New Light Tailor Limited, re [2009] NZLLA 176 (27 February 2009)

Last Updated: 28 January 2010

Decision No. PH 176/2009

IN THE MATTER of the Sale of Liquor Act

AND

IN THE MATTER of an application by NEW LIGHT TAILOR LIMITED pursuant to s.18 of the Act for renewal of an on-licence in respect of premises situated on the First Floor, 51 High Street, Auckland, known as “The Lounge Bar”


BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 12 February 2009

APPEARANCES

Mr D G Scott – agent for applicant
Miss A L Marsh – Auckland District Licensing Agency Inspector – in opposition
Sergeant B R Law – NZ Police – in opposition
Ms A M Richards – representing Medical Officer of Health – in opposition
Mr H C Caddy – representing “Elbow Room” – objector

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This is an opposed application by New Light Tailor Limited (the company) for the renewal of its on-licence. The premises are situated in High Street in the Auckland Central Business District, and the business trades under the name of “The Lounge Bar”. The hours authorised for the sale of liquor are at any time on any day. The licence was granted on 17 August 2007. No changes were sought to the conditions of the licence.

[2] This renewal application is the first to be dealt with since the business was established under its present ownership. The application is, therefore, the most important of all renewals, as it gives an opportunity for the reporting agencies and neighbours to report on the impact of the business following the first ‘probationary’ year.

[3] The application attracted opposition from the Police, the District Licensing Agency Inspector, and the Medical Officer of Health. The Police noted that the company had failed to attach a copy of the application in a conspicuous place within 10 working days as required by s.18(4) of the Act. They contended that potential objectors had been deprived of the opportunity to object.

[4] The District Licensing Agency Inspector referred to the fact that 13 noise complaints had been registered with the Council over a period of 13 months. She noted that four excessive noise directions had been served, and that on one occasion the company’s sound equipment had been seized. The Medical Officer of Health advised that the company had failed to return its Public Health Questionnaire and their enquiry could not be completed. In addition a visit had revealed a lack of food and signage.

[5] Public notification attracted objections from two licensed premises within the vicinity. These were from “Vivace Restaurant” and “Elbow Room”. In addition a late objection was received from a resident of a nearby apartment. The basis of all the objections was the unacceptable manner in which the premises had traded with detrimental effect on neighbouring residents and businesses. In the event, the only objector to appear at the public hearing was Mr H C Caddy representing the “Elbow Room”.

[6] In those circumstances we have applied our normal policy. This is that if objectors do not appear, and no explanation is received for their non-appearance, little probative weight is given to the objection. This is because there has been no opportunity to test the objection by questioning the objector. Furthermore it is now unclear whether the objector is still concerned about the way the business has been operated. Some objectors change their minds after hearing from the applicant.

[7] “The Lounge Bar” was the subject of an enforcement application earlier in the year. The licensee traded into the small hours of Good Friday morning 21 March 2008, in breach of the provisions of ss.14(2), 170(2) and 171 of the Act. This illegal activity culminated in suspension (imposed by the Authority by consent) of the on-licence for 24 hours (on a Friday), and the General Manager’s Certificate issued to Mr Chamandeep Singh for three weeks. See Bryce Robert Law v New Light Tailor Limited and anor LLA 804-805/2008.

The Application

[8] Mr Chamandeep Singh spoke on the company’s behalf. He is the company’s sole director and shareholder. He spoke of the company’s success in attracting patrons to its ‘Hip Hop’ music style. He believed that “The Lounge Bar” was the only licensed premises dedicated to such popular rap in Auckland. He stated that the business was his passion and he would not do anything to affect his licence. He said that the maximum capacity is 101 people and that most customers come to the premises having heard about the entertainment on offer. He said that the premises were generally open on Thursday, Friday and Saturday nights. The business tended to open at about 10.00 pm and trade through to 5.00 am or 5.30 am. On Sunday mornings the bar closes at 6.00 am to 6.30 am.

[9] Mr Singh said that a menu is now displayed in the bar, and that although food is never requested, they have the capacity to heat up mini meals as well as provide snack food. He explained why he had neglected to complete the questionnaire. He said that there was some confusion because he had received a letter to pick up the food licence. As this was from the Environmental Health Officer at the Auckland City Council, he had apparently assumed that there were no other outstanding matters from a health perspective. He had then gone on holiday only to return and find that the questionnaire still needed to be completed. He advised that this had been attended to the day before the hearing.

[10] As far as the public notice was concerned, Mr Singh said that he put it on the front door one afternoon. He said he was not sure of the date but thought it was a Monday or a Tuesday. He said that the next day he found that the notice had been ripped off. When he was advised of the Police concerns he said that he again placed a notice on the front door. On the second occasion he thought it was a Thursday and the same thing had happened. According to him there was a piece of the notice hanging to some blue tack. He said that he had to place the notice on the outside of the front door as otherwise the document would not have been able to be read.

[11] Mr Singh accepted that on the door there was a notice indicating the business was open to “late”. He acknowledged that there were often migrating drinkers from other licensed premises who were attracted to the entertainment. He accepted that often people queued outside the premises waiting to enter. He acknowledged that sometimes there could be as many as 100 to 120 people. Generally he thought that the number was 50 to 60 people. It was estimated that people waited in the queue for about 30 to 60 minutes.

[12] Mr Singh produced a current copy of the company’s Host Responsibility Policy. This includes the comment that the company promotes its food with clear signage. He said that he was responsible for staff training. He contended that when they tried to sort out problems with patrons, the patrons sometimes became aggressive and they tended to leave them alone. He said that they did not hesitate to call the Police if necessary. He said he had “called the cops” a few times although the Police indicated that there were no records of any such call outs.

[13] The company called Mr Jack Jagjiva as a witness. He is the manager of “The Lounge Bar” and holds a manager’s certificate. He has worked at the premises for two and a half years. He confirmed that the company had non-alcoholic beverages available as well as food, and the signage confirmed this. He accepted that the menu might have been missing when a representative from the Medical Officer of Health called in August 2008. He confirmed that the door staff were unable to intervene in any disturbances outside the premises. If people showed signs of aggression or intoxication inside the premises then service was slowed down.

[14] Mr Jeremy Eves has a security business and is under contract to the company to supply security door staff. He stated that he was also under similar contracts with other premises in the general area. Mr Eves said that they did their best to maintain order outside the premises and tried to take a pro-active approach. He maintained that there was a dress code and they ensured that all identifications were checked.

[15] Mr D G Scott, the company’s agent, submitted that some of the people who got into trouble outside the premises were people who had been drinking at other premises. He argued that the people had been refused entry to the premises because of their state of intoxication. They had then caused the disorder that had been referred to.

The District Licensing Agency Inspector

[16] Anita Marsh is a warranted liquor licensing Inspector and has been with the Auckland City Council for eight months. She stated that prior to receiving the renewal application she received notification that the sound equipment at “The Lounge Bar” had been seized. This happened on the morning of 8 August 2008. The equipment had been returned later in the afternoon. However, at 2.49 am on 9 August 2008, “The Lounge Bar” had again been served with an excessive noise direction notice.

[17] Miss Marsh researched the history of noise complaints in respect of the subject premises. She produced the record showing that from 1 August 2007 to 9 February 2009 there had been 13 noise complaints registered with the Council. The record showed that four excessive noise direction notices had been served on the company. These were as follows:

14 September 2007 1.31 am
8 August 2007 1.37 am
9 August 2007 2.49 am
15 November 2007 2.40 am

[18] On all other occasions, either the music was deemed not to be excessive or no noise was detected. In addition the sound equipment had been seized at 3.19 am on 8 August 2007. Some of the witnesses contended that over the Christmas period businesses became quieter in the Auckland Central Business District as people went away. The company witnesses disputed this opinion.

The Police

[19] Sergeant B R Law is in charge of the Auckland Downtown Police Liquor Licensing Unit. He stated that his Unit was aware that there were members of the public who had stated an interest in filing an objection to the renewal of the licence. He said that these people were waiting for the company to place a public notice on the front door as required by the Act. Sergeant Law contended that members of the Unit walked past the premises twice a day. Accordingly he became aware that no notice had been posted within 10 working days after the renewal application had been filed.

[20] Sergeant Law stated that he contacted Mr Scott, the company’s agent, and advised him that no notice had been displayed. This was followed up with an e-mail. Because of the lack of public notification as required by s.18(4) of the Act, the renewal was opposed. The Sergeant recalled that the requisite notice been posted in 2007, when the application for a new on-licence was first filed. He advised that in October 2008, a member of the public had rung to ask where the notice was. By that time the objection period was well expired.

[21] Sergeant Law gave evidence that on 23 November 2008, at 2.30 am, he was walking to his car. He and his associates witnessed a female arguing with and slapping a male. He believed that both parties had come from “The Lounge Bar”, because advice had been since received that the incident had started in the bar. He then noticed four females and five males erupt into a savage brawl. A 111 call was made for assistance. In the meantime one person was arrested for smashing the window of a parked car.

[22] The Sergeant noticed that there were approximately 100 to 120 patrons milling around the entrance waiting to get in. Many of them were blocking the road. In his opinion the door staff could not control the crowd numbers. He described the area outside “The Lounge Bar” as a "shambles". For safety reasons the Sergeant told management not to allow any other patrons entry into the premises.

[23] Sergeant Law produced the Alco-Link data for the bar between 1 January 2007 and 10 February 2009, a period of 25 months. This data is collected automatically by the Police. It provides very useful intelligence about how a particular business is being operated. Any person who is apprehended or arrested, is asked where he or she had consumed his or her last drink. Copies of the relevant data are sent to each of the premises on a monthly basis. In 2007 there were 27 entries of individuals who had been apprehended or arrested after drinking at "The Lounge Bar". Sixteen were described as slightly intoxicated, and 11 were said to be moderately intoxicated.

[24] The records show that in the 2008 year, there were 46 entries. Of these people, six were described as extremely intoxicated, 21 were said to be moderately intoxicated, 17 were slightly intoxicated, and two people were not assessed. Sergeant Law stated that the licensee had reported only one of the occurrences leading to the apprehension of the 46 persons. He produced a chart to show that a significant number of calls for assistance had came from people in the vicinity of “The Lounge Bar”.

[25] Sergeant Law produced a chart to show that “The Lounge Bar” was the fourth worst performing premises in the Auckland Policing District. His Unit monitors some 1760 licensed premises. He noted that the three premises who were worst performing, were two or three times the size of “The Lounge Bar”.

The Medical Officer of Health

[26] Ms Angela Richards is a Liquor Licensing Officer with the Auckland Regional Public Health Service. She reports on licensing matters on behalf of the Medical Officer of Health. She confirmed that the Medical Officer of Health has a legislative function under the Health Act to improve, promote and protect public health. To that end, one of the aims is to reduce the negative social and health outcomes, brought about by over-consumption of liquor.

[27] She advised that on 26 August 2008, a Public Health Questionnaire had been sent to the company. The accompanying letter asked that the document be completed and returned within five days, to enable the report to be filed. Ms Richards gave evidence that on 28 August 2008, she had visited the premises to assess compliance with the Act. She could find no signs indicating the availability of food. She stated that the bar staff advised her that no food was available. She had been told that the premises were being refurbished at the time.

[28] Ms Richards spoke with Mr Chamandeep Singh who was the duty manager at the time. When prompted about the lack of food, he offered to send a doorman or member of the bar staff to a local food outlet to pick up a ‘combo’. He said that the menu that advertised the availability of ‘combos’ from local food outlets, had been misplaced. Ms Richards pointed out the relevant condition in the on-licence. She noted that the snack menu that had accompanied the on-licence application had a different range of food than the ‘combos’ that Mr Singh had stated were available. Ms Richards advised that the completed questionnaire had been received the day before the hearing.

The Objector

[29] The original objection was filed by Ms Emma Wright on behalf of the “Elbow Room”. Her objection was based on the following issues:

Failure to display the required notice

Noise

Footpath space

Violence

Intoxication

Drug Use

[30] Ms Wright was unable to attend the hearing at the last moment and Mr Caddy attended on her behalf. He has worked at the “Elbow Room” on a full time basis since November 2008, and had also been a regular patron prior to that time. He confirmed the comments that had been made earlier. He described the music as rhythm and bass and that the bar attracted people in the 18-25 year age group. He argued that the noise from the music travelled extensively. He suggested that “Elbow Room” had often been accused of excessive noise which had actually come from “The Lounge Bar.” He referred to times when “Elbow Room” had been visited by a Noise Control Officer only to find that the noise was actually emanating from “The Lounge Bar”.

[31] In addition Mr Caddy referred to patrons of “The Lounge Bar” smoking and congregating in High Street. He argued that the patrons often had arguments resulting in fighting, screaming and vomiting. He said that he had witnessed the aftermath of an assault on Saturday 23 November 2008. He contended that there was a lack of control over the patrons who were queuing outside on the footpath. The patrons appeared to dominate both sides of the street as well as the street itself. Mr Caddy submitted that there were often fights, and abusive language from patrons of both genders. Of more concern was that many “Lounge Bar” patrons would move down and intimidate and disturb “Elbow Room” staff and patrons. He thought there was a climate of fear in the area caused by the behaviour of the patrons, and he had witnessed such incidents.

[32] Mr Caddy accepted that he was unable to give direct evidence in respect of his allegations. On the other hand he was sure that “Lounge Bar” patrons had vomited and urinated in business doorways, against business walls and on the footpath. He suggested that there was often the smell of marijuana around the vehicles parked outside the premises. He argued that he had seen patrons coming out of the "Lounge Bar" in an intoxicated condition. In summary Mr Caddy submitted that the management of “The Lounge Bar” were unable, or refused, to control the patrons who attended their premises in large numbers.

The Authority’s Decision and Reasons

[33] As a matter of law, all new licences are granted for one year. This gives neighbours and the agencies the opportunity to monitor the business. If an applicant shows a lack of commitment to host responsibility, or to the conditions of the licence, then we have the power to refuse to renew the licence, or alter the conditions, with particular attention to the trading hours.

[34] In this way all licence holders have a clear incentive to show not only that they are committed to the welfare and safety of their patrons, but also the well-being of the neighbours. It seems to us that in this particular case, the company has failed to understand, and/or come to terms with, the impact its activities have been having on the immediate neighbourhood.

[35] Pursuant to s.22 of the Act we are required to have regard to the following matters when considering the application:

(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.

[36] On a renewal application it is up to the applicant to establish its suitability to continue to hold the licence in its present form. In Page v Police (unreported HC v Christchurch AP 84/98 24 July 1998) Panckhurst J commented on the issue of suitability in this way.

“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.”

[37] What we are discussing here is a new form of night-club with a special type of music that appeals to young patrons. The company has become a victim of its own success. The new business attracts migratory drinkers who come to the premises in the early hours of the morning, when they are required to leave the bar in which they have been drinking. Sometimes there are more people queuing outside waiting to get in, than can safely be accommodated in the premises. There seemed to us to be little interest in promoting a range of good food.

[38] We did not think that the company took seriously the issue of how to control the patrons outside the premises. We accept that there will be times when a licensee cannot prevent a patron from exhibiting general exuberance in the street. However, if this happens on a regular basis causing a nuisance to others (as in this case), then the trading hours may well have to be reviewed. A measure such as clawing back the closing time will either stop, or at least mitigate, the consequences of patron migration, as well as a tendency by patrons to loiter around late night premises.

[39] The owner/operator was less than impressive when explaining the lack of public notification of the renewal application. We took the view that the failure to display the notice had not resulted from negligence, and was not because someone must have removed the document. It seemed to us that the company was concerned not to attract attention.

[40] The inability to control the escape of noise reflects on the suitability of a licensee to continue to hold an on-licence. To have so many excessive noise directions as well as an equipment seizure in the first year of operation, showed that the company has made very little effort to reduce the impact of noise. In the decision known as Paihia Saltwater (2001) Limited LLA PH 391/2001 we made a number of comments about the issue of noise:

"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."

[41] Finally there is the data from the Alco-Link records. To be the fourth worst performing premises out of 1760 businesses in the first ‘probationary’ year is one of the most damning records we have encountered. While we accept that the records are not evidence, they provide an overview of how the premises have been managed. In this case the company has fewer customers than those premises that were rated higher in terms of patron apprehensions. Yet the company has continued to set an example of inept management. In terms of the object of the Act, it is reasonably obvious that the company is stimulating liquor abuse, rather than contributing to its reduction.

[42] In considering a renewal we must have regard to the conditions of the licence. The company carries the onus of showing that the conditions should not be altered. The fact that the company obtains revenue up to 6.30 am is not the issue. It is our view that until such time as the company can show that it can control the impact of its operation on the escape of noise, as well as control the general disorder in the area outside its premises and reduce the numbers of patrons who are apprehended by the Police, its hours should be restricted.

[43] In the decision of N.B.T. Limited LLA PH 584-585/2005 we dealt with an opposed application for renewal. In that decision we made these comments:

“Limiting the hours of operation has become established as an important tool in addressing the growing social and economic cost of alcohol-related crime, disorder, and anti-social behaviour. Although it has been said that the issue is not so much about the hours of trading, as the way the premises are managed, it is our experience, that the longer the hours, the greater the potential exists for liquor abuse, or breaches of the Act. In our view, the liberal hours that have been granted in the past have not been universally respected.

[44] In summary, the evidence fell well short of persuading us that the company was suitable to operate a late licence; or that the company’s overall response to the various concerns was adequate; or that the company was entitled to have its licence renewed without any amendment to the conditions of the licence.

[45] We have limited options. We are unable to impose conditions on a licence that have resource management implications, such as the control of noise, or the playing of music. We are not unaware that the object of the Act refers to a regulatory system that is ‘reasonable’. On the other hand we have the jurisdiction to limit the trading hours, and truncate the period of renewal. In considering an application for the renewal of an on-licence, we are governed by s.23 of the Act. That section reads:

(1) After considering an application for the renewal of an on-licence, the Licensing Authority shall –

(a) Renew the licence on the conditions presently attaching to it; or

(b) Renew the licence on such different conditions (relating to

any matters specified in section 14 (5) of this Act) as the Licensing Authority thinks fit; or

(c) Refuse to renew the licence.

(2) The Licensing Authority shall not exercise its powers under paragraph (b) or paragraph (c) of subsection (1) of this subsection except in response to –

(a) An objection duly made under section 19 of this Act; or
(b) A report duly submitted under section 20 of this Act; or
(c) A request by the applicant.

[46] As can be seen, we are given the power to review the days on which, and the hours during which liquor may be sold. As stated above, 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. Decisions of the Auckland High Court in Sheepys Limited AP77-SW01 and Club Raro Limited AP86-SW01 both dated 10 December 2001, confirm the Authority’s discretion to cut back a licensee’s operating hours on a renewal. In the former case, O’Regan J stated:

“The Authority was entitled to consider the impact of noise as an aspect of the manner in which the licensee had conducted the sale and supply of liquor pursuant to the licence (s.22(c)), and was also entitled to consider this because of the relevance of s.14(7) to its consideration of conditions under s.23(1)(b).

[47] We refer to the decision of Heron J in Excel Promotions Limited v Police [1998] NZAR 72/79. Among other matters, the Judge was asked to determine whether the Authority could change the conditions of a licence on renewal. He stated:

“Provided the safeguards in the Act are duly observed, the Sale of Liquor Act in itself does not and should not be seen as entrenching the rights of licensees if after proper inquiry, the Liquor Licensing Authority, a specialist body, considers licence renewal appropriate but only with different or further conditions applying to the licence.”

[48] As was said in Ocean Focus Limited LLA PH 579/2004:

“The company needs to be aware that a licence is a privilege and not a right. It is not a guarantee of profitability, and its holder acquires certain responsibilities. It is apparent that the applicant has become blinded by its perception of the type of business that it wants to operate regardless of the conditions of its licence, and regardless of consideration to its neighbours. It is in the applicant’s best interests to get on well with its neighbours.”

[49] In view of our findings about the lack of a public notice on the doorway, we believe it will be important to review the position again in the near future. This will give potential objectors the right to oppose any further renewal if they so wish. In addition, the company will have the opportunity to consider the implications of this decision and take what action it may consider necessary. It is likely that the premises will continue to be closely monitored. If the complaints persist, then the existence of the licence will be considered as well as a further reduction in the trading hours. On the other hand, we do not rule out the possibility that if the company can satisfy us that the operation is well managed, the trading hours could be extended.

[50] For the reasons given, the on-licence will be renewed for a reduced period of 18 months. This means that the on-licence will fall due again on 17 February 2010, thereby giving the company a further ‘probationary’ year. The trading hours will be Monday to Sunday 11.00 am to 3.00 am the following day. However, these new trading hours will not come into effect until Monday 30 March 2009.

DATED at WELLINGTON this 27th day of February 2009

Judge E W Unwin
Chairman

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