Club DP Pty Ltd v State of Queensland [2000] QSC 256

SUPREME COURT OF QUEENSLAND CITATION: Club DP Pty Ltd v State of Queensland & Anor [2000] QSC 256 PARTIES: CLUB DP PTY LTD (applicant) v STATE OF QUEENSLAND (first respondent) DAVID WILLIAMS (CHIEF EXECUTIVE AND DIRECTOR GENERAL OF THE DEPARTMENT OF TOURISM AND RACING) (second respondent) FILE NO/S: 4563 of 2000 DIVISION: Trial Division DELIVERED ON: 14 June 2000 DELIVERED AT: Brisbane HEARING DATE: 7 June 2000 JUDGE: Douglas J ORDER: Order that the application be dismissed with the exception of ground 2. In that respect it is ordered that the chief executive’s determination that all applications for adult entertainment permits under the Liquor Act 1992 are to be advertised, be set aside and the matter remitted for further consideration according to law. CATCHWORDS: ADMINISTRATIVE LAW - JUDICIAL REVIEW LEGISLATION - application for review and statutory order for review pursuant to s 43 and s 20 of the Judicial Review Act 1991 - review of decision of the chief executive that all applications for adult entertainment permits under the Liquor Act 1992 are to be advertised STATUTES - BY-LAWS AND REGULATIONS - VALIDITY - whether reg 19E of the Liquor Regulation 1992, made pursuant to s 103H(c) of the Prostitution Act 1999 which monitors and controls adult entertainment in Queensland, is unreasonable and beyond power - meaning of unreasonableness and beyond power and considerations that apply Judicial Review Act 1991 Liquor Act 1992 Liquor Regulation 1992 Liquor Amendment Regulation (No 1) 2000 -- 1 of 8 -- 2 Prostitution Act 1999 Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 Assignment Pty Ltd v Kirby (1981) Qd R 129 Brunswick Corporation v Stewart (1941) 65 CLR 88 Carter v Egg Pulp Marketing Board for Victoria (1942) 66 CLR 557 Commonwealth v Tasmania (1983) 158 CLR 1 South Australia v Tanner (1989) 166 CLR 161 Widgee Shire Council v Bonney (1907) 4 CLR 977 Williams v Melbourne Corporation (1933) 49 CLR 142 COUNSEL: RW Gotterson QC, with ES Morzone for the applicant JA Logan RFD SC, with SA McLeod for the first and second respondents SOLICITORS: Hynes Hartnett for the applicant CW Lohe, Crown Solicitor, for the first and second respondents [1] DOUGLAS J: The applicant, Club DP Pty Ltd, is the manager of a business known as “Club DP” in Brisbane. It is the holder of a general liquor license in respect of its premises at 130 Petrie Terrace, Petrie Terrace, Brisbane. DP and RG Pty Ltd, as trustee for the DP trust, is the owner of the business and one Anthony Gerald Shead is the sole director of DP and RG Pty Ltd. Shead is also the sole director of The Red Garter and Moskva Nightclub Pty Ltd, the manager of a business known as “The Red Garter” in Fortitude Valley, a director of Showgirls Australia Pty Ltd and the owner and licensee of a business known as “Skycity” in Woolloongabba. [2] Each of Club DP, The Red Garter, and Skycity are licensed premises providing adult entertainment in the form of striptease reviews and related performances. [3] Mr Shead deposes that construction of the existing building fitout for Club DP was completed in or about October 1999 and that the premises were purpose built for the provision of adult entertainment. It was necessary to obtain both town planning approval and the grant of a general liquor licence for the premises. The legal and other costs incurred in obtaining these approvals were approximately $100,000. It was always the case that the premises were to be used to provide adult entertainment which resulted in the Liquor Appeals Tribunal imposing a trading condition upon the general licence that the principal type of entertainment to be provided be “adult entertainment in the form of exotic dancing”. [4] Shead further deposes that there are structural load bearing pylons within Club DP’s premises which are approximately half a metre in diameter and in part obscure the viewing from inside the premises. He says that it is not possible to remove these structural pillars and provide another method of support to the building which does not result in internal viewing within the premises being somewhere restricted. -- 2 of 8 -- 3 [5] He further deposes that the situation with respect to The Red Garter and Skycity nightclubs is worse. The Red Garter is in effect divided into two rooms with a door linking them. Each of these rooms used to be the ground floor of separate buildings and accordingly, he says, there is a structural load bearing wall between them. Adult entertainment is provided in each room. [6] He deposes that Skycity is essentially comprised of one room but has an internal staircase located in the middle of that room and that in addition there are structural load bearing pylons in the premises. The staircase and the pylons substantially restrict the view within the premises. [7] Shead further deposes that if it were necessary to modify Club DP to comply with the new law, which will be discussed later, the fit out to be demolished or removed from the premises would be of a value of $350,000, and that the value of the works required to ensure that the premises comply with the new law would be approximately $200,000 to $300,000. He says that it would take a minimum of two to three months to complete subject to trades people and materials being available. [8] He also says that in addition to Club DP, Skycity and The Red Garter there are six other licensed premises, whose primary purpose is the provision of adult entertainment, who are liaising with him regarding the outcome of this application. The application has been lodged as a test case for all of these premises. [9] The applicant’s concern arises from events which have occurred since the Queensland Parliament passed the Prostitution Act 1999 (“PA”) in December 1999. That Act amended the Liquor Act 1992 (“LA”) by adding a series of new provisions. The amendments are contained in Part 9 of the PA (ss 142-169) and, inter alia, introduce into the LA a new division, being Part 4 Division 13A - Adult Entertainment Permit. [10] These provisions create a regime for the regulation of sexually explicit adult entertainment on licensed premises under the LA. Under the regime, licensees who wish to conduct this type of entertainment are first required to obtain an Adult Entertainment Permit (“AEP”): LA Part 4 Div 13A, s 103E and s 149A. [11] The new regime is to commence on 1 July 2000. [12] Pursuant to the various regulation making provisions in the LA, the Governor in Council made the Liquor Amendment Regulation (No 1) 2000 (“Amendment Regulation”) on 20 April 2000. Inter alia, this regulation amended the Liquor Regulation 1992 (“Regulations”) by inserting a new Part 5B - Adult Entertainment Permits (Regs 19C-19J). Part 5B is also to commence on 1 July 2000. [13] There is no question that the applicant has standing to bring this application which is in essence a combined application for review and statutory order for review. It is brought pursuant to s 43 of the Judicial Review Act 1991 and claims a prerogative order quashing or, alternatively, a declaration declaring invalid: (a) Regulation 19E of the Amendment Regulation; and (b) the statutory instrument comprising the form 23 application for adult entertainment permit approved by the second -- 3 of 8 -- 4 respondent which requires all applications for an adult entertainment permit under the LA to be advertised. [14] The application further claims pursuant to s 20 of the Judicial Review Act 1991 a statutory order for review of the decision of the second respondent whereby, by approval of form 23 application for adult entertainment permit, he has determined that all applications for adult entertainment permit under the LA are to be advertised. [15] Regulation 19E provides as follows: “(1) For section 103H(c) of the Act, the area must consist of an open room or other area that allows a person attending the entertainment to view the entertainment from any part of the room or area; (2) Without limiting subsection (1), the area must not - (a) have any walls or partitions, whether transparent or not, that separate or divide, or could be used to separate or divide, the area; or (b) contain furniture that screens, or could be used to screen, a part of the area from the remainder of the area.” [16] That regulation has purportedly been made pursuant to the power conferred under s 103H(c) of the PA. Section 103H provides as follows: “Approved area to conform with requirements 103H Before the chief executive approves an area as an approved area, the chief executive must be satisfied the area conforms, or will conform, with this Act and the following requirements while adult entertainment is being provided in the area - (a) the area must be fully enclosed in a way that prevents a person outside the area from seeing inside the area; (b) the area must not contain, for the private use of persons attending the entertainment, a lounge, booth, compartment or cubicle (other than a toilet cubicle); (c) another requirement prescribed under regulation.” [17] The application submits that reg 19E is beyond power and that sub paragraph (b) of reg 103H deals expressly and comprehensively with separate or divided parts within an area for approval. What sub paragraph (b) does, it is submitted, is require that there be no separate or divided parts in the area for approval in the form of a lounge, booth, compartment or cubicle for the private use of persons attending the entertainment (emphasis added). It is submitted that it does not prohibit every lounge, booth, compartment or cubicle. -- 4 of 8 -- 5 [18] The submission goes on that the qualification brought into sub paragraph (b) by the phrase “for the private use of” connotes privacy in the use of. Thus, it is said, the prohibition in sub paragraph (b) is of lounges, booths, compartments or cubicles which give or assure privacy to those who might use them as would be the case, for example, if fitted with a lockable door. It is submitted that the perceived object is to prohibit locations within the area which facilitate private acts of an unauthorised kind, like prostitution. It is submitted that in light of this, it follows that it is not a requirement of sub paragraph (b) that other forms of separation or division in the area for approval not exist. Moreover, it is submitted that it is to be inferred from the comprehensiveness of sub paragraph (b) that other forms of separation or division are to be permitted. [19] The submission goes on to say that the power to prescribe a regulation under s 103H(c) is to be interpreted conformably with the remainder of s 103H, particularly sub paragraph (b). So interpreted, it is said, sub paragraph (c) does not authorise a regulation the effect of which is to prohibit other forms of separation or division. [20] In addition it is submitted that reg 19E does not advance the objectives of either the PA or the LA. It is submitted that the objective of the PA is to regulate and control prostitution in Queensland: PA s 3; Prostitution Bill Explanatory Notes p 1. It is conceded that consistent with that objective, areas for the private use of patrons be prohibited. But, it is submitted, the prohibition of walls and partitions (even if transparent) and furniture screens within areas to which the public have access is distant from that objective. [21] Perhaps alternatively, it is submitted that reg 19E is beyond power as unreasonable at two levels being: (a) in its application to premises currently licensed to provide adult entertainment; and (b) in its requirement that a person attending the entertainment must be allowed to view it from any part of the room or area. As to (a) above, it is clear that reg 19E applies to all premises currently licensed. It is submitted that in so doing it makes no concession for the fact that many such premises: (i) have been purpose built for adult entertainment with the approval of multiple authorities; (ii) have structural walls, columns or other elements that obscure the view of entertainment from various parts of the premises; (iii) area leased by licensees without any or any unilateral right to alter premises; (iv) cannot be brought into conformity with its requirements without considerable expenditure and modification; and (v) are able to facilitate adequate supervision to ensure the objects of the PA and LA are met. -- 5 of 8 -- 6 [22] It is submitted that the regulation will have the effect that some premises currently licensed to provide adult entertainment will either cease to be able to be used to provide such entertainment, or be able to be so used only after expensive structural alterations are made. It is said that the regulation will operate oppressively in respect of currently licensed premises and for this reason it is unreasonable and beyond power. Reliance is made on the dicta of Williams J in Brunswick Corporation v Stewart (1941) 65 CLR 88 at 99 where his Honour said: “A by-law must be certain in the sense that it must contain adequate information as to the duties of those who are to obey (Country Roads Board v. Neale Ads Pty. Ltd. (1930) 43 CLR at p132; Robert Biard Ltd. v. City of Glasgow (1936) AC at p 44; Twickenham Corporation v. Solosigns Ltd. (1939) 3 All ER 246 at p 251). It must not be unreasonable in the sense that it must not involve such oppressive or gratuitous interference with the rights of those who are subject to it as could find no justification in the minds of reasonable men (Jones v. Metropolitan Meat Industry Board (1925) 37 CLR 252 at p 261; Robert Baird Ltd. v. City of Glasgow (1936) AC 32; and the authorities collected in the judgment of Dixon J. in Williams v. Melbourne Corporation (1933) 49 CLR 142 at p 154). Such an interference would be an abuse of power and therefore not within it.” [23] It is convenient to deal with the question of the unreasonableness of the regulation first. In this regard I accept the submissions of the respondents that to question a regulation on the grounds of “unreasonableness” is a basis upon which, in the past, the validity of regulations has been questioned. It is however an extremely narrow basis of challenge with respect to which the court must be scrupulous not to transgress into areas consigned by Parliament to the executive. In my view “unreasonable” in this context means that the regulation is so oppressive and capricious that no reasonable mind can justify it: Widgee Shire Council v Bonney (1907) 4 CLR 977 at 980-983, 986-989; Brunswick Corporation v Stewart (supra) at 97 and 99 and Carter v Egg Pulp Marketing Board for Victoria (1942) 66 CLR 557 at 584-585 per Starke J, at 581 per McTiernan J and at 599 per Williams J. [24] In my respectful view the legislature here has decided to set up an entirely new regime to control and monitor prostitution in Queensland. Therefore in my view reg 19E is not unreasonable in the sense that unreasonableness is understood in the authorities to which I have referred. It is not proper to test its reasonableness by the subjective sentiments portrayed by Mr Shead’s affidavit, or any relationship to the peculiar circumstances with respect to the businesses with which he is associated or indeed of those who are supporting him. The regulation is of general application, within power, and is suitable in the context of monitoring and controlling “adult entertainment” in Queensland. [25] It is next necessary to consider whether the regulation is “beyond power”. As I have said, the power to make the regulation is found in s 103H(c) of the LA. Consideration of the validity of the regulation requires a determination of the “true nature and purpose of the [regulation making] power”; Williams v Melbourne Corporation (1933) 49 CLR 142 at 145 per Dixon J; and South Australia v Tanner (1989) 166 CLR 161 at 164 per Wilson, Dawson, Toohey and Gaudron JJ. Mr Logan SC for the respondents submitted that the modern approach is to ask whether the regulation is capable of being considered to be “reasonably -- 6 of 8 -- 7 proportionate” to the pursuit of the enabling purpose: Commonwealth v Tasmania (1983) 158 CLR 1 at 260 per Deane J. [26] He further submitted: “The evident purpose of s. 103H is to ensure that only those who choose to enter a permitted adult entertainment area can see the “entertainment” and that the area is used only for such entertainment, i.e. external privacy and singularity of internal use. Reg. 19E is a “requirement” with respect to an adult entertainment area in terms of s. 103H(c). Its requirement as to an open room or area for viewing the “entertainment” is consistent with the two express statutory requirements and the evident purpose of s. 103H.” I accept that submission as correct. [27] It therefore follows that reg 19E is not, in my view, either made beyond power or unreasonable. [28] The chief executive of the department has determined by the approval of form 23 “Application for Adult Entertainment Permit” that all applications for AEP’s “must be advertised”: Exhibit 1 page 2 top. [29] The PA contains no express requirement that an application for an AEP be advertised. Section 118(1) of the LA says: “Advertising of applications 118.(1) An application for the following must be advertised under this section - (a) a licence or variation of a licence; (b) an approval under section 59(1)(d) (Authority of a general licence); (c) an extended hours permit, or a variation of an extended hours permit, that would extend trading hours on a regular basis; (d) another application that the chief executive requires, by written notice to the applicant, to be advertised. [30] It is clear from s 118(1) that certain applications must be advertised. An AEP is not one of those. The PA did not amend s 118 of the Act. It is noteworthy that s 117 was amended to include AEP’s in matters requiring compulsory consultation with the relevant local authority and the assistant commissioner of police. In my view, it is safe to assume that the intention of the legislature was the applications for AEPs be governed by the discretion under s 118(1)(d) of the LA. [31] In deciding that all applications for an AEP must be advertised the chief executive has closed his mind to the circumstances individually of each case; and in particular this case. He has, in my view, unlawfully fettered his discretion. See Assignment Pty Ltd v Kirby (1981) Qd R 129 at 134. See also s 23(f) of the Judicial Review Act 1991. [32] Additionally the chief executive’s decision, as communicated in the form (exhibit 1), does not invite persons to be heard as to any departure from the policy -- 7 of 8 -- 8 and as it is to be applied in a blanket fashion, without regard to the individual merits of each case, it is an unlawful future fetter on discretion. [33] The respondents’ submitted that in circumstances where there has been no request to make an exception in a particular case, there is nothing wrong in departmental decisions being made in accordance with a prestated policy position unless (unlike here) that policy is itself inconsistent with the legislation concerned. Reliance was placed upon Ansett Transport Industries (Operations) Pty Ltd v The Commonwealth (1977) 139 CLR 54 at 61-62 per Barwick CJ, at 62 per Gibbs J, at 87 per Murphy J and at 115-116 per Aickin J. [34] For myself, I see no difficulty generally with a person in the position of the chief executive making decisions in accordance with a prestated policy position. However, in this case, fettered as he is by the provisions of s 118(1)(d) he is not permitted so to do. [35] The upshot of my decision that the chief executive unlawfully required advertising for all applications for AEPs, is that that decision be set aside and the matter be remitted to the second respondent for further consideration according to law. [36] In the event I dismiss the application with the exception that in relation to ground 2 of the application, concerning the chief executive’s determination that all applications for an adult entertainment permit under the Liquor Act 1992 are to be advertised, that that decision be set aside and the matter be remitted to the second respondent for further consideration according to law. -- 8 of 8 --