Wonall Pty Limited v Clarence Property Corporation Limited [2003] NSWSC 497

Reported Decision : 58 NSWLR 23

New South Wales Supreme Court

CITATION : Wonall Pty Limited v Clarence Property Corporation Limited [2003] NSWSC 497 HEARING DATE(S) : 27 May 2003 JUDGMENT DATE : 23 June 2003 JURISDICTION: Equity JUDGMENT OF : Campbell J DECISION : Declarations and order refused

CATCHWORDS : LIQUOR LAW - licensing - poker machine entitlements - whether lessee of hotel can transfer poker machine entitlements to another person without consent of lessor of hotel - appropriateness of Supreme Court making declarations on matters dependent upon the state of mind of Liquor Administration Board - WORDS AND PHRASES - "in respect of" Gaming Machines Act 2001 LEGISLATION CITED : Liquor Act 1982 Registered Clubs Act 1976 Attrill v Richmond River Shire Council (1995) 38 NSWLR 545 Evans v Button (1988) 13 NSWLR 57 CASES CITED : Mellor v Liquor Administration Board [2003] NSWSC 38 Rogers v Wentworth (1986) 7 NSWLR 88 Workers Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642 Wonall Pty Limited - First Plaintiff PARTIES : Peter James Durning - Second Plaintiff Clarence Property Corporation Limited - Defendant FILE NUMBER(S) : SC 1333/03 COUNSEL : P Clay; S Berveling - Plaintiffs S Austin QC; M Darke - Defendant SOLICITORS : Rummerys - Plaintiffs Phillips Fox - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

CAMPBELL J

23 June 2003

1333/03 WONALL PTY LIMITED & ANOR v CLARENCE PROPERTY CORPORATION LIMITED JUDGMENT 1 HIS HONOUR: The issue in this case concerns whether the lessee of premises in relation to which a hotelier's licence has issued can sell, without the consent of the lessor of the premises, poker machine entitlements which have issued in respect of that hotelier's licence. 2 The first plaintiff, Wonall Pty Limited ("Wonall") is the lessee of licensed premises known variously as "Maggie Moores Pub" or "Maggie Moore's Pub & Bistro". Those premises are part of the ground floor of a building located on the corner of Molesworth and Woodlark Streets, Lismore. The defendant is the property manager of those premises, and the case has been conducted on the basis that its actions concerning this litigation bind the lessor. The lease is one for a term of 15 years, which commenced on 21 October 1999. Wonall is a company of which the second plaintiff, Mr Peter Durning, is the sole director and shareholder. Mr Durning holds the hotelier's licence concerning the premises. 3 Mr Durning has been involved in the operation of the premises since about March 1993. In about March 1993 a partnership consisting of Mr Durning, and various of his relatives, became the lessees of the premises. At that time Havenrim Pty Ltd ("Havenrim") was formed to conduct the business of the hotel. Mr Durning and one of his relatives were the sole directors and shareholders of Havenrim. Havenrim rented from the partnership all the inclusions of the licensed premises, and owned the stock in trade of the hotel from time to time. 4 Beginning probably at some time in 1998, poker machines were installed in the premises. At first there were four poker machines, installed by the poker machine manufacturer without charge as a promotional exercise. In March 1999 an additional five poker machines were installed. Two of these were machines which Havenrim leased from a financier, while three were older machines which the owner permitted to be installed without charge. 5 In 1999 the hotel encountered both trading difficulties, and a dispute within the partnership. The dispute was resolved by Havenrim and the partnership entering an agreement on 20 October 1999 to sell to the then landlord all their right title and interest in the stock in trade or any other interest in the business carried on under the name "Maggie Moores Pub & Bistro", all their right title and interest in the business name of that business, the fixtures and fittings of the business, the goodwill of the business, and to surrender the lease of the premises. Mr Durning agreed to transfer the license relating to the premises to his landlord or his nominee. 6 The next day, 21 October 1999, the then landlord sold to Wonall the business, including the goodwill and all stock in trade, plant, equipment and furnishings. On that same day the then landlord granted to Wonall the lease of the premises which is now current. I infer that the lessor either waived his right to have Mr Durning transfer the licence, or else nominated Mr Durning to be the licensee. One way or another, Mr Durning continued without interruption as the licensee, even though the identity of the lessee of the premises changed. 7 After the new lease was entered, Wonall took over making the rental payments on the two poker machines that were leased. Additional poker machines were acquired by Wonall. I infer that prior to 19 April 2001 some or all of the poker machines which had originally been placed in the hotel without payment, were removed. 8 As at 19 April 2001 there were 10 poker machines on the premises. Two of them had been installed before the new lease was granted, and eight after the new lease had been granted. Legal Basis of Entitlement to Keep Poker Machines in the Hotel Before 19 April 2001 9 The Liquor Act 1982 has at all material times contained the following definitions in section 4. " Board means the Liquor Administration Board constituted by section 72. Hotel means the premises to which a hotelier's licence relates. Hotelier means the holder of a hotelier's licence. Hotelier's licence means a licence that, subject to this Act and the conditions of the licence, authorises the licensee to sell liquor by retail on the licensed premises, whether or not for consumption on those premises, being a licence that is granted as a hotelier's licence. Licensed premises means: (a) in case of an on-licence to sell liquor at a function … (a1) in the case of a caterer's licence … (b) in the case of any other licence to sell liquor – the premises or part of premises on which the sale of liquor is authorised by the licence … 10 Prior to 2 April 2002 section 4 Liquor Act 1982 contained definitions: " approved gaming device means an approved amusement device, an approved poker machine or an authorised poker machine. approved poker machine and authorised poker machine have the same meanings as in the Registered Clubs Act 1976 . poker machine has the same meaning as in the Registered Clubs Act 1976 ." 11 At all material times the Liquor Act 1982 contained the following provisions: 18(1) Subject to this Act, the court may grant a licence in a form approved by the Board authorising the licensee to sell liquor on the premises specified in the licence. (2) The court may, under subsection (1), grant: (a) a hotelier's licence, being a licence that is granted as a hotelier's licence and, subject to this Act and the conditions of the licence, authorises the licensee to sell liquor by retail on the licensed premises, whether or not for consumption on those premises. 19A(1) A licence remains in force until its surrender in writing is accepted by the Board, except as provided by this section. 12 At all material times section 20 of the Liquor Act 1982 made provision for licences to have conditions imposed on them. Prior to 2 April 2002 section 20(2)(c1) said that a licence was subject to "any conditions imposed under this Act in relation to an approved gaming device …".