Ambrosia Restaurant Limited [2004] NZLLA 834 (1 December 2004)

Last Updated: 23 January 2012

Decision No. PH 834/2004

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by AMBROSIA RESTAURANT LIMITED pursuant to s.18 of the Act for the renewal of an on-licence in respect of premises situated at 76 Golf Course Road, Wanaka, known as “Ambrosia Restaurant”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E B Anderson
Member: Mr J C Crookston

HEARING at QUEENSTOWN on 13 October 2004

APPEARANCES

Mr B A Boivin - for applicant
Ms T Surrey - Queenstown-Lakes District Licensing Agency Inspector - to assist
Mr C K Steven - for Mr D G McKinlay - objector
Mrs B Rennie - objector

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an application by Ambrosia Restaurant Limited for renewal of its on-licence in respect of premises situated at 76 Golf Course Road, Wanaka. The authorised hours for liquor sales are between 12.00 noon and 11.00 pm daily. No changes are sought to the conditions of the licence.

[2] The reporting authorities did not oppose the application for renewal.

[3] Public notification attracted two letters of objection from neighbouring residents. Both of the objectors referred specifically to a function on the premises on 5 February 2004 from which an unacceptable level of noise emanated. Peripheral concerns in relation to parking, the erection of an awning and occupancy in contravention of the resource consent, were also raised.

Background

[4] In 1997 the previous owners of the premises, Mr and Mrs Gessler, applied for a Land Use Consent to erect a Tuscan style building for a small Italian restaurant. Their application was declined in a decision of the Queenstown-Lakes District Council on 27 May 1997. Mr and Mrs Gessler appealed that decision to the Environment Court. On 22 December 1997 Judge J R Jackson allowed the appeal subject to certain conditions. Those conditions included; an accessway for large vehicles to service the restaurant, carparking was limited to eight spaces, the hours of operation were restricted from noon until 11.00 pm, outdoor dining was prohibited after 9.00 pm, and live entertainment outdoors including any speakers or sound systems providing recorded entertainment outside the building were also prohibited. In addition, the steady noise at the boundaries of the property, was not to exceed the following levels when measured or assessed on an hourly basis:

Day time 0800 to 2000 hours 50 dBA L10
Night time 2000 to 0800 hours 40 dBA L10

At the boundary of any sight the maximum sound level shall not exceed:

Day time 0800 to 2000 hours 60 dBA Lmax
Night time 2000 to 0800 hours 50 dBA Lmax

Noise levels were to be measured and assessed in accordance with the New Zealand Standards.

[5] These conditions still apply to the applicant’s premises.

The Applicant’s Evidence

[6] Carl Justin Atkinson together with his mother Susan May Atkinson, her partner Richard Heathfield and a trustee company, is a shareholder of Ambrosia Restaurant Limited. Ms Atkinson and Mr Heathfield are directors of the company.

[7] In June 2001, Mr and Mrs Gessler subdivided the land retaining that on which the restaurant is sited. The other portion was sold to Mr and Mrs McKinlay.

[8] Ambrosia Restaurant Limited was established in August 2002 and purchased Mr and Mrs Gessler’s business formerly known as “Toscana Restaurant”. On 2 December 2002, Ambrosia Restaurant Limited obtained a temporary authority to operate the restaurant. On 18 March 2003 an on-licence was granted. That licence expired on 18 March 2004.

[9] On 19 February 2004, Ambrosia Restaurant Limited lodged an application to renew its on-licence, which subsequently attracted two objections from Mr McKinlay and Mrs Rennie.

[10] Mr Atkinson drew the Authority’s attention to the Inspector’s report of 20 April 2004, which said that, the “licensee appears to be experiencing no difficulties with running the premises in compliance with the licence and the Act.” and the reporting agencies did not have any opposition to the application.

[11] Mr Atkinson is a qualified chef with 13 years experience in the United Kingdom as well as in New Zealand. He said the restaurant was aimed at serving the top end of the Wanaka market. The restaurant seats 28 people, and is generally open every night for dinner and occasionally for lunch. He referred to various reviews, as well as two letters from tourism operators, praising the premises.

[12] Mr Atkinson contended that Mr and Mrs McKinley knew when they were building a new house that it was going to be in close proximity to a restaurant. He referred to a photograph showing the McKinlay’s house being constructed next to the restaurant.

[13] In about September 2003 Ski Limited, the owner of the land on which the “Ambrosia Restaurant” and accompanying house stands, offered the property for sale. A seriously interested purchaser, in completing due diligence, anticipated extending the restaurant premises. Having obtained approval from the directors of Ski Limited, he spoke to Mr McKinlay. Mr McKinlay was opposed to any extension, and threatened to go to the High Court if necessary to stop it. Consequently, the sale did not go ahead. Subsequently, there was a heated verbal exchange between Mr Heathfield and Mr McKinlay, in which intemperate language was used by Mr Heathfield.

[14] On 5 February 2004 a wedding was held at the “Ambrosia Restaurant” for a friend of Mr Atkinson’s family. It was a private function and roadside signs to that effect were put in place. A canvas structure was erected over the paved patio area which is part of the licensed premises. The wedding commenced on the property at 3.30 pm. Bagpipes were played to welcome the bride and groom to the premises. It was accepted that the bagpipes were played once more at 9.30 pm, at the request of the bride’s mother. Dancing also took place within the restaurant building and the doors and windows were closed. Music was provided by way of four internal speakers inside the restaurant. There were no speakers outside the premises. The music was turned off by the duty manager at 11.15 pm. Mr Atkinson said that at no time did Mr or Mrs McKinlay or Mrs Rennie make any noise complaint to the restaurant manager, or to any other person on the premises.

[15] In respect of Mr McKinlay’s objection, Mr Atkinson said that the only bus company that uses the restaurant and parks its bus outside the premises is a Canadian tour company which conducts bicycle tours. Mr Atkinson contended that the number of persons on that tour never exceeds 24. Because of its size the bus has to be parked on the grass frontage of the restaurant rather than in the carpark.

[16] In respect of Mrs Rennie’s objection, Mr Atkinson said that the “Ambrosia Restaurant” had never allowed a disc jockey to operate the premises. A stereo provided the only music at the premises. Only the wedding party and their guests attended the restaurant at the time of the wedding. The awning over the patio was not intended to cover seating for extra people.

[17] Mr Atkinson asked that the on-licence be renewed for a further three years. He assured the Authority that there would not be another wedding function at the premises. The shareholders and directors of Ambrosia Restaurant Limited had carefully read the objections and would ensure that there would not be any repeat of the incidents referred to.

Objector’s Evidence

[18] Bridget Mary Rennie lives in Golf Course Road close by to the restaurant. Her main reasons for objecting to the renewal of the licence related to the suitability of the applicant, the conditions attached to the licence, and the manner in which the licensee had conducted the sale and supply of liquor pursuant to the licence.

[19] Mrs Rennie said that the most obvious breach of the conditions of the licence occurred when the wedding was held on 5 February 2004. She asked the Authority to confirm that this was a breach of the on-licence and to ensure that there would be no repetition.

[20] The on-licence held by Ambrosia Limited permits liquor to be sold: “On such days and during such hours as the premises are being operated as a restaurant...” Section 2 of the Act provides: “Restaurant” means any premises in which meals are regularly supplied on sale to the public for consumption on the premises.” It is a common feature of restaurants that from time to time members of the public may book the whole of the premises for a private function. Providing the premises is operating as a restaurant when supplying liquor to the attendees the licensee is not breaching the conditions of its licence. As there was no evidence to the contrary we find that the “Ambrosia Restaurant” was being operated as a restaurant in accordance with the conditions of the licence.

[21] Mrs Rennie also referred to breaches of the resource consent and the conditions imposed by Judge Jackson. In particular she referred to restrictions on the amount of noise allowed from the restaurant. She noted that the noise levels would be breached if a band were allowed to play on the premises.

[22] Mrs Rennie was unable to provide any evidence of the amount of noise emanating from the restaurant. While it is likely that the sound levels from the bagpipes would have exceeded the resource consent conditions we note that it was on two apparently short occasions on one day, and there has been no repetition since.

[23] Mrs Rennie also suggested that the layout of the restaurant had changed, and that advertisements indicated that the number of tables currently being used on the premises exceeded the number for which the resource consent was issued.

[24] She also drew the Authority’s attention to the noise generated at night from revving of bus engines while waiting to take customers home, and the slamming of car doors well after closing hours.

[25] Mrs Rennie accepted that the restaurant was an amenity in the town and all she wanted was for the business, which was in an area zoned rural-residential, to operate in the same manner as when the original owners had operated the restaurant.

[26] Donald Gordon McKinlay and his wife live on an adjoining property to the restaurant. They objected to the renewal of the on-licence for “Ambrosia Restaurant” because in their view the business was being conducted in a manner, which made it incompatible with the rural residential amenity they thought they would enjoy when they built their house. It appeared to Mr and Mrs McKinlay that the applicant wanted to maximise its business investment, which was incompatible with their expectations.

[27] Mr McKinlay referred to the history of the restaurant, and how its character had changed since they purchased the adjoining land. Although the restaurant existed before they purchased their property they knew what to expect, and what the Gessler’s intended to establish on the site. He said that he and his wife had dined at the restaurant on a number of occasions when the Gesslers ran it. The atmosphere was that of a small, quiet, and intimate restaurant with a Tuscan theme, a wood fired pizza oven, but no bar. The carpark was small, catering for approximately eight cars, and noise was not an issue.

[28] Since October 2002 there had been a number of changes. The District Plan had been changed and the surrounding area which was originally Rural, now became Rural Residential. Neighbouring land had been subdivided and occupied for residential use. However, the restaurant was the only commercial premises in the vicinity.

[29] Mr McKinlay said that since the present owners took over the restaurant there had been a change in the way that it had been operated. He said that the kitchen was upgraded. Alterations were made to the office, and a bar was constructed on the premises. The carpark was excavated and expanded. An industrial extractor fan was installed, which added to the noise emanating from the premises. Mr McKinlay referred to an advertisement, which stated that that the restaurant had 54 seats, 30 inside and 24 outside.

[30] Mr McKinlay said that about six months after the present owners had purchased the property it was put up for sale again. In early 2003 Mr McKinlay had a conversation with Mr Ritchie Heathfield when he inquired whether there had been any interest in the property. Mr Heathfield advised Mr McKinlay that if the property did not sell he would simply double the size of the restaurant. Mr McKinlay said that the alarm bells then started ringing for him. Over the last 18 months there had been a noticeable increase in the intensity of use in other premises, which had led to more noise and disturbance. Mr McKinlay referred to the bicycle tour bus which visited the premises regularly and left between 10.30 pm and 11.00 pm. The idling of the bus engine before it left the premises was a real disturbance to his family.

[31] Mr McKinlay referred to the wedding on 5 February 2004, the music which had played throughout the night, as well as the disturbance caused by the bagpipes. He said although the wedding was a “one off”, he thought that the applicant’s attitude towards the peace and quiet of the neighbourhood was cavalier. He referred to other functions which had occurred at the premises. The first was a 50th birthday party during the day when he counted 23 cars in the carpark, the neighbouring property, and on the roadside. In August 2004 there was a lot of outside noise when another party continued until well after midnight. Mr McKinlay said that the restaurant was no longer the quiet owner/operator venture that he and his wife had expected and for which consent had been given. He referred to the verbal altercations that he had had with Mr Heathfield, and the tensions which had arisen between them over Mr McKinlay’s opposition to a proposal to extend the restaurant.

[32] Mr McKinlay expressed concern about the advertisement for the restaurant as a 54-seat restaurant which, in his view, had never been contemplated. He and his wife were also concerned that whenever the interests of the restaurant and the McKinlay’s domestic interests conflicted, the applicant was never prepared to make any concessions. He said they did not want buses or trade vehicles accessing the carpark which was a major disturbance. He said their lives had been made very uncomfortable by the ongoing tension.

Objector’s Submissions

[33] Mr Steven submitted that this case was a classic clash between rural residential amenity versus commercial activity. He submitted that the position was not yet out of control, but there was potential for that to happen “unless the reins are drawn more tightly.” In broad terms the applicant had a commercial investment which it wanted to maximise, and the nature of the activity next door had altered in character and intensity. In particular, that activity had developed beyond the scale contemplated by the resource consent. On occasion, the applicant had failed to comply with the conditions of its licence, which was not consistent with the resource consent. Further, the applicant’s lack of respect for the rights of the objector had resulted in hostility, intimidation and minor retribution.

[34] Mr Steven noted that the Environment Court decision referred to the purpose of the land use consent was to establish a “small Italian restaurant”, and the floor plan accompanying the decision showed seating indoors for 24 persons, but it did not show any outdoor seating. He referred to a gap between the liquor licence conditions and the resource consent, whereby the outdoor area is part of the licensed premises, and the liquor licence permits liquor to be consumed on the premises until 11.00 pm. However, the resource consent only permits dining in the outdoor area until 9.00 pm.

[35] Mr Steven referred to the judgment of McGechan J in Buzz and Bear Limited v Woodroffe [1996] NZAR 404 at 410 where His Honour said that:

“Times change. Communities and environments change. Social habits and levels of tolerance change. Obviously it would have been seen by the legislature to be wise to keep conditions imposed under review in light of potential social change. The licensee’s submissions would have licence conditions frozen in some time warp while the world marches on; not, even in the arcane world of liquor licensing, a likely legislative intention. Section 4 interpretation directives align with common sense to point towards allowing the Authority to engage in the wider perspective. It can keep its eye on wider trends and needs in a specialist area where it has unique, and uniquely current expertise. Any licensee takes a licence under the risk that conditions may change, and a report may recommend adjustment. There is no asset protected for all time whatever may happen inside.”

[36] Mr Steven also referred to two other cases. The first was Meads Brothers Limited v Rotorua District Licensing Agency CA46/01 (Court of Appeal 30 April 2001) where the Court held that there was no obligation by the Authority to have regard to the financial viability of an applicant. The second was Sheepys Limited v Manukau District Licensing Agency [2002] NZAR 603 where O’Regan J held that the Authority was entitled to consider the impact of noise as an aspect of the manner in which the licensee had conducted the sale and supply of liquor.

[37] Mr Steven submitted that Mr McKinlay does not want the application for renewal declined. He asks that the applicant comply with the conditions of its licence and the resource consent

Authority’s Conclusion and Reasons

[38] Sections 22 and 23 of the Act provide:

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.

[39] Although there have been breaches of the resource consent conditions we do not find them to be sufficient to call into question the applicant’s suitability and, therefore, to deny the applicant renewal of its on-licence, as we recently had occasion to do in an application by Nicholas James Saunders and Patrick George Thompson LLA PH 782/2004.

[40] In A R and M C Holdings Limited v Countdown Properties Limited (1990) 14 NZTAA 362,381 McGechan J said:

“Town planning laws regulate an increasingly fractious commercial and social environment. They are important, and exist to be obeyed, not disregarded.”

[41] The Authority has said on a number of occasions that the enforcement of matters under the Resource Management Act is outside its jurisdiction. We suggest that such matters as the extension of the carpark, the erection of an awning, any increased seating on the premises, the car parking, the parking of tour buses and any change in character of the restaurant should be brought to the attention of the relevant authority.

[42] We have also said that where there is no opposition from the reporting authorities to an application, objectors have a difficult task to persuade the Authority that the applicant is unsuitable.

[43] Both objectors were concerned about the issue of noise, and in particular music that emanated from a wedding celebration on 5 February 2004. That incident has not been repeated and Mr Atkinson assured us that the applicant has no intention of having wedding celebrations on the premises again.

[44] Both objectors referred to bus and traffic noise and Mr McKinlay referred to two other incidents of noise when parties were held on the premises. One of them occurred during the day. However, in respect of those two incidents there was no evidence of complaints to, or action by, the Council’s Noise Control Officer.

[45] For the benefit of the applicant, we repeat our views on the issue of noise from Paihia Saltwater (2001) Limited LLA PH 391/2001 where we said:

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

It seems to us that there have 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. ..."

[46] In the decision of Stephen Ofield and Linda Fay Ofield LLA 2466 – 2467/96 the Authority said:

“The Authority is conscious of the fact that unlike the Sale of Liquor Act 1962, the current legislation does not empower us to impose conditions on a licence restricting noise emission from licensed premises. However, we are also conscious that it was a fundamental precept of the report of the 1986 Working Party on Liquor (the Laking Committee) that resulted in the present legislation that licensees have to live with their neighbours. In our view if we do not react to genuine concerns of residents who are neighbours of licensed premises, then the whole procedure of the Act providing for objections and public hearings would be a meaningless exercise.”

[47] In Sheepys Limited v Manukau District Licensing Agency (supra) O’Regan J said:

“The Authority’s jurisdiction is determined by the Act, and I am satisfied that the impact of the operation of the licensed premises on neighbours (including noise), is a relevant consideration under both s 22(c) and s 23(1)(b), by virtue of its incorporation of the requirements of ss.14(5) and 14(7).”

[48] Section 14(7) of the Act provides:

In determining whether to impose conditions under subsection (5)(a), and, if so, what conditions, the Licensing Authority or the District Licensing Agency, as the case may be, may have regard to the site of the premises in relation to neighbouring land use.

This section gives the Authority the responsibility and the power to fix the hours of trading after taking into account neighbouring land use. The applicant should be aware authorised hours may be reviewed if there are further noise issues when the licence is next due for renewal.

[49] We are therefore satisfied as to the matters to which we must have regard in s.23 of the Act. Because of the applicant’s apparent lack of commitment to comply with the land use conditions imposed by the Environment Court the licence will be renewed until 18 March 2006 on the same conditions.

DATED at WELLINGTON this 1st day of December 2004

B M Holmes
Deputy Secretary

Ambrosia Restaurant.doc(afw)