Chon and Chon [2002] NZLLA 677 (6 December 2002)

Last Updated: 30 January 2012

Decision No. PH 677/2002

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by CHOL NAM CHON and HOA JU CHON, trading in partnership pursuant to s.31 of the Act for an off-licence in respect of premises situated at 24/66 Victoria Street West, Auckland, known as “Kiwi’s”

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 20 November 2002

APPEARANCES

Mr Chol Nam Chon – for the applicant partnership
Miss K M Bush – Auckland District Licensing Agency Inspector – in opposition

RESERVED DECISION OF THE AUTHORITY

The Application

[1] This is an application by Chol Nam Chon and Hoa Ju Chon for an off-licence pursuant to s.31 of the Act. They are a husband and wife partnership. The premises is currently operated as a souvenir shop in Auckland’s Victoria Street Market, situated in 210 Victoria Street West, Auckland. They have operated the premises since June 2002.

[2] The Inspector’s report states that the management of the Market suggested to the applicants that it may be a good idea for them to apply for a liquor licence so that they could sell liquor with their goods both individually and in gift baskets. Accordingly, the applicants are seeking an off-licence under s.36(2)(b) of the Act, to sell New Zealand wines such as honey, kiwi fruit, feijoa wines as well as other wines as an “appropriate complement” to the kinds of goods sold in their shop.

[3] The main focus of the applicants’ shop is the sale of New Zealand honey and honey based products to the Asian tourist market. We noted that the sign at the front of the shop does not mention souvenirs but says:

“Kiwi’s

Pure natural
NZ Products

KIWI HONEY

UMF MANUKA HONEY

KIWI WINES
HEALTH FOOD”

[4] The honey based products include health foods (propolis, royal jelly, and other extracts from honey), confectionery, and cosmetics.

[5] The District Licensing Agency Inspector has opposed the application on the basis that:

“Section 36(4) of the Sale of Liquor Act 1999 precludes the grant of an off-licence to premises on which the principal business is the sale of food or groceries whether or not the business or the premises are similar in nature to a supermarket or grocery store” – M J Lopdell v Deli Holdings and Others (High Court, Auckland, AP97/01, 10 December 2001, Randerson J).

[6] However, the Inspector says that there is no reason to believe that the partnership is not a suitable entity to hold a liquor licence.

[7] The applicants have sought the following hours:

Monday to Sunday 9.00 am to 6.00 pm.

[8] Following receipt of the application the Inspector sought a breakdown of food items and non-food items sold in the shop. The applicants responded with a very extensive and detailed list of their sales for the period of 29 July 2002 to 7 August 2002. They listed; the type of product sold, the quantity, the unit price, the total cost of sales, how payment was made, and the nationality of the purchaser. Over 50% of the sales were made to members of the Asian community.

[9] The sales percentages based on revenue were:

(a) Honey ... 41%
(b) Health food ... 38%
(c) Chocolate ... 08%

(d) Crafts ... 06%

(e) Cosmetics ... 06%

(f) Others ... 0.7%

[10] Mr Chol Chon has completed a course of instruction in the Sale of Liquor Act 1989. He has obtained a Resource Management Act certificate for the premises. He has yet to apply for his manager’s certificate. He said he will proceed with an application for a manager’s certificate if his off-licence application is successful.

[11] He submitted that the meaning of “food” is a matter of perception. It changes according to its purpose and target audience. His principal target audience is Japanese, Chinese, Indonesian and Korean tourists. To illustrate his point he referred to a knife. It can be used as a weapon, or as an article for preparing food for cooking. Likewise, to a New Zealand customer what he is selling is simply food. To a tourist it is a souvenir.

[12] Although it is an interesting argument, a Court or Tribunal can only determine the law as enacted by Parliament. If Parliament wishes to make an exemption for food which is sold for its souvenir status then it must say so.

Authority’s Conclusion and Reasons

[13] Section 36 of the Act provides:

36. Types of premises in respect of which off-licences may be granted---

(1) Except as provided in subsections (2) to (5) of this section, an off-licence shall be granted only—

(a) To the holder of an on-licence in respect of a hotel or tavern, in respect of the premises conducted pursuant to that licence; or
(b) To the holder of a club licence, being a club that is entitled under paragraph (i) or paragraph (j) of section 30(1) of this Act to hold an off-licence, in respect of the premises conducted pursuant to that licence; or
(c) In respect of premises in which the principal business is the manufacture or sale of liquor; or
(d) In respect of—

(i) Any supermarket having a floor area of at least 1000 square metres (including any separate departments set aside for such foodstuffs as fresh meat, fresh fruit and vegetables, and delicatessen items); or
(ii) Any grocery store, where the Licensing Authority is satisfied that the principal business of the store is the sale of main order household foodstuff requirements.

(2) The Licensing Authority [or District Licensing Agency, as the case may be,] may grant an off-licence in respect of any other premises if the Licensing Authority [or District Licensing Agency, as the case may be,] is satisfied, in a particular case,—

(a) That, in the area in which the premises are situated, the sale of liquor in premises of a kind described in paragraph (c) or paragraph (d) of subsection (1) of this section would not be economic; or
(b) That the sale of liquor would be an appropriate complement to the kind of goods sold in the premises.

(3) Nothing in subsection (1) or subsection (2) of this section shall authorise the grant of an off-licence in respect of—

(a) Any service station or other premises in which the principal business is the sale of petrol or other automotive fuels; or
(b) Any shop of a kind commonly known as a dairy.

(4) Nothing in subsection (2)(b) of this section shall authorise the grant of an off-licence in respect of any supermarket or grocery store, or any other premises on which the principal business is the sale of food or groceries.

[13] Food is defined in s.2 of the Food Act 1981 as:

“ ‘Food’ means anything that is used or represented for use as food or drink for human beings; and includes -

(a) Any ingredient or nutrient or other constituent of any food or drink, whether that ingredient or nutrient or other constituent is consumed or represented for consumption by human beings by itself or when used in the preparation of or mixed with or added to any food or drink; and
(b) Anything that is or is intended to be mixed with or added to any food or drink; and

(c) Chewing gum, and any ingredient of chewing gum, and anything that is or is intended to be mixed with or added to chewing gum.”

[14] The Inspector submitted that it would be impossible to exclude honey and health foods from this category. We agree. When those items are combined with the chocolate sales the percentage climbs to 87% of the total sales on the premises.

[15] The owners describe the business as a souvenir shop. They do so because they have deliberately chosen to sell New Zealand made products to Asian tourists. Apparently, New Zealand honey and honey based products are highly sought after by Asian people. The Pocket Oxford Dictionary defines souvenir as “a memento of an occasion or a place.” One would expect a memento to be something that is less perishable and more enduring than food.

[16] The Authority visited the shop and viewed the goods displayed. There is no doubt that the business is aimed at the tourist trade. While there is a mixture of goods for sale it was apparent that the preponderance of those goods were products that would fall within the definition of “food”. We agree that the sale of New Zealand wine and beer would be very complementary to the style of goods for sale.

[17] In M J Lopdell v Deli Holdings and others Randerson J examined the meaning of s.36(4), using various tools of statutory interpretation, and its legislative and case history. He concluded that the principal business carried on at the premises had to be goods other than the sale of food or groceries to enable liquor to be sold as an appropriate complement. He cited examples from “Brooker’s Sale of Liquor” text such as liquor with gentlemen’s apparel, whiskey associated with sales of goods by a wool dealer, and limited sales to souvenir and specialty shops.

[18] Hence, while the goods are displayed and sold principally for tourists to take home as gifts, in other words as souvenirs, the principal business is the sale of food. The fact that they are, or may be, souvenirs is a secondary consideration in terms of s.36(4) of the Act.

[19] Therefore, in accordance with M J Lopdell v Deli Holdings and Others, we find that the application must be declined.

DATED at WELLINGTON this 6th day of December 2002

Judge E W Unwin Mr J C Crookston
Chairman Member

kiwi’s.doc