Palate Hotel Pty Limited v Independent Liquor and Gaming Authority [2012] NSWSC 1654

Supreme Court New South Wales

Medium Neutral Citation: Palate Hotel Pty Limited v Independent Liquor and Gaming Authority [2012] NSWSC 1654 Hearing dates: 20 December 2012 Decision date: 20 December 2012 Jurisdiction: Equity Division Before: Brereton J Decision: Summons dismissed with costs Catchwords: ADMINISTRATIVE LAW - statutory construction - meaning of approval under Clause 52 of Schedule 1 of the Gaming Machines Act 2001 - whether approval to keep hardship gaming machines only takes effect once it is lawful to keep machines by reason of satisfaction of conditions of approval Legislation Cited: (NSW) Clubs, Liquor and Gaming Machines Legislation Amendment Act 2011 (NSW) Gaming Machines Act 2001, Schedule 1 Clause 52 Category: Principal judgment Parties: Palate Hotel Pty Limited ACN 159 081 633 - First Plaintiff Kiara Jade Salmon - Second Plaintiff Independent Liquor and Gaming Authority - Defendant Representation: Counsel: M Leeming SC & S Cirillo - Plaintiffs J Hutton - Defendant Solicitors: Back Schwartz Vaughan - Plaintiffs File Number(s): 2012/ 391780

Judgment (ex tempore) 1HIS HONOUR: By letter dated 15 January 2003, the then Liquor Administration Board - the predecessor of the defendant - wrote to an officer of the first plaintiff in the following terms: The Board has considered the hardship application that you made under s 27 of the Gaming Machines Act 2001 to keep 15 hardship gaming machines. The Board has determined that it will conditionally approve 15 hardship gaming machines. The approval is subject to the following conditions. 1. that the licence is removed to premises that are situated not more than 1 kilometre from the existing premises. 2. that the proposed premises open for trade within a period of 4 years from the date of this letter. 3. the premises must trade for a period of 3 years before any application may be made under s 31 for an allocation of poker machine entitlements in respect of the hardship gaming machines. 4. that Maycot Pty Limited continues to remain the beneficial owner of the licence until the hotel opens for trade and there is to be no change in the shareholders of the company prior to that time. The approval is also conditional upon the preparation and approval of a class 2 SIA and you satisfying the Board that the proposed premises are not part of or adjoin a retail shopping centre - see s 60 of the Gaming Machines Act. ... The Board may only allocate hardship gaming machines if there are sufficient numbers in both the hotel authorised pool and the hotel entitlements pool at the time of the proposed allocation. Please note that under s 30 and s 31 of the Gaming Machines Act 2001, hardship gaming machines allocated to clubs and hotels are not transferable for a period of 3 years after the date of approval to keep hardship gaming machines. Also, if within the 3 year period, approval is given to transfer any poker machine entitlement held in respect of the hotel the hardship gaming machines must be forfeited to the Board. 2On 19 February 2003, the plaintiffs executed the subscribed notification of acceptance of proposed allocation. 3By letter dated 20 July 2006, the Board advised that it varied condition 2 of the approval by extending the period by which time the proposed premises were to open to four years from 15 January 2007. By letter dated 24 September 2010, the Casino Liquor and Gaming Control Authority advised the plaintiffs of a further variation of condition 2, by extending it to a period of six years from 15 January 2007. 4On 26 November 2012, the solicitors for the plaintiffs applied to the defendant for urgent consideration of an application to change condition 3. In their covering letter, those solicitors recorded their understanding, from prior correspondence, that the defendant took the view that clause 32 of the savings and transitional provisions of the (NSW) Gaming Machines Act 2001 had the effect that the grant of the 15 hardship gaming machines to be allocated under the approval in question would expire on 15 January 2013, and contended for a different view. 5In a decision apparently made on 13 December 2012, and communicated in a telephone conversation on 14 December 2012, the defendant declined to revoke the condition as sought, and adhered to the view that the original grant of the hardship gaming machines would expire on 15 January 2013. 6By summons filed on 18 December 2012, the plaintiffs claim the following relief: 1 A declaration that on the proper construction of clause 52 of Schedule 1 of the Gaming Machines Act 2001, the approval of the keeping of 10 hardship gaming machines at the licenced premises known as the Palate Hotel 275-279 Victoria Road Rydalmere will expire (a) on the tenth anniversary of the date at which it became lawful to keep hardship gaming machines at the premises, which is not earlier than September 2022 (b) alternatively, on 19 February 2013. 2 An order in the nature of mandamus requiring the Authority to allocate 10 hardship gaming machines to the licenced premises known as the Palate Hotel 275-279 Victoria Road Rydalmere (licence LIQ400122993 "Licence"). 3 An order setting aside the determination of the defendant made on 13 December 2012. 4 An order remitting the first plaintiff's application to the defendant for determination in accordance with law. 5 Such further order as to the Court seems fit. 6 Costs. 7The parties have cooperated to bring the matter before the Court for final determination in vacation today of the relief claimed in paragraph 1 of the summons, and have between themselves agreed on the consequences that will flow from such determination. 8Clause 52 of Schedule 1 of the Gaming Machines Act relevantly provides as follows: 52 Hardship gaming machine approvals (1) The approval under Division 3 of Part 3 of this Act (as in force immediately before its repeal by the amending Act) of the keeping of a hardship gaming machine expires on the tenth anniversary of the date of the approval. 9The plaintiffs submit that the date of the approval referred to in that clause has not yet arrived, as not all of the conditions referred to in the approval set out above have yet been satisfied: in essence, that there has not yet arrived a time at which a hardship gaming machine could be kept under the approval. The defendant submits that the date of the approval was the date it bears on its face, namely, 15 January 2003. 10In 2011, the hardship provisions formerly contained in Division 3 of Part 3 of the Act were repealed in their entirety by the (NSW) Clubs, Liquor and Gaming Machines Legislation Amendment Act 2011, which also introduced clause 52 of Schedule 1. Schedule 1 contains savings, transitional and other provisions. The Explanatory Memorandum for the 2011 amending Act states the purposes of the amending Act as including: (c) to remove provisions relating to ... hardship gaming machines and to phase-out the keeping of such ... machines (including by providing that the approval of the keeping of a hardship gaming machine expires on the tenth anniversary of the approval). 11Essentially, the contest between the parties is whether it is inherent in the concept of "approval ... of the keeping of a hardship gaming machine" in clause 52(1) that it be possible and lawful for a machine to be kept (as the plaintiffs contend), or whether that concept is a statutory concept, which, in the circumstances of this case, is satisfied by the letter of 15 January 2003. 12As is apparent from clause 52(1), this must be decided by reference to the former provisions of Division 3 of Part 3 of the Act. The opening section of that Division relevantly commenced with the following [section 26(1)] (emphasis added): An hotelier or registered club may apply to the Authority for approval to keep an additional number of approved gaming machines ... This is the first of a number of references to an approval under Division 3 being an approval "to keep" such machines. 13Section 27, particularly by subsection (2A), contemplates that an application for such an approval may be made at a time when machines could not be kept - because it may be made by a prospective hotelier, as distinct from an hotelier. Subsection (5) of the same section refers to a hardship application "to keep" such number of approved gaming machines. Section 29 provides, by subsection (1), that (emphasis added): the Board may refuse a hardship application or it may approve of the hotelier ... keeping all or some of the number of approved gaming machines sought by the hotelier or club in the application. Any such machine is referred to as a hardship gaming machine. 14Subsection (1AA) expressly provides that such an approval may be made subject to conditions imposed by the Board "in relation to the keeping of hardship gaming machines by the hotelier concerned". Subsection (1B) provides that if a hardship application is made by a prospective hotelier the Board may, inter alia, "approve the keeping of hardship gaming machines subject to a prospective hotelier being granted a hotel licence" and that if the licence is "not granted within 3 years of the Board's approval, the approval is revoked". This indicates that even though it could not be possible to keep machines during the period until a licence was granted, nonetheless there was in place a relevant approval, which approval was revoked if the relevant condition was not satisfied. 15Section 31(5) provides that if the Authority is satisfied that the conditions applying to an approval to keep a hardship gaming machine have been complied with, and various other matters, the Authority may notify the hotelier concerned in writing that the hotelier is eligible to make an application for the allocation of a poker machine entitlement in relation to hardship gaming machines. Again, this contemplates that there is an approval in place, to which conditions apply, upon satisfaction of which eligibility to convert it into a poker machine entitlement was triggered. 16Section 56, which provided that, in respect of approved gaming machines, an hotelier must also have "an authorisation" to keep or dispose of approved gaming machines, reflects the dichotomy in the Act between approvals to keep gaming machines and authorisations to keep those machines, both of which must be in place for a machine lawfully to be kept. 17In my view, this review of the legislation demonstrates that the concept referred to in clause 52(1) is the statutory concept of an approval to keep a hardship gaming machine of the types referred to, in particular, in s 26(1) of former Division 3. That such an approval is issued subject to conditions under s 29(1AA) does not mean that its date is deferred until those conditions take effect. 18This conclusion is supported by the use of the very words "date of the approval" in clause 52(1), which directs attention not to the date upon which conditions are satisfied, but to the date on which the approval - albeit one that may have conditions attached to it - issues. 19It follows in my view that the plaintiffs' primary submission fails. 20The parties now agree that it is unnecessary for me to resolve the question whether the true date of the approval is the date of the letter which conveyed the offer of an approval subject to conditions, or the date of its acceptance. 21I therefore order that the summons be dismissed with costs.