Blairgrove Pty Ltd v Independent Liquor & Gaming Authority

1. [1]

   By summons filed 9 August 2024, the plaintiff, Blairgrove Pty Ltd ("Blairgrove") seeks orders setting aside the decision of the defendant, the Independent Liquor and Gaming Authority ("ILGA") made on 25 June 2024. By that decision the ILGA refused Blairgrove’s local impact assessment (“LIA”) and its application for a gaming machine threshold increase. Blairgrove sought an order that the LIA and application for the threshold increase be remitted to the ILGA for determination in accordance with law.

2. [2]

   The parties have reached agreement with respect to the orders to be made. The ILGA has agreed that the relevant decisions were affected by jurisdictional error. There are consent orders provided to the court setting aside those decisions and remitting the matter to the ILGA for the purposes of determination according to law.

3. [3]

   Whilst the parties have consented to those orders, the court must be satisfied of the basis for the relief: Kovalev v Minister for Immigration and Multicultural Affairs (1999) 100 FCR 323; [1999] FCA 557 at [8]-[13] per French J; Mackey v CIC Allianz Australia Insurance Limited [2015] NSWSC 505 at [3] per Beech-Jones J; and Commissioner for Police, New South Wales Police Force v Claydon [2023] NSWSC 1041 at [3]-[4] per Campbell J.

4. [4]

   Directions were made by the registrar for provision by the parties of submissions and evidence in support of the final relief proposed in the consent orders. The plaintiff chose not to file any additional evidence or submissions. The defendant has filed submissions and a bundle of supporting evidence.

5. [5]

   For the reasons shortly stated below, based on the helpful submissions of the defendant and the evidence relied on, I am satisfied that it is appropriate to make the final relief sought in the consent orders.

Background

1. [6]

   Blairgrove owns and operates the Grand Shanghai Hotel (formerly the Burwood Social House) in Burwood under a liquor licence granted in 2019.

2. [7]

   On 11 March 2020, the ILGA approved a threshold increase application by Blairgrove in respect of the Burwood Social House (as it was then known), increasing that venues gaming machine threshold from 0 to 20.

3. [8]

   On 21 April 2021, Blairgrove applied for the gaming machine threshold to be increased by a further 10 machines to 30.

4. [9]

   On 2 May 2022, the ILGA wrote to Blairgrove advising that, although it had not reached a concluded view on the application, it was concerned that it could not at that stage be satisfied of the statutory factors contained in s 36(3) of the Gaming Machines Act 2001 (NSW) ("GM Act"). Those statutory factors were said to include whether the proposed increase in gaming machines would provide a positive contribution towards the local community where the venue was situated. The ILGA indicated that its concerns may be "ameliorated by a period of active trading" and thus invited Blairgrove to withdraw its application and reapply at least 12 months after the venue had commenced active trading.

5. [10]

   Blairgrove did withdraw the application on 10 June 2022. In doing so, it indicated to the ILGA that it would lodge a further application after the premises had commenced active trading.

6. [11]

   On 27 October 2023, Blairgrove made a further threshold increase application in respect of the venue which had by that time changed its name to the Grand Shanghai Hotel. The application was accompanied by a class I LIA in circumstances where the Grand Shanghai Hotel was, at the time, a venue in a “Band 2" area.

7. [12]

   This was followed by correspondence between officers of Liquor & Gaming New South Wales and the plaintiff with respect to the application. Relevantly, that correspondence which is in evidence in the tender bundle provided by the ILGA indicates:

8. [13]

   On 12 April 2024, Blairgrove was notified of ILGA’s refusal of its applications. In notifying Blairgrove of their refusal, an officer of Liquor & Gaming New South Wales indicated that Blairgrove had failed to comply with the GM Regulation in that it had failed to provide the 12 months of trading data referred to in ILGA’s letter of 22 May 2022. It was said that this was information which was “required by ILGA" under clause 33(e) of the GM Regulation. It was thus considered that the gaming machine threshold application and the class I LIA were invalid. Blairgrove was invited to make submissions on this and confirm whether it intended to proceed with the applications.

9. [14]

   It is accepted that the Grand Shanghai Hotel commenced trading on 11 April 2024. The evidence indicates that Blairgrove did make submissions in response to the 12 April 2024 email on 29 April 2024.

10. [15]

    On 15 May 2024, ILGA determined that the approval for the class I LIA and the threshold increase should be refused. The reasons included that Blairgrove’s inability to provide the “required 12 months of trading history means the LIA is assessed as not meeting the requirements of clause 33(e) of the Regulation".

11. [16]

    These are the decisions relevantly under review. I should observe that the summons also seeks relief with respect to a decision to refuse Blairgrove’s application to lease eight gaming machine entitlements under s 25 of the GM Act. No decision in that regard has yet been made and the issue remains outstanding.

12. [17]

    On 26 June 2024, the ILGA provided a statement of its reasons for the decision. Relevantly, those reasons provided:

13. [18]

    The findings of the ILGA as outlined in the reasons included that Blairgrove had failed to provide information which was required under clause 33(e) of the GM Regulation, being the 12 months trading history, such that the class I LIA did not comply with the GM Regulation for the purposes of s 36(3)(a) of the GM Act. It was said, therefore, that the ILGA could not approve the LIA under s 36(1) of the GM Act.

14. [19]

    Following receipt of those reasons, Blairgrove commenced the proceedings.

Was there jurisdictional error in the ILGA decision?

1. [20]

   In its submissions, the ILGA referred to LPDT v Minister for Immigration, Citizen, Migrant Services and Multicultural Affairs (2024) 98 ALJR 610 to support a submission that "jurisdictional error" includes a breach of an express or implied limit on power (here, a statutory power), which means that the purported exercise of the power lacks the legal effect it would otherwise have. I accept that this is so.

2. [21]

   In this case, the relevant powers to be exercised by the ILGA making the decisions are contained in ss 34 and 36 of the GM Act.

3. [22]

   By s 32 of the GM Act, the ILGA may, for a hotel, set the maximum number of approved gaming machines that can be kept on the premises. That maximum number is referred to as the “gaming machine threshold" for that hotel: s 32(2).

4. [23]

   Section 34 of the GM Act provides:

5. [24]

   It is accepted that, in this case, s 35 of the GM Act required Blairgrove’s threshold increase application to be accompanied by a class I LIA. That is because, at the time of the application, the venue was situated in a Band 2 Local Statistical Area and the application was for a low-range increase in the gaming machine threshold for the venue: s 35(3)(b). A "low-range increase" is any number of machines from 1 to 20: GM Regulation clause 30(a). By reason of s 36(1) of the GM Act, because an LIA was required to be provided with the threshold increase application, that application could not be approved unless the ILGA also approved the LIA.

6. [25]

   The LIA could only be approved if the ILGA was satisfied that the LIA complied with the requirements of Pt 4, Div 1 and the GM Regulation with respect to the LIA: s 36(3)(a) GM Act. There were also additional matters that the ILGA was to be satisfied of before it approved the LIA: see s 36(3)(b)-(e).

7. [26]

   Clauses 31 and 33 of the GM Regulation relevantly provide certain requirements with respect to the contents of class I LIA’s of the type sought by Blairgrove. This includes that they must include any other information required by the authority.

8. [27]

   As the defendant submits, it can be seen, therefore, that ss 34(4) and 36(3)(a) of the GM Act require the ILGA to reach a state of satisfaction prior to approval. The ILGA submits that the powers to be exercised by it under ss 34 and 36 are “bounded by a requirement to form that state of mind reasonably", citing by way of comparison Hinkler Ave 1 Pty Ltd v Sutherland Shire Council [2023] NSWCA 264 at [55]-[66]. The ILGA submitted that the bounds of reasonableness will be exceeded if the decision is one lacking an evident and intelligible justification, which may (without limitation) be the case where no reasonable person could have reached it: Minister of Immigration and Citizenship v Li (2013) 249 CLR 332 at [68], [76].

9. [28]

   The ILGA submits that in the present case, it considered the class I LIA did not comply with the GM Regulation because Blairgrove had failed to provide 12 months trading data that it had requested in 2022. It submits that this was an impermissible path of reasoning in the circumstances of the case. It submits that the failure to provide the trading data did not provide an intelligible justification per se for its conclusions under ss 34 and 36 of the GM Act in circumstances where ILGA knew such data did not and could not exist at the time it considered and determined the relevant applications.

10. [29]

    The ILGA submits, therefore, that this constituted a jurisdictional error such that the decisions under review lack legal effect and ought to be set aside.

11. [30]

    I accept those submissions. It was plainly unreasonable for the ILGA to refuse the application on the basis of the failure of Blairgrove to provide the 12 months trading data when such data could never have been provided at the time the decision was made, and the ILGA knew that this was so. Further, despite the request for it to do so, the ILGA had refused Blairgrove’s application for an extension to provide that material, or, in the alternative, to provide a lesser period of trading data.

12. [31]

    In my opinion, therefore, jurisdictional error has been established such that the decisions ought to be set aside and the orders sought in [5], [6] & [7] of the consent orders dated 21 October 2024 should be made.

Orders

1. [32]

   The court, therefore, makes the following orders:

   1. (1)

      The defendant’s decisions on 25 June 2024, to refuse the plaintiff's Local Impact Assessment (LIA) under s 36 of the Gaming Machines Act 2001 (NSW) (“the GM Act”) and to refuse the plaintiff's application for a gaming machine threshold increase (“GM application”) under s 34 of the GM Act are set aside.

   2. (2)

      The plaintiffs LIA and GM application are remitted to the defendant for determination in accordance with law.

   3. (3)

      There is no order as to costs of the proceedings.