Amigo Investments Limited [2007] NZLLA 1368 (21 December 2007)

Last Updated: 29 January 2012

Decision No. PH 1368/2007

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by AMIGO INVESTMENTS LIMITED for an on-licence pursuant to s.9 of the Act in respect of premises situated at 28 Maclaggan Street, Dunedin, known as “Clarendon Hotel”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Dr J Horn

HEARING at DUNEDIN on 22 November 2007

APPEARANCES

Mr P Buckner – for applicant
Ms Z L Hammett – Dunedin District Licensing Agency Inspector – to assist
Sergeant W D Pitcaithly – NZ Police – to assist
Mr M Strickson – objector – in opposition
Mr J M Meddings – objector – in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an application by Amigo Investments Limited (hereafter called the company), for an on-licence in respect of premises known as the “Clarendon Hotel”. The “Clarendon Hotel” is known as a late night destination, catering principally for shift workers. The business has been operating at its present site for decades and is one of the oldest drinking establishments in Dunedin. It is situated on the outer fringes of the Central Business District. The company operates two medium sized bars and a gaming area.

[2] The application was filed with the District Licensing Agency on 17 May 2007. It follows the purchase of the existing business in February 2007. The underlying licence is for a tavern with hours authorised for the sale of liquor at any time on any day. The business currently trades under a temporary authority. The company is seeking the same trading hours as were authorised under the base licence.

[3] It is this aspect of the application that has brought about limited opposition from the Secretary of the District Licensing Agency. The Inspector had recommended that the application be granted, but the Secretary’s report referred to the City Council’s Sale of Liquor Policy. Initially, the Police did not oppose the application. However, they submitted a supplementary report covering the period that the business had been operating under temporary authority. It was clear from the report that there had been significant shortcomings in the manner in which the premises were being operated.

[4] Neither the Police, nor the District Licensing Agency, nor the Medical Officer of Health objected to the grant of a licence per se. Their concerns related to the Dunedin City Council’s Sale of Liquor Policy. This policy restricts trading hours for taverns to 3.00 am. To have hours outside those recommended in the policy, an applicant is required to explain how it is proposed to control intoxication inside the premises, prevent intoxicated people from entering the premises, and generally comply with the provisions of the Act.

[5] In addition to the issues raised in the reports, public notification resulted in two objections being received from neighbouring residents. By the time the application was advertised, the company had been trading for three months. The objectors raised concerns about the hours of operation, damage to property in the area, fighting, intoxication, and general misbehaviour. There was a delay in processing the application because one of the objectors went overseas to work for two months after his objection had been filed.

[6] The company’s directors are Marcus Anthony Chidley, Robert Munro, and Bruce Wayne Scoullar. Mr Munro is the business manager. He has had prior experience in the industry. The remaining directors have recently decided to take a more active interest in the running of the business. Both have obtained their Licence Controller Qualifications preparatory to obtaining General Managers' Certificates.

[7] There are no compliance issues, and the company has lodged the relevant certificates under the Resource Management Act and the Building Act. The company sought to have the lounge bar undesignated between 10.00 am and 7.00 pm to enable sports clubs to hold regular meetings and special events in that area. We understand that the lounge bar is not generally open to members of the public. There were no objections to this particular aspect of the proposal.

[8] The primary issue is about the proposed trading hours. Initially this licence was restricted to a 4.00 am closing. However, in November 2000, the previous licensee was granted trading hours for twenty-four hours seven days a week. Prior to the hearing, attempts were made by the Police and others, to persuade the company to accept reduced trading hours. However, the company has resisted any suggestion of operating its business in a different manner than has been the case over the past seven years.

The Applicant

[9] Mr Robert Munro spoke on the company’s behalf. He was aware that there had been incidents when the tavern was under its previous ownership. Accordingly he checked with the Agency about staff suitability but did not receive a negative reaction. He said that the current trading hours were generally from 8.00 am to 6.00 am the following day. He advised that the premises were normally open as follows:

Mondays 10.00 am to 12.00 midnight
Tuesdays and Wednesdays 10.00 am to 5.30 am the following day
Thursdays 10.00 am to 5.00 am
Fridays and Saturdays 10.00 am to 5.30 am
Sundays 2.00 pm to 12.00 midnight

[10] Mr Munro estimated that between midnight and 5.30 am there was an average of 14 people present during the week, and 20 to 40 people present during the weekend. There was an exception every second Tuesday when staff from the local casino were paid, and about 20 extra patrons patronised the premises between 3.00 am and 5.30 am.

[11] Mr Munro acknowledged that the Police had spoken with him on 25 July 2007 about three incidents that had occurred a few days previously. He stated that both doormen who had been involved in the incidents had since sought other employment. In September 2007, the company had entered into a contract with a security company. He felt that the security company had done exceptionally well since that time.

[12] Mr Munro confirmed that he had agreed with the Police that following the incidents, the company would stop serving liquor at 5.30 am with a view to having the premises closed at 6.00 am. He said that he had kept to the agreement and to his knowledge there had been no further incidents. On the other hand, Mr Munro wished to retain the right to trade on a 24-hour basis to give the company the ability to screen soccer matches and other sporting fixtures live from the Northern hemisphere. He confirmed that he had spoken with one of the objectors in an attempt to address his concerns.

[13] Mr Munro disputed allegations that the “Clarendon Hotel” was the source of rubbish and bottles and cans on the street. He said that he and the staff constantly removed rubbish, and that many of the containers were not sold at the premises. He stressed that the “Clarendon Hotel” was a safe place to drink. He produced a number of references, including one from a Police prosecutor, indicating confidence in the way the premises were being managed.

[14] Mr P Buckner appeared for the company. He submitted that the company provided a unique opportunity for locals to socialise from midnight to 6.00 am in a comfortable, safe and well managed environment. He stressed that the premises were located in an industrial zone and the company’s immediate neighbours were commercial businesses. He submitted that licensed premises would always attract a degree of noise, laughter, and general excitement both inside and outside the premises, but he argued that the operation had improved since July 2007. Mr Buckner contended that although the company traded to 6.00 am at present, he sought the right for the company to retain its trading hours so that it could from time to time trade through the night in response to demand.

The District Licensing Agency Inspector

[15] Mr Kevin Mechen is the Secretary of the Dunedin District Licensing Agency. He presented a copy of the Dunedin City Council’s Sale of Liquor Policy. This policy became effective on 1 July 2006. Under item 12.2 appear the following comments:

“Dunedin has, in the past, allowed licensed premises to operate 24 hours per day. Unfortunately this has coincided with an increase of alcohol-related crime and disorder in the city. In Buzz & Bear Limited v Woodroffe [1996] NZAR 404 at 410, McGechan J said, “Times change. Communities and environments change. Social habits and levels of tolerance change....Any licensee takes a licence under the risk that conditions may change, and a report may recommend adjustment.”

In Ronald Cornelius Van der Lem LLA PH 126/2004 the Authority said, “For some time now the Authority has become concerned at the results of extensive licensing hours.” The Dunedin City Council believes that there is a need for premises to be allowed to open to cater for the increasing late night demand. In setting the hours in the policy the District Licensing Agency has adopted the guidelines used by the Liquor Licensing Authority as described in K R Burton and C A Burton LLA 2020-2025/95:

1. If there are residential neighbours, closure is around 11.00 pm weekdays and midnight or 1.00am on Friday and Saturday nights;

In other cases closure is at 3.00am; and
24-hour licences are the exception rather than the norm

Licences for hours outside those set in the policy may be granted but the application will be determined at a public hearing convened by the District Licensing Agency Hearings Committee. The applicant will be given the opportunity to demonstrate a commitment to the application by explaining how he/she will comply with the provisions of the Sale of Liquor Act and reduce alcohol related harm.”

[16] Mr Mechen confirmed that because the application had to be dealt with by the Authority, there had not been a committee hearing. He stated that the committee had granted three 24-hour licences under the policy. He noted that the “Clarendon Hotel” had existing use rights, and that although it was sited in an Industrial 1 Zone, there was residential activity within the zone. He said it was not clear whether the business fell within the non-residential area in terms of recommended hours, or the residential area. We took the view that despite the evidence from the objectors, the company should be treated as being in a non-residential area. This was particularly because the business had retained a 24-hour licence on that site for seven years.

The Police

[17] The Police exercised their right of audience pursuant to s.108(b) of the Act. They relied on a report sent to the Agency on 10 September last for our consideration. No other evidence was called. In the report, reference was made to three incidents that came to Police attention on 20 July 2007. It was reported that at 7.30 am two patrons had left the premises. They had an argument and then separated. One patron (assessed as extremely intoxicated), kicked the side of a moving vehicle and then punched the driver. A bystander pulled the two apart. The second patron (assessed as moderately intoxicated) saw his friend, and then also assaulted the victim.

[18] At 8.00 am the same morning, three males left the premises. One was an employee. They got into a vehicle which was then driven dangerously before colliding with another vehicle. The driver refused to supply a blood specimen. At about 9.00 am on the same morning, the Police found an extremely intoxicated male slumped over the steering wheel of his car. He had vomited numerous times. He said that he had left the “Clarendon Hotel” at 7.00 am and walked to his car.

[19] We were advised that if the company had held a licence, proceedings would have followed under s.132 of the Act. The report confirmed that the company had offered to stop selling at 5.30 am with a view to closing the premises at 6.00 am. The Police report confirmed that there had been no further incidents, and recommended a 5.00 am closure.

The Objectors

[20] Mr John Meddings resides with his wife at 1 Clark Street, Dunedin, about 100 metres from the “Clarendon Hotel”. He stated that since the beginning of the year there had been a definite increase in late night drunken disturbances. These included property damage, offensive behaviour, fighting and breaking or throwing bottles. He gave evidence that he had called the 111 number several times during the year. Three incidents in February, March and May required Police attention. In addition there had been numerous other incidents when they had been disturbed by drunks. In particular he referred to noise from congregations of patrons at the entrance to the premises or in the smoking area.

[21] Mr Meddings said that he would like to see the company exercising greater control of its patrons. He accepted that not all the disturbances could be traced to patrons of the “Clarendon Hotel”. He suggested a midnight closing time.

[22] Mr Mark Strickson also lives in Clark Street. He stated that since January 2007, loud noise and disturbance from the “Clarendon Hotel” has been a regular occurrence. He contended that he was regularly woken between midnight and 6.00 am. The night before the hearing, he had been woken at 2.50 am as people left the hotel shouting to each other. He had become so incensed at activity on 1 May last, he had written to the Mayor. His letter was a graphic account of what he had put up with in the three months since the company had taken over the premises. He accepted that there had been an improvement since July.

[23] Mr Strickson supported the suggestion that there be more licensee control of patrons, many of whom had been seen leaving the premises with bottle in hand. He suggested that 24-hour licences be restricted to the inner city. He also recommended a midnight closing time as a way of making Dunedin a more pleasant place to live and visit. He described the issue as balancing the needs of the licensee to make a living against the people’s wish to have a quieter and safer city to live in.

The Authority’s Decision and Reasons

[24] When making a decision about a new on-licence, there are a number of criteria to be considered. These are set out in s.13(1) of the Act. In this case, most of the criteria have been satisfied. There are two issues to be resolved. The first is the days on which and the hours during which the applicant proposes to sell liquor. The second issue is the company’s suitability although this does not have the same significance.

[25] The settling of trading hours for a new licence is very much a matter for our discretion. In exercising such discretion we will be guided by the object of the Act. However, where there is a local liquor policy, then the guidelines proposed by the territorial authority, will be invaluable. In K R & C A Burton LLA 2020-2025/95, the Authority said:

“Finally we restate the view we expressed in Tonto Investments (supra) that we continue to welcome and weigh the views of elected Local Authorities (including Community Boards) where these exist. Such an expression of opinion is particularly valuable where a district local approach is advocated as being in the best interests of a particular locality.......Whilst retaining our discretion on a case by case basis, we will be slow to reject the formally expressed views of elected community leaders.”

[26] We accept that the trading hours stated in the policy are guidelines only. In the past we have expressed the wish that councils would develop a clear policy reflecting the views of the community. The Dunedin City Council has been pro-active in accepting responsibility to develope such a policy. The policy attempts to provide a balanced approach between the needs of the community, the rights of the applicant, and the need to consider the objectives of the Act. We note that the Agency is not averse to granting 24-hour licences.

[27] After hearing from the objectors, we agree that the company did not start out well. What has yet to be determined is whether the improvement since the company began to close at an earlier time can be sustained. In our view 24-hour licensing needs exemplary management systems. Initially, these proved to be inadequate. Given the company’s record after trading for a few months, there is no way that we would agree to a 24-hour licence.

[28] It could be argued that the company had a reasonable expectation that the existing conditions would be rolled over. However, the policy does not say this. The guidelines give no indication that 24-hour trading is the norm. In balancing the competing factors, we will take into account the hours previously granted.

[29] In granting any new licence, we prefer to adopt a precautionary approach. In our view, the issue of trading hours can be reviewed on renewal of the licence. Any such renewal will take into account the District Council’s policy and whether changes are recommended. Other considerations will include the number of special licences that have been applied for during the previous 12 months, and the impact of the business on the neighbours. The company should be well aware that the trading hours could be further reduced on renewal.

[30] Much of the evidence produced by the objectors was non-specific. However we need to address the issue of noise as we have consistently taken the view that the escape of noise creating a nuisance, is an example of poor management, and therefore reflects on an applicant’s suitability. This is a case where s.14(7) of the Act applies. This reads:

In determining whether to impose conditions under subsection (5)(a) and, if so, what conditions, the Liquor 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.

[31] In the decision known as Paihia Saltwater (2001) Limited LLA PH 391/2001 we made a number of comments about the issue of noise:

“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 to 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”.

[32] Now issues such as a noise management plan or an acoustic consultant are not appropriate since all the activity complained about occurs outside the premises. It is accepted that the licensee’s responsibility is not to allow patrons to become intoxicated. The regulation of the hours of trading has always been recognised as a useful tool in controlling liquor abuse issues as well as anti-social behaviour. We believe that it is critical that there be a period between the time the premises closes and the time it opens again. If the company wishes to show televised sport to persons who are sober, then it may have to apply for special licences initially.

[33] The difficulty about 24-hour licences is that there will be times when they attract people who have already been drinking. Furthermore, they encourage patrons to stay out late. The longer a person is able to drink the greater the likelihood of intoxication. Unless skilfully managed, 24-hour licences will often act as a catalyst for misbehaviour. They should be the exception and they should only be granted where there is an exemplary management regime in place. The company can hardly claim that description.

[34] In summary, we are satisfied as to the matters to which we must have regard as set out in s.13(1) of the Act. However, we believe that for the next 12 months the applicant should not trade beyond 5.00 am, subject to the right to apply for special licences. Allowing for the 30-minute drink up time this will effectively provide for a minimum three-hour gap between the business closing and opening up again. In making this decision, we have taken into account the provisions of s.14(7) of the Act. We give notice that if there is evidence of further disorder causing disturbance to neighbours on the renewal, the closing hour may well be reviewed. On the other hand, if the probationary period is successful, there is no reason why the company cannot apply to extend the trading hours.

[35] We grant the company an on-licence for the sale and supply of liquor for consumption on the premises, to any person present on the premises. A copy of the licence setting out the conditions to which the licence is subject is attached to this decision. The lounge bar will be undesignated from 10.00 am to 7.00 pm as requested.

[36] The hours of operation will be Monday to Sunday 9.00 am to 5.00 am the following day. 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.

[37] The company’s attention is drawn to ss.25 and 115(3) 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 duty manager placed inside the premises so as to be easily read by persons using the premises.

DATED at WELLINGTON this 21st day of December 2007

Judge E W Unwin
Chairman

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