Harbour Masters, re [2003] NZLLA 607 (28 August 2003)

Last Updated: 24 November 2010

Decision No. PH 607/2003

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by THE HARBOUR MASTERS LIMITED pursuant to s.18 of the Act for renewal of an on-licence in respect of premises situated at 10 Ocean View Road, Matiatia, Waiheke Island, known as “Harbour Masters”

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 16 July 2003

APPEARANCES

Mr J H Wiles – for applicant
Mr G S Whittle – Auckland District Licensing Agency Inspector – to assist
Mr N S L Johnstone – in opposition
Mr W R Lincoln – in opposition
Mr B J McKibbin – in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an application by The Harbour Masters Limited for renewal and variation of its on-licence pursuant to s.18 of the Act for the premises known as “Harbour Masters“ situated at 10 Oceanview Road, Matiatia, Waiheke Island.

[2] The business operates as a tavern with authorised hours from 7.00 am to 1.00 am daily. As well as renewing its on-licence, the applicant seeks to extend its authorised hours of trading on Fridays and Saturdays to 2.00 am.

[3] The applicant had initially filed the application for an on-licence seeking hours of 7.00 am to 3.00 am the following day. That application attracted six objections from the public. Meetings and discussions were held with the objectors. Jennifer Rowse, a sole director and shareholder in the applicant company, drafted a memorandum to the objectors dated 15 January 2002. That memorandum listed the concessions she had agreed to, in order to progress the company’s application. The concessions of relevance to this hearing were:

“2. The application for on-licence has been changed to reflect a closing time of 1.00 am.

3. Use of outdoor area: It is intended that this area will be used for functions, cultural performances, Sunday afternoon jazz (acoustic), Jazz festival, and other events. Should an occasion arise where we may require amplification outside, (such as the Jazz Festival), we will undertake to advise you in advance.
   

With regard to noise, it should be noted that “Harbour Masters” must comply with the council bylaws regarding allowable noise levels. This is measured at the nearest residential boundary and may not exceed 50dBA 7 am to 10 pm Monday to Saturday, and Sunday 9 am to 6 am – 40 dBA at all other times...”

[4] Several of the objectors thought they should have been consulted prior to the application for renewal regarding the increase in hours. It was also alleged that Ms Rowse did not uphold her undertaking that she would advise the objectors, prior to the event, of outdoor concerts requiring amplification.

[5] There was no opposition to the application from the Police, District Licensing Agency Inspector, or the Medical Officer of Health.

Background

[6] Jennifer Rowse is the director of the applicant company. She did not believe that the objections based upon the emission of noise, were valid or had been made on reasonable grounds, with the exception of Mr and Mrs Lincoln who operate a bed and breakfast facility. She said that Mr and Mrs Lincoln did have grounds for complaint on two occasions, but her manager, Sean Deery, immediately attended to them at that time.

[7] Ms Rowse said that she had engaged the services of Mr Hegley, a noise and acoustic consultant, and she had adopted all his recommendations to reduce the creation and escape of noise. Consequently, the extra hour of trading that is sought will not create any additional noise problems, thereby removing the basis of Mr and Mrs Lincoln’s objection to the application.

[8] Mr Rowse pointed out that there was a real demand for an additional hour of trading on Friday and Saturday nights. By today’s standards 2.00 am was not a late closure because there is an increasing tendency for people to go out later, and the company was missing out on custom and revenue. Ms Rowse supplied a report from her accountant to demonstrate that having two extra hours of trading would make a positive contribution to the profitability of the business.

[9] In response to Mr and Mrs Lincoln’s objection, Ms Rowse said there was no need for any consultation before the application for extension to the trading hours was made. The fact that the application was advertised gave objectors an opportunity to consult, and that had happened. Ms Rowse submitted a letter she had sent to all known objectors regarding planned events. No complaints were received. The letter also served to notify the objectors of a meeting at “Harbour Masters” on 7 May 2003.

[10] On 7 May 2003 the objectors were advised of the steps that had been taken to mitigate the escape of noise from the premises. They were invited to telephone the premises or Ms Rowse personally, of any concerns or complaints. Since that meeting no complaints have been received.

[11] Ms Rowse said that the objections to the outdoors concert on 12 January 2003 were unreasonable. She said that it was midsummer, at the height of the tourist season, and the concert was over by 9.30 pm. It has been the only outdoors concert during the tenure of the on-licence.

[12] Ms Rowse referred to Mr and Mrs McKibbin’s objection wherein they had suggested the applicant was in breach of the operational management plan, circulated in December 2001, because the applicant was not running a “fine dining” establishment. Ms Rowse said that the applicant has only ever sought a tavern licence. It has never sought a restaurant licence. However, she produced a copy of the current menus to show that while the premises was a tavern, the standard of food was more in keeping with a restaurant. Ms Rowse said that the ratio of food to alcohol has consistently been 45/55 per cent.

[13] Ms Rowse was not aware of any noise complaints to the council since the premises opened. She said that a noise control officer had attended the premises in May 2003, and had told her that the noise levels were within acceptable limits.

[14] Ms Rowse acknowledged that they had failed to advise the neighbours of the outdoors concert on Sunday 12 January 2003. That was because the applicant had not received confirmation from the promoters that the concert was to go ahead until the previous Wednesday. They had to rush to meet the advertising deadline in the “Gulf News” on the Thursday. The newspaper was published on the Friday before the event.

[15] Sean Matthew Deery is a project manager living on Waiheke Island. He is a former member of the Police liquor licensing section. He also has extensive experience in the hospitality industry. Between June 2002 and April 2003 he was general manager of the “Harbour Masters” restaurant and bar. He produced an aerial photograph he had obtained from the Auckland City Council, of Matiatia and the surrounding area. The photograph showed the direct distance from the applicant’s premises to each of the objector’s homes. He had ascertained from the Senior Planner at the Council that the extra hours applied for were not affected by the District Plan criteria.

[16] The concert on Sunday 12 January 2003 had taken place without incident. However, on Monday 13 January 2003 he had a telephone conversation with a neighbour, Mrs Nettie Johnstone. She told Mr Deery that they were with friends who had measured the sound levels from the concert with a sound meter. Mrs Johnstone said that the levels were above the allowable limits. Mr Deery told her that she was being unreasonable because the concert finished at 9.30 pm. He also considered Mrs Johnstone’s call unreasonable because when she was the owner of “Harbour Masters”, she had allowed concerts to take place on the property.

[17] Within a day of the concert Mr Deery received a complaint by facsimile from Mr and Mrs Johnstone that included allegations of drunk patrons. He called Mrs Johnstone, and told her that her complaints were unsubstantiated, and that on and off-duty members of the Police had attended the concert.

[18] Mr Deery said that while he was at “Harbour Masters” he had never received any noise complaints from the Council, nor had the Police passed on any complaints.

[19] He said that Mr and Mrs Lincoln had made two complaints which were entirely reasonable, and he had immediately attended to them.

[20] Nick Johnstone spoke on behalf of himself and his wife, Annette. They have lived above the “Harbour Masters” property for 20 years. He said that they had withdrawn their objection to the original application because of the statements in the Operational Plan that had been drafted and circulated prior to the premises opening. He quoted various statements in that Plan:

“...offer a world class gaming environment”, “...in keeping with quality environment”, “...not the operator’s intention to offend the neighbours in any way”, and “...we consider consultation with neighbours to be a valuable feedback to our business, an excellent gauge of how we are performing and whether we are meeting our customers’ expectations.”

He said it was on the basis of the undertakings in that document that he and his wife withdrew their original objection. He said none of those undertakings had been kept since the establishment of the premises.

[21] Mr Johnstone said that they had made several complaints about excessive bass beat noise to the noise control body. However, when he made a recent check he found that only one, on 8 March 2003, was logged and acted upon. When he enquired as to why that was so, he was told that complaints are only logged when an officer attends a complaint.

[22] At a pre-hearing mediation meeting on 7 May 2003, co-ordinated by the applicant, Ms Rowse said that a sound consultant had agreed that there was a problem with excessive noise when doors were left open, and patrons were outside. She suggested that the neighbours monitor the noise level over the following months under the new management plan.

[23] On 12 July 2003 Mr and Mrs Johnstone attended a Rotary dinner at “Harbour Masters”. At 10.30 pm the disco started, and conversing was impossible. The choice of music, level of noise, and the calibre of the patrons were such that it was a night-club scene. They noted that the external door next to the speakers, and opening onto the seaward patio, was open. Young patrons were outside smoking, drinking, and dancing to music. No attempt was made by the security guard or staff to close the door. Mr and Mrs Johnstone gained the impression that it was the usual practice to leave the door open. Mr Johnstone asked, if this was the applicant’s attitude to a “trial period” leading to the present hearing, did the neighbours have worse to come after the “trial period”?

[24] Mr and Mrs Johnstone noted when they returned home that the noise emanating from the premises was still unacceptable. Mr Johnstone said that the premises is situated in a rural area where there is no level of “grey” noise, like the background of city traffic. Mr Johnstone said that outside of ferry times Matiatia was one of the quietest places on the Island.

[25] He said that they support a high-class fine dining restaurant. However, they objected to the application because of the premises gradual change to a night club, its track record over the past 12 months, the lack of consultation on the proposed change to hours, excessive noise, and the proposal to extend the availability of alcohol from the premises.

[26] Warren Russell Lincoln and his wife run an accommodation facility called “The Moorings” at Matiatia on Waiheke Island. He complimented Sean Deery on the way he had managed the “Harbour Master”, and how he had reacted quickly to problems. He speculated whether the changes in management at the “Harbour Master” would lead to more outdoor events being held at the “Harbour Master” in the future. In that respect he noted that the proposed development of Matiatia will bring the likelihood of more bars which will have a flow-on effect to the locality.

[27] Mr Lincoln said that they supported the “Harbour Master” and they did not want to see it “go broke”. He said that the extension from 1.00 am to 2.00 am would have a significant effect on his business. They were desperately concerned as what the impact will be in summer. He said that Ms Rowse runs a hotel on the island, and she cannot be at the “Harbour Master” all the time. Noise from the premises affects their guests’ sleep, and the extra hour would exacerbate that situation. He noted the statistics showed that more alcohol would be sold in that extra hour.

[28] Mr Lincoln said that the last ferry went at 12.15 am. As there was nowhere for people to stay, the bar would be catering for a captive Waiheke audience.

[29] Brian McKibbin and his wife live at Church Bay. The direct distance from their home to the applicant’s premises is 800 metres. Their principal objection was to the extension of hours in the application. He said that they strongly objected to the application which, in his view, was due to the applicant’s inability to implement their original business plan, and the demographics of Waiheke Island. It was their view that the purpose of the application for an extension of hours was so that the applicant can cater for a demand for a disco. It was their contention, that at no time during negotiations and discussions with Ms Rowse, did she give any indication that she intended to operate a disco.

[30] Mr McKibbin then referred to statements in the “Harbour Masters” Operational Management Plan dated 30 December 2001 to demonstrate that the original intention was to operate a fine dining establishment. He said that they had agreed with the original proposal. He submitted that “the goal posts keep getting moved.” The proposed extension of hours was never ever agreed to in the first place. It was merely to cater for a disco. He referred to the stance taken by Ms Rowse in her facsimile of 15 January 2002 where she told the objectors that if all objections were not withdrawn the applications would proceed without the concessions.

[31] Mr Wiles submitted that he did not accept that Ms Rowse had breached any undertakings. She had said that she would advise all objectors in advance of any outdoor concert, and that had been advertised in the newspaper. However, time constraints before the concert had prevented her contacting the objectors personally. He submitted that this was only one occasion, and the concert finished at 9.30 pm. The only objector who was most concerned with noise because of his business was Mr Lincoln, but he had not had any cause to complain.

[32] Mr Whittle said that if a closing time of 2.00 am were granted it would be the latest on Waiheke Island. The problem with a renewal in 12 months time is that the premises would not get the monitoring that similar premises in Auckland City would get. On the other hand if the licence was renewed for three years, and an application for variation or suspension was required it would take several months before it was heard.

[33] Mr Wiles submitted that Ms Rowse had conducted the premises in an exemplary fashion. She provided quality food, and the proportion of food to alcohol was higher than most taverns. He suggested that here was no reason why the application for the extension of hours could not be granted. He said that the applicant would accept a probationary period of one year.

Authority’s Conclusion and Reasons

[34] This is the first application for renewal of the licence. It is the most important in that it follows the “probationary” year. It gives the reporting agencies and the Police an opportunity to monitor the premises and report.

[35] The Authority is required to consider ss.22 and 23 as follows:

22. Criteria for renewal--- In considering any application for the renewal of an on-licence, the Licensing Authority shall have regard to the following matters:

(a) The suitability of the licensee:

(b) The conditions attaching to the licence:

(c) The manner in which the licensee has conducted the sale and supply of liquor pursuant to the licence:

(d) Any matters dealt with in any report made under section 20 of this Act.

23. Decision on application for renewal---(1) After considering an application for the renewal of an on-licence, the Licensing Authority shall—

(a) Renew the licence on the conditions presently attaching to it; or

(b) Renew the licence on such different conditions (relating to any matters specified in section 14(5) of this Act) as the Licensing Authority thinks fit; or

(c) Refuse to renew the licence.

(2) The Licensing Authority shall not exercise its powers under paragraph (b) or paragraph (c) of subsection (1) of this section except in response to—

(a) An objection duly made under section 19 of this Act; or

(b) A report duly submitted under section 20 of this Act; or

(c) A request by the applicant.

(3) On renewing an on-licence, the Licensing Authority shall specify a date (being no later than 3 years after the date on which the renewal takes effect) on which the licence shall expire unless it is again renewed under this section.

[36] The suitability of the applicant has been put directly in issue. The issue of suitability was raised when some of the objectors had expressed concern that they were persuaded to withdraw their original objections because of statements made on behalf of the applicant. There was also a suggestion that the objectors should have been consulted regarding the application for the extension of hours particularly since they had withdrawn their original objections. Otherwise, the objections related to the generation of noise and the extension of hours. Neither the Police nor the Inspector provided adverse reports.

[37] The principal concern arising out of the objections, is that the style of the premises is changing. Therefore, the real issues are s.22(a), (b), and (c).

[38] In H L Walker & W J Walker (High Court, Wellington, AP 87/01, 31 May 2001) at paragraph [18], Fisher J said, that s.22 is largely a paraphrase of s.13. He went on to say that “expressly or by implication one could not exclude anything found in s.13 on the occasion of a renewal. This indirectly brings into operation such provisions as s.14(5) and (7)...”

[39] Section 14(7) states:

(7) 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.

[40] It is clear from the evidence that the style of the premises is changing, particularly late at night. Changes, such as those proposed by the applicant, are more noticeable in a place like Waiheke Island. The ambience and demographics are very different from nearby Auckland City, and would have a profound effect on the locality. While there is no legal requirement for the applicant to consult with its neighbours, in light of what was originally proposed, it is not surprising that the neighbours have objected to the extension of hours. If the emphasis is on food as stated, why is there a need to employ security?

[41] The creation and emission of noise has been a real concern to the objectors. We have said in Paihia Saltwater (2001) Limited LLA PH 391/2001 that:

"The Authority intends to ‘draw a line in the sand’ on the issue of noise.

It seems to us that there has been a number of changes in drinking and entertainment habits. Music tastes have altered. More and more people seem to congregate outside if weather permits. Young people tend to want to ‘party’ at much later hours. The music (particularly the bass) is louder and more intrusive.

It is our view that no-one should have to put up with persistent interference with their sleep patterns. We do not think it is sufficient to submit that a true test is the number of calls to the licensed premises or the Noise Abatement Officer. We have heard enough evidence to suggest that making such calls in the early hours of the morning is unpleasant and often unrewarding.

Noise is not just a resource management issue. The escape of noise (particularly music) is 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.

We have already heard from licence holders who have either 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. We will always give full credit to those 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.

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.”

[42] Ms Rowse referred to the steps that she had taken to reduce the emission of noise from the premises following a consultation with an acoustic expert, Mr Hegley. However, Mr Johnstone’s experiences of dealing with the Noise Control Office, and his visit to the tavern for a Rotary dinner, would seem to indicate that his objections are not “contrived or fanciful” as Ms Rowse suggested, but an expression of genuine concern. Mr Lincoln also has grave concerns regarding the effects of noise on his business which cannot be ignored. We were somewhat surprised that Ms Rowse did not mention the real reason for the application.

[43] Although the original application was for a tavern style licence, it is understandable that the objectors have felt that they were misled by the operational management plan of December 2001. The plan contained references, amongst others, to “a venue of quality for discerning locals”, “a comprehensive Waiheke wine list”, and “a world class gaming environment”. There was also a comprehensive description of the food to be available to be prepared under the supervision of a “Chef in Charge”. Apart from the reference to gaming facilities the description does not match the usual features of a tavern. There was no mention in that document of the night-club type of operation described by Mr Johnstone. That addition to the business was completely unexpected by the objectors. As stated, they would have fought the application “tooth and nail” had they known that it was going to happen.

[44] After consideration of all the evidence and taking into account the requirements of s.14(7) of the Act, we are not satisfied that the applicant has made out a case for an extension to its authorised trading hours. We have suggested in other cases that an applicant can demonstrate a need for extension to trading hours by applying for special licences. We note also that any extension of hours is likely to have a significant effect on the neighbourhood. The application for variation of the hours is therefore refused. Ms Rowse said that “we are missing out on custom and revenue”. In that respect we refer to Meads Brothers Limited [2001] NZCA 386; [2002] NZAR 308, where at paragraph 56 the Court of Appeal said:

“Most restrictive licensing controls will have an economic impact on licensees which sometimes will be substantial. That is a normal incident of a system of reasonable control of liquor abuse. The general provisions for grant and renewal of licences allow no basis for the expectation that a licensee will be able to run a particular type of business successfully.”

[45] We are satisfied as to the matters to which we must have regard as set out in s.22 of the Act. However, we share the objectors’ concerns regarding the change in style of the premises, particularly as regards to its location and to neighbouring land use. The application for renewal is therefore granted for two years which is effectively a period of almost eighteen months to February 2005. That will allow more time for the objectors to monitor the premises. It will also allow the applicant an opportunity to demonstrate that its operation will not have an adverse effect on neighbouring land use.

DATED at WELLINGTON this 28th day of August 2003

Judge E W Unwin Mr J C Crookston
Chairman Member

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