O'Flaherty's 2000 Limited [2000] NZLLA 1218 (26 October 2000)

Last Updated: 16 February 2012

Decision No. PH 1218/2000

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by O'FLAHERTY'S 2000 LIMITED for an on-licence pursuant to s.7 of the Act in respect of premises situated at 35-37 Hastings Street, Napier, known as "O'Flaherty's Irish Pub"

BEFORE THE LIQUOR LICENSING AUTHORITY

Quorum: Mr R J S Munro
Mr J W Thompson

HEARING at NAPIER on 6 September 2000

APPEARANCES

Mr E Forster for the applicant
Mr P F Evans – Napier District Licensing Agency Inspector – in opposition
Miss K M Harris as Agent of District Medical Officer of Health – in opposition

DECISION

1. This is an application by O'Flaherty's 2000 Limited for an on-licence in respect of premises situated at 35-37 Hastings Street, Napier, known as O'Flaherty's Irish Pub. The application was opposed by a Napier District Licensing Agency Inspector and the District Medical Officer of Health and set down for public hearing.
   
2. The sole issue for determination is the closing hour. The applicant seeks to sell and supply liquor to any person present on the premises:
   

Monday to Sunday 11.00 am to 4.00 am the following day

Opposing reports recommend trading only until 3.00 am the following day.

3. Mr Forster told the Authority that the applicant is a newly formed company although the site of O'Flaherty's has traded for approximately 9 years under an on-licence authorising the sale and supply of liquor until 4.00 am the following day Monday to Sunday, except for Sunday morning closure at 3.00 am. He then called Mr T N Elers, a director and shareholder of O'Flaherty's 2000 Limited.
   
4. Mr Elers is an ex Police Officer with 7 years experience in Napier. He told us the applicant intended to provide entertainment and that a change over to dance parties created a separate market between 1.00 am and 4.00 am in the morning. A new crowd arrived between 1.30 and 2.00 am in the morning, but if the premises had to close at 3.00 am, some of that "crowd" is not likely to visit "O'Flaherty's". Friday is usually the best night for such dance parties. No problems had arisen in meeting this market. He described the demand as "strong".
   
5. In answer to questions Mr Elers said that he had begun work on the premises in November 1999 and at that stage was unaware of the "policy" of the Napier District Licensing Agency requiring all licensed premises to close at 3.00 am. The Agency had granted temporary authority orders which allowed trading until 4.00 am the following day. The temporary authority orders were issued "on the papers" without public hearing. Conditions mirrored on-licence 030/ON/23/93 issued on 22 December 1993 to the partnership of Kevin Donald McLeod and Brett Andrew Pedersen. A s.111 waiver has been sought by Mr Elers and later granted by the Authority for a minor breach of the public notice requirements in this application.
   
6. Mr K D McLeod, a partner of the previous licensee, appeared to support the application. He told the Authority that Mr McLeod's wife and Mr Elers are 50 percent shareholders and directors in the new company and said that there had been few noise complaints in his 9 years on the premises. He confirmed the development of "dance parties". In recent years there were much later starts by patrons of licensed premises. In answer to questions from Mr Evans, he agreed that Mr Elers may initially not have been aware of the Agency policy on hours.
   
7. Mr D Robinson, the director of a Napier taxi firm, gave evidence suggesting that it was preferable to have a spread of closing hours in Napier which may improve the safety of the drivers. Mr Robertson said he was disappointed in the Agency's 3.00 am closure policy.
   
8. Mrs G P Treadwell, a director and fifty percent shareholder of the applicant also appeared. Mrs Treadwell is the wife of Mr McLeod, a partner in the previous licensee. Prior to the formation of the new company she had worked for some nine years behind the bar on a full time basis, although she did not hold a General Manager's Certificate. In answer to questions Mrs Treadwell said she did not intend to obtain a General Manager's Certificate, although she continues on the premises on cooking and kitchen duties for around 10 hours per week.
   
9. Mr P F Evans, a Napier District Licensing Agency Inspector, told the Authority that the proposed 4.00 am closure is the sole reason for his opposition to the application. The hours "do not comply with the stated policy of the Napier District Licensing Agency". He referred the Authority to an earlier decision upholding the Agency approach in Borac Enterprises Ltd (LLA PH 1682/99).
   
10. Under cross-examination, Mr Evans referred to some (although not all) of the policy documents which had resulted in the Agency's present "policy". He agreed to provide those documents to all parties.
    
11. Miss K M Harris, appeared on behalf of the Medical Officer of Health opposing the applicant's request to trade until 4.00 am. Miss Harris is responsible for completing reports on liquor licence applications on behalf of the Medical Officer of Health. Miss Harris said that the Medical Officer of Health opposed renewal beyond 3.00 am. She referred to potential problems of migrating drinkers, an unfair advantage to other premises, congestion, and possible loitering outside the premises. She also adopted the arguments presented by Mr Evans, particularly supporting a consistent approach to the hour of closure.
    

Further Submissions and Evidence

12. On 11 September 2000 our Registry Manager received further documentation forwarded by Mr Evans relating to the Napier District Licensing Agency's consideration of 3.00 am closure. Documents of the Napier City Council, its planning committee, and the Napier District Licensing Agency show that liquor licensing hours have been considered by councillors since June 1995. There have been reports from the District Licensing Agency's Inspectors, information from the Police and the Medical Officer of Health. Meetings with licensees have also been held. The most recent consideration of trading hours by the Agency is shown to have occurred on Friday 11 December 1998 in open session, when six elected councillors were present, together with Police and Healthcare representatives. A request for an "approval in principle" to extend licensing hours in premises in Napier to 5.00 am on Thursday, Friday and Saturday mornings was declined.
    
13. A report prepared for that meeting recommended that the Agency "supports a consistent time of 3.00 am for all licensed inner city premises". Following discussion, that recommendation was carried. Mr Evans reported that the "policy" has not been altered since December 1998, as the Chairman of the Agency "felt the issue had been discussed recently enough" in December 1998.
    
14. Mr Evans also provided a copy of a letter he wrote dated 28 July 1999 addressed to the licensee partnership of O'Flaherty's Irish Pub:
    

"As you no doubt recall, the Chief Inspector and myself have discussed the issue of O'Flaherty's trading hours with you a number of times in the last six months. Essentially, our concern is that your premises is the only premises in Napier that has licensed hours beyond 3.00 am. We have discussed with you the fact that we do intend to apply to have the licence hours reduced to 3.00 am at the next renewal in December 2000 ... ."

15. Mr Forster in comprehensive written submissions in reply dated 6 October 2000 repeated a number of his oral submissions but also raised new points arising from perusal of the documents. In particular he submitted that the:
    

“Hearing Committee’s adoption and application of a consistent 3.00 am closing time policy for on-licences is ultra vires and as such ought not to be considered or relied upon.”

16. In the alternative, if the Authority finds the policy to be intra vires, Mr Forster submitted there is justification to depart from the policy in the application. He invited the Authority to:
    
    • Distinguish “consistency” in hours from “relative consistency” in Napier and Hastings licensed premises (a one hour difference is relatively consistent);

Consider the legitimate expectation of the wider public in consultation; and

• Highlight the irrelevancy of inadequate Police resources, and note the lack of evidence of street disorder at 4.00 am.
  

17. He also reminded the Authority that s.14 of the Act placed no limitation on closing hours and accordingly there is potential for "24 hour a day on-licences". He referred to dicta in the High Court of Robertson J in Ole Forge Limited v Papakura District Licensing Agency [1996 NZAR 305 at 309]:
    

“ ... what the Authority must not do is close its mind to individual applications in an over rigid application of its policy ...".

18. Mr Forster pointed to a number of arguments in favour of his client's application:
    

• The 1989 Act is a liberalising one;

• In Napier there is proven demand for on-licence services between 3.00 am and 4.00 am;

• Confining trading to 3.00 am will erode Napier's competitiveness as a tourist destination;

• Having all revellers from all on-licences flood out on to the street at the same time "heightens the risk of violence and damage to property" and will "put stress on other utilities such as taxi drivers and food outlets who at 3.00 am are faced with a huge demand" ;

• Decreasing the trading hours will decrease the profitability of O'Flaherty's and change the nature of the owner's bargain;

• No police or public complaints exist concerning O'Flaherty's current hours;

• Over rigid application of policy without weighing of the merits of the individual case should not apply; and

• Other licences can be distinguished as they have not previously had a 4.00 am closing time.

Authority Conclusion and Reasons

19. The applicant is a company incorporated on 12 November 1999. Its directors are Mrs G Treadwell, the wife of a partner in the former licensee, and Mr T Elers, both of whom also hold equal shares in the company. The applicants describe the premises as a "tavern/entertainment and function centre".
    
20. In reaching its determination, the Authority is directed by s.13(1) of the Act to have regard to:

“(a) The suitability of the applicant:

(b) The days on which and the hours during which the applicant proposes to sell liquor:

(c) The areas of the premises or conveyance, if any, that the applicant proposes should be designated as restricted areas or supervised areas:

(d) The steps proposed to be taken by the applicant to ensure that the requirements of this Act in relation to the sale of liquor to prohibited persons are observed:

(e) The applicant's proposals relating to--

(i) The sale and supply of non-alcoholic refreshments and food; and

(ii) The sale and supply of low-alcohol beverages; and

(iii) The provision of assistance with or information about alternative forms of transport from the licensed premises:

(f) Whether the applicant is engaged, or proposes to engage, in--

(i) The sale or supply of any other goods besides liquor and food; or

(ii) The provision of any services other than those directly related to the sale or supply of liquor and food,--

and, if so, the nature of those goods or services:

(g) Any matters dealt with in any report made under section 11 of this Act."

21. In addition s.4(2) of the Act directs the Authority to exercise its jurisdiction, powers and discretions, in the manner that is most likely to promote the object of the Act. The object of the Act is:
    

"to establish a reasonable system of control over the sale and supply of liquor to the public, with the aim of contributing to a reduction of liquor abuse, so far as that can be achieved by legislative means."

22. There is no concern in relation to any of the matters in s.13(1) other than the hour of closure. Mr Forster questioned the powers of the Napier City Council Hearings Committee to adopt a “policy” as distinct from exercising by delegation pursuant to s.104 any “power, authority or discretion.” If the validity of such delegation was to be raised as a question of law in a declaratory judgment or other High Court proceeding, such a submission may well be upheld. There is a certain looseness of wording in the documentation before us when examined with hindsight. Despite this, the overall message, stance, or "guideline" as we prefer to call it, is clear. This Authority is not prevented from receiving such hearsay documentary evidence (see s.109) and the weight to be given is for the Authority to determine. The Hearing’s Committee consideration of the topic is relatively recent, and an adjournment to enable the Agency to obtain legal advice, if necessary to then place new delegations into effect, and finally indicate its formal viewpoint would further delay determination of this application.
    
23. Mr Forster raised the doctrine of legitimate expectation in two ways. First, that of O’Flaherty’s patrons and the wider public, and secondly (although somewhat faintly) that of the licensee. Insofar as the licensee is concerned the evidence produced by the Inspector of consultation during the tenure of the previous licensee and formal notification contained in the letter dated 28 July 1999 is decisive. Through its own enquiries, the new company should have been well aware of the Napier District Licensing Agency stance in relation to 3.00 am closure. Any suggestion to the contrary flies in the face of the evidence now before us.
    
24. The legitimate expectations of O’Flaherty’s patrons and the wider public should be addressed by the Napier District Licensing Agency as it consults all parties as part of an ongoing review of guidelines on 3 am (or later) closing.
    
25. During the course of the hearing, the distinction between licensing premises and licensing persons became a little blurred. This Authority issues licences to individuals and other legal entities pursuant to the Act. It does not directly licence premises, only legal persons in respect of particular premises. Premises licences are no longer issued. Such distinctions become significant in an application such as this.
    
26. Since November 1999, a new legal entity has been created which now formally seeks an on-licence. We find that it has made such an application with either the actual or constructive knowledge of the Napier District Licensing Agency guidelines which seek to restrict hours. That knowledge may, in the normal course of events, have affected the commercial arrangements under which the previous licensee sold the business. There are financial conflicts being resolved in another jurisdiction, Mr McLeod told us, which involve the previous licensee.
    
27. The "controlling hands" in the corporate applicant are both new. Although Mrs Treadwell had worked full time for the previous licensee, her present involvement is limited. Although a director of the company, she does not intend to obtain a General Manager's Certificate and it is clear that her involvement will be considerably less than Mr Elers.
    
28. As we have stated regularly, each application is dealt with on its own merits, but we have also usually found that similar circumstances should result in similar outcomes. Although neighbouring land use issues may result in differing hours of closure, this is not such a case within Napier City. The previous licensee enjoyed a privilege not available to other licensees. The scheme of the Act prevents arbitrary changes to conditions or as the High Court has described it "ill informed tinkering". Any change to an existing licence may only be made after closely prescribed grounds are established. This, of course, is not such an application. It is a new application, despite suggestions that continuity has been preserved.
    
29. The Authority has said repeatedly that it will be slow not to follow a properly established policy or guidelines of a local authority following appropriate consultation with all affected parties including licensees. We affirm that stance.
    
30. Noting the background and context of this application, we accept that the Agency has turned its mind to relevant questions and reached its own conclusions. That is not to suggest we accept them individually. We are not bound to adopt any "policy" or "guidelines" (a term which we prefer). They are a consideration, usually a major consideration which we weigh in reaching a determination in any application. Yet we have from time to time not followed such guidelines, e.g. recently in Hastings in Jancliffe Holdings Ltd (LLA PH 1164/00) an application involving a massage parlour.
    
31. In this application we will follow the 3.00 am closure guideline of the Napier District Licensing Agency. We emphasise the consistency of outcome in the sense that all inner city licensed premises in similar trading circumstances should face identical closing hours. The application of such guidelines throughout New Zealand has tended to support the s.4 objectives of the Act. In reaching that conclusion, we would not wish to preclude an extension of hours in Napier at some future date. The trend towards later socialising on licensed premises is New Zealand wide.
    
32. The Authority endeavours not to be over rigid in the application of guidelines and invites the Agency to introduce a mechanism to ensure ongoing consideration of its own guidelines. We are mindful of comments made in the High Court by McGechan J in a somewhat different context rejecting a licensee's appeal for longer trading hours:
    

"Times change. Communities and environments change. Social habits and levels of tolerance change. Obviously it would have been seen by the legislature to be wise to keep conditions imposed under review in light of potential social change. The licensee's submissions would have licence conditions frozen in some time warp while the world marches on; not, even in the arcane world of liquor licensing, a likely legislative intention. Section 4 interpretation directives align with common sense to point towards allowing the Authority to engage in the wider perspective. It can keep its eye on wider trends and needs in a specialist area where it has unique, and uniquely current, expertise ...". [Buzz & Bear Ltd v Woodroffe (1996) NZAR 404 at 410].

33. As a result of extensive changes made to the Act from 1 December 1999 and 1 April 2000, patterns of both entertainment offered and liquor consumption on and off licensed premises will inevitably change. Mr Elers impressed us with his testimony and his honest approach to providing what he believes is appropriate in Napier. As in many other locations throughout New Zealand, we would certainly not wish to exclude the possibility of longer trading hours for responsible licensees in appropriate circumstances. The number of occasions for which special licences are granted may be an indicator. That of course is a matter for the District Licensing Agency to consider in the first instance when and if an application is made.
    
34. We are satisfied as to the matters to which we must have regard as set out in s.13(1) of the Act, and we grant the applicant an on-licence. A copy of the licence setting out the conditions to which it is subject is attached to this decision.
    
35. The Licensing Inspector objected to the application and recommended that it be declined. The provisions of s.147 preclude the issue of the licence until the time allowed for filing an appeal has expired.
    
36. The applicant's attention is drawn to s.25 of the Act obliging the holder of an on-licence to display:-
    

(a) A sign attached to the exterior of the premises, so as to be easily read by persons outside each principal entrance, stating the ordinary hours of business during which the premises will be open for the sale of liquor AND

(b) A copy of the licence, and of the conditions of the licence, attached to the interior of the premises so as to be easily read by persons entering through each principal entrance.

DATED at WELLINGTON this day of October 2000

R J S Munro J W Thompson
Member Member oflahertys.doc(sh)