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Venus NZ Limited [2015] NZHC 1377 (18 June 2015)

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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