In early‑July 2018 the Independent Liquor & Gaming Authority of New South Wales (ILGA) published its first two determinations under the revised Three Strikes Regime. In both determinations, a “first strike” was imposed against each licensee.
One of those determinations also resulted in the venue’s extended trading authorisation (ETA) being revoked as a direct regulatory response to one of the most blatant disregards to the NSW licensing legislation that the author has seen. That matter involved a Korean barbecue restaurant in Sussex Street, Sydney known as “Gangnam Station”.
These two determinations are significant in that they are the first time that ILGA has considered and published its reasons for whether or not it should impose a strike under the revised Three Strikes Regime. Subsequently two more first strikes have been recorded against the licences of two different venues.
The revised Three Strikes Regime came into force on 1 October 2017 as a consequence of a report into the previous Three Strikes Regime by Ian Callinan QC. Under the previous Three Strikes Regime a strike was recorded against the licence itself, rather than the holder of the licence. The first strike was automatically recorded if a “prescribed offence” was committed. Incurring a second strike involves a decision to be made by the Secretary of the Department and incurring a third strike involves a decision to be made by ILGA. Under the revised Three Strikes Regime, a strike is recorded against the licensee, the decision to impose a strike is one to be made by ILGA, including a first strike. ILGA can also take “remedial action” against the licensee, even following a first strike being imposed.
The circumstances behind the Gangnam Station first strike determination are quite spectacular. According to the published determination, three female patrons began drinking at about 7:55pm, consuming shots of soju (a Korean spirit). At about 8:38pm, the patrons consumed their eighth shot of soju, immediately after which two of the patrons collapsed and became unconscious. The restaurant staff then carried the two unconscious patrons out of the venue and placed them on the footpath. Police passing by observed these two unconscious patrons left on the footpath and called an ambulance.
The relevant prescribed offence was permitting intoxication. Penalty notices were issued by the Police for this offence which were then paid by the licensee, or on the licensee’s behalf. The licensee was back home in Korea at the time of the incident and made no submissions to ILGA, despite being invited to do so.
The ILGA determination imposing a first strike is fairly uncontroversial, given the seriousness of the incident. What is of note is that despite the time when alcohol was consumed with the last drink at 8:38pm, ILGA has given notice to the licensee that it will exercise its own initiative powers to effective revoke the venue’s extended trading authorisation (ETA), requiring the venue to cease service of alcohol at 12:00 midnight, instead of 2:00am.
The exercise of the power to revoke an ETA is not taking “remedial action” against the licensee under the Three Strikes Regime, but rather the exercise of the Authority’s own initiative powers under s.53(1) of the Act. Those powers are said to be exercised in the public interest, having regard to the objects of the Act and the Act as a whole.
While the Author believes that the licensee of Gangnam Station is about to get what is deserved, the Author does not believe that revoking the ETA is the appropriate way for ILGA to send a message to the liquor industry about responsible service of alcohol. The proposed action looks more like the imposition of a penalty, rather than being a protective measure, being taken in the public interest. Perhaps a disciplinary complaint under Part 9A of the Act would have been a more appropriate regulatory measure to be taken in the circumstances.
The important message to take from these ILGA determinations, is that strikes are now being recorded against licensees, following the revised Regime coming into force last year. They remain an important due diligence enquiry for purchasers and mortgagees to make.
6 September 2018