Austin's Food Design Events Limited, re [2002] NZLLA 464 (28 August 2002)

Last Updated: 24 April 2010

Decision No. PH 464/2002

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by AUSTIN'S FOOD DESIGN EVENTS LIMITED pursuant to s.7 of the Act for an on-licence in respect of premises situated at 72 – 80 Stanley Street, Parnell, Auckland, known as "ASB Bank Tennis Centre"

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at Auckland on 22 July 2002

APPEARANCES

Mr P D Swain – for applicant
Mr D Sara – Auckland District Licensing Agency Inspector – in opposition
Sergeant M J Lopdell – NZ Police – in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an application by Austin's Food Design Events Limited (the applicant) pursuant to s.7 of the Act for an on-licence in respect of premises situated a 72 – 80 Stanley Street, Parnell, Auckland known as the "ASB Bank Tennis Centre".

[2] The application is opposed by the Police and the District Licensing Agency Inspector on the ground that the applicant does not have exclusive tenure of the Tennis Centre.

Background

[3] The applicant is a catering company. It wants to supply food and liquor at the ASB Tennis Centre, in Stanley Street, Auckland. The applicant was issued with a temporary authority for the period 31 August to 30 November 2001. A second temporary authority was issued for the period of 1 December 2001 to 1 March 2002.

[4] The base on-licence was issued to Culinary Delights Limited on 15 June 2000. It is due to expire on 15 June 2004. That licence authorises the sale and supply of liquor to, and consumption by, any person who is present on the premises known as the ASB Bank Tennis Centre Monday to Sunday between the hours of 11.00 am to 1.00 am the following day.

[5] On 22 August 2001 the applicant entered into an "Agreement as to Exclusive Catering Concession Incorporating Lease Provision" with Auckland Tennis Incorporated. That Agreement is for 3 years with a right of renewal for a further two periods each of 3 years.

[6] That Agreement states in clause 2.1 that an "Exclusive Catering Concession" means:

"(i) A lease of such parts of Auckland Tennis' Tennis Complex at Stanley Street, Auckland as are more particularly described in Part A of the Schedule hereto.

(ii) A right to use in common with Auckland Tennis such parts of Auckland Tennis' Tennis Complex at Stanley Street, Auckland as are more particularly described in Part B of the Schedule hereto, subject to a first come first served booking arrangement to be kept by the Company for private functions arranged by the Company and functions arranged by Auckland Tennis.

(iii) An exclusive right for the Company to cater for all functions held at the Association complex whether private functions arranged by the Company or functions arranged by Auckland Tennis PROVIDED HOWEVER Auckland tennis reserves the right on special occasions to allow other catering arrangements which are closely associated with the event being held but UNDERTAKES in normal circumstances to promote the interests of the Company in all areas of the Stanley Street Tennis Centre."

[7] Subclause (3) of clause 2 describes "The Premises" as meaning "Those parts of the Tennis Complex as described in Parts A and B of the Schedule." By clause 3 of the Agreement the Company shall pay Auckland Tennis rental for the premises.

[8] On 1 March 2002, as a result of opposition by the Police to the application, the parties executed a Variation to Part B of the Schedule to that Agreement whereby Part B now includes "and all other areas within the ASB Tennis Centre."

Mr Blackman's Evidence

[9] Mr Christopher Blackman is the General Manager of the applicant. He said that he entered into negotiations with Auckland Tennis Incorporated to provide catering services to that organisation. The Agreement provided that the applicant has exclusivity to the areas defined in Part A of the Schedule and also rights in common with others for the remainder of the tennis complex. The Agreement was a copy of an earlier Agreement between Auckland Tennis and the former caterer, Culinary Delights Limited.

[10] Mr Blackman said that, following objection by the Police as to the validity of the applicant's tenure in the complex, the Agreement was changed to clearly show that the provision of food and beverage was to take place in the whole of the complex.

He explained that as the seating arrangements for spectators at tournaments varies so does the site for the provision of refreshments. He said the international tennis body and sponsors dictate the layout of the complex. Hence, a specific area of the complex could not be declared the sole area for the provision of refreshments.

[11] He said, from time to time a part of the complex is hired out to people for private functions. Sometimes, the catering is provided by the applicant and at other times by someone else. When someone other than the applicant provides the catering it is a condition of hire that that person obtains a special licence. That is the only area that is hired out for functions not associated with tennis.

[12] During tennis tournaments the applicant employs up to 80 people. Some of them are permanent staff. The others are described as permanent part-time staff. The applicant employs 5 staff members who hold General Manager's Certificates.

[13] Mr Blackman said that the applicant operated under temporary authorities until March this year without complaints or allegations about improper liquor sales.

Evidence of Mr Pearce

[14] Graham Frank Pearce is the Chief Executive of Auckland Tennis Incorporated. He said that organisation operates the stadium known as the ASB Tennis Centre at 72-80 Stanley Street, Parnell, Auckland. The centre is the headquarters for tennis in Auckland.

[15] He said throughout the year, Auckland Tennis hosts two international tournaments, a number of national tournaments, and other like events. He reiterated the evidence of Mr Blackman as regards the arrangements for the applicant under the Agreement with Auckland Tennis. He said it is the clear intention of Auckland Tennis that the applicant can and is to operate the provision of food and beverages throughout the whole of the Centre. As far as Auckland Tennis is concerned the applicant has tenure of the whole of the Centre.

Closing Submissions of the Police

[16] Sergeant Lopdell is the District Licensing Officer for the Auckland Police District. On 3 January 2002 he opposed the application and the issue of further temporary authorities on the ground of the applicant's lack of exclusive tenure.

[17] Sergeant Lopdell said that although his opposition was based on the original Agreement of 22 August 2001 his opposition remained unchanged following the execution of the Variation of that Agreement on 1 March 2002.

[18] He submitted that tenure was a fundamental requirement when considering applications for licences. He referred us to two decisions of the Authority in D S Maxell-McGinn LLA 976-977/94 and Flaxmere Café & Casino Limited LLA PH 401/2001. In both cases security of tenure was in issue.

[19] Sergeant Lopdell said that if the applicant was able to provide a properly executed lease and a new plan showing the exact areas that the lease applied to the Police would amend its objection.

[20] Sergeant Lopdell referred to the application form on which it states:

"The applicant does not own the premises. The premises are leased from Auckland City, whose consent to the issue of a liquor licence is attached hereto. Applicant has a contract with Auckland Tennis Inc to provide food and beverage for those attending the tennis centre."

[21] It was his submission that this situation did not comply with the regulations and did not establish any tenure whatsoever by the applicant.

[22] Sergeant Lopdell submitted that the Agreement of 22 August 2001 is a catering contract or concession but not a lease. It was his view that any lease or sublease to the applicant would have to authorised by Auckland City.

[23] Sergeant Lopdell referred to Part B of the Schedule of the Agreement of 22 August 2001. He said that "the areas used in common could not be included in an on-licence to the applicant as there is insufficient tenure of those shared areas."

[24] Sergeant Lopdell referred to Part A of that Agreement which states that:

"Exclusivity of the Peter Wilson Lounge and the Racquettes Room shall have regard to the tennis objectives of Auckland Tennis."

[25] He said the use of those two rooms remains at the discretion of Auckland Tennis. Therefore the applicant does not have sufficient tenure of those areas to be granted an on-licence.

[26] Sergeant Lopdell said it was also questionable whether the applicant has exclusive use of the kitchens referred to in Part A of the Agreement.

[27] As a further example that the applicant does not have sufficient tenure of the complex, Sergeant Lopdell referred to clause 14 of the Agreement. Clause 14 states that the applicant shall, when required by Auckland Tennis, give quotations for its catering "when the use of the premises is reserved by Auckland Tennis for itself or for persons whose use is considered desirable by Auckland Tennis."

[28] Sergeant Lopdell submitted that almost without exception the control of the premises remains in the hands of Auckland Tennis.

The Inspector's Submissions

[29] Mr D W Sara is an Auckland District Licensing Agency Inspector. He questioned whether a "right to use in common" is sufficient tenure for premises to be granted a liquor licence.

[30] Mr Sara referred to paragraph (ii) of clause 2.1 of the Agreement of 20 August 2001. There the Agreement stipulates that the use of the areas described in Part B of the Schedule shall be decided on "a first come first serve booking arrangement to be kept by the company for private functions arranged by the company and functions by Auckland Tennis." He submitted that the variation to that Agreement now gives

the applicant the right to use in common "all other areas within the ASB Tennis Centre."

[31] Mr Sara referred to Mr Swain's letter to the Agency on 7 February 2002. In that letter Mr Swain referred to the situation regarding a liquor licensee who operates in a food hall. Mr Swain said that there is nothing in the Act that requires licensees to have exclusive tenure. Mr Sara said that in such situations the Agency requires an applicant for a licence to provide a letter of consent from a landlord or sub-lessee of the landlord. That letter is to state that consent will not be given to any other stall holder applying for a licence, and that other stall holders do not object to the applicant having exclusive use of the whole food court area.

[32] Mr Sara submitted that a licensee who has applied for the whole of the premises should not be limited by a "first come first serve booking arrangement" as to whether the licensee can hold a function in a particular part of the premises or not.

Applicant's Submissions

[33] Mr Swain on behalf of the applicant noted that the criteria for on-licences in s.13 of the Act do not contain a requirement for tenure. He said that the form of tenure has to be specified in clause 4(d)(ii) of Form 2 of the Sale of Liquor Amendment Regulations 2000.

[34] He said that examples of tenure are given in s.24 of the Act. In particular, he believed the insertion of the words "any business conducted in any premises..." was passed to cement, into the code, a practice that was already used.

[35] Mr Swain said that the previous operator acting under an identical agreement had the ability to sell and supply liquor throughout the whole complex. Likewise, the applicant also has tenure of the whole complex and has an interest in the business conducted on the premises.

Authority's Conclusion and Reasons

[36] The Police and the Agency Inspector argued that the applicant is required to have exclusive tenure of the premises in order to be granted an on-licence.

[37] Tenure is not defined in the Act. Collins Concise Dictionary defines "tenure" as (amongst other things) 4a "the holding or property, especially realty in return for services. b the duration of such holding."

[38] Tenure is not a criterion under s.13 of the Act. The Sale of Liquor Regulations 1990 as amended by the Sale of Liquor Amendment Regulations 2000 simply requires the applicant to specify "what form of tenure of the premises will the applicant have (including term of tenure)?" There is no reference to "exclusive" tenure.

[39] The applicant has produced a document entitled "Agreement as to Exclusive Catering Concession Incorporating Lease Provision" dated the 20 August 2001. That document is drafted in the form of a lease. It is for a term of three years. It provides for two further terms of renewal each for three years. At clause 2.1(I) it states an "Exclusive Catering Concession" means: "(i) A lease of such parts of Auckland Tennis' Tennis Complex..."

[40] There are other indicators that the document is intended to be a lease. For example clause 3 requires the applicant to pay a rental. That clause specifies how the rental is to be calculated and that it shall be paid monthly. Clauses 7 and 8 are standard provisions in any lease. Clause 7 requires the applicant to maintain the interior of the premises, fixtures and fittings in good repair and tenantable order while Auckland Tennis is responsible for fair wear and tear and damage outside the control of the tenant. Clause 8 contains an indemnity provision and requirement that the applicant shall comply with all statutes, regulations, ordinances and so on.

[41] In our view the Agreement is clearly a document in the form of a lease. It is not "a sham". It clearly provides tenure for a period of time between the applicant, as tenant, and the landlord, Auckland Tennis Incorporated. We accept Mr Swain's submission there is no legal requirement for the applicant to have exclusive tenure.

[42] The applicant is operating a business that has been run under exactly the same conditions at least since 13 October 1999 when Exhibition Catering Limited, the predecessor to Culinary Delights Limited, held the lease with the Auckland Tennis Incorporated. There has been no evidence before us that any problems arose while those catering companies were operating at the ASB Bank Tennis Centre.

[43] Therefore, subs.(1) of s.4 of the Act is pertinent to this application. That is:

The object of this Act is to establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse, so far as that can be achieved by legislative means. [emphasis added]

[44] It should be noted that this applicant is operating a catering business within a tennis centre that is a prominent sporting facility. There is no suggestion that the applicant is unsuitable to hold an on-licence. We note that there has been no cause for concern while it has been operating under a temporary authority.

[45] Although Sergeant Lopdell expressed some concern about the lack of designation and conditions relating to the method or style of trading we have no such qualms.

[46] We are satisfied as to the matters to which we must have regard as set out in s.13 of the Act. We grant the applicant an on-licence authorising the sale and supply of liquor, for consumption on the premises, to any person who is present on the premises.

[47] The hours for the on-licence will be:

Monday to Sunday 7.00 am to 1.00 am the following day.

[48] 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.

[49] 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 cpopy of the licence, and of the conditions of the licence, attached to the interior of the premises so as to be easily read by persons entering through each principal entrance.
  

DATED at WELLINGTON this 28th day of August 2002

Judge E W Unwin Mr J C Crookston
Chairman Member

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