Freeze On New Liquor Licences In Sydney

The NSW Premier announced on 25 June 2009 a 12 month freeze on the grant of new liquor licences, effective immediately.

The freeze was agreed at the first meeting of the newly established Sydney Liquor Taskforce co-chaired by Premier Rees and Lord Mayor Clover Moore.

The Premier has announced that although legislation will need to be introduced to implement the freeze, it will be effective from 25 June 2009. This will mean that any legislation that is introduced will need to have retrospective effect.

The limited details available at the moment include:

• Targeted areas will include Kings Cross, the Oxford St precinct in Darlinghurst and parts of the southern CBD. The exact boundaries are yet to be worked out.
• There will be some exemptions – again, the details are yet to be worked out. However, it seems likely that no exemptions will be permitted for "high risk" venues such as hotels, nightclubs and late-trading venues, with the Premier noting "a common sense approach is needed and licences for low risk venues including restaurants, special events and cafes will be exempted."

The freeze on new licences will have a devastating impact on investors and developers who have purchased or leased property within the affected areas for the purpose of establishing licensed premises. The freeze is particularly bad news for those who were already in the process of preparing a licence application or obtaining development consent.

It is not clear whether the freeze will also apply to the removal of a licence to a location within the affected areas, although this seems likely given the goal of preventing any further licensed premises. Movements of existing licences within the affected areas may also be prohibited by the freeze, as the Liquor Act treats the removal of a licence to a new location the same way as a grant of a new licence in a new location. If this is the case, venues within the affected areas will not be able to relocate to new premises within the affected areas.

The retrospective effect of the freeze will cause great uncertainty, as fundamental details of the freeze, such as the type of premises that will be affected and the boundaries of the freeze zone, have not yet been worked out. It is also not clear whether the freeze will apply to licence applications that have already been lodged and are currently being processed.

The freeze comes at a time when the City of Sydney has recently released the Late Night Trading Research Project, inviting submissions from the community and other interested stakeholders. The Project contains the first research into the concepts of "cumulative impact" and a "saturation point" of licensed premises. The Project is open for submissions until 31 July 2009 and makes several suggestions for "evidence-based strategies that local governments might reasonably implement to reduce the impact of alcohol-related crime on their communities".

Although the Project is still open for submissions for another five weeks, the City of Sydney and the Premier appear to have "jumped the gun" and have begun implementing significant changes without considering such submissions or even waiting for the consultation period to close.

Exactly how the freeze will be implemented and its lawfulness is yet to be seen. The process for seeking exemptions and any transitional provisions will clearly be important. Affected stakeholders should keep an eye out for any developments and should carefully consider their ability to apply for an exemption, or to challenge the freeze, once more details are known.

For more information, please contact:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.