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Saltwater Corporation Limited, re [2007] NZLLA 105 (23 February 2007)

Last Updated: 20 February 2010

Decision No. PH 105/2007

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by SALTWATER CORPORATION LIMITED pursuant to s.18 of the Act for the renewal of an on-licence in respect of premises situated at 14 Kings Road, Paihia, known as “Saltwater Cafe”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Ms P A Ballard

HEARING at PAIHIA on 1 February 2007

APPEARANCES

Mr W W Peters – for applicant
Mr J A Thorne – Far North District Licensing Agency Inspector – in opposition
Senior Constable G Wright – NZ Police – in opposition
Mrs W A Sharland – representing Alfa Boutique Motel and others – in opposition
Mrs Edith Bell – representing Kings Road residents – in opposition

RESERVED DECISION OF THE AUTHORITY


Introduction


[1] This is the fourth occasion in the last five years that there has been a public hearing concerning the premises at 14 Kings Road in Paihia. There has been a café on the site for many years. An on-licence was issued approximately 10 years ago. On 23 August 2001 we heard an application for a tavern style on-licence for a company called Paihia Saltwater (2001) Limited. The application was opposed by a number of residents and motel owners. The grounds for opposition were potential noise nuisance and patron misbehaviour. In that case, the applicant had yet to start trading. The application was granted with hours of operation between 8.00 am and 1.00 am the following day Monday to Sunday. See Paihia Saltwater (2001) Limited LLA PH 391/2001.

[2] On 21 November 2003 we heard an application by the same company to extend the hours of trading to 3.00 am. The application was opposed by residents and motel proprietors and the District Licensing Agency Inspector. The grounds for opposition related to the escape of noise. The application was declined see Paihia Saltwater (2001) Limited LLA PH 974/2003.

[3] On 30 September 2005 we heard an application by Saltwater Corporation Limited (hereafter called the company) for an on-licence. This followed the company’s purchase of the business. The application was opposed by motel proprietors who wished to see the trading hours brought back to midnight. The grounds for opposition related to the company’s suitability based on the escape of noise. The company had been trading on temporary authorities for 10 months. The application was granted with hours of operation between 8.00 am and 1.00 am the following day. See Saltwater Corporation Limited LLA PH 722/2005.

[4] The present application is for the renewal of the on-licence which fell due on 21 November 2006 following the first ‘probationary’ year of operation. In its application, the company sought to extend the trading hours to 3.00 am the following day. Public notification of the application attracted 13 objections from neighbouring residents and motel proprietors. The majority of the objections related to the application to extend the trading hours rather than the renewal of the licence. Once again the main concerns related to the escape of noise and patron behaviour.

[5] Initially, the Police did not initially oppose the application but they reviewed the matter and lodged an objection. The basis of their objection related to their Alco Link data, as well as concerns about the proposed increase in the trading hours. In the event that the trading hours were extended, the Police suggested that the company adopt a closed-door policy from say 12.30 am to encourage patrons to be on the premises at a reasonable time.

[6] The District Licensing Agency Inspector opposed the request to extend the trading hours based on the Far North District Licensing Agency Sale of Liquor Policy dated May 2004. He also expressed concern about the fact that no other licensed premises in Kings Road traded beyond 1.00 am. He noted that two noise complaints had been received on 21 November 2005 and 5 February 2006. He confirmed that there were five other licensed premises in Kings Road with closing hours as follows:

“Paihia Pacific Resort” – 1.00 am.
“Beach House Café & Bar” – 12.00 midnight.
“Peppercorn Restaurant and Bar” – 1.00 am.
“Pipi Patch Lodge” – 12.00 midnight.
“Sandpit “ - 1.00 am.

The Application


[7] Mr W W Peters appeared for the company. He submitted that the commercial zoning of the property and its characteristics were relevant to the application particularly as licensed premises were a permitted activity in such a zone. He argued that the application reflected the demands of tourists to the Bay of Islands as well as interests of local residents. It was his contention that the Council’s policy did not cover the current situation because the zoning was commercial and the land use was not residential.

[8] Mr Peter Sirius is one of the company’s directors. He produced a petition which he had started on 28 December 2006, and which had been signed by about 1000 individuals most of whom had come from overseas or from areas outside Paihia. Mr Sirius appeared to base the company’s application on public demand as shown by the petition, and what he described as a genuine business need based on the fact that the majority of his turnover occurred after 10.00 pm. He seemed to be of the view that the extra two hours would increase his turnover at the same level.

[9] Mr Sirius confirmed that the company had always been aware of noise levels as evidenced by the comprehensive noise plan produced at the earlier hearing. He argued that the five noise complaints related to the sound inside the premises and therefore the sound outside the premises was within acceptable limits. It appeared on cross-examination that Mr Sirius had based his views on what he had been told by members of his staff. He pointed out that the company had been granted special licences to operate to 3.00 am on three previous New Years Eve celebrations, and that no complaints had been received.

[10] He believed that if the premises were allowed to trade to 3.00 am then this would reduce the flow of pedestrians between Kings Road and the Town Centre. The evidence clearly shows that because there is a licensed premises known as the “Lighthouse Tavern” situated in the Town Centre, and because those premises trade until 3.00 am, there is constant movement between the backpacking establishments and the late night premises in the centre of the town. Mr Sirius stated:

“As backpackers form the majority of the Applicant’s customer base and backpacker accommodation is primarily situated on and around Kings Road, it is the Applicant’s position that, should the variation be granted, those patrons who wished to continue their entertainment past 1.00 am would be able to do this without having to walk to the beach or Town Centre.”

The District Licensing Agency Inspector


[11] Mr J Thorne is the Far North District Licensing Agency Inspector. Prior to the hearing he provided a supplementary report. As he pointed out, although the area in question is zoned commercial there is a mix of private dwellings, residences, motels and backpackers accommodation. He noted that there had been five noise complaints received by the Council since the on-licence was issued. These were as follows:

[12] Mr Thorne argued that the area was residential in nature and therefore section 8.1 of the Far North District Licensing Agency Sale of Liquor Policy applied. This section gives a higher priority to the amenity values of the community in residential areas, and recommends that trading hours be restricted to 11.00 pm during the week, and 1.00 am on Fridays and Saturdays. He was supported by Mr Barry Webb the Field Compliance Manager for the Far North District Council and one of the architects of the Policy. The issue is whether the area in question can properly be defined and/or described as residential, or whether the Policy has been overtaken by subsequent changes to the District Plan.

The Police


[13] Although the Police objection was out of time they were entitled to appear and be heard under s.108 of the Act and pursuant to s.106(3)(4) of the Act, they are entitled to call, examine, and cross-examine witnesses. Senior Constable G Wright has the licensing portfolio for the Mid/Far North District. He had been requested to assist with liquor licensing supervision and general policing of licensed premises in Paihia because of local concerns about increases in violence and disorder. He said that one of the areas of concern was the migration of patrons from Kings Road into the Town Centre when the Kings Road premises closed at 12.00 midnight or 1.00 am.

[14] Senior Constable Wright considered that the company had endeavoured to manage problems as far as possible but there were ongoing problems with noise and alcohol-fuelled disorder when patrons leave the premises. He noted that the company’s management had been involved in a local accord when discussions were held about a ‘closed-door’ policy. He expressed concern that the company had rejected such a policy because of financial implications rather than a desire to reduce disorder and noise nuisance.

[15] He produced the Alco Link reports for the period 2 January 2006 to 7 October 2006 showing that nine people, on being apprehended, had stated that they had consumed their last drink at “Saltwater Café.” Of these alleged patrons, eight were described as moderately intoxicated, and three were described as extremely intoxicated. Mr Sirius disputed that some of the patrons had been on the premises. However, the information is based on what the Police are told by each individual. As such, the data is useful intelligence which may show a managerial problem that needs to be addressed. The data is not sufficiently probative to form the basis of a refusal to renew the licence.

[16] In addition, Senior Constable Wright produced three job sheets which supported a claim that on a visit to the premises on 30 December 2006, three patrons were located who were believed to be intoxicated. The indication was that the duty manager had agreed with the assessments. One of the patrons had been told to leave earlier and had apparently got back inside. It appears that the three men were required to leave and a warning was issued. It will be noted that the evidence was based on hearsay material but not disputed.

[17] Constable Mark Caswell is the officer in charge of the Paihia Police Station. He stated that there were problems of liquor abuse in Paihia caused by a number of factors. He referred to the fact that Paihia is a tourist resort with a large number of young backpackers staying in the Kings Road area. He noted that the mix of restaurants, residences, motels, and other tourist facilities was also affected by the beachfront adjacent to the intersection of Kings Road and Marsden Road. In addition he said that young people from other town centres often descend on Paihia for their entertainment and recreation. In his view problems are generated by the migratory-type clientele when different establishments close at different times.

[18] Constable Caswell argued that although the premises were well run, there were still noise complaints. He was concerned that if the hours were increased to 3.00 am the situation would deteriorate. He stated that he relied on one other member of staff and additional support had to come from Kawakawa or Kerikeri both of which were over 15 minutes away.

The Objectors


[19] Mrs Bell lives with her husband very close to “Saltwater Café”. She spoke on behalf of the other residents who had objected some of whom were present to observe the proceedings. She gave evidence that she was required to shift grandchildren to another part of the house to avoid disturbance from the bass component of the music. She stated that most of the noise complaints were from music between midnight and 1.00 am when she believed that the music was turned up to attract patrons from other bars which closed at midnight. She gave evidence of unruly behaviour by patrons but was unable to identify the time of the incidents or provide proof that the individuals were patrons of “Saltwater Café”. She said that there was more people noise now that patrons had to go outside to smoke.

[20] Mrs W Sharland and her husband operate the “Alfa Boutique Motel”. She pointed out that the four bars were situated in the middle of the accommodation precinct which can accommodate up to 1300 people all within hearing distance. It was her opinion that most motel guests require a good night’s sleep. She said that the because the bass noise comes through the walls and double glazed windows, guests complain about loss of sleep which results in loss of business. She argued that if the application were granted then other bars would follow. She expressed frustration at the way noise complaints were dealt with. It was her view that the atmosphere and safety of the town had been affected by the activities of the licensed premises in Kings Road and these amenities should not be compromised any further.

The Authority’s Decision and Reasons


[21] When considering an application for the renewal of a licence we are required by s.22 of the Act to take into account the following criteria:

(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; and

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

[22] There were indirect references to the company’s suitability based on the escape of noise, but in our view the material that was placed before us was insufficiently detailed to raise the threshold necessary to expect the company to affirmatively prove its suitability. Although there was evidence about the Alco Link data and the finding of intoxicated patrons, there were also affirming comments made by the Police. It is clear that the company performs better than some of its competitors. In our view the most disappointing aspect of the evidence was the company’s apparent unwillingness to embrace the closed-door policy until the hearing itself. In summary, the company has done reasonably well in its first year and a renewal of the licence is appropriate.

[23] We turn to the company’s request to allow the extra two hours of trading. Section 16 of the Act governs the process by which the conditions of a licence can be varied. In making a decision we are required to consider the relevant matters contained in s.13(1) of the Act. These criteria are the same as must be taken into account when an application for an on-licence is considered.

[24] The relevant provisions of s.13 (1) of the Act would appear to be limited to subsections (a) (b) and (g) as follows:

(a) The suitability of the applicant:

(b) The days on which and the hours during which the applicant proposes to sell liquor:

(g) Any matters dealt with in any report made under section 11 of this Act.


[25] There are other considerations as well. In the helpful decision of H L Walker & W J Walker v New Zealand Police AP 87/01 Wellington Registry, Mr Justice Fisher made a number of comments about the way the sections are interconnected as follows:

“For all of those reasons I am satisfied that s.22, and to the extent that it is relevant s.13, are not to be interpreted in any narrow or exhaustive sense in the way proposed by the appellants. The Authority was permitted to take into account anything which in terms of the statute as a whole appeared to be regarded by the legislature as relevant to licence conditions and the terms on which they should be granted. That must include the statutory object referred to in s.4. If Goldcoast was intended to indicate otherwise I regret that I am unable to follow it.”


[26] One of the Judge’s significant findings was that in considering the criteria in s.13 of the Act, we are also entitled to take into account s.14(7) of the Act. This reads:

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


[27] While we accept that the land is zoned commercial we are well aware, (from having stayed in the area and visited it from time to time), that there is a large number of motels and residences and backpackers in the area. We have heard enough evidence over the last five years to be more than satisfied that any extension past the 1.00 am closing would severely compromise the fragile nature of the commercial and residential mix. As Mrs Sharland pointed out, there are many tourist beds available. The rights of those tourists must be protected. Subject to any recommendation in any future Sale of Liquor Policy, we believe that 1.00 am closing in Kings Road is the absolute limit. In coming to this conclusion we have had regard to the site of various bars and restaurants in Kings Road in relation to the neighbouring land use.

[28] There are other reasons why we intend to refuse the application. We have no doubt that if the application were to be granted there would be an immediate response from the other licensed premises. The consequences of several premises in Kings Road trading to 3.00 am would be well beyond the Police resources to cope, and would lead to a reduction of safety in an otherwise reasonably quiet neighbourhood. We believe that the Police would have enough difficulty in coping with the effect of patrons leaving this particular premises at 3.00 am. In our opinion, the way in which the licensing of premises in Paihia has developed needs to be looked at otherwise than in a piecemeal fashion. We believe that there is a better way of dealing with the migration of drinkers from Kings Road and back without creating a domino effect.

[29] We do not think that the Council’s policy assists the objectors in the way submitted. The current policy seeks to defines “residential” by reference to the District Plan. However, the current District Plan does not define residential at all. It defines “Residential Unit.” In those circumstances and since the land is zoned commercial it seems logical to consider the premises as non-residential. However, the policy for non-residential premises has no recommended trading hours. The policy simply states that with non-residential premises any problems associated with licensed premises are generally more about management than hours.

[30] In this case there are unanswered questions about the company’s managerial suitability to operate the licence to 3.00 am without causing noise or other nuisance. The issue is not so serious as to warrant a refusal to renew the licence. A question could be: has the company done enough to warrant such a major concession? Contrary to the submissions expressed by Mr Peters, the answer in our view is no. The gaining of extra trading hours is not a right. It may result from the exercise of a discretion. We gained the impression that in legitimately seeking to expand its business, the company has failed to take into account the equally legitimate concerns of the neighbours, and the Council, and the Police. The company seemed to think that a petition signed by overseas backpackers should somehow influence a decision as serious as this.

[31] Although the Policy has proved to be of limited assistance in this case, it does represent a combination of community expectations about how liquor is made available to consumers. In paragraph 7.2 there is a heading Exceptions to Standard Limits. This reads:

For these reasons the DLA views the limits specified in the following sections as maximums unless circumstances exist where it could be shown that:

There are specific, justifiable reasons for extension to the hours of operation,

That an exemplary management regime is operating, and

That any impacts on community amenity and city safety are prevented from occurring or are satisfactorily managed.


[32] As stated above, the fixing of trading hours is very much a matter for our discretion but the above criteria provide a useful way of testing a request to extend the current hours of trading. Although the company has done well it cannot contend that an exemplary regime has been operating. A verbal warning and an abatement notice combined with the Police evidence shows that there have been lapses. We do not accept that the company could manage the extra two hours without having an impact on the amenities of the community or compromising the safety of residents of, and visitors to, Kings Road. The Act does not contain a needs test and, as we have already stated, it is our view that the issue of migratory drinkers can be addressed in another way.

[33] It is our experience that the adverse impact on people’s quality of life, (such as unruly behaviour and noise), from activities that are part of the entertainment scene, and which normally occur within a central business district, become comparatively much greater when they occur in areas where there are residential properties and motels. We have no intention of increasing the potential impact of these licensed premises on the neighbouring residents and businesses.

[34] Accordingly, and for the reasons given we make the following orders:

DATED at WELLINGTON this 23rd day of February 2007

Judge E W Unwin Ms P A Ballard
Chairman Member

Saltwater Cafe.doc


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