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P J Ryan's Hotels Pty Ltd v Casey

 

[2004] QSC 105

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

P J Ryan’s Hotels P/L v Casey & Ors [2004] QSC 105

PARTIES:

PJ RYAN’S HOTELS PTY LTD ACN 000668 413
(plaintiff)
v
PAUL MARTIN CASEY and JO-ANNE CASEY
(first defendants)
TOWNPUB PTY LTD ACN 065 108 376
(second defendant)

FILE NO:

BS12047 of 2003

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

30 April 2004

DELIVERED AT:

Brisbane

HEARING DATE:

22 April 2004

JUDGE:

Muir J

ORDER:

That declarations be made as set out in paragraphs [4] and [6] of the reasons.

CATCHWORDS:

LIQUOR LAW- LICENSING- TRANSFERS- GENERAL- where the plaintiff sought declarations concerning the transfer by operation of law of operating authorities issued under the Gaming Machine Act 1991 following the transfer of the General Liquor Licence and issue of a Gaming Machine Licence for the same premises- whether the existence of an allocation dispute between the parties in the Queensland Commercial and Consumer Tribunal suspends the operation of s 78(5) of the Act

Gaming Machine Act 1991

Liquor Act 1992

COUNSEL:

P O’Shea SC with him D Cronin for the plaintiff

J M Horton for the defendants

SOLICITORS:

Phillips Fox for the plaintiff

Suthers Taylor for the defendants

  1. The plaintiff is the proprietor of the Rising Sun hotel premises in Townsville. It leases the premises to the first defendants under a lease the existing term of which expires on 26 June 2004. The first defendants are the sole directors and shareholders of the second defendant which is the holder of a general liquor licence under the Liquor Act 1992 for the hotel and the holder of the gaming machine licence for the hotel issued under the Gaming Machine Act 1991 (“the Act”). It also holds 40 operating authorities for the hotel issued under the Act.
  1. In its amended statement of claim in these proceedings, the plaintiff alleges that –
  1. The second defendant is obliged to transfer the general liquor licence to the plaintiff upon the expiration or sooner determination of the lease (paragraph 22);
  1. the first defendants are obliged to cause the second defendant to transfer the general liquor licence to the plaintiff upon the expiration or sooner determination of the lease (paragraph 23);
  1. the first defendants and the second defendant are obliged to surrender all gaming machine licences upon the expiration or sooner determination of the lease with a view to allowing the plaintiff to obtain such gaming machine licences (paragraphs 24 and 25); and
  1. the first defendants are obliged to cause the second defendant to surrender all gaming machine licences upon the expiration or sooner determination of the lease with a view to allowing the plaintiff to obtain such gaming machine licences (paragraph 26).
  1. Various other declarations are sought, including declarations that the first defendants are in breach of the lease by failing to hold the general liquor licence in their names, failing to hold the gaming machine licences in their names and failing to hold all operating authorities issued under the Act in their names.
  1. The defendants, in an amended defence, admit the conclusions of law pleaded in paragraphs 22 and 23 and consent to the making of declarations generally in terms of those paragraphs. The declarations are –

1It is declared that the Second Defendant is obliged to transfer General Liquor Licence No. 41110674 to the Plaintiff, or as the Plaintiff may direct, upon the expiration or sooner determination of Registered Lease 702774158.

2It is declared that the First Defendants are obliged to cause the Second Defendant to transfer General Liquor Licence No. 41110674 to the Plaintiff, or as the plaintiff may direct, upon the expiration or sooner determination of Registered Lease 702774158.”

  1. By their pleading and consent the defendants implicitly acknowledge that the facts are such as to justify the making of the declarations.

The issue contested in these proceedings

  1. On the basis of those admissions, together with others which do not need to be addressed for present purposes, the plaintiff claims an entitlement to the following declaration –

“3It is declared that if upon the expiration or sooner determination of Registered Lease 702774158:

3.1General Liquor Licence No. 41110674 is so transferred to the Plaintiff, or to such person as the Plaintiff may direct (“the transferee”); and at the same time

3.2The transferee applies for and obtains a Gaming Machine Licence issued under the Gaming Machine Act 1991 for the Rising Sun Hotel; all operating authorities issued under the Gaming Machine Act 1991 for the Rising Sun Hotel will be transferred by operation of law to the holder of such new Gaming Machine Licence for the Rising Sun Hotel.”

The plaintiff’s case

  1. The plaintiff’s argument advanced by Mr O’Shea SC is as follows –

“It is admitted that the second defendant is obliged to transfer the liquor licence to the plaintiff (or as the plaintiff may direct). When that occurs, the current gaming licence for the hotel will be cancelled under s 96(1). The plaintiff must seek to make arrangements under s 78(3). If it does, the operating authorities are transferred to the holder of the new gaming machine licence by virtue of s 78(5) and there is no reason why the declaration sought should not be made.”

The defendant’s case

  1. Mr Horton, who appears for the respondents, resists the making of the disputed declaration on grounds principally that the second defendant and the applicant are parties to an “allocation dispute” in the Queensland Commercial and Consumer Tribunal concerning the operating authorities. The argument was developed in the following way. The Tribunal has power to “deal with” the operating authorities of a party to the dispute. Its powers extend to making orders for the sale or other disposal of an operating authority. Once an allocation dispute is commenced, the Act preserves the status quo by prohibiting licensees from surrendering their gaming machine licence without written permission from the chief executive.[1] The Tribunal’s jurisdiction is enlivened by the commencement of an allocation dispute and “section 78(5), if it has any operation at all, has a limited one. While operating authorities might still be “transferred”, the transfer is all that would occur. There would be a change in the “initial” holder of those authorities, but such change would not bring with it better title than the transferee had; that is, the transferee’s title to those authorities is subject to the Tribunal’s power to order sale, disposal or that another dealing occur.”

Relevant statutory provisions

  1. Section 96(1) of the Act provides that –

“If a liquor licence is cancelled, transferred or surrendered, any associated gaming licence is cancelled.”

  1. An “associated gaming licence” is “a gaming machine licence for the premises, or part of the premises, to which the liquor relates”.[2]
  1. Under the Act, gaming machine licences cannot be transferred.[3] Section 78 of the Act contemplates that, where a liquor licence is transferred and any associated gaming licence is cancelled, a new gaming machine licence will be issued contemporaneously with such transfer and cancellation.
  1. Subsections 3, 4, 5 and 6 of s 78 provide –

“(3) If a person -

(a) makes a liquor licence transfer application relating to a club liquor licence, general liquor licence or prescribed liquor licence; and

(b) applies at the same time for a gaming machine licence for the premises to which the application mentioned in paragraph (a) relates; and

(c) the liquor licensing authority is prepared to transfer the liquor licence; and

(d)  the commission is prepared to grant the gaming machine licence;

the chief executive and the liquor licensing authority are to make arrangements so that the transfer of the liquor licence and the issue of the gaming machine licence happen at the same time.

(4) Subsection (5) applies if, under subsection (3), arrangements are made for a gaming machine licence (a ‘new licence’) to be issued at the same time as the transfer of a liquor licence and an associated gaming licence for the liquor licence is cancelled under section 96(1) because of the transfer of the liquor licence.

(5) All operating authorities, if any, for the licensed premises under the cancelled associated gaming machine licence are transferred by operation of this subsection to the holder of the new licence.

(6) In subsection (5)-

‘operating authority’, for the licensed premises under the cancelled associated gaming machine licence, does not include an operating authority that must be sold at an authorised sale.

Provisions of the Act relating to allocation disputes

  1. “Allocation Dispute” is defined in s 408 as meaning “a dispute arising from the allocation of an operating authority to a category 1 licensee under section 409 and affecting existing arrangements between parties”. Sections 408 to 427 inclusive are contained in Division 8 of the Act which is entitled “Provisions for Gaming Machine and Other Legislation Amendment Act 2003”. Subsection 409(2) provides that immediately after the commencement of s 408, the number of operating authorities equal to the approved number of gaming machines for the licensee's licensed premises are allocated to the licensed premises by operation of s 409(2).
  1. Section 419 provides that, subject to subdivision 2 of division 8, a proceeding for an allocation dispute must be heard and decided under the Tribunal Act. Section 420(1) provides that the tribunal may make an order “in relation to an allocation dispute about dealing with operating authorities of a party to the dispute”. The subsection gives as examples of the orders which may be made, orders –

(a) about the sharing, as between the parties, of any amounts payable to a party under section 109E; or

(b)about compensating a party in another way for the sale or other disposal of an operating authority.”

Conclusions

  1. Mr Horton expressed concern that the giving of the declaratory relief sought by the plaintiff might impinge on the relief the tribunal was able to give in the proceedings before it as a result, in particular, of the acquisition of relevant interests by third parties.
  1. But the fact that the tribunal might be seized of an allocation dispute cannot affect the operation of provisions of the Act such as s 78 unless the Act, on its proper construction, so provides. It does not seem to me that it does.
  1. I do not wish to express an opinion on the scope of the tribunal’s powers under s 420 as that matter was not properly before me and, in consequence, was not fully argued. Accordingly, I will assume, for the purposes of argument, that the tribunal may make orders for the sale or other disposal of operating authorities. In that case it may well be arguable that it would be desirable, in some circumstances at least, that operating authorities the subject of an allocation dispute not be dealt with in such a way as to give rise to rights on the part of third parties before the tribunal makes its determination. One cannot go from that position, however, to a conclusion that this is what the legislation achieves without an analysis of its wording.
  1. There is nothing in s 78 which suggests that its operation should be read subject to Division 8. There is in fact a strong indication to the contrary in Division 8. Section 424(1) provides –

Despite section 95, a category 1 licensee can not, without the chief executive's written approval, surrender a gaming machine licence after the commencement.”

  1. Section 95 permits a licensee “at any time” to surrender the licensee’s gaming machine license by following the procedure prescribed in the section.
  1. Section 424(1) ceases to apply at the end of the period prescribed under a regulation for s 416(1). It ceases to apply also where the licensee or another person has applied to the tribunal to start an allocation dispute related to the licence, after the allocation dispute is decided.
  1. The terms “cancel”, “transferred” and “surrendered” when used in s 96(1) obviously refer to different acts or processes. By operation of the principle expressio unius est exclusio alterius, the legislature, by implication, although concerned to prevent surrenders during the pendency of allocation disputes has not deemed it necessary to prevent cancellations or transfers. It follows that, in my view, the mere existence of an allocation dispute cannot suspend or otherwise impinge on the operation of section 78(5).
  1. No other impediment to the making of the declaration set out in paragraph [6] having been disclosed, I propose to make a declaration in those terms and the agreed declarations. Costs will follow the event.

Footnotes

[1] S 424.

[2] Gaming Machine Act 1991 s 96(5).

[3] Gaming Machine Act 1991 s 77.

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Editorial Notes

  • Published Case Name:

    P J Ryan's Hotels P/L v Casey & Ors

  • Shortened Case Name:

    P J Ryan's Hotels Pty Ltd v Casey

  • MNC:

    [2004] QSC 105

  • Court:

    QSC

  • Judge(s):

    Muir J

  • Date:

    30 Apr 2004

Litigation History

No Litigation History

Appeal Status

No Status