We regularly receive enquiries from both vendors and purchasers of licensed businesses anxious to finalise the sale before the licence has been transferred.
We have a strong appreciation for the damage which often occurs to the business during the period between contract and settlement. If your contract is subject to a licence transfer, settlement can be delayed by up to 12 weeks, during which the goodwill, staffing arrangement and general wellbeing of the business can suffer sometimes irreparable damage.
Accordingly, we are routinely asked how the purchaser can take over the conduct of the business before the transfer has been approved, without unlawfully selling and supplying liquor. In the past we have developed a range of strategies for clients, such as devising ways for the purchaser to take on a caretaker role in the business prior to settlement. Caution has always been paramount given the risk, not only of severe penalties for unlicensed liquor sales, but closure of the business and potentially adverse findings in relation to the suitability of the purchaser to hold the liquor licence.
On a number of occasions we have succeeded in using the mechanism of the interim authority, which, if granted, authorises the holder to lawfully conduct the business in advance of the licence transfer.
Off the back of these issues we have suggested to OLGR that they consider adopting the system of an optional fast track process used in NSW where a purchaser has the option of taking the risk that the application for transfer will ultimately be refused. As the basis for refusal is largely specific to the history and character of the applicant, those opting for the fast track are rarely taking any genuine risk at all.
Recently we have been given reason to believe there may be a willingness within OLGR management to favourably consider the use of an interim authority as a de facto fast track option. As the process of granting interim authorities, under other circumstances, is well entrenched and requires no legislative amendment, we intend making more frequent use of this strategy in future to avoid the potentially significant damage to the business asset occasioned by the lengthy transfer process.