Last Thursday the Supreme Court handed down the first good news in years for Sydney’s ‘locked out’ venues, but there’s no cause for celebration yet.

Justice Natalie Adams was called to adjudicate on the case filed by the Coronation Hotel, on Park Street in Sydney’s CBD, and specifically an area within the Coronation, the Smoking Panda Bar.

The Liquor Amendment Act 2014 (NSW), introduced on 24 February of that year, allowed for regulations requiring licensed premises in the Sydney CBD to adhere to 1:30 am “lockout” and 3am “cease service of alcohol” conditions – commonly known as the ‘lockouts’.

Some licence types were exempt, such as those deemed part of a ‘tourist accommodation establishment’. This applied to the Coronation until an investigation by Liquor & Gaming NSW found patrons in its Smoking Panda Bar that were not guests of the Hotel.

On 19 July of 2016, the acting deputy secretary of the Department of Justice – “first defendant” in the case filed in the Supreme Court – overruled the Coronation’s exemption, meaning the establishment would be subject to the lockout laws.

The Hotel sought for the Court to find this decision “invalid” as it was based on sub-clauses of the Liquor Regulation 2008 (NSW) that are ‘ultra vires’ (beyond one’s legal power or authority).

The case hinged on the legality of s116 of the Liquor Act 2007 to endow power to the Secretary of L&G to specify which premises will be subject to the laws. The parties did agree if such power was not conferred in the Act, the ruling was indeed invalid.

Last week Justice Adams did indeed find this to be the case, thus overturning the ruling for relevant licence holders. This included the plaintiff and proprietors of ‘public entertainment venues’ that had been subject to the lockout restrictions.

Government had previously sought to enmesh a number of these ‘entertainment’ licences, which includes some strip club venues, operating under on-premise theatre licences, classifying them instead as ‘high-risk’. These rulings by the Secretary would be overturned.

Contrary to media reporting, Liquor & Gaming has not yet filed an appeal of Justice Adams’ decision, merely a Notice of Intention to Appeal. This reserves the right to appeal at a later date, but is no guarantee that will occur.

Furthermore, Justice Adams noted the suggestion during the hearing that the Secretary could have imposed the same conditions on the plaintiff’s licence via another section of the Act (s.54) – one where the Secretary is not required to give affected licensees reasonable opportunity to make submissions, or to take any such submissions into consideration in any proposed decision.

“Procedural fairness doesn’t seem to have been given much consideration by legislators in this instance,” David Sylvester, partner at Sylvester & Brown Solicitors, told PubTIC.

“The only positive to come out of this proposed way of imposing conditions is that L&G will need to make separate applications regarding individual venues, which is more cumbersome than a blanket ruling pursuant to 116I of the Act.

“Whilst those venues who hold the relevant licence are at this juncture deemed to be exempt from the lock-outs (by virtue of the decision), there are other mechanisms within the Act that allow the Secretary to impose the same conditions.

“Thus, the question of whether the Secretary will simply seek to rely on s.54 in future remains a possibility.”

The eagerly-awaited Callinan Review into the effectiveness of the lockout laws is expected to be released in coming days, by the end of August. It may include recommendations to soften or reduce the application of the laws, although Premier Mike Baird has already made it clear he likes them the way they are now.

Ominously, Liquor & Gaming has already served affected venues with correspondence detailing they are “strongly encouraged” to continue to comply, despite the Supreme Court ruling, until such time as the appeal is considered or Government issues a response.

It remains to be seen whether the regulator will seek to exercise the alternate methods of implementing restrictions prior to – or after – the Review.

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