New Light Tailor Limited [2009] NZLLA 852 (10 August 2009)

Last Updated: 24 January 2012

Decision No. PH 852/2009

IN THE MATTER of the Sale of Liquor Act 1989

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 22 July 2009

APPEARANCES

Mr J H Wiles – 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 – for Medical Officer of Health – in opposition
Mrs S L Noble – Auckland City Council – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] On 12 February 2009 we heard an opposed application for renewal of an on-licence by New Light Tailor Limited (hereafter called “the company”), trading as “The Lounge Bar”. The renewal application was the first to be dealt with since the licence had been granted on 17 August 2007. The trading hours authorised for the sale of liquor had been fixed at any time on any day. The evidence was that the bar used to stay open to 5.30 am on most occasions and to 6.30 am on Sunday mornings.

[2] The renewal was opposed by the Police, the District Licensing Agency Inspector, the Medical Officer of Health and a nearby business. In our decision issued on 27 February 2009 (LLA PH 176/2009), we truncated the period of renewal to 18 months, requiring the company to re-apply for a further renewal on 17 February 2010. At the same time we reduced the trading hours to 11.00 am to 3.00 am the following day, seven days a week. We made these comments:

“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.”

[3] The company appealed against the decision to the High Court but the accompanying application for a stay of the decision was rejected. In other words the company was required to cease trading on a 24-hour basis. The new trading hours commenced on or about 1 April 2009.

[4] On 22 April 2009, the company applied for a rehearing of the application. The main ground was that the company was unaware that it faced the possibility of reduced trading hours and had therefore not prepared any evidence of the likely impact of such a decision on sales. It was suggested that the business was no longer sustainable. Furthermore it was argued that the company had addressed the escape of noise, as well as alleged misconduct by patrons who were waiting outside the premises. The application for a rehearing was granted.

[5] The rehearing of the application took place on 22 July 2009. The three monitoring agencies continued to oppose the application on substantially the same grounds as previously. There were no appearances by the neighbouring businesses although they had been advised of the rehearing.

The Application

[6] Mr Chamandeep Singh is the company’s sole director and shareholder. He confirmed that the nature of the business was a form of nightclub featuring hip-hop music. He believed that the company was the only licensed premises in Auckland dedicated to this type of music.

[7] Mr Singh referred to the financial impact of having to close at 3.00 am as from 1 April 2009. He produced uncertified figures to show that the turnover had reduced over the three months. He accepted that the recession and the winter months might have had an impact on the figures. Mr Singh also disclosed the monthly overheads that the company had faced over the three months. These were close to the income being received although we note that vehicle expenses were close to 20 percent of the total. Mr Singh suggested that the company might not be able to trade for much longer unless it was allowed to revert to previous trading hours. The loss of turnover in percentage terms was as follows:

April 66 percent

May 48 percent
June 61 percent

[8] Mr Singh contended that since the first hearing, security had been tightened to the extent that there were now no longer problems with prospective patron behaviour outside the premises. He said that queuing was controlled in a formal way with the use of chrome stands and red ropes and only a small portion of the footpath was unavailable to pedestrians. In addition security had become more vigilant in weeding out badly behaved or intoxicated prospective patrons. A stricter dress code had been implemented.

[9] Mr Singh argued that there had only been one noise complaint since the previous hearing. He accepted that the bass was unduly loud on that occasion but contended that this had been unintentional and the problem had been fixed the following day. He claimed that a sound limiter was in place. He said that they had opened an hour earlier to try to compensate for the lost revenue but to date there had not been any change in patronage. In other words patrons still tended to arrive between 12.30 am and 1.00 am.

[10] We heard from Mr Jeremy Eves, the managing director of a security company that had been contracted to maintain security at “The Lounge Bar”. He stated that his company had been in charge of security for about two years. He conceded that in 2008 the system of controlling queues was not as good as it could have been. He said that our previous decision had given him the message that there needed to be more orderly queuing of prospective patrons, and a need to restrict any intrusion onto the roadway, as well as the footpath. In particular the system now caters for a single queue with a red carpet to help guide patrons where to stand.

[11] Mr Eves spoke about the new dress code and the requirement of male patrons to wear collared shirts. He thought that this had resulted in an older, more mature clientele. Additionally members of his company’s staff had all received professional training and were now required to wear security tags to enable them to be identified.

[12] Mr Eves spoke particularly about an incident on 23 November 2008 although he accepted that he was not present. He contended that the alleged fight looked worse than it was, and that most of the people were arguing and shouting rather than fighting. He did say that the aggressive group had not been in “The Lounge Bar”. In relation to an incident on 3 April last, a person had been refused entry and had smashed a window in retaliation.

[13] The company called three young patrons to give evidence. Two were aged 24 and one was aged 19. Their evidence gave an interesting insight into the business. They stated that the main attraction was the hip-hop music being played. Generally they considered that the patrons inside the premises were well behaved and that untoward incidents were rare, especially in 2009. One of the patrons had noticed that queues were now much more orderly. He recalled the incident on 23 November 2008 and remembered a disturbance on the street that in his view was brought quickly under control. He had noticed a different atmosphere, and said that he used to stay until 4.00 am but now leaves at about 2.30 am. He stated that he generally arrived at about midnight.

[14] Another patron stated that she did not drink liquor but went to the premises for the music. She also thought that the atmosphere had changed and there was an absence of gang regalia. She recalled odd incidents the previous year when patrons had been removed for bad behaviour. She had not seen anything similar this year. She also thought that the behaviour of patrons waiting outside in the queue had improved this year, and they were much more orderly. She also thought that there were fewer “dodgy” people attending the venue. She also used to stay to 4.00 am but now tends to leave at 2.30 am. The third patron had visited the premises earlier in the year and considered that the business was very well managed with good security at the door.

The District Licensing Agency Inspector

[15] Miss Anita Lee Marsh has been employed by the Auckland District Licensing Agency for the past 12 months. She advised that for the period 1 August 2007 to 9 May 2009 there had been 16 noise complaints registered with the Council. Five excessive noise directions had been issued and on one occasion noise equipment had been seized. The official list was as follows:

• 14.9.7 00.44 am Not excessive

14.9.07 01.31 am Excessive noise direction issued

14.9.07 03.20 am No noise
20.9.07 07.46 pm No noise
29.9.07 01.45 am No noise
08.8.08 01.37 am Excessive noise direction issued
08.8.08 02.27 am Non compliance with noise direction
08.8.08 03.19 am Seizure of equipment
09.8.08 02.49 am Excessive noise direction issued
19.9.08 00.25 am Not excessive
15.11.08 02.40 am Excessive noise direction issued
28.12.08 03.12 am Not excessive
23.1.09 00.00 Stood down
04.4.09 02.12 am Not excessive
01.5.09 02.48 am Excessive noise direction issued
09.5.09 02.24 am Not excessive

[16] Miss Marsh argued that since the licence had been granted, there had been a steady level of noise complaints. She submitted that the number of excessive noise directions that had been issued during the probationary year and beyond showed a lack of suitability to hold a licence. She contended that noise continued to be an issue and she therefore favoured the retention of the limited trading hours.

The Police

[17] Sergeant Bryce Robert Law has been in charge of the Downtown Police Liquor Licensing Unit for the past two and a half years. He gave evidence about the lack of public notification of the renewal on the front door of the premises. We note that we dealt with that issue in our previous decision in the following way.

“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.”

[18] On 23 November 2008 at 2.30 am Sergeant Law witnessed a female arguing with and slapping a male. He had received advice that they had allegedly come from “The Lounge Bar”. He then saw a group of four females and five males erupt into a savage brawl. It was one of the worst brawls he had witnessed in 12 years of front line policing. A window of a parked car was smashed and the male was arrested. He considered that there were 100 to 120 people milling about waiting to get in. They were effectively blocking the road and he believed that security staff were unable to control them.

[19] Sergeant Law produced the Alco-Link statistics for the bar for the 2008 calendar year. There were 46 entries resulting in 47 arrests. 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 although he accepted that there had been other calls from the premises that the Police could not attend. He produced a chart to show that a significant number of calls for assistance had come from people in the vicinity of “The Lounge Bar”.

[20] Sergeant Law produced a chart to show that “The Lounge Bar” was the fourth worst performing premises in the Auckland Policing District for 2008. His unit monitors some 1760 licensed premises. He stated that since the reduction in trading hours, the business has all but disappeared off the radar. There had only been one entry in April, three in May and one in June. There had only been two calls for assistance over this time. Sergeant Law stated that for the first six months of 2009, “The Lounge Bar’ had gone from fourth on the list to the fifteenth. He thought that the improvement was significant and the Police believed that the area was a much safer place to walk through.

[21] Constable Joshua Ballantyne is familiar with the area. He supported the Sergeant’s evidence and stated that “The Lounge Bar” and High Street had been known for disorder, fighting, thefts and assaults. These incidents had been common from Thursday to Saturday nights. He said that since the reduction in hours he had noticed a significant reduction in reported misconduct although he accepted that the premises was not responsible for all reported crime. As a consequence of the change in behaviour, the need to patrol the street had reduced, and he felt that the area was safer.

The Medical Officer of Health

[22] Ms Angela Richards is employed by the Auckland Regional Public Health Service as a Liquor Licensing Officer. She referred to the evidence that she had given at the first hearing when she had opposed the application. She confirmed that her opposition had been mainly based on the lack of information received from the company. This information had been supplied on the morning of the previous hearing. She advised that although there had been a lack of signage promoting the availability of food, a visit on 7 July 2009 had revealed no issues or breaches.

The Authority’s Decision and Reasons

[23] 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.

[24] The onus of establishing suitability is on the company. It must also show that the manner in which it has conducted the sale and supply of liquor entitles it to a renewal, and that the conditions attaching to the licence should remain unaltered. In the process the company must answer any criticisms contained in the reports made under s.20 of the Act. This process is particularly important following the first probationary year because in many cases the members of the public and the agencies had little knowledge of the nature and style of the proposed business. The vast majority of new licences are renewed without the need for public hearings. Less than five percent of all tavern style licences have the type of problems that were experienced by this licensee.

[25] It is fair to say that the force and impact of the opposition was not as strong at the rehearing as it was at the initial hearing. The question is whether this was because of the initiatives that were undertaken by the company to address its previous problems, or whether it was because of the consequences of our decision to reduce the trading hours. To some extent this review has been tilted in the company’s favour, because it has had the advantage of receiving a decision outlining its faults, and has had the opportunity to correct them. It has also traded for a short period with reduced hours. In terms of public disorder and Alco-Link data the results have been quite dramatic.

[26] An explanation of our role in considering a renewal application was given by of McGechan J in Buzz & Bear Limited v Woodroffe [1996] NZAR 404. He commented as follows:

“There is no doubt that upon renewal the Authority, which is obliged to consider conditions and reports, and to confirm on same or altered conditions (or to refuse renewal), can consider whether existing hours are appropriate and alter those hours. The restraint, and safeguard against ill-informed tinkering, is that such can occur only in response to inspectors’ or Police reports, or at the request of the licensee itself.

I am satisfied it was within powers, and proper, for the Authority to take into account, not only the specifics of the Cork ‘n’ Fork operation, but also more general community concerns which had been made known to it. Quite simply why not? Of course the Authority must be closely concerned with the actual operation of the actual licensed premises, here the Cork ‘n’ Fork. One does not renew a licence without thinking about the licensee and his operations. That is directed by s.22 (a) and (c). However, there is no logical or policy need to stop at that, as the licensee urges.

Times change. Communities and environments change. Social habits and levels of tolerance change. Obviously it would have been seen by the legislature to be wise to keep conditions imposed under review in light of potential social change. The licensee’s submissions would have licence conditions frozen in some time warp while the world marches on; not, even in the arcane world of liquor licensing, a likely legislative intention. Section 4 interpretation directives align with common sense to point towards allowing the Authority to engage in a wider perspective. It can keep its eye on wider trends and needs in a specialist area where it has unique, and uniquely current, expertise. Any licensee takes a licence under risk that conditions may change, and a report may recommend adjustment. There is no asset protected for all time whatever may happen outside.”

[27] In this case there is a record of noise complaints and six occasions where action had to be taken. As Miss Marsh pointed out, this is a poor record for a licensee in its probationary year. The inability to control the escape of noise reflects on the suitability of a licensee to continue to hold an on-licence. It is accepted however, there has been an improvement, and the lack of interest shown by the original public objectors is a matter that must be taken into account.

[28] It is also accepted that the company has taken steps to control crowd behaviour outside the premises. Once again it is difficult to distinguish whether the improvement has taken place because of the steps taken by the company, or for other reasons including the reduced trading hours. There can be no question that the later the closing time, the greater the likelihood of alcohol fuelled disorder. In our earlier decision we discussed the impact of migratory drinkers who came to the premises because of its late closing time. The issue for us is whether they will return if the hours are extended.

[29] Despite Mr Wiles’ submissions, we believe that the Alco-Link data provides valuable intelligence. The issue is whether the improvement has taken place because of improved managerial standards including the new dress code. Alternatively it could be argued that the lack of arrests are directly attributable to the reduction in hours and consequential reduction in levels of intoxication.

[30] It is clear the licence should be renewed. The question is whether we should alter the trading hours in response to the matters raised by the reporting agencies. This is a discretion that the Act requires us to exercise in a way that is most likely to promote the Act’s objective. This reads:

The Licensing Authority, every District Licensing Agency, and any Court hearing any appeal against any decision of the Licensing Authority, shall exercise its jurisdiction, powers and discretions under this Act in the manner that is most likely to promote the object of the Act.

[31] There is evidence that one of the ways of reducing harm in a community is to restrict the days and hours of sale of liquor. For example there is the international study sponsored by the World Health Organisation entitled ‘Alcohol, No ordinary commodity’ (Babor T, Caetano R, Casswell S, et al. Research and Public Health (2003) Oxford University Press/World Health Organisation, Geneva. August). This study made the following comments:

“The higher the average amount of alcohol consumed in a society, the greater the incidence of problems experienced by that society. Consequently, one way to prevent alcohol problems is through policies directed at the reduction of average alcohol consumption, particularly those policies that limit the availability of alcohol.”

It is widely and internationally accepted that reduction from alcohol related harm can best be achieved by applying combinations of the following strategies:

1. minimum legal purchase age;

government monopoly of retail sales;

alcohol taxes to increase the price;

4. restrictions on hours or days of sale; (Our emphasis)
5. outlet density restriction; and

licensing and enforcement to ensure compliance with these measures.”

[32] When 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.

[33] In the decision of the Auckland High Court in Sheepys Limited AP77-SW01 dated 10 December 2001, the High Court confirmed the Authority’s discretion to cut back a licensee’s operating hours on a renewal. 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).”

[34] As to economic viability, the last word on the subject is the Court of Appeal’s decision in Meads Brothers Limited v Rotorua District Licensing Agency and anor [2001] NZCA 386; [2002] NZAR 308. The Court stated at paragraph [56]:

“When the renewal of an on-licence is opposed the Act empowers the Authority to renew the licence subject to more restrictive conditions as well as to refuse to renew but clearly it is never envisaged nor permissible under the Act for the Authority to impose conditions such as would effectively negate the act of renewal or be oppressive or burdensome to the extent no licensee could operate on that basis. In an appropriate case such a situation might properly be the subject of evidence albeit not the type of evidence which Mr Meads sought to give; in any event, such a case would be, if not entirely theoretical, then certainly a rarity. More restrictive licensing controls will have an economic impact on licensees which sometimes will be substantial. That is a normal incident of a system of reasonable control of liquor abuse. The general provisions for grant and renewal of licences allow no basis for the expectation that a licensee will be able to run a particular type of business successfully. Nor is there any indication in the material before us that the appellant’s situation is so special that the restriction of hours provided for by the Authority’s decision would be oppressive or burdensome beyond what the Act contemplated.”

[35] The company has produced some uncertified figures but there was no professional evidence about the actual impact of the reduction in closing hours. We do not accept that a closing hour of 3.00 am effectively negates the renewal of this licence or that such a closing hour is so oppressive or burdensome that no licensee could operate with them. The comments by Mr Wiles that trading is unviable without an extension of hours or that the business faces extinction have not been established before us.

[36] In summary there have been a number of problems associated with the operation of these premises during the first two years of the existence of the licence. We believe that we should truncate the period of renewal in order to step up the level of monitoring, give all objectors a further opportunity to comment, and make up for the lack of public notification.

[37] We accept that the hours of trading is not the sole criterion to be considered on renewal. It can be argued that problems arising from the over consumption of liquor can relate more to the management of the premises where the consumption is taking place, rather than the hours of operation. However, it is our experience that there is a direct link between the adverse impact from licensing activities on people’s quality of life (such as unruly behaviour and noise), and the activity that takes place in licensed premises and the trading hours. In our view the company has failed to establish a continued right to trade for 24 hours a day.

[38] For the reasons given, the on-licence issued to New Light Tailor Limited Limited will be renewed for two years to 17 August 2010. The trading hours will be:

Monday to Sunday 11.00 am to 4.00 am the following day

DATED at WELLINGTON this 10TH day of August 2009

Judge E W Unwin
Chairman

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