Liquor Licensing Update: Pay the fine, pay the price (possibly twice)

A licensee client of Brand Partners was recently told by Council Planning Enforcement Officers that they shouldn’t “lawyer up” and fight a Planning Infringement Notice in court because payment of the fine “wouldn’t affect their liquor licence”.

Regrettably, the Council officer couldn’t have been more wrong. Section 16 of the Liquor Control Reform Act 1998 (Vic) (‘LCRA’) provides that “it is a condition of every licence and BYO permit that the use of the licensed premises does not contravene the planning scheme that applies to the licensed premises under the Planning and Environment Act 1987”.

Paying an infringement notice for a breach of your planning permit can affect your liquor licence because by operation of section 16 of the Act, a breach of the Planning Scheme is a breach of a condition of your liquor licence.

Disciplinary Proceedings under the LCRA

Pursuant to sections 90, 91 and 93 of the LCRA, Police and LCV may apply to the Liquor Commission to conduct an inquiry into the conduct of a licensee to determine whether there are grounds for taking “disciplinary action” against a licensee (an Inquiry).

If you pay a fine for a breach of your liquor licence you cannot dispute that offence in an Inquiry.

Section 90 provides:

“disciplinary action“, against a licensee means any one, or a combination, of the following—

• the cancellation, or suspension for a specified period, of the licensee’s licence;
• the variation of the licensee’s licence;
• the endorsement of the licensee’s licence;
• the issuing of a letter of censure to the licensee;
• the imposition of a fine not exceeding an amount that is 250 times the value of a penalty unit (presently $192.31 making a maximum penalty of $48,077.50).

“grounds for disciplinary action“, in relation to a licensee or permittee, means any of the following:

• that the licensee has contravened a provision of this Act, the regulations, the licence or a condition of the licence (as the case may be);
• that the licensee has been found guilty of an offence against this Act or the regulations;
• that the licensee has paid a penalty for an offence under this Act for which an infringement notice has been served.

Because the payment of an infringement notice constitutes grounds for disciplinary action, careful consideration must be given to whether you have a basis to defend the offence alleged in the infringement notice in court to avoid the offence being relied upon by Police or LCV at a later date in an Inquiry against the licensee asking the Commission to take disciplinary action against the licensee.

The Liquor Commission recently held in the case of Sterling Nightclubs Pty Ltd[1] that a fine ordered in the course of an Inquiry by way of “disciplinary action” under the LCRA may be imposed even where the licensee has already been fined by a Court after being found guilty of an infringement offence which is one of the offences identified as grounds for disciplinary action in the Inquiry. Accordingly, the Inquiry regime including the ability to fine a licensee as disciplinary action in an Inquiry is treated as separate from any punishment arising from Court proceedings in which offences against the LCRA have maximum penalties fixed by the legislation. It is therefore possible to be fined in relation to the same conduct in two different proceedings.

In addition, directors of licensees who pay infringement notices must declare the payment of infringement notices on all licence transfers and new licence applications and the offences may be considered in relation to the suitability of the director and/or licensee company in relation to the licence transfers and new licence applications or as a ground for objection by police LCV or Council that the licensee or a director is unsuitable to hold a liquor licence.

There is no rule about how many infringement notices you can pay or “strikes” you can have against your liquor licence before disciplinary proceedings are commenced against a licensee. Therefore, it is critical that where you believe you may have a defence against an offence alleged in an infringement notice that you seek advice about possible defences that may avoid the offence being recorded against the licensee.

If you would like to discuss compliance concerns or a recent infringement notice, please contact Terence O’Brien or Grace Madafferi.