Saltwater Corporation Limited [2005] NZLLA 722 (20 October 2005)

Last Updated: 21 January 2012

Decision No. PH 722/2005

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by SALTWATER CORPORATION LIMITED pursuant to s.9 of the Act for an on-licence in respect of premises situated at 14 Kings Road, Paihia, known as “Saltwater Café”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin

Member: Mr J C Crookston

HEARING at KERIKERI on 30 September 2005

APPEARANCES

Mr W W Peters – for applicant
Mr J Thorne – Far North District Licensing Agency Inspector – to assist
Mr R D Buller – representing neighbouring residents and moteliers – in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an opposed application by Saltwater Corporation Limited (hereafter called the company), for an on-licence pursuant to s.9 of the Act. The premises are situated at 14 Kings Road, in the commercial zone of the township of Paihia. A cafe has been located at 14 Kings Road for several years. The premises received a restaurant style liquor licence in 1997 with trading hours from 8.00 am to 1.00 am the following day. The on-licence was changed to a tavern style licence with the same trading hours in 2001.

[2] The application stems from the company’s purchase of the existing business on 1 November 2004. The company has been trading under temporary authorities ever since. The directors and shareholders of the company are Peter Sirius and Ruth Wernli. No changes to the existing conditions of the current on-licence have been sought.

[3] The application was publicly notified in April 2005, and attracted a letter of objection from Mr R D Buller, a motelier whose business is located nearby. Mr Buller purported to speak on behalf of other residents and moteliers, and indeed, his objection was accompanied by a petition bearing 18 signatures. No grounds for opposing the application were given in the petition, but Mr Buller’s letter referred to such matters as the suitability of the company based on the escape of noise, and the hours of operation. A letter was received from the Secretary of the Paihia & Districts Residents’ and Ratepayers’ Association on 28 June 2005, but this was well outside the time limits imposed by the Act, and was therefore disregarded.

[4] There were no concerns expressed by the Police, the Medical Officer of Health, or the Far North District Licensing Agency. As a consequence of the public objection, the application was set down from a public hearing. The matter was due to be heard by us on 8 June last, but it was adjourned because of the unexpected absence of one of the company’s directors.

[5] The business was the subject of a public hearing on 23 August 2001, when the former proprietor known as Paihia Saltwater (2001) Limited, applied for a tavern style on-licence. A number of objectors gave evidence at the hearing. They were concerned with the issue of potential noise. The premises had been refurbished by the new owner, and were not operating when the application was heard. The applicant was able to show that it had the necessary resource consent to operate a tavern. In addition, it had put in place a noise management plan. In a reserved decision Paihia Saltwater (2001) Limited LLA PH 391/2001, the on-licence was granted with the same trading hours as had been operated by the licensed cafe.

[6] On 26 May 2004, there was a public hearing in respect of a neighbouring business known as the “Beach House”. This was an application for renewal of the on-licence, as well as a request to vary the conditions of the licence to change the nature of the business from a restaurant to a tavern. The Authority found that the applicant had been operating a de facto tavern in disregard of the conditions of the licence. Accordingly, the variation application was refused, the licence was renewed for a reduced period, and the trading hours were restricted to a midnight closure. See Ocean Focus Limited LLA PH 579/2004.

The Application

[7] As stated above, the company did not seek to change the conditions of the previous on-licence in any way. It sought trading hours from 8.00 am to 1.00 am the following day from Monday to Sunday inclusive. It filed a certificate pursuant to s.9(1)(e) of the Act, in which the Far North District Council confirmed that the use of the premises as a tavern met the requirements of the Resource Management Act 1991, and was a permitted activity in the zone.

[8] Mr Peter Sirius gave evidence on behalf of the company. He contended that in response to the objections, his company had devised a noise management plan which included a number of items as follows:

(1) The installation of sound limiting equipment in December 2004.

(2) The installation of sound muffling curtains in December 2004.

(3) The soundproofing of the toilet areas.

(4) The sound muffling of the deck area.

(5) The instruction and training of entertainment staff.

(6) The hiring and training of additional security staff.

(7) The implementation of a security management plan

[9] Mr Sirius confirmed that he had engaged the services of Mr B E White of Wards Musicworks, of Whangarei. He had been asked by Mr Sirius to assess the venue for defects, which might lead to the escape of excessive noise. He was also asked to install limiters to stop the stereo sound from reaching levels in excess of Council requirements. He wrote on 8 January 2005, that he had done so, and a copy of his letter was forwarded to the Council. Mr Sirius commissioned a second independent report from Mr White in September 2005, and a copy of the second report was also sent to the Council on 18 September 2005.

[10] On the other hand, Mr Sirius acknowledged that there was a need to improve management’s response to the issue of noise, particularly in relation to the closing of the outside doors and windows. He undertook that the karaoke entertainment would not in future, be operated after midnight. This gesture was well received by the objectors. Mr Sirius is aware that any breach of such an undertaking could expose the company to a finding of unsuitability to hold a licence.

[11] Brendon Eric White has a Diploma in Audio Engineering. He is the proprietor of Wards Musicworks. In December 2004, he installed limiters to the sound system to stop the sound from reaching levels in excess of the Council’s requirements. He also installed a graphic equaliser to reduce the level of low frequencies, which are known to travel long distances. He subsequently measured the sound coming from the premises, and confirmed that it was within acceptable levels. He recommended that other work be undertaken to help reduce the sound levels further. Mr White returned in September 2005, and undertook further sound readings. He stated that he was satisfied that the decibel levels were within the guidelines set by the Council’s resource management plan.

The District Licensing Agency Inspector

[12] The District Licensing Agency Inspector reported on the application in May 2005. He enclosed copies of six relevant noise complaints which the Agency had received since the present management had taken over on 1 November 2004. These may be summarised as follows:

11 November 2004 at 10.10 pm. A neighbour complained about loud music from a jukebox. The premises were visited, and the company’s security representative was asked to close the doors.

1 February 2005 at 11.00 pm. A neighbour complained about the noise from the Master of Ceremonies at a Quiz Night. The premises were visited and the volume was turned down, and the doors closed.

5 February 2005 at 12.40 am. A neighbour complained about loud music from the DJ. The premises were visited, and the tavern representative stated that she had to open the doors to let the people out, as the premises were closing.

28 February 2005 at 12.31 am. A neighbour complained about noise from a stereo. The premises were visited, and management was told to turn the music down. The officer was advised that the premises were closing in 15 minutes.

20 March 2005 at 11.00 pm. A neighbour complained about noise from the karaoke. The premises were visited, but it appears no action was taken, although a verbal warning was given.

10 April 2005 at 9.45 pm. A neighbour complained about the noise from the karaoke. The premises were visited, and the doors and windows were closed resulting in major noise reduction.

[13] It will be noted that of the six complaints received, only two related to noise levels after midnight. Furthermore, the last official complaint was in April 2005. When he spoke to us briefly at the hearing, the Inspector noted that the great majority of the complaints related to managerial failure to close the doors and windows. He suggested that if the company’s attention was concentrated on keeping the doors and windows closed, there might be fewer concerns raised by the neighbouring residents and businesses.

The Objectors

[14] Mr Buller referred us to s.14(7) of the Act. Pursuant to that section the Authority may have regard to the site of the premises in relation to neighbouring land use, when fixing the days on which and the hours during which liquor may be sold. He submitted that the predominant use in the area was visitor accommodation including residential apartment blocks. He said that there were nine motels, five backpacker lodges, one bed and breakfast business, two major hotels, and a new apartment block in proximity to the café/bar. He believed that there was a capacity to host in excess of 1500 people.

[15] Mr Buller noted that his group had raised the issue of noise on a number of occasions following the increased number of licensed premises in the area. He said that the main concerns were noise levels from music, people, and vehicles. He argued that the group’s major commitment was to ensure that visitors to the resort had a quiet and restful night’s sleep, and that they were able to walk the streets with safety. He contended that the licensed premises in Kings Road were dominating the environment, and making serious inroads into the quality of life in the neighbourhood.

[16] Mr Buller confirmed that he and the other objectors had no reason to doubt the applicant’s integrity or management skills. On the other hand, he drew our attention to the noise complaints received by the Council. He said that the objectors’ concerns would be met if there was a noise management plan which was monitored by the Council. He also submitted that the closing hour should be brought back to midnight. He stated that if the application was granted, he and the other objectors believed that there would be a further degeneration of the neighbouring quality of life, with increased noise, traffic, and disorder. On the other hand, he thanked Mr Sirius for adopting a noise management plan, which he thought was a step in the right direction.

[17] We also heard from Mrs Edith Bell who spoke on behalf of her husband as well as herself. The Bells are the closest residential neighbours to the premises. They objected to the application to change the style of the premises to a tavern in August 2001. Mrs Bell stated that they had rung noise control on numerous occasions to complain about excessive music noise. However, the Council records only show that they complained twice in March 2005, and once in April 2005. On the second occasion in March 2005, there was no noise when the noise control officer arrived at 11.45 pm, and accordingly, this call out was not included in the Inspector’s report.

[18] The Bells wrote to the Council on 22 November 2004. They complained about licensed premises in Kings Road generally, and in particular the bad behaviour of patrons on the street. They also complained about the conduct of the “Saltwater Café” patrons when they left the premises at 1.00 am.

[19] When she gave evidence, Mrs Bell again referred to patrons leaving the premises after they had closed at 1.00 am. She stated that on 23 May 2005, nine patrons had left the “Saltwater Café” at closing time and walked up Kings Road when a vehicle approached. She said that the females got into the vehicle, and the men climbed on top of the vehicle which then drove away.

The Authority’s Conclusion and Reasons

[20] In considering an application for an on-licence the Authority is directed by s.13(1) of the Act to have regard to a number of matters. In this case, the only possible matters for consideration are the suitability of the company to hold a licence, and the days on which, and the hours during which, the applicant proposes to sell liquor.

[21] On the other hand, it seems to us that the objectors are restricted by s.10(4) of the Act solely to arguing about the suitability of the applicant. That section reads:

In any case where –

(a) The application relates to any premises or conveyance in respect of which an on-licence is presently in force; and

(b) The applicant seeks the same conditions as those presently applying to that licence,-

an objection may only be made in relation to the suitability of the applicant.

[22] In relation to suitability, we have often held that a licensee who allows excessive noise to escape, can be found to be unsuitable. Mr Peters argued otherwise on the basis on the comments of Chambers J in the High Court decision of K & J Fraser Ltd v D Major and others AP 113-1M/01. We believe that this case should not be regarded as an appropriate benchmark on the issue of noise. This is partly because there was no opposition to the appeal, and partly because at the time of the hearing, we had not formulated any policy on noise nuisance. Nevertheless, his Honour did acknowledge that if a licensee were to operate a business in a way which showed flagrant contempt for noise levels, that could reflect on suitability.

[23] In this case, the objectors have been able to observe and monitor the business for over 10 months. We accept that initially there were noise complaints, although once again we stress that the majority occurred before midnight. In this case, there have been no reported noise complaints since 10 April 2005. We accept that the period of time in question would have covered the winter months. However, when viewed against the implementation of the noise management plan, and the work carried out by Mr White on the company’s behalf, we do not accept that the objectors have reached the threshold necessary to cause a serious review of the trading hours.

[24] The objectors raised the issue of patron misbehaviour and noise in the street. The licensee’s responsibility for the safety and well being of his patrons is mainly confined to ensuring that they do not become intoxicated. In the event that nuisance is caused to neighbouring residents as a result of the intoxication of any exiting patron, then there would be a valid argument for us to consider the suitability of an applicant or impose a sanction. Such behaviour could result in the filing of an enforcement application. Objectors face the difficult task of establishing that (a) the patron is intoxicated, and (b) that the patron became intoxicated while drinking on the subject premises. Our previous comments on noise nuisance have mainly been in relation to the escape of noise from the playing of loud music.

[25] In the absence of concerns by the District Licensing Agency Inspector, the Medical Officer of Health, and the Police, the objectors will struggle to persuade us that an applicant is unsuitable. At any event, Mr Buller acknowledged that the objectors had no reason to doubt the applicant’s integrity or management skills. For our part, we have noted that both Mr Sirius and more particularly Ms Wernli, have previous experience in the industry. Ms Wernli holds a General Manager’s Certificate and ipso facto, must be regarded as suitable. After hearing the evidence, we are confident that both directors are well aware of their responsibilities to uphold the law should the company be granted a licence. We believe that they deserve the opportunity to see if their noise management plan is successful.

[26] Some of the concerns of the objectors were related to resource management issues such as the removal of the planter boxes outside the premises, and limiting the number of patrons on the deck. These concerns are really outside our jurisdiction. There was concern that the company might be able to operate on Good Friday, Easter Sunday, Christmas Day and before 1.00 pm on Anzac Day. This is a standard condition for all taverns. Pursuant to s.14(2) of the Act, hotels and taverns are not allowed to sell liquor on those days unless it is to any person who is on the premises for the purpose of dining. This is an aspect of the law, which is not welcomed but respected in the industry.

[27] Mr Buller seemed to want us to impose a blanket closing hour of midnight on all licensed premises in Kings Road. We would only do that if the proposal had the support of the community through their elected representatives in the form of a liquor policy, or a change to the district plan. The reduced closing hour for the “Beach House” was imposed solely to ensure that the licensee kept to the conditions of the licence, which was to operate as a restaurant. It was not imposed in response to the objections, but rather to ensure that the applicant operated within the law.

[28] We would be prepared to reduce the trading hours in respect of a new application, if an applicant had been unable to establish his suitability. In other words, if it had been established that the company had consistently allowed the town’s noise levels to be exceeded, we would be prepared to tailor the conditions of the licence accordingly. However, before doing so, we would have to be satisfied on the evidence of the objectors that their rights had been disregarded. The evidence in this case fell short of such a test.

[29] Where objectors seek to have conditions of a licence altered in this way, we need to hear specific probative evidence of excessive noise emission. Although we have a discretion to have regard to the neighbouring land use, when fixing trading hours, in this case there was insufficient evidence of noise nuisance to persuade us to do so. Nor was there any evidence that the Council had adopted a liquor policy with appropriate trading guidelines.

[30] Accordingly, we propose to grant the application in the same terms as the current licence. Given both a suitable applicant and a Resource Management certificate, a liquor licence is appropriate. As the parties are aware, the purpose of the legislation is that any initial grant of a licence will be restricted to 12 months to give neighbouring residents and the reporting agencies the opportunity to comment when the licence is due to be renewed.

[31] We grant the applicant an on-licence for the sale and supply of liquor for consumption on the premises to any person present on the premises. The hours of trading will be 8.00 am to 1.00 am the following day Monday to Sunday. A copy of the licence setting out the conditions to which the licence is subject is attached to this decision.

[32] The licence will not issue until the expiry of 20 working days from the date of this decision. That period is the time provided by s.140 of the Act for the lodging of a notice of appeal.

[33] The applicant’s attention is drawn to ss.25 and 115 of the Act obliging the holder of an on-licence to display:

(a) A sign attached to the exterior of the premises so as to be easily read by persons outside each principal entrance, stating the ordinary hours of business during which the premises will be open for the sale of liquor, and

(b) A copy of the licence, and the conditions of the licence, attached to the interior of the premises so as to be easily read by persons entering through the principal entrance, and

(c) The name of the manager on duty to be displayed prominently inside the premises so as to be easily read by persons using the premises.

DATED at WELLINGTON this 20th day of October 2005

Judge E W Unwin Mr J C Crookston
Chairman Member

Saltwater Cafe.doc(nl)