Coote v State of NSW and the Independent Liquor and Gaming Authority

By summons filed on 29 February 2016 Craig Allan Coote (“the plaintiff”) seeks orders in the following terms:

In support of the summons, an affidavit of the plaintiff of 25 February 2016 was read, along with an affidavit of Ryan Timothy Watts, solicitor, of 25 February 2016. That material, along with the exhibit to the affidavit of Mr Watts, was contained in a Court Book which was tendered by consent and marked Exh. A.

The first defendant was the only active defendant in the proceedings, the second defendant having filed a submitting appearance.

The factual background is not in dispute and may be summarised as follows.

The plaintiff is a director of Coote Hotels Pty Limited, which owns and operates the Gladstone Hotel at Dulwich Hill (“the hotel”). The plaintiff is also the licensee of the hotel.

The second defendant, the Independent Liquor and Gaming Authority (“the Authority”) is a statutory corporation created pursuant to s. 6 of the Gaming and Liquor Administration Act 2007 (NSW).

On 27 June 2014 the plaintiff made an application to the Authority for an extended trading authorisation (“ETA”) for the hotel pursuant to s. 49(2) of the Liquor Act 2007 (NSW) (“the Act”). For the purposes of that application, a “Site Notice and Notice of Application to Neighbouring Premises and Other Stakeholders” (“the notice”) was affixed to the hotel premises on 27 June 2014. It was also distributed, by hand, to occupiers of buildings within a 100 metre radius of the hotel, as well as being sent to community and Government stakeholders by the plaintiff’s solicitors.

At its meeting on 4 March 2015, the Authority refused the plaintiff’s application. It is not necessary for the purposes of this judgment to canvass the Authority’s reasons for its determination on that occasion. However, it is relevant to note that shortly after that determination, the notice was removed from the hotel premises.

On 27 May 2015 the plaintiff commenced proceedings in this Court seeking judicial review of the Authority’s determination to refuse its application for an ETA. On 26 June 2015, orders were made by consent in those proceedings setting aside that determination, and remitting the matter to the Authority for redetermination according to law.

By letter of 11 September 2015, the plaintiff’s solicitor wrote to the Chief Executive of the Authority, effectively making further submissions in support of the plaintiff’s application, and setting out what was said to be the appropriate procedure to be adopted in determining such application in light of its history. The letter stated (in part):

The letter requested that the Authority notify the plaintiff of any matters about which the plaintiff was not otherwise aware, and which might be viewed by the Authority as being adverse to the application.

As noted in [8] above, the notice which had been affixed to the hotel premises was removed at some time shortly after the Authority’s original determination.

On 22 September 2015, the Authority wrote to the plaintiff’s solicitor in response to his letter of 11 September 2015, drawing his attention to the absence of the notice:

On 16 October 2015 the notice was re-affixed to the hotel premises. It follows that there was no notice of the application affixed to the premises between some time shortly after 5 March 2015 and 16 October 2015.

On 20 October 2015 the plaintiff’s solicitor responded to the Authority’s letter of 22 September 2015 by setting out what were said to be a number of agreed facts. Those agreed facts covered the history of the plaintiff’s application, including the circumstances in which proceedings had been commenced in this Court and resolved by the making of consent orders. They also recorded (at (10) and (11)) the terms of the correspondence which had passed between the Authority and the plaintiff’s solicitor on 12 September 2015 and 22 September 2015, as well as the circumstances of the re-affixing of the notice to the hotel premises (at (12)). The letter then went on to explain the circumstances in which the notice had been removed from the premises, stating:

Having recounted the history of the previous proceedings, the letter stated:

In an email to the plaintiff’s solicitor of 23 October 2015, the Manager (Licensing) of the Authority advised that the plaintiff’s application would be prepared for the Authority’s meeting which was scheduled to take place on 17 November 2015. In an email of 26 October 2015, the plaintiff’s solicitor enquired of the Authority:

The Authority responded by email of 29 October 2015 advising that both issues would be considered.

Subsequently, the Authority released a document headed “Meeting Outcomes” which stated the following:

In an email of 16 December 2015, the plaintiff’s solicitor wrote to the Authority stating:

In a subsequent letter to the Authority of 4 January 2016 the plaintiff’s solicitor stated (inter alia):

Under cover of a letter of 6 January 2016 the Authority forwarded its reasons to the plaintiff’s solicitors. The covering letter reviewed the history of the application before stating:

I have set out the relevant parts of the Authority’s reasons below.

Before turning to consider the grounds relied upon by the plaintiff it is appropriate to set out three relevant legislative provisions which bear upon the present issues.

Firstly, s. 3 of the Act sets out its objects:

Secondly, s. 51 of the Act is in (inter alia) the following terms:

Thirdly, cl. 9 of the Regulation is in the following terms:

The plaintiff relies on three grounds of review, although at the hearing the principal focus was on ground 1.

Commencing at [95] the reasons of the Authority stated the following:

Senior counsel for the plaintiff submitted that the Authority had incorrectly interpreted, and/or incorrectly applied, cl. 9 of the Regulation, and had erred in finding that it had no “jurisdiction” or power to determine the application. Senior counsel further submitted that the Authority had incorrectly applied the decision in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28. He submitted that although s. 51 of the Act and cl. 9 of the Regulation used prescriptive language (i.e. the word “must”) in respect of the advertising requirements, there was nothing in either enactment which expressed an intention that an application would be invalid in the absence of strict compliance with such requirements. It was submitted that in concluding, by reference to the objects of the Act, that non-compliance with the advertising requirements resulted in the application being invalid, the Authority had:

Senior counsel further submitted that the plaintiff had strictly complied with the provisions governing advertising until about the time of the Authority’s first determination, and had resumed doing so on and from 16 October 2015. He submitted that in these circumstances, there had been substantial compliance with the advertising requirements during the period in which the application was under the Authority’s consideration, and that such substantial compliance met the relevant object(s) of the Act.

Senior counsel also emphasised that cl. 9 of the Regulation did not enliven the Authority’s power to grant the application, but that it formed part of an overall process of determination. He submitted that had Parliament intended to do so, it could have legislated to render invalid any application which did not strictly comply with the notice requirements.

Finally senior counsel further submitted that the Authority had erred in failing to consider and apply s. 80 of the Interpretation Act 1987 (NSW) (“the IA”) which is in the following terms:

Counsel for the first defendant submitted that I needed to consider only the first of the three grounds relied upon by the plaintiff. He submitted that if his position in respect of ground 1 was correct, it followed that the plaintiff’s application was invalid, and the Act did not permit it to be granted. He submitted that in these circumstances, any issue raised in the two remaining grounds relied upon by the plaintiff was of no relevance, such that consideration of either ground was of no utility. Conversely, he accepted that if ground 1 was made out, it would follow that the Authority’s decision should be quashed, and an order made remitting the matter to the Authority to be determined according to law, without the need to consider grounds 2 and 3.

Counsel for the first defendant submitted that having regard to the terms of ground 1, three questions arose, namely:

In developing his submissions, counsel for the first defendant turned firstly to the question of the proper construction of the Act and Regulation. He submitted that a failure to comply with a particular statutory requirement may or may not lead to invalidity, and that the question of whether it did so was to be resolved by reference to the text, scope and purpose of the legislation. In this regard, counsel pointed to a number of matters in the present case which, he submitted, supported the conclusion that in the absence of strict compliance with the advertising requirements, an application for an ETA was invalid.

Firstly, counsel highlighted the provisions of s. 51(2)(c) of the Act which require that an application for an authorisation be advertised in accordance with the Regulations, if the Regulations require it.

Secondly, he pointed to a number of provisions of the Act which, he submitted, reflected the fact that community consultation was a centrally important feature to the determination of an ETA. He drew particular attention to the objects of the Act set out in ss. 3(1)(a) and (b), namely to:

Counsel submitted that these objects specifically highlighted the importance of community consultation in the process of determining applications under the Act. He submitted that whilst members of the community did not have a general right to procedural fairness in circumstances such as the present, the Act encompassed a range of mechanisms to provide an equivalent form of protection, of which the provisions of ss. 3(1)(a) and (b) were examples. He submitted that the advertising requirements were neither onerous nor complex, and that their importance lay in the fact that if they were not complied with, a central protective requirement of the legislation could not be properly satisfied. It was submitted that when the text, scope and purpose of the Act were taken into account, all of these considerations led to the conclusion that an application which had not strictly complied with the notice provisions was invalid.

Counsel for the first defendant accepted that the reference in s. 3(1)(b) to “minimal formality and technicality”, when taken by itself, ran contrary to his position. However, he again emphasised the need to consider the scope, objects and purpose of the Act as a whole.

Counsel then turned to the question of whether substantial compliance was sufficient to comply with s. 51(3)(c). Firstly, he submitted that substantial compliance was not read into s. 51(3)(c) by s. 80 of the IA. He submitted that s. 80 was of no relevance to the present case, given that it was concerned with compliance with prescribed “forms”. Further, he submitted that the advertising requirements were clear, and did not sensibly admit of a concept of “substantial compliance”.

In the alternative, counsel submitted that non-compliance with the advertising provisions led to invalidity unless such non-compliance was properly regarded as trivial. He submitted that in the circumstances of the present case, the plaintiff’s non-compliance did not fall into such a category.

Finally, counsel submitted that it was necessary for me to determine whether the advertising requirement imposed by s. 51(2)(c) of the Act was a jurisdictional fact in the strict sense (being a matter purely for the Court on judicial review), or in the broader sense (and thus a matter for the Authority). Counsel submitted that the requirement was a jurisdictional fact in the latter sense, with the legislation implicitly tasking the Authority with determining whether or not the notice requirements had been satisfied.

In this regard, counsel drew particular attention to the Authority’s reference (at [119] of its reasons) to the fact that the length of time during which there had been no notice affixed to the hotel premises meant that relevant stakeholders had been denied the opportunity to make submissions regarding the application. He submitted that if it were concluded that the requirement imposed by s. 51(2)(c) of the Act was a jurisdictional fact in the narrower sense, I should nevertheless conclude that the pre-condition was not satisfied such that, however the matter was approached, the plaintiff should fail.

CONSIDERATION

The competing positions of the parties raise (inter alia) a question of statutory construction. In Project Blue Sky (supra) the plurality (McHugh, Gummow, Kirby and Hayne JJ) said at [69] – [70]:

Their Honours went on to say (commencing at [91]):

In my view, on a proper construction of s. 51(3)(c) of the Act and cl. 9 of the Regulation, strict compliance with the advertising requirements was necessary and that, absent such compliance, the plaintiff’s application for the ETA was invalid.

The objects of the Act include (inter alia) regulating aspects of the liquor industry in a way which is consistent with the expectations, needs and aspirations of the community, and facilitating the development of the industry in a manner which is in the public interest. Compliance with the notice requirements serves as the method by which the community, and other relevant stakeholders, are notified of the making of an application. The purpose of notification is to ensure that the attention of such persons is drawn to the fact that an application has been made, thus enabling them to consider whether they wish to make any submission(s) to the Authority in relation to it.

Unless there is strict compliance with those requirements, the objects in ss. 3(1)(a) and (b) are compromised. In a practical sense, it is difficult to meet the “expectations, needs and aspirations of the community”, and act in the public interest, if members of the community, and the public, are left unaware of an application made under the Act. Such lack of awareness is the inevitable consequence of a failure to strictly comply with the advertising requirements which are imposed. Importantly, in the present case there was no compliance at all with s. 51(2)(c) for an extended period of time. Further, although the reference in s. 51(2)(c) of the Act concerning the need for “minimal formality and technicality” may, when taken by itself, be capable of supporting a conclusion that strict compliance with s. 51(2)(c) is not necessary, reference to the purpose and objects of the Act and Regulation makes it clear that community consultation is of paramount importance in regulating the liquor industry. That consultative process cannot be undertaken as envisaged by the Act if applications are not properly advertised.

Part of the effect of the plaintiff’s submissions is that there was substantial compliance with the requirement imposed by s. 51(3)(c), and that this was sufficient. One of the matters upon which the plaintiff sought to rely in support of that proposition was s. 80 of the IA. However in my view, that provision provides no support for the plaintiff’s position, for the simple reason that it is directed to a completely different issue, namely non-compliance with prescribed forms. The provision says nothing remotely relevant to the present issue and for the reasons previously stated, nothing in the Act or the Regulation suggests that substantial compliance with the relevant provisions is sufficient. Moreover, the concept of substantial as opposed to strict compliance is fundamentally at odds with the scheme of community consultation to which Parliament has obviously attached considerable importance in setting out the objects of the Act.

For all of those reasons, I am satisfied that on a proper construction of the Act and the Regulation, strict compliance with the notice requirements is necessary.

In these circumstances it is not strictly necessary for me to consider the separate question of whether non-compliance leads to invalidity unless it can be categorised as trivial: Lloyd v Police (2004) 89 SASR 383; [2004] SASC 278 esp. at [84] per White J. Even if that approach were taken, the plaintiff would still fail. In circumstances where there was an absence of notice for approximately 7 months, this is not a case in which the non-compliance with the advertising requirements could be regarded as trivial.

Finally, I am satisfied that on its proper construction, the Act confers, upon the Authority, the task of determining whether the advertising requirements have been satisfied. In particular:

All of these matters support a conclusion that the Authority’s assessment of compliance with the advertising requirements is a pre-condition to validity of an application: Coordinated Construction Company Pty Limited v Climatech (Canberra) Pty Limited [2005] NSWCA 229 per Basten JA at [43]-[44].

In circumstances where the Authority was correct to conclude that the plaintiff’s application was invalid, there is no necessity for me to consider grounds 2 and 3 advanced by the plaintiff.

ORDERS

For the forgoing reasons I make the following orders: