By Clyde Mooney
The revised Bill dictating the terms of the notorious NSW three strikes legislation has been released, complete with consequences for venue operators.
A key revision is greater clarity on how a strike may occur, with the first falling automatically when a ‘breach’ is acknowledged and fine paid by the operator, or when proven in court.
This is likely to mean a lot more defence cases, as the consequences are more real than ever and breach notices are challenged rather than humbly accepted.
Subsequent strikes are at the discretion of the Director General of Trade & Investment, and the Independent Liquor and Gaming Authority.
The accumulation of three strikes will result in a review by the Director General, with subsequent suspension or cancellation of trading likely.
As the new regulations threaten to affect business, leading hospitality chartered accountants, Taylor Woodings, released a general alert to both the industry and its financiers (17 Nov).
Partner in charge, Quentin Olde, spoke to TheShout about how the Bill may impinge on an operator’s ability to obtain, secure and retain finance and investment.
“The restrictions that may be imposed on venues include altering trading hours, times when patrons can enter (lockouts), the total number of patrons, plastic glassware, drinks sold per person, even timeout periods such as ten minutes out of every half hour after midnight when the bar can serve only water.
“If a venue receives three strikes and after review the licence is revoked, to cease trading will obviously mean a significant impact on the business.
“The ruling remains with the licence, but the ability to sell the business will no doubt be affected.
“A question certain to arise is: at what stage does the bank become involved? If an operator gets a second strike, the bank’s security is severely compromised; will the banks amend loan agreements to allow provision to remove the offending publican? The same issue applies to a landlord leasing his hotel to an operator.
“What is unclear is how the authorities will exercise their discretion under this new regime and as such the likely impact on operators who have strikes imposed on them.
“It is not clear at that stage if a licence subject to suspension or cancellation could be sold to a new licensee and be able to reopen once ownership is transferred.”
Taylor Woodings is able to assist key stakeholders identify specific licencing and regulatory risks, by analysing risk management policies, aptitude, experience, history (including previous breaches) and special conditions.