Parnell Superette, re [2002] NZLLA 544 (7 October 2002)

Last Updated: 2 October 2010

Decision No. PH 544/2002

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by TARAL PATEL and TARUNA PATEL trading in partnership pursuant to s.31 for an off-licence of the Act in respect of premises situated at 486-490 Parnell Road, Parnell, Auckland, known as “Parnell Superette”

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 2 October 2002

APPEARANCES

Mr P D Swain – agent for the applicants
Mr D W Sara – Auckland District Licensing Agency Inspector – to assist
Mr R G Poole – New Zealand Police – in opposition

INTERIM DECISION OF THE AUTHORITY

Introduction

[1] This is an opposed application for an off-licence. The issue is whether the applicants have established that their premises can accurately be described as a grocery store, with its principal business being the sale of main order household foodstuff requirements.

The Background to the Application

[2] Mr and Mrs Patel have been operating the Parnell Superette for five years. The shop is situated on the busy Parnell Road, not far from the War Memorial Museum in the Auckland Domain. There are a number of residences, rental properties and apartments in the immediate vicinity.

[3] They open the shop at 7.00 am and generally trade until 11.00 pm each day. These are the hours requested on a seven day basis, should a licence be granted.

[4] When the application was first made, the size of the shop was estimated at 85.5 square metres. However, a recalculation was done to include the storerooms at the back. Accordingly, it is now submitted that the floor space available to the Patels is 102.65 square metres.

[5] There are no issues about the suitability of the Patels. Mr Patel is the holder of a General Manager’s Certificate. When the application was lodged in January, the principal purpose of the business was described as ‘Superette’ (Grocery store).

[6] Pursuant to Regulation 8(2)(j), the Patels produced turnover figures for three months trading in October, November and December 2001. The figures were divided into 15 categories. These categories were:

1. Confectionary $ 422.53

2. Drinks and Beverages $1,011.24

3. Milk $ 525.55

4. Newspapers $ 268.40

5. Toiletries $ 378.00

6. Ice-cream $ 376.00

7. Bread $ 523.20

8. Magazines $ 704.00

9. Stamps $ 66.00

10. Cigarettes, Tobacco, Cigars $2,349.00

11. Phonecards $ 788.40

12. Fruit and Vegetables $ 117.00

13. Biscuits and Chips $ 600.00

14. Delicatessen $ 500.00

15. Other grocery $1,826.06

[7] The figures were not certified, and the categories were not particularly helpful. For example drinks and beverages could include dairy items as well as main order household foodstuffs. The same argument could be applied to biscuits and chips. We noted a reasonably extensive milk shake operation. Further, it is not possible to establish whether the ice cream includes the same product sold in cones. The Police allege that the Patels had advised them that the ‘other grocery’ category included cleaning and laundry items. Without detailed and accurate figures, it is not possible to make a proper assessment of the principal business.

[8] The applicants grouped categories 2, 3, 5, 7, 12, 13, 14 and 15 together. They included toiletries because they argued that these items were part of their customers’ normal shopping. In this way they were able to show that ‘groceries’ represented 52.48% of turnover. In our view only foodstuffs should be included. By taking a more conservative approach the Police argued that main order foodstuffs amounted to only 27% of turnover. It should be possible to establish a definitive result.

[9] In Jay and H Company Limited LLA PH 155/2001 the Authority stated:

“In determining the ‘principal business’ of any store we endeavour to apply a broad common sense approach. Consideration includes –

(1) The turnover percentages produced in accordance with Regulation 8(2)(j).

(2) The number and range of the items available. The greater the number and depth of foodstuff items available, the more likely the premise is to be a grocery store in terms of s.36(1)(d)(ii).

(3) The size of the premises. Larger premises are less likely to be categorised as a dairy.

(4) The layout of the premises. The evidential weight given by the Authority to a view is usually considerable.”

[10] We have applied the J and H Company criteria to the present case.

The turnover percentages

[11] The figures provided are not sufficiently detailed for the Authority to make a determination. Because this case is so evenly balanced, we believe that future figures should be certified in accordance with the regulations.

Number and range of items

[12] The greater the number and depth of foodstuff items available, the more likely a premise may be classified as a convenience or grocery store and not a dairy. However, the range of products is not as important as the quantity of products that are sold. In other words, there is no point in stocking a large range of items in order to be classified as a grocery if those items are rarely, if ever, sold.

[13] In the present case, there is a large range of items on display, and in those circumstances it could be argued that the premises narrowly qualify as a grocery.

Size of the premises

[14] The premises are large enough to be categorised as a grocery, and small enough to be categorised as a dairy. In this case, it is not the size that is the telling factor.

The layout of the premises

[15] The Authority took a view of these premises. This was the most telling factor. The premises gave the impression of a dairy both inside and outside. On the outside, all the windows are covered with advertisements for dairy type items. ‘Kit Kat’ is predominant. The Patels have every right to advertise their shop in this way, but in doing so, they run the risk of being classified as a dairy. On the inside, one receives the same impression. The counter is small and is surrounded by dairy type items. There is provision for milk shakes and ice creams. We can imagine children going to the shop for sweets, chips and ice creams. The layout of the shop is presently quite cluttered. The ability to browse while selecting ‘grocery’ items for the home is restricted.

[16] It seemed to us that the applicants have to make a decision whether they truly wish to convert their store to a grocery. To do so they would have to alter the outside advertising to show the new nature of the business. They may wish to alter the inside so that it is more like a supermarket. Some of the present items of stock may have to be sacrificed. We are uncertain whether the Patels may wish to go to this trouble.
[17] In this case, the view which we took was very important in reaching a decision. Having been to the premises we were left in a position of uncertainty as to whether the business was a dairy or not. It seems to us that the Patels must carry the onus of establishing that the premises is not a shop ‘of a kind commonly known as a dairy’.

[18] We have therefore decided to adjourn the application for three months so that the Patels may come to a decision in the light of the forgoing comments. If they wish to proceed with the application we will require certified figures clearly categorising the items. We will then take a second view of the premises, and make a final decision. On the other hand if the Patels wish to retain the current character and style of the premises, then either they can withdraw the application, or it will be refused.

DATED at WELLINGTON this 7th day of October 2002

Judge E W Unwin Mr J C Crookston
Chairman Member

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