Elation Limited, re [2002] NZLLA 387 (31 July 2002)

Last Updated: 4 April 2010

Decision No. PH 387/2002

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by ELATION LIMITED for an on-licence pursuant to s.7 of the Act in respect of premises situated at 106b Parnell Road, Parnell, Auckland, known as "Komodo Klub"

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Mr J C Crookson

HEARING at AUCKLAND on 23 July 2002

APPEARANCES

Mr J P Sewter – on behalf of applicant
Sergeant M J Lopdell – New Zealand Police – to assist
Mr D W Sara – Auckland District Licensing Agency Inspector – in opposition
Mr N Thinn – for Ms J S Kaye – in opposition
Mr D Stuart – in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an opposed application for an on-licence pursuant to s.7 of the Act. The premises are situated on the corner of Parnell Road and Garfield Road, in Parnell, Auckland. The legal address is said to be 106b Parnell Road, although the main entrance is from Garfield Road. The premises have been the subject of a liquor licence for just over three years. The application for a new on-licence has been brought about following a change of ownership of the business.

[2] The premises are zoned Business – 2 in the Auckland City Operative District Plan. The use of the site as a tavern is permitted by a resource consent granted by the Auckland City Council in April 1999. The resource consent allows for hours of operation between 11.00 am to 2.00 am on Monday to Saturday, and between 11.00 am and 10.00 pm on Sundays and public holidays. The maximum capacity is set at 100 persons. A condition of the resource consent is that the occupier must supply twelve off-site carparking spaces located at 37 Bath Street.

[3] In addition, the resource consent provides that the activity will comply with the following noise levels:

"At or within the boundary of any residential zoned site

Monday to Saturday 7.00 am to 10.00 pm L₁₀ 50 dBA

Sunday and Public Holidays 9.00 am to 6.00 pm L₁₀ 50 dBA

At all other times L₁₀ 40 dBA

L_Max 75 dBA, or background (L₉₅) plus 30 dBA, whichever is the lower

At or within the boundary of any adjacent business 2 zoned site

7.00 am to 10.00 pm L₁₀ 55 dBA

10.00 pm to 7.00 am L₁₀ 45 dBA"

[4] It will be noted that the consent contains a number of conditions (such as closure of certain windows and doors after 10.00 pm), which we infer were aimed at controlling the escape of noise from the building.

[5] The applicant is a private company. The sole director and shareholder is Jeremy Paul Sewter. Mr Sewter recently returned to New Zealand after having spent nearly 20 years in Australia, where he ran an unrelated business. The nature of the proposed business is essentially a tavern. It was originally called 'Komodo Klub', although it is now called 'Komodo Premium Bar'. The applicant company has been operating under temporary authority since 1 September 2001. The application for the on-licence was filed on 6 December 2001.

The Application

[6] Mr Sewter represented himself at the hearing. It became clear that he was ill prepared and/or ill equipped to present his case. Consequently he failed to answer many of the complaints which were directed at the way he had operated the business over the past ten months. His evidence was short on detail, and long on promises and expectation. When he took over the bar, he had not been informed that the previous licensee had also incurred a number of complaints from neighbouring property owners, about the management of the operation.

[7] Mr Sewter described his business as a 'dance bar'. The application for an on-licence referred to a DJ and bar facilities, together with pool tables in a separate room. Although Mr Sewter has worked in a number of bars in the past, this was the first bar he has operated himself. He acquired a manager's certificate last year.

[8] The hours sought by the applicant company are:

Monday to Saturday 11.00 am to 2.00 am the following day
Sunday 11.00 am to 10.00 pm

Mr Sewter stated that the bar does not generally open until 5.00 pm, and it is not open on Sundays.

[9] Mr Sewter gave evidence that since he had taken possession of the business, he had repainted the interior of the premises; renovated the ladies toilets, soundproofed the two windows facing the neighbouring properties; and purchased new furniture.

[10] It became clear at the hearing that during the time that Mr Sewter's company has been trading, there have been serious noise and disorder problems. Much of the criticism was directed to the behaviour of patrons outside the premises, but seen to be either leaving or entering the bar.

[11] Mr Sewter placed some of the blame for the disorder on a tavern that is situated diagonally opposite his premises. This business is known as 'The Exchange'. That establishment closes at 1.00 am. It appears that The Exchange markets itself as a student bar, and promotes cheap $5.00 jugs of beer. The Exchange was not represented at the hearing, and could not answer any of the comments and criticisms made by the various parties. However, we were sufficiently concerned by what we heard, to suggest to the Inspector that the licence renewal for that premises be the subject of a public hearing. The provision of s.154A (an offence to promote excessive consumption of alcohol) would also need to be considered at any such hearing.

[12] Mr Sewter's argument was that once The Exchange had closed at 1.00 am, the patrons gravitated towards his establishment. He said that he had difficulty in controlling the behaviour of intoxicated patrons in the street. Recently he had adopted a policy of barring entry to his premises after 1.00 am. He denied suggestions that he had allowed under age persons into the bar unless they were accompanied by a parent or guardian. He also denied allowing entry to intoxicated persons, or allowing patrons to become intoxicated. We observe that his explanations and answers were not particularly convincing.

[13] Mr Sewter had prepared a plan showing projected sales and capital expenditure. However, he was not prepared to invest further money unless he knew that he had some 'licence' security. Furthermore, his proposed improvements had yet to be approved by the landlord. There is really no way of knowing whether Mr Sewter is committed to these proposals. Mr Sewter advised that when the objections were received, he had held discussions with the objectors. He advised that he now uses an alternative entry on Wednesday nights. This is the night when many of the problems occur.

The District Licensing Agency

[14] Mr D W Sara is an Inspector employed by the Auckland District Licensing Agency. He appeared in opposition to the application, although his initial report was neutral. He called an Environmental Health Officer, specialising in noise control, to give evidence. The evidence disclosed that there had been no less than fourteen noise complaints since the premises had opened under Mr Sewter's management and control. Seven excessive noise directions had been given, the last one being on 19 May 2002. On two occasions, verbal warning had been given. On the other five occasions no action had been warranted.

[15] Regrettably, it appeared that no actual noise measurement had ever been taken. Accordingly, all testing had been carried out on a subjective basis. Nevertheless, it is our view that the number of call outs and excessive noise directions, reflect no credit on the applicant company.

The Objections

[16] Public notice of the application attracted two objections. Both were present at the hearing.

[17] Mr Duncan Stuart resides at 2 Garfield Street, Parnell, less than 100 metres from Komodo. He spoke on behalf of himself and his partner. We have seldom heard a more graphic yet dispassionate account of the distress caused to residential neighbours by the thoughtlessness of the operators of licensed premises and excessive consumption of alcohol. Mr Stuart very fairly pointed out that a large part of the problem was The Exchange, which targets students by promoting cheap liquor. It was very clear that many of the problems started when The Exchange closed an hour before Komodo.

[18] Mr Stuart gave evidence of intoxicated people entering Komodo after The Exchange had closed. He spoke of people who appeared to be minors also entering the bar. He described the scene when young patrons left Komodo after 2.00 am, and then proceeded to misbehave in the street. Mr Stuart kept a diary. He described no less than eleven separate incidents since January 2002. We have not detailed his complaints, because we accept what he had to say without reservation. While it could be argued that not all the complaints were proved to have been caused by, or originated in, Komodo, he satisfied us that the company's suitability to operate a licence was at the very least, questionable.

[19] Mr Stuart was not asking the Authority to refuse the application. He asked that the hours of opening be reduced to midnight. In his original objection in December 2001, he had suggested that the hours be pegged back to 1.00 am.

When asked why he had changed his mind, he said that lack of sleep over the last six months had persuaded him to argue for earlier closing.

[20] Ms Julie Sophie Kaye resides with her partner and daughter at 1 Garfield Street in Parnell. By consent she produced briefs of evidence from her daughter and also a visitor who was staying at the home. Both gave evidence of the hoonish behaviour of drunken youths misbehaving in the street on Wednesday nights between midnight and 3.00 am.

[21] Ms Kaye purchased her property in 1995 prior to the establishment of the bar. In her original objection she outlined a series of incidents over the past two years. Her concerns included the fact that young intoxicated people appearing to be under age, had been admitted to Komodo. She said that since January 2002, the sound of the music has decreased. She accepted that Mr Sewter had carried out soundproofing work, and this had helped. She said that she had seen highly intoxicated people entering and leaving the club. Her mains concerns were now focused on what the patrons did on the street to create a nuisance for those who live nearby.

[22] Ms Kaye also felt that the closing hour should be restricted to midnight. The witnesses accepted that the area had become a gathering place for the young. They accepted that some of them might bring their own liquor rather than purchase it. The open car park had become something of a magnet for the activity. However since February a four storied building including five quality apartments is currently being built. It may well be that the building will contribute to a reduction in the activity.

Noise

[23] Over the last twelve months, we have heard a number of noise complaints directed at licensed premises. As a result, we have made a number of statements on this subject. For the benefit of the parties we repeat a summary of what has been said particularly as they apply to this application.

[24] We acknowledge that the enforcement of noise levels is a matter for the appropriate local authority. However, it is our view that no one should have to put up with persistent interference with their sleep patterns. In terms of the Act, noise is not just a resource management issue. The escape of noise (particularly music) is in our view an example of bad management. The Authority takes the view that if no attempt is made to prevent the escape of, or reduce noise, then it is the Authority's duty to monitor the hours of opening, if not the existence of the licence.

[25] We have heard from a number of licence holders who have installed air conditioning so they can keep doors and windows closed, or have employed security people to monitor outside noise, or they have installed automatic sound control systems. Some have erected surveillance cameras outside their establishments. We will naturally give full credit to those licence holders who acknowledge any existing noise problem, and try and do something about it. In our view the term 'host responsibility' does not exclude the people who live nearby.

[26] Many licensed premises have shown that they can operate in harmony with their residential neighbours. It is no coincidence that the managers and owners of such premises also show a commitment to the reduction of liquor abuse.

Behaviour of Patrons Outside the Premises

[27] This case is also an example of the dilemma currently faced by licensees in being asked to accept responsibility for the behaviour of patrons once they have left the premises. The issue is not without difficulty. If it is established that the patrons have been allowed or encouraged to leave licensed premises in a state of intoxication, then the Authority will not be slow to sheet home the consequences of any resultant misbehaviour on the licensee or manager. Such 'accountability' should be enforced in the area of s.132 and 135 applications, and opposition to renewals.

Conclusion

[28] In considering an application for an on-licence the Authority is directed by s.13(1) to have regard to the following matters:

(a) The suitability of the applicant:

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

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

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

(e) The applicant's proposals relating to –

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

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

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

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

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

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

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

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

[29] In this case, the two issues to be determined by the Authority are the suitability of the applicant, and the days and hours of closing.

[30] In terms of suitability, we note that there was no objection from the Police to the application. The applicant has not been prosecuted for any breaches of the Act. If the complaints levelled at Mr Sewter's company reflected the way it had been run, it is surprising that the premises had not come under serious scrutiny from the Police. The evidence from the objectors was quite disturbing. We accept there was no actual proof of the age of the people, seen going in and coming out of the bar. We also accept that some of the people who were seen to be acting in a drunken and disorderly fashion, may have been drinking from cars, or in car parks, or at other licensed establishments.

[31] Although Mr Sewter expressed a desire to operate in harmony with the law and his neighbours, the last ten months of trading under temporary authorities illustrated the opposite. If the holding of a licence is regarded as a privilege, as stated by Holland J in Hayford v Christchurch DLA High Court Christchurch AP 201/92, then by virtue of s.24(4) so is the holding of a temporary authority. By any definition, that privilege has been abused in this case. A record of seven excessive noise directions is indefensible.

[32] Nevertheless, we find that Mr Sewter is entitled to the opportunity to run this bar. The lack of proved specifics means that we are not prepared to hold that his company is unsuitable at this time. In some respects he could be considered to be fortunate that there was no serious opposition to the application. The opposition was directed more at the hours of operation.

[33] Section 14(7) is relevant to the hours of opening.

In determining whether to impose conditions under subsection (5)(a) and, if so, what conditions, the Licensing Authority or District Licensing Agency, as the case may be, may have regard to the site of the premises in relation to neighbouring land use.

[34] This tavern is in close proximity to a residential zone. In K R Burton & C A Burton LLA 2020-2025/95, the Authority suggested the following formula:

"(a) If there are residential neighbours, closure is around 11pm weekdays and at midnight or 1am on Friday and Saturday nights;

(b) In other cases closure is at 3am; and

(c) 24 – hour licences are the exception rather than the norm."

[35] We have no hesitation in reducing the closing time to 1.00 am. Although Mr Sewter has made some attempts to change the operation to answer the criticism, it is a case of too little too late. We considered changing the hour to midnight or even 12.30 am, but it was unclear about the impact of such a closing time on the behaviour of the patrons in relation to other licensed premises. In other words we would prefer to consider the closing hours of other nearby licensed premises at the same time. In the light of the lack of specific proof to support the allegations, we take the view that the company should have a probationary year.

[36] There are a number of public safeguards built into the Act. Any new on-licence is issued for a period of one year. This gives residents and authorities the opportunity to monitor the business to see whether their concerns about excessive noise and unruly behaviour have been realised and/or repeated. If they have been, then the Authority has the power to refuse to renew the licence, or further alter the hours of opening. During the year we hope that tests will be taken of noise levels to ensure that the conditions of the resource consent are being followed.

[37] Another form of protection for the residents is s.132 of the Act. The Police or the District Licensing Agency Inspector are empowered to apply to vary, suspend or cancel a licence if problems persist.

[38] The Act requires us to be satisfied that the applicant is suitable and will uphold the law. We are satisfied as to the matters to which we must have regard as set out in s.13(1) of the Act. We grant the applicant an on-licence for the sale and supply of liquor for consumption on the premises to any person present on the premises. A copy of the licence setting out the conditions to which the licence is subject is attached to this decision.

[39] The hours for the on-licence will be

Monday to Saturday 11.00 am to 1.00 am the following day
Sunday 11.00 am to 10.00 pm

[40] The licence will not issue until the expiry of 20 working days from the date of this decision. That period is the time provided by s.140 of the Act for the lodging of a notice of appeal.

[41] The applicant's attention is drawn to s.25 of the Act obliging the holder of an on-licence to display

• [a] A sign attached to the exterior of the premises so as to be easily read by persons outside each principal entrance, stating the ordinary hours of business during which the premises will be open for the sale of liquor, and
  
• [b] A copy of the licence, and the conditions of the licence, attached to the interior of the premises so as to be easily read by persons entering through the principal entrance.
  

DATED at WELLINGTON this 31st day of July 2002

Judge E W Unwin Mr J C Crookston
Chairman Member

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