Insomnia Limited, re [2004] NZLLA 29 (29 January 2004)

Last Updated: 16 February 2010

Decision No. PH 029/2004

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by INSOMNIA LIMITED for an on-licence pursuant to s.9 of the Act in respect of the premises situated at 10 Seaview Road, Paraparaumu Beach known as “Insomnia Café & Bar”

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at WELLINGTON on 27 November 2003

APPEARANCES

Mr R J S Munro - for applicant
Mrs A G Ball - Kapiti Coast District Licensing Agency - to assist
Senior Sergeant M Coleman - NZ Police - in opposition
Mr J W Maassen - for the objectors - in opposition

RESERVED DECISION OF THE AUTHORITY

The Application

[1] This is an opposed application by Insomnia Limited for an on-licence pursuant to s.9 of the Act to operate premises situated at 10 Seaview Road, Paraparaumu Beach, known as “Insomnia Café & Bar”. The premises has previously been licensed as a restaurant. The applicant has obtained the requisite resource consent, subject to certain conditions, to conduct the business of a café/bar and restaurant, but the temporary authority (being based on the conditions of the licence in force when the lease changed hands) only permits a restaurant operation.

[2] The main thrust of the objections is persistent noise which allegedly emanates from the premises until a late hour.

[3] The hours sought by the applicant are Monday to Sunday 7.00 am to 3.00 am the following day.

[4] Public notification of the application resulted in objections being lodged by Mr and Mrs L Penno who are the owners of Copperfield Seaside Motels which are situated directly opposite the premises at the Copperfield Shopping Mall complex.

[5] The application was not opposed by either the District Licensing Agency Inspector or the Police. However, following the filing of their report pursuant to s.11 of the Act, the Police became aware of incidents that occurred in August and October 2003 which caused them to change their stance on the matter, and oppose the application.

Factual Background

[6] Matthew Beldham is the sole director and shareholder of the applicant company, and he controls its operations. On 2 September 2002 he applied to the Kapiti Coast District Council for a land use consent for what was described in the application as “a bar/café/restaurant within the Commercial/Retail Zone of Kapiti”, and “a bar/café selling high quality food and serving alcohol.”

[7] Since purchasing the premises Mr Beldham has extensively renovated and upgraded the premises with high quality fittings. He sought approval from a number of his neighbours. Their approval accompanied his application. Mr L Penno was one of the neighbours who gave written approval before he changed his mind, and objected to the application.

[8] A resource consent with conditions was issued by the Council on 15 October 2002. Those conditions were:

“1. That the proposal must be in accordance with the information submitted in with application RM20231.

2. The Consent Holder must carry out all of the recommendations in 5.1, 5.2, and 5.3 (Annexure 2) of the Malcolm Hunt Associates Noise Assessment Report dated 28th August 2002.”
   

Recommendation 5.1 listed six short term physical improvements to improve the acoustic performance of the premises that could realistically achieve compliance with the District Plan rules. Recommendation 5.2 listed five long term physical improvements to be undertaken if the internal sound level was to be increased to above the recommended 90dBA internal sound limit. Recommendation 5.3 set out five management methods to ensure compliance with the noise limits as set out in the District Plan were met at the closest residential location.

[9] Mr Beldham was later granted a temporary authority to enable him to begin trading from the premises on 1 February 2003. From 1 February 2003 to 31 October 2003 the premises traded until 3.00 am. During that period, Insomnia Limited applied to the District Licensing Agency for an extension of its temporary authority. The Agency granted the application for an extension of the temporary authority, but reduced the applicant’s trading hours until 1.00 am as from 1 November 2003. As part of its present application the company seeks to reverse that decision. From shortly after the premises opened, the character changed. The demand was for late night socialising. People had frequently eaten before they arrived. As a consequence it seemed to us that the character of the operation changed from what was initially envisaged.

[10] Mr Beldham said the premises are located in the Commercial Retail Zone under the Council’s District Plan. Since the premises have opened he has received nothing but positive feedback from patrons, particularly women, who said that they felt safe at “Insomnia Bar & Cafe” because of the security arrangements which have been put in place.

[11] Mr Beldham said that despite being in the Commercial Retail Zone of Kapiti, the Company was conscious of the need to reduce noise emissions for the residential neighbours. The Company therefore intends to install a double screening door and build a wall outside the premises after obtaining Resource Management Act consent. Mr Beldham said his company wanted to work in harmony with its neighbours. However, no such application has been made.

[12] He said on 23 August 2003 a 1970s show night was held at the premises that attracted some undesirable and unwanted patrons who arrived very late on Sunday morning. There was an incident, which resulted in adverse publicity and the Police prosecuted Mr Beldham. He was unable to offer any evidence on the matter because it had not been determined in the District Court.

[13] Mr Beldham said that on 5 March 2003, Sergeant Laurie, the Kapiti Police Licensing Sergeant, had written to the District Licensing Agency stating that the Police had no objection to a substantive on-licence being issued to Insomnia Limited. However, because of the incident in August, the Police now considered he was unsuitable as a director of the company. Mr Beldham said he was a responsible person, and that single incident in August should not prevent him being issued with a licence.

[14] He said that Mr and Mrs Penno’s objection was largely based on noise. He had indicated to them that he wished to remove the noise problem, and would do so with support from the Council. That support is apparently related to his wish to build a permanent wall outside his premises to overcome the noise problems.

[15] Mr Beldham said he was well aware of the existence of noise problems, and he had rearranged the sound system to overcome those problems. He referred to a meeting he had with the Council on 18 September 2003 to install “a double noise wall and baffle, which would stop the noise rather than simply ‘turn off the band noise’”. He said it was his intention to do whatever the Council required but he did not wish to pay for an interim solution as well as a long-term solution. Mr Beldham referred to other meetings he had had with Council officers whom he said were unhelpful and did not assist him to find a solution to his problems.

[16] In August 2003 he found that his business could no longer sustain a full time chef, and he made the position redundant. He said that immediately afterwards the Council began to take an interest in his business.

[17] He produced a letter from an immediate neighbour, Ms Sinclair, who supported the application. In addition he produced eight other letters of support.

[18] Mr Beldham asked that the Authority grant an on-licence with authorised hours until 3.00 am as that closing hour would meet the demand of his patrons. He asked for an opportunity to resolve the Resource Management Act problem and that he be allowed to run his business. He said if he did not do what he said he intended to do, then enforcement action would clearly follow, and his business would not succeed. It is noted that the Council issued an abatement notice on 20 October 2003.

[19] Mark Spiekerman said that he and his wife are both directors of a local Paraparaumu business “Tiles by Design”. They had run the company for 18 years and had lived on the Kapiti Coast for 13 years.

[20] He said that upmarket spots for people such as he and his wife to go to after having a meal were few and far between on the Coast. He had watched with interest as Mr Beldham established his business. He has no personal links with Mr Beldham other than through contact with his business. Mr Spiekerman was happy to support Mr Beldham’s application for later closing hours. He said that 3.00 am was not excessive for a responsible business that had taken all the right steps to control its patrons and noise. He said that he used the premises about twice a month as a late night bar or nightclub.

[21] Andrew Robb is the branch manager of a financial firm in Wellington. He had recently moved to the Kapiti Coast. He met Mr Beldham through a mutual business acquaintance. He said that “Insomnia” provided its clientele with the ambience that Mr Robb had grown to expect in Wellington City. The business filled a void on the Kapiti Coast. The operation was well run and Mr Beldham set high personal standards for staff and patrons. It was not a noisy place, and any patron showing signs of intoxication was quickly and effectively dealt with.

[22] He was surprised to find that the Council had restricted the trading hours to 1.00 am. He considered that a closure of 1.00 am was too early for many people on the Kapiti Coast. In contrast the evidence showed that the lives of some residents were improved by the early closure. He said that he used the premises about twice a month after having eaten.

[23] Lindsay Richard Penno and his wife are the owners of Copperfield Motel, 7 Seaview Avenue, Paraparaumu. They objected to the application for an on-licence by Insomnia Limited. They believed that since February 2003, Mr Beldham had demonstrated an absence of host responsibility, as well as a disregard of the rules and regulations relating to the operation of the premises, particularly in respect of the control of noise.

[24] Mr Penno said that although he and his wife do not live at the motel, he had been receiving continuous reports from his managers in relation to the operation of the “Insomnia Café/Bar”, and he was satisfied that the premises was having an adverse effect on their business.

[25] He engaged an acoustic consultant, Neil Jepsen, to undertake noise measurements to ascertain whether there was compliance with the conditions of the Resource Consent granted to Matthew Beldham. Mr Penno said noise readings taken on three successive weekends on 9 September, 16 September and 27 September 2003 showed that on each occasion the noise standards in the District Plan had been substantially exceeded. Mr Jepsen had also advised him that Mr Beldham had not complied with other conditions of his Resource Consent to reduce noise emissions.

[26] Mr Penno said that was particularly disappointing because Mr Beldham had had more than ten months to rectify the situation. Mr Beldham had repeatedly been informed of unacceptable noise emanating from the premises as early as March 2003. On 24 March 2003, Mr Penno received a letter from Mr Beldham acknowledging noise problems and describing the impact of the noise as being minuscule. Mr Beldham had described the noise problem as “due to the popular opening”, and was therefore a one-off occurrence. Mr Penno said subsequent events had proved that to be incorrect.

[27] Mr Penno said that his previous managers Brian and Jane See had resigned after only nine months. He believed that the significant cause for their resignation was disturbance of their sleep. Mr Penno produced six reports from his managers regarding concerns about noise.

[28] Mr Penno said that the District Licensing Agency’s decision to limit the closing hours to 1.00 am had largely remedied the noise problems. However, the applicants’ attitude to the Agency was summed up in a notice on the door of the premises which read:

“Because of local bureaucracy, Insomnia must close at 1.00 am. We will inform you when we are able to resume normal hours.”

[29] Mr Penno also submitted an affidavit from Robert George Thomson whose property is at the end of Seaview Road, Paraparaumu Beach and directly adjacent to the premises. The affidavit was not objected to by Mr Munro who asked that the Authority give it the appropriate probative value in the absence of the ability to cross-examine.

[30] In his affidavit Mr Thomson said that the “Insomnia Café & Bar” had been operating for most of 2003, and the music tended to be “cranked up” at about 11.30 pm. It was very invasive with a lot of bass. Mr Thomson said his property was zoned residential and the noise was extremely disturbing with the consequence that he often lost sleep.

[31] Neil Monteith Jepsen is an acoustic consultant. He was engaged by Mr Penno to prepare and present evidence regarding the Resource Consent issued to those premises on 15 October 2002 and the noise emissions from the “Insomnia Café & Bar”.

[32] Mr Jepsen has a Master of Science degree with Honours and is a member of the New Zealand Acoustics Society. He has been engaged in electronics for 27 years and sound engineering and acoustics for over ten years.

[33] Before giving his evidence Mr Jepsen commented on the existing Resource Consent and compliance status. He also referred to, and commented upon the report that had been prepared by Malcolm Hunt and Associates on behalf of Matthew Beldham that provided an assessment of potential environmental noise effects when the initial Resource Consent application was made in 2002. Mr Jepsen noted that the report stated that noise would be generated by playing music through the inhouse system, by DJs, and by people entering and leaving the premises, talking, and socialising.

[34] Mr Jepsen then referred to the noise limits on the District Plan, and he said the report noted that the highest potential for adverse noise effect comes from the DJ’s music. He referred to Mr Hunt’s recommendation in his report that the noise level should be lowered by 5 dBA.

[35] Mr Jepsen confirmed that noise from the “Insomnia Café & Bar” contained “special audible characteristics”, and it was his considered opinion that to comply with the District plan the noise level had to be lowered by 5 dBA.

[36] Mr Jepsen carried out noise measurements from midnight to 4.00 am on Sunday 9, 16 and 27 September 2003. Measurements were taken one metre inside the boundary of the nearest residence at 11 Howell Road which is at the intersection of Seaview Road and Howell Road. He said that the significant sources of noise were from the music from the café bar and from patrons in the foyer of the bar. He said that noise from passing vehicles and from people other than those in the bar was excluded by using the pause facility meter.

[37] Mr Jepsen said that on each of the three occasions he took the readings he had slept at the Copperfield Seaside Motel until midnight. On the first two occasions he was awoken at or before midnight by the “beat” of the music before his alarm went off. He said the low frequency “beat” music from the café bar was dominant inside the motel room, and was very audible even with the TV running at normal volume. The tempo was approximately two to three beats per second, and was usually continuous from about midnight until some time after 3.00 am.

[38] On 7 September 2003 the music stopped at 3.05 am but on 27 September 2003 the music continued until 3.45 am. He said the noise from patrons in the foyer and on the footpath was also very noticeable. It was typical of those who were intoxicated. He said the noise level at the nearest residence was about 50 dBA L10 when the door was closed, and it rose by approximately 5 dBA to 8 dBA whenever the door opened. The constant rise and fall in the noise levels was particularly annoying when trying to sleep. It was this noise that awoke him when he was in the motel.

[39] Noise measurements taken from 9 Howell Road, which is approximately 80 metres from the entrance of the “Insomnia Café & Bar”, were over the 40 dBA limit when taken on all three nights. He said the level exceeded the District Plan noise rules by 10 dBA. A 10 dBA increase in noise level makes the sound twice as loud.

[40] Mr Jepsen said that those 15 local residents and business people who gave “notice of written approval” did so in the expectation that noise levels at the boundaries would not exceed 40 dBA L10 at night. He listed six conditions of the Resource Management consent which had not been complied with by “Insomnia Café & Bar”. That list was not exhaustive. He said all of the conditions would be necessary for there to be any realistic chance of the applicant meeting the District Plan noise limits on the residential boundaries, and to comply with the Resource Management Act requirements. He said even if all the consent conditions were met it was still possible that the District Plan noise limits could be exceeded at times.

[41] Mr Jepsen said that the consent conditions recommended by Malcolm Hunt and Associates and adopted by the Kapiti Coast District Council if implemented may provide a workable solution, but the implementation had never occurred. Mr Jepsen said it was also possible that Mr Hunt had not understood the true nature of the activity of the site because his report had referred to a bar/café and not a nightclub. It was Mr Jepsen’s view that the latter description best fitted the operation of the premises.

[42] Mr Jepsen concluded that Insomnia Limited was not complying with the Kapiti Coast District Council noise plan or the conditions of its Resource Consent imposed by the Council. It was Mr Jepsen’s view that the proximity of what was clearly a bar/nightclub to the Residential Zone, made its location unsuitable.

[43] Shea Grant Peterson is the manager of Copperfield Seaside Motel situated at 7-13 Seaview Road, Paraparaumu. He and his partner live on the site 24 hours a day, seven days a week. He said he was familiar with the operation of “Insomnia Café & Bar” because the motels are directly adjacent to the bar. The best description of the activity at “Insomnia Cafe & Bar” was that of a nightclub because the emphasis was on music and dancing. The music was typically techno dance music. It starts at about 11.30 pm when most patrons start arriving at “Insomnia Café & Bar”. The music has particular characteristics including a staccato bass, and a complete absence of lyrics. The music was invariably played at an excessively loud volume. There were a number of factors that aggravated the noise. One of those was that the front doors on Seaview Road were left open. Despite repeated complaints about the noise there had been no improvement in the control of the doors by the bouncers.

[44] Mr Peterson said that a number of the people who arrived at the premises were heavily intoxicated. Their behaviour is very anti-social, with a lot of noise, aggression, and screaming. It was also not uncommon for there to be unsafe driving practices that included sustained loss of traction at the entrance to the premises. Patrons leaving the premises were noisy and destructive. They break bottles, leave litter and destroy signs. Mr Peterson said a lot of truck drivers used to stay at their motel but they have lost that business because of vandalism to the trucks.

[45] He had asked Matthew Beldham to arrange for rubbish to be picked up at the end of the evening but that has seldom happened and Mr Peterson has to pick up the rubbish up after Thursday, Friday and Saturday nights.

[46] Mr Peterson said the noise was highly disturbing to their customers and they have routinely received complaints about noise in the last seven months. The opening of the bar has had a serious impact on their business.

[47] Mr Peterson referred to three specific incidents on 19 June 2003, 18 July 2003 and 1 August 2003 which he had recorded in emails he sent to Mr and Mrs Penno. On the first occasion he was awoken at 1.30 am as a result of excessive noise. Despite his request noise control did not attend the incident. At 2.20 am he got dressed and spoke to Shaun Killalea, the manager of “Insomnia Bar & Cafe”, and he asked him to tell the DJ to turn the music down. Mr Killalea refused. He said the music wasn’t loud. Mr Peterson persisted in his request, and Mr Killalea motioned to the DJ to turn the music down. At that stage a security officer who responds to noise complaints had arrived at the premises, but by then the noise had been substantially reduced. Mr Killalea was told to keep the noise down, and Mr Peterson went back to the motel to sleep. However, he was unable to sleep because the volume of the music had increased. It was his view that “Insomnia Bar & Cafe” had no sincere intention of complying with the noise controls in its Resource Consent.

[48] The second incident was on 18 July 2003. A neon light sign of the motel had been smashed in the early hours of the morning. On Friday 1 August 2003 Mr Peterson and his partner had to repeatedly call noise control because of excessive noise coming from the premises.

[49] Mr Peterson said Matthew Beldham and the operators of “Insomnia Café & Bar” were uncooperative, and had a complete disregard to the interests of others in the community. However, he did acknowledge that there had been a significant difference since 31 October 2003 when the bar’s closing hour had been cut back to 1.00 am. Even complaints from the motel’s customers had stopped.

[50] William Mark Edgar resides at 3 Seaview Road, Paraparaumu. His family has a beach side residence which they have lived at for three years. He is a registered surveyor. In the course of his work he handles applications for Resource Consents and Subdivision Consents, and therefore considers that he has a reasonable knowledge of the Resource Management Act.

[51] Mr Edgar said that before “Insomnia Café & Bar” opened, Mr Beldham approached Mr Edgar and discussed his plans for the use of the premises. He was seeking his neighbours’ consent in respect of his proposals to operate a bar and café. He said that he wanted to operate an elegant upmarket café of the type that was found in the inner city Wellington with dining being a significant part of the business. Mr Edgar was left with the impression that Mr Beldham wanted to establish a quality bar/café that would make a positive contribution to available facilities in the community, and would not cause any disruption to their lifestyle. Mr Edgar said the operation had never been of that character, and the description he was given was misleading. In his opinion the premises operated as nightclub.

[52] He argued that the principal business of the premises is to cater for migrating patrons from establishments that had closed at approximately 12.00 midnight or 1.00 am. There was a strong emphasis on loud music and dancing, and he did not believe that the provision of food played a significant part in the operation of the premises. Mr Edgar gave his consent to Insomnia Limited to obtain a Resource Consent on the basis that it was a bar/café. He did not give his consent to a nightclub.

[53] Over the last seven to eight months Mr Edgar’s family had suffered significant disturbance as a result of the operation of the “Insomnia Café & Bar”. The most significant factor was not the noise of the premises but the conduct of patrons that were trying to get into the premises before 3.00 am, and particularly when they leave after closing time at 3.00 am. Until this establishment was opened, migratory drinkers were not a problem in Paraparaumu. He said more often than not in the early hours of the evening and early morning, there were significant numbers of people in the immediate vicinity of the entrance waiting to get in. Anti-social behaviour routinely occurred at that time. He said the noise and “hi-jinx” is incredibly disturbing, and the noise was most intrusive. On three occasions they have had to call the Police to ensure that public peace was maintained.

[54] Recently, when Insomnia Limited applied for an extension of its temporary authority and the Council restricted its hours to 1.00 am, there had been a remarkable improvement in the general behaviour of patrons. There had been fewer migratory drinkers and less noise.

[55] Michael George Coleman is a Senior Sergeant in charge of the Kapiti Police. He said the grounds for the Police opposition was poor management of the premises. Senior Sergeant Coleman referred to three incidents where Mr Beldham was the manager on each occasion. The first was on Saturday 9 August 2003 when the manager was warned for having a number of intoxicated persons present in the bar.

[56] The second incident was on Sunday 24 August 2003 at 1.30 am when two plain clothes Police Officers were in the bar carrying out observations on unrelated matters. They observed about ten people who became involved in fights and disorder outside the bar. All of those people had been inside the bar and several were intoxicated. He said that Mr Beldham was charged pursuant to s.168(1)(a) of the Sale of Liquor Act for allowing intoxicated persons to remain on licensed premises. The matter had been set down for a defended hearing in the Porirua District Court. In those circumstances the evidence has not been used when considering the issue of suitability.

[57] The third incident was on Friday 24 October at 2.30 am when the Police were called to fighting outside the premises. Up to eight persons were fighting. At 3.00 am the Police were again called to the bar where more people were fighting on the street. A large number of the people were intoxicated. The bar was closed and the Police spoke to the duty manager, Mr Beldham, about the incident.

[58] Senior Sergeant Coleman advised that Mr Beldham works full time elsewhere during the day and covers as manager of the “Insomnia Café & Bar” at night. He believed that Mr Beldham could not carry out his managerial responsibilities while operating from behind the bar. He noted that prior to opening the bar on 1 February 2003, Mr Beldham had no previous experience in the liquor industry. He thought that the premises were the most badly managed licensed premises in the district.

[59] David Stone is a Constable stationed at Kapiti. From January 1997 until December 1999 he was a Constable attached to the Wellington Police Strategic Response Group. Its members are a specialised group of officers responsible for controlling disorders, crowd control, and the policing of licensed premises. He said he therefore had a sound understanding and extensive knowledge of the liquor licensing legislation.

[60] At 9.00 pm on 23 August 2003, he commenced night shift duty with Constable G Cooper. At about 1.30 am on 24 August 2003 they went to “Insomnia Café & Bar”. They were in plain clothes. Immediately upon entering the bar they saw two females fighting and resisting attempts to eject them. Two “bouncers” parted them.

[61] As soon as the “bouncers” took the two females outside two other females started fighting. The fight went unchecked yet it was in full view of the bar and bar staff. All the females involved in the fighting were very intoxicated. Constable Stone noted that one of the females was so intoxicated she spilt drinks as she walked back across the room.

[62] For the next hour, Constable Stone spoke with numerous patrons all of whom he opined were intoxicated to the point that they should not have been served alcohol or allowed to remain in the bar. All of them were able to go to the bar, and purchase alcohol without being questioned.

[63] Constable Cooper pointed out to Constable Stone a male who was staggering around bumping into people and being a general nuisance. He had trouble standing unaided and at times used the bar to steady himself.

[64] At 2.30 am Constables Cooper and Stone left the bar, and they watched the entrance from an unmarked Police car. Within five minutes a fight broke out directly outside the bar involving three females. Two males immediately joined them. One of the males was so intoxicated he could hardly walk. He was the male that Constable Cooper had earlier pointed out to Constable Stone in the bar. Constables Cooper and Stone called for assistance. By the time the assistance arrived there were about ten people fighting. The Police made five arrests.

[65] Constable Stone opined that the Police were faced with an unnecessary and potentially riotous situation at closing time as a direct result of the bar manager’s inability to restrict the sale of alcohol to intoxicated patrons, and remove them from the premises. It took about 30 to 45 minutes for the Police to get the fighting and disorderly behaviour under control.

[66] Aroha Gaye Ball is the Licensing Inspector for the Kapiti Coast District Licensing Agency. Her evidence was supplementary to her report of 9 May 2003. When she prepared that report, she had no objection to an on-licence being granted to the applicant to operate a licensed café/bar. Mr Beldham’s Resource Consent application stated he was proposing to establish an “upmarket café/bar” for “fine dining/city style café food, and serving alcohol”. Mrs Ball said the application form did not mention that there was to be an entertainment venue or nightclub on the premises.

[67] Mrs Ball said when the premises opened on 1 February 2003, the public greeted it with great expectation because the premises had become widely known locally as a new bar with late closing. In her report Mrs Ball had referred to some problems during the first few weeks of operation because of the large number of noisy prospective patrons expecting to be admitted. At the time she felt that once patrons realised they could not gain entry if they were already intoxicated, or not properly dressed, or the premises could not accommodate the extra numbers, the problem would soon settle down.

[68] She said that it became apparent during the next few months that the style of the premises had changed from what she had believed was to be an upmarket café/bar, to a venue where people did not go until the latter part of the night. The premises ceased opening during the day for lunches and were only open only on Thursday, Friday and Saturday nights. That was confirmed by advertisements in the local newspapers that said that the entertainment started at 10.00 pm or 11.00 pm and continued until 3.00am.

[69] On 30 October 2003, the District Licensing Agency after a hearing for an application for a further temporary authority, reduced the closing hour of the premises from 3.00 am to 1.00 am the following day. Mrs Ball noted that the changed hours had produced a marked reduction in the number of complaints of noise nuisance (music) and unruly behaviour.

[70] Mrs Ball had no objections to an on-licence being granted to operate the style of premises that was described in the applications for the Resource Consent and the liquor licence. In that event, she recommended a further reduction in the operating hours from 1.00 am the following day.

[71] Kevin Bruce Jefferies is the manager of Consents and Compliance for the Kapiti Coast District Council. He is also the secretary of the District Licensing Agency. Mr Jefferies said that the purported certificate pursuant to s.9(1)(e) was in effect a report from Ms April Peckham, a planner for the District Council. He said that the Council was not prepared to certify that the premises met the requirements in the Resource Management Act 1991 because the conditions contained in the Resource Consent had not been complied with. Mr Jefferies said that a certificate pursuant to s.9(1)(e) of the Sale of Liquor Act 1989 would have been issued if the applicant had met the conditions of the Resource Consent. He argued that the present “certificate” no longer had any validity.

[72] Mr Maassen made written submissions that were well researched and very helpful. He submitted that the objectors opposed the grant of an on-licence on three grounds. They were:

• [a] The Authority did not have jurisdiction to grant the application because there was no valid certificate from the local authority in accordance with s.9(1)(e) of the Act;
  
• [b] That the proposed use of the premises did not meet the requirements of the Resource Management Act 1991. In addition, notification of the application for the on-licence was not made in accordance with the prescribed regulations.
  
• [c] The applicant was not a suitable person to hold an on-licence within the meaning of s.13(1) of the Act. That was demonstrated by:
  
  • [i] The behaviour of patrons entering and leaving the premises demonstrating a high degree of intoxication and anti-social behaviour;
    
  • [ii] Persistent failure to comply with the law, and in particular, the provisions of the Resource Management Act 1991;
    
  • [iii] A failure to avoid unreasonable noise.
    
• [d] That a condition be imposed limiting the closing time to 11.00 pm having regard to the above factors and the provisions of s.14(7) of the Act.
  

[73] Mr Maassen submitted that the document provided under s.9(1)(e) of the Act was not a certificate as required by that section. He referred to the wording of the document and said that the document did not certify that the proposed use complied with the Resource Management Act. The document that was signed 18 March 2003 by April Peckham was in the form of report and made a recommendation. There were no words of certification. Nor was there a certificate by a duly authorised officer of the Kapiti Coast District Council that the proposed use complied with the District Plan.

[74] He said the requirement for a certificate pursuant to s.9(1)(e) of the Act was mandatory, and non compliance was fatal to the application. Mr Maassen said it appeared that the Council was unable to give a certificate, and although the reason had not been ascertained from the Council, the objectors understood it was for two reasons:

[a] The proposed use of the premises was that of a nightclub for which consent had not been granted and was a non-complying activity under the Operative District Plan;

[b] The applicant had failed to comply with the conditions of consent for a café/bar imposed in the Council’s decision dated 15 October 2002.

[75] Because compliance with the Resource Management Act was a pre-requisite for the grant of an on-licence it would be inappropriate for the Authority to grant a licence, the utilisation of which would be an offence under other legislation.

[76] Mr Maassen said that the site was a commercial/retail zone, and under Rule D.3.1.4 of the District Plan, places of assembly were a non-complying activity. Pursuant to s.9 of the Resource Management Act an activity that otherwise contravened a District Plan was unlawful unless “expressly authorised by a Resource Consent”.

[77] Mr Maassen said that Mr Beldham had sought consent for the continued operation of the “Silver Dragon Restaurant” as a bar/café/restaurant. He referred to Mr Beldham’s application for land use consent and noted that at Clause 4 Mr Beldham had stated:

“The application involves the continued operation of the Silver Dragon restaurant as a bar/café, selling high quality café food and serving alcohol and associated effects as described in the assessment of effects forming part of this application.”

[78] Mr Maassen noted that the decision of the Council dated 15 October 2003 said “that the proposal must be in accordance with the information submitted with the application RM 20231.” Mr Maassen submitted that in substance the proposed use of the premises was a nightclub. That use was not expressly authorised by the Resource Consent which only permitted the premises to be used for a café/restaurant.

[79] The applicant had also been unable to comply with the conditions of consent regarding noise which was mentioned in the Abatement Notice issued by the Kapiti Coast District Council on 20 October 2003.

[80] In addition, Mr Maassen submitted that the applicant’s public notification of the on-licence was defective because it had not accurately described the business to be undertaken, and had not complied with Reg. 4 of the Sale of Liquor Regulations 1990 that required public notice to be advertised twice. The opportunity for public participation in licensing applications was an important pillar in achieving the object of the Act. Therefore, that lack of compliance was a material error, which could mislead a reasonable member of the public as to the true nature of the activity proposed on the premises. He said absolving inaccuracies of this nature was contrary to the intention of the Act. He referred to s.26 of the Interpretation Act 1999 which provides that:

“A form is not invalid just because it contains minor differences from a prescribed form as long as the form still has the same effect and is not misleading.”

[81] Mr Maassen said that both the public notice and the application stated that the general nature of the business would be that of a café/bar. However, the evidence demonstrated that it was a materially inaccurate description of the true nature of the business conducted by the applicant. A reasonable person reading the notice would not have recognised the true nature of the activity proposed.

[82] Mr Maassen submitted that the applicant was not a suitable person to hold an on-licence because it had demonstrated a lack of appreciation of host responsibility. The behaviour of patrons entering and leaving the premises testifies to that. It was also plain that the applicant had a disregard for the law because the conditions of the Resource Management consent had not been complied with for ten months. There was continual non-compliance with the District Plan standards, which the applicant said he would comply with in his application. Noise monitoring had demonstrated non compliance on five occasions in August and September 2003. He said that the applicant’s failure to comply with the Abatement Notice issued by the Council on 20 October 2003 was an offence under the Resource Management Act. The Abatement Notice had required compliance by 20 November 2003.

[83] Mr Maassen referred to Hayford v Christchurch District Licensing Agency (High Court, Christchurch, AP 201/92, 3 December 1993) where Holland J said:

“Deliberate failure to carry out conditions attached to the licence or the term of the licence must be a strong factor justifying a conclusion that the holder was not a suitable person to hold the licence.”

And in K and J Fraser Limited v Major [2002] NZAR 466 at paragraph 39 Chambers J said:

“I accept, however, that were a licensee of licensed premises to run his or her business in a way which showed a flagrant disregard or contempt for noise levels imposed in a Resource Consent, it could reflect on the operator’s entitlement to an on-licence.”

[84] Mr Maassen submitted that if the Authority concluded that the applicant was not unsuitable then the objectors submit that the closing hours should be restricted to 11.00 pm. If, as the applicant states, the premises is a café/bar, then a closing time later than 11.00 pm would not be necessary. In view of the problems that had arisen and the noise issue, a closing time of 11.00 pm was appropriate. In that respect Mr Maassen referred to the decision of O’Reagan J in Sheepys Ltd v Manukau District Licensing Agency [2002] NZAR 603 and the decision of the Authority in Paihia Salt Water (2001) Limited where the Authority stated that noise was not just a Resource Management issue. The escape of noise (particularly music) is an example of bad management.

[85] Mr Munro sought time to supply submissions in response to Mr Maassen’s unexpected submission regarding the validity of the certificate pursuant to s.9(1)(e) of the Act.

[86] Mr Maassen submitted that if the applicant wanted a nightclub it had to reapply for a Resource Management Act Consent.

[87] Senior Sergeant Coleman submitted that the Police were concerned with the poor management of the premises by Mr Beldham. The Police were also concerned that two witnesses had been misled by the applicant’s application for a high-class restaurant. Senior Sergeant Coleman submitted that all along the premises had been running as a nightclub. Senior Sergeant Coleman noted that Ms Vicki Keegan’s letter of support of 25 November 2003 had referred to the premises as a nightclub.

[88] On 10 December 2003 the Authority received closing submissions from Mr Munro in response to the challenge to the s.9(1)(e) certificate and the jurisdictional question as to whether the Authority could grant the application for an on-licence.

[89] Mr Munro submitted that although the certificate was not precisely worded for the purposes of the Sale of Liquor Act 1989 the intent of the certificate was nevertheless plain. He submitted that the applicant had not caused the difficulty, and imprecision from local authorities in such matters was not uncommon.

[90] Mr Munro noted that officers of the Council including its experienced Inspector and the Secretary of the Agency, had by their actions, continued to accept its validity by forwarding the complete file for determination by the Authority at a public hearing pursuant to s.106(2) of the Act. The District Licensing Agency had also granted a further temporary authority on 30 October 2003 “until such time as the substantive on-licence hearing decision is written and released by the Liquor Licensing Authority”.

[91] Mr Munro noted that the jurisdictional point arose in closing by objector’s counsel without prior notice to the Authority or the parties. He submitted that the certificate had been accepted by all parties except one of the objectors until the present challenge arose. Mr Munro referred to the Authority’s decisions in J A and J Williamson LLA 1505/95 and F Donaldson LLA 1507/96. He submitted that the Authority had jurisdiction to determine the application, and to consider the application in terms of the criteria for s.13 of the Act despite the imprecise wording of the certificate.

[92] Mr Munro said that if the submission was not accepted by the Authority then in fairness to the applicant an indication should be provided to the applicant and other parties to enable continuity of the business through either an application for an immediate further temporary authority order or a special licence application to the Kapiti Coast District Licensing Agency.

[93] We have to say that we would not be inclined to follow that submission. The applicant said at the beginning it intended to run the premises as a restaurant in accordance with the Resource Consent, and there is no reason in our view why the premises could not be run as a restaurant. In fact, Mr Munro submitted that if the Authority found that it did have jurisdiction to deal with the application then the applicant would amend the modus operandi of its business to ensure that the Resource Management Act problems were overcome. He said that the applicant would then concentrate on the restaurant and food aspect of its business, consider a name change, employ a chef on a near full time basis, provide a more extensive menu, and alter the décor to emphasise the restaurant/dining purpose of the premises. He submitted that consequentially the noise emission problems could then be expected to cease.

[94] As regards the applicant’s suitability, the applicant had every incentive to make the business succeed and cooperate with neighbours. Mr Munro noted that Mr Beldham already holds a General Manager’s Certificate, and the supporting evidence of Messrs Spiekerman and Robb presented a favourable picture as did the other letters of support that were produced at the hearing.

[95] Mr Munro submitted that the evidence showed the applicant had acted responsibly, although perhaps slowly. He submitted that although the Police view was less than favourable, it was perhaps coloured by the incident on 23/24 August 2003 which resulted in a prosecution that was yet to be heard. He noted also that the Inspector’s evidence was broadly supportive other than on the question of closing hours. He submitted the applicant was deserving of another chance considering the evidence as a whole.

[96] Mr Munro’s submissions were forwarded to Mr Maassen and his response was received on 18 December 2003. Mr Maassen submitted that pursuant to a decision of Gallen J in Kyriak v Opua General Store Limited [1993] NZAR 176, that decision made it plain that a certificate under s.9(1)(e) of the Sale of Liquor Act must contain words in the nature of a certificate such as “certified”. Such words were absent in the document that the Council produced.

[97] Mr Maassen reiterated that Mr Jefferies had accepted that the “certificate” (report by Ms Peckham) was not a certificate in terms of the Act nor was he prepared to certify that the activity was authorised by the Resource Management Act. The Council’s Abatement Notices also remained in force.

[98] Mr Maassen submitted that despite the applicant’s submissions regarding future behaviour the applicant had to be judged on the basis of what the site was being used for at the time of the hearing. He submitted that Mr and Mrs Penno had no confidence at the present time that the applicant would comply with the Resource Management Act or indeed the Sale of Liquor Act, and the Council’s Abatement Notices have still not been complied with.

The Authority’s Conclusion and Reasons

[99] Section 9(1)(e) of the Act provides that:

9. Applications for on-licences
   

Every application for an on-licence shall-

(e) Where the application relates to any premises, be accompanied by a certificate by the local authority that the proposed use of the premises meets [requirements of the Resource Management Act 1991 and of the building code].

[100] The Certificate pursuant to s.9(1)(e) provided as follows:

APPLICATION FOR A LIQUOR LICENCE PURSUANT
TO SECTION 9(1)(e) OF THE SALE OF LIQUOR ACT 1989

APPLICANT: Insomnia Limited

PROPOSED TRADING NAME: Insomnia Café/Bar

LOCATION: 10 Seaview Road, Paraparaumu Beach

LEGAL DESCRIPTION: Unit F & AU 3 & 4 on Unit Plan 48241

OWNER: Matthew Beldham

ZONE: Commercial/Retail

ACTIVITY STATUS: Café – Permitted ----- Bar – Non Complying

EXISTING RESOURCE CONSENT: RM020231

DATE CONSIDERED: 18 March 2003

PROPOSAL: A change of ownership of the lease has resulted in the need to obtain a new on-licence to sell liquor within the premise. It would appear that the premise is being converted from a restaurant to a Café-Bar.

PLANNER: April Peckham

1.0 DISTRICT PLAN

The site is zoned Commercial/Retail. The existing café is permitted to operate within this zone as lone as it continues to comply with all the permitted activity standards, particularly those relating to noise, lighting and traffic movements.

The operation of a bar in conjunction with the café would mean that the activity would fall into the definition of a place of assembly (D.3.1.4 (xi)).

A resource consent has been granted to the applicant, and therefore the conditions of the consent must be met so that the objectives and policies of the District Plan are complied with.

2.0 RECOMMENDATION

Accordingly the proposed use of the building is a non-complying activity, but has been granted resource consent (RM020231) allowing it to operate as a café-bar (place of assembly), provided that it complies with all of the conditions of its resource consent, and the permitted activity standards set out in the commercial retail zone of the District Plan.

3.0 CONDITIONS

1. The proposed activity shall comply with the resource consent RM02031 and all the permitted activity standards set out in the commercial retail zone of the Proposed District Plan.

Report Prepared By: Report Peer Reviewed By:

April Peckham Trevor Garnett
Resource Consents Planner Senior Resource Consents Planner

[101] We agree that the purported certificate pursuant to s.9(1)(e) of the Act provided by the Kapiti Coast District Council was actually a report prepared by April Peckham, Resource Consent Planner for the Council. The document was countersigned by Trevor M Garnett, a Senior Resource Consents Planner as a “report peer reviewed by” Mr Garnett. Nowhere in the document does it state that it is certifying that the proposed use of the premises meets the requirements of the Resource Management Act 1991. A similar situation arose in Kyriak v Opua General Store Limited [1993] NZAR 176 where the Court was required to consider whether a letter from a private planning consultant for the Council for an application for an on-licence pursuant to s.31 of the Act was a certificate in form. That section is a mirror of s.9 of the Act. In that case the letter simply confirmed that the Opua General Store Limited enjoyed existing use rights within the meaning of the Town and Country Planning Act and that the writer certified that the proposal would satisfy the requirements of the District Scheme.

[102] Gallen J held:

“In my view s.31 contemplates that decisions as to planning aspects of the matter are to be made by the local authority and certified in the certificate. In this case no such certificate was provided. The local authority clearly abrogated its function and left it to the Liquor Licensing Authority to make it. I do not think such a certificate is what is contemplated by s.31(1)(e), or that the letter is the kind of certificate which is contemplated by the section.”

[103] That situation is on all fours with the present application and accordingly we find that the report provided by Ms Peckham is not a certificate for the purposes of s.9(1)(e) of the Sale of Liquor Act 1989.

[104] It follows that as the application was not accompanied by a certificate by the local authority that the proposed use of the premises meets the requirements of the Resource Management Act 1991, the Authority therefore has no jurisdiction to entertain the application. It is fundamentally flawed. The fact that the document was imprecisely worded and had been acted on by the District Licensing Agency and the applicant and accepted by them as a genuine certificate does not make that document valid for the purposes of the Act.

[105] Mr Munro submitted that the applicant was suitable to be the holder of an on-licence. In the course of his submissions, he said that the applicant intended to amend the modus operandi of its business by converting it into a restaurant and concentrate on the food aspect of its business. It was apparent from the evidence that the applicant, through Mr Beldham, has brought the current situation upon itself by not complying with the original intention stated in the application for the Resource Consent and the application for the on-licence. The applicant intended to operate a restaurant as a bar/café selling high quality café food. By not complying with that intention and converting the premises to another use outside the terms of the resource consent, he has not only been the subject of an unnecessary public hearing, but he has also seriously called into question his suitability as an operator of licensed premises.

[106] Whether the company is suitable to hold an on-licence in the future will very much depend on the actions taken by it following the release of this decision. In light of the evidence which we heard, Mr Beldham must know that if a licence is granted, then the hours of operation will be closely looked at.

[107] Accordingly, pursuant to the Act, this Authority has no jurisdiction to grant the application for an on-licence and the application must therefore be refused.

DATED at WELLINGTON this 29th day of January 2004

Judge E W Unwin Mr J C Crookston
Chairman Member

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