptance of the surrender on 9 March 2015 and the refusal to revoke the surrender on or by 23 September 2015. The connection, in administrative law terms, between them was said to be that the first decision was a nullity with the result that the failure to revoke at the later time involved legal unreasonableness and a constructive failure to exercise its power. Implicit in that submission was not so much that there was a failure to revoke (because the first decision was said to be a nullity) but rather that the Authority ought to have corrected the record so that the Plaintiffs retained the ETA: Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 at [53].

Extension of time

1. [13]

   Since the first decision being challenged was that of 9 March 2015 the Summons, which was filed on 1 December 2015, was out of time (Rule 59.10 Uniform Civil Procedure Rules 2005 (NSW)). An extension of time was sought and was not opposed. In circumstances where a final refusal to revoke the earlier decision was not conveyed until 23 September 2015 an extension of time should be granted.

Submissions

1. [14]

   In their oral submissions the Plaintiffs raised the matter alluded to at the conclusion of the judgment of the High Court in The Queen v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 35 where the following appears:

2. [15]

   Mr Robinson SC said that he did not mention this matter other than to make a point. Since it was the Plaintiffs who joined the Authority and no other party, although he said that the State of New South Wales would have been an appropriate party, and since the Authority engaged the services of the Crown Solicitor to act for it as the State would have done, the point was far from clear to me.

3. [16]

   The Plaintiffs put forward two bases upon which it was said the decision of 9 March 2015 was a nullity because it was affected by jurisdictional error. The first basis was a denial of procedural fairness to the owners of the Hotel. The second basis was a fundamental mistake which the Plaintiffs submitted was akin to a fraud.

4. [17]

   The Plaintiffs submitted that the ownership of a hotel licence had a value to the freehold owner, and a hotel licence with an ETA had a greater value than a hotel which could trade only in ordinary trading hours.

5. [18]

   The Plaintiffs submitted that the Liquor Act 2007 (NSW) recognised the interests of the freehold owners and recognised that they required particular protection in a number of places including ss 59, 61, 92, 140(3) and 144G. The Plaintiffs acknowledged that s 51(13) of the Act did not contain any express requirement that the Authority receive and consider submissions before it exercised its statutory power but the Authority ought to have done that as a matter of procedural fairness. Reliance was placed on what was said in Vanmeld Pty Ltd v Fairfield City Council (1999) 46 NSWLR 78 at [87]-[90] and Hornsby Shire Council v Porter (1990) 19 NSWLR 716 at 718. The Plaintiffs relied on what they said the Authority had done in other cases where the freehold owner had been notified before an ETA had been permanently revoked or varied.

6. [19]

   The Plaintiffs submitted that where persons were owed a duty of procedural fairness but were not accorded it, a decision such as the present is a nullity: Bhardwaj at [51].

7. [20]

   The Plaintiffs submitted that the lodgement of the surrender application was a fundamental mistake the effect of which, by analogy with fraud or otherwise, was that the decision was a nullity. Reliance was placed on the effect on a decision by the fraud of a third party in SZFDE v Minister for Immigration and Citizenship [2007] HCA 35; (2007) 232 CLR 189 at [49], [51]-[52].

8. [21]

   In relation to the decision of 23 September 2015 the Plaintiffs submitted that the Authority had and retains statutory powers to exercise its functions from time to time as occasion requires pursuant to s 48 of the Interpretation Act 1987 (NSW). These provisions were said to be beneficial provisions the purpose of which was to overcome:

9. [22]

   Even without such statutory power the Plaintiffs submitted that an implied power arises as a necessary and beneficial incident of the express power conferred on the Defendant. The Plaintiffs relied on what Beaumont J said in Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No. 1) (1991) 32 FCR 219 at 225 that where a decision has proceeded on a wrong factual basis it is appropriate, proper and necessary that the decision-maker withdraw his or her decision.

10. [23]

    In any event, the Plaintiffs submitted that the Authority ought to have recognised that its decision of March 2015 was a nullity with the result that it needed to exercise its power properly the result of which would be the revocation of the surrender. At that time the Authority had a duty to remake its decision, or revisit it or set it aside or apply Bhardwaj and accept that the decision was erroneous and make a correct decision.

11. [24]

    The Defendant submitted that the statutory framework within which a decision maker exercises statutory power is of critical importance when considering what procedural fairness requires: reference was made to SZBEL v Minister for Immigration [2006] HCA 63; (2006) 228 CLR 152 at [26]. The Defendant submitted that when regard is had to s 51(9)(b) of the Act the owners of the premises were not entitled to procedural fairness in relation to such a decision. That is particularly so when viewed in the light of s 51(13).

12. [25]

    Further support for that is to be found in the provisions of the Act which place the obligations on the licensee for dealing with the Authority such as s 91. Further, the Act contains other express provisions where notice to owners is required such as ss 61, 92, 140 and 144G. The Defendant submitted that those situations are where owners have an independent obligation under the Act. The Defendant said that the position arises because the owners of licensed premises will not have a sufficient interest, having regard to the scope and purpose of the Act, to have a right to be invited to make submissions before the Authority accepts a licensee’s application to revoke an ETA and/or because the structure of the Act, in giving express rights in limited circumstances, implicitly excludes the right in s 51(9)(b).

13. [26]

    The Defendant submitted that the two earlier decisions where the Authority gave notice to the owners, relied upon by the Plaintiffs, involved a proposed variation to an ETA over the objection of a licensee.

14. [27]

    The Defendant submitted in relation to the second decision that once the surrender of the ETA had been validly accepted the Authority had no power to revoke that decision. This was for two reasons. First, the text and purpose of the Act precluded any power to revoke a revocation. Secondly, neither s 48 of the Interpretation Act nor any implied power was capable of operating to permit the Authority to revoke its first decision if validly made.

15. [28]

    The Defendant submitted that s 48 of the Interpretation Act only applied unless the contrary intention appears. Under the Liquor Act an ETA cannot be granted without the applicant satisfying advertising requirements in the Regulation and the consideration by the Authority of submissions that might be made by any person. It would circumvent the requirements of the Liquor Act if the Authority simply revoked its revocation of the ETA in reliance on s 48 of the Interpretation Act.

16. [29]

    The Defendant submitted further that the power to revoke in s 51(9)(b) of the Act was not a power to which s 48 was capable of applying. The Defendant said that the power in s 51(9)(b) was to be compared with the exercise of power in a case such as Parkes Rural Distributions Pty Ltd v Glasson (1986) 7 NSWLR 332. The Defendant submitted that s 48 should be contrasted with ss 43 and 47 of the Interpretation Act. The power given by those sections would be unnecessary if s 48 operated as broadly as contended for by the Plaintiffs.

17. [30]

    The Defendant submitted that if the earlier decision was not a nullity in the sense referred to in Bhardwaj it must be possible to discern some statutory intention to enable the revisiting of the decision once made. In the present case, the Defendant submitted, assuming there was no denial of procedural fairness, the earlier decision was not a nullity.

18. [31]

    The Defendant submitted that the present decision was not infected by fraud or any suggestion of bad faith on anyone’s part. The Defendant submitted that if the First and Second Plaintiffs did not have a sufficient interest to be notified of the application and be invited to make submissions about it, they did not have a sufficient interest to challenge the Authority’s non-revocation of that decision. However, the Defendant did not submit that the Plaintiffs lacked standing in that regard.

Legislation

1. [32]

   The following are the relevant provisions of the Liquor Act:

Determination

1. [33]

   The Plaintiffs essentially challenge this decision on two grounds; first, that procedural fairness was denied to the first and second Plaintiffs and, secondly, that the mistake made was analogous to the sort of fraud that could operate to nullify an administrative decision.

2. [34]

   In the first place it may be accepted that a licence with an ETA would have a value to the First and Second Plaintiffs: Jabetin Pty Ltd v Liquor Administration Board [2005] NSWCA 92; (2005) 63 NSWLR 602 at [3]-[6]; Tooheys Ltd v Housing Commission of New South Wales (1953) 53 SR (NSW) 407 at 414; Sunset Investments Pty Limited v Casino Liquor and Gaming Control Authority [2010] NSWSC 1411 at [23]. However, I do not consider that the First and Second Plaintiffs were denied procedural fairness.

3. [35]

   In the first instance, the terms of the legislation did not require such notice to be given. Section 51 deals expressly with extended trading authorisations. Section 51(9) gives power to the Authority to vary or revoke such an authorisation. Section 51(13) requires the Authority to give the licensee to whom the authorisation relates a reasonable opportunity to make submissions in relation to the proposed decision but expressly excludes a variation made on application by a licensee. That provision and others are to be understood in the light of s 91(1)(a) which makes the licensee the person responsible at all times for the personal supervision and management of the conduct of the business of the licensed premises under the licence.

4. [36]

   The position is further supported by the fact that the Act expressly requires the Authority to consider the position of interested parties, whether the owner of premises or of the business or the licensee, in other situations:

5. [37]

   As the Defendant submitted, the provisions requiring notice to the owners are in situations where it would be otherwise difficult for the owner to protect himself or herself through contractual arrangements with the licensee.

6. [38]

   In Kioa v West (1985) 159 CLR 550 Mason J (as his Honour then was) said at 584:

7. [39]

   The position was reiterated in the High Court’s judgment in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 at 26 where it was said:

8. [40]

   It is relevant in the consideration of the facts and circumstances of this particular case that s 91 makes the licensee the person responsible for the supervision and management of the conduct of the business and that the provisions of the Act mean that, ordinarily speaking, the Authority deals with the licensee of the premises.

9. [41]

   The particular provision in the Act to be considered is s 51(13). That subsection provides expressly for notice to be given to, and submissions to be considered by, the licensee in all cases concerning dealings with an authorisation except a variation application made by the licensee. It does not provide for giving notice to any other person. Although there is a need for caution in applying the maxim expressio unius est exclusion alterius (O’Sullivan v Farrer (1989) 168 CLR 210 at [10] and the cases there cited) that is not to say that it has no work to do in a situation such as here where the subsection requires notice to one person but not others, and within a statute that elsewhere provides for notice to the others in different situations.

10. [42]

    Unlike in O’Sullivan v Farrer at [11], application of the maxim does not produce curious results here. Rather, its application at s 51(13) sits well with the scheme of the Act that points to the licensee in ordinary circumstances being the point of contact with the Authority in respect of the licensed premises.

11. [43]

    Reliance by the Plaintiffs on two previous decisions of the Authority on applications under s 51(9)(b) is misplaced. In both of those decisions, concerning the Bada Bing Nightspot and La La Land, the application was made by a delegate of the NSW Commissioner of Police. The Authority in each case invited written submissions from (inter alia) the owners of the business and the premises. Affording that right to such persons was presumably made pursuant to s 51(13) because the application in each case was not made by a licensee. In both cases the application was made by a third party against the interests of the licensee and accordingly, it might be thought, against the interests of the owners.

12. [44]

    The Plaintiffs relied on Sunset Investments but that decision is of little assistance to the Plaintiffs. It arose under a very different legislative scheme being the Liquor Act 1982 (NSW), and the Liquor Administration Board did not follow its own procedures contained in the form for surrendering a licence. The present Act makes express provision for notification to persons other than an applicant in certain situations but not others. That statutory framework is of critical importance.

13. [45]

    In my opinion, there was no requirement for notice to be given to the First and Second Plaintiffs of the licensee’s application. Nothing in Vanmeld nor Hornsby Shire Council v Porter suggests otherwise. Both cases addressed the legislation relevant to those cases, both of which involved planning decisions.

14. [46]

    A breach of the rules of procedural fairness has not been established.

15. [47]

    The Plaintiffs’ submission that the mistake made is akin to, or analogous with fraud must be rejected. Nothing in SZFDE suggests that what was there discussed regarding the effect of fraud on a decision went beyond the identification of what constituted fraud for administrative law purposes. There was no suggestion that mistake was sufficient to bring the matter within principles involving fraud. The significant point was whether the fraud of a third party could bring about the result that the decision made was, in law, no decision at all (at [52]). The Court held that it did bring about that result because it stultified the operation of the legislative scheme to afford natural justice to the appellants in that case (at [49]).

16. [48]

    In the present case no fraud was committed on the Plaintiffs. The evidence was that the licensee told them what he was doing although he and they apparently misunderstood the effect of what he was doing. They were not in any event, as I have held, entitled to procedural fairness because under the scheme of the Act it was the licensee who dealt with the Authority, certainly on this sort of application, and the Authority had no reason to believe that the licensee did not intend to do what the form he completed requested the Authority to do.

17. [49]

    If mistake is relevant, it is relevant in relation to the second decision, when the Authority was informed of the mistake.

18. [50]

    The decision of 9 March 2015 is not a nullity.

19. [51]

    The Plaintiffs’ submissions on this decision were put on three bases. First, when the Authority realised that a mistake had been made it had an implied power to revisit the decision. Secondly, there was power under s 48 of the Interpretation Act to exercise the power again. Thirdly, the Authority ought to have realised that the first decision was a nullity and exercised its power to make a proper decision. In the light of my conclusion in relation to the first decision this third point does not arise.

20. [52]

    The Plaintiffs’ submission concerning a decision on the basis of a mistake of fact being able to be withdrawn or revoked is dependent on a statement by Beaumont J in Kawasaki Motors. His Honour there said:

21. [53]

    There has been but limited adoption of Beaumont J’s suggestion that a wrong factual basis is sufficient for the decision-maker to withdraw his or her decision. In Phytologic Pty Ltd v The Secretary, Department of Health and Aging, Commonwealth of Australia [2012] FCA 1407; (2012) 209 FCR 48 Cowdroy J said at [78] that Beaumont J’ s statement,

22. [54]

    In Miller v Australian Cycling Federation Inc [2012] WASC 74 at [114] Kenneth Martin J cited Beaumont J’s remarks to say:

23. [55]

    In Leung v Minister for Immigration and Multicultural Affairs (1997) 79 FCR 400 the Minister had granted citizenship to the applicant. When he later discovered that false representations had been made to obtain the citizenship the Minister revoked the decision and refused the application for citizenship. The revocation was upheld at first instance and on appeal to the Full Federal Court. Heerey J said (at 402):

24. [56]

    Finkelstein J said (at 411):

25. [57]

    Moreover, an examination of the facts in Kawasaki, to the extent that they throw any light on the matter, tend to point to the decision-maker having made the error that can be described as the wrong factual basis.

26. [58]

    However, a number of decisions in the migration area appear to have led Collier J to concluding in Orthotech Pty Ltd v Minister for Health [2013] FCA 230; (2013) 211 FCR 241 (a case under the Private Health Insurance Act 2007 (Cth)) at [62] that:

27. [59]

    The present case is, however, entirely different from what was discussed and decided in those judgments. In Dallikavak v Minister of State for Immigration and Ethnic Affairs (1985) 9 FCR 98 Northrop and Pincus JJ said (at 103):

28. [60]

    In the present case the decision of 9 March 2015 is not incorrect nor was it made on a wrong factual basis. It may have come about because the licensee misapprehended and misunderstood what he was doing but there were no wrong facts put before the authority. The licensee intended to surrender the ETA, albeit for a year. It is not asserted that the Authority made any mistake when it accepted and processed the surrender form. Nor did the Authority know at the time it did so that the licensee was labouring under any misapprehension as to the legal effect of the surrender.

29. [61]

    The mistake cannot be described as fundamental (as the Plaintiffs described it without elucidating what that precisely meant) because the licensee knew that he was surrendering the ETA. His mistake was believing that he was doing so temporarily not permanently.

30. [62]

    The Plaintiffs relied also on s 48 of the Interpretation Act. When it cannot be said that the decision of 9 March 2015 was made on a wrong factual basis no occasion arises for the re-exercise of the power even if s 48 enabled it. On the basis that my conclusion in that regard is in error, I will, nevertheless, consider whether s 48 applies in the present case.

31. [63]

    Relevant provisions of that Act are these:

32. [64]

    Section 48 is also relevant to a consideration of the second of the three decisions referred to by Collier J – Kurtovic (at [58] above). Kurtovic concerned s 33(1) of the Acts Interpretation Act 1901 (Cth) which is in similar terms and is subject to the same qualification of “contrary intention” in s 2(2) of the Commonwealth Act as is found in s 5(2) of the State act. Section 33(1) provides:

33. [65]

    In Kurtovic Gummow J said (at 219):

34. [66]

    In the light of what was said in Kurtovic as well as in Parkes Rural Distributions Pty Ltd v Glasson (1986) 7 NSWLR 332 at 335-6 by Glass JA it is necessary to construe s 48 of the Interpretation Act liberally as a beneficial provision. The Defendant submitted that what was expressly contained in ss 43 and 47 suggested that s 48 could not have the wide construction for which the Plaintiffs contended. Although on one view the provisions in ss 43 and 47 might be otiose because of s 48(1) that does not justify a narrow reading of the power in s 48. What is of greater significance is whether the Liquor Act evinces a contrary intention as far as re-visiting the surrender of an ETA in circumstances such as the present.

35. [67]

    In my opinion the scheme of the Liquor Act is inconsistent with a re-consideration of an application to surrender an ETA. Such a re-consideration would amount to a procedure that circumvented the requirements of Division 2 of Part 4 of the Act. Section 48(3) requires a community impact statement. Section 48(5) prohibits the authorisation unless the subsection is satisfied. Section 51 contains specific requirements for ETAs including advertising and other matters prescribed by the regulations.

36. [68]

    A significant matter in this regard is that the Authority is required to be satisfied under s 48(5) that the overall social impact of the authorisation will not be detrimental to the well-being of the local or broader community. Timing is relevant to that provision as to the advertising and the community impact statement. Those matters would not need to have been considered since the surrendered ETA was put in place in 1992. If an ETA was to be put in place or back in place relevantly at July to September 2015 the Act requires the social impact to be considered and for interested parties to make submissions at that time.

37. [69]

    The ETA was surrendered on 9 March 2015. The first time the Plaintiffs sought to withdraw the surrender was in a letter from the First and Second Plaintiffs’ solicitor of 10 July 2015. That was some four months later. The final refusal of the Authority to accede to the Plaintiffs’ request was more than six months after the surrender. Had it not been for the happenstance of an intention to sell, the matter might have languished for longer, perhaps years. It is quite inconsistent with the scheme of the Act that an ETA could simply be reinstated at some indefinite future time without the need to comply with the provisions of the Act in the light of the objects contained in s 3.

38. [70]

    The provisions contained in s 58C, which provide for the reinstatement of a cancelled licence within a specified time, are a further indication that the Act does not envisage that the power in s 51 can be re-exercised or performed from time to time. In my opinion, the Act evinces a contrary intention for the purpose of s 5(2) of the Interpretation Act.

39. [71]

    The Plaintiffs sought to rely by broad analogy on the obligations of a payee of money where the monies were paid in circumstances of a mistaken belief on the part of the payer: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353. I do not consider the analogy is either useful or helpful when an administrative decision is being considered. Notions involving money had and received or monies paid under a mistake of fact derive from very different bases such as quasi-contractual principles. Mr Robinson SC conceded that matters involved in mistakes of fact and law and the repayment of money do not sit well with public law considerations.

Conclusion

1. [72]

   Despite the bases for review contained in the Amended Summons no attempt was made to show an error on the face of the record in respect of the decision of 9 March 2015. Nor was any submission made in support of the allegation that the decision of 9 March 2015 was infected with legal unreasonableness.

2. [73]

   The decision of 9 March 2015 was properly made. There was no obligation to accord procedural fairness to the First and Second Plaintiffs before the decision was made. The decision was not made on a wrong factual basis. The power under s 51(9) Liquor Act could not be re-exercised, but even if it could be re-exercised there was no occasion for re-exercising the power.

3. [74]

   Accordingly, I make the following orders:

   1. (1)

      Extend time for the filing of the Summons to 1 December 2015;

   2. (2)

      Summons dismissed.

   3. (3)

      The Plaintiffs are to pay the Defendant’s costs.