QCAT considers Liquor Licence risk criterion fees

Liquor licence fees can be onerous enough without the added burden of a risk criterion fee, especially if that risk criterion fee was imposed as a result of a previous licensee’s misdemeanours.

The Liquor Regulation 2002 (Qld) (the Liquor Regulation) prescribes that a risk criterion fee is added to the annual base fee for a liquor licence if the licensee was convicted of an offence against the Liquor Act 1992 (Qld) (the Act) in the previous annual licence period and the time for appeal against that conviction has ended.

The recent Queensland Civil and Administrative Tribunal (QCAT) decision of Sandglass Pty Ltd trading as Café 63 Noosa v Commissioner for Liquor and Gaming, deals with this issue and determines whether the current licensee was liable to pay a $13,500 risk criterion fee for offences committed by the previous licensee prior to the transfer of the licence to the current licensee.

In arguing that Sandglass (the current licensee) was liable, the Commissioner for Liquor and Gaming (the Commissioner) pointed to section 113(3) of the Act, which states that upon transfer of a licence, the transferee becomes the licensee and is subject to the obligations imposed by the Act or the conditions of the licence on the holder.

The Commissioner maintained that the possibility of a risk criterion fee arising for a transferee is a business risk that must be dealt with like any other, noting that liabilities run with the licence just as benefits do.

In taking over the premises, Sandglass dealt only with the lessor of the premises rather than the previous licensee, and therefore had no opportunity to insist that the outgoing licensee advise of any pending or possible charges. Additionally, in the absence of the consent of the outgoing licensee there is no public register or other method of obtaining this kind of information which may assist incoming licensees to mitigate this risk against related financial liability.

The decision

Accordingly, the question to be considered was whether Section 113(3) of the Act operates to impose liability on a new licensee when a previous licensee has been convicted of an offence against the Act. The provision carries a general implication that upon transfer of the licence, the transferee becomes the licensee and accordingly, becomes liable for any burden that may attach to the licence because of the conduct of a previous licensee.

It was found that clear words within the Liquor Regulation were required to extend liability for the risk criterion fee to the situation where a former licensee rather than the current licensee has been convicted. As a result, it was found that Sandglass was not liable to pay the risk criterion fee.

The implications

QCAT considered the implications of this finding and noted that if liability does not run with the licence, there would be incentive for a licensee to transfer the licence to an associated entity in order to avoid a risk criterion fee. However, the fact that a licence cannot be transferred unless the Commissioner allows it, means that suspicious transfers can be assessed and denied if this issue were to arise.

As risk criterion fees are intended to deter the repetition of misconduct, it appears such deterrence is irrelevant in circumstances where the licence has been transferred by the wrongdoer to an unrelated entity. Therefore, it seems only fair that licensees are spared from literally paying the price for the mistakes made by those who went before them.

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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