Party Bus [2010] NZLLA 1541; Oddballs Adventure Tours Ltd [2010] NZLLA 1541 (22 December 2010)

Last Updated: 27 May 2011

[2010] NZLLA PH 1541-1545

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of appeals by ODDBALLS ADVENTURE TOURS LIMITED, SCREWBALLS PARTY BUS LIMITED, CD PARTY BUS LIMITED, KENNETH MARTIN VICTOR WATSON, GUINEY HOLDINGS LIMITED, BEALEY GALLERY LIMITED, and KT. NT. WT. GROUP LIMITED pursuant to s.137 of the Act against decisions of the Christchurch District Licensing Agency granting applications for special licences in respect of conveyances

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge J D Hole
Member: Dr J Horn

HEARING at CHRISTCHURCH on 24 November 2010

APPEARANCES

Mr C B Persson – for appellants
Mr T J Mackenzie – for Police and Christchurch District Licensing Agency Inspector

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] In late March 2010 the appellants applied to the Christchurch District Licensing Agency for special licences for various conveyances owned and operated by them. While not all the applications are identical, generally they stated that the occasions or events in respect of which each licence was sought was for birthdays, social functions, work related parties, mystery tours, race meetings, weddings, and wine tours. Each application stated that the series of occasions or events were to occur between 1 May 2010 and 31 May 2010 from 10.00 am to 12.00 midnight as per each charter. It was indicated that in each case the applicant intended to sell liquor pursuant to the licence from 10.00 am to 12.00 midnight although sales would cease one and a half hours before the completion of each charter.

[2] The Police and the Inspector opposed each application. Accordingly between 28 April 2010 and 3 May 2010 the District Licensing Agency heard the applications. On 31 May 2010 it delivered its decisions. While the decisions are not identical, they are sufficiently similar to be treated as being the same for the purposes of the appeals.

[3] The District Licensing Agency, in each case, granted the application subject to conditions. In each case the licence was to be for a term of 60 days from the date of the decisions.

[4] Paragraphs 97 to 101 contain the essence of the decisions. They are set out in full:

“[97] The DLA has carefully considered the statements, the submissions that were made by the parties and its previous 2009 decision. The DLA is not bound by its previous decisions although clearly it is preferable for it to take a consistent approach to issues that have general applications, in order to ensure that there is a level playing field between applicants and that all applicants can plan their affairs with an appropriate degree of certainty. However, circumstances also change, and the panel must deal with each application that comes before it, based on the evidence and the submissions that it receives.

[98] The DLA considers that it is appropriate to proceed to consider the merits of this application on this occasion. Having received extensive evidence at a hearing stretching over three and a half days, it considers that it is able to consider the impacts of the bus operations, in the immediate term.

[99] The fact that this application has been granted does not indicate that the applicant should expect to be granted special licences for its licences on an ongoing or “revolving” basis. The DLA has taken account of the s.96 statements set out above and the LLA’s comments in Ruapehu Lions Club (LLA decision 1287/94). The DLA agrees that it would not be appropriate for it to continue indefinitely to grant a series of special licences for such business activities. However, in light of all the circumstances surrounding this application, it is considered appropriate that it be granted. It also enables the applicant to proceed in the short term and get its business in order on the correct basis. However, the applicants should take note that the DLA will not grant special licences on the basis set out in this decision indefinitely and that it considers the applicants should apply for an on-licence for their operations within six months of the date of this decision.

[100] In terms of the other issue about the unspecified nature of the events that will occur under the licence, the panel has had regard to the LLA’s comments in Invercargill Workingmen’s Club (LLA decision PH 50/02). In that case, a 48 hour notice condition was not considered adequate to deal with concerns around enforcement. However, the DLA considers that in this case a condition that requires notice to be given of the events in the following week can provide adequate certainty of the frequency of the events that will occur under the licence during the licence period (see condition 13(a) below). It will ensure that the District Licensing Inspector and the Police are aware of the location and operating details of the applicant on any given night.

[101] Due to the timeframe required for the hearing and the release of the decision on this application, it is also considered appropriate to extend the term of the licence for 60 days from the date of this decision.”

[5] The appellants filed general appeals in terms of s.137(1) of the Act against the decisions of the District Licensing Agency.

[6] At paragraph 65 of the appellants’ submissions, their concerns become apparent. Paragraph 65 reads:

“65 The appellants have identified the following aspect of the decision and conditions imposed as causing dissatisfaction.

(a) Not correct licence; and

(b) Duty manager additional to the bus driver; and

(c) Range of food; and

(d) Licence hours; and

(e) Liquor containers.”

[7] From the foregoing it may be observed that most of the areas of concern relate to the conditions imposed by the District Licensing Agency. However, the submission, “not correct licence”, is misleading. It was apparent from the appellants’ submissions that the appellants were submitting that the District Licensing Agency was entitled to issue the special licences. However, the District Licensing Agency was not entitled to state in its decisions:

“However, the applicants should take note that the DLA will not grant special licences on the basis set out in this decision indefinitely and that it considers the applicants should apply for an on-licence for their operations within six months of the date of this decision.”

[8] In this regard, it was argued that special licences (and not on-licences) were appropriate to the activities carried on by the appellants. Further, the District Licensing Agency was in error when it purported to decide applications not yet made and in advance of any hearing. This submission together with the notices of appeal inevitably put in question whether or not the licences should have been granted by the District Licensing Agency. The appeals were argued accordingly.

Appeals

[9] The appeals have been brought in terms of s.137 of the Act. Section 137(6) of the Act provides that every appeal is to be by way of rehearing. Section 137(7) of the Act provides that after hearing an appeal the Authority may confirm, modify, or reverse the District Licensing Agency’s decision. Finally, s.137(8) provides that in a case such as this, the effect of the decision under appeal is that it is suspended pending the outcome of the appeal.

[10] A pre-trial conference of counsel was heard on 28 September 2010. A minute from this Authority dated 7 October 2010 records directions given by the Authority as a result of that conference. The District Licensing Agency Inspector was required to provide a transcript of the evidence adduced at the original hearing. In this regard, a complete transcript was not provided. “Working notes” were submitted and it is clear from them that they were not a complete transcript. Nevertheless, the appeal proceeded to hearing as the appeal (in the main) did not relate to evidential matters. It was recognised by the parties that there was no necessity for the Authority to hear viva voce evidence.

[11] The licences were intended to remain in existence for 60 days commencing 1 May 2010. Thus, by the date of the appeals, prima facie, they had expired. In those circumstances the Authority questioned if it still had jurisdiction to consider an appeal. In that regard, it was directed to s.137(8) of the Act. The effect of s.137(8) of the Act is that the District Licensing Agency’s decision has been suspended since the filing of the notice of appeal. The effect of this subsection is to give the Authority jurisdiction to hear the appeals. It also means that if the Authority wished to decline the appeals then it would need to modify the decision of the District Licensing Agency to provide that the 60 day period was to commence after the date of this decision. The Authority notes that appeals have been heard by it in similar circumstances on previous occasions: (see, for example, Newell NZLLA PH 1062/2009.

Authority’s decision and reasons

[12] As the Authority intends to allow the appeals, there is no necessity for the Authority to consider the complaints against the conditions imposed by the District Licensing Agency. However, it is worth noting that conditions imposed by the District Licensing Agency must of necessity not only take into account the object of the legislation (the reduction of liquor abuse) but also must have specific regard to the nature of the occasion or event or series of occasions or events to which any special licence relates.

[13] Three issues arise:

• Should the special licences have been issued?
• Did the applications comply with s.4 of the Act?
• Should the District Licensing Agency have stated that in the future it might not grant special licences?
  

Should the special licences have been issued?

[14] The Authority considers that given the way in which each of the applications was drafted, it was not open for the District Licensing Agency to grant each application. Each application was brought in terms of s.73 of the Act. Section 73 reads:

73 Special licences

[i] A special licence authorises the holder of the licence to sell and supply liquor, on the premises or conveyance described in the licence, to any person attending any occasion or event or series of occasions or events described in the licence.

[15] Section 76 requires applications for special licences to be made in the prescribed manner. Regulation 14(2) of the Sale of Liquor Regulations 1990 provides that applications for special licence must be in Form 11. Clause (3) of Form 11 requires an applicant to define the purposes for which the special licence is sought. Clause (3) reads:

Purposes

(a) what is the occasion or event, or series of occasions or events, in respect of which the licence is sought?

(b) when is this occasion or event, or series of occasions or events, to occur?

(c) on which days and during which hours does the applicant intend to sell liquor under the licence?

[16] Form 11 is very specific. It requires the occasion or event or series of occasions or events to be specifically identified. It requires the applicant to state exactly when the occasion or event or series of occasions or events will occur. It then requires the applicant to state on which days and during which hours the applicant intends to sell liquor under the licence.

[17] Further guidance is to be found in s.79 of the Act which sets out the criteria for the consideration of special licences. In particular, s.79(1)(a) requires the District Licensing Agency to have regard to “the nature of the particular occasion or event or series of occasions or events in respect of which the licence is sought.”

[18] If an applicant were still confused as to what was required of it, then there are a number of decisions of this Authority which can assist. The leading decision is Invercargill Workingmen’s Club Incorporated NZLLA PH 58/2002 dated 14 February 2002. At paragraph [86] of the decision the Authority said:

“It seems to us that an application that fails to adequately describe or specify the occasions or events with full particularity including the proposed dates of those occasions or events circumvents the requirements and intent of ss.73, 74, 78 and 79. It also circumvents the scheme of the Act whereby enforcement authorities play a significant role in ensuring the object of the Act is met”.

(Thus, one of the tests is enforceability).

[19] At paragraph [105] et seq the Authority concluded as follows:

“[105] The club cannot be granted a special licence for unspecified occasions or events or series of occasions or events. Sections 73 and 74 require occasions or events to be described and specified accordingly. We do not differentiate between those terms. In the context of the Act and the reporting requirements on any application for a special licence, we would expect in terms of ss.73 and 74 any occasion or event or series of occasions or events described or specified in the licence to contain their operative dates.

[106] A series of occasions or events must necessarily be related.

[107] For the reasons we have expressed above an omnibus special licence that does not specify or describe the occasions or events by including the dates of those occasions or events is contrary to the scheme of the Act, and in particular cannot comply with s.79 (1)(c) of the Act.

[108] For the same reason, imposing a condition requiring an applicant to specify the occasions or events on 48 hours notice to the Police and District Licensing Agency must necessarily be contrary to the Act. Also, at the time the District Licensing Agency considers an application, it would not be able to consider either the criteria in s.79(1)(a) or (c).”

[20] Another decision to the same effect is Newell NZLLA PH 1062/2009.

[21] In determining the applications before it, the District Licensing Agency was required to consider the terms of the application against the provisions of s.79. These were omnibus applications covering activities of various types which were likely to occur on unspecified days and when liquor might be sold during unspecified hours. The only commonality of the various functions referred to in the applications were that they were not open to the general public but were by way of invitation only and that the activities would occur on a bus. Apart from that, the various activities referred to in the applications were poorly specified, diverse in nature and unrelated.

[22] For this reason, alone, the Authority considers that the applications did not come within the ambit of s.73 and that it was not possible for the District Licensing Agency to appropriately apply the criteria to the applications as required by s.79 of the Act. Accordingly the appeals must be allowed.

[23] In the appellant’s submissions at paragraphs 140, 141 and 147 certain statements made in the High Court by Chisholm J in the judgment of 4 September 2008 were used to reinforce the appellant’s case. Chisholm J did not have before him the applications which were considered by the District Licensing Agency and which are the subject of the appeals. The problem faced by the appellants here is the defective applications which the District Licensing Agency purported to grant. Chisholm J’s statements do not assist the appellants.

Did the applications comply with s.4 of the Act?

[24] The Authority has already referred to the omnibus nature of the activities proposed in the applications. Some of those activities have greater ramifications in terms of s.4 of the Act than others. Section 4 of the Act sets out the object of the legislation which is the reduction of liquor abuse and the District Licensing Agency was obliged to act in such a way as to promote that object.

[25] There was a suggestion that on some occasions when the buses were travelling between various hotels or taverns patrons would be able to purchase tickets to enable them to acquire four alcoholic drinks to be consumed on the journey. It is accepted that the intention was that only one drink would be consumed on each stage. Nevertheless, if each stage were to be of 20 minutes duration (and there was evidence to that effect) then on four occasions of not more than 20 minutes each a patron was to be permitted to consume one alcoholic drink. Then, no doubt, at the tavern or hotel the patron would be encouraged (or might not even need such encouragement) to consume further alcohol. While the Authority appreciates that some of the Police evidence at the hearing before the District Licensing Agency was disputed, this evidence (supplied by the appellants) would seem to indicate the encouragement of the abuse of liquor. The Authority appreciates that there was no expert evidence before the District Licensing Agency that to consume liquor in such a manner was likely to lead to liquor abuse. However, it is difficult to argue that a reduction of liquor abuse would happen despite the various measures put in place by the appellants.

[26] It is the omnibus nature of the applications which indicates that on some of the occasions abuse of alcohol is likely. Thus, if the specific activities were detailed then those which were identified as likely to result in liquor abuse could be declined and those not likely to contribute to liquor abuse could be granted. By lodging omnibus applications, the worst type scenario must be considered by the District Licensing Agency. On that basis, the whole of each application becomes tainted with a possible contravention of s.4.

Should the District Licensing Agency have stated that in the future it might not grant special licences?

[27] The reason that the District Licensing Agency attempted to spell out its future policy was that it had been misled into believing that when considering the applications it needed to determine whether or not a special licence was the appropriate licence or whether the applications should have been for on-licences. The Authority considers that such an approach is wrong. The Authority considers that the District Licensing Agency, when considering the applications, should have asked itself whether or not what was proposed in each application constituted an activity or activities which authorised it to grant a special licence. Had it approached the applications in this way it would not have been diverted into asking itself what sort of licence was appropriate for the specific activities proposed. It is not a matter of trying to fit the activities into some sort of licence; but rather determining whether what is proposed justifies the licence sought.

[28] It is not surprising that the District Licensing Agency adopted the approach that it did. A number of the authorities to which it referred in its decision, including a decision of Chisholm J in Oddballs Adventure Tours Company Ltd and Ors v Fergusson and Christchurch City Council District Licensing Agency – CIV 2008-409-2032, needed to adopt a comparison between an on-licence and a special licence to achieve a result on the question posed. In the latter case, the question before the court was whether or not a special licence authorised the licensee to permit its patrons in a bus to bring onto the bus BYO liquor. The High Court needed to compare special licences which are concerned with the sale and supply of liquor with on-licences which allow the consumption of liquor. It was held in that case that while an on-licence might permit customers to consume BYO liquor on the licensed premises, there was no such provision applicable to special licences.

[29] It was also argued that the District Licensing Agency should not have made the remarks that it did because they could be construed as pre-determining future applications. This would be a denial of natural justice. The Authority considers that the District Licensing Agency was unwise to make those comments for that reason. Nevertheless, as was pointed out by Fogarty J in CH and DL Properties Ltd v Christchurch District Licensing Agency and Ors – CIV-2009-409-002906 at paragraph [78] Parliament has delegated to the Authority the ability to make policy. It follows, therefore, that the District Licensing Agency also has that ability. However, it is one thing to make policy: it is another to indicate that it is pre-determining future applications when the details of those applications are not known. Natural justice often involves perception: if a party gets the impression that its fate in a judicial process is pre-ordained, then this can be enough to constitute a breach of the rules of natural justice. In the circumstances, the Authority considers that it was unwise for the District Licensing Agency to make the comments that it did.

Conclusion

[30] For the reasons set out in paragraph 14 of this decision the appeals are allowed. This means that each application is deemed to have been refused and no special licences should have been issued.

[31] This then raises the issue as to whether the appellants are presently operating pursuant to any licence at all. It was suggested at the hearing that the appellants were operating their party buses under special licences which were in force during August 2008 and which were ordered (by the High Court) to continue in force until such time as the substantive application for judicial review was determined by that Court or was earlier resolved in some other way. No doubt it was anticipated that that substantive application would be dealt with expeditiously. While the High Court has inherent jurisdiction, it is questionable whether it has the power to extend special licences beyond the period referred to in s.82 of the Act. It seems that these are special licences referred to in s.82(1)(b) of the Act. In terms of s.82(3) of the Act such licences cannot continue in force for longer than 12 months. Accordingly, it can be argued that those special licences are no longer in force. The Authority has not heard argument on this issue and it was not an issue relative to the appeal. Nevertheless, the Authority raises the issue in case the appellants are presently operating illegally. If so, they may wish to take appropriate steps to remedy the position.

DATED at WELLINGTONthis 22ND day of December 2010

B M Holmes
Secretary

Party Bus.doc(aw)