Author: Bruce Bulford

The Liquor Amendment (24-hour Economy) Bill 2020 (Bill) has been a long time coming.  The Bill began as a public consultation draft in early‑May 2020.  It was introduced into Parliament on 16 September 2020.  On 17 November 2020, the Legislative Assembly agreed to the extensive amendments made to the Bill by the Legislative Council.  The Bill is now partially in force.  It contains far reaching amendments to the Liquor Act 2007, the Environmental Planning & Assessment Act (1979) and a range of other planning laws.

The Bill has also been renamed the Liquor Amendment (Night-time Economy) Act 2020.  It received Assent on 27 November 2020.

Overview of the Bill

The Bill as now passed, is some 68 pages in length.  It was originally drafted to only make amendments to the Liquor Act 2007 (Act) and the Liquor Regulation 2018 (Regulation).  However, as a result of the extensive amendments, the Bill also amends the Environmental Planning and Assessment Act 1979, the Environmental Planning and Assessment Regulation 2000, the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008, the Standard Instrument (Local Environmental Plans) Order 2006 and the Local Government Act 1993.

A public consultation draft of the Bill was posted to the website of Liquor & Gaming NSW (L&GNSW) in early-May 2020.  In this draft form, the Bill was principally concerned with:

• a new “integrated demerit points system and incentive scheme”.  This is to replace the Three Strikes Regime, as well as the Minors Sanction Scheme;
• a new “cumulative impact assessment regime” to replace the Liquor Freeze;
•  a new regime for the regulation of same-day deliveries of alcohol;  and
• hidden deep in the Bill, is a small but significant change to the regulation of noise emissions from licensed premises, which is mentioned below.

Changes to the regulation of noise emissions from licensed premises

These new measures will commence on Proclamation.  They are quite confusing.  In one part of the Bill you would think that the power to control noise from licensed premises will pass from the Liquor & Gaming jurisdiction, completely to local councils, which is a significant and disturbing change.  However, in a separate part of the Bill, buried up the back in the Savings and Transitional Provisions, you will see that the Secretary of the Department of Customer Services may still impose noise abatement conditions on a licence, as a result of a noise complaint (see cl.70(3)) of the Bill.  This exercise of power is not in relation to a noise complaint, in the context of a Disturbance Complaint under sections 79 to 81 of the Act.  Clause 70(3) appears to be a de‑facto disturbance complaint regime, in addition to the existing disturbance complaint regime?

Who is to be in control of noise being emitted from licensed premises?  Does control remain with the Secretary of the Department, or does it now pass to the local council when this part of the Bill commences?  The addition of section 79(6) to the Act, makes it appear that the disturbance complaint provisions do not apply to a “complaint of a type prescribed by the Regulations”, if the “local consent authority has a local plan to deal with complaints of that type” and the local consent authority gives “written notice to the Secretary … that it will be dealing with complaints of that type”.  This would appear to be a clear transfer of jurisdiction to those local councils who have a “plan” to deal with complaints of that type.

Sydney City Council is currently formulating such a plan.  At the time of preparing this Update, Sydney Council has on exhibition a planning proposal entitled “Open and Creative Planning Reforms and draft Sydney Development Control Plan – Open and Creative Planning Reforms” (Council File Reference #X009155).  The purpose of this planning proposal is stated to “provide a clear and fair approach to managing “entertainment sound from venues, by applying the ‘agent of change’ approach”.  The details of this planning proposal can be found in the Minutes of the Transport, Heritage and Planning Committee on 22 June 2020, available on the Council’s website.  The report to the Committee together with its attachments are some 220 pages in length.  It is therefore clear, that for the purposes of section 79(6) of the Act, Sydney City Council will be taking control of noise emissions from licensed premises.  This is a disturbing development.

The Cumulative Impact Assessment Regime

Schedule 2 of the Bill contains a new cumulative impact assessment regime to replace the licence freeze.  The liquor freeze will be removed from the Act, on Proclamation of the Bill.  Most of Schedule 2 commences on Assent, on 27 November 2020.

Since 1999 there has been a “temporary” freeze on the granting of most Liquor Act applications, in various parts of the Sydney Local Government Area, including Kings Cross.  In early 2020 the liquor freeze applied to the defined prescribed precincts of Kings Cross and the Sydney CBD Entertainment Precinct.  Both of these freeze precincts will be abolished on the Proclamation of the Bill.  The Bill wholly repeals the Division of the Act containing the Liquor Freeze.

How the cumulative impact assessment regime would work, was indicated by the Authority on 1 June 2020, when it published Interim Guideline 6.1, entitled “Density Controls in the Sydney CBD Entertainment and Kings Cross Precincts”.  In this Guideline, certain parts of the Sydney CBD Precinct were shown as “Designated Cumulative Impact Areas”.  For these areas, the Guideline stated that there was a rebuttable presumption that applications to extend trading hours or increase patron capacity, would be refused.  Effectively, this is a liquor freeze, but by another name.

Now that this part of the Bill is in force, the Authority is to publish a “cumulative impact assessment” that applies to the relevant council area.  Currently the only relevant council area is the local government area of the City of Sydney.

As a part of the decision‑making regime under which the Authority grants applications of a certain type (section 48(5)), the Authority is now to take into account its own published cumulative impact assessment.

The Authority now also has a “social impact duty”.  That duty is to “ensure that the overall social impact of the granting of a licence or authorisation will not be detrimental to the well‑being of the local or broader community” (section 72A).

How any of the so‑called “high risk” applications will ever be granted by the Authority, is beyond the Author.  These provisions of the Bill, when coupled with Guideline 6.1 set the bar impossibly high.  Applications involving hotel trading hours or an expansion to the footprint of the hotel licence are examples of these high risk applications, which are certain to be refused.

As I said before, the cumulative impact assessment regime is a liquor freeze, by another name.

Integrated Demerit Points and Incentive Regime

This regime is contained in Schedule 1 to the Bill.  Schedule 1 will commence on Proclamation.

Schedule 1 wholly repeals the Minors Sanction Scheme (contained in sections 130A to 130F).  In addition, Schedule 1 abolishes the Three Strikes Regime contained in sections 144A to 144P).  All strikes currently recorded under both of these regimes will be deleted, however any remedial action already imposed by the Authority continues on as well as any suspension or cancellation already ordered.  The Demerit Point Regime is similar to the existing Three Strikes Regime and the Minors Sanction Scheme in terms of a person having to commit a “demerit” offence (section 144C).  Currently, the Three Strikes Regime only involves a strike being recorded against the holder of the licence.  Demerit points are also recorded against the licensee.  In respect of licensed clubs, the licensee is always the club itself.

In sections 144P to 155R, there is an escalating regime for the Authority’s powers when a licensee has accumulated a certain number of demerit points within a three year period.  This escalating regime ranges from simply reprimanding the licensee through to permanently disqualifying the licensee.  The suspension or cancellation of the licence itself is not part of this escalating regime.  This reinforces the Author’s view that liquor licences should be held by the individual venue manager rather than by the corporate entity that owns the business.  If the licensee (being a natural person) is suspended or disqualified, then the obvious remedy is to sack that person, employ a new venue manager and transfer the licence to the new venue manager.

If demerit points are personal to the licensee, then potentially the licensee takes with them to their new employer, their accumulated demerit points, remembering that demerit points last three years.

Bruce Bulford – 4 December 2020

On 29 May 2020, the Government proclaimed the Liquor Amendment (COVID-19 Licence Endorsements and Temporary Freezes) Regulation 2020 (Amending Regulation).  On 1 June 2020, the Independent Liquor and Gaming Authority of New South Wales (Authority) released Interim Guideline 6.1, headed “Density controls in the Sydney CBD Entertainment and Kings Cross Precincts” (Guideline).

The Amending Regulation and the Guideline clearly appear to be in direct conflict with each other.  However, when read together they are clearly part of a deliberate policy scheme.  The Amending Regulation and Guideline also need to be understood in light of the Government’s response to the Parliamentary Inquiry into the Night Time Economy (released in November 2019), as well as the draft Liquor Amendment (24-Hour Economy) Bill 2020 (Bill).

The Bill needs to be mentioned to give context to the Amending Regulation and to the Guideline.  The Bill is only in draft form, for public comment.  The consultation period has now been held open to 28 June 2020.

The Bill deletes the whole of Part 4, Division 1A of the Liquor Act 2007 (Act).  This part deals with the “temporary” freeze on licences and other authorisations, in the Kings Cross Precinct and the Sydney CBD Entertainment Precinct (Liquor Freeze).  In place of this so-called “temporary” Liquor Freeze, which has been in place since 1999, a new Division 5 is to be inserted into the Act, headed “Cumulative Impact Assessments”.

What is not readily apparent from a quick reading of the Bill, is the real significance of this amendment.  In my view, the Guideline gives a useful insight into the policy intent behind the proposed amendment in the Bill.

The Guideline indicates that there is a “rebuttable presumption against the granting of applications”, which fall within the Guideline.  It is probably the case that the same rebuttable presumption will be applied by the Authority, when determining the test contained in s.48(5) of the Act, after the Bill becomes law.

A marker of this policy intent, appears at s.72B(1) of the Bill, which mentions the “Authority’s duty under s.48(5) to ensure that the granting of a licence or authorisation will not be detrimental to the well-being of the local or broader community”.  With respect, this is definitely not the statutory test contained in s.48(5) of the Act, either now or after the Bill becomes law.  Section 48(5) is only one of a number of matters that the Authority must be satisfied in relation to, when determining a “relevant application”.

It is well settled law that the Authority’s determinations must be:

1. In accordance with the express provisions of the Act;
2. Be guided by the policy objectives expressly contained in the Act (see s.3(1) of the Act);  and
3. In accordance with the matters that the Authority is required to have “due regard to” in s.3(2) of the Act.

A “guideline” must be just that – to guide applicants, in the application or decision making processes which are not readily apparent from the legislation.  A guideline must never be a substitute for legislation.  It is the duty of our elected State representatives to consider and pass legislation through both Houses of the NSW Parliament.  Parliament cannot abrogate its responsibility and leave it to the Authority to do what it does not have the political appetite to do.  If there is to be a bar to applications, as contained in the Guideline, that bar must be contained in the legislation.

The Guideline might also appear to be a knee-jerk reaction to the Regulation being made.  However, on closer examination of the Guideline, that is not the case.  It is apparent from the Guideline, that the Authority had been working on it for some time.

The crime hotspot mapping images contained in the Guideline are not those which are publicly available from the BOCSAR website.  It is obvious that the Authority commissioned BOCSAR to produce the crime hotspot maps used in the Guideline.  These hotspot maps would take about 10 business days to produce.  Also, on the Guideline itself, while it was signed by the Authority Chair on 1 June 2020, the document has a date of 29 May 2020.  For those who know the workings of the Authority well, it is not that quick off the mark.

One may well ask, what was the purpose of, on one hand, the Government announcing the Regulation as a COVID-19 relief measure, and on the other hand, the Authority releasing the Guideline, which clearly takes away from the effect of the Regulation?  This is a clear case of “giving with the left” and “taking with the right”.

Bruce Bulford – 11 June 2020