That's an interesting idea.
Ignoring the legal side of things, since that's already finished and I'm not familiar with Aussie laws anyway.
The concept of a restricted space for an art experience that works for both the admitted and refused parties as a different experience is pretty damn intriguing. The execution of it in this case arguing after refusing admission to someone seems to defeat the purpose to a small degree, but that's nitpicking.
The core concept is, I think, something that should be expanded. Other locations, and other dichotomies. I don't know if it would pass legal muster here in the states, but I'd love to have a seat and watch how it played out in a busy place here.