Kim and Chang, re [2009] NZLLA 1470 (22 December 2009)

New Zealand Liquor Licensing Authority

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Kim and Chang, re [2009] NZLLA 1470 (22 December 2009)

Last Updated: 17 January 2010

Decision No.PH 1470/2009

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by MIN SUNG KIM and JI SUN CHANG, trading in partnership, pursuant to s.31 of the Act for an off-licence in respect of premises situated at Shop 12, 240A Broadway, Newmarket, Auckland, to be known as “Liquor Mate”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Mr P M McHaffie

HEARING at AUCKLAND on 11 December 2009

APPEARANCES

Mr J G Dahlin and Mrs J E Dahlin – agents for applicant
Mrs M J McLeod – Auckland District Licensing Agency Inspector – to assist
Acting Sergeant C D Lally – NZ Police – to assist
Mr P S Christini – on behalf of Broadway Park Residents Society Incorporated – objector
Mr W J D Guest – on behalf of Veolia Transport Auckland Limited – objector
Mr A S Galloway – representing Alcohol Advisory Council of New Zealand – submitter

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an application for an off-licence in respect of a proposed stand-alone retail liquor store that is to be called “Liquor Mate”. The application is brought under s.36(1)(c) of the Act. In other words the sale of liquor is to be the principal business of the store. The applicants are Min Sung Kim and his wife Ji Sun Chang (hereafter called “the applicants”), trading in partnership. The application was filed with the Auckland District Licensing Agency on 24 August 2009 and received by the Authority two months later. In early November 2009 the agents for the applicants requested urgency.

[2] The applicants have a lease of Shop 12 in a new retail development that is currently being established in and around Station Square, linked to the Newmarket Train Station. There are 32 new speciality shops that are gradually being outfitted. These will form three sides of Station Square. A further 12 shops will face onto Remuera Road. The Newmarket Railway Station is due to be opened on 18 January 2010. It is the shop’s proximity to Station Square and the Railway Station that has been the primary factor in the opposition to the grant of the licence.

[3] Accompanying the application was a planning certificate from the Auckland City Council for the purposes of s.31(1)(e) of the Act. This certificate confirmed that the use of the premises as a retail shop met the requirements of the Resource Management Act 1991 between the hours of 7.00 am and 2.00 am the following day. The building also meets the requirements of the New Zealand Building Code. The applicants requested that the premises be designated as supervised.

[4] Originally the trading hours that were sought were from 9.00 am to 11.30 pm Monday to Sunday. Following the receipt of objections the applicants reduced the proposed hours to enable them to trade between 9.00 am to 10.00 pm seven days a week. On the question of suitability, both applicants hold current General Manager’s Certificates issued in December 2006. They owned and operated a retail liquor store in Queen Street, Auckland between December 2006 and March 2009. During that period of time an employee sold liquor to a minor during a controlled purchase operation. As a result the applicants had their off-licence suspended for 24 hours and Mr Kim’s manager’s certificate was suspended for 28 days (see Bridget Jane Suckling v Min Sung Kim and others LLA 1554-1555/2008).

[5] The Police opposed the application. They pointed to the Auckland City Council’s draft Liquor Licensing Policy that required that off-licence premises be located no closer than 100 metres to sensitive activities. They expressed concern about the proximity between the proposed store and the new railway station coupled with the numbers of school children expected to use the station, the ease of access between Station Square and the station, and safety issues. There were also concerns about the company’s suitability although this was not a critical factor. Because of the short notice caused by setting the matter down under urgency, the Police requested an adjournment. Given the potential delay, that request was declined. We are grateful to Acting Sergeant Lally for producing the Police overview despite other commitments.

[6] The District Licensing Agency Inspector noted that the draft Liquor Licensing Policy had been released for public consultation, but the City Council had effectively stopped the process on 8 October last. She pointed out that the Council was planning to have Station Square closed to the public from half an hour after the last train to half an hour before the first train. She said that she was opposed to the application unless the closing hour was reduced to 10.00 pm, and the applicants undertook not to sell beer and RTDs singly but in a minimum of four. As it happens the applicants agreed to these conditions, so the Inspector withdrew her opposition.

[7] Public advertising attracted 11 separate letters of objection. Six of these objections were identical. They were all signed off by the secretary of five bodies corporate as well as the Broadway Park Residents Society (hereafter called “the society”). The bodies corporate represented some 180 apartments situated close to the Newmarket Railway Station. The concerns raised related to the number of existing licensed outlets in Newmarket, a claim than the grant of an off-licence was not in the public interest, risk of harm to school children using the railway station, and detriment to the environment. The sixth letter from the society’s secretary was based on identical grounds. The society was said to represent 379 properties in Broadway Park.

[8] The other five objections were from:

• [a] The Chairman of another body corporate representing 40 owners of apartments in Broadway Park;
• [b] The Newmarket Protection Society;
• [c] The Newmarket Business Association;
• [d] Veolia Transport Auckland Limited; and
• [e] An apartment block in Station Square.
  

[9] The grounds for opposition included the trading hours, traffic considerations, proliferation of licences, proximity to a busy transport hub, and potential for intoxication and disorder.

[10] Although some of the objections did not address the criteria set out in s.35 of the Act, and although there was a question as to whether all the objectors were able to demonstrate a “greater interest than the public generally”, the objections to the trading hours were sufficient to trigger the requirement to hold a public hearing. At any event we believe that the Inspector was right when she recommended that all objections be accepted because of the unique nature of the application.

[11] In the event only two of the objectors appeared at the hearing. The President of the Newmarket Protection Society advised that it was not possible to attend. A submission was sent on the Society’s behalf. It was argued that the premises were in an area obscured from public scrutiny; that a large number of students already frequented Station Square; that there was already a new off-licence on Broadway; and that the link between availability of liquor and crime placed users of the area at risk.

[12] As for the remaining objectors, their objections carry little weight. Given the lack of any explanation for their non-appearance it is not possible to ascertain whether these objectors wish to continue with their objections or have lost interest in the outcome. At any event the applicants and their agents were prevented from testing any of these objector’s claims and assertions. To make a ruling adverse to an applicant based on an unsupported objection is a denial of natural justice.

[13] A view of the site confirmed that the proposed shop is a very small part of a massive and impressive redevelopment in Newmarket. It seems clear that when the complex is open it may well become a hub and/or focal point of activity. We note that 10 of the current shop owners wrote letters to express their support for the proposed bottle store. However, the application has to be determined on the criteria set out in the Sale of Liquor Act 1989, and not on the numbers of objectors and supporters. The fact that a bottle store is not welcomed by some of the nearby residents and businesses is not a ground for refusing to grant a licence. Pursuant to the Act as it is presently written, the applicants are entitled to a grant of a licence if they satisfy us as to the relevant criteria.

The Application

[14] Mr M S Kim noted that the size of the floor area for the new shop was 85 m2. He emphasised that the store would not be a “discount liquor store”. He intended to stock a good range of high quality wines and spirits as well as beer and RTDs. He stated that the store’s policy would be not to sell beer or RTDs singly or in less than packs or lots of four. Furthermore he stated that his intention was that there would be no promotions or sales on the store’s window or door. He contended that an uncluttered window and door would assist with monitoring and managing the business. The absence of advertising in this way is a significant and positive gesture very much in keeping with a later submission made on behalf of the Alcohol Advisory Council. We regard this concession as a form of undertaking any breach of which could lead to enforcement proceedings.

[15] Mr Kim rejected any suggestion that school children would walk past the store to gain access to the station as the store was at the dead end of the line of shops and not on any direct route to the entrance to the station. This was confirmed not only be our own view of the store but also by the objection from the Newmarket Protection Society, which was concerned that because the shop was at the end of a row of shops, there would be less scrutiny late at night. Mr Kim was advised at the hearing that the only food items that could be sold were chips, nuts and cocktail nibbles normally associated with the sale of liquor. He confirmed that there was no intention to sell party pills.

[16] In summary the applicants presented as very concerned to conduct this new venture in a responsible and neighbourly fashion. They were well aware that Station Square was the subject of a liquor ban and were anxious to ensure that the area remained safe for everyone.

[17] Mr G G Bulling represented the owners of the 42 retail properties. He had already written a major submission in support of the application and sought to expand on his earlier comments. He noted that there was to be a 24 hour liquor ban covering the Square. This would prevent the presence of open containers of alcohol as well as its consumption. In addition the Square was policed by security cameras. His understanding was that security at the railway station was very high with approximately 35 security cameras as well as security patrols provided by the Auckland Regional Transport Authority.

[18] Mr Bulling advised that the retail properties were all part of a body corporate that would have a site manager engaged at night and during the day. He submitted that all shop operators around the Square had a natural self-interest in maintaining and improving the quality of the development. This incentive to keep standards high would in turn support the value of their investments and their businesses. This attitude and atmosphere would be reinforced by the self-regulation of the Body Corporate rules, the high levels of foot traffic in the general area, as well as observations by the residents in the apartments overlooking the Square. In summary Mr Bulling considered that it would be difficult to imagine a more secure or observed location anywhere in Auckland

[19] Mrs J E Dahlin is a licensing consultant based in Auckland. She was aware of recent trends arising from growing community concerns about increased access to liquor. On the other hand she pointed out that no schools had objected to the application. Mrs Dahlin noted that the draft Auckland City’s Liquor Licensing Policy was no longer being progressed, and accordingly the site of the proposed store could not be an issue particularly as the policy had only been in draft form. She questioned whether the apartment dwellers had demonstrated a greater interest in the application than the public generally.

[20] Mrs Dahlin referred us to a recent Agency decision to grant an off-licence to a “Bettys” outlet at 160 Broadway. The site is located about 30 metres away from a popular park and close to an urgent pharmacy. She had been able to purchase a single RTD from the store. Not only was she given a free 10 percent discount card, but she was offered the opportunity to increase the discount after earning loyalty points. She questioned why the objectors had not opposed this particular application, given its propensity to discount liquor, and the likelihood of members of the public being able to access this store, on their way to the railway station or the Square.

The Police

[21] Acting Sergeant C D Lally argued that the proposed location of the new store was a sensitive area since the Square was likely to be used as a community meeting place for locals and visitors. He suggested that the establishment of the store would undermine the integrity of the liquor ban and encourage anti-social behaviour. He contended that a large number of school age children would use the area to transit to and from the 11 schools in the general area. On the other hand he acknowledged that there were no schools nearby. He expressed concerns about youth access to alcohol and youth exposure to advertising. This claim, while valid, was countered by the applicants’ decision not to advertise on the window or door of the shop.

[22] The Acting Sergeant produced a number of national and international studies that have established certain guiding principles. These may be summarised as follows:

[a] Increases in hours and days for which alcohol is available for sale are consistently related to increases in levels of problems;
[b] Restricting hours and days of sale as well as density of liquor outlets are an effective way of reducing alcohol-related harm;
[c] Regulating the availability of alcohol can lead to reductions in violence;
[d] Alcohol outlet density has an impact on overall alcohol consumption and drinking patterns;
[e] Caffeine in alcoholic beverages has not been demonstrated to be safe;
[f] Advertising of alcohol plays a role in an underage person’s drinking decisions.

The Objections

[23] Mr P S Christini is the site manager for the various bodies corporate that come under the umbrella of the Broadway Park Residents Society Incorporated. He referred to the “thousands” of students who come into Newmarket on a daily basis to attend the 11 secondary schools in the area. He contended that a significant number of these students would use the Newmarket Railway Station as well as the adjacent bus stops on both Broadway and Remuera Road.

[24] He argued that the “prominence” of a liquor store was contrary to a strong and healthy community. He was unable to say why the Society had not objected to the recent establishment of “Bettys” on the same basis, except that the public notice had not been seen. He submitted that it was the ‘centrality’ of the location that was the issue, combined with access to, and promotion of, alcohol. He stated that the society’s other concerns arose from ‘safety’ issues resulting from people consuming liquor prior to getting on and off trains.

[25] Mr W J D Guest is the General Manager – Strategy and Development for Veolia Transport Auckland Limited (hereafter called “Veolia”). Veolia is currently contracted to the Auckland Regional Transport Authority to operate passenger rail services in Auckland. We understand that it does not own or have responsibility for the management of tracks or rail stations. Its priority is to ensure that passengers are safe and comfortable.

[26] Mr Guest thought that the new railway station would initially service up to 3,500 passengers daily. He contended that many of the passengers would be likely to pass through the Square on their way to and from Broadway and the Station. He foresaw potential safety and security problems if a new bottle store was established and if people were able to drink in the Square.

[27] On the one hand Mr Guest accepted that Veolia was responsible for dealing with persons considered unsafe to travel and further, that passengers were allowed to carry liquor on the trains. On the other hand if liquor is consumed on the train the passengers are removed at the next station. He acknowledged that there were on and off-licences located in close proximity to other railway stations. He noted that two such stations were given special attention because of the activities of young people in those areas. His main concern was the proposed store’s proximity to the railway station as well as its position in relation to the tracks. However, we understood that mesh is to be erected to counter any suggestion of risk.

The Alcohol Advisory Council of New Zealand

[28] The Alcohol Advisory Council of New Zealand (hereafter called “the Council”), was established in 1976. Its primary objective is to encourage and promote moderation in the use of liquor, and discourage and reduce the misuse of liquor, and the minimisation of the personal, social, and economic harm, resulting from liquor abuse. Pursuant to s.108(f) of the Act, the Council was granted the right to appear and be heard.

[29] Mr Andrew Galloway is the Council’s Project Manager, and spoke on its behalf. He confirmed that the Council’s motivation was based on its statutory interest in reducing alcohol-related harm in New Zealand. On the other hand the Council recognised that the Authority’s ability to refuse licences based on density grounds or locality was inhibited by the Act. He referred to our decision in P P & G Basra Limited LLA PH 540/2009 where trading hours had been reduced to limit the exposure of school children to a bottle store and its advertising, noting at the same time that the decision was under appeal to the High Court.

[30] Mr Galloway also referred to a comment made in the recent Court of Appeal decision in My Noodle Limited and ors v Queenstown-Lakes District Council and anor [2009] NZCA 564 as follows:

“In our view, the Authority is not required to be sure that particular conditions will reduce liquor abuse. It is entitled to apply the equivalent of the precautionary principle in environmental law. If there is a possibility of meeting the statutory objective (as the Authority found there was in this case), then it is entitled to test whether that policy is a reality. In this case, it clearly intended to test its hypothesis and keep the matter under review.”

[31] Mr Galloway developed the Council’s argument that young people were significantly affected by liquor promotions and advertising by reference to overseas studies. The research shows a correlation between liquor promotions and advertising and higher levels of consumption. He argued that it is common knowledge that supply of liquor to minors is often made by older friends or siblings making purchases on their behalf. For those reasons Mr Galloway advocated that we impose conditions on any licence as follows:

• [a] Limiting price advertising and promotions especially on the outside of the outlet;
• [b] Prohibiting under 18 year olds wearing school uniforms from entering the liquor store.
  

The Authority’s Decision and Reasons

[32] In considering an application for an off-licence the Authority is directed by s.35(1) of the Act to have regard to the criteria set out below. Pursuant to s.32(3) of the Act, an objector may not make an objection in relation to any matter other than these criteria:

(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 or conveyance, 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 and services:
(f) Any matters dealt with in any report made under section 33 of this Act.

[33] The only other relevant consideration is s.37(5) of the Act. This provision does not affect our ability to grant or refuse a licence, but we are able to invoke the provision in relation to the proposed trading days and hours. This section reads:

In determining the conditions to be imposed under subsection (4) of this section, 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.

[34] In a recent decision Liquor World Limited LLA PH 1189/2009 we attempted to set out a number of principles and guidelines that apply when applications like the present one are made. This was because of general public misconceptions and/or misunderstandings about the licensing of new liquor outlets. The principles and guidelines are:

• [a] Only people who have a greater interest in the application than the public generally can object. They can only object in relation to one or more of the criteria set out above. How people establish an interest in the application that is greater than any other member of the public, is a matter of judgement. In this case the Inspector has suggested a circle with a radius of one kilometre within which an objector must reside or have a business that could be affected. We think that although the proposal is generous, it is a fair and realistic suggestion (see s.32(1) and (3) of the Act);
• [b] If there is a valid objection then it is likely that there will be a public hearing. At the hearing we have the discretion to hear evidence about matters outside the above criteria. How much weight is given to that evidence is a matter for us. Such evidence may assist us in fixing the conditions of the licence, with particular regard to the trading hours;
• [c] If objectors do not appear and no explanation is received for their absence, then it is likely that their objection will have no value. On the other hand if they appear and do not address the above criteria then their objection will also have little probative value;
• [d] Any objection that refers to the prejudicial effect that the grant of a licence may have on any other licensed premises will not be taken into account (see s.35(2) of the Act);
• [e] We have no power to take into account the number of other liquor outlets in the area or the density of those outlets. We cannot refuse to grant a licence in response to public opinion that the licence is not wanted. It is not necessary for an applicant to establish that the grant of a new licence is necessary or desirable. In summary we have no discretion to refuse an application if the applicant is suitable and holds the appropriate resource consent (see Cayman Holdings Limited LLA PH 145/2001);
• [f] The certificate under the Resource Management Act covers issues such as parking, traffic, and the suitability of the location. If an applicant has been given resource permission to establish an off-licence it is not open to us to suggest that the site is unsuitable because of its proximity to churches or schools or other sensitive land uses;
• [g] In fixing the trading days and hours we may have regard to the site of the premises in relation to neighbouring land use (see s.37(5) of the Act). In two recent cases we have declined to allow trading on a Sunday (see Complete Catering Limited LLA PH 1445/2009 and P P & G Basra Limited LLA PH 540/2009);
• [h] When fixing trading hours and days for new licences, a conservative approach will be adopted, particularly where there is no trading history. The trading hours and days can be reviewed on renewal;
• [i] It is accepted that the establishment of a new bottle store or other off-licence may impact adversely on the neighbouring amenities and way of life. This potential can sometimes be addressed by fixing conditions for the new licence, as well as by the renewal process after the ‘probationary’ year;
• [j] Any new licence is issued for a period of one year. This gives objectors and the reporting agencies the opportunity to monitor the store to see exactly what sort of business develops. If concerns are realised, then the Authority has the power to refuse to renew the licence, or it may alter the trading hours or other conditions of the licence.

[35] Applying the above criteria as well as the principles it is our view that we have no option other than to grant the application. The company fulfils the criteria referred to above. Given the levels of security in the railway station and the Square, combined with the liquor ban, there was no indication that this particular store would foster the type of behaviour anticipated by the objectors. If it is established that the applicants have not followed their business plan then consequences to the licence will flow on renewal. Our view of the area satisfied us that the proposed store was well away from any thoroughfares that might be used by people going to and from the railway station. We also note that currently KiwiRail has licences to sell liquor in respect of six trains in New Zealand including a commuter train.

[36] We used to take the view that the establishment of a new bottle store was unlikely to have any impact on the neighbouring community. Experience has shown that this is not necessarily the case. However, in this case the applicants have requested that the store be designated as supervised. They do not intend to discount liquor or sell RTDs or beer in single lots or advertise on the window or door of the shop. The shop itself is not prominent and the hours are reasonable. Notwithstanding the name chosen for the business, the measures to be taken show all the attributes of good corporate citizenship and host responsibility. There is a stronger argument that the people who purchase liquor at the other new premises in Broadway, could well drink the contents in the park over the road, and could create a much greater problem.

[37] While we accept that there is a Bill currently before Parliament that seeks to give local bodies a greater say into where a new licence may be sited, and we recognise that a report from the Law Commission is due next March, the company is entitled to be judged under the present law. We would like to be able to impose a condition preventing school children from entering the store when wearing a school uniform. The fact is that if they are under 18 then it is illegal to do so without a parent or guardian. If they are over 18 then such a condition would be governed by the Human Rights Act 1993 (see s.37(5A) of the Act).

[38] For the reasons we have attempted to set out, we are satisfied that in terms of s.35(1) of the Act a liquor licence is appropriate. We grant the applicant an off-licence for the sale or delivery of liquor on or from the premises to any person for consumption off the premises.

[39] The hours of trading will be:

Monday to Sunday 9.00 am to 10.00 pm

[40] A copy of the licence setting out the conditions to which the licence will be subject, will be attached to this decision. The premises will be designated as supervised. The licence will not issue until:

• [a] 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;
• [b] All relevant clearances have been obtained. The company is not entitled to sell liquor until the licence issues.

[41] The applicant’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 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 each principal entrance; and
• [c] When any manager is on duty the name of the manager is to be prominently displayed inside the premises so as to be easily read by persons using the premises.
  

DATED at WELLINGTON this 22ND day of December 2009

B M Holmes
Deputy Secretary

Liquor Mate.doc