The Hotel Delany has failed in its legal bid to stay open until 2am after a court sided with residents on noise and safety concerns.
The Land and Environment Court rejected an appeal by the Cooks Hill pub's owner, Marvan Hotels, which sought a 2am closing time from Monday to Saturday on a 12-month trial.
Marvan Hotels applied to Newcastle council in 2021 to extend the Delany's trading hours from midnight to 2am six days a week and from 10pm to midnight on Sundays.
The council partially rejected the application in 2022, instead allowing the pub to trade until 1am on Fridays and Saturdays only on a year-long trial.
Marvan took the matter to court last year, but commissioner Nicola Targett entirely rejected the appeal late last week.
Marvan had proposed a staged closing for the 990-capacity pub, including reducing the number of patrons to no more than 300 from midnight to 1am and 120 from 1am to 2am.
Commissioner Targett noted that up to 690 patrons could be ejected from the pub at midnight.
She said she was not satisfied the proposal would have "acceptable noise and amenity impacts" on houses "in close proximity".
"Although I accept that the respondent has identified the Darby Street Precinct as a location identified for late night trade through the NAD [Newcastle After Dark] Strategy, this desire must be appropriately balanced with the privacy, comfort, security, amenity and liveability of residents," she said.
Commissioner Targett also accepted the council's view that the hotel's plan to manage customer behaviour and shut down in stages was "overly complex, confusing and ultimately inadequate".
The Newcastle Herald reported in April that the council's barrister, Geoff Farland, had told the court the Delany was "not a low-impact venue by any stretch of the imagination".
"There are a plethora of objections and complaints, they are known, and to put the neighbourhood through a trial period in that context, the council says is entirely inappropriate," he said.
Under the hotel's proposed management plan, the top floor, Darby Street beer garden and door to the council car park would close at midnight on Fridays and Saturdays and capacity would fall to 300.
The public bar would close at 1am and the pub's capacity reduced to 120, including a maximum of 80 people in the gaming room.
The plan said head counts would be taken at 11pm, 11.45pm, 12.30am and 12.45am, after which mechanical or electronic counters would be used to maintain an accurate patron total.
If more than 300 people were in the venue at 11pm, entry would be restricted, and if more than 300 people were still inside at midnight, patrons on the top floor would be told to leave.
If more than 120 people were inside at 12.45am, patrons in the public bar would be directed to leave.
From Monday to Thursday, the public bar would also close at midnight and the capacity reduced to 120.
Marvan Hotels is headed by well known Sydney hotelier Marcus Levy.
