Mellor v Liquor Administration Board [2003] NSWSC 38

New South Wales Supreme Court

CITATION : Mellor v Liquor Administration Board [2003] NSWSC 38 HEARING DATE(S) : 04/11/02; 21/11/02 JUDGMENT DATE : 14 February 2003

JUDGMENT OF : Whealy J at 1 DECISION : I make orders as follows: ; 1. Summons dismissed; 2. Plaintiff to pay defendant's costs; 3. Exhibits may be returned.

CATCHWORDS : Gaming Machines Act 2001 - Liquor Act 1982. Gaming Legislation freeze on poker machines in hotels and clubs. Power to impose conditions on dormant licences. Legislative intention of freeze regulation - prohibition on stockpiling gaming machines Liquor Act 1982 Liquor Amendment (Approved Gaming Devices) Regulation 2001 LEGISLATION CITED : Liquor Regulation 1996 Liquor Further Amendment (Approved Gaming Devices) Regulation 2001 Gaming Machines Act 2001 Ex parte Mullen re Hood (1935) 35 SR 289 at 302; 525 (High Court) CASES CITED : Washington Soul Pattinson v Ogilvy (1954) 55 SR 143 at 148 Ex Parte Walsh re Latham (1949) 66 NSW WN 145 at 147 PARTIES : David Mellor v Liquor Administration Board FILE NUMBER(S) : SC 12429/02 COUNSEL : Mr S. Austin QC; Mr I Lawry - Plaintiff Mr M. Leeming - Defendant SOLICITORS : Slater & Elias - Plaintiff I. V. Knight (Crown Solicitor) - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

WHEALY J

FRIDAY 14 February 2003

12429/02 - David MELLOR v LIQUOR ADMINISTRATION BOARD

JUDGMENT

1 HIS HONOUR: The plaintiff is the licensee of a newly opened hotel in the heart of the central business district of Sydney. It is located at 60 Castlereagh Street just off Martin Place. By all accounts the hotel is an attractive establishment offering many facilities to the public. But it does not have any functioning gaming room and at the present time there are no poker machines or gambling devices operating at the establishment. 2 This state of affairs might be regarded by some patrons as something of a benefit rather than a disadvantage. That, however, is not the attitude of the owners and operators of the hotel. They wish to operate poker machines in the hotel. It is common ground in this litigation that the ability to operate 20 gaming machines in a hotel in the heart of Sydney is an extremely valuable financial commodity. 3 The hotel commenced trading at Castlereagh Street on the 21st September 2001. The hotel licence had originally attached to a site at 252 Sussex Street, Sydney. This parcel of land had an interesting history. The site at 252 Sussex Street was originally granted to the Wentworth family estate in the early 1800s. There were dwellings and small shops on the site until about 1882. A hotel known as the United States Hotel was constructed in 1882 on the southern portion of the land. In 1914 the northern portion of the site was used as a weighbridge. In 1922 the buildings were all demolished and a new hotel was established on the site opening in 1924. It was also called the United States Hotel. In 1987 the premises were renamed St Elmo's Tavern but this building was demolished in 1997. 4 In 1996 a Mr John Howard Lyons was a director of a company known as "888 Casino and Tavern Pty Ltd". This company purchased the licence attaching to the site at 252 Sussex Street, Sydney. Mr Lyons applied on behalf of his company to transfer the licence to his own name in his capacity as a director of the company. In his application he informed the Licensing Court of New South Wales that the licence would be held in a dormant capacity and not exercised pending its transfer to a further nominee of the company. On 15 June 1998 – the delay has not been explained – the Licensing Court granted the transfer of the licence to Mr Lyons. The order of the court was endorsed "Licence to be held in a dormant capacity until court orders otherwise". As mentioned earlier, the premises had been demolished in 1997 although this fact does not appear to have been brought specifically to the Licensing Court's attention at the time of the transfer. The details of the application however indicated that there was no intention to conduct any business under the licence at the premises in the event that the licence was transferred to Mr Lyons. Further, Mr Lyons had informed the court that the existing business of the hotel was to cease on or about 5 November 1996. Mr Lyons made no application, in conjunction with the transfer application, to transfer the ownership of any approved amusement devices into his name. His company had no right to occupy, nor any intention of occupying, any part of the Sussex Street premises. 5 The subsequent history shows that in about 2000 Mr Lyons and others associated with his business activities determined upon a course of action to establish a new hotel at new premises to be provided at 60 Castlereagh Street, Sydney. The vehicle for this was to be the dormant licence at 252 Sussex Street, Sydney. First, the licence was transferred from Mr Lyons name to that of Mr Theo Feros. Subsequently, in July 2000 it was transferred into the name of Mr Rayk, an employee of one or more of the Lyons companies. Secondly, on 4 July 2000, the Liquor Administration Board approved the change of the name of the licence premises at 252 Sussex Street, Sydney to "The Verandah Bar and Bistro Sydney". This was despite the fact that there was no intention or ability to trade the licence at Sussex Street, Sydney. Thirdly, there commenced a series of applications to the Liquor Administration Board known as "stand alone gaming device applications". These applications were made pursuant to s 161 Liquor Act 1982 (as amended). It is convenient at this stage to set out the terms of that section as it stood at the relevant time. " 161 Authority to keep approved gaming devices