Australia: Three strikes and you're out – new liquor licensing law enacted

Last Updated: 18 January 2012
Article by Jodie Masson, Ole Georgieva, Michael J Hain, Vicki Sharp and Melanie Watters

How is a strike incurred?

The Liquor Amendment (3 Strikes) Act 2011 (NSW) will come into force on 1 January 2012 introducing a "three strikes" disciplinary scheme in relation to breaches under the Liquor Act 2007 (NSW) (Liquor Act). According to the Office of Liquor, Gaming and Racing, the scheme is aimed to target repeat offences and not to adversely affect responsible licensees.

The first strike is incurred when the licensee or manager of the licensed premises commits a prescribed offence. A prescribed offence is defined to include the following breaches of the Liquor Act:

  • sale or supply of liquor contrary to licence
  • breach of licence condition
  • permitting intoxication or indecent, violent or quarrelsome conduct
  • selling or supplying liquor to an intoxicated person
  • permitting the sale, possession or use of a prohibited plant or drug
  • failure to comply with a notice or direction given by the Director-General
  • failure to comply with a short-term or long-term closure order
  • selling or supplying liquor to a minor or allowing such sale or supply
  • in defined circumstances, where the licensee or manager is liable for acts of employees.

This means the first strike is automatically incurred when a prescribed offence is committed (which is defined to mean upon court conviction or payment of a penalty notice that has been issued in relation to the prescribed offence). The first strike will remain on record for three years from the day the prescribed offence was committed.

The second strike is incurred at the discretion of the Director-General if the licensee or manager of the licensed premises commits a prescribed offence during the three year period in which the first strike is in force.

The third strike is incurred at the discretion of the Casino, Liquor and Gaming Authority (Authority) (which will be known as the Independent Liquor and Gaming Authority from next year) if the licensee or manager of the licensed premises commits a prescribed offence during the period in which two strikes are in force.

The relevant factors considered by the Director-General or the Authority when deciding whether strike two or three should be recorded include:

  • size and patron capacity of licensed premises
  • history and nature of the commission of previous prescribed offences
  • history and nature of violent incidents that have occurred
  • change of ownership or management
  • changes to business practice.

You incur a strike - now what?

Where a first or second strike is incurred, the Director-General has the discretion to impose conditions on a licence. The conditions can include the use of plans of management and incident registers, prohibiting the use of glass, engaging persons to promote the responsible service of alcohol and in the case of a club licence – requiring members of the governing body of the club to undergo training.

The Director-General can also impose further conditions where two strikes are in force. The conditions can include restricting who can be appointed as a manager, implementing security measures, prohibiting the sale of alcohol during certain times, implementing lockouts, and prohibiting the sale of certain types of alcohol or the provision of certain types of entertainment.

Where a third strike is incurred in respect of a licence (but not a Club licence), the Authority must take action under the Liquor Act either suspending or cancelling the licence, disqualifying the business owner, licensee or manager, or imposing, varying or revoking a condition on the licence.

Club licences are dealt with separately by the Liquor Act in relation to action taken by the Authority in response to the third strike. The Authority may not cancel or suspend a club licence, however it can impose, vary or revoke conditions on the club licence. Further, individual employees will be held responsible for the offence and the Authority also has the power to disqualify the club secretary, board members and manager and to appoint a person to administer the affairs of the club.

How will the Three Strikes scheme affect you?

In light of the commencement of the Three Strikes scheme on 1 January 2012 it is important that stakeholders undertake review processes of their licensed establishments to identify and eliminate any licensing and regulatory risk.

The new scheme has obvious implications for licenses, managers and business owners especially where there is a risk for a licence to be suspended or cancelled, or an individual disqualified. However, there are further implications to be considered given that any strike incurred will run with the licence even where it is sold.

In order to eliminate any risk that your business or premises may breach the Three Strike scheme, it is imperative that:

  • customer/tenant risk management policies are up-to-date and watertight
  • management and staff are properly trained on the implementation of these policies
  • you are aware of the history of offences of the business/venue and ensure that any related
  • deficiencies in policy or management have been resolved.

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.

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