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High Court of New Zealand Decisions |
Last Updated: 19 June 2015
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV 2014-419-420 [2015] NZHC 1377
UNDER
|
ss 138 and 139 of the Sale of Liquor Act
1989
|
IN THE MATTER
|
of an appeal of a decision of the Alcohol Regulatory and Licensing
Authority by VENUS NZ LIMITED, a duly incorporated company having
its registered
office at 7 Dugald Court, Rototuna, Hamilton 3210
|
Hearing:
|
2 and 12 June 2015
|
Counsel:
|
J B Forret and K F Shaw for Appellant
No appearance by or on behalf of any other party
|
Judgment:
|
15 June 2015
|
Reasons:
|
18 June 2015
|
REASONS FOR JUDGMENT OF HEATH
J
Solicitors:
Harkness Henry, Hamilton
Venus NZ Ltd [2015] NZHC 1377 [15 June 2015]
CONTENTS
Outcome [1] Procedural issues [3] The appeal [5] The legislative framework [13] The proceedings before the Authority
(a) Introduction [21]
(b) The Authority’s decision
(i) The “suitability” issue [35]
(ii) The amenity and good order” criterion
[40] The s 139 appeal: Was there an “onus” on Venus?
[51] The s 139 appeal: “Suitability”
[63] Conclusions
[73] Result
[76]
Outcome
[1] Venus NZ Ltd (Venus) appeals against a decision of the Alcohol
Regulatory and Licensing Authority (the Authority), given
on 15 October
2014.1 Despite a lack of opposition from the Police, and the
appearance of only one of 64 members of the public who had written letters of
objection, the Authority declined an application from Venus to operate an
off-licence from proposed business premises in Raglan.
The appeal was served on
affected persons.2 No steps have been taken by any of them. The
Authority, as is customary, abides the decision of the
Court.3
[2] On 15 June 2015, I gave judgment allowing the appeal, setting aside
the Authority’s refusal to grant an off-licence
and directing the
Authority to issue an off- licence on conditions set out in the judgment.4
These are my reasons for doing so.
Procedural issues
[3] The appeal was called before me on 26 November 2014, so that directions could be given to ready the appeal for hearing. I raised with Ms Shaw (who appeared on that occasion for Venus) whether there might be a need for the Court to appoint a Contradictor. I directed the Registrar to refer submissions, when filed on
behalf of Venus, to a Judge to determine whether a Contradictor should
be appointed
1 Re Venus NZ Ltd [2014] NZARLA PH 762 (Judge Hole and Ms J D Moorhead).
2 See para [6] below.
3 See Attorney-General v Maori Land Court [1999] 1 NZLR 689 (CA) at 695.
4 Re Venus NZ Ltd [2015] NZHC 1346.
to present argument to support the Authority’s decision.5 On 27 February 2015, Brewer J directed that the appeal should proceed in the absence of a Contradictor.6
On 2 June 2015, I heard the appeal on that basis. In addition, I heard
briefly from counsel in chambers on 12 June 2015 on questions
of
relief.7
[4] Although the Authority made its substantive decision under the Sale
and
Supply of Alcohol Act 2012 (the 2012 Act) the appeal is brought under ss 138
and
139 of the Sale of Liquor Act 1989 (the 1989 Act). Because Venus
filed its application before the 2012 Act received
the Royal Assent, s 407 of
the 2012 Act is engaged. While the sections of the 2012 Act to which s 407
refers required the substantive
application to be decided by reference to them,
appeals remain to be determined under the 1989 Act.
The appeal
[5] Sections 140 and 141 of the 1989 Act govern the way in which appeals from the Authority are instituted and rights to appear and to be heard on appeals. A copy of the Notice of Appeal must be served, either personally or by post, on every other party to the proceeding before the Authority.8 Service by post under s 140(2) must be by registered letter which is deemed, in the absence of proof to the contrary, to have been effected at the time when the letter would be delivered in the ordinary course of post.9 If a party wishes to appear on the appeal it is required to give notice to the Registrar of this Court and to serve a copy on the appellant.10 On appeal, this Court may direct the Authority to lodge additional documents or to provide a report
if any documents have not been transmitted to the High Court or there are
relevant
issues of concern on appeal that are not set out in the Authority’s
decision.11
[6] Counsel for Venus confirmed, by memorandum dated 26 November 2014,
that the Notice of Appeal was served on 29 October 2014
on the Authority,
the
5 Venus NZ Ltd HC Hamilton CIV 2014-419-420, 26 November 2014, at paras [2] and [4].
6 Venus NZ Ltd HC Hamilton CIV 2014-419-420, 27 February 2015 (Brewer J), at paras [3] and
[4].
7 See para [74] below.
8 Sale of Liquor Act 1989, s 140(2).
9 Ibid, s 140(3).
10 Ibid, s 141.
11 Ibid, s 142.
Waikato District Council’s Licensing Inspector (the Inspector), the
Waikato District Health Board and 19 objectors, being those
whom the Inspector
had confirmed had standing before the Authority. As indicated earlier, none of
those persons took any steps to
oppose the appeal.
[7] Section 138 of the 1989 Act deals with general appeals to this
Court against decisions of the Authority. Section 138(7)
states that every such
appeal is by way of rehearing. Unless this Court exercises a discretion to the
contrary, the appeal is conducted
on the basis of the material before the
Authority.12
[8] Venus seeks to adduce further evidence on appeal. That evidence is in the form of affidavits sworn by Mr Thangavadivel (Vel) Gnanasundaram and Mr Chandrasekar (Sekar) Gnanasundaram, both of which are directed to the question whether Venus is a “suitable” licensee.13 A finding to the contrary was made by the Authority.14 That finding is challenged on appeal. Section 138(8) of the 1989 Act gives this Court “full discretionary power to ... receive further evidence on questions
of fact, either by oral evidence or by affidavit”. I decided to
exercise my discretion to receive the additional evidence because
it was
relevant, cogent and responded to concerns expressed in the Authority’s
decision that were not put directly to Mr Vel
Gnanasundaram when he gave
evidence.15
[9] This Court has power to “confirm, modify or reverse”
the decision against
which the appeal is brought. Its decision “shall be final and binding
on all parties”.16
Venus accepts that the principles set out in the judgments of the Supreme Court in
Austin, Nichols & Co Inc v Stichting Lodestar17 and
Kacem v Bashir18 apply to appeals brought under s 138 of the
1989 Act.
12 Ibid, s 138(7) and (8).
13 “Suitability” is one of the factors to be taken into account when the Authority considers whether
to grant an off-licence. See s 105(1)(b) of the Sale and Supply of Alcohol Act 2012, set out at para [15] below.
14 See para [39] below.
15 See paras [37]–[39] below.
16 Ibid, s 138(11).
17 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103; [2008] 2 NZLR 141 (SC) at paras [13]–[17].
18 Kacem v Bashir [2010] NZSC 112; [2011] 2 NZLR 1 (SC).
[10] Section 139 of the 1989 Act is directed to appeals on questions of
law.19
Ms Forret, for Venus, adopted the approach articulated in Berry v
Blackbull Liquor
Hastings Ltd,20 in which Collins J said:
[19] In Bryson v Three Foot Six Ltd the Supreme Court discussed
what amounted to a question of law for appeal purposes. The Supreme Court has
revisited this topic on
other occasions such as in R v Gwaze and
Vodfone New Zealand Ltd v Telecom New Zealand Ltd. From these
authorities, and for present purposes I note that an error of law may arise if
the Authority has:
(1) misdirected itself when making a decision pursuant to the requirements of
the Act;
(2) reached a factual finding that is “so unsupportable –
so clearly untenable – as to amount to an error
of law.
(footnotes omitted)
[11] The s 138 appeal challenges the Authority’s decision on “suitability”. Ms Forret submits that there was no evidence on which the Authority could properly find that the persons proposed by Venus were not suitable to manage the proposed off- licence business. Alternatively, she contends that any deficiencies in the evidence that might have justified that finding have been remedied by the additional evidence
filed on appeal.21
[12] The s 139 point is that the Authority erred in law in holding that there was an “onus” on Venus to satisfy the Authority that there would be no likely reduction to the amenity and good order of the locality if the off-licence were granted.22 Ms Forret submits that issue ought to have been determined (as a matter of fact) by the Authority on the basis of the evidence actually provided, rather than on the footing
that Venus had failed to discharge an onus of
proof.
19 Ibid, s 139(1). Section 407(2) and (4) of the Sale and Supply of Alcohol Act 2012 required
Venus’ application to be dealt with on the basis of ss 102–106 of the 2012 Act.
20 Berry v Blackbull Liquor Hastings Ltd [2014] NZHC 314.
21 See para [9] above and [67] below.
22 Sale and Supply of Liquor Act 2012, ss 105(1)(h) and 106(1). The “object” of the Sale and Supply of Alcohol Act 2012 is set out in s 4. Criteria affecting questions of alcohol related harm are set out in s 105(1)(c), (f), (g), (h) and (i). The relevant provisions are set out at paras [14], [16], and [19] below.
The legislative framework
[13] There are four kinds of licence that may be issued under the 2012
Act: on- licences, off-licences, club licences, and special
licences.23
The difference between an on-licence and an off-licence is that the former
authorises the licensee to sell and supply alcohol for
consumption at the place
from which the business is carried on,24 whereas an off-licence
allows a licensee to sell alcohol for consumption somewhere else.25
The type of premises for which an off-licence may be granted includes a
retail bottle store of the kind that Venus proposes to operate.26
The application stated that the sale of liquor was intended to be the
principal purpose of the business.
[14] The 2012 Act does not articulate a specific test for the Authority
to apply when determining whether to grant an off-licence
application. Rather,
a series of criteria are identified in s 105(1) of the 2012 Act that the
Authority must take into account
in determining whether to issue a
licence:
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:
(c) any relevant local alcohol policy:
(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:
23 Sale and Supply of Alcohol Act 2012, s 13.
24 Ibid, s 14.
25 Ibid, s 17. See also ss 18 and 19.
26 Ibid, s 32. See also paras [21] and [22] below.
(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.
....
[15] In the present case, the object of the 2012 Act, the
suitability of the applicant and the amenity and good order
factors assumed prominence.27 Those issues were considered in
the context of the Police, Medical Officer and Inspector’s reports28
and the evidence given at the hearing.
[16] The “object” of the 2012 Act is set out 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
27 Sale and Supply of Alcohol Act 2012, s 105(1)(a), (b), (h) and (j).
28 Ibid, s 105(1)(k). The Police and the Medical Officer of Health are required to inquire into the application and, if any opposition is made, report on it within 15 working days after receiving the application. On the other hand, the Inspector must inquire into, and file a report on, the application. See also, ss 103(2) and (3) and 197 of the 2012 Act.
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).
[17] The term “alcohol-related harm” is defined by s 5(1) of
the 2012 Act:
alcohol-related harm—
(a) means the harm caused by the excessive or inappropriate
consumption of alcohol; and
(b) includes—
(i) 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
(ii) 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 subparagraph (i)
[18] The Authority is not entitled to take into account “any
prejudicial effect that the issue of the licence may have on
the business
conducted pursuant to any other licence”.29
[19] In forming an opinion on whether the amenity and good order
criterion has been met, s 106(1) of the 2012 Act sets out relevant
factors to be
considered:
106 Considering effects of issue or renewal of licence on amenity and
good order of locality
(1) In forming for the purposes of section 105(1)(h) an
opinion on whether the amenity and good order of a locality
would be likely to
be reduced, by more than a minor extent, by the effects of the issue of a
licence, the licensing authority or
a licensing committee must have regard
to—
(a) the following matters (as they relate to the locality): (i) current, and possible future, noise levels:
(ii) current, and possible future, levels of nuisance and
vandalism:
29 Ibid, s 105(2).
(iii) the number of premises for which licences of the kind concerned are
already held; and
(b) the extent to which the following purposes are compatible:
(i) the purposes for which land near the premises concerned is
used:
(ii) the purposes for which those premises will be used if the licence is
issued.
...
[20] 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?
That is the approach I take to the appeal.
The proceedings before the Authority
(a) Introduction
[21] Venus sought an off-licence for premises situated at 35 Bow Street,
Raglan. The business was to be known as “Bow Street
Liquor”. It was
intended to trade as a bottle store between 9am and 9pm each Sunday to Thursday,
and 9am to 10pm on Friday
and Saturday of each week. The application was filed
on 30 October 2013.
[22] Bow Street is the main street of Raglan. The Authority described it as “an attractive tree lined street [which] contains many areas of public seating”. The commercial area of Raglan was described as “small”, so that the six existing off- licence premises were within 200 metres of the proposed location. In addition, the Authority observed that “within a 200 metre radius are seven on-licensed premises
and one club licensed premises”.30
[23] In addition to written and oral evidence from Mr Vel Gnanasundaram
in support of the application, the Authority had
the benefit of a
report from the
30 Re Venus NZ Ltd [2014] NZARLA PH 762, at para [9].
Inspector, a statement of evidence from her, a statement of evidence from Mr
Young (on behalf of the Medical Officer of Health), and
confirmation from the
Police that it had no objection to the application. It also heard some oral
evidence.
[24] In her initial report, the Inspector referred to the intended
principal purpose of the business as a bottle store. She
observed that the
premises were situated in a “Business” zone under the Waikato
District Plan, and that commercial properties
surrounded the proposed
premises. The Inspector identified the existence of a bakery and a fish
and chip shop around
which children often congregated. She confirmed that the
premises were located in an area that was subject to a permanent liquor
ban.
[25] The Inspector then addressed questions of “amenity and good
order”:
Amenity and Good Order
Police data and interrogation of the council data base do not highlight the
immediate vicinity around the applicant property as being
a hot spot for
nuisance and vandalism. A number of people, including the police, acknowledge
the introduction of a liquor ban in
the area has helped significantly as there
were historical problems with young people drinking on the street and in their
vehicles.
I have been alerted to the fact that some young people congregate in Bow
Street on Thursdays after school before they are collected
at 7pm to attend a
youth group at Surfside Church in Te Uku (approx 10 minutes by car). I
enquired into the matter as some of the
objectors had raised it. In order to
get an appreciation of this issue I spoke to a member of the ‘Night
Owls’ (a community
group who patrol and streets and provide a report to
the police) and a young man who works in Raglan but used to assist with the
youth group up until recently.
Approximately 65 young people between the ages of 13 to 18 years (mostly
13 to 15) attend the sessions. The youngsters are advised to go home and get
dinner before arriving in town to be collected outside
the community centre,
which is 70m from the proposed bottle store. Many do not go home and loiter
around the town centre.
The manager from SuperValue advised me that shoplifting increases during this
period and the owner of the fish and chip shop said
they were a nuisance on
these evenings.
Apparently the young people that attend the youth group come from a mix of socio economic backgrounds, however anecdotally I am of the impression it is those from the lower end of the scale that don’t go home for a meal. The youngsters are driven directly home after the church session.
[26] Venus filed its application on 31 October 2013, through a Licensing
Agent. By the time the application was determined there
were five other premises
in the area which held off-licences. Three of those were entitled to trade from
9am until 11pm, one was
permitted to carry on business between 9am and 10am. A
fifth, held by Orca Restaurant and Bar, was issued after the application
was
filed but was, essentially a renewal of an existing licence that had
lapsed.
[27] A sixth off-licence was issued before the Authority considered
Venus’ application. That was for a Four Square outlet.
Its application
had been submitted on 11 December 2013, after that of Venus. As there were no
objections, Four Square’s
application was granted by the Waikato
District Licensing Committee, rather than the Authority.
[28] The Inspector referred to grant of the Orca licence and receipt of
the off- licence application from Four Square. She raised
a question of
consistency:
Interestingly two off-licence application were submitted to the Agency, as it
was then, subsequent to lodgement of Venus NZ Limited’s
application. One
for Orca Restaurant & Bar, this was a new licence as they had inadvertently
let the original off-licence lapse.
The application was advertised in the
Raglan Chronicle but attracted no opposition. On 11 December 2013 an
application for an
off-licence was received for a new Four Square which is in
the process of being built. Again there was no opposition to the
application, leaving one wondering about the consistency of people’s
attitude to the density
of outlets.
(Emphasis added)
[29] On the topic of “amenity and good order”, the Inspector
concluded:
It is difficult to say whether the amenity and good order of the locality is
likely to be reduced by more than a minor extent should
a licence for a bottle
store be granted. There is much documented about increased availability of
alcohol equating to detrimental
effects in terms of harm and amenity,
however I believe management systems of the individual premises play a major
role.
[30] In a subsequent written statement of evidence, dated 18 September
2014, the
Inspector expressed some concerns about the number of premises holding off-
licences in Raglan. That, she pointed out, was a factor to be taken into
account in
assessing the “amenity” and “good order”
criterion.31
[31] The Inspector identified all off-licence premises as being situated
within 200 metres of those that Venus intended to use. She
continued:
10. Raglan businesses rely heavily on the summer tourist trade to
offset the leaner months. This situation will have been compounded
with the
recent opening of Raglan Four Square. As noted in decisions by the Authority
(Sapphire Dreams Limited [2012] NZLLA PH 1370 and Hari Om (2013)
Limited [2014] NZARLA PH 309) the addition of premises holding an
off-licence does not necessarily increase the consumption of alcohol
of a
given population; just that the purchasing is dispersed more widely, so
existing businesses have a smaller ‘slice
of the cake’. This in
turn leads to competition which I am aware occurs in Raglan already.
Competitive price cutting is
likely to lead to a percentage of the population
and could encourage elevated levels of drinking leading to increased harm. In
the application it stated that the applicant would not enter into a ‘price
war’ situation; this does not prevent other
outlets from doing so and it
is difficult to see how the applicant would avoid price cuts to remain
competitive and viable out of
season.
11. In a recent public consultation held in Raglan regarding a
proposed Local Alcohol Policy, of the 22 respondents to the question “Are
there too many off Licences in Raglan” 13 said ‘yes’, 9 said
‘no’ and no one said ‘more needed’,
indicating 59% would
prefer to see fewer premises holding an off-licence and 41% were happy with the
status quo. All of the objectors
to this application mentioned density of off-
licensed premises as at least one reason for objection.
...
13. ... since the filing of [Venus’] application the number of
off-licences granted in this very small area of Raglan
has increased.
Suitability may be in question with the director of the applicant company not
advising the licensing authority of
change of company name as required by the
Act, whilst appreciating this is easy to overlook it is indicative of ignorance
of the
obligations of a director of a company holding a licence. There is also
the question of availability of sufficient certificated
managers to cover both
licensed premises.
(Emphasis added)
[32] The Inspector also considered the relevant criteria for an off-licence,
set out in ss 105 and 106 of the 2012 Act.32 She
said:
31 Sale and Supply of Liquor Act 2-012, s 106(1)(a)(iii).
32 Set out at paras [14] and [19] above.
Objective of the Act
The object of the Act is that the sale, supply and consumption of alcohol
should be undertaken safely and responsibly and the harm
caused by the excessive
or inappropriate consumption of alcohol should be minimised.
In order to address this criterion the applicant advised the following steps
will be taken:
• There will be no single sales, limits will be three-packs
• Patrons will be closely monitored at entry
• ID checks for those who look under 25
• CCTV, panic button and security system will be installed
• Advertising will be limited to displays in the shop window
• No toleration of any signs of intoxication
• No ‘price-war’ situations with other outlets will be entered into
• Sale focus will be on wines and premium spirits
In my research into the problems relating specifically to Raglan
and attributed to alcohol, I spoke to the coordinator of the Community Centre
based in Bow Street. She has worked there for four years. The venue is used
for counselling sessions where they see approximately 100 clients per year
(though only funded for 37) 70 per cent of who are there with alcohol related
problems. The coordinator believes this is only the
‘tip of the
iceberg’. The clients are entitled to six sessions each. She confirmed
there was a socio- economic element
to the client base and there is a definite
link to family violence. She advised me that at the local school one in five
children
either witness or experience domestic violence.
She was concerned that another off-licence would increase the opportunity
for recidivist drinker patterns to go undetected, that is
to say they could
spread their purchasing habits between more premises. I had not considered this
point before; it has some validity.
(Emphasis added)
[33] Mr Young provided a brief of evidence on behalf of the Waikato District Health Board. He too opposed the application on the grounds “that Raglan [was] already well served by off-licences”. Nevertheless, he acknowledged that there was no Local Alcohol Policy in force. That meant that there was ‘no official’ cap on the number of off-licensed premises. Mr Young said that his concern was that:
16. ... the proximity of the proposed premises to existing off-licences
represents increased availability, increased competition
and competitive pricing
and according to research, increased harm.
[34] Mr Young advised the Authority that the “Medical Officer of Health is not satisfied that [Venus had] established that the amenity and good order of the locality would not be likely to be reduced, to more than a minor extent, by the effects of the issue of the licence having regard to the number of premises for which licences are
already in existence”.33
(b) The Authority’s decision
(i) The “suitability” issue
[35] The Authority had concerns about the “suitability” of
the applicant.34 The Authority observed that neither the applicant
nor its director had any experience in running a bottle store. Their lack of
experience
was detailed.
[36] Venus is a family company. The principal shareholder is Mr Vel
Gnanasundaram. Between them, Mr Vel Gnanasundaram and his
wife hold 55% of the
shareholding. The balance of the shares are owned by Mr Gnanasundaram’s
brother, Sekar, and his wife.
While companies associated with the family own
two unlicensed restaurants in Hamilton and a licensed restaurant in Raglan,
Venus
itself owns no other licensed business.35
[37] The Authority described the way in which the Gnanasundaram
family intended to run the bottle shop:
[13] [Mr Sekar Gnanasundaram] and [his wife] intend to run the
proposed bottle shop. [Mr Sekar Gnanasundaram] does
not hold a General
Manager’s Certificate as he is still waiting to learn if he will have New
Zealand residency. He has passed
his Licence Controller Qualification. He
currently works in the licensed restaurant in Raglan. On rare occasions he has
assisted
a family friend working in a bottle store in Hamilton. He has
virtually no experience in running a bottle store.
33 The reference to onus of proof was made in reliance on an earlier decision of the Authority, Re
Hari Om (2013) Ltd [2014] NZARLA PH 159.
34 With reference to Page v Police HC Christchurch CP84/98, 24 July 1998 (Panckhurst J), New
Zealand Police v Casino Bar (No 3) Ltd [2013] NZHC 44, at para [36] and Re Sheard [1996] 1
NZLR 751 (HC) at 758.
35 Ibid, at para [11].
[14] [Mr Vel Gnanasundaram’s sister-in-law] obtained her General
Manager’s Certificate in February 2013. She has never
worked in a bottle
store. There was no evidence as to her experience in working in licensed
premises although she must have
some to have obtained a General
Manager’s Certificate.
[15] David Marshall is the third person who will be involved in working
in the proposed premises. He obtained his General Manager’s
Certificate
in September 2013. He worked in a supermarket’s liquor department in 2010
and 2011 although not as a duty manager.
As [Mr Sekar Gnanasundaram’s
wife’s] stepfather, Mr Marshall is part of the extended
family.
[38] The Authority recorded that Venus had stated that “it would not discount product or try to undercut competitors”. Although initially the Authority “was told that it was intended that the proposed business would sell premium spirits and wines together with beer and RTDs”, the witnesses later “conceded that the business would also sell ordinary spirits and ordinary wines”. The Authority appeared a little perplexed about why the business did not intend to sell “single bottles of RTDs or
beer”.36
[39] None of the proposed managers gave evidence before the
Authority.37 The Authority considered that “the witness for
the applicant [Mr Vel Gnanasundaram] displayed a lack of candour”, with
his “evidence in chief [being] self-serving”. It was critical of
his failure to inform the Authority of relevant aspects
of the application. The
Authority said:
[33] If a witness is not prepared to be frank with the Authority or a
District Licensing Committee, it is likely that that witness
will be equally
evasive with the reporting agencies. In this case the witness was effectively
the alter ego of the applicant.
[34] The Authority is not satisfied that the applicant meets the
suitability test as stated in Re Sheard [[1996] 1 NZLR 751
(HC)].
(ii) The “amenity and good order”
criterion
[40] The Authority considered the “amenity and good order”
criterion. One of the
factors that the Authority has to consider in deciding whether to issue
a licence is
36 Ibid, at para [17].
37 Re Venus NZ Ltd [2014] NZARLA PH 762, at paras [13]–[15] and [31].
whether 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.38
[41] The Authority took the view that there were a number of sites which
“could be classified as sensitive, within the small
commercial
area”. In particular:39 a community house; a Plunket centre;
a town hall; a library; a childcare centre; a church; a skate park; a
“very popular fish
and chip shop”; and a bakery, including a
takeaway outlet. Seven of the eight sites were within 160 metres of the
proposed
bottle store, while the other was about 500 metres away.
[42] The Authority was concerned about the tendency of young
people to congregate in the vicinity of the fish and chip
shop and the bakery
after school hours, and for people generally to frequent those areas during the
holiday season. Those factors
raised questions about the minimisation of
alcohol-related harm.40
[43] The Authority referred to evidence from the one objector who appeared in person, Ms Hodkinson. Her principal concern was with the activities of Raglan Community House which is situated “four or five doors to the west of the proposed premises”. The Community House is engaged in both suicide prevention and the prevention of violence. Ms Hodkinson expressed a view that alcohol dependency and abuse had been a significant issue for many of those interacting with the
Community House.41
[44] By reference to one of its earlier decisions (which
concerned proposed premises in proximity to a “McDonalds”
outlet in Upper Hutt), the Authority outlined evidence from a witness in
that case to the effect that “having alcohol
available opposite one of the
biggest young hang-outs ... is a recipe for
disaster”.42
[45] The Authority held that the same principle applied, albeit on
“a smaller scale”, notwithstanding the presence
of a general liquor
ban in the business district
38 Sale and Supply of Alcohol Act 2012, s 105(h).
39 Re Venus NZ Ltd [2014] NZARLA PH 762, at para [10].
40 The definition of “alcohol-related harm” is set out at para [17] above.
41 Re Venus NZ Ltd [2014] NZARLA PH 762, at para [23].
42 Re Tony’s Liquor Upper Hutt Ltd [2014] NZARLA PH 171.
of Raglan. It held that the “obligation was on [Venus] to satisfy the
Authority that
potential alcohol-related harm would be
minimised”.43
[46] In describing the “potential alcohol-related harm”
that might arise, the Authority found that such harm
arose from the location
of the premises, its proximity to the sensitive sites (specific reference was
made to the proximity of the
fish and chip shop and bakery), the way in which
it was proposed that the business be managed. The last of those
considerations
demonstrates the inter-linking of the suitability and amenity and
good order factors.
[47] Observing that the “prospect of seven off-licensed premises within the small town of Raglan seems excessive”, the Authority also remarked on the “very large increase in population that occurs during the summer holiday period”. It concluded that, “with no evidence as to alcohol-related harm it is difficult to reach any conclusion as to how the amenity and good order of the locality would be affected by
the addition of one off-licensed premises”.44
[48] Notwithstanding that conclusion, the Authority went on to find that
there was enough evidence about the likelihood of price
cutting and the greater
availability of alcohol as a result “to conclude that the amenity and good
order of the locality would
be reduced by the grant of the
application”.
[49] The Authority emphasised that it was “difficult to determine
the extent of the
reduction”.45 In taking that view, the Authority
referred to s 106(1)(a)(iii) of the
2012 Act, which requires the Authority to have regard to the number of
premises for which licences of the kind concerned are already
held in forming an
opinion on whether the amenity and good order of the locality would likely be
reduced, in terms of s 105(1)(h)
of that Act.
[50] In its conclusion, the Authority said:
[47] Having considered the evidence in relation to the criteria specified in ss 105 and 106 of the Sale and Supply of Alcohol Act 2012, the Authority
43 Re Venus NZ Ltd [2014] NZARLA PH 762, at para [29].
44 Ibid, at para [40].
45 Ibid, at para [41].
then stands back to ascertain if the evidence in its totality satisfies it
that the object contained in s 4 of the Sale and Supply
of Alcohol Act 2012 can
be achieved by the grant of this application. On this basis the
Authority concludes that the
object of the Act cannot be achieved by the grant
of this application.
The s 139 appeal: Was there an “onus” on
Venus?
[51] In determining that there was an onus on Venus to establish that the
object of the 2012 Act could be met if an off licence
were granted,46
the Authority applied its earlier decision, in Re Hari Om.47
In that case, the fate of the application turned on ss 105(1)(a) and (h)
of the 2012 Act. The Authority, in Hari Om, said:
[27] ... The issue as to whether 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 is one of the new criteria introduced by the
Sale and Supply of Alcohol Act 2012.
Section 106(1)(a)(iii) requires the
Authority to have regard to the number of premises for which similar off-
licences are already
held. Thus, whilst under the Sale of Liquor Act 1989 the
proliferation of liquor licenses was not relevant, it now becomes very
relevant.
[28] The proliferation argument was raised on behalf of the appellant in
Utikere (supra). In commenting on it at paragraph [63], Kos J
stated:
In addition there was no cogent evidence that the granting of a licence to
the applicant to establish its new store would necessarily
result in an increase
in the supply of liquor to the public in absolute terms. Let alone an adverse
increase in the abuse of liquor.
As Mr Sheriff put it, dilution or
diminution of sales at other outlets, resulting in the same total volume
sold, was an
equally (if not more) likely outcome. It followed that there was
no evidence that more liquor in absolute terms would be consumed
by the public
either generally, or specifically in the two suburbs most concerned.
[29] At paragraph [64], Kos J noted that it was not the scheme of the
Sale of Liquor Act 1989 to limit the proliferation of outlets.
[30] Sections 105(1)(h) and 106(1)(a)(iii) of the Sale and Supply of Alcohol Act 2012 introduce the proliferation argument unequivocally. The Authority considers that just as in the case of suitability issues, there is an onus on an applicant to prove its case (see, for example, Page v Police
24/7/98 Panckhurst J, HC Ch-ch AP 8498), so also is there an onus on an applicant to satisfy the Authority that the issue of the proposed off-licence is
unlikely to reduce the amenity and good order of the locality to more than a
minor extent. In any event, whether the Authority is correct as to the onus on an applicant in this regard, the proliferation issue was squarely placed before
the Authority, both by the Medical Officer of Health and by the
objectors.
46 Ibid, at para [27]. Sale and Supply of Alcohol Act 2012, s 105(1)(h), set out at para [14] above.
47 Re Hari Om (2013) Ltd [2014] NZARLA PH 159.
Thus, it was incumbent upon the applicant to give consideration to this
issue. It did not do so.
[31] When considering s 106(1)(a)(iii) relating to the number of
premises for which licences are already held, it is not so much
the number of
licences that creates the concern but rather the harm which could be created by
them. This is directly relevant to
the object of the Act as set out in s 4 of
the Sale and Supply of Alcohol Act 2012. ....
(emphasis added)
[52] With respect, the conclusion that there is an onus on an applicant to satisfy the Authority that the issue of a proposed off-licence is unlikely to reduce the amenity and good order of the locality to more than a minor extent is not justified by the extract from Kós J’s judgment in Utikere v IS Dhillon & Sons Ltd,48 on which the
Authority relied.49 As I read that extract, the Judge is
emphasising the need for the
Authority to consider cogent evidence when forming its opinion about the
likelihood or otherwise of a reduction in the amenity and
good order of the
locality.
[53] There is a fine line between the proposition that the proliferation of licensed premises will necessarily result in an increase in the supply of liquor to the public in absolute terms, and the injunction that the Authority not take into account “any prejudicial effect that the issue of the licence on the business conducted pursuant to any other licence”.50 The difficulty arises out of the clash between the public policy goals inherent in competition among businesses (on the one hand) and the regulation of the sale, supply and consumption of alcohol (on the other). It seems to me that question whether amenity and good order will not be materially reduced is one on
which a judgment must be formed by the Authority, on the facts of a specific
case, as opposed to something that an applicant is required
to prove on a
balance of probabilities. The difficulties inherent in proving a negative
support that view.
[54] The Authority held that there was an obligation on Venus to satisfy it that potential alcohol-related harm would be minimised.51 In taking that view, the
Authority effectively placed an onus on Venus to demonstrate that the
amenity and
48 Utikere v IS Dhillon & Sons Ltd [2014] NZAR 431 (HC).
49 Re Hari Om (2013) Ltd [2014] NZARLA PH 159, at paras [28] and [29], set out at para [51]
above.
50 Sale and Supply of Liquor Act 2012, s 105(2).
51 Re Venus NZ Ltd [2014] NZARLA PH 762, at para [28], set out at para [51] above.
good order criterion had been met.52 However, it appears from
the Authority’s reasons that the possibility of the type of harm to which
s 105(1)(h) was directed,53 was finely balanced.
[55] At one point, the Authority said that “with no evidence as to
alcohol-related harm it is difficult to reach any conclusion
as to how the
amenity and good order of the locality would be affected by the addition of one
off-licensed premises”. Later,
it expressed the view that there was
enough evidence about the proliferation of alcohol outlets and the likelihood of
price cutting
“to conclude that the amenity and good order of the locality
would be reduced by the grant of the application”.54 Then,
the Authority said that it was “difficult to determine the extent of the
reduction”, before concluding that the
object of the 2012 Act could not be
achieved by the grant of the application.55
[56] Section 106(1)(h) of the 2012 Act requires the Authority to form an
opinion that “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”. That is
one factor to be taken into account in determining
whether a licence should be granted. To the extent that Re Hari Om held
that there was an onus on an applicant to demonstrate that there would be no
material reduction to the good order and amenity
of the location, I consider
that it was wrongly decided. In my view, no such onus exists.
[57] First, s 105(1)(h) and (i) of the 2012 Act, both of which deal with
“amenity and good order” considerations,
requires the Authority to
form an “opinion”. The need for a judicial body to form an
independent opinion is conceptually
different from a decision that is based on
whether or not an applicant has established on a balance of probabilities that a
relevant
fact has been proved.
[58] Second, the existence of an onus on some aspects of the s 106(1)
criteria is inconsistent with the nature of the evaluative
task contemplated by
s 106 of the 2012
52 See paras [44] and [40] above.
53 Section 105 of the Sale and Supply of Alcohol Act 2012 is set out at para [14] above.
54 Re Venus NZ Ltd [2014] NZARLA PH 762, at paras [40] and [41].
55 Ibid, at para [47].
Act, to determine whether the amenity and good order criterion has
been met.
Section 106(1) refers to factors to which the Authority “must have
regard”.
[59] Third, s 105(1) of the 2012 Act contemplates the same type of
evaluative exercise as is undertaken under s 106(1). The factors
listed in s
105(1) are taken into account by the Authority in determining whether the
application succeeds.
[60] There is an underlying assumption (which I take from the way in which criteria are expressed) that the Authority will exercise an inquisitorial role in determining the appropriateness of the grant of a particular licence having regard to all relevant factors. Although the 2012 Act does not express the powers of the
Authority in that way, the breadth of its functions,56 (which go
beyond judicial
determinations) suggests that the application of rules involving onus of
proof may not be appropriate. For example, powers of investigation
are
explicitly conferred by s 174, albeit ones that are delegated to one of its
members or some other qualified person.
[61] In my view, the Authority erred in requiring Venus to
establish that the amenity and good order criterion had been
established. It
was obliged to inquire into that consideration and to form its own opinion on
the basis of the evidence adduced.
[62] That being so, what conclusion should be reached? In my
view, the Authority’s findings were such that
it could not conclude that
the amenity and good order of the locality would be affected to more than a
minor extent if the application
were granted. There was insufficient evidence
to enable an affirmative conclusion to that effect to be reached.
The s 139 appeal: “Suitability”
[63] As with “amenity and good order”, the “suitability of the applicant” is a
factor to which the Authority must have regard in determining whether to
issue an off-licence.57 It is not determinative.
Nevertheless, depending upon the
56 The functions and powers of the Authority are set out in ss 170–176 of the Sale and Supply of
Alcohol Act 2012.
57 Sale and Supply of Liquor Act 2012, s 105(1)(b).
circumstances in which the off-licence business is to be conducted, the
“suitability”
of those responsible for its management assumes some importance.
[64] The “suitability” factor was considered by Dobson J in
Police v Casino Bar
(No. 3) Ltd58 and Kós J in Utikere. In
Utikere, Kós J said:
[49] In Police v Casino Bar (No. 3) Ltd Dobson J set out a list of
considerations likely to be relevant to the assessment of suitability in
relation to an on-licence application.
Similar considerations are likely to be
relevant to an off-licence application:
(a) previous convictions, especially those involving liquor or
those raising questions as to honesty or propensity for violence;
(b) character, reputation;
(c) matters raised in reports filed under s [33]; (d) previous unlawful operation of premises;
(e) any of the above in relation to a person other than the
applicant who is involved in the application (as a director,
manager, etc) or is
intended to be employed by the applicant;
(f) breach of an undertaking; and
(g) misleading information in an application and/or misleading public
notice.
[65] Later in his judgment in Utikere, Kós J reinforced
the proposition that
“suitability” was not an abstract assessment. He
continued:
[55] The analysis in Nishchay, [Nishchay’s Enterprises Ltd
[2013] NZARLA PH 837] quoted above, is orthodox. Suitability is not an
abstract assessment. But the concern of s 35(1)(a) is with
the suitability of
the applicant. This word is used in contradistinction to
“application”, which appears just a few words earlier. The
provision does
not permit an objector to instead focus on the conceptual
desirability of a further off- licence in that location. That, of course,
is
something the Authority may do for itself, given its wider remit. The Court of
Appeal in [in My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 564; [2010]
NZAR 152 at para [67]] has emphasised the Authority must consider the purpose of
the Act when considering an application for a licence. The High Court
[in
Otara- Papatoetoe Local Board v Joban Enterprises Ltd [2012] NZHC 1406; [2012] NZAR 717 at
para [26]] has emphasised s 35 criteria must “be read in light of the
statutory object”. But s 32(3) makes clear that objectors
may not use s
35(1)(a), any more than they may use s 35(1)(b), as a pretext for wider
social
58 Police v Casino Bar (No 3) Ltd [2013] NZHC 44; [2013] NZAR 267 (HC) at para [34].
policy considerations not directly related to the express subject matter of
those provisions.
(footnotes omitted)
[66] It appears that the question of “suitability” was
considered by the Authority in the context of the lack of experience
of proposed
managers in running a bottle store and the (apparent) lack of candour from Mr
Gnanasundaram, when giving evidence before
the Authority.59
The considerations that led the Authority to conclude that the
applicant did not meet the “suitability” test did
not embrace the
factors identified by Dobson J in Casino Bar (No 3) Ltd.60
In any event, it is debatable whether the suggestion of “lack of
candour” on the part of Mr Vel Gnanasundaram was something
that was
justified on the evidence before the Authority.
[67] The evidence that Venus seeks permission to provide on appeal goes
to the question of suitability. The affidavits from
Mr Vel Gnanasundaram and
Mr Sekar Gnanasundaram now demonstrate a level of experience, and the
acquisition of a manager’s certificate
for each of the persons who will be
involved in the running of the business. Mr Vel Gnanasundaram has also provided
information
to explain why various “sensitive” sites were not
referred to in his original evidence and why he gave evidence that
the Authority
regarded as puzzling about not selling single bottles of RTDs or
beer.
[68] Mr Vel Gnanasundaram deposes that he did not give full details of his own qualifications and experience because he did not appreciate that skills, outside of running a bottle store, would be regarded as relevant to Venus’ application. He refers to qualifications and experience that he gained in India, and after coming to New Zealand in 2008. Among other things, Mr Vel Gnanasundaram holds a Master of International Business degree from Bharathiar University, in India. His present position is as Area Customer Service Manager for the Waikato region for Spotless Cleaners. The evidence shows that four supervisors report directly to Mr Vel
Gnanasundaram, in respect of 68 employees in that
area.
59 See paras [37] and [39] above.
[69] Mr Vel Gnanasundaram also explains, satisfactorily in my view,
why he failed to identify the bakery business as a sensitive
site. He points
out that that did not appear in the Inspector’s report. He gives a reason
why Venus proposes not to sell
single bottles of RTDs and beer. He says this
was in response to a concern raised by the Inspector. He continued:
22. ... The agent who prepared our application was told that
single bottles of beer and RTDs posed more of a risk to youth
because youth were
more likely to be able to afford single purchases. He communicated that
information to us and recommended
that our application stated that we would
not sell single bottles of RTDs or single bottles of beer. We accepted that
recommendation
and that is how our application was framed. We are also
aware that other operators applying for off licences have agreed not
to sell
single RTDs or single bottles of beer because that is what the licensing
inspectors and police are wanting.
[70] As I read the Authority’s decision, it was not
concerned with the issue identified by the Inspector
about a failure
to advise the change of name of a company. Their concerns were more
based on the nature of the evidence
given by Mr Vel Gnanasundaram and the
inexperience or lack of qualification of those involved. I am satisfied that
the evidence
now meets those concerns. For the reasons given earlier, I
granted permission for the additional evidence to be
filed.61
[71] I have considered whether it is necessary to refer the application
back to the Authority, given the new “suitability”
evidence.
Ordinarily, some oral exploration of the evidence might be necessary. In this
case, however, I am satisfied that the
information is largely formal and can be
accepted without the need for it to be tested before the Authority.
[72] My finding of “suitability” is based on the
additional evidence I have received. I do not criticise
the Authority for
forming its view on the evidence before it.
Conclusions
[73] While it was open to the Authority to take a view of the problems that might be caused by a proliferation of off-licences, the fact remains that, unless an onus
were placed on the applicant, there was no basis on which the Authority could
legitimately find that the amenity and good order criterion
was not satisfied.
That being so, the only independent opinion supportable on the evidence was that
there was nothing to suggest
that the amenity and good order of the locality
would be reduced to more than a minor extent, in the manner contemplated by s
105(1)(h).
When one adds a finding of “suitability” to the mix, I
cannot see any basis on which the off-licence could legitimately
have been
refused.
[74] On 12 June 2015, I saw Ms Forret and Ms Shaw in chambers, while
sitting in Hamilton. I expressed a provisional view that
the appeal would be
allowed on the onus and suitability points. I sought submissions on whether I
should deal with the application
or remit it to the Authority to consider
further.
[75] Ms Shaw provided to me a copy of the conditions for the off-licence
operated by PGS Ltd in Raglan, known as “Raglan
Wines and Spirits”.
I considered the conditions set out in that off-licence and could not see any
basis on which different
conditions should be imposed on Venus.
Result
[76] For those reasons, I allowed the appeal, set aside the decision of
the Authority and authorised the Secretary of the Authority
to issue an
off-licence on (materially) the same conditions as apply to PGS Ltd. I
reserved leave to either Venus or the Authority
to apply in the event that there
were any concerns about the nature or extent of any of the conditions
imposed.62
[77] As the appeal was not contested by any other party, no order as to
costs was made.
[78] I thank Ms Forret and Ms Shaw for their
assistance.
P R Heath J
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