My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 564; [2010] NZAR 152 (1 December 2009)

Last Updated: 6 January 2012

IN THE COURT OF APPEAL OF NEW ZEALAND

CA340/2009 [2009] NZCA 564

BETWEEN MY NOODLE LIMITED, CENTRAL OTAGO BREWERIES LIMITED, CHUCK NORRIS LIMITED AND BARMUDA QUEENSTOWN LIMITED
Appellants

AND QUEENSTOWN-LAKES DISTRICT COUNCIL
First Respondent

AND NEW ZEALAND POLICE
Second Respondent

Hearing: 21 October 2009

Court: William Young P, Glazebrook and Chambers JJ

Counsel: A J Forbes QC for Appellants
R S Cunliffe and T J Surrey for First Respondent
No appearance for Second Respondent

Judgment: 1 December 2009 at 3.00 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.

2. The appellant must pay the first respondent costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT
(Given by Glazebrook J)

Table of Contents

Para No
Introduction [1]
Statutory framework [5]
The Council’s liquor policy [12]

Process leading to the new policy [12]

Contents of new policy [18]
Background [21]
The Authority’s decision [22]

Evidence and submissions [22]

The reasoning of the Authority [28]
Subsequent developments [38]
French J’s decision [41]
Question one [50]

Submissions [51]

Discussion [53]
Question two [61]

Submissions [62]

Our assessment [65]
Question three [68]

Submissions [69]

Our assessment [72]
Question four [76]

Submissions [77]

Our assessment [79]
Answers to questions [80]
Result and costs [84]

Introduction

[1] The appellants all operate taverns or bars in the central business district (CBD) in Queenstown. In a decision of 23 October 2007 the Liquor Licensing Authority (the Authority) granted the renewal of the appellants’ on-licences but declined to allow (in one case) or renew (in three cases) 24 hour trading: LLA PH 1064-1071/2007 23 October 2007. Instead, licences were granted to trade 21 hours a day (from 7.00 am to 4.00 am the following day).
[2] On 4 June 2008 French J upheld the Authority’s decision with regard to the appellants: My Noodle Ltd v Queenstown Lakes District Council [2008] NZHC 814; [2008] NZAR 481 (HC). (We note that the Authority’s decision concerned eight applications but only four of the applicants appealed.)
[3] In My Noodle Ltd v Queenstown Lakes District Council HC CHCH CIV 2007-485-002559 20 October 2008, French J granted leave to appeal against her decision on the following questions:

(a) Whether a report furnished under s 20(2) or (3) of the Sale of Liquor Act 1989 is entitled to rely on a local authority’s liquor licensing policy as the sole reason for opposing an application for renewal of an on-licence, or whether the report must be confined to matters pertaining to the suitability of the licensee and the manner in which the licensee has conducted the sale and supply of liquor pursuant to the licence.

(b) Whether in making a decision under s 23 of the Sale of Liquor Act 1989, the Liquor Licensing Authority is entitled to alter the conditions of the licence by reference to a local authority’s licensing policy notwithstanding the absence of any specific problems associated with the operation of the particular premises in question.

(c) Whether the Authority abdicated its statutory decision-making role and discretion under s 23 of the Sale of Liquor Act 1989 by applying the trading hours contained in the policy in respect of all the applications before it, in particular having regard to:

(i) the fact that the overwhelming majority of written submissions received during the public consultation process on the draft policy were opposed to any reduction in the existing policy allowing 24 hours trading;

(ii) the terms of the policy as to maximum trading hours; and

(iii) the Authority’s finding the appellants were all regarded as suitable and that the licences should be renewed.

(d) Whether the Authority was entitled to apply the policy in the absence of any direct evidence regarding a connection between:

(i) the policy and the statutory object specified in s 4(1) on the one hand; and

(ii) any matters relating specifically to the appellants other than the fact of their operation in the Queenstown Central Business District.

[4] As can be seen, the main issue in the appeal is the Authority’s alleged reliance on the liquor policy of the Queenstown-Lakes District Council (the Council). Before considering the questions before us, we detail the statutory framework, summarise the Council’s liquor policy and the process leading to its adoption, set out the factual background to this case and summarise the Authority’s decision and subsequent developments. We also summarise French J’s decision.

Statutory framework

[5] The relevant legislation is the Sale of Liquor Act 1989 (the Act). The overarching object of the Act is to reduce liquor abuse. Section 4 provides:

4 Object of Act

(1) The object of this 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 the reduction of liquor abuse, so far as that can be achieved by legislative means.

(2) The Licensing Authority, every District Licensing Agency, and any Court hearing any appeal against any decision of the Licensing Authority, shall exercise its jurisdiction, powers, and discretions under this Act in the manner that is most likely to promote the object of this Act.

[6] Part I of the Act relates to on-licences. Section 8 deals with who may hold an on-licence, while s 9 deals with applications for licences. Renewals of licences are dealt with at s 18. Section 19 deals with objections to renewal. It provides that any person with a greater interest than the public generally may object to the renewal of an on-licence but the objection can only cover the matters set out at s 22 of the Act. Section 22 provides:

22 Criteria for renewal

In considering any application for the renewal of an on-licence, the Licensing Authority shall have regard to the following matters:

(a) The suitability of the licensee:

(b) The conditions attaching to the licence:

(c) The manner in which the licensee has conducted the sale and supply of liquor pursuant to the licence:

(d) Any matters dealt with in any report made under section 20 of this Act.

[7] Section 20 of the Act relates to the obtaining of reports on renewals. It provides:

20 Reports on applications for renewals

(1) On receiving an application for the renewal of an on-licence, the Secretary must send a copy of it, and of each document filed with it, to—

(a) The member of the Police in charge of the police station nearest to—

(i) The premises in respect of which the licence is in force; or

(ii) The Secretary’s office, where the licence is in force in respect of a conveyance; and

(b) An inspector; and

(c) Where the licence is in force in respect of any premises, the Medical Officer of Health in whose district the premises are situated.

(2) The inspector must inquire into and file with the District Licensing Agency a report on the application.

(3) The Police and the Medical Officer of Health must each inquire into and, if they have any matters in opposition, file with the District Licensing Agency a report on the application within 15 working days after receiving the application.

(4) The District Licensing Agency may assume that, if no report is received from the Police or Medical Officer of Health within 20 working days after sending the application to them, the Police and the Medical Officer of Health have no matters in opposition to the application.

(5) The Secretary must send to the applicant a copy of any reports filed with the District Licensing Agency under this section.

[8] Section 21 provides that unopposed applications must be granted. There is a power in such cases to vary the terms of any conditions of the licence but only at the request of the applicant.
[9] Where an objection has been made or where a s 20 report raises matters in opposition, the application must be placed before the Authority. Thus, an application for renewal of an existing licence is only referred to the Authority if it is opposed. In Meads Brothers Ltd v Rotorua District Licensing Agency [2001] NZCA 386; [2002] NZAR 308 at [34] (CA), that was said to reflect a statutory policy that further controls on renewal are to be in response to expressed concerns rather than at the Authority’s initiative.
[10] Under s 23, the Authority has the power to renew the licence on the same conditions, change the conditions relating to any of the matters set out in s 14(5) or refuse to renew the licence. Section 23 provides:

23. Decision on application for renewal

(1) After considering an application for the renewal of an on-licence, the Licensing Authority shall—

(a) Renew the licence on the conditions presently attaching to it; or

(b) Renew the licence on such different conditions (relating to any matters specified in section 14(5) of this Act) as the Licensing Authority thinks fit; or

(c) Refuse to renew the licence.

(2) The Licensing Authority shall not exercise its powers under paragraph (b) or paragraph (c) of subsection (1) of this section except in response to—

(a) An objection duly made under section 19 of this Act; or

(b) A report duly submitted under section 20 of this Act; or

(c) A request by the applicant.

(3) On renewing an on-licence, the Licensing Authority shall specify a date (being no later than 3 years after the date on which the renewal takes effect) on which the licence shall expire unless it is again renewed under this section.

[11] The matters specified in s 14(5) are as follows:

(5) On granting an application for an on-licence, the Licensing Authority or District Licensing Agency, as the case may be, may impose conditions relating to the following matters:

(a) The days on which and the hours during which liquor may be sold:

(b) The provision of food for consumption on the premises or conveyance:

(c) The sale and supply of low-alcohol beverages:

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

(e) Any other matter aimed at promoting the responsible consumption of liquor:

(f) The steps to be taken by the licensee to ensure that the provisions of this Act relating to the sale of liquor to prohibited persons are observed:

(g) The designation of the whole or any part or parts of the premises or conveyance as a restricted area or supervised area:

(h) The persons or types of persons to whom liquor may be sold or supplied.

The Council’s liquor policy

Process leading to the new policy

[12] In 1999 the Council agreed to permit 24 hour liquor trading in the CBD of Queenstown. A closing time of 2.30 am was established for all other areas in the district. In November 2003 the Council adopted a liquor policy which maintained 24 hour trading in the CBD. A working party from the Council’s Regulatory and Hearings Committee was appointed to review the policy in March 2006. This led to the adoption of the new policy at issue in this appeal.
[13] The Authority noted that the following processes were undertaken before the policy was adopted:

[37] Processes and time frames were agreed, and in June and July 2006 the working party met with reporting agencies and licensees and managers. A draft version of the revised Policy was presented to the Committee on 5 September 2006. The draft suggested that there were five different options for trading hours. The Committee amended the draft Policy. The amended document was considered by the full Council on 29 September 2006 and released on 2 October 2006 by formal public notices and media releases. At this time the issue of trading hours was still presented as five options. Submissions were invited over a period of six weeks. 465 submissions were received.

[38] Ms Surrey then prepared background reports in respect of Queenstown and Wanaka, summarising the review process, and the submissions. She referred to the submissions received from ALAC, Police, Public Health South, and HANZ, as well as from individual licensees. A public hearing was convened in March 2007. A copy of Ms Surrey’s report was made available to all submitters. The Committee spent two months deliberating on the issue. It released its recommendations and draft policy on 22 May 2007. The policy was ratified and adopted by Council on 25 May 2007.

[14] We understand that there were 401 submissions in respect of the proposed policy relating to the Queenstown CBD. Of those, 93 per cent supported 24 hour trading and three per cent made no specific comment on it.
[15] Ms Surrey, then the Principal Liquor Licensing Inspector for the Queenstown-Lakes District Licensing Agency (the District Licensing Agency), said in her evidence before the Authority that approximately 300 of the submissions were delivered en masse by licensees and managers in the hospitality industry in central Queenstown. Mr Forbes QC pointed out, however, that only 36 of the submissions relating to Queenstown gave any indication that the submitter worked in the hospitality industry. The vast majority of the submitters described themselves as either residents or taxpayers of Queenstown.
[16] The police and Public Health South supported a move away from 24 hour trading. They suggested a 2.30 am blanket closing time. There was some support for this closing time from community groups and a small number of residents.
[17] The new policy was described in evidence before the Authority by Ms Surrey as a compromise between the concerns of the community and agencies and the desire of licensees to provide later trading hours in an international tourist resort.

Contents of new policy

[18] The new policy substituted a 21 hour period (from 7.00 am to 4.00 am the following day) for the 24 hour period. In relation to trading hours, the policy states:

The maximum trading hours for all on-licences (other than trading for house guests in hotel and for restaurant style on-licences) in the Queenstown Central Business District (Town Centre Zone) will be 7.00 am to 4.00 am the following day, subject to the rules in the District Plan and the provisions of the Resource Management Act 1991.

The actual trading hours of each separate premises shall be determined on a case by case basis within the maximum times set out in the policy.

[19] The policy then states that any application for an on-licence seeking trading hours wider than those authorised in the policy were to be forwarded to the Authority for determination.
[20] We understand from the Authority’s decision that the revised policy directly affected 18 on-licence premises in the Queenstown CBD.

Background

[21] It is common ground that there were no problems with the way any of the appellants were operating their respective premises and there was no opposition to the renewal of their licences. The police and the District Licensing Agency filed reports under s 20 of the Act opposing 24 hour trading solely on the basis that these opening hours would not conform with the Council’s liquor policy. The Medical Officer of Health did not have any objection to the renewal of the licences or the hours sought.

The Authority’s decision

Evidence and submissions

[22] The Authority had before it submissions and reports that were presented to the Council during the formulation of its liquor policy. It also heard from Ms Surrey in evidence. Ms Surrey referred to community concerns about problems associated with the sale and supply of liquor in Queenstown. She said that the information she had received from a variety of sources throughout the course of the policy review convinced her that a reduction in trading hours was essential to further the Council’s objective of addressing the problems created by alcohol abuse in the district. She accepted that reducing trading hours would not be the only means by which liquor abuse could be potentially addressed but she believed that it was a good start.
[23] In cross-examination, Ms Surrey acknowledged that, regardless of how well particular premises operated, she felt that it was her role to make decisions in accordance with the policy. She said that the Alcohol Advisory Council (ALAC) had made a submission on the policy stating that the key factors in liquor abuse were access and availability. That submission also outlined that there was police data and evidence from both overseas and New Zealand demonstrating that the more alcohol there is available, the more potential there is for alcohol abuse. She was asked if she was producing any evidence to show a link between trading hours and alcohol abuse but acknowledged that there was nobody giving evidence from ALAC at the hearing.
[24] Mr Todd, on behalf of the Council, argued before the Authority that the policy was thorough and followed comprehensive consultation over a period of 18 months. The policy was made by members of the Council who had a wide range of experience. He submitted that the Council was in a unique position in that it needed to balance the needs of a largely tourist town with those of its residents. Mr Todd denied any suggestion that there would be hardship for the licensees if the licences were reduced to a 4.00 am closure.
[25] Sergeant K P Newell, the Liquor Licensing Sergeant for Queenstown, appeared for the police. He told the Authority that the police fully supported the Council’s liquor policy and had participated in the consultation process under which it had come into existence. He said that now that the policy was in place, the police continued to support it as an important step towards meeting the objective of the Act regarding the reduction of liquor abuse. (We note that the police did not appear before French J or this Court but continue to support the Authority’s decision.)
[26] Dr Wylie QC represented the appellants at the hearing before the Authority. He called as witnesses Mr Spary, who is a director and shareholder of a significant number of licensed premises in Queenstown and Wanaka, and Mr Kerr, who is the commercial manager of those businesses. Their evidence was mostly directed to the lack of problems with 24 hour trading and, in particular, with the businesses with which they were involved.
[27] Dr Wylie argued that the Authority could only alter the days and hours of trading in response to a perceived problem. With regard to the policy, Dr Wylie noted that policies produced by local authorities had no statutory basis. In his submission, the object of the Act was not threatened by the continuation of 24 hour trading because there was no evidence of liquor abuse issues on any of the premises. He argued further that the right to trade and sell liquor was a valuable asset and that licensees who had made significant financial commitments were entitled to a measure of certainty that they could continue to operate under present conditions.

The reasoning of the Authority

[28] The first issue was whether the Authority had the power to alter the conditions of a licence in the absence of some valid reason such as migratory drinking, noise, or associated antisocial behaviour. The Authority accepted that trading hours cannot be changed in an arbitrary or capricious way, but held that a liquor policy adopted by a local authority, and supported by the reporting agencies, could constitute a valid reason for making changes.
[29] The Authority considered itself obliged to consider trading hours when making a decision on an application for renewal or for a new licence, relying on Heron J’s interpretation of the Act in Excel Promotions Limited v Police [1998] NZAR 151 at 159 (HC) and that of McGechan J in Buzz & Bear Limited v Woodroffe [1996] NZAR 404 (HC) where a tavern’s trading hours had been reduced. McGechan J commented (at 410):

There is no doubt that upon renewal the Authority, which is obliged to consider conditions and reports, and to confirm on same or altered conditions (or to refuse renewal), can consider whether existing hours are appropriate and alter those hours. The restraint, and safeguard against ill-informed tinkering, is that such can occur only in response to inspectors’ or Police reports, or at the request of the licensee itself.

I am satisfied it was within powers, and proper, for the Authority to take into account, not only the specifics of the Cork ‘n’ Fork operation, but also more general community concerns which had been made known to it. Quite simply why not? Of course the Authority must be closely concerned with the actual operation of the actual licensed premises here the Cork ‘n’ Fork. One does not renew a licence without thinking about the licensee and his operations. That is directed by s 22(a) and (c). However, there is no logical or policy need to stop at that, as the licensee urges.

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 a wider perspective. It can keep its eye on wider trends and needs in a specialist area where it has unique, and uniquely current, expertise. Any licensee takes a licence under risk that conditions may change, and a report may recommend adjustment. There is no asset protected for all time whatever may happen outside.

[30] The Authority recognised the apparent lack of flexibility in the Council’s policy. However, it noted that the policy allows the Authority to fix hours outside the maximum period and thus does permit trading outside the 21 hour period. It considered this approach was an unusual way of dealing with the matter, as the Council had effectively made the Authority the arbiter of any request to grant trading hours outside those limits. The Authority said, however, that this might yet prove to be more effective than a policy which gave the District Licensing Agency the power to make exceptions to the rule. As the Council had effectively delegated the fixing of hours beyond the 21 hour period to the Authority, it was determined to carry out such functions in a principled and fair way.
[31] The Authority held that the Council had the right to change its collective mind and reject its earlier acceptance of 24 hour trading. In this case it did so only on the basis of the submissions it received during the consultative process. The Authority said that there was no point in reviewing the reasons behind the Council’s decision but noted that the Council clearly believed that Queenstown would be safer if licensed premises closed at a certain hour.
[32] The Authority pointed out that licensing policies had been encouraged by the Authority since 1992. In Andrew Watson Rae & Co Ltd LLA 1710/92 27 May 1992, it was said:

We have frequently expressed a wish to hear from Local Authorities - particularly in relation to trading hours. In our first Annual Report to Parliament we indicated that we wished to know that recommendations from Licensing Inspectors reflected the views of the Local Authorities. We mention in the report that some Local Authorities had expressed views on trading hours based solely on the level of resources and personnel available to local Police and the Ministry of Transport. We had anticipated the adoption of policy guidelines by Local Authorities to assist Licensing Inspectors in reporting on individual applications. Such guidelines would need to have regard to the statutory criteria, particularly neighbouring land use considerations in respect of trading hours. We saw that as a means by which the community or communities might have an input and while we would not be bound by any such guidelines, we saw them as being of value to us in the exercise of our discretion.

[33] This approach had been encouraged by the courts. In Walker v Police HC WN AP87/01 31 May 2001, Fisher J stated:

[32] Following that invitation [to prepare policies], district licensing agencies have prepared appropriate Policies and referred them to territorial authorities for adoption. The Policies are then seen by the Authority as a helpful source of information as to what a local community wants on liquor licensing matters. Essentially it is the perceptions and desires of the local community as expressed through their elected representatives, presumably after some level of consultation with the community.

[33] It would of course be wrong for the Authority to fetter its discretion by treating the content of the Policy as a mandatory requirement or rule. However, it could not be suggested that the Policies are irrelevant on an application of this nature. I have already held that the matters expressly referred to in s 22 are not exclusive. Section 4 requires reference to the object of reducing liquor abuse. The views of local residents are likely to be helpful in deciding how that object can best be achieved and balanced against the desire for access to liquor in appropriate circumstances.

[34] Further, in Ole Forge Ltd v Papakura District Licensing Agency [1996] NZAR 305 at 309 (HC), Robertson J stated:

I am not persuaded that there is anything intrinsically wrong in a body such as the Liquor Licensing Authority developing a consistent approach to application for hours. The legislative framework enables flexibility and appropriate response to individual circumstances, but basis justice requires that even handed and consistent approach. What the Authority must not do is close its mind to individual applications in an over rigid application to its policies.

[35] The Authority did not accept the argument that a 24 hour licence has an intrinsic value. This is because licences may not be transferred. In any event, if there is a common closing time (or level playing field), there is less chance that the financial commitments made by licensees will be placed at risk.
[36] The Authority considered, however, that it would be unreasonable to implement changes immediately. It determined that the aspects of the policy that affected licensees with trading hours after 4.00 am would come into effect on 4 August 2008. Apart from the need for fairness, this date was chosen to allow a potential appeal process to be completed and provide licensees with an opportunity to prepare for change. It would, in the Authority’s view, mitigate the potential for the migration of drinkers and it could well be that the remaining licensees would take the opportunity to fall into line with the proposed changes on a voluntary basis.
[37] The Authority stated that, in its view, “the reduction of liquor abuse may well be achieved if there is a common closing time for all licensed premises in Queenstown rather than allowing premises to make their own decisions about when to cease trading”. The restriction in trading hours alone would not, however, be sufficient to solve any perceived problems of liquor abuse. The Council and the police would monitor the situation to be able to give an informed report on the efficacy of the policy. The Authority said that it intended to review the way that the changes had been implemented by way of a public hearing 12 months after the orders had been implemented.

Subsequent developments

[38] Since the Authority’s decision, other decisions have been issued by the Authority reducing the trading hours of other taverns in the Queenstown CBD to trading hours in line with the policy. The reduction in hours was agreed to by the licensees concerned.
[39] On 27 August 2008 a hearing was held at Queenstown in respect of two applications for renewal from premises known as “Tardis” and “Sky City Casino”. On 5 September 2008 the Authority issued a decision whereby the trading hours for Tardis were reduced to Monday to Sunday 7.00 am to 4.00 am and the trading hours for the Casino were reduced to Monday to Sunday 7.00 am to 4.00 am in respect of the main Casino area. However, the function room at the Casino was authorised to retain a 24 hour trading licence: Tardis Ltd and Queenstown Casinos Ltd LLA PH 1271-1272/2008 5 September 2008.
[40] On 1 and 2 September 2009 the Authority held the review hearing that it heralded in its decision: see above at [37]. No formal decision has been issued as a result of this review as the Authority is awaiting the outcome of this appeal.

French J’s decision

[41] French J held that the policy was not the sole reason for the Authority’s decision as the Authority also expressed its independent view that the reduction of liquor abuse could be achieved if there was a common closing time for all licensed premises rather than allowing premises to make their own decisions about when to cease trading. She did accept, however, that had it not been for the policy, it was unlikely the Authority would have come to the decision it did.
[42] French J held, referring to Buzz & Bear, that the Authority was entitled to take a local authority's policy, such as that promulgated by the Council, into account when considering applications for renewals or grants of licences. This was so notwithstanding the absence of any express reference to such policies in the Act. While s 22 refers to the suitability of the licensee and the manner in which the licensee has conducted its business, there was, in French J’s view, nothing in s 22 to prevent the Authority from having regard to wider considerations. In French J’s opinion, the list of matters which s 22 requires the Authority to take into account was not exhaustive.
[43] In French J’s view, it would be wrong for the Authority to refuse to take into account wider policy considerations that have been raised in a s 20 report. Section 22(d) specifically provides that the Authority must have regard to “any matters dealt with in any report made under s 20”. Because the policy on trading hours was a matter validly raised in the report, the Authority was required to have regard to the policy. French J stated that there was no question that, on an application for renewal, the Authority has the power to alter the trading hours of an existing licence in response to a s 20 report. She considered that this conclusion was clear from ss 23(1)(b) and 14(5) and supported by Excel Promotions.
[44] French J held that, in the present case, it would be wrong to say the Authority failed to have any regard to the individual operations in breach of its obligations under s 22. The Authority did examine the individual operations in its decision and concluded that it was appropriate to renew the licences. It was simply that, with regard to the issue of trading hours, the policy and the desirability of a common closing time outweighed the other relevant considerations.
[45] In French J’s opinion, the key issue in this case was whether the Authority did what Fisher J in Walker and Robertson J in Ole Forge said it must not do, that is, treat the content of the policy as a mandatory requirement or rule or close its mind to individual applications in an over-rigid application of the policy. She concluded that the Authority did not for the following reasons:

• (a) The nature of the subject-matter and the fact that the perceived need for consistency was an underlying or inherent imperative.
• (b) The Authority did not import a fixed policy of its own as distinct from relying on police and District Licensing Agency reports.
• (c) The Authority recognised the policy was not binding on it but chose to adopt it for reasons connected with the statutory objective.
• (d) The Authority did consider the merits of the policy in terms of the statutory objective.
• (e) The fact the Authority delayed implementation of the reduced hours, notwithstanding the absence of a sunset clause in the policy.
• (f) The fact the Authority stated it was prepared to effect changes to the policy and to admit exceptions.

[46] As to the argument that the Authority’s decision was not founded on any rational and cogent evidence that closing at 4.00 am was likely to be effective in reducing liquor abuse, French J said that there was no dispute as to the existence of concerns about alcohol abuse in Queenstown, nor any dispute that those concerns were well founded. The issue was as to the effectiveness of the policy to assist with reducing the problem.
[47] French J considered that there was some evidence before the Authority which connected the general thrust of the policy, being a reduction in trading hours, to a reduction in liquor abuse. She referred to the police submission at the hearing before the Authority supporting the continued operation of the policy. She also referred to Ms Surrey’s evidence and the fact that, during the Council’s consultation process, a reduction in hours was supported by the police, the Medical Officer of Health and ALAC.
[48] French J noted that ALAC’s submission to the Council was to the effect that extensive research shows the key factors in liquor abuse are access and availability and that there is a link between trading hours and alcohol abuse. The more alcohol is available, the greater the potential there is for alcohol abuse. French J also referred to the minutes of the meeting of Council’s Regulatory and Hearings Committee on 1 May 2007, which record discussion of a submission from the police highlighting an increase in alcohol-related offending in central Queenstown. The Committee concluded that a reduction in the trading hours would be required to achieve the aim of reducing the issues relating to alcohol related harm in central Queenstown.
[49] French J recognised that views as to the effectiveness of the policy in dealing with the alcohol abuse problem differed dramatically. Ultimately, in her opinion, the issue as to what weight should be attached to the competing views was an issue within the specialist expertise of the Authority to which she considered she should defer. She pointed out that criticisms of the alleged paucity of factual evidence before the Authority would also need to be tempered by the fact that the Authority was entitled to draw inferences as a matter of common sense about such issues as common closing times.

Question one

[50] Is a report furnished under s 20(2) or (3) of the Sale of Liquor Act entitled to rely on a local authority’s liquor licensing policy as the sole reason for opposing an application for renewal of an on-licence, or must it be confined to matters pertaining to the suitability of the licensee and the manner in which the licensee has conducted the sale and supply of liquor pursuant to the licence?

Submissions

[51] Mr Forbes, on behalf of the appellants, submits that a policy of a local authority which has no statutory authorisation cannot lawfully be the sole reason for a s 20 report. In his submission, the s 20 reports in this case did not provide any justification for restricting trading hours other than by reference to the policy. Nor did they address the issue of whether it could be said that the problem of liquor abuse relates more to the management of licensed premises than to the hours of operation. No issues relating to the particular licensees were raised.
[52] Mr Cunliffe, for the first respondent, submits that there is nothing in s 20 that limits the matters that can be included in a report and such reports can cover wider policy issues. In his submission, to interpret s 20 narrowly would be inconsistent with the requirement under s 4(2) that the Authority must exercise its jurisdiction, powers and discretions in the manner most likely to promote the object of the Act.

Discussion

[53] Section 22(d) requires the Authority to have regard to any matters raised in as 20 report. This is in addition to the matters set out in s 22(a) – (c), which implies that a s 20 report can deal with matters other than those contained in s 22(a) – (c). Even if s 20 reports were limited to those matters, however, trading hours are clearly, in terms of s 22(b), conditions attaching to a licence: see s 14(5)(a). There is nothing in s 22(b) or elsewhere that confines the consideration of conditions to matters relating to the manner in which the particular licence has been operated. In any event, as noted by McGechan J in Buzz & Bear, this would make little sense: see [29] above.
[54] Neither is there anything in s 20 that limits the matters that may be covered in a s 20 report. In particular, a s 20 report is not limited to matters relating to the suitability of the licensee and the manner in which the licensee has conducted the sale and supply of liquor pursuant to its licence. We consider French J was clearly correct in her conclusion on this issue.
[55] If, as the appellants submit, only matters relating to particular licensees are to be included in a s 20 report, this would mean that conditions could never be changed to match the current social environment. This would give those with existing licences a perpetual competitive advantage over new licensees. This cannot be in accordance with the overall statutory objective. We thus accept Mr Cunliffe’s submission that s 20 must be interpreted broadly to allow considerations of general policy to be addressed so that the requirements of s 4(2) can be met.
[56] It must also be noted that, in referring to the policy, the s 20 report in this case necessarily incorporated the thinking behind the report, the consultation process and the research upon which the report was based (such as that referred to in the ALAC submission). It is not strictly correct to say that the report was based solely on the policy.
[57] A number of objections were made by the appellants to the policy, including that it had no statutory basis, that it required information to be provided (such as staff training) which is not required by the Act and that it adopted a closing time of 4.00 am which had not been advocated by any of the submitters. The appellants also noted the overwhelming support that the public submissions gave to the continuance of 24 hour trading.
[58] We consider that there was nothing inappropriate in the Authority encouraging the development of liquor policies by local authorities and the Authority’s reliance on such policies has rightly been upheld by the High Court. Policies promote consistency of decision making, they provide guidance to applicants and allow for wider community input and consideration at a broad policy level than is possible in the context of individual licensing applications. Although the issue is not before us, we consider staff training to be clearly within the scope of the statute: see s 14(5)(e) and (f).
[59] We note further that consultation does not mean that a body is required to accept the submissions received. As to the complaint that the policy did not adopt a closing time advocated by any of the submitters, the Council was, we would have thought, entitled to turn its collective mind to the appropriate compromise between the various competing factors: see above at [17].
[60] We accept that there may be an issue whether it was proper for the Council as licensing agency to fetter any discretion to accept a variation to the policy in individual cases. However, the existence of the Authority and the express recognition in the policy that it is for the Authority to consider any individual variations to that policy may well mean there could be no objection to this.

Question two

[61] In making a decision under s 23 of the Sale of Liquor Act 1989, is the Liquor Licensing Authority entitled to alter the conditions of the licence by reference to a local authority’s licensing policy notwithstanding the absence of any specific problems associated with the operation of the particular premises in question?

Submissions

[62] The appellants’ submission on this point is that the Authority was only able to amend the conditions attaching to the three existing licences, or refuse to renew them, in response to a report under s 20 or on a request by the applicant. Accordingly, the Authority did not have jurisdiction to reduce the hours of trading of the three applicants which already had 24 hour trading, unless the s 20 reports of Ms Surrey and the police were validly able to oppose the renewal of 24 hour trading on the basis of the policy as the sole ground.
[63] The appellants say that it is clear that the central reason for the Authority’s decision to alter the existing conditions as to the maximum trading hours (in three cases) and the refusal of an extension for 24 hour trading (in one case) was because of its adoption of the policy. But for the policy, the Authority would not have come to the decision it did.
[64] The first respondent submits that the statutory framework in ss 20 to 23 and s 14(5) of the Act does not limit the Authority to considering specific problems with the particular premises or particular licences. Wider issues, including local authority liquor policies, can be considered by the Authority. It is also submitted that the list of matters outlined by s 22 is not an exhaustive list.

Our assessment

[65] As the liquor policy was validly included in the s 20 report, as French J pointed out, the Authority was bound to consider it in terms of s 22(d). If it is bound to consider the policy, it cannot be criticised for deciding to follow it. The answer we have given to question one thus provides a complete answer to this question.
[66] We accept Mr Cunliffe’s submission that the statutory framework in ss 20 to 23 and s 14(5) of the Act does not limit the Authority to the consideration of specific problems with the particular premises or the particular licensee. In particular, as French J pointed out, s 23(1)(b) specifically allows renewal with different conditions, without limiting in any way the matters that are seen as relevant to that determination.
[67] We also accept Mr Cunliffe’s submission that the list of matters in s 22 is not an exhaustive list. Section 22 thus allows consideration of a policy which has been promulgated by a community’s elected representatives after a process of community consultation. As Fisher J noted in Walker:

[29] For all of those reasons I am satisfied that s 22, and to the extent that it is relevant s 13, are not to be interpreted in any narrow or exhaustive sense in the way proposed by the appellants. The Authority was permitted to take into account anything which in terms of the statute as a whole appeared to be regarded by the legislature as relevant to licence conditions and the terms on which they should be granted. That must include the statutory object referred to in s 4. If Goldcoast [[2001] 2 NZLR 769] was intended to indicate otherwise I regret that I am unable to follow it. Of course to say that a consideration is relevant is not to say that it takes priority over other considerations expressly listed where the statutory discretion is created. Nor is it to say that the matters raised in s 4 are to be approached on anything other than a nationally consistent basis.

Question three

[68] Did the Authority abdicate its statutory decision-making role and discretion under s 23 of the Sale of Liquor Act 1989 by applying the trading hours contained in the policy in respect of all the applications before it, in particular having regard to:

(i) the fact that the overwhelming majority of written submissions received during the public consultation process on the draft policy were opposed to any reduction in the existing policy allowing 24 hours trading;

(ii) the terms of the policy as to maximum trading hours; and

(iii) the Authority’s finding the appellants were all regarded as suitable and that the licences should be renewed?

Submissions

[69] Mr Forbes submits that the Authority committed an error of law by allowing its statutory decision-making power under s 23 to be fettered by an over-rigid application of the policy. It unlawfully gave precedence to the policy, a non-statutory factor, over the statutory criteria. He pointed out that the Authority adopted the policy on a blanket basis in respect of all eight applications before it.
[70] Further, he submits that it is clearly evident that the policy would be applied to all future applications for new on-licences or for the renewal of on-licences. Even if the blanket adoption of the policy would not be permanent, he submits that it would occur at least until such time as the proposed review by the Authority of the policy has taken place. Until then, all applications for wider hours by tavern-type licensees would be refused. He submits further that there was no independent assessment by the Authority of the justification for, or the merits of, the policy or how it might contribute to meeting the object of the Act in s 4. It simply decided that it should be accepted and applied. The Authority was unsure whether a blanket closing time would help meet the statutory object and this does not suffice. Further, the Authority was not entitled to give precedence to the statutory object in s 4 over the statutory criteria for the renewal of licences, which it effectively sought to do.
[71] Mr Cunliffe submits that the Authority made independent decisions in relation to each applicant in accordance with its statutory obligations. Moreover, the approach taken by the Authority in this case was consistent with the approach to the exercise of a statutory discretion as outlined in Practical Shooting Institute (NZ) Inc v Police [1992] 1 NZLR 709 (HC); because of the nature of the subject matter, the Authority was justified in adopting a uniform approach to the applications based on the policy. As long as the Authority was open to considering individual circumstances that could justify the departure from the policy, there was no error of law. The Authority has in fact shown itself to be open to situations which justify departure: see Tardis above at [39]. None of the appellants in this case have suggested there are any special circumstances in their individual cases.

Our assessment

[72] In our view, the Authority was entitled to give precedence to the overriding statutory object in s 4. The specific statutory criteria must be interpreted having regard to that purpose. The Authority was not restricted to consideration of individual licensees or individual premises: see above at [66].
[73] If the Authority considered (as it did) that reduced trading hours would help reduce liquor abuse then, logically, any restriction on trading hours must be a blanket provision that applies to all liquor outlets (subject to the consideration of special individual circumstances).
[74] In our view, the Authority is not required to be sure that particular conditions will reduce liquor abuse. It is entitled to apply the equivalent of the precautionary principle in environmental law. If there is a possibility of meeting the statutory objective (as the Authority found there was in this case), then it is entitled to test whether that possibility is a reality. In this case, it clearly intended to test its hypothesis and keep the matter under review: see above at [37].
[75] We also agree with French J (see at [49] above) that the Authority did not accept and apply the policy uncritically. It came to its own view. It also did not close its mind to possible departures from the policy. Finally, just as the Council in formulating its policy was not required to follow the views of the majority of those who made submissions, neither was the Authority required to do so. It was entitled to give greater weight to some submissions (for example, from ALAC or the police) over others. In any event, it was entitled (and indeed obliged) to come to its own view on the policy based on its own experience and knowledge.

Question four

[76] Was the Authority entitled to apply the policy in the absence of any direct evidence regarding a connection between:

(i) the policy and the statutory object specified in s 4(1) on the one hand; and

(ii) any matters relating specifically to the appellants other than the fact of their operation in the Queenstown Central Business District.

Submissions

[77] Mr Forbes submits that the only evidence the Authority had before it as to the merits of the policy or any demonstrated connection or link between it and the statutory object was the evidence of Ms Surrey. Her evidence was in relation to the general situation, not the appellants in particular. In his submission, the Act does not allow for a restriction on the availability of licences as a means of reducing general liquor abuse: see Meads at [24]. It is, in Mr Forbes’ submission, hard to see how a general restriction in trading hours is nevertheless permissible for this purpose, especially when the means by which the restriction is imposed is not one provided for in the governing statute. Because the object of the Act in s 4 is not to reduce alcohol consumption as such or its availability, Mr Forbes submits that s 4 cannot be used for that purpose.
[78] The first respondent submits that there was some evidence which connected a reduction in trading hours to a reduction in liquor abuse. The question of the weight to be given to that evidence was for the Authority. Further, the first respondent submits that the Authority is not bound by strict rules of evidence and is to be allowed the benefit of specialist expertise in weighing up material placed before it: Buzz & Bear at 411, ss 109 – 100 of the Act and s 4B Commissions of Inquiry Act 1908. It also points out that the Authority is entitled to draw inferences both as a matter of common sense and on the basis of its specialist experience.

Our assessment

[79] We accept the submission (as did French J) that there was evidence linking a reduction in hours with a reduction in liquor abuse. We also accept the submission that, having regard to the evidence before it, along with inferences of fact it was entitled to make, the Authority was lawfully able to conclude, within its own knowledge and expertise, that with regard to the issue of trading hours, the policy and the desirability of a common closing time outweighed the other relevant considerations.

Answers to questions

[80] Is a report furnished under s 20(2) or (3) of the Sale of Liquor Act 1989 entitled to rely on a local authority’s liquor licensing policy as the sole reason for opposing an application for renewal of an on-licence, or must it be confined to matters pertaining to the suitability of the licensee and the manner in which the licensee has conducted the sale and supply of liquor pursuant to the licence?

The answer is that a report furnished under s 20(2) or (3) of the Act is entitled to rely on a local authority’s liquor licensing policy. The report does not have to be confined to matters relating to the particular premises or the particular licensee.

[81] In making a decision under s 23 of the Sale of Liquor Act 1989, is the Liquor Licensing Authority entitled to alter the conditions of the licence by reference to a local authority’s licensing policy notwithstanding the absence of any specific problems associated with the operation of the particular premises in question?

The answer is yes.

[82] Did the Authority abdicate its statutory decision-making role and discretion under s 23 of the Sale of Liquor Act 1989 by applying the trading hours contained in the policy in respect of all the applications before it, in particular having regard to:

(i) the fact that the overwhelming majority of written submissions received during the public consultation process on the draft policy were opposed to any reduction in the existing policy allowing 24 hours trading;

(ii) the terms of the policy as to maximum trading hours; and

(iii) the Authority’s finding the appellants were all regarded as suitable and that the licences should be renewed?

The answer is no. The Authority, as it was required to do, came to its own independent view on the policy. It was not obliged to confine its consideration to matters relating to the particular premises or the particular licensees. Nor was it obliged to follow the line taken by the majority of submitters.

[83] Was the Authority entitled to apply the policy in the absence of any direct evidence regarding a connection between:

(i) the policy and the statutory object specified in s 4(1) on the one hand; and

(ii) any matters relating specifically to the appellants other than the fact of their operation in the Queenstown Central Business District?

The answer is that there was evidence of a connection between the policy and the statutory object. The Authority is also entitled to act on the basis of its own expertise and experience.

Result and costs

[84] The appeal is dismissed.
[85] The appellant must pay the first respondent costs for a standard appeal on a band A basis and usual disbursements.

Solicitors:
Cruickshank Pryde, Queenstown for Appellants
Macalister Todd Phillips, Queenstown for First Respondent