Supreme Court New South Wales Medium Neutral Citation: Sarah Rachael Lewis & Anor v Director-General Department of Trade & Investment, Regional Infrastructure and Services [2012] NSWSC 1044 Hearing dates: 30.08.12 Decision date: 31 August 2012 Before: Nicholas J Decision: Pars 27-29 Catchwords: ADMINISTRATIVE LAW - Liquor Act 2007 - proposed variations to precinct liquor accord - whether variations likely to affect conditions of liquor license - licensee invited to make submissions - whether procedural fairness to enable licensee to contest approval of variations required provision of data upon summaries of which the Director-General intended to rely - legislation considered - Liquor Act 2007 ss 136A(1), 136B(1), 136D(1), (3), 136E(1) Legislation Cited: Liquor Act 2007 Cases Cited: Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 Mahon v Air New Zealand [1984] AC 808 Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; (2012) 200 FCR 30 Smith v Director of Liquor and Gaming [2009] NSWSC 837 Category: Interlocutory applications Parties: Sarah Rachael Lewis - first plaintiff KX Operations Pty Ltd - second plaintiff Director-General Department of Trade & Investment, Regional Infrastructure and Services Representation: Counsel: M Leeming SC/D Klineberg - plaintiffs S Lloyd SC/M Izzo - defendant Solicitors: Bulford Legal Pty Ltd - plaintiffs Crown Solicitor - defendant File Number(s): 12/268223 Judgment 1His Honour: By summons filed 28 August 2012 the plaintiffs claim an order restraining the defendant from varying the existing terms of the Sydney Central - Kings Cross Precinct Liquor Accord (the Accord) under s 136D Liquor Act 2007 (the Act) until a date not less than 28 days after the production by the defendant to the first plaintiff of certain documents, to which I will refer in detail later. 2By way of background I acknowledge, with gratitude, the thorough submissions made on behalf of each of the parties by their respective senior counsel. For obvious reasons, I do not propose to recite them other than to the limited extent necessary, but without their assistance I would have had difficulty in coming to a decision today. 3The first plaintiff is the holder of a hotel licence in respect of premises known as the Kings Cross Hotel in William Street, Kings Cross. The second plaintiff owns the business conducted at that hotel. The hotel falls within the area to which the Accord applies. 4By letter dated 14 August 2012 the defendant notified the plaintiffs that he had formed a preliminary view to vary the terms of the Accord pursuant to s 136D of the Act by introducing a number of additional measures to the Accord. In particular, the letter included the following: "My consideration is based on information contained in the attached Kings Cross Precinct Liquor Accord alcohol-related harm profile... The attached report demonstrates a prima facie case for regulatory intervention to: * minimise or prevent alcohol-related violence or anti-social behaviour or other alcohol-related harm in the precinct or area to which the accord applies; and to * protect and support the good order or amenity of any such precinct or area in connection with issues arising from the presence of, or proposed increase in the number of, licensed premises in the precinct or area concerned. I have formed a preliminary view that it is necessary to vary the existing terms of the accord under s 136D of the Liquor Act 2007 to include the additional measures as set out in enclosure 1. Prior to forming a final view, and to ensure that all relevant factors are considered you are invited to make a submission on the proposed measures." The Director-General required that submissions be received by 4 September 2012. It was stated that late submissions would not be considered. 5The report was provided to the first plaintiff as an enclosure but the underlying data or source documents referred to therein were not. 6The relevant sections of the Act are the following: "136A General provisions (1) For the purposes of this Act, a precinct liquor accord or a community event liquor accord is a set of measures, approved by the Director-General under this Division, that aim to do either or both of the following: (a) to minimise or prevent alcohol-related violence or anti-social behaviour, or other alcohol-related harm, in the precinct or area to which the relevant liquor accord applies, (b) to protect and support the good order or amenity of any such precinct or area in connection with issues arising from the presence of, or any proposed increase in the number of, licensed premises in that precinct or area ... 136B Director-General may approve liquor accords for designated precincts (1) The Director-General may: (a) designate a precinct as being a precinct to which a proposed precinct liquor accord is to apply, and (b) approve a precinct liquor accord for the designated precinct, and (c) vary, at any time, the terms of a precinct liquor accord. ... 136D Content of precinct and community event liquor accords (1) A precinct liquor accord or community event liquor accord may include such measures as the Director-General considers are necessary: (a) to minimise or prevent alcohol-related violence or anti-social behaviour or other alcohol-related harm in the precinct or area to which the accord applies, or (b) to protect and support the good order or amenity of any such precinct or area in connection with issues arising from the presence of, or proposed increase in the number of, licensed premises in the precinct or area concerned. ... (3) Without limiting the measures that may be included in a precinct liquor accord or community event liquor accord, any such accord may include measures requiring a licensee to do any one or more of the following: (a) to cease serving liquor (including take-away liquor) on the licensed premises during such times as are specified in the accord, (b) to restrict the public's access to the licensed premises in a manner and to the extent provided by the accord, (c) to restrict the use of glass containers on the licensed premises, (d) to maintain an incident register, (e) to install and operate closed-circuit television or any other security device on the licensed premises, (f) to provide security staff in or about the licensed premises. ... 136E Requirement to participate in precinct or community event liquor accord (1) The Director-General may, in the case of licensed premises situated wholly or partly in the precinct to which a precinct liquor accord applies or in the area to which a community event liquor accord applies, impose conditions on the licence, by notice in writing to the licensee, requiring the licensee to participate in the liquor accord for that precinct or area." 7Following the establishment of the present Accord a condition of the plaintiffs' licence was imposed in the following terms: "The licensee must participate in the precinct liquor accord that applies to the Sydney Central precinct designated by the Director-General of Communities NSW under s 136B of the Liquor Act 2007." 8The plaintiffs rely upon the evidence in the affidavit of Andrew David Gibbs sworn 28 August 2012. It is unnecessary for present purposes to set out the contents of that affidavit. Suffice it to say that it establishes what, no doubt, is self-evident that the nature of the business and operations conducted by the plaintiffs are likely to be adversely affected by the imposition of measures which were identified as proposed variations to the Liquor Accord in the Director-General's letter of 14 August 2012. 9The affidavit included the statement that the plaintiffs proposed to submit that several of the measures should not be approved insofar as they apply to the plaintiffs' licence, and that several of the measures are not necessary in the circumstances as the plaintiffs' business was well run and there had been compliance with the Act. The observation was made (and it is established by its contents) that the report appears to have been based upon studies or investigations conducted by the Office of Liquor Gaming and Racing, the NSW Police Force, the NSW Bureau of Crime Statistics and Research and the Council of the City of Sydney. Reference is made to various material within the report although much of that material is not presently available to the plaintiffs. 10The plaintiffs submitted that certain of the measures, if introduced, would impose substantial limitations upon the licence and restrict the way in which the business of the hotel would be conducted. That proposition was supported by the evidence of Mr Gibbs. It appears to be arguable that a number of the measures would restrict or prevent in various ways the sale or supply of alcoholic drinks after midnight on Friday and Saturday evenings, including requiring no service at all between 4am and 5am, which is in contrast with the current Accord, which contains no provision limiting or restricting the service of alcohol. 11It was not disputed that the defendant was obliged to exercise his powers under s 136D(1) with regard to the common law requirements of procedural fairness, recognition of which was reflected in the defendant's invitation to the plaintiffs to make submissions as to whether variations to the current Accord as contemplated should be made. The principal question for determination, as expressed in par 15 of the plaintiffs' written submissions, is whether for the purposes of s 136D(2) of the Act, the obligation on the defendant to afford procedural fairness to the first plaintiff has been satisfied by the giving of notice of the defendant's intention to vary the Accord, and by provision of the report, and the invitation to make a submission without providing the underlying data as sought by the first plaintiff. 12It is feared that should the variation be made there is a real risk that some or all of the proposed measures will adversely affect the plaintiffs' interests as explained in Mr Gibbs' affidavit. It was submitted that the requirements of natural justice in the circumstances include the provision of the source material in the defendant's possession as requested, and that a reasonable time be provided to enable consideration of that material and the preparation of the submissions, without which it was contended the plaintiffs would be unable to properly respond to the matters referred to in the report, and as to whether or not the content of the information proposed to be relied upon was sound and reliable. 13In essence the plaintiffs contend that a reasonable opportunity to be heard as to the inclusion of the variations involves the opportunity to consider and make submissions about the source material from which the data in the report is derived. Bound up with this notion is the entitlement of the plaintiffs to contest the accuracy and reliability of the conclusions and opinions stated in the report, and to demonstrate to the extent open that in the circumstances the material does not justify the imposition of variations which adversely affect the plaintiffs' operations. 14As to this, the plaintiffs submitted that they wished to distinguish their hotel from other licensed premises subject to the Accord but, absent the material sought, it is difficult or impossible for them to show that the conclusions in the report do not reflect the manner in which they conduct the business of their hotel. Reliance is placed upon the ruling of Rothman J in Smith v Director of Liquor and Gaming [2009] NSWSC 837 in which his Honour held that procedural fairness required making available to a licensee the source documents for the relevant reports intended to be relied upon for the purposes of a decision under s 81 of the Act. 15In opposition, the defendant submitted that the considerations as to the scope of the requirements of procedural fairness relevant to conventional adversarial litigation do not necessarily extend to situations involving the making of administrative decisions. It was put that the requirement to provide an opportunity to deal with adverse material does not entail an obligation to disclose the entire text or document within which that material is contained, and that it was sufficient that the gravamen or substance of the issue upon which the decision would turn is brought to the attention of the party to be affected by it. 16Furthermore, it was put that there was no obligation under the principles to disclose material to which a decision-maker has access where he or she does not have actual knowledge of that material and does not propose to have regard to it in making a decision. It was also submitted that the requirements of procedural fairness are flexible, depending on the circumstances of each case which include, inter alia, the nature of the inquiry, subject matter and the statutory framework within which the decision-maker acts. The ground of opposition to the provision of the documents which the plaintiffs seek in this case was essentially that it was the report which was to be relied upon in considering whether the variations were to be imposed, and in the circumstances the plaintiffs were entitled to no more from the defendant to enable them to put submissions in exercise of their right to be heard. 17In my opinion, for the proper exercise of power under s 136D(1) the question of necessity is to be determined with regard to the need shown to exist at the time the determination is made. Thus the information upon which the Director-General relies should be information and data which identifies the relevant state of affairs which exists in the precinct at the time consideration is being given as to whether any measure is necessary for the purposes of s 136D(1)(a) and (b) and, if so, as to the content thereof. 18The defendant's invitation, as already indicated, is in the following terms: "Prior to forming a final view and to ensure that all relevant factors are considered you are invited to make a submission on the proposed measures." 19The defendant correctly has afforded the plaintiffs the opportunity to deal with, or contest, the evidence and information before him, and to address inferences which may be drawn from it, and to put information and submissions to him in support of their case against the formulation of measures adverse to their interests. For this opportunity to be real, the plaintiffs must be allowed to meet the substance of the information to be relied upon in this case, and to test and call into question the accuracy of the conclusions and data in the report, including the relevance of the information to the existing state of affairs, at least insofar as it concerns their operations and the conduct of their business. Obviously enough, in my opinion, the defendant is under a statutory duty to base his consideration on information which is sound and relevant to the existence of necessity at the time it is made. 20The requirements of procedural fairness applicable to the exercise of an administrative function, such as in this case, are to be determined with regard to the particular facts and circumstances of the case. Guidance as to the scope of the opportunity in a particular case is found in many authorities. For example, in Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 at p 601, Mason CJ, Deane and McHugh JJ said: "Their legal entitlement is confined to making submissions in respect of matters which may be the subject of adverse findings against them... This does not mean that their submissions must be perfunctory or limited to assertions or denials. In opposing the making of any adverse finding the appellants are entitled to put every rational argument open on the evidence and where necessary to refer to and analyse the evidence to support that argument." At p 619 Toohey J, citing Lord Diplock's statement in Mahon v Air New Zealand [1984] AC 808 at pp 820-821, said: "In relation to a person making a finding in the exercise of an investigative jurisdiction: 'The second rule is that he must listen fairly to any relevant evidence conflicting with the finding and any rational argument against the finding that a person represented at the inquiry whose interests (including in that term career or reputation) may be adversely affected by it, may wish to place before him or would have so wished if he had been aware of the risk of the finding being made... The second rule requires that any person represented at the inquiry who will be adversely affected by the decision to make the finding should not be left in the dark as to the risk of the finding being made and thus deprived of any opportunity to adduce additional material of probative value which, had it been placed before the decision maker, might have deterred him from making the finding even though it cannot be predicted that it would inevitably have had that result.'" His Honour continued: "Although Lord Diplock was there speaking of the opportunity to adduce additional material his remarks apply equally to the right to address." 21As Senior Counsel for the defendant submitted, there are many authoritative statements such as those recently reviewed by Flick and Foster JJ in Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; (2012) 200 FCR 30, to the effect that (par 37): "...an adequate 'opportunity' to be heard may be satisfied in some cases if the gist of any adverse information is disclosed without the entire text or document in which that information is contained necessarily also being disclosed." Thus in Plaintiff M61/2010E v Commonwealth (2010) 243 CLR 319 [the High Court] observed: [91]: [P]rocedural fairness required the reviewer to put before the plaintiff the substance of matters that the reviewer knew of and considered may bear upon whether to accept the plaintiff's claims. The Migration Act makes special provision about how the Refugee Review Tribunal is to conduct its reviews. It provides that the Tribunal must give an applicant 'clear particulars of any information that the Tribunal considers would be the reason, or a part of the reason, for referring the decision that is under review'. But that obligation is subject to qualifications.... Their Honours continued: "More broadly expressed, procedural fairness may not require a decision-maker to disclose 'the precise details of all matters upon which he intends to rely'... It is sufficient that the gravamen or substance of the issue or factor is brought to the applicant's attention or that the applicant is on notice of its 'essential features'." Nevertheless their Honours concluded (par 42): "Subject to any statutory qualification of the common law rules of procedural fairness, either the entirety or the substance of such personal information may have to be disclosed if procedural fairness is to be afforded." 22Turning to the documents sought by the plaintiff in this case, as listed in par 10 of the plaintiffs' written submissions, document 3 seeks the crime data sourced from the NSW Bureau of Crime Statistics and Research referred to on page 4 of the report. This reference includes the following: "The data sourced from NSW Police and the New South Wales Bureau of Crime Statistics and Research (BOCSAR) was used to quantify the risk of harm and disturbance in the precinct and determine whether there are any trends emerging in Kings Cross. These trends were compared to the findings of pedestrian and antisocial behaviour research conducted by the City of Sydney Council." 23Further reference on that page was made to what was described as the principal source of data. Also included was the following passage: "Further, some venues within the PLA do not maintain an incident register and others provided only their current register capturing several months of incidents. Notwithstanding this caveat the key trends arising from the aggregated incident register data demonstrate a significant risk of alcohol-related harm and disturbance in the Kings Cross precinct." 24Documents 10 and 11 as sought by the plaintiffs may be dealt with together. They refer to reports of the New South Wales Police Kings Cross Precinct Alcohol Assessment Report referred to on page 9 of the report. It appears that the report provided by the New South Wales Police on 18 July 2012 covered the period 1 July 2011 to 30 June 2012, and the report provided on 3 August 2012 for the same period expanded on the previous data. 25Document number 12 is the police crime data in respect of glassing incidents between August 2008 and July 2012, as referred to on page 10 of the report. 26In essence the plaintiffs' concern is that the statements in the report are bald summaries of surveys, activities, and incidents which happened in periods commencing 12 months, or (as to glassing) four years before July 2012. It is put that, if denied access to the source material, the plaintiffs will be denied the opportunity to contest that the summaries are an accurate or sound basis on which the defendant should rely in determining whether to approve any or all of the proposed variations. 27In my opinion the plaintiffs' claim must be upheld. The statements or conclusions in the report to which the documents sought relate are expressed in general terms with regard to lengthy periods. On their face the statements do not focus on the present situation which must be established to enable the defendant to consider that the imposition of a proposed variation is necessary under s 136D(1). 28It follows, in my opinion, that in the circumstances of this case it would not be fair to deprive the plaintiffs of the opportunity to analyse and meet the information contained in the underlying surveys. The imposition of measures which would operate as conditions of a licence will have a significant impact on the plaintiffs' operations. In a different context, the Act has established a regime of procedural fairness in respect of the imposition of similar conditions following the investigation of complaints under s 81, and pursuant to the three-strike disciplinary action scheme under Pt 9A. Regard to these considerations provide additional persuasive support for the plaintiffs' claim. In my opinion the plaintiffs have demonstrated that the applicable rules of procedural fairness require that they be provided with the documents sought. 29Accordingly, in this matter I make orders in accordance with orders 1 and 2 of the short minutes of order and annexure initialled by me and dated today. I direct that these orders be entered forthwith. I give the parties liberty to apply on half a day's notice. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 September 2012