Church St Night 'n' Day [2010] NZLLA 1357 (18 November 2010)

Last Updated: 10 December 2010

[2010] NZLLA PH 1357

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by TURNBULL GROUP LIMITED pursuant to s.41 of the Act for renewal of an off-licence in respect of premises situated at the corner of Camp Street and Church Street, Queenstown, known as “Church Street Night ‘n Day”

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge J D Hole
Member: Mr P M McHaffie

HEARING at QUEENSTOWN on 21 October 2010

APPEARANCES

Ms K P Lane – for applicant
Ms M R Fitzgerald – Queenstown Lakes District Licensing Agency Inspector – in opposition
Sergeant K P Newell – NZ Police – in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] Since its introduction, the application of s.36(1)(d)(ii) of the Act has caused difficulties and confusion. The section provides that an off-licence shall be granted only in respect of

(ii) Any grocery store, where the licensing Authority [or District Licensing Agency as the case may be,] is satisfied that the principal business of the store is the sale of main order household foodstuff requirements.

[2] Initially, in such decisions as Douglas-Oliver Corporation NZLLA 9/90, the Authority was inclined to give the section a very literal interpretation. A change of policy occurred in 2000 with the Caltex and Kasha decisions (LLA PH 10/82-10/82/2000). A significantly different and liberal interpretation was adopted. A line in the sand was drawn and a more literal interpretation adopted in 2008 with the Woodward Group Ltd NZLLA PH 1145/2008 and M K Devereux Ltd NZLLA PH 1532/2008 decisions. The Authority recognised in those cases that the section should be construed in accordance with s.5(l) of the Interpretation Act 1999 and in the light of the purpose of the Act (promoting the reduction of liquor abuse) as set out in s.4 of the Act. The Woodward and Devereux decisions and those issued subsequently have meant that no new off-licences have been issued where the business is plainly a convenience store and not a grocery.

[3] In C H and D L Properties Ltd v Christchurch District Licensing Agency and Others, 27 July 2010 (CIV 2009-409-002906), it was held that the Woodward and Devereux principles also apply to applications for the renewal of off-licences.

[4] At paragraph [43] (and subsequently) of the C H and D L Properties Ltd decision, reference was made to statements made during the debate in the House of Representatives when the bill was first introduced. At that time, there was no provision limiting off-licences by types of store. The Select Committee then proposed a clause, 33A, to cover the topic now found in s.36. Fogarty J referred to statements made in the course of the Select Committee hearings and Parliamentary debate but concluded that he could not derive assistance from them as to the purpose of the section. This Authority, too, has difficulty in determining the rationale behind the section.

[5] The C H and D L Properties Ltd decision related to a Christchurch convenience store known as the “Victoria Night ‘n Day Foodstore”. The decision of the Authority, noted the change in policy arising from the Woodward and Devereux decisions, and stated:

“[43] We firmly believe that much of the current debate about liquor abuse has its genesis in the 2000 decision to allow convenience stores to be licensed. With the benefit of hindsight, that was a turning point in the off-licence industry. There has since been a proliferation in the number of off-licences being granted to convenience stores that have portrayed their business as scaled down supermarkets, when in fact some of them were nothing more than ambitious dairies. When one examines the Sale of Liquor Act’s objective, the reduction of liquor abuse might well be encouraged if the number and type of off-licences nationally was reduced.”

[6] The Authority agrees with those comments. However, it does not accept that to interpret s.36(1)(d)(ii) of the Act by referring to s.4 of the Act and then referring to the aim of reducing the proliferation of liquor outlets is appropriate. To use s.4 to reduce the proliferation of liquor outlets would constitute a very blunt instrument and it is not what the Authority meant. However, it did mean that the object of the Act is relevant to its interpretation. This was confirmed by the High Court in CH and D L Properties Ltd.

The application

[7] This decision relates to an application for the renewal of an off-licence in respect of premises situated at the corner of Camp Street and Church Street, Queenstown known as “Church Street Night ‘n Day”.

[8] On 17 March 2009 an application was made to the District Licensing Agency for the renewal of the off-licence which was to expire on 17 April 2009. There has never been an issue as to compliance with s.41 of the Act. No objections were lodged to the application. The Queenstown Police advised that they had no opposition to the renewal application.

[9] However, on 27 April 2009 the Inspector in her report indicated that she was not convinced that the premises met the standard of a grocery and that it appeared to be a convenience store where one could purchase fast foods, beverages and other impulse items. Accordingly the Inspector was not convinced that it was a grocery where the principal business of the store was the sale of “main order household foodstuff requirements”.

[10] One of the difficulties experienced by the Inspector was that the certified turnover sales accounts were for a week in June/July 2008 and for another week in December 2008 and 2009. These demonstrated that grocery take home (including liquor) sales was between 35 percent and 38 percent respectively. Accordingly, when assessing the application in 2009, it was considered that the premises did not meet the criteria set out in s.36(1)(d)(ii) of the Act. At that time, other matters as suggested in Jay & H Company Ltd NZLLA PH 155/2001 were also taken into account.

[11] At the hearing, new certified accounts were submitted for the period from 16 August 2010 to 29 August 2010. The accountant stated that multi sales of drinks and confectionery were not provided in the main order figures and had been left in the non main order figures. The figures are as follows.

Main Order

Canned/jars baby food .05 percent

Baking needs, canned or packet desserts,

dried fruit, microwave popcorn, coconut and

other milk products, jellies, herbs, flours,

sugars, essences 1.14 percent

Biscuits – packets – 200 grams 1.95 percent

Bread – Tiptop loaves, pita breads,

packets of crumpets and pikelets,

10 pack donuts 2.58 percent

Spreads, breakfast cereals, porridges, oats 2.54 percent

Butter and margarine 0.67 percent

Carbonated drinks over one litre 2.68 percent

Cream cheese, cottage cheese, sour cream 0.25 percent

Cheese – blocks, grated and slices 1.20 percent

Chocolate, family blocks and tablets 1.61 percent

Cold meats – salami, bacon, corn beef, beef,

pork, saveloys, frankfurters, sausages, salmon,

jerky 2.12 percent

Deli – eggs, yoghurts, mussels 1.30 percent

Deli – bushroad salads and coleslaw 0.26 percent

Family sized bags of sweets and confectionery 4.68 percent

Family sized potato chips 2.73 percent

Frozen meals and desserts 1.04 percent

Milk, cream and custard 5.43 percent

Frozen vegetables, fish, mussels, pizza,

potato products 0.57 percent

Fruit 2.18 percent

Packet pasta, Asian soups, rice, tin salad and

tuna, canned heat up meals i.e. spaghetti,

baked beans, ravioli, canned fruit and

vegetables, sauces, six pack muesli bars 3.10 percent

Packet coffee, tea, chocolate drinks,

bottles of concentrate squash and cordials 1.90 percent

Instore bakery – loaves of bread, buns,

croissants, biscuits, cold pizzas, french sticks,

muffins 2.29 percent

Juice over one litre 1.92 percent

Pates, dips, humus, pestos 0.33 percent

Sauces, chutneys, dressings, oil, vinegar,

canned olives, stocks, gravies 1.11 percent

Canned, packet soups 0.71 percent

Family sized icecream tubs, blocks 0.96 percent

Fresh vegetables 0.70 percent

Water over one litre 1.45 percent

Nuts 0.27 percent

[12] From the foregoing table, it will be noted that drinks total 6.05 percent and confectionery, chocolate, and sweets total 6.29 percent.

[13] The total main order items amount to 49.71 percent.

[14] One of the difficulties which arises when evaluating figures turnover percentages such as those submitted is that they are for one week only. That week is not necessarily representative of the business’s trading pattern. Indeed, there are apparently reasons for the differences which are apparent when one compares the 2008-2009 turnover figures with those for the period from 16 August 2010 to 29 August 2010. First, another takeaway bar (“Devil Burger”) opened on or about 13 August 2010. It is suggested that this business detrimentally affected the takeaway takings of the applicant. Second, construction has been taking place in Church Street so that construction workers have purchased their lunch and other items from the applicant’s premises thus boosting non main order items.

Decision of Authority and reasons

[15] The turnover percentages in this case differ quite significantly from those which were submitted to the Authority and referred to at first instance in the Victoria Night ‘n Day decision. There, 18.67 percent of the total main order food items comprised confectionery and a further 17.78 percent of the main order food lines comprised drinks. In this case, the drinks referred to in the main order food items totalled 6.05 percent and the confectionery, chocolate and sweets totalled 6.29 percent. As Fogarty J mentioned at paragraph 34 of C H and D L Properties Ltd, what impressed the Liquor Licensing Authority was that you would not expect a grocery store’s bigger sales of generic products to be drinks, confectionery, tobacco products, liquor and takeaway food. He pointed out that the decision did not depend on whether it was right or wrong to exclude confectionery or drinks. The point was that if it could be claimed that the confectionery or drinks should be included in the main order items then they should not constitute a significant part of them. In Victoria Night ‘n Day, they did constitute a significant portion of the total main order sales.

[16] That is not the case here. The drinks and confectionery do not comprise a significantly large proportion of the total turnover percentages for main order items. Thus, those items would seem to have been appropriately placed amongst the main order items and the Authority has no reason to believe that the total main order items are anything but 49.71 percent. It follows, therefore, that while the total main order items do not exceed 50 percent, they almost do, and they unquestionably constitute the principal business of the store. The Authority is satisfied that those items that are described above as being “main order items” come within the meaning of “main order household foodstuff requirements”.

[17] When determining if a business comes within s.36(1)(d)(ii) of the Act, not only are the turnover figures relevant. C H and D L Properties Ltd confirmed that the approach adopted in Jay & H Company Ltd NZLLA PH 155/2001 is appropriate.

[18] Mr Turnbull, one of the directors of the applicant, deposed that in the store there were 63 different varieties of packets of biscuits, 63 different varieties of bottled/canned sauces, 33 different varieties of meats, 21 different varieties of milk, 90 different varieties of frozen meals/pizzas, 46 different varieties of frozen vegetables, 49 different varieties of packet/canned soups, 77 different varieties of bread and 153 different varieties of packets and canned meals. Photographs produced in evidence also indicated a reasonable variety of main order household foodstuffs.

[19] The premises are not large. The retail area contains 160 square metres and the entire internal area of the store is 232 square metres. It is intended to enlarge this; although little weight is given to this proposal as it may not happen. There are 128 shelves of main order household foodstuffs and the shelves are mainly .9 metre long. There are eight display bins of main order household foodstuffs.

[20] Significantly, the liquor is kept to the rear of the store and nowhere near its entrance. This, in the Authority’s experience is unusual and indicates that it does not constitute the main raison d’etre for the store.

[21] There are three trolleys available to assist patrons but these are kept at the rear of the premises to prevent their being stolen.

[22] The Authority viewed the premises. The store was certainly not a dairy. About a quarter of the area of the premises was used for takeaway purchases. The balance was for grocery items (including non-food items).

[23] Parking is available for customers. There are approximately 70 angle carparks in Church Street. There are also four carparks in Camp Street. There is a large underground carpark in Church Street which is in close walking distance of the store.

[24] Evidence was given that many of the customers are residential dwellers or people finishing work who wish to shop at the store as they are not prepared to walk one kilometre to the nearest supermarket. There are regular elderly shoppers and many night workers and shift workers who do their grocery shopping at the store.

[25] While the store was listed in the local telephone book as a dairy previously, it was also listed in the same telephone book as a grocery store. In the 2009 telephone book it has only been listed under “supermarkets and grocers”.

[26] There was no evidence that the premises are close to schools or that school pupils patronised the premises extensively. Had there been such evidence, this might well have indicated that the dairy portion of the business was more extensive than it appears to be and accordingly issues relating to the reduction of liquor abuse (s.4 of the Act) might have arisen.

[27] The business ceases trading at 11.30 pm. In the circumstances there does not seem to be an issue of liquor being sold for consumption immediately in a public place or cars with corresponding liquor abuse issues.

[28] Like so many cases that come before Agencies and this Authority, to endeavour to apply the yardstick of s.36(1)(d)(ii) of the Act to this store is fraught with difficulties. The Authority suspects that to expect applicants to keep detailed annual accounts as to main order household foodstuff percentages is unrealistic and uneconomic. Nevertheless, such accounting information would be more useful than that undertaken on a weekly basis. Even with such information, the various matters referred to in Jay & H Company Ltd (supra) remain relevant but in themselves pose difficulties.

[29] In this case, on balance, the Authority concludes that there is evidence which indicates that this store is a grocery store where the principal business of the store is the sale of main order household foodstuff requirements.

[30] Accordingly, the application is granted.

DATED at WELLINGTON this 18TH day of November 2010

B M Holmes
Secretary

Church Street Night ‘n Day2.doc(aw)