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Licensee Update – Basic tips for avoiding Disciplinary Actions for Restaurant Licensees

In the hospitality industry – where red tape is as much a part of life as serving a meal and a glass of wine – licensees find themselves under increasing pressure to remain compliant. The changes to the legislation over the last couple of years, with the introduction of management plans and codes of practice means that it is hard for licensees to work in and on their business, and often keeping up to date and complying with all the legislative requirements is the thing which gets ignored.

Especially at a time of year when most businesses are in one of their peak customer periods, it is important to take a short break and ensure your business is compliant as the Office of the Liquor and Gambling Commissioner tend to do audits from time to time. Simple steps now will make it easier if a liquor licensing officer does attend your licenced premises.

To assist, below is a reminder of a few of the sometimes forgotten compliance issues of the Liquor Licensing Act 1997 (“the Act”) which can catch licensees out.

1. Profit Sharing and Unapproved Agreements
Do you have a profit sharing arrangement regarding the profits generated from the sale of liquor that are shared with anyone, approved or not? Such arrangements include where a licensee:

– enters into partnership with an unlicensed person in relation to the business carried on under an approved licence;
– enters into an agreement where an unlicensed person receives proceeds from the business carried out under an approved licence;
– remunerates an unlicensed person by reference to profits obtained from the business or by reference to quantity of liquor sold;
– permits an unlicensed person to manage or exercise control over the business.

Licensees should be aware that it is an offence to enter into any profit sharing or management type arrangement or agreement without the Liquor and Gambling Commissioner (“Commissioner”) approval. The Commissioner must endorse both the profit sharing/management arrangement and the person ultimately receiving the benefit of the profits raised from the sale and supply of liquor. And in cases where it is found that such arrangements exist, both the licensee and unlicensed person are guilty of an offence.

If you are a licensee, or an unlicensed person who may be receiving profits from the sale of liquor, or exercising control over licensed premises, and are unsure whether you have entered into such an arrangement or agreement or you want to apply to have such an arrangement or agreement approved please contact us and we will discuss your business model with you.

2. Alterations and Redefinition of licensed premises
Have there been any alterations to the licensed premises? Has this lead to liquor being supplied in areas outside the plan approved by the Commissioner.

If yes and the licensed premises (including the areas where liquor is served) are varied without approval of the Commissioner a licensee is guilty of an offence.

When applying for a licence, the Commissioner requires and approves a specific plan with clearly identified areas permitting sale and consumption of liquor. The plan specifically identifies licenced and unlicensed areas.

If your premises has been altered, an application must be lodged to obtain the Commissioner consent. If an alteration has already occurred that application needs to be lodged ASAP to avoid any potential disciplinary action. Licensees should be aware that the Commissioner can only approve alterations if all other approvals and consents required for any alterations, such as planning, have been obtained first.

3. Changes to Corporate Structure
Has there been a change to the structure of a licensee company?

Under the Act, any person in a position of authority for a licensed premises must be approved for that purpose by the Commissioner. Most licensees understand that a person in a position of authority includes:

– directors of the licensee company;
– all shareholders of the licensee company; and
– adult beneficiaries of a trust who hold the beneficial interest in the license.

However this also includes anyone who exercises (or is in a position to exercise) control or influence over the business or who manages the business conducted under the licence.

Licensees should be aware that it is an offence for a person to be in a position of authority without the approval of the Commissioner. WARNING: Harsh penalties can apply if in breach.

If there has been a change to your structure and it is not noted on your licence, contact us to assist in having a revised corporate structure approved.

What to do if you receive a Complaint for Disciplinary Action? Call us!

If you receive any complaint for disciplinary action from the Police or the Commissioner, no matter what the subject of the complaint, please feel free to call one of the experienced practitioners below who will be able to assist.

DW Fox Tucker Lawyers offer a reduced rate for services for all R&C members and may offer a fixed fee service – taking the guess work out of legal fees.

Lisa Harrington
DW Fox Tucker Lawyers
+61 8 8124 1960

Alex Bastian
Senior Associate
DW Fox Tucker Lawyers
+61 8 8124 1910