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Auckland Council v Woolworths New Zealand Limited [2021] NZCA 484 (24 September 2021)

Last Updated: 28 September 2021

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA160/2020
[2021] NZCA 484

	BETWEEN	AUCKLAND COUNCIL Appellant
	AND	WOOLWORTHS NEW ZEALAND LIMITED First Respondent
	AND	FOODSTUFFS NORTH ISLAND LIMITED Second Respondent
	AND	ALCOHOL REGULATORY AND LICENSING AUTHORITY Third Respondent

Hearing:	15–16 June 2021
Court:	Kós P, Miller and Goddard JJ
Counsel:	PMS McNamara and T R Fischer for Appellant (Auckland Council) J S Cooper QC and A W Braggins for First Respondent (Woolworths New Zealand Ltd) I J Thain and I E Scorgie for Second Respondent (Foodstuffs North Island Ltd) D R La Hood for Interested Party (Medical Officer of Health)
Judgment:	24 September 2021 at 11.30 am

JUDGMENT OF THE COURT

The appeal is allowed. We make the orders specified at [126]–[127].
The cross-appeal is dismissed.

The first and second respondents must pay the appellant one set of costs on the appeal and cross-appeals for a complex appeal on a band A basis, with usual disbursements. We certify for second counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

[1] Auckland Council developed a local alcohol policy which would limit trading hours for off-licences; restrict the granting of new off-licences by imposing a temporary freeze in certain central city areas and a rebuttable presumption against new off-licences in certain areas; require local impact reports in connection with licence applications; and establish certain discretionary conditions that might be imposed when issuing or renewing off-licences.
[2] The Council adopted the Policy in 2015 as a provisional local alcohol policy under s 75 of the Sale and Supply of Alcohol Act 2012, which allows a territorial authority to have a policy relating to the sale, supply or consumption of alcohol within its district. The Policy is to cover the entire Auckland district.
[3] The first and second respondents operate New Zealand’s major supermarket chains. We will call them “Woolworths” and “Foodstuffs” or “the Supermarkets”. They sell alcohol from those premises under off-licences. The Supermarkets objected to the Policy. They appealed to the Alcohol Regulatory and Licensing Authority, which we will call ARLA, on the ground that elements of the Policy were unreasonable having regard to the object of the Act. ARLA held they had failed to satisfy it that some of those elements were unreasonable.
[4] The Supermarkets sought judicial review of ARLA’s decision. In a judgment delivered on 27 February 2020 Duffy J found for them on two grounds: ARLA had erred in law by not giving reasons for its decision, and elements of the Policy were ultra vires the Act.^[1] The Judge remitted the affected elements of the Policy to ARLA for reconsideration.
[5] The Council now appeals the High Court’s decision on judicial review. The appeal addresses aspects of what are known as policy elements 1 (maximum trading hours), 2 (among other things, a temporary freeze and rebuttable presumption against new off-licences), and 4 (discretionary conditions on licences).
[6] Woolworths has cross-appealed and both Supermarkets have given notice of intention to support the judgment under appeal on other grounds. They challenge ARLA’s invocation of the precautionary principle, which they say forms no part of the Act, and maintain that ARLA applied the wrong test to element 1 by failing to balance public harm against the public interest in the safe and responsible supply of alcohol. They say that element 2 is ultra vires the Act. And they contend that, contrary to the view arguably taken by the Judge, ARLA was obliged to form its own view of reasonableness by reference to the merits.
[7] The Medical Officer of Health, who supports the Policy, has been heard as an interested party.

Outline

[8] Because this appeal is ultimately an exercise in statutory interpretation, we begin by discussing relevant provisions of the 2012 Act, remarking as we go on aspects of the High Court and ARLA decisions. We then outline the Policy elements and summarise relevant parts of ARLA’s decision before addressing the judgment under appeal.

The legislation

Background

[9] The 2012 Act marked the end of an experiment in the regulation of alcohol supply in New Zealand. Its immediate predecessor, the Sale of Liquor Act 1989, had the modest objective, which was not expressly incorporated in that Act’s licensing criteria, of establishing “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] It was thought at that time that New Zealand’s drinking culture would be best addressed through public education. As this Court remarked in 2002, the 1989 Act differed markedly from its predecessors by departing from the notion that limits on supply would reduce alcohol abuse in the community:^[3]

In marked contrast with its predecessors the [1989] Act does not provide for general economic regulation of the liquor industry ... The notion that if the availability of licenses to sell and supply liquor is restricted the abuse of liquor will be diminished has been at the heart of licensing systems in New Zealand since 1881.

After the introduction of the 1989 Act, an applicant for a new licence need no longer show that the licence was “necessary and desirable”.^[4] Rather, any licensee and premises that met the 1989 Act’s criteria might be licensed. The effect was to allow availability and price to be determined by the market. It was under the 1989 Act that the Supermarkets were first permitted to sell alcohol.

[10] The Law Commission found in 2010 that the experiment had not been a success.^[5] The 1989 Act had not reduced alcohol-related harm and was insufficiently ambitious about doing so.^[6] The problem had worsened, partly through proliferation of outlets.^[7] The Commission emphasised that levels of alcohol-related harm in the community were high, both for those who consume alcohol and those who are affected directly or indirectly by others’ consumption.^[8] The problem is not confined to binge drinking, drinking to intoxication and offending while under the influence. Alcohol misuse affects children from conception,^[9] it reduces workplace productivity and safety,^[10] and it increases the risk of death from alcohol-related causes for the many New Zealanders who consume more than two drinks a day.^[11] Its effects are disproportionately felt by Māori and those in lower socioeconomic groups.^[12]
[11] As the Law Commission recognised, the concept of a “reasonable system of control” assumed importance in the 1989 Act and industry groups were anxious to retain it. The Commission accepted that it was “essential that, in addition to providing a focus on the key alcohol-related harms that the Act aims to prevent, the object of the Act should include the establishment of a reasonable system for the sale, supply and consumption of alcohol” and that control should be “for the benefit of the community”.^[13] But the Commission rejected submissions arguing that the object of the 1989 Act should be retained:^[14]

However, our review has shown us that fundamental changes are needed to the way in which we regulate the sale, supply and consumption of alcohol. Many sections of New Zealand society have told us clearly that there are problems with alcohol-related harms that are not adequately addressed by the current regime. While several elements of the proposed scheme are consistent with the existing legislation, a new focus is needed if New Zealand is to achieve a reduction in alcohol-related harms. We consider it to be essential that the object of the new Act sets out aims that relate directly to the broad spectrum of alcohol-related harms. We are convinced that the current state of alcohol-related harms means a new approach is warranted. The object of the new Act should signal this. The legislation needs to take a wider focus than that of simply contributing to the reduction of liquor abuse. Preventing liquor abuse is clearly important, but there are wider effects of alcohol use and misuse that should be emphasised, such as crime, disorder, public health, accidents, the amenity of public places and the resource use of our public services. The problems related to alcohol in New Zealand are at a point where a more proactive approach to addressing harms is needed.

[12] The Commission proposed a suite of reforms which included restrictions on opening hours and allowing more local input into licensing policy and decisions. A reasonable system of control would encourage responsible attitudes, contribute to minimisation of social harms, delay the onset of youth drinking, protect public health and promote public safety, and reduce the impact of alcohol abuse on police and public health resources.^[15] Among the Commission’s proposals were restrictions of various kinds on supply.^[16]
[13] In a Cabinet Paper dated 5 August 2010 the Minister of Justice, then the Hon Simon Power, responded to the Law Commission’s report. He proposed to accept most of the Commission’s 153 recommendations, in whole or in part, but added that he did not want “to unduly inconvenience low and moderate drinkers”.^[17] He proposed “to focus on the availability and accessibility of alcohol to reduce opportunities for excessive drinking”.^[18] With respect to licensing, he proposed to improve community input into licensing decisions and to reduce the availability of alcohol. He stated that there was evidence that high outlet density and lengthened trading hours lead to greater levels of harm.^[19]
[14] Speaking on the Bill’s third reading on 11 December 2012, the Hon Judith Collins, by then the Minister of Justice, spoke of “clear evidence” linking availability and harm and stated that that the Bill’s “key measures” included restrictions on access to alcohol.^[20] Referring to local alcohol policies, she said that:^[21]

Another important measure to give local communities a greater say is the option for communities to adopt a local alcohol policy. Under these policies, communities will be able to restrict or extend maximum trading hours. They will also be able to limit the location of licensed premises near certain facilities, such as schools, and specify whether further licences should be issued in a defined area. There have been calls to make local alcohol policies mandatory; however, there are important reasons why policies should be optional. Firstly, there is significant cost associated with the development of a local alcohol policy. Some territorial authorities—particularly the smaller ones—may not want to fund the development of a policy. Secondly, some communities may consider that a local alcohol policy is unnecessary for their area, and that the national maximum trading hours, a new criteria in the bill, adequately address their needs. It is very important that we allow communities to decide what it is best for them, especially given the aim of increasing community input and control over licensing.

The object of the 2012 Act

[15] We begin with the object of the Act because an appeal against an element of a proposed local alcohol policy must be decided by reference to it. As we explain at [33] below, the question for ARLA on such an appeal is whether the element is unreasonable in light of the Act’s object. It is found in s 4:

4 Object

(1) The object of this Act is that—

(a) the sale, supply, and consumption of alcohol should be undertaken safely and responsibly; and

(b) the harm caused by the excessive or inappropriate consumption of alcohol should be minimised.

(2) For the purposes of subsection (1), the harm caused by the excessive or inappropriate consumption of alcohol includes—

(a) any crime, damage, death, disease, disorderly behaviour, illness, or injury, directly or indirectly caused, or directly or indirectly contributed to, by the excessive or inappropriate consumption of alcohol; and

(b) any harm to society generally or the community, directly or indirectly caused, or directly or indirectly contributed to, by any crime, damage, death, disease, disorderly behaviour, illness, or injury of a kind described in paragraph (a).

[16] It will be seen that subs (1)(a) and (b) form a single object. The Act does not envisage that there will be conflict between the two subsections, or a need to balance one against the other. They are directed toward the same end. The Act permits the sale, supply and consumption of alcohol, provided all of those things are done safely and responsibly and provided the harm caused by excessive or inappropriate consumption is minimised.
[17] The definition of alcohol-related harm (meaning harm caused by excessive or inappropriate consumption) was a significant departure from the 1989 Act. The term is extensively defined to include both harm from injury, illness, disease, death, damage, crime, or disorderly behaviour to which misuse of alcohol has contributed directly or indirectly, and harm to society generally or the community resulting directly or indirectly from such injury, illness or misconduct. This is a very broad concept of harm, not limited to those who misuse alcohol or directly experience the consequences of its misuse. It envisages that harm relating from supply of alcohol may occur after sale, where the alcohol is consumed or the consequences of its misuse felt. And it recognises that society and communities experience harm and have an interest in minimising it.
[18] The Act also contains a purpose statement, which is found in s 3:

3 Purpose

(1) The purpose of Parts 1 to 3 and the schedules of this Act is, for the benefit of the community as a whole,—

(a) to put in place a new system of control over the sale and supply of alcohol, with the characteristics stated in subsection (2); and

(b) to reform more generally the law relating to the sale, supply, and consumption of alcohol so that its effect and administration help to achieve the object of this Act.

(2) The characteristics of the new system are that—

(a) it is reasonable; and

(b) its administration helps to achieve the object of this Act.

[19] We make several points about s 3. The first, which is obvious but bears labouring having regard to the Supermarkets’ submissions before us, is that the legislature chose, as the Law Commission had recommended, not to retain the object of the 1989 Act. It will be recalled that the object of that Act was a “reasonable system of control” which aimed to contribute, so far as legislation could do, to the reduction of alcohol abuse.^[22] Section 3 of the 2012 Act refers to a system of control that is reasonable, but it is to be a “new system of control”;^[23] it is not carried over from the system established under the 1989 Act.
[20] Second, the new system of control is not only to be reasonable but also to help achieve the object of the Act, which differs very significantly from that of the 1989 Act. In contrast to the 1989 Act, the reasonable system of control is not the Act’s end in itself.
[21] Third, the content of a reasonable system of control should be gleaned from the legislation itself and the legislative history, including the Law Commission’s report which, as we have explained, the legislation sought to implement in significant measure. We observe that it is a premise of the 2012 Act that licensing policy can reduce alcohol-related harm; that was the lesson the legislature took from the 1989 Act, under which increased outlet density and longer trading hours contributed to increased harm.^[24] We have referred at [12] above to what the Commission identified as characteristics of a reasonable system of control. We observe too that it is a feature of the 2012 Act that the system of control should facilitate local preferences about alcohol supply.^[25]
[22] In what we have to say below it will be apparent that we respectfully think Duffy J did not attach sufficient weight to these features of the Act’s object and purpose provisions. She considered that the Act balances a “freedom” to sell alcohol against a community freedom to take reasonable steps to protect people from harm.^[26] But there is no antecedent right or freedom to sell or supply alcohol; the right to do so is conferred under the Act and on its terms. Section 4 does not speak of balancing competing rights or freedoms, though it undoubtedly recognises that alcohol may be consumed lawfully and safely, and that alcohol-related harm cannot be eliminated. And, perhaps most importantly, there is no presumption in favour of the status quo; the 2012 Act looks to a new system of control.

Default trading hours and terms

[23] Section 43 establishes “default national maximum trading hours”, relevantly the hours between 7 am and 11 pm on any day for the sale of alcohol on premises for which an off-licence is held.^[27] Where a local alcohol policy setting maximum trading hours is in force, s 45(1)(a) provides that the applicable maximum trading hours for any licensed premises are those stated in the policy.
[24] Speaking generally of the Act’s provisions for sale, supply and consumption, Duffy J held that:^[28]

[55] The provisions for the sale, supply and consumption of alcohol must indicate Parliament’s view on what will generally achieve the [Act’s] purpose and object, because otherwise they would not be in their present form. They are a general default standard from which there should be reason for departure. The presence of Part 2 Subpart 2 of the [Act], however, with provisions for [local alcohol policies], indicates that Parliament also recognises the [Act’s] general provisions may require tailoring to meet specific features of individual communities, if the purpose and object of the [Act] are to be met. Accordingly, the elements of a [provisional local authority policy] need to be formulated with these matters in mind. ....

[25] We do not agree. So far as trading hours are concerned, ss 43–45 establish no presumption in favour of the default hours and nothing in them requires that a local authority justify departure from those hours. The default hours are merely those that apply if a territorial authority has chosen not to establish a local alcohol policy. Where a policy is established, any limit on trading hours prevails unless ARLA finds that element of the policy unreasonable in light of the Act’s purpose, as we explain below.

Local alcohol policies

[26] Under s 75 a territorial authority may have a local alcohol policy, which may discriminate among parts of its district and between kinds of licence:

75 Territorial authorities may have local alcohol policies

(1) Any territorial authority may have a policy relating to the sale, supply, or consumption of alcohol within its district (or to 2 or all of those matters).

(2) A local alcohol policy—

(a) may provide differently for different parts of its district; and

(b) may apply to only part (or 2 or more parts) of its district; and

(3) A local alcohol policy must be produced, adopted, and brought into force, in accordance with this subpart.

(4) No territorial authority is required to have a local alcohol policy.

[27] Section 77 sets out what a local alcohol policy may contain:

77 Contents of policies

(1) A local alcohol policy may include policies on any or all of the following matters relating to licensing (and no others):

(a) location of licensed premises by reference to broad areas:

(b) location of licensed premises by reference to proximity to premises of a particular kind or kinds:

(d) whether further licences (or licences of a particular kind or kinds) should be issued for premises in the district concerned, or any stated part of the district:

(e) maximum trading hours:

(f) the issue of licences, or licences of a particular kind or kinds, subject to discretionary conditions:

(g) one-way door restrictions.

[28] It will be seen that a policy may include restrictions on new licences and trading hours. It may provide for licences to be issued subject to discretionary conditions. The policy must be confined to matters relating to licensing. Under s 94 it must also be consistent with the Act and the general law.
[29] Under s 78 the territorial authority must produce a draft policy which has regard to certain matters, and it must not produce the draft without consulting the police, licensing inspectors and Medical Officers of Health:

78 Territorial authorities must produce draft policy

(1) A territorial authority that wishes to have a local alcohol policy must produce a draft policy.

(2) When producing a draft policy, a territorial authority must have regard to—

(a) the objectives and policies of its district plan; and

(b) the number of licences of each kind held for premises in its district, and the location and opening hours of each of the premises; and

(d) the demography of the district’s residents; and

(e) the demography of people who visit the district as tourists or holidaymakers; and

(f) the overall health indicators of the district’s residents; and

(g) the nature and severity of the alcohol-related problems arising in the district.

(3) For the purposes of subsection (2), a district’s residents include people who have holiday homes there.

(4) The authority must not produce a draft policy without having consulted the Police, inspectors, and Medical Officers of Health, each of whom must, if asked by the authority to do so, make reasonable efforts to give the authority any information they hold relating to any of the matters stated in subsection (2)(c) to (g).

[30] The territorial authority must then produce a provisional policy, following a prescribed public consultative process, if it wishes to proceed.^[29]
[31] We return to s 78 at [110] below. We pause here to make two points about it. The first is that a local alcohol policy need not discriminate among parts of the territorial authority’s district. There is no presumption that, as the Judge held, a policy may require “tailoring to meet specific features of individual communities, if the purpose and object of the [Act] are to be met”.^[30] On the contrary, there may be good reason not to discriminate. By way of example, evidence as to alcohol-related harm may be generally applicable; put another way, there may be no reason to doubt that it affects the entire district. (In this case, by way of illustration, there was general evidence that those purchasing alcohol after 9 pm are likely to be abusing it.) Subdivision of a district into boundaries may tend to defeat the purpose of a control on off-licences, since people may travel to buy alcohol and may consume it anywhere. Attempts to draw boundaries are prone to engender controversy, making the policy difficult and costly to develop and administer.^[31] This last point is a relevant consideration because the Act recognises that a local alcohol policy imposes burdens on a territorial authority; the legislative record suggest that is why local alcohol policies were not made compulsory and why two or more local authorities may adopt a joint policy.^[32]
[32] The second and more general point is that revealed community preference has an important role to play under the Act. That is shown by provision for local alcohol policies, the extent to which it is permissible for such policies to govern the supply of alcohol, and delegation of decision-making to territorial authorities.^[33] As Mr McNamara submitted for the Council, a local alcohol policy is a means by which communities can implement, through participatory processes, some of their own policies on alcohol-related matters in their districts. Because those policies are the product of a process designed to discover and implement a community preference, they need not be evidence-based. If an objectively unreasonable preference finds its way into a proposed local alcohol policy, the remedy lies in an appeal to ARLA.

Appeals

[33] Anyone who made submissions during the consultative process may appeal to ARLA. The sole ground on which “an element of” the policy can be appealed against is that it “is unreasonable in the light of the object of this Act”.^[34] Section 83 prescribes how ARLA is to deal with an appeal:

83 Consideration of appeals by licensing authority

(1) The licensing authority must dismiss an appeal against an element of a provisional local alcohol policy if it—

(a) is not satisfied that the element is unreasonable in the light of the object of this Act; or

(b) is satisfied that the appellant did not make submissions as part of the special consultative procedure on the draft local alcohol policy concerned.

(2) The licensing authority must ask the territorial authority concerned to reconsider an element of a draft local alcohol policy appealed against if it is satisfied that—

(a) the appellant made submissions as part of the special consultative procedure on the draft local alcohol policy concerned; and

(b) the element is unreasonable in the light of the object of this Act.

(3) The licensing authority must notify the appellant and territorial authority of its decision.

(4) The appellant has no right of appeal against the decision of the licensing authority.

(5) Subsection (4) does not limit or affect the Judicature Review Procedure Act 2016.

[34] It will be seen that ARLA must dismiss an appeal against an element of the policy if not satisfied that the element is unreasonable. If satisfied that the element is unreasonable it must ask the territorial authority to reconsider that element. In contrast to appeals on licensing matters under ss 154–158, which are by way of rehearing,^[35] ARLA may not substitute its own view of the merits.
[35] Duffy J held that the words “ in light of the object of this Act” do no more than invoke well settled administrative law principles for assessing the exercise of administrative powers; that is to say, ARLA’s jurisdiction must be exercised to promote the policy and objects of the legislation.^[36] The latter proposition is of course correct, but it was an error to view ARLA’s jurisdiction through an administrative law lens. The Judge went on to hold that ARLA must decide whether the inclusion of an impugned element was something that no reasonable territorial authority acting in light of the object of the Act would have done, and she stated that unreasonableness is generally understood to mean Wednesbury unreasonableness.^[37] It was common ground before us that this was an error, for ARLA’s task under s 83 is evaluative. We agree. It must decide for itself whether a given element is unreasonable in light of the Act’s object. ARLA correctly took that approach in this case.^[38]
[36] The appeal standard has built into it a substantial degree of deference to the preferences of the territorial authority; only if an element is unreasonable in light of the Act’s object may ARLA intervene, and then only by asking the territorial authority to reconsider. When exercising this jurisdiction ARLA must bear in mind that, as noted above, community preferences have a substantial role to play in deciding what is reasonable.
[37] Counsel before us debated whether the standard of review to be applied by ARLA is the same as used in the bylaw cases, the leading examples of which are Kruse v Johnson^[39] and McCarthy v Madden.^[40] ARLA itself adopted what it described as the proportionality principle applied in those cases,^[41] holding that it is likely the policies in a Local Alcohol Policy will be unreasonable in light of the object of the Act if:^[42]

(a) the proposed measures constitute a disproportionate or excessive response to the perceived problems;

(b) the proposed measures are partial or unequal in their operation between licence holders;

(d) an element is an oppressive or gratuitous inference with the rights of those affected.

[38] The authority ultimately relied on for these propositions in a licensing context is Hospitality New Zealand Inc v Tasman District Council, in which ARLA held:^[43]

[44] It was suggested that when considering “unreasonableness” consideration should be given as to how the concept was considered under the Sale of Liquor Act 1989. The Authority agrees. In particular, the comments of the Court of Appeal in Meads Brothers Limited v Rotorua District Licensing Agency, [2002] NZARLA 308 (CA) at [53] are pertinent:

“It is to be remembered that the statutory object is to establish a reasonable system of control. This envisages that at a certain point, at the extreme end of the scale, the administration of the licensing may become unreasonable in its pursuit of the aim of reducing liquor abuse.”

[45] The comment made in Meads Brothers Limited was reiterated in Christchurch District Licensing Agency v Karara Holdings Limited, [2003] NZCA 96; [2003] NZAR 752 (CA) at [26]. This the Authority confirmed in New Zealand Police v Absolute Caterers Limited, [2013] NZARLA 946 at paragraph [12]. Thus, it will be an indicator that a particular element of a [provisional local alcohol policy] is unreasonable if those wishing to purchase or consume alcohol in a safe and responsible manner find that the element is a disproportionate response to possible alcohol-related harm.

[46] The same principle can be deduced from the by-law cases. As was stated in the leading case of McCarthy v Madden, [1914] 33 NZLR 1251 (SC):

“The reasonableness or unreasonableness of a by-law can be ascertained only by relation to the surrounding facts including the nature and condition of the locality in which it is to take effect, the evil, danger, or inconvenience which it is designed or professes to be designed to remedy, and whether or not public or private rights are unnecessarily or unjustly invaded.”

[47] An important aspect of reasonableness discussed in the by-law cases is proportionality. In essence, proportionality involves the assessment of the interference with a public right, against the benefits sought to be achieved by the provision.

(Emphasis in original.)

[39] We accept Mr La Hood’s submission, for the Medical Officer of Health, that ARLA erred to the extent it held that “the proportionality principles used in bylaw cases” apply under the 2012 Act.^[44] The context is not the same.
[40] It is correct, as noted above, that an element is not unreasonable merely because ARLA might take a different view of its merits than did the territorial authority. The bylaw cases stand for that proposition, holding that a bylaw cannot be condemned as unreasonable “merely because it does not contain qualifications which commend themselves to the minds of Judges”.^[45] Deference must be paid to the preferences of the community.
[41] What is not appropriately transferred from the bylaws context to alcohol regulation under the 2012 Act are the propositions that (a) the reasonableness of a bylaw depends in part on “whether or not public or private rights are unnecessarily or unjustly invaded” and (b) any bylaw must be unreasonable if it unnecessarily abridges or interferes with a public right without producing for local inhabitants a benefit that is “real and not merely fanciful”.^[46] As explained above, under the 2012 Act there is no antecedent right to sell alcohol that must be balanced against a given control on supply. It is inherent in a licensing regime, and to be expected given the object of the 2012 Act, that controls may have an adverse economic impact on licensees.^[47] Nor is it necessary to prove that tangible harm reduction is more likely than not to result from a given policy element, as we explain below. And finally, the concept of a “reasonable” system of control under the 2012 Act is not the same as it was under the 1989 Act, as explained at [19] above. We add that for that reason, care should be taken when applying authorities decided under the 1989 Act.

No further appeal, except for the territorial authority

[42] An appellant before ARLA has no right of further appeal, but the territorial authority may appeal ARLA’s decision to the High Court under s 84:

84 Actions territorial authority may take if asked to reconsider element of provisional policy

(1) If the licensing authority asks a territorial authority to reconsider an element of a provisional local alcohol policy, the territorial authority must—

(a) resubmit the policy to the licensing authority with the element deleted; or

(b) resubmit the policy to the licensing authority with the element replaced with a new or amended element; or

(c) appeal to the High Court against the licensing authority’s finding that the element is unreasonable in the light of the object of this Act; or

(d) abandon the provisional policy.

[43] Section 85 provides that if the High Court overturns ARLA’s decision the affected element stands as part of the policy, otherwise the territorial authority must delete the element, abandon the policy or resubmit the policy to ARLA with an amended element:

85 Effect of High Court decisions on appeal by territorial authority

(1) If the High Court overturns the licensing authority’s finding that an element of a provisional local alcohol policy is unreasonable in the light of the object of this Act, the element stands as part of the policy.

(2) If the High Court upholds the licensing authority’s finding that an element of a provisional local alcohol policy is unreasonable in the light of the object of this Act, the territorial authority must—

(a) resubmit the policy to the licensing authority with the element deleted; or

(b) resubmit the policy to the licensing authority with the element replaced with a new or amended element; or

Judicial review

[44] The Act recognises judicial review, providing in s 83 both that an appellant before ARLA has no right of further appeal and that the prohibition on appeal does not limit or affect the Judicial Review Procedure Act 2016.
[45] However, the 2012 Act does no more than specify, for the avoidance of doubt, that the prohibition on appeals does not preclude judicial review. It goes without saying that judicial review must be conducted by reference to the particular statutory powers and processes found in the 2012 Act. So, for example, it may be relevant that the legislature established a consultative process for the adoption of local alcohol policies by territorial authorities and conferred a limited right of appeal in which (a) an appellant must show an element of the policy is unreasonable in light of the object of the Act and (b) ARLA or the High Court may not substitute their own view but must refer an unreasonable element back to the territorial authority for reconsideration.
[46] Judicial review is not an appeal. The consequence of the Supermarkets’ success in judicial review in the High Court is not that the Council must revise the elements as it would be required to do on losing an appeal under s 85. It is not the policy but ARLA’s decision that has been found wanting, and it is ARLA which must reconsider.

Onus and proof in appeals to ARLA under s 81

[47] ARLA’s functions under the Act extend to deciding licence applications, deciding appeals from decisions of licensing committees, deciding applications for variation, suspension or cancellation of licenses and managers certificates and deciding appeals against elements of draft local alcohol policies.^[48] Within the scope of its jurisdiction it must be treated as if it were a Commission of Inquiry.^[49]
[48] Section 205 deals with rights to appear on appeals under s 81:

205 Right of persons to appear in relation to appeal under section 81

(1) The following persons may appear and be heard, whether personally or by counsel, and call, examine, and cross-examine witnesses in an appeal under section 81 (which relates to an appeal to the licensing authority against any element of a local alcohol policy that is a matter relating to licensing):

(a) the appellant:

(b) any person authorised in that behalf by a territorial authority.

(2) With the leave of the chairperson of the licensing authority, the following persons may appear and be heard, whether personally or by counsel, and call evidence:

(a) any inspector:

(b) any constable:

(d) any other party who made a submission as part of the special consultative procedure on the draft local alcohol policy:

(e) any other person who satisfies the licensing authority that he or she has an interest in the proceedings, apart from any interest in common with the public.

[49] Under section 207, ARLA may receive as evidence any statement, document, information or matter that in its opinion may assist it to deal effectually with any matter before it.
[50] ARLA held, citing its own previous decisions, that in an appeal under s 81 the onus of proof is on the appellant and the standard of proof is the balance of probabilities:^[50]

[31] The onus of proof is on the appellant. The standard of proof is ‘on the balance of probabilities’. In Tasman we said at [36]:

“the onus is on the appellant to satisfy the Authority that the appealed element is unreasonable in light of the object of the Act. The very wording of the ground of appeal places that onus on the appellant. Should an applicant fail to discharge its onus on the balance of probabilities then there would be no need for a territorial authority respondent to do anything.”

[51] Judicial review was not sought on the ground that ARLA misdirected itself on this point, but Duffy J decided that it had done so. She stated that burden and standard of proof are “evidential principles to be applied when there is a need to make factual determinations on evidence in the context of a lis inter partes” and cited a licensing decision, Re Venus NZ Ltd, for the proposition that there is no onus.^[51]
[52] It is not in dispute that the Judge was correct to hold there is no legal burden in an appeal to ARLA under s 81. Rather, an appellant bears a persuasive burden of showing that an element included by the territorial authority was unreasonable in light of the Act’s object.
[53] Ultimately ARLA must be satisfied that a given element of a policy is unreasonable. Sometimes that may call for proof of facts on the balance of probabilities. An appeal may raise a question of past or present fact that is capable of proof to that standard. But an appeal may also raise factual propositions that are not capable of proof on the balance of probabilities. As ARLA plainly recognised, evidence of alcohol-related harm may not be directly traceable to a given licensee or class of licensee, but that does not preclude intervention if it may reduce the harm.^[52] ARLA may also be required to evaluate what will happen with and without a given policy element. Such an inquiry involves predictions about what might happen in future in two states of regulation, one current and the other hypothetical. Neither outcome is likely to be capable of proof on the balance of probabilities. It would be an error — because the object of the Act could not be achieved — to insist on proof that, for example, restrictions on trading hours will reduce alcohol-related harm. Rather, ARLA must make a decision on the information and evidence available to it, incorporating the likelihood that a given element will reduce alcohol-related harm. A prospective benefit may be taken into account if there is a real and appreciable possibility that the element will deliver it.
[54] We doubt ARLA meant to hold, in the passage quoted at [50] above, that an appeal under s 81 must be “proved” on the balance of probabilities. An appeal may raise questions of law as well as fact, and ARLA itself recognised that causes of alcohol-related harm cannot be proved on the balance of probabilities; it sufficed that there was evidence of “a relationship” between off-licence trading hours and consumption and harm.^[53] ARLA did not rest its decision on a burden of proof; it evaluated each element in light of the object of the Act. When dealing with element 1, for example, it examined the evidence about the relationship between trading hours and alcohol consumption and harm and satisfied itself that there was an evidential foundation for the restriction on closing hours. It concluded that it had not been established that the closing hours restriction was unreasonable in light of the object of the Act.^[54]
[55] Woolworths invited us to classify appeals under s 81 as de novo. We decline to do that. The term is inapt. It is correct that evidence may be called before ARLA and there is no provision for transmission to ARLA of any record created in the territorial authority’s process.^[55] But Woolworths sought to argue that because the appeal is de novo there is no presumption that the local authority’s decision was correct. We cannot accept that. A distinction must be drawn between appellate process and the standard of appellate review, which is provided for in s 81; the element stands unless ARLA is satisfied that it is unreasonable in light of the object of the Act.

The precautionary principle

[56] ARLA invoked the precautionary principle, citing the judgment of this Court in My Noodle Ltd v Queenstown-Lakes District Council, which was decided under the 1989 Act:^[56]

[40] In Tasman, we said that the precautionary principle applies to the development of a local alcohol policy (at [54]). This was deduced from My Noodle Ltd v Queenstown-Lakes District Council (Court of Appeal) [2009] NZCA 564; 2010 NZAR 152. There Glazebrook J said at [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: ...”

[57] ARLA went on to explain that it would apply the precautionary principle where there was an evidential basis supporting it, meaning that there is evidence sufficient to show that a proposed element may have a “positive effect” on alcohol-related harm or “has the possibility of meeting the object of the Act”.^[57]
[58] Duffy J accepted that the precautionary principle is available but reasoned that ARLA erred when applying it: in her view, ARLA understood the principle to mean that it need not interrogate the evidence itself but could simply defer to the Council.^[58] ARLA must have applied the precautionary principle, but because its reasons were inadequate the Judge found it impossible to say how.^[59]
[59] As we explain below, we consider that ARLA did not fail to evaluate the evidence for itself and its reasons were adequate. We focus here on Woolworths’s cross-appeal, in which it is alleged that the Judge was wrong to conclude that ARLA might apply the precautionary principle. Woolworths contends that My Noodle is not binding because there was no provision for local alcohol policies under the 1989 Act; the precautionary principle is expressly applied in environmental regulation but is nowhere mentioned in the 2012 Act; the principle applies where there is scientific uncertainty about harm, which is not the case with alcohol; and if it is to be used at all, it must be done in a rigorously scientific way.
[60] The precautionary principle is usually traced in law to the Rio Declaration, Principle 15 of which provides that “[i]n order to protect the environment, the precautionary approach shall be widely applied ... [w]here there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”.^[60] The principle has been employed in New Zealand environmental legislation, in which it may simply require that decisionmakers favour caution where information about effects is uncertain or inadequate.^[61]
[61] My Noodle concerned a territorial authority proposal, adopted by ARLA,^[62] to reduce on-licence trading hours in Queenstown to reduce alcohol-related harm.^[63] 24‑hour trading had been in place since 1989. The question was not whether there was evidence of alcohol-related harm — there was — but to what extent a blanket reduction in trading hours (from 24 to 21 hours in the day) would mitigate it. One of the questions on appeal was whether ARLA must be sure the new conditions would reduce alcohol abuse. The Court held that ARLA need not be sure; it could impose conditions and assess later whether they had the desired effect.^[64] It was in this context that the Court held ARLA might apply the equivalent of the precautionary principle.
[62] We have reached the same conclusion by a more direct route under the 2012 Act, holding that the appellate standard does not require that ARLA be sure a given element will reduce alcohol-related harm. It suffices that there is a real and appreciable possibility that the element will do so. As Mr McNamara submitted for the Council, this is consistent with the Act’s requirement that an element be “reasonable” in light of the Act’s object. This approach can be described as “precautionary”, in that it admits remedial measures to reduce harm although their effects are uncertain.
[63] It follows that we do not accept the submission for Woolworths that a precautionary approach is unavailable because the effects of alcohol on the body are well understood. The Act is concerned with the licensing of alcohol, and the effects of specific licensing measures on alcohol abuse are not easy to measure.
[64] Woolworths also argued that if a precautionary approach is to be used ARLA must adopt a specific hypothesis and incorporate specific provision for testing the hypothesis by measuring harm and the effects of policy elements. It will be apparent from what we have already said that this submission rests on a misunderstanding of My Noodle, in which the Court employed the precautionary principle not as scientific methodology but by analogy, to emphasise that harm reduction measures need not await proof but may be tested by imposing restrictions. It is correct that there is a need to keep licensing policies under review, but the Act itself provides for it. Under s 97 territorial authorities review local alcohol policies at intervals of not less than six years. There is no warrant for reading any additional requirement into the legislation. As we see it, the argument is an attempt to defend a status quo which developed under the 1989 Act by insisting that any change to existing licensing arrangements be founded on thorough proof of effectiveness. To impose such a requirement would be contrary to the harm reduction and community decisionmaking purposes of the 2012 Act.

Implementation of a local alcohol policy in practice

[65] The Act contains a series of provisions for implementing a local alcohol policy once it has been notified and any objections dealt with. It is ultimately given effect through the grant or renewal of licences. Licences are granted in the first instance by district licensing committees (DLCs)^[65] which must be chaired by a member of the territorial authority.^[66] The Council has one licensing committee which sits in panels to deal with the volume of work.
[66] A licensing committee or ARLA may refuse to issue a licence if that would be inconsistent with a local alcohol policy, which may for example establish maximum trading hours.^[67] A licence may be issued subject to conditions if it would be inconsistent with the policy to issue it without those conditions.^[68] Section 105 provides that:

105 Criteria for issue of licences

(1) In deciding whether to issue a licence, the licensing authority or the licensing committee concerned must have regard to the following matters:

(a) the object of this Act:

(b) the suitability of the applicant:

(d) the days on which and the hours during which the applicant proposes to sell alcohol:

(e) the design and layout of any proposed premises:

(f) whether the applicant is engaged in, or proposes on the premises to engage in, the sale of goods other than alcohol, low-alcohol refreshments, non-alcoholic refreshments, and food, and if so, which goods:

(g) whether the applicant is engaged in, or proposes on the premises to engage in, the provision of services other than those directly related to the sale of alcohol, low-alcohol refreshments, non-alcoholic refreshments, and food, and if so, which services:

(h) whether (in its opinion) the amenity and good order of the locality would be likely to be reduced, to more than a minor extent, by the effects of the issue of the licence:

(i) whether (in its opinion) the amenity and good order of the locality are already so badly affected by the effects of the issue of existing licences that—

(i) they would be unlikely to be reduced further (or would be likely to be reduced further to only a minor extent) by the effects of the issue of the licence; but

(ii) it is nevertheless desirable not to issue any further licences:

(j) whether the applicant has appropriate systems, staff, and training to comply with the law:

(k) any matters dealt with in any report from the Police, an inspector, or a Medical Officer of Health made under section 103.

(2) The authority or committee must not take into account any prejudicial effect that the issue of the licence may have on the business conducted pursuant to any other licence.

[67] It will be seen that a local alcohol policy is one of 11 statutory criteria to which a licensing committee or ARLA must have regard in the exercise of its decision to grant a licence. Under s 117 it may impose any reasonable conditions that are not inconsistent with the Act’s object. The jurisdiction affords licensing authorities significant discretion and admits a wide range of relevant considerations, as Clark J held in Medical Officer of Health (Wellington Region) v Lion Liquor:^[69]

[43] On any analysis of the Act, and the various functions of the bodies making decisions under it, the object of the Act is the first criterion when considering applications for renewals. What the Court of Appeal described as the “modest object” of the Sale of Liquor Act 1989 has been replaced by a new Act signalling “a new community-oriented approach incorporating both purpose and object provisions”. Decision-making in the context of Lion’s application is essentially rooted in a risk assessment. The factors to be considered in the course of assessing an application for a licence or for renewal, as the appellants submitted, stand to be assessed in terms of their potential impact upon the prospective risk of alcohol-related harm.

[44] An application for renewal of a licence is to be assessed in light of a range of factors relevant to the particular application. There is no one test. Regard must be had to the object of the Act and the statutory criteria for renewal. The criteria relevant to this application include the suitability of the applicant, the days on which and the hours during which the applicant proposes to sell alcohol, the design and layout of the premises, and the matters dealt with in the reports from the Police and Medical Officer of Health. There is also to be regard for the amenity and good order of the locality and whether it would be likely to be increased by more than a minor extent, if a renewal were refused.

[45] The statutory provisions must be applied in a way that promotes the twin statutory objects which are that the sale, supply and consumption of alcohol should be undertaken safely and responsibly and that alcohol-related harm should be minimised. The aim of minimisation requires alcohol-related harm to be reduced to the smallest amount, extent or degree.

[46] No party contests that the proper approach to the application is evaluative and merits based. The following further principles may be taken from the cases:

(a) There is no presumption that an application for a licence will be granted or that a licence will be renewed.

(b) This is made reasonably plain by the fact the approach to renewal is virtually the same as the process engaged by an application for an initial licence.

(c) A licensing committee or Authority, after having regard to the criteria for renewal in s 131, is then to step back and consider whether there is any evidence indicating that granting the application will be contrary to the statutory object in s 4. Or, as Heath J articulated a “test”:

Although the “object” of the 2012 Act is stated as one of 11 criteria to be considered on an application for an off-licence, it is difficult to see how the remaining factors can be weighed, other than against the “object” of the legislation. It seems to me that the test may be articulated as follows: is the Authority satisfied, having considered all relevant factors set out in s 105(1)(b)–(k) of the 2012 Act, that grant of an off-licence is consistent with the object of that Act?

(d) The breadth of the Authority’s functions suggests the application of rules involving onus of proof may be inappropriate. Similarly there is no onus on the reporting agencies to prove the application should not be granted.

(e) The criteria for the issue of licences, and for renewal, are not to be interpreted in any narrow or exhaustive sense. The Authority may take into account anything which, from the terms of the statute as a whole, appears 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.” The matters raised by s 4 are to be approached on a nationally consistent basis.

(f) 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 ... then it is entitled to test whether that possibility is a reality.

(Footnotes omitted, emphasis in original.)

[68] Consistent with the object of the Act, which we discussed at [15]–[16] above, Clark J recognised that restrictions on supply by a given off-licensee may be justified although the licensee conducts its business lawfully, provided there is reason to think the premises contribute to excessive or inappropriate consumption.^[70] That may happen, for example, where premises are located in an area in which alcohol‑related harm is common; the premises contribute to harm merely by making alcohol accessible to those who go on to abuse it. We return to this point at [119] below.
[69] We address at [125] below the question whether the discretionary conditions in the Policy in this case were ultra vires the Act as an impermissible fetter on the discretion of a licensing committee.

The Auckland Council Provisional Local Alcohol Policy

[70] The Policy was recorded in a document dated May 2015 and accompanied by an explanatory document. It was to be the first local alcohol policy adopted for the Auckland region. It applied to the entire region but identified discrete areas of concern; they were the City Centre and the Priority Overlay (which comprised named suburban centres).
[71] With respect to element 2 (the temporary freeze and rebuttable presumption), the Policy stated in cl 3.2.1 that the Council’s policy position was that there should be a temporary 24-month freeze in the City Centre and Priority Overlay areas and in cl 3.3.1 that there should be a rebuttable presumption against new off-licences in those areas (and in certain neighbourhood centres) following expiry of the freeze.
[72] With respect to element 1 (trading hours), the Policy stated that no licences should be issued with longer trading hours than that specified in the Policy.^[71] Initially the off-licence maximum trading hours were 9 am to 9 pm Monday to Sunday, but they were revised after ARLA found there was no evidence that a starting hour of 9 am would reduce alcohol-related harm compared to the default statutory starting hour of 7 am.^[72] The Policy envisaged that individual licences might be issued with more restrictive hours.^[73]
[73] Element 4 comprised policies relating to off-licences. Parts of element 4 concerned hours of delivery from remote sellers, which ARLA found to be ultra vires.^[74] That was not in issue on judicial review and we need say no more about it.
[74] Clauses 4.4.3 and 4.4.4‑–4.4.5 contained discretionary conditions intended respectively to ensure that alcohol is not sold to prohibited persons and that licensees must maintain a register of alcohol-related incidents. The Policy specified, in cl 4.4.1, that it was the Council’s policy that the specified conditions be imposed “unless there is good reason not to do so”. It was these elements that were in issue before Duffy J, the Supermarkets contending that while the specified conditions were not intrinsically objectionable they were made ultra vires by the requirement that they be imposed unless there was good reason not to.
[75] The Council further recommended, in cl 4.5.1, that licensing committees and ARLA consider conditions relating to CCTV, exterior lighting, single sales and closure of premises near education facilities. We record that the last two of these items were referred back by ARLA for reconsideration, the Council having conceded that there were shortcomings with their drafting.^[75] These elements were not in dispute on judicial review.
[76] It is not in dispute that the Council consulted the police, licensing inspectors and the Medical Officer of Health before producing a draft of the Policy, and we were given to understand that the police and the Medical Officer of Health support those parts of it that are in issue before us. (In some respects they wished the Council had gone further.)

ARLA’s decision

[77] The Provisional Policy having been notified following consultation, and appeals having been filed, ARLA held a four-week hearing at which a number of interested parties, including the Supermarkets, were represented. It heard a good deal of factual and expert evidence about alcohol-related harm and its linkage to the sale and supply of alcohol. The evidence addressed behaviour in the City Centre and Priority Overlay areas and the linkage between trading hours and alcohol-related harm as experienced by police and health professionals. ARLA heard evidence that the Council had sought to target the Policy toward at-risk populations and applied a risk‑based approach to defining the City Centre and Priority Overlay areas. It noted evidence that off-licence density is associated with high levels of criminal offending.^[76]
[78] ARLA referred to the views of the police and Medical Officer of Health that there is a linkage between off-licence hours and alcohol-related harm.^[77] It considered expert evidence that, among other things: purchases from off-licences after 10 pm are likely to be made by heavier drinkers;^[78] a high proportion (compared to national averages) of hospital presentations in Auckland is attributable to alcohol;^[79] off‑licences were the source of the last drink for most alcohol‑related presentations in the early hours of weekend mornings;^[80] the practices of pre-loading and side-loading with cheap alcohol are harmful in themselves and lead to other harm;^[81] up to 80 per cent of alcohol sold in Auckland is sold from off-licences and consumed in an unlicensed place;^[82] and violent and disorderly offending, including in the home, correlates with off-licence opening hours.^[83]
[79] The evidence heard by ARLA included expert evidence of Dr Douglas Fairgray, Dr Francesca Kelly and Michael Foster for the Supermarkets. There was also evidence from Natalie Hampson about the timing of alcohol-related offending, relative to off-licence hours. The evidence was to the effect that the Policy ought to discriminate by area and population characteristics and among types of off-licence. The witnesses challenged the theory that availability contributes to alcohol-related harm. They considered that the evidence did not sufficiently link supermarkets to harm, which is predominantly associated with bottle stores. ARLA referred to the Supermarkets’ arguments based on this evidence but did not expressly to refer to most of the witnesses.
[80] The purpose of element 1 (trading hours) was that of targeting what the Council described as high risk purchases. ARLA concluded that:

[146] Notwithstanding that evidence of reduction in harm from specific reductions in trading hours of off-licences is sparse, there is evidence to establish a relationship between off-licence trading hours and alcohol consumption and harm. Given the level of alcohol-related harm in Auckland, the Authority does not consider that it has been established that the closing hour restriction is unreasonable in light of the object of the Act. Given this evidential basis for the closing hour restriction, if the Council considers the closing hour restriction for off-licences has the possibility of meeting the object of the Act, then the Council is entitled to test whether that possibility is a reality.

It will be seen that ARLA considered the evidence, though sparse, justified this element of the Policy and it was reasonable for the Council to test the possibility that earlier evening closing hours would reduce the high level of alcohol-related harm in Auckland.

[81] With respect to element 2 (the freeze and rebuttable presumption in the City Centre and Priority Overlay areas), ARLA reasoned that the freeze was justified and did not discriminate unfairly against off-licences:

[82] The Authority does not consider that the Priority Overlay areas have an unequal and disproportionate policy impact on supermarkets and grocery stores compared to other types of off-licences. This is discussed below in relation to the impact of the “freeze” and “rebuttable presumption” elements of the [provisional local alcohol policy].

...

[84] Otherwise, the Authority is not satisfied that it has been shown that it is illogical that the [provisional local alcohol policy] imposes restrictions on new off-licences in the City Centre and Priority Overlay areas but does not put any restrictions on new on‑licences given the impact of on-licences on alcohol-related harm. The proposed cls 5.1.4 - 5.1.5 and 5.2.2 – 5.2.3 impose restrictions on on-licences in the Priority Overlay areas. Given the nature of off-licences, it has not been shown that these restrictions are unreasonable in light of the object of the Act because they are different from those which apply to on-licences.

[82] ARLA held that the rebuttable presumption was not ultra vires the Act:

[114] The Authority considers that the freeze and rebuttable presumption elements, at best, provide guidance to the Committee and the Authority on the Council’s preferred outcome. They do not operate automatically to prevent the issue of off-licences in all cases. A licence may still be issued where an applicant, in light of the information contained in the Local Impacts Report, satisfies the DLC or Authority that a licence should be granted.

[115] The Authority does not agree that the rebuttable presumption is ultra vires s 77(1) of the Act. The rebuttable presumption is a policy that goes to whether further licences should be issued for stated parts of Auckland. In the Authority’s view, the rebuttable presumption falls within the types of policies permitted by s 77(1)(d) of the Act and provides some guidance to the DLC and the Authority on the Council’s preferred treatment and outcome of certain licensing applications.

[116] As the parties have acknowledged, these elements do not act as a prohibition on the issue of licences. Because the local alcohol policy is but one of the matters in s 105 to which the DLC or the Authority must have regard to when deciding whether to issue a licence, a licence may still be issued depending on the weight given to the local alcohol policy relative to the other matters in s 105. While the Council hopes that the DLC or Authority will give significant weight to the freeze and rebuttable presumption, that remains a matter for the decision-maker.

[117] The rebuttable presumption is able to be considered on a case by case basis having regard to the information in the Local Impacts Report and information put forward by the applicant. As the circumstances of each application will vary, the rebuttable presumption simply requires that in certain cases, the information required to persuade the DLC will be greater than what might otherwise be the case. The effect of this is that the rebuttable presumption may require the applicant to provide more information to the DLC to satisfy it that the criteria in s 105 have been met. Alternatively, the applicant may need to state how the applicant proposes to address a matter of concern. This will, in time, lift the quality of applications.

[118] The Authority is also not persuaded that there will be unintended consequences for Auckland as a result of the [provisional local alcohol policy] or that the freeze or rebuttable presumption is disproportionate in effect. While there will undoubtedly be development pressures arising from the application of the Auckland Unitary Plan as regards supermarkets in residential areas (which may see some supermarkets developed outside Priority Overlay areas), the Authority consider that this impact is overstated. The freeze and rebuttable presumption are not intended to operate in metropolitan centres. Nor will they apply to town centres or local centres unless those centres are in the Priority Overlay areas. As the Authority heard from Mr Andrews, Team Manager Resolutions within the Resource Consents Department of the Council:

“Supermarkets are already well-established in the City Centre and Priority Overlay. The Priority Overlay affects a relatively small proportion of centres. The Neighbourhood Centre zone anticipates smaller scale supermarkets where land size allows. New off‑licences for supermarkets are not precluded in the City Centre or Priority Overlay (after the temporary freeze) or in Neighbourhood Centres; there is simply a higher threshold for granting because the presumption against granting must be rebutted. For these reasons I consider that Mr Foster overstates his concerns that the [provisional local alcohol policy] will “drastically change the zoned opportunity for supermarket and grocery store growth.”

[83] As explained above, element 4.4.3 and elements 4.4.4–4.4.5 contained discretionary conditions intended respectively to ensure that alcohol is not sold to prohibited persons and that licensees must maintain a register of alcohol-related incidents. ARLA dismissed the appeal with respect to these elements. It found that the proposed register of alcohol-related incidents was not ultra vires:^[84]

... that these clauses indicate the Council’s preferred position in respect of their imposition does not mean that they will necessarily be imposed. The words “unless there is a good reason not to” in cl 4.4.1 means that the DLC and the Authority still retain the ability to [not] impose the condition and the conditions are, therefore, still discretionary in nature. There is nothing in the [provisional local alcohol policy] which fetters what the DLC or Authority may consider to be a good reason not to impose the condition.

It will be seen that ARLA’s view generally was that appropriately drafted conditions are permissible provided licensing authorities retain the discretion to not impose those conditions. We infer that ARLA took the same view with respect to sales to prohibited persons; the decision does not refer expressly to them.^[85]

The judicial review applications

Separate review applications by the Supermarkets and Redwood

[84] Separate appeals were brought before ARLA by the Supermarkets and by Redwood Corporation but ARLA held one hearing and delivered a single decision. The Supermarkets and Redwood then brought separate applications for judicial review. Their applications were heard together but not consolidated, and Duffy J delivered separate decisions.
[85] The Judge’s decision in the Redwood appeal has not been appealed to this Court, though it rested on similar grounds, principally what she saw as an absence of reasons.^[86] The Judge “set aside in its entirety” ARLA’s “decision on Redwood’s appeal” and directed that ARLA reconsider the appeal.^[87]

Consequence of judicial review for ARLA

[86] We have referred to the judicial review jurisdiction at [44] above. In granting judicial review the Judge presumably envisaged that ARLA would revisit its reasons and decide whether to remit the affected elements to the Council under s 83. Because the question for the High Court was not whether a given element was unreasonable in light of the Act’s object, it need not be the case that ARLA must decide to remit an element in respect of which the High Court set its decision aside. ARLA presumably would have no alternative to the extent the High Court found a given element ultra vires the Act, but it could address a failure to give reasons by reconsidering its reasons against the evidence that was before it at the first hearing, following which it might remain of the view that an element was not unreasonable and dismiss the Supermarkets’ appeals accordingly. We record that counsel for the Supermarkets accepted this before us, and further recognised that ARLA might make such a decision on the papers, if it thought fit. We accept that ARLA might also choose to hold another hearing or even to receive further evidence about the elements concerned; that would be a matter for ARLA. But this litigation has dragged on long enough, and it should be of concern to all involved that not until it is concluded by ARLA will Auckland finally get a local alcohol policy.

No res judicata or issue estoppel in this appeal

[87] For Woolworths, Ms Cooper QC argued that the relief sought by the Council cannot be granted, for ARLA issued a single decision dealing with appeals by both the Supermarkets and ARLA and the Council has not appealed Duffy J’s decision setting aside ARLA’s decision in Redwood’s appeal. It is true that the Judge delivered separate judgments in separate judicial review applications, but her reasons overlapped; it is difficult to see how ARLA’s decision could be set aside for Redwood but not the Supermarkets.
[88] The argument is without merit. As noted, in her Redwood judgment the Judge set aside ARLA’s decision on Redwood’s appeal, so severing those parts of ARLA’s decision dealing with Redwood from those dealing with the Supermarkets. Redwood was not party to the Supermarkets’ appeals and they are not privies. The subject matter differed; Redwood’s concern was with the definition of City Centre and the Policy’s provision for a closing hour of 3 am, rather than the statutory default hour of 4 am, for on-licences in the City Fringe area, where Redwood’s premises (a brothel) are located. Those elements were not the subject of the Supermarkets’ appeal to ARLA. Further, the Council is entitled to pursue its right of appeal in this judicial review proceeding. To the extent that the appeal raises questions of law or fact that were addressed in both the judgment under appeal and the Judge’s subsequent decision in Redwood, we cannot be bound by her conclusions. Lastly, there is no reason to suppose that ARLA or the Council will be bound by conflicting outcomes, since it may be assumed that ARLA will take this Court’s decision into account, so far as relevant, when reconsidering the policy elements at issue in Redwood’s appeal.

The obligation to give reasons

[89] The 2012 Act does not specify that ARLA must give reasons for its decisions on appeals under s 81, but it was common ground before us that it must do so.^[88] As Mr Braggins contended, arguing this part of the appeal for Woolworths, reasons are integral to the open justice principle, they discipline the decisionmaker, and they allow a court exercising supervisory jurisdiction to assess the decision’s lawfulness.^[89]
[90] Counsel cited the judgment of this Court in Belgiorno-Nettis, which was said to be analogous.^[90] There was a statutory obligation to give reasons and the legislation, recognising the scale of the task and the likely number of interested parties, provided that reasons might be grouped.^[91] The Court confirmed that reasons might be of a summary nature but they must give some articulation of the decisionmaker’s thinking.^[92] The decisionmaker had set out a general approach to zoning and height controls in an overview report, but that was no more than a statement of principles; it did not provide reasons for accepting or rejecting competing submissions on zoning and height restrictions in specific areas.^[93]
[91] Duffy J relied on Belgiorno-Nettis, reasoning that ARLA here made the error of dividing its decision into general comment on the specific elements on appeal, then failed to give specific reasons for accepting or rejecting specific submissions.^[94]
[92] In our view what the Court had to say in Belgiorno-Nettis was merely an application, in a very particular statutory and factual setting, of the general rule as to adequacy of reasons which was summarised in Lewis v Wilson & Horton:^[95]

[81] The reasons may be abbreviated. In some cases they will be evident without express reference. What is necessary, and why it is necessary was described in relation to the Civil Service Appeal Board (a body which carried out a judicial function) by Lord Donaldson MR in R v Civil Service Appeal Board, ex parte Cunningham [1991] 4 All ER 310 at p 319:

“... the board should have given outline reasons sufficient to show to what they were directing their mind and thereby indirectly showing not whether their decision was right or wrong, which is a matter solely for them, but whether their decision was lawful....”

[93] As the Court said there, reasons may be abbreviated and in some cases they will be evident without express reference. The decision under review must be read as a whole.

Element 1: trading hours

[94] We have referred at [77]–[80] above to ARLA’s conclusions about the association between off-licences and alcohol-related harm and the adoption of a 9 pm closing time. ARLA considered that there was an evidential basis for the restriction and the Council was entitled to test whether it would be effective.
[95] Duffy J’s approach turned on her view that the Act sets default standards from which there should be reason for departure on a community by community basis. We have quoted what she had to say about that at [24] above. Partly because of her view about default standards, she took the view that the Council was required to justify discriminating between supermarkets and other off‑licences:^[96]

[96] None of the submissions or evidence in support of reduced closing hours, to which ARLA refers, differentiates between supermarket and grocery store off-licences on the one hand and bottle store off-licences on the other. The alcoholic beverages that each group sells differ. The types of problems identified in the evidence of those supporting the [provisional local alcohol policy] are not problems one would usually associate with off-licence sales from supermarkets and grocery stores throughout the Auckland region. Why those outlets and their customers should be subject to reduced closing hours is not clear from this evidence. Nor is it clear from the available evidence why the closing hours of all bottle stores in the Auckland region should be reduced to 9pm, when Parliament considers that in general 11pm closing hours will meet the object of the [Act]. The idea the examples given of alcohol-related harm can be associated with all bottle stores wherever located in the Auckland region is not self-evident.

[96] She concluded that ARLA gave no reasons for concluding that the same closing hours restriction could apply across all of Auckland:

[97] ARLA’s dismissal of the appeals against the off-licence closing hours restriction must mean ARLA found it was not unreasonable in light of the object of the [Act] for the same closing hours restriction to apply to all off‑licences in the Auckland region. But, ARLA gives no reasons for this outcome. This is in circumstances where reasons for the outcome are not self‑evident, nor can they be inferred from the evidence and submissions ARLA mentions in its decision. ARLA uses the language of “proof” in its conclusion; stating that it “does not consider that it has been established that the closing hour restriction is unreasonable...”. ARLA also uses language which suggests it was influenced by the precautionary principle. For the reasons set out below I consider these to be errors of law by ARLA, which led to it wrongly dismissing the appeals of Woolworths and Foodstuffs.

(Footnote omitted.)

[97] She returned to the subject of default hours when concluding that the Council was obliged to consider the individual characteristics and needs of the various local communities within Auckland:

[113] The [Act] recognises the freedom to consume alcohol in a reasonably safe and responsible way. Parliament considers 11pm closing hours for off‑licences to be consistent with the purpose and object of the [Act], otherwise those hours would not have been adopted as default hours. As Foodstuffs submitted, Auckland Council’s replacement of the default hours with the reduced hours in the [provisional local alcohol policy] appears to be an attempt to re-write the [Act] by substituting an earlier closing time for the statutory time, without proper regard being paid to the individual characteristics of the various local communities within Auckland and their respective needs.

[98] Ultimately, however, she did not conclude that the Policy was unreasonable for these reasons, though she doubted how “the comprehensive substitution of the [Act’s] provisions with the restrictions imposed by the reduced closing hours ... could ever satisfy the [Act’s] requirements for a [provisional local alcohol policy]”.^[97] Rather, she granted the application for review and remitted the matter of closing hours to ARLA for reconsideration:

[212] Whilst the outcomes of those decisions are not necessarily excluded by the [Act], it is difficult to see how: (a) the comprehensive substitution of the [Act’s] provisions with the restrictions imposed by the reduced closing hours; and (b) the comprehensive application of the temporary freeze and rebuttable presumptions could ever satisfy the [Act’s] requirements for a [provisional local alcohol policy]. However, this is a matter that should be left to ARLA to determine. The discipline which the requirement to provide reasons imposes on a decision-maker should ensure that when ARLA comes to determine the appeals against those elements again they receive proper consideration.

It will be seen that the Judge dealt with element 2 (temporary freeze/rebuttable presumptions) in the same paragraph and on the same basis as element 1.

[99] As we have made clear at [23]–[25] above, we do not accept that there is any onus on a territorial authority to justify departure from the statutory hours. Nor does the Act presume that trading hours should be set on an area by area or community by community basis within the district. On the contrary, there may be good reason to adopt an area-wide policy, as we explained at [31] above.
[100] The Judge’s view about default standards informed her expectations of ARLA’s reasons. She recognised that she might look to the evidence and submissions that were before ARLA for inferences about its reasons, but found the evidence linking off‑licence trading hours with criminal offending was at best weak.^[98] The evidence could not be accepted without considering the extent to which other causes (on-licence hours) might play a part, whether the harm was attributable to a type of off-licence rather than off-licences generally, and whether the pattern was district-wide:

[107] First, ARLA referred to evidence that it considered showed a pattern of violent and disorderly behaviour offences between 7.00am and 12 midnight and off-licence trading hours, which currently end at 11pm. This is as far as the evidence went. There was no consideration of other factors that may contribute to this pattern of offending, such as: (a) the extent to which on‑licence trading hours play a part; (b) whether it is a certain type of off‑licence supplier rather than all off-licence suppliers; and (c) whether this pattern of offending happens throughout the entire Auckland region or only in certain parts of the region. But without such consideration the correlation that ARLA purports to draw between off-licence trading hours and alcohol related offending to support a blanket reduction in off-licence closing hours throughout the entire Auckland region appears to be no more than an expression of the post hoc ergo propter hoc fallacy. There is nothing inferentially available here to explain why ARLA dismissed Woolworths and Foodstuffs appeal.

(Footnotes omitted.)

[101] For similar reasons, she rejected the evidence that many alcohol presentations at hospitals occur at around 1 am and 80 per cent of alcohol purchases are made from off-licences:

[108] Secondly, ARLA referred to evidence from medical experts regarding alcohol presentations at hospitals around 1 am. ARLA accepted this evidence did not identify where alcohol was purchased and therefore the influence of on-licence supply could not be discounted. ARLA also referred to other evidence that showed 80 per cent of alcohol purchases were made from off‑licence suppliers. This gave ARLA the confidence to find that off-licence supply was a contributor to the late-night/early morning presentations at hospital emergency departments. Again, the extent of the contribution from off-licence suppliers, to what extent any such contribution by them could be attributed to all off-licence suppliers, rather than a particular type of supplier, in all districts, rather than some districts, was not touched on. Again, the failure to address those factors leaves ARLA’s reasoning open to the inference it has fallen victim to the post hoc ergo propter hoc fallacy. Again, there is nothing inferentially available here to explain why ARLA dismissed Woolworths and Foodstuffs appeal.

[102] Similarly, the Judge rejected the evidence about reported incidence of risky drinking behaviour among young people in Auckland, their pattern of buying alcohol between 9 pm and 11 pm, and pre-loading and side-loading:

[109] Thirdly, ARLA took evidence from Ms Turner that 25 per cent of Aucklanders had reported risky drinking behaviour “in the last four weeks”, that those most likely to engage in consumption in this way were young people between 15 and 24 years old, those living in south/south east Auckland and Māori and Pacific populations, and combined this evidence with evidence from Dr Clough that most young people between 18 and 24 years do their alcohol spending between 9pm and 11pm. ARLA does not say how the combined effect of this evidence would indicate the need for a blanket restriction on off-licence closing hours throughout the entire Auckland region, nor is it inferentially apparent.

[110] Fourthly, ARLA had heard evidence that pre-loading was a well‑planned activity and heard submissions to the effect that this suggested the restriction of off-licence closing hours would not control alcohol consumption, except for those who failed to plan. ARLA expressly referred to and relied on a contrary submission from a Police Officer from the Counties Manukau district who said that pre-planning was not a feature of lower socio-economic groups, where the relationship between alcohol and consumption is “more immediate” and opportunities for stockpiling are more limited. For those persons alcohol is not consumed when it is not available. However, this evidence does not address whether such persons seek their supplies from all off-licences or whether they are drawn to those off-licence suppliers that supply alcoholic beverages with a higher alcohol content than beer, wine and mead, and only to those off-licences near to where they live or frequent. Logic would suggest such persons prefer beverages with higher levels of alcohol for quick effect and are likely to purchase them from suppliers close to where they live and frequent. Again, ARLA does not say why it thought this evidence supported a blanket restriction on off-licence closing hours throughout the entire Auckland region, nor is it inferentially apparent.

[103] The Judge expressed the opinion that supermarkets and grocery stores are less likely to be associated with alcohol-related harm than are other off-licences:

[112] Such evidence as there is of a link between reduced trading hours of off-licences, alcohol consumption and alcohol-related harm does not distinguish between the different types of off-licence suppliers. Supermarkets and grocery stores are restricted to selling beverages with a lower alcohol content. Supermarkets and grocery stores are not self-evidently associated with displays of excessive alcohol consumption or alcohol related harm, nor are those features generally associated with their customers. ...

[104] We agree with the Judge that the evidence, and ARLA’s account of it, may be considered when examining ARLA’s reasons for sufficiency. We differ in the conclusions to be drawn from that exercise. In short, and notwithstanding her adoption of a Wednesbury standard and acceptance of the precautionary principle, we consider that the Judge insisted the evidence meet a higher standard than the legislation requires.^[99] This is perhaps best seen in her view that correlation between alcohol‑related harm and trading hours is not sufficient justification to reduce trading hours, in the absence of evidence identifying supermarkets and grocery stores as the cause of such harm.
[105] We accept the submissions of Mr McNamara, for the Council, and Mr La Hood that the evidence was sufficient to justify the restriction on closing hours. Specifically, the Council’s evidence discussed region-wide evidence of harm, including survey evidence.^[100] The evidence indicated that 25 per cent of Aucklanders had reported recent risky drinking behaviour. It is more prevalent among young people, for whom excess consumption is also more likely to manifest in public drunkenness, offending and hospitalisation, but it is not limited to them. There was evidence about the practices of pre-loading and side-loading by young people, using cheap alcohol purchased from off-licences to become intoxicated before driving to an on-licence in the city. Price is the main driver of this behaviour, which is associated with excess consumption and alcohol-related harm. Preloading occurs until about 11 pm. The supplier is usually a bottle store, but it is reasonable to infer that supermarkets would be used if bottle stores were closed, so long as supermarkets are accessible and the alcohol is cheaper than it would be at on-licence premises.
[106] Before us counsel for the Supermarkets sought to support the Judge’s conclusion that the Policy ought to discriminate by area and by type of off-licence. We do not agree. There was expert evidence, based on New Zealand and overseas experience, that there is a relationship between off-licence hours and alcohol-related harm, and that reducing availability is one of the most cost-effective ways of reducing harm. Because it dealt expressly with the proper use of the evidence, we mention the evidence of Dr Jennie Connor, a leading epidemiologist and expert of alcohol‑related harm. She recognised that all epidemiological research is subject to limitations that affect causal inference, but considered that within a regulatory framework that permits a precautionary approach it is reasonable to rely on conclusions founded on critical appraisal of a wide range of studies. Good quality research can be generalised from other settings. Her own analysis of the research led her to conclude that it justified the conclusion that restrictions on off-licence hours in Auckland would reduce availability and subsequent harm. She cited overseas studies that measured a material reduction in alcohol-related harm following reduction in off-licence hours and a New Zealand study which showed that purchases from off-licences after 10 pm were approximately twice as likely to be made by heavier drinkers. We add that there was also evidence, from Dr Nicola Jackson, the Executive Director of Alcohol Healthwatch, that the incidence of alcohol-related harm is significantly higher among young people in Auckland than in other parts of New Zealand; and further, that the incidence of hazardous drinking has increased year on year since 2011.
[107] As noted above, there is also evidence that an off-licence was the most common source of a last drink for intoxicated people who present at hospital around 1 am on a Saturday or Sunday morning. They may have been drinking in a city on‑licence, but their pre-loading usually happens in a home, which may be in any part of the district, and alcohol-related harm resulting from their consumption may be experienced anywhere. There is a correlation between alcohol-related offending, which peaks around midnight, and off-licence closing times.^[101]
[108] The Supermarkets contest the inferences to be drawn from much of this evidence. Before us Mr Braggins sought to show, by reference to a New South Wales study, that there is a weak correlation between off-licence hours and alcohol-related offending. The argument rested on the false premise that the Council must prove harm associated with supermarkets as a class of licensee before it can justify restrictions on off-licence hours in any given area. The evidence that ARLA cited sufficiently established a correlation between the serious alcohol-related harm experienced in Auckland and off-licence trading hours, such that restricting the latter might reasonably reduce the former. Ultimately, that was sufficient to justify the Policy’s supply restrictions.
[109] It is true, as Ms Cooper submitted, that ARLA did not expressly engage with the witnesses for the Supermarkets and explain why their evidence was rejected. But we accept Mr McNamara’s submission that when its decision is read as a whole ARLA relied on the evidence led in support of the Policy for its conclusions that “there is evidence to establish a relationship between off-licence trading hours and alcohol consumption and harm”.^[102] It was not necessary that ARLA reach a final view about the relationship between trading hours and harm. It sufficed, as we have explained, that there was a real and appreciable possibility that an earlier closing time would reduce alcohol-related harm. And that, in essence, is what ARLA decided in the passage quoted at [80] above, in which it referred to the evidence it had mentioned and concluded that there was an evidential basis for the closing hours restriction.
[110] We specifically reject Mr Thain’s submission, for Foodstuffs, that ARLA’s reasons were inadequate because it is implicit in s 78 that reasons must be given for failing to discriminate by area and population type. To cite s 78 as the source of an obligation to give reasons is to criticise the Council, whose policy it is, not ARLA. In any event, we have explained at [31] above that s 78 allows that a local policy may discriminate by area and demographic characteristics, but does not require it. A policy need be no more than a local preference about a licensing matter.
[111] It follows that in our respectful opinion Duffy J was wrong to find that ARLA did not give reasons for its decisions. It did, and in our view its reasons were adequate.

Element 2: temporary freeze and rebuttable presumption against new off‑licences in certain areas

[112] We have quoted ARLA’s decision on this element at [81]–[82] above. In short, it reasoned that the freeze and rebuttable presumption were not unreasonable, nor did they preclude the issue of new off-licences; they were at best guidance for licensing committees and ARLA itself.
[113] Duffy J surveyed the evidence, arguments and ARLA’s decision at some length before finding that ARLA had failed to provide reasons for treating supermarkets and grocery stores in the same manner as other off-licences, or for finding that a policy against new licences in the short term was not unreasonable. She did not conclude that the temporary freeze and rebuttable presumption were unreasonable.
[114] Nor did the Judge find that these elements were necessarily ultra vires the Act. She observed that under s 77(1)(a) it is permissible to include a policy on the location of licensed premises. She reasoned, however, that before doing so it would be necessary to consider the relevant considerations set out in s 78, “which would include the different types of off-licences and the different impacts they might have on the relevant factors set out in s 78”.^[103] She held that ARLA had again failed to provide reasons:

[154] By upholding the [provisional local alcohol policy’s] comprehensive application of the temporary freeze and rebuttable presumptions to all off-licences in the City Centre, Priority Overlay areas and Neighbourhood Centres ARLA has found this element of the [provisional local alcohol policy] is not unreasonable in light of the object of the Act. However, ARLA gives no reasons for this finding. For the Court to assess the lawfulness of the decision-making process that led to the inclusion of this element, whether it complied with the requirements of ss 77 and 78 and whether ARLA properly considered this aspect of the appeal the Court needs to know ARLA’s reasons for its decision. How and why the decision was reached needs to be seen. Whether due regard was paid to the relevant factors in s 78 and whether the discretionary authority in s 77(1)(a) and (d) were properly exercised cannot be properly assessed when no reasons have been given. In short, the absence of reasons to explain ARLA’s decision on this element, including the failure to explain why Woolworths’ arguments were rejected prevent any proper analysis by this Court of the ultra vires ground of review.

[115] She concluded that in the absence of reasons the Court could not decide whether the “comprehensive application” of the temporary freeze and rebuttable presumption to all off-licences was unreasonable in light of the object of the Act. We observe that this appears to assume the Court was engaged in a merits review. Notwithstanding that s 77 expressly contemplates that a local alcohol policy may include policies on location of licensed premises by reference to broad areas, she contemplated that the Policy might ultimately prove to be ultra vires.^[104] It is not clear to us how that could be so.
[116] The Judge went on to dismiss the Council’s arguments:

[157] Auckland Council contended that the temporary freeze and rebuttable presumption were not ultra vires as they comprised a policy that goes to whether further licences should be issued in certain stated parts of Auckland, which brought them within s 77(1) of the [Act]. The Council also submitted that the evidence of Dr Cameron, before ARLA, suggested there was no basis for different treatment of supermarkets and other off-licences, and thus ARLA was entitled not to find elements of the [provisional local alcohol policy] unreasonable on account of their failure to differentiate between different off-licence locations. The Medical Officer of Health made minimal submissions on this point, opting to support the submissions made by the Council, but he also noted that if an element could be linked to the minimisation of alcohol related harm, because this was an objective of the [Act], the element would not be unreasonable in light of the object of the Act. Regarding the temporary freeze and the rebuttable presumption sufficient evidence was placed before ARLA to establish the necessary link that rendered the policy reasonable.

[158] I reject the opposing submissions. First, if ARLA was influenced by the suggested inferences that Auckland Council draws from Dr Cameron’s evidence I would expect ARLA to refer to those inferences as part of its discussion of Dr Cameron’s evidence. But it does not. ARLA simply refers to Dr Cameron’s evidence in relation to Neighbourhood Centres and says it shows an association between off-licence density and higher levels of violence, sexual offences and drug and alcohol offences. This outline of Dr Cameron’s evidence is not enough to support the inference ARLA either understood or accepted that the features Dr Cameron identified are something that is common to all types of off-licences. Secondly, Auckland Council took me to aspects of Dr Cameron’s evidence and invited me to infer from those that his evidence showed there was no basis for differentiation between different types of off-licences when it came to their association with alcohol‑related harm. However, unlike ARLA I have not had the benefit of seeing and hearing all of Dr Cameron’s evidence. So, I am not well-placed to assess his evidence or to draw the inferences that Auckland Council wants me to draw. Accordingly, I propose to approach Dr Cameron’s evidence from the perspective of how it was outlined in ARLA’s decision.

[159] More importantly, it is not apparent from ARLA’s decision whether evidence that it understood as showing linkage between off-licences and alcohol-related harm was evidence that generally referred to off-licences, without the researchers taking account of any distinction between the different types of off-licences; or whether they had taken this factor into account and then found that much the same level of alcohol-related harm could be linked to all types of off-licences. The former circumstance may well render the same treatment for all off-licences unreasonable in light of the object of the [Act], whereas the latter may not. Even if the level of alcohol-related harm were found to be the same for all types of off-licences, the next question is whether that would be the case for all areas within the region, or whether it would differ according to the local characteristics of the various areas. Until a view is formed on these questions, it is not possible to say whether an approach that may limit the number of all new off-licences in all parts of the Auckland region is not unreasonable in light of the object of the [Act]. The arguments advanced by Auckland Council and the Medical Officer of Health rely on a an overly superficial view of the evidence and relevant issues.

[117] It will be seen that the Judge again considered that the Policy must justify a decision not to discriminate among licensees and among communities within Auckland. She recognised that there was evidence to support the view that there was no basis for differentiation among off-licences, but reasoned that ARLA itself had not discussed whether the evidence applied to all off-licences.
[118] We do not agree. In its decision ARLA reviewed the evidence and arguments at length, concluding among other things that the definition of areas affected by the freeze/presumption was reasonable having regard to extensive evidence of harm there,^[105] that it was reasonable to distinguish between on-licences and off-licences for this purpose,^[106] and that there was evidence of an association between off-licence density and the more severe forms of alcohol-related harm.^[107] We accept Mr McNamara’s submission that the Judge again focused on the perceived absence of reasons for failing to discriminate among off-licence types. We have already held that the Policy need not do that, in circumstances where the evidence sufficiently justified the inference that there is a relationship between off-licence density and alcohol‑related harm in these areas. The evidence applied generally to off-licences.
[119] There is force in Mr La Hood’s submission that the Judge’s approach rested in part on assumptions that supermarkets cause less harm because they are restricted to “selling beverages with a lower alcohol content” and “are not self-evidently associated with displays of excessive alcohol consumption or alcohol related harm, nor are those features generally associated with their customers”.^[108] Those assumptions are not warranted on the evidence. It cannot be assumed that those who are pre-loading are consuming beverages with a higher alcohol content than wine or beer. Alcohol‑related harm is not confined to public displays of drunkenness; it extends to health effects on those who drink to excess, perhaps in their suburban homes. It is a reasonable inference that those who are pre-loading or making impulse purchases will frequent supermarkets if they are allowed to sell alcohol when other off-licences are closed; what matters is that the alcohol is accessible and cheaper than it would be in an on‑licence.
[120] The Supermarkets sought to defend the Judge’s decision to remit this element of the Policy to ARLA on a collateral ground, namely her decision that the Policy’s provision for Local Impact Reports was ultra vires the Act.^[109] The Reports were intended as a tool to guide licensing committees and ARLA in licensing decisions. The Policy envisaged that the Reports would provide information about matters including the number of licensed premises in the area, proximity to education facilities and nature and severity of alcohol-related harm in the area. The Judge’s decision that they were ultra vires has not been appealed.
[121] The Supermarkets argue that it must follow that, as the Judge directed, ARLA should reconsider the freeze/presumption element because ARLA expressly relied on Local Impact Reports to justify its conclusion that the element was reasonable and the Reports were part of the element, which ARLA must reconsider in its entirety.
[122] ARLA did rely on Local Impact Reports when reasoning that the element was not ultra vires because licences could still issue, having regard to information contained in the Reports.^[110] But the Reports would duplicate responsibilities already assigned to reporting authorities under the Act; they were intended to ensure those authorities do their job consistently and thoroughly.^[111] It may be true that the Reports imposed stricter reporting requirements than the Act, but as Mr McNamara submitted, there is no express link between the Reports and the temporary freeze, and the rebuttable presumption refers to them in cl 3.3.3(a) only by requiring that licensing committees and ARLA should consider them when deciding whether to issue a licence. Element 2 functions without provision for the Reports.
[123] Mr Thain took a jurisdictional point, arguing that the decision to amend a local alcohol policy can be made by the territorial authority only after ARLA has referred the policy back for reconsideration. We do not agree. It is correct, as noted at [33] above, that an appeal to ARLA addresses an element of a local alcohol policy, but “element” is not defined. Division into elements is a question of fact and judgement. In our view, the policy element dealing with Local Impact Reports is cl 3.1, which provided for them as a “policy tool”. The temporary freeze was a separate policy tool, provided for in cl 3.2, as was the rebuttable presumption, provided for in cl 3.3. They are discrete policy elements which the Policy treats as separate tools and which ARLA might treat separately. The Reports were intended to apply to all licensing decisions, not just those affected by the temporary freeze and rebuttable presumption, which concerned new off-licences in specified areas.

Element 4: discretionary considerations

[124] We can deal with this ground of appeal shortly. Ms Cooper argued that the Policy left little room for “any real exercise of discretion” by licensing committees and ARLA; in effect cl 4.4.1 was directive, requiring that the relevant conditions be imposed. She accepted, as noted above, that the conditions themselves would not be ultra vires the Act if a licensing committee chose to require them under s 117.
[125] In our view cl 4.4.1 plainly is not ultra vires. Section 77 permits the Council to include a policy about discretionary conditions. There is no reason why a policy cannot include a preference about how the discretion to impose a condition should be exercised. That is all that cl 4.4.1 amounts to. It is not a direction to licensing committees to include the specified conditions. On the face of the legislation, such a policy could not fetter their express statutory discretion with respect to conditions.^[112] As the Judge recognised, cl 4.4.3 replicates mandatory considerations relating to prohibited persons; that being so, it can hardly be ultra vires the Act.

Disposition

[126] The Council’s appeal is allowed. Woolworths’ cross-appeals is dismissed. The High Court order remitting ARLA’s decision on the Supermarkets’ appeals for reconsideration is set aside. The effect of this decision is that:

(a) The orders made by ARLA at [203(b)] to (d) of its decision stand (this includes its decision that cl 4.4.1 is not ultra vires or unreasonable);

(b) ARLA’s decision is reinstated with respect to trading hours (noting that the effect of the order made at [203(a)] of its decision was that the Council need reconsider only the opening hours component of this element of the Policy); and

(c) ARLA’s decision that the temporary freeze and rebuttable presumption (elements 3.2 and 3.3) are not unreasonable in light of the object of the Act is reinstated.

[127] Those elements of the Policy that were not the subject of the Council’s appeal to this Court (being provision for Local Impact Reports and certain discretionary conditions) remain subject to reconsideration as agreed by the Council or directed by Duffy J. We record that the effect of her decision was only that certain elements must be reconsidered by ARLA, which may in turn remit them to the Council for reconsideration. She could not and did not quash, or declare unreasonable, any element of the Policy herself. To the extent that any element is in fact ultra vires the Act, we agree with the Judge that it could not be found reasonable in light of the Act’s object. However, the question whether any element is ultra vires or unreasonable must be reconsidered by ARLA by reference to the law as explained in this judgment. ARLA is not bound by the Judge’s reasons to the extent they differ from those given here.
[128] The Supermarkets must pay the Council one set of costs on the appeal and cross-appeals for a complex appeal on a band A basis, with usual disbursements. We certify for second counsel.

Solicitors:
Simpson Grierson, Auckland for Appellant
Berry Simons, Auckland for First Respondent
DLA Piper, Auckland for Second Respondent
Luke Cunningham Clere, Wellington for Interested Party

^[1] Woolworths New Zealand Ltd v Alcohol Regulatory and Licensing Authority [2020] NZHC 293 [Judgment under appeal].

^[2] Sale of Liquor Act 1989, s 4(1).

^[3] Meads Brothers Ltd v Rotorua District Licensing Agency [2001] NZCA 386; [2002] NZAR 308 (CA) at [24].

^[4] As was required under the Sale of Liquor Act 1962, ss 74–75.

^[5] Law Commission Alcohol in our Lives: Curbing the Harm (NZLC R114, 2010).

^[6] See generally ch 3, and specifically see [3.23]–[3.29].

^[7] The Law Commission considered the relationship between drinking and the availability of liquor in detail in ch 6. See in particular the conclusion at [6.45]–[6.46].

^[8] See generally ch 3.

^[9] At [3.76]–[3.81].

^[10] At [3.99]–[3.102].

^[11] At [3.12].

^[12] At [3.103]–[3.110].

^[13] At [5.41].

^[14] At [5.42].

^[15] At the summary at [35]. See also [5.44].

^[16] See the summary at [8] and [36].

^[17] Office of the Minister of Justice “Alcohol Law Reform” (5 August 2010) at [9].

^[18] At [10].

^[19] At [13].

^[20] (11 December 2012) 686 NZPD 7348.

^[21] (11 December 2012) 686 NZPD 7349.

^[22] Sale of Liquor Act, s 4. The 1989 Act spoke of “liquor”; alcohol has been used in the 2012 Act because it is in common use to describe alcoholic beverages.

^[23] Sale and Supply of Alcohol Act, s 3(1).

^[24] For the connection between density and alcohol-related harm see Law Commission, above n 5, at Chapter 6. For the connection between trading hours and alcohol related harm see [9.27]–[9.39].

^[25] See (11 December 2012) 686 NZPD 7348–7349. See also sections 75 (permitting local alcohol policies) and 189 (establishing District Licensing Committees) of the 2012 Act.

^[26] Judgment under appeal, above n 1, at [54].

^[27] Section 43(1)(b).

^[28] Judgment under appeal, above n 1.

^[29] Section 79.

^[30] Judgment under appeal, above n 1, at [55].

^[31] As demonstrated by the Redwood appeal, heard by ARLA at the same time as the appeal by the Supermarkets and dealt with in a separate but related judgment of Duffy J. See our discussion of the Redwood appeal at [84] below.

^[32] See (11 December 2012) 686 NZPD at 7349.

^[33] The consultative processes are found in the Local Government Act 2002, s 5(1): see the Sale and Supply of Alcohol Act, s 5(1) definition of “special consultative procedure”.

^[34] Section 83.

^[35] Section 158.

^[36] Judgment under appeal, above n 1, at [47], citing Padfield v Minister of Agriculture [1968] UKHL 1; [1968] AC 997 (HL) at 351.

^[37] At [56].

^[38] Redwood Corp Ltd v Auckland City Council [2017] NZARLA PH 247–254 [Decision of ARLA] at [30].

^[39] Kruse v Johnson [1898] UKLawRpKQB 101; [1898] 2 QB 91.

^[40] McCarthy v Madden (1914) 33 NZLR 1251.

^[41] Decision of ARLA, above n 38, at [31]–[36].

^[42] At [32].

^[43] Hospitality New Zealand Incorporated v Tasman District Council [2014] NZARLA PH 846.

^[44] Decision of ARLA, above n 38, at [32].

^[45] McCarthy v Madden, above n 40, at 1259 per Stout CJ and 1268 per Denniston and Edwards JJ, quoting Slattery v Naylor [1888] UKLawRpAC 25; (1888) 13 App Cas 446 (PC) and 453.

^[46] McCarthy v Madden, above n 40, at 1269.

^[47] As the Court noted in Meads Brothers Ltd v Rotorua District Licensing Agency, above n 3, at [56].

^[48] Sale and Supply of Alcohol Act, s 170.

^[49] Section 201(1).

^[50] Decision of ARLA, above n 38.

^[51] Judgment under appeal, above n 1, at [64]–[65], citing Re Venus NZ Ltd [2015] NZHC 1377, [2015] NZAR 1315 at [52]–[53] and [57]–[61].

^[52] See Medical Officer of Health (Wellington Region) v Lion Liquor Retail Ltd [2018] NZHC 1123, [2018] NZAR 882 at [64]–[65] and [68]–[70]; and Capital Liquor Limited v Police [2019] NZHC 1846, (2019) 15 TCLR 375 at [66].

^[53] Decision of ARLA, above n 38, at [146].

^[54] At [146].

^[55] We are not called on in this appeal to decide to what extent ARLA, which has the powers of a Commission of Inquiry, may limit or control the evidence adduced in an appeal under s 81; compare Meads Brothers Ltd v Rotorua District Licensing Agency, above n 3, at [53], where the Court held ARLA has control over the nature and scope of evidence it will receive.

^[56] Decision of ARLA, above n 38.

^[57] At [42]–[43].

^[58] Judgment under appeal, above n 1, at [69].

^[59] At [71] and [73].

^[60] Rio Declaration on Environment and Development UN Doc A/CONF151/26, Vol 1 (12 August 1992), annex I.

^[61] By way of example, see Fisheries Act 1996, s 10, and formerly the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, s 87E (repealed on 1 June 2017).

^[62] In its former incarnation as the Liquor Licensing Authority.

^[63] My Noodle Ltd v Queenstown Lakes District Council [2009] NZCA 564, [2010] NZAR 152.

^[64] At [74].

^[65] Section 187.

^[66] Section 189(2).

^[67] Section 108.

^[68] Section 109.

^[69] Medical Officer of Health v Lion Liquor Retail Ltd, above n 52.

^[70] At [67]–[70].

^[71] Clause 3.4.1.

^[72] Decision of ARLA, above n 38, at [153]–[157].

^[73] Clause 3.4.2.

^[74] Decision of ARLA, above n 38, at [195]–[196].

^[75] At [198].

^[76] At [120].

^[77] At [132].

^[78] At [134].

^[79] At [136].

^[80] At [138].

^[81] At [137].

^[82] At [139].

^[83] At [140]–[141].

^[84] At [202].

^[85] Woolworths’ submissions suggested that both cls 4.4 and 4.5 were in issue on the basis they fettered ARLA’s discretion. Neither ARLA nor the High Court engaged with cl 4.5 and we infer that only cl 4.4 is now in dispute.

^[86] Woolworths New Zealand Ltd v Alcohol Regulatory and Licensing Authority [2020] NZHC 971 [Redwood Decision].

^[87] At [126].

^[88] Lewis v Wilson & Horton Ltd [2000] NZCA 175; [2000] 3 NZLR 546 (CA); and Belgiorno-Nettis v Auckland Unitary Plan Independent Hearings Panel [2019] NZCA 175, [2019] 3 NZLR 345. Section 211 of the 2012 Act does provides that ARLA must give written decisions, with reasons, on applications, but this was an appeal.

^[89] Lewis v Wilston & Horton Ltd, above n 88, at [76]–[82].

^[90] The judgment was delivered on judicial review of decisions by a specialist body established to make recommendations on a unitary plan for Auckland. There were limited rights of appeal.

^[91] Belgriorno-Nettis v Auckland Unitary Plan Independent Hearings Panel, above n 88, at [52].

^[92] At [65].

^[93] At [77] and [83].

^[94] Judgment under appeal, above n 1, at [104].

^[95] Lewis v Wilson & Horton, above n 88.

^[96] Judgment under appeal, above n 1.

^[97] At [212].

^[98] At [106].

^[99] As discussed at [47]–[55] above.

^[100] For example, Health Promotion Agency Attitudes and Behaviour towards Alcohol Survey 2013/14 to 2015/16: Auckland Regional Analysis (Health Promotion Agency, Wellington, November 2016).

^[101] Decision of ARLA, above n 38, at [140].

^[102] Decision of ARLA, above n 38, at [146].

^[103] Judgment under appeal, above n 1, at [153].

^[104] At [156].

^[105] Decision of ARLA, above n 38, at [80].

^[106] At [84].

^[107] At [120].

^[108] Judgment under appeal, above n 1, at [112].

^[109] At [189].

^[110] Decision of ARLA, above n 38, at [114] and [117].

^[111] As the Judge discussed at [181]–[182] of the Judgment under appeal, above n 1.

^[112] Section 105(1)(c). Clause 4.5.1 also expresses the Council’s preference that certain discretionary conditions be considered by the District Licensing Committee.

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