THE exclusive three-hat club of Sydney fine dining has grown to five with the elevation of Sepia and Bilson's Restaurant to the coveted position.

Bilson's lost its third hat last year but regained it last night, in part due to a new chef, Diego Munoz. They join est, Marque and Quay as the top restaurants.

But it was Sepia that stole the show with a rise nothing short of meteoric. In 2009, an unassuming, new 50-seater restaurant in an old chocolate shop in Sussex Street was awarded a prestigious chef's hat in The Sydney Morning Herald Good Food Guide.

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The next year, Martin Benn, Vicki Wild and George Costi's restaurant received its second hat with Benn, a former Tetsuya chef, named chef of the year.

Last night, Sepia completed the hat-trick. It was also named restaurant of the year at the Good Food Guide Awards, a rise so spectacular, according to the guide's editors Terry Durack and Joanna Savill, that only Peter Gilmore's arrival at Quay a decade ago bears comparison.

''It's a pretty extraordinary thing; a seriously meteoric rise in only three years,'' Savill said.

''With any restaurant, to get to that point it's a combination of everything from service to food, obviously, to ambience to hitting all the right notes. Martin has an incredible pedigree, his food is really, really extraordinary. His partner Vicki runs the front of house and just has exactly the right touch. The wine and the wine service is extraordinary. It's one of those places where barely a note goes wrong.''

Your questions on the awards answered: Live blog with editors from midday here

In the snakes and ladders world of restaurant rankings, 29 gained hats while eight lost them. Buon Ricordo, a 25-year-old Italian institution in Paddington, was a high-profile casualty dropping from two hats to one.

Porteno, an Argentinian barbecue restaurant run by two tattooed, rockabilly chefs, Ben Milgate and Elvis Abrahanowicz, was awarded best new restaurant and catapulted to two-hat status. Gastro Park, only eight months old, was awarded two toques. ''I put the whole thing together in a very short amount of time,'' said chef/owner Grant King, who left Pier, where he was head chef, to open his 50-seater in Potts Point. ''I just want a place that's warm and inviting. If you deliver service in a relaxed way and put good food on the plate, I just don't see how you can fail.''

Peter Gilmore, who took over as head chef at Quay in 2001 and has earned it three hats each year since, was named chef of the year. His snow egg dessert is almost more famous than he is after featuring as a grand final challenge on MasterChef and resulting in the restaurant being booked out for months.

''We've never singled him out for the individual award because the whole package of Quay has always been fantastic,'' Savill said. ''But … he's just an example of someone who is really creative and a great mentor.''

The Sydney Morning Herald Good Food Guide 2012 is on sale from Tuesday, September 6 at bookstores, newsagents and online ( www.smhshop.com.au/good with FREE postage), or by calling The Sydney Morning Herald on 1300 656 059. Recommended retail price is $29.95.

This year The Sydney Morning Herald Good Food Guide 2012 will be available as both an iPhone app as well as exclusively on the Samsung Android platform. Both are available for $9.49.

Buyers of the print and iPhone app editions of The Sydney Morning Herald Good Food Guide 2012 receive special access code to the new Good Food Guide website (www.goodguides.com.au).

The Sydney Morning Herald Good Food Guide Awards 2012

Vittoria Coffee Restaurant of the Year: Sepia

Citibank Chef of the Year: Peter Gilmore (Quay)

Plumm Wine Glasses Best New Restaurant: Porteno

Gelatissimo Regional Restaurant of the Year: Lochiel House, Kurrajong Heights

Le Cordon Bleu Professional Excellence Award: Justin and Georgia North

Virgin Australia Silver Service Award: Sam Di Stefano (est.)

Champagne Louis Roederer Sommelier of the Year: Stuart Knox (Fix St. James)

Brown Brothers Wine List of the Year: Bentley Restaurant & Bar

Best Short Wine List: bloodwood

Regional Wine List of the Year: Manfredi at Bells (Killcare)

The Josephine Pignolet Best Young Chef: Terry Robinson (Sepia)

Vittoria Legend Award: Lyndey Milan

Lucky Beer Best Bar with Food: The Owl House

Dan Murphy's Best BYO Restaurant: Rosso Pomodoro

Good Living Sustainability Award: Manfredi at Bells (Killcare)

Dimmi Award for Innovation: TOYS Collective

The Sydney Morning Herald Good Food Guide Favourites 2012

Favourite Bar: Gardel’s Bar (Surry Hills)

Favourite Breakfast: Three Blue Ducks (Bronte)

Favourite Noodles: Golden Century (Sydney)

Favourite Steak: Rockpool Bar & Grill (Sydney)

Favourite View: Icebergs Dining Room and Bar (Bondi)

Favourite Pub: Four in Hand (Paddington)

Favourite Sushi: Kenji, Opera Kitchen (Sydney)

Favourite Vegetarian Menu: Bilson’s (Sydney)

Favourite Street Food: Billy Kwong at Eveleigh Markets

Favourite Chocolate: Zokoko (Emu Plains)

The Chef’s Hats 2012

City

3 Hats

Bilson’s, Est, Marque, Quay, Sepia

2 Hats

Aria, Becasse, Bentley Restaurant & Bar, Berowra Waters Inn, Bistro Ortolan, Claude’s, Four In Hand Dining Room, Gastro Park, Guillaume at Bennelong, Icebergs Dining Room and Bar, Longrain , Lucio’s, Pilu at Freshwater, Porteno, Rockpool, Rockpool Bar & Grill, Spice Temple, Tetsuya’s, Universal

1 Hat

A tavola, Aki’s, Assiette, The Bathers’ Pavilion, Billy Kwong, Bird Cow Fish, Bistro Moncur, Bistrode, Bistrode CBD, The Boathouse on Blackwattle Bay, Buon Ricordo, buzo trattoria, Cafe Sopra, Catalina, The Cook’s Garden, District Dining , Duke, Felix, Fish Face, Flying Fish, Foveaux, Glass Brasserie, Jonah’s Whale Beach, Manly Pavilion, Ormeggio at the Spit, Oscillate Wildly, Otto Ristorante, Pendolino, Pier, Quarter Twenty One, sailors thai the rocks, Sails on Lavender Bay, Sake Restaurant & Bar, Sean’s Panaroma, Tomislav, Uccello, Vini

Regional

2 Hats

Aubergine (Griffith), Lochiel House (Kurrajong Heights), No. 2 Oak Street (Bellingen)

1 Hat

Bacchus (Newcastle), Biota Dining (Bowral), Bistro Molines (Mount View), Caveau (Wollongong), Darley’s (Katoomba) , Eschalot (Berrima),Fins (Kingscliff), Italian and Son (Braddon) ,The Lanterne Rooms (Campbell) , Lolli Redini (Orange), Manfredi at Bells (Killcare), Muse (Pokolbin), Neila (Cowra),Ottoman Cuisine (Barton). Racine Restaurant at La Colline (Orange), Restaurant Como (Blaxland), restaurant deux (Newcastle), Satiate (Bangalow), Terrace (Thredbo), Vulcans (Blackheath), Zest (Nelson Bay)

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