Would you let someone re-enter your licensed venue after lock out to retrieve a lost phone?

The summer holiday period is a great time for licensed venues, with trade often at its peak.  However, it is critical during this busy time that licensed venues and their staff don’t relax when it comes to obligations under their liquor licence and generally under the Liquor Act 2007 (NSW) (Liquor Act) and Liquor Regulation 2008 (NSW) (Liquor Regulation).  

With the introduction of ‘lock out laws’ first in Newcastle in 2008 and more recently in Sydney’s Kings Cross and CBD Entertainment precincts, we are starting to see an increasing number of offences and strikes imposed on venues for ‘failure to comply with condition of a licence’.  A recent decision by the NSW Office of Liquor Gaming and Racing (OLGR) involving the Hollywood Hotel, Surry Hills (Case no. A15/0005340, decision dated 25 November 2015), is a good reminder of the need to keep a strict eye on compliance, especially given the expense that often comes with defending an alleged offence, even where it is ultimately not upheld or, as in this case, a strike not entered on record.

The Hollywood Hotel Decision

Strike 1

Around 16 December 2014, police reviewed CCTV footage of the Hollywood Hotel and subsequently issued a penalty notice for failing to comply with the Sydney CBD Entertainment Precinct ‘lock out’ requirements on 7 December 2014.  The Hollywood Hotel paid the penalty notice which resulted in a first strike being automatically incurred in accordance with sections 144C(1)(b) and 144D(1) of the Liquor Act.

Strike 2

The police review also detected a second prescribed offence on 14 December 2015, with CCTV footage showing persons entering the venue after the 1.30am lockout at 1.32am, 1.33am, 1.36am, 1.41am, 2.23am and 2.27am.  This penalty notice was also paid which, under section 144C(1)(b), triggered the requirement under section 144D(2) for the Secretary, Department of Justice (or in this case, their delegate), to consider whether a second strike should be incurred.

When is an entry not a breach of lock out laws?

On the balance of the evidence, the licensee’s submission that the CCTV was running seven minutes fast was accepted, which settled the issue of the 1.32am, 1.33am and 1.36am entries.  Supporting evidence included that the licensee had replaced the CCTV system at significant cost and the footage clearly showed the security guard checking the time on his phone and closing one half of the double doors at around 1.35am.  
The entries at 1.41am and 2.23am were found to have been staff members who were on duty and dressed in uniform and accordingly were not subject to the lock out laws under the Liquor Regulation which only prohibits re-entry to ‘patrons’.

“Can I please just go in for a sec to get my phone?”

The final entry at 2.27am related to a female patron who re-entered the premises for a total of 17 seconds to retrieve a lost phone.  Although this seems quite reasonable (especially when bar service had ceased at 2.00am), unfortunately, a patron re-entering licensed premises for any reason during the lock out period is still an offence.

The Decision

The OLGR delegate addressed a number of statutory considerations as required under section 144G and noted that:

  1. there was no history of alcohol-related violent incidents at the venue;
  2. the timing of the police review which led to the detection of two offences simultaneously meant no remedial measures could have been put in place in the one week between the first and second strike incidents; and
  3. once notified of the offence, a number of changes to business practices were voluntarily implemented by the licensee to ensure accurate time-keeping and increased vigilance around unauthorised entry to avoid further breaches of the lock out requirements, which lessened the need for remedial conditions.  

The relevant statutory test under section 144D(2)(c) for whether or not to impose a second strike is ‘the seriousness of any harm that may have resulted from, or been associated with, the commission of the offence’, which the delegate acceded may have been greater where deficiencies in management practices are not addressed in such a timely manner.

Ultimately, the delegate decided in the circumstances not to impose a second strike on the Hollywood Hotel, although it was noted that allowing a patron entry for any reason during a lock out period ‘demonstrates a failure in venue practices and procedures’ which could lead to a range of further harm.  

Overall, it was found that the seriousness of the harm which may have arisen was significantly reduced due to the discrete, one-off nature of the single entry, the limited amount of time spent inside the venue, the purpose of the re-entry to retrieve lost property, and that bar service had ceased at the time.  The delegate noted that while procedures should have been in place to prevent the offence in the first place, the steps taken subsequently by the venue greatly reduced the potential for this particular offence to recur. 

What should you be doing?

For hospitality business owners, operators, licensees and staff who work in licensed venues, this is an excellent case to learn from, and you may wish to consider implementing some of the following practical measures taken by the Hollywood Hotel in your venue:

  • recalibrate CCTV systems and cash registers so that the clocks are synchronised
  • ensure the manager and security staff synchronise the time on their phones/watches with the cash register or CCTV system at the start of each shift
  • duty manager to check in with security staff 15 minutes prior to lock out and confirm instructions and procedures, and
  • venue staff to be tasked with retrieval of lost property during the lockout period.

Finally, we would encourage owners and licensees of venues to seek legal advice quickly if you receive a penalty notice for any offence in order to assess your options and reduce the likelihood of strikes and remedial conditions being imposed on your liquor licence.