Liquor Stop Limited [2007] NZLLA 1308 (12 December 2007)

Last Updated: 29 January 2012

Decision No. PH 1308/2007

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by LIQUOR STOP LIMITED for an off-licence pursuant to s. 31 of the Act in respect of premises situated at Shop 1, 29-31 Manuroa Road, Takanini, Papakura, to be known as “Liquorstop”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Ms J Moorhead

HEARING at AUCKLAND on 6 December 2007

APPEARANCES

Mr A W R Hettiarachchi – on behalf of the applicant company
Mrs J L Walden - Papakura District Licensing Agency Inspector– to assist
Ms C A Conroy – objector - in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an opposed application by Liquor Stop Limited (the company), for an off-licence pursuant to s.31 of the Act. The proposed premises are situated in Manuroa Road in Papakura. The shop in which the business is to be sited, is one of a block of four new shops in a mainly residential area. Contained within the block of shops are a bakery, a fruit and vegetable shop, and a Roast Café. The fit out of the premises has just been completed and a final Code Compliance certificate was presented at the hearing.

[2] The company is owned by Andrew William Hettiarachchi, and his wife Chammika Hasanthie Hettiarachchi. It is intended that the premises will operate as a stand-alone liquor store, the principal business of which will be the sale of liquor. The hours requested were from 10.00 am to 11.00 pm. These proposed hours are less than the normally acceptable trading hours for standalone off-licences. There are two other bottle stores within a kilometre radius of the proposed business, both with hours of 9.00 am to 11.00 pm.

[3] The application was accompanied by a certificate from the Papakura District Council confirming that the proposed use of the premises as a liquor retail outlet for the sale of liquor for consumption off the premises, met the requirements of the Resource Management Act 1991.

[4] There was no opposition from the Police. Mrs June L Walden is the District Licensing Agency Inspector for Papakura. In her report, she stated her belief that the applicant was suitable and would contribute to the object of the Act. She noted that the company had sought to designate the premises as supervised. In terms of an applicant’s duty to prevent prohibited persons from purchasing liquor, she confirmed that there were nine cameras located around the shop to cover all areas inside and out. The company had advised that there would be two certificated managers.

[5] Through no fault of the company, both public notices stated that each was the first public notice. A letter admitting fault, had been sent by the newspaper. We are satisfied that the omission was not wilful and that no objectors were disadvantaged. We confirm that the company is granted a waiver under s.111 of the Act. Public notification of the application attracted a total of four objections. However, three of the objections were out of time. It was pointed out that they may have been misled by the fact that the second advertisement was said to be a first advertisement. On the other hand, the objections did not address the criteria set out in s.35(1) of the Act.

[6] One objection referred to problems with vandalism caused to the Sikh Temple by young people who had been drinking. The objection referred to the nearby presence of one liquor store, which was said to be more than enough. The second objection also referred to a store in the area as well as young people causing problems such as litter. This objection also referred to the nearby church. Although both objections made passing references to the proposed trading hours, they did not address that issue in any substantive way. Their concerns were primarily related to the proliferation of licensed premises, and subsequent misconduct after consuming liquor. The third objection also referred to presence of liquor outlets in the area. The objector expressed concerns about potential drunkenness and misconduct as well as graffiti.

[7] On the other hand, Ms Caroline A Conroy specifically addressed the proposed trading hours. She stated that the hours were excessive for a liquor store in a residential area, and referred to the potential noise nuisance if the business was allowed to trade to 11.00 pm. The company responded by stating that it would be willing to reduce the closing hour to 10.00 pm, if it was felt that this would appease the objector. Ms Conroy was written to, at our request, to see if she wished to maintain her objection in the light of the concession, and the restricted criteria for objections. Pursuant to s.32(3) no objection may be made in relation to any matter other than one specified in s.35(1) of the Act. She indicated that she wished to do so.

[8] Shortly before the hearing, a further objection was received from the Takanini Residents Action Group. Although the objection was well out of time, it addressed the criteria in a limited way. Because of the representative nature of the objection, the Group was advised of the date and place of hearing, but it was not represented.

The Application

[9] Mr Hettiarachchi was one of the more impressive new applicants we have encountered. He is an engineer by vocation. During the last 18 years, he has had a successful employment record in the insurance industry. He is the holder of a General Manager’s Certificate. By definition he is therefore suitable to be the holder of a licence. He worked for some months in another liquor outlet to gain the necessary experience to enable him to be issued with the certificate. In 1983 he established an up-market wine store in Sri Lanka. That business was subsequently sold.

[10] He formed the company this year, with the long-term view of opening a further five retail outlets. He then plans to franchise the business. He said that his main aim was to import and supply liquor. This would include low alcohol products and quality wines. Judging by the photographs, the fit-out of the shop presents as a quality destination. He has spent a considerable amount of capital on surveillance systems and alarms. When he obtained the resource consent from the Council he had anticipated opening the business in early October. He had not appreciated that there would be a public consultation process that might lead to a public hearing. He has spent just under $40,000 in rental payments.

[11] Mr Hettiarachchi intends to employ the holder of a General Manager’s Certificate as the store’s manager. This person has been the front office manager of a quality hotel in Rotorua, and has held his certificate for over two years. Although Ms Conroy submitted that there was no evidence that he had retail experience, he holds a General Manager’s Certificate, and is entitled to be employed as a manager of any licensed premises. The issue of the sale of party pills had been raised by the objector. Mr Hettiarachchi gave an assurance that his business would not be selling this product.

The District Licensing Agency Inspector

[12] Mrs Walden supplemented her report with a very full brief of evidence. She stated that in her view the applicant company met all the criteria in s.35 of the Act. She noted that there was no adverse Police report, and nothing adverse was known about the company or its directors. Ms Conroy contended that the company itself had no experience, but as is usual in such situation the focus is on the directors, who are after all, the company’s alter egos.

[13] Mrs Walden said that she was satisfied that the proposed trading hours were not excessive or unreasonable. She noted that many of the objections did not address the criteria specified in s.35(1) of the Act, or fell outside the timeframe of s.32(3) of the Act.

The Objection

[14] Ms Conroy lives some distance from the store. She purported to speak on behalf of the community as the local District Councillor for the Ardmore Ward of Papakura which includes Takanini. She criticised aspects of the Act that restricted the objection rights to a licence saying that this leads to a considerable amount of frustration in the community. She said that she hoped that the late objections had been given consideration, since there had been some confusion caused by the publication of two ‘first’ notices.

[15] Ms Conroy stated that her objection to the trading hours was as stated in her objection. In her original objection she had argued that the area in question was predominantly residential, but that day-time activity started early, because of the area’s proximity to the rail station, and the neighbouring industrial area. She submitted that if the premises were allowed to open to 11.00 pm, then the level of potential noise activity would be increased. She thought it was unreasonable to allow such trading hours in a local shopping area. When she gave evidence, Ms Conroy argued that other off-licensed premises close by, closed at 9.00 pm during the week, and that the applicant’s closing time should be 9.00 pm.

[16] Ms Conroy spoke about the company’s suitability, basing her arguments on its perceived lack of experience in the retail liquor industry. She applied the same argument to the new manager since he had gained his experience in operating an on-licence. She stated that she was aware of incidents where inexperienced operators ran into problems under the Act. Finally, Ms Conroy took the opportunity to express her concerns about the explosion of liquor licences generally. She disputed any suggestion that the Council had the ability to restrict the number of off-licences by amending its District Plan.

The Authority’s Decision and Reasons.

[17] At the conclusion of the hearing, we adjourned to consider the matter. After doing so, we returned to confirm that the off-licence would be granted with trading hours from 10.00 am to 11.00 pm seven days a week. We stated that a full decision with reasons would be issued later. We indicated that in accordance with the Act, the company would only be able to trade prior to the end of December 2007, only if the objector waived her appeal rights.

[18] As the parties are aware, the criteria to which we must have regard when considering an application for an off-licence are restricted to the matters set out in s.35(1) of the Act. The criteria are:

(a) The suitability of the applicant:

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

(c) The areas of the premises, if any, that the applicant proposes should be designated as restricted areas or supervised areas:

(d) The steps proposed to be taken by the applicant to ensure that the requirements of this Act in relation to the sale of liquor to prohibited persons are observed:

(e) Whether the applicant is engaged, or proposes to engage , in –

(i) The sale or supply of any other goods besides liquor, or

(ii) The provision of any services other than those directly related to the sale or supply of liquor, -

and, if so, the nature of those goods or services:

(f) Any other matters dealt with in any report made under section 33 of this Act

[19] The only criteria which could be regarded as relevant to this particular application are the proposed trading days and hours, and to a much lesser extent, the suitability of the applicant company. Any concern about whether the company might sell party pills has been extinguished by the strong assurances given by Mr Hettiarachchi.

[20] We prefer to approach the issue of suitability by reference to the comments of Panckhurst J in Page v Police (unreported HC V Christchurch AP 84/98 24 July 1998). He stated:

“Section 13(1)(a) provides that the applicant for an on-licence must demonstrate his or her suitability. In other words what is required is a positive finding. That implies an onus upon the applicant to demonstrate suitability. Such suitability is not established in a vacuum but in the context of the particular case: for example, the place, the intended business (here in a difficult central city location), the nature of the business itself, the hours of operation and the intended activities, provide the basis for the assessment of the individual.”

[21] In this case, we are discussing the establishment of an off-licence in a small block of shops with limited trading hours. The primary issue is whether we are satisfied that the company, its directors, and any employees, will obey the law particularly with regard to the sale to prohibited persons as defined in s.2 of the Act. As already stated, we thought that Mr Hettiarachchi was an impressive witness. It is the directors of the company who must show suitability on the basis that their actions are those of the company.

[22] We thought that the appointment of the new manager was perfectly acceptable. We agree with Mr Hettiarachchi that the management of a stand alone bottle store requires less experience than operating an on-licence. Given that the new manager holds a General Manager’s Certificate, and given the absence of concerns from the reporting agencies, there is a reasonably high threshold for the objector to meet if she wished to question the company’s suitability. The company voluntarily accepted a supervised designation of the premises and has installed security cameras. Both these measures are designed to help ensure that prohibited persons are not served with liquor. On balance we were more than satisfied that the company is suitable.

[23] We turn to the objectors’ other concerns. It seems to us that Parliament has deliberately separated the process of determining site suitability with licence suitability. It is the local authority which determines whether the site is suitable. It does so by reference to planning requirements including the particular zone in which the proposed business is located. It is the Agency or Authority which then determines whether an applicant is suitable.

[24] In Cayman Holdings Limited LLA PH 145/2001 the Authority stated:

“The Authority’s approach has been to satisfy itself that the applicant is suitable and will uphold the law. The Police or District Licensing Agency Inspector are empowered to apply to vary, suspend or cancel a licence pursuant to s.132 of the Act if problems arise. Apprehension of problems alone is not sufficient to prevent a suitable applicant, particularly one supported by a District Licensing Inspector and the Police from exercising rights granted by the District Council.”

[25] In other words concerns by residents about increased criminal or anti-social behaviour, will not in themselves be sufficient to prevent the grant of a licence. The tailoring of conditions in each licence to meet each particular factual situation is the responsibility of the Liquor Licensing Authority, or if unopposed, the District Licensing Agency.

[26] We refer briefly to the argument raised by the other objectors that there are already sufficient licensed premises in the area. It is important to appreciate that the Sale of Liquor Act 1989 no longer requires an applicant to establish a community need for the business. In 1989, Parliament essentially legislated for a ‘free market’ for liquor outlets. In the absence of any planning restrictions, there is no legal limit to the number of licences, which can be granted. The only limitation will be whether (in the light of other established premises), an applicant can make the proposed business profitable. We assume that there must come a time when it is simply uneconomic even to consider the establishment of yet another liquor outlet. Section 35(2) of the Act specifically prevents other licensed premises from opposing a new application.

[27] The objector contended that the proposed trading hours were unreasonable. Pursuant to s.37(5) of the Act, we are given power to have regard to the site of the premises in relation to neighbouring land use, when fixing the days and hours of trading. However, we do not accept the argument that the establishment of an off-licence will lead to an increase in liquor abuse or increased crime although it is accepted that there is potential for this to happen.

[28] Although there have been instances where licensees have sold to person under the age of 18, our experience is that there are few if any incidents of liquor abuse in and around off-licensed premises. We accept that a different scenario can arise if liquor can be purchased by young people and subsequently consumed to excess. Ms Hettiarachchi will be aware that it only needs one incident of a sale to a minor or an intoxicated person, and a suspension application would follow.

[29] Ms Conroy argued that other premises did not use the full extent of their licences during the week. All licensees are entitled to close when they wish provided it is not after the authorised closing time. The evidence is that both nearby off-licences are permitted to close at 11.00 pm. We believe that it is entirely reasonable that this new business is not placed at a potential disadvantage. In our view the advertised trading hours were neither excessive nor unreasonable.

[30] The applicant company and the objector are reminded that a liquor licence is granted in the first instance for 12 months. If renewal is sought some of the community concerns can be re-examined in the light of evidence then available. In this way the applicant has a clear incentive to ensure that it complies with the conditions of the licence, and the Act. Experience has shown, particularly with off-licences, that community fears have not been realised.

[31] We are satisfied as to the remaining matters to which we must have regard as set out in s.35(1) of the Act. Given that the applicant is suitable, and has a resource management certificate, then an off-licence is appropriate. We grant the applicant an off-licence for the sale or delivery of liquor on or from the premises described in the licence to any person for consumption off the premises.

[32] The authorised trading hours will be 10.00 am to 11.00 pm, seven days a week. A copy of the licence setting out the conditions to which the licence is subject is attached to this decision. The premises will be designated as supervised.

[33] The licence may issue 20 working days from the date of determination being 6 December 2007. This period is provided for in s.140 of the Act. The company is not entitled to sell liquor until the licence is issued.

[34] The company’s attention is drawn to ss.48 and 115(3) of the Act obliging the holder of an off-licence to display:

(a) A sign attached to the exterior of the premises so as to be easily read by persons immediately 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 is to be displayed in a prominent position inside the premises, so as to be easily read by persons using the premises.

DATED at WELLINGTON this 12th day of December 2007

B M Holmes
Deputy Secretary

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