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15 Oct 2020

The public interest in liquor licensing: the Leisure Inn redevelopment

By Brad Wylynko, Mark Etherington

A recent court decision suggests a need to broaden the Liquor Control Act 1988's remit, as it never contemplated the unique challenges of a post-pandemic economic recovery.

Under Western Australia's Liquor Control Act 1988, in issuing a liquor licence, the licensing authority (Licencing Commission or Director of Liquor Licensing) weighs competing considerations and makes a broad value judgment &ndash a "public interest" determination. However, little statutory criteria are provided in the Act to define what is, or what is not, in the public interest.

Recently, the WA Court of Appeal addressed the relevance of economic considerations in that determination. In Australian Leisure and Hospitality Group Pty Ltd v Commissioner of Police [2020] WASCA 157 the Court unanimously considered that:

  • regard may be had to potential economic benefits that are associated with the development of the liquor, tourism and hospitality industries or the use of licensed premises; but
  • the Liquor Commission erred in considering potential economic benefits that were not concerned with those industries or premises.

The Court held that when determining the Leisure Inn redevelopment, the Liquor Commission erred in considering:

  • the benefits to the City of Rockingham and the local community, including in the form of employment, and a proposed $6.5 million investment;
  • a staff training facility,;
  • the potential catalytic contribution to the further development of the wider commercial precinct; and
  • the benefit to other businesses from a more active commercial precinct.

The Leisure Inn application now returns to the Liquor Commission for reconsideration.

The Court's consideration of the "public interest" under the Liquor Control Act 1988

While accepting that "the public interest" is multi-dimensional, the Liquor Commission "is not free to apply idiosyncratic notions of public interest" nor "to act on whim". Accordingly, the question of scope must be determined through statutory construction, in this case, of the Liquor Control Act 1988.

"Considered in the abstract, rather than through the prism of the Act, the term 'public interest' is capable of encompassing a wide range of considerations. It may, depending on the subject matter, scope and purpose of the relevant statute, include matters as diverse as freedom of political communication, the proper administration of government, open justice, public health and safety, the prevention and detection of crime, national security and economic wellbeing. However, when used in a particular [statutory] context … the term 'public interest' is not at large".

In finding that the "public interest" did not encompass mere general economic benefit or economics-at-large, Quinlan CJ & Vaughan JA noted that statutory construction:

"is not assisted by the truism that the Act impacts on many and varied economic activities throughout Western Australia. Virtually all statutory regulation has the capacity to impact on economic activity in a general sense, if not directly then at least indirectly. It does not follow from the circumstance that other economic activities may be affected, either positively or negatively, by the exercise of statutory power or discretion grounded on a public interest criterion that economic benefits are a relevant public interest consideration. That argument suffers from the fallacy of conflating what might, in general terms, be considered a public interest benefit with identification of the public interest that is engaged by the statutory provision in question".

The Court noted regard is given to amenity considerations connected with licensed premises. However, those amenity considerations (being the relevant effects or consequences upon the overall character, quality and enjoyment of life within a location) are necessarily limited. Amenity considerations do not include any additional economic benefits that may generally arise for others simply because the licensed premises increases the range of commercial opportunities in the locality or "may contribute to further development of the immediate commercial precinct benefitting nearby businesses".

The Court confirmed that the public interest in the development of the liquor, tourism and hospitality industries and the use and development of licensed premises "falls within the general rubric of the public interest in relation to the sale, supply and consumption of liquor". That is, the Act expressly contemplates and addresses three industries - the liquor, tourism and hospitality industries - but not others.

Similarly, the Court noted the statutory objectives of regulating liquor and developing the liquor, tourism and hospitality industries, and that employment, facilities and investments are inherent benefits associated with such development. However, the statutory objectives do not regulate liquor or developing those industries for the purpose of achieving or enhancing such benefits in other industries or catering for the non-liquor requirements of the consumers generally.

Consequently the "public interest" criteria may include obtaining general economic benefits for the liquor, tourism and hospitality industries, but not any benefits that may accrue to other industries or the community generally.

Implications for WA's post-COVID-19 recovery

The Court's decision in this case highlights:

  • the often differing technical requirements that apply to projects requiring multiple statutory approvals (eg. the different considerations or nuances that apply under each of planning, building and liquor licensing laws); and
  • the risk of public interest assessments addressing economic (and other beneficial, development or population) criteria in broad, conceptual or high-level terms without clear and logical linkages to the objectives and purposes of the Liquor Control Act (eg. the regulation of licensed premises, the use and development of licensed premises and the development of the liquor, tourism and hospitality industries).

The consideration of the public interest (and therefore the development of public interest assessment application documentation) needs to be undertaken in a very technical and targeted way, given the scope for objection, appeal and judicial review.

While Western Australia is looking to maximise economic stimulus for post-COVID recovery across all sectors and precincts, such recovery cannot (absent legislative amendment) inform licensing decisions under the Liquor Control Act 1988, even as a short-term measure.

Post-COVID-19 recovery will only be relevant where a redevelopment generates economic benefits for the liquor, tourism and hospitality industries themselves. This likely arises only within the context of designated tourism and hospitality precincts.

As the Liquor Control Act 1988 never contemplated the unique challenges of a post-pandemic economic recovery, the State Government may need to consider broadening the Liquor Commission's remit (even if subject to a sunset date).

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.