Gold Liquor [2011] NZLLA 1328 (16 November 2011)

New Zealand Liquor Licensing Authority

[Index] [Search] [Download] [Help]

---

Gold Liquor [2011] NZLLA 1328 (16 November 2011)

Last Updated: 12 December 2011

[2011] NZLLA PH 1328

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by MALKIT SINGH for an off-licence pursuant to s.31 of the Act in respect of premises situated at 29 O’Shannessey Street, Papakura, Auckland known as “Gold Liquor”

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at PAPAKURA on 26 October 2011

APPEARANCES

Mr J H Wiles – for applicant
Mrs J L Walden – Auckland District Licensing Agency Inspector – to assist

Objectors

Reverend P G Williamson
Inspector G Hill
Mr K J Robinson
Mr G W Archibald
Mr C M Penrose

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This decision relates to an application for an off-licence for premises at 29 O’Shannessey Street, Papakura, Auckland to be known as “Gold Liquor”. It is intended that the business will trade as a bottle store. The application seeks hours to be authorised for the sale of liquor between 9.00 am and 10.00 pm. At the hearing the applicant stated that he was prepared to reduce the hours so that the business would be open for the sale of liquor from 10.00 am to 9.00 pm each day.

[2] It is proposed that the bottle store be situated within the central business district at Papakura. The area is zoned Commercial 3 which is principally a retail zone. Within 500 metres of the proposed store are three churches and one Sikh temple.

[3] The premises consist of a small shop with a retail area of 107 square metres plus staff facilities and storage. A chiller will be situated within the retail area. The liquor will be on shelving down two sides of the shop. A counter will be situated to the left of the principal entrance. The principal entrance opens on to O’Shannessey Street.

[4] In recent time when an application has been made for an off-licence in Papakura, the application has attracted many objections. That is the case here. The primary concern of objectors in the past (and in this case) has been the proliferation of liquor outlets in a relatively small urban area. According to the Inspector, within a 500 metre radius of the proposed premises there are 10 off-licences consisting of six bottle stores, a florist, an internet supplier, and two supermarkets. (One of those bottle stores may not be trading). In addition there is a club licence and 15 on-licences consisting of four taverns and 11 restaurants.

[5] Upon advertising, the application attracted three petitions or petition-style objections. One petition contained 223 signatories. Many of the petitioners lived some distance from the proposed premises and are unable to establish status to object in accordance with s.32(1) of the Act. However, no issue as to status arose in respect of those objectors who were present at the hearing.

[6] The premises will be within a building owned by the Ross Kruge Trust. A trustee of the Ross Kruge Trust, Maurice Desmond Hayes, provided an affidavit supporting the application.

[7] Neither the Police nor the Inspector opposed the application.

Applicant’s Evidence

[8] The principal witness in support of the application was the applicant, Malkit Singh. He has taken a lease of the premises for nine years. He has a General Manager's Certificate. Although he has been in New Zealand for approximately 24 years, he has not operated a liquor store previously. However, he has run other businesses successfully. For approximately 18 months he has assisted a friend who operates the “Clevedon Liquor Store”.

[9] Insofar as Mr Singh’s suitability is concerned, some of the objectors and the Authority noted that he seemed to have a poor command of the English language. However, when he was later recalled to give evidence pertaining to financial aspects of the application, Mr Singh’s English improved markedly.

[10] A number of objectors were concerned that the business would not be economically viable. In this regard, the total cost of the complete fit out of the premises will be approximately $100,000. About $200,000 will be spent on acquiring stock. This expenditure will be satisfied by Mr Singh providing cash in the sum of $200,000 and obtaining a bank loan for $100,000.

[11] Mr Singh’s son, Baljinder Singh (aged 21) will be the principal employee of the business. He indicated that initially an annual turnover of $200,000 had been budgeted for.

[12] Although, to some extent, the evidence of Malkit Singh raised questions as to his ability to operate the liquor store, these deficiencies were made up for when Baljinder Singh gave his evidence. He is a young man who seems to be well acquainted with the proposal and the obligations of a licensee pursuant to the Act. He holds a General Manager's Certificate.

[13] At the invitation of the Authority, Malkit Singh undertook that, if the application were granted, he would employ Baljinder Singh in the premises on a full time basis for the first year of the business’s operation. He also undertook that if Baljinder Singh was unable to remain so employed he would consult with the Inspector and only employ a replacement who was approved by the Inspector.

[14] Upon receipt of this undertaking, the Authority is satisfied as to the suitability of the licensee.

Objectors

[15] Reverend P G Williamson was the first objector to give evidence. Because he had another commitment, his objection was received by the Authority before evidence was given in support of the application. Mr Williamson understood the ramifications of his request in this regard. His evidence, to a small degree suffered as a result of his not having heard the evidence for the applicant first. His main concern related to the hours when it was proposed that the business should be open for the sale of liquor. He considered the hours proposed as excessive. He thought the business should close at the same time as other retail premises in the area. He submitted that the business should close at 8.00 pm and not open at all on Sundays. He also submitted that the premises should be designated as restricted rather than supervised. Mr Williamson’s principal objection seemed to be that it was proposed that the premises be established within 300 metres of three large churches and one small church. Each of the larger churches has Sunday services commencing at 8.00 am and finishing at 8.00 pm. The Crossroads Methodist church (of which he is a minister) has a service commencing at 9.30 am and another at 11.30 am. The latter is a Samoan language service. The sale of liquor on Sundays is culturally inappropriate for church going Samoans. It is intended to shortly start a Tongan service at 4.00 pm and, again, church going Tongans find the sale of liquor on Sundays culturally offensive. In the circumstances, he asked that the premises not be allowed to be open for the sale of liquor on Sundays.

[16] Under cross examination he conceded that it is not possible to see the proposed premises from his church. (It seems that the proposed premises will not be able to be seen from any of the churches in the vicinity).

[17] Inspector Hill gave evidence as the area commander for the Counties Manukau South area which includes Papakura. It was disconcerting to discover that he had not liaised with the Alcohol Harm Reduction Officer who had indicated that the Police had no opposition to the application. He acknowledged that his objection did not constitute a report in accordance with s.33(3) of the Act. He gave evidence as to how liquor contributes towards criminal activity with particular reference to the Counties Manukau area. He noted that 31 percent of the population of the Counties Manukau South area is under the age of 20 and there is concern about these young people obtaining liquor from their older siblings or friends. These matters led him to believe that there was an excessive number of liquor outlets in the Papakura area and that liquor abuse was an inevitable consequence.

[18] Inspector Hill was also concerned that many retailers in Papakura have either wittingly or unwittingly become receivers of stolen goods. He considered that the applicant was vulnerable in this respect.

[19] Mr K J Robinson is the chairman of the Papakura Local Board and had authority to represent the Board at the hearing. Its objection was primarily based on the proposed trading hours which the board considered excessive. The Board was also concerned with the proliferation of off-licences in the area. Mr Robinson considered that this led to alcohol abuse for the same reasons as Inspector Hill.

[20] Mr Robinson was also concerned that the proposed business would not be financially viable. He thought that if the profit margin was about 30 percent, the business was unlikely to be viable. He noted that the rent proposed was $22,000 plus GST per annum. Interest would have to be paid on the bank loan of $100,000 and, in his opinion, the interest would probably amount to $12,000 per annum although if the loan was secured he conceded it might reduce to about $6,500. Staff salaries would have to be paid and he anticipated that a duty manager would probably earn about $40,000 to $45,000 per annum (excluding penal rates for the long hours worked). All of these expenses would have to come out of the net profit of about $60,000.

[21] Mr G W Archibald who is a taxation consultant (with 30 years experience) was also concerned that the business might not be viable. He thought that if the business was not likely to be financially viable then the lack of viability might lead to breaches of the Act. He, too, sought a reduction in the trading hours with the elimination of Sunday trading.

[22] Mr C M Penrose who was a former mayor of Papakura, and who is now a councillor with the Auckland Council, initially purported to give evidence on behalf of the Auckland Council. He conceded that no resolution authorising him to speak on behalf of the Council had been passed and accordingly gave evidence on his own behalf. It is conceded that he had status as an objector as he is a councillor elected by the Manurewa Papakura Ward (which includes the area where the premises are to be situated). He was concerned that the proposed premises are within Papakura which adjourns Manurewa (which is the lowest socio-economic area in the country). Like the other objectors, he was concerned that the proposed premises were close to religious facilities. He considered that the proposed hours sought for the sale and purchase of liquor at the premises were excessive. Like Inspector Hill and Mr Robinson, he was concerned that there would be a proliferation of liquor outlets in the vicinity of a low socio-economic area with a high proportion of its population being under the age of 20. All of this, he claimed, would lead to the abuse of liquor and the increase in crime.

Additional Financial Evidence from Applicant

[23] Given the criticisms concerning the possible lack of financial viability of the business, the applicant gave further evidence. He stated that he and his wife own real estate which has a market value in excess of 1.5 million dollars. The bank manager has indicated that there would be no difficulty in the bank lending him $100,000 at an interest rate between six and seven percent. He has lived in New Zealand for 24 years and the innuendo was that his substantial capital assets arose as a result of his success as a businessman.

Authority’s Decision and Reasons

[24] In considering an application for an off-licence the Authority is directed by s.35(1) of the Act to have regard to the following criteria:

(a) The suitability of the applicant;

(b) The hours on which and the hours during which the applicant proposes to sell liquor;

(c) The areas of the premises or conveyance if any, that the applicant should be designated as restricted areas or supervised areas;

(d) The steps proposed to be taken by the applicant to ensure that the requirements of this Act in relation to the sale of liquor to prohibited persons are observed;

(e) Whether the applicant is engaged, or proposes to engage, in –

(i) The sale or supply of any other goods besides liquor; or

(ii) The provision of any services other than those directly related to the sale or supply of liquor –

and if so, the nature of those goods and service:

(f) Any matters dealt with in any report made under section 33 of this Act.

[25] In its decision dated 16 October 2009 in Liquor World Limited NZLLA PH 1189/2009, the Authority referred to the criteria set out in s.35(1) of the Act and then set out a number of principles and guidelines that apply where applications like the present one are made. It is worth summarising what the Authority said now:

[a] Only people who have a greater interest in the application than the public generally can object. They can only object in relation to one or more of the criteria set out above;

[b] If there is a valid objection then it is likely that there will be a public hearing. At the hearing the Authority has a discretion to hear evidence about matters outside the criteria mentioned in s.35(1) of the Act. How much weight is given to that evidence is a matter for it. Such evidence may assist the Authority in fixing the conditions of the licence, with particular regard to the trading hours;

[c] If objectors do not appear and no explanation is received for their absence, then it is likely that their objection will have no value. On the other hand if they appear and do not address the above criteria then their objection will have little probative value;

[d] Any objection that refers to the prejudicial effect that the grant of a licence may have on other licensed premises will not be taken into account (see s.35(2) of the Act);

[e] The Authority has no power to take into account the number of other liquor outlets in the area or the density of those outlets. It cannot refuse to grant a licence in response to public opinion that the licence is not wanted or necessary. It is not necessary for an applicant to establish that the grant of a new licence is necessary or desirable. In summary, the Authority has no discretion to refuse an application if the applicant is suitable and holds the appropriate resource consent (see Cayman Holdings Limited NZLLA PH 145/2001;

[f] The certificate under the Resource Management Act covers issues such as parking, traffic, and the suitability of the location. If an applicant has been given resource consent to establish an off-licence it is not open to the Authority to suggest that the site is unsuitable because of its proximity to churches or schools or other sensitive land uses;

[g] In fixing the trading hours and days the Authority may have regard to the site and the premises in relation to neighbouring land use (see s.37(5) of the Act);

[h] When fixing trading hours and days for new licences, a conservative approach will be adopted, particularly where there is no trading history. Trading hours and days can be reviewed on renewal;

[i] It is accepted that the establishment of a new bottle store or other off-licence may impact adversely on the neighbouring amenities and way of life. This potential can sometimes be addressed by fixing conditions for the new licence, as well as by the renewal process after the “probationary” year;

[j] Any new licence is issued for a period of one year. This gives objectors and the reporting agencies the opportunity to monitor the store to see exactly what sort of business develops. If concerns are realised, then the Authority has the power to refuse to renew the licence, or it may alter the trading hours or other conditions of the licence.”

[26] The principles and guidelines mentioned in the Liquor World decision represented the legal position that existed in 2009 before the Court of Appeal decision in My Noodle Limited [2009] NZCA 564 and the more recent decision in Wells Instrument and Electrical Limited v Shree Sai Holdings (Levin) Limited CIV 2011-443-000050. The effect of those two decisions and subsequent decisions of this Authority (including Plateau Group Limited [2011] NZLLA PH 1027) is that when considering whether or not to grant an off-licence, not only are the criteria as set out in s.35 of the Act relevant, but also the object of the Act as set out in s.4.

[27] Section 4(2) of the Act requires the Authority to exercise its jurisdiction, powers and discretions “in the manner that is most likely to promote the object of this Act”.

[28] Section 4(1) of the Act states:

The object of this Act is to establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse, so far as that can be achieved by legislative means.

[29] The Authority must exercise its jurisdiction in a reasonable manner: Meads Brothers Limited v Rotorua District Licensing Agency [2001] NZCA 386; [2002] NZAR 308; Christchurch District Licensing Agency and Another v Karara Holdings Limited and others [2003] NZCA 96; [2003] NZAR 752 (CA). Further, when exercising its jurisdiction, powers and discretions the Authority is required to take into account the aim of contributing to the reduction of liquor abuse: My Noodle Limited and Wells Instrument and Electrical Limited.

[30] It is when considering the over-arching requirement that the object of the Act be taken into account, that matters previously deemed irrelevant become relevant. The objectors’ evidence, relating to the proliferation of liquor outlets in a low socio-economic area, the consequential increase in the availability of liquor leading to its abuse and criminal activity, are s.4 issues as they relate to the object of reducing liquor abuse. They are admissible because of the objections to the hours of operation in terms of s.35(1)(b) of the Act: see especially Wells Instrument and Electrical Limited.

[31] In the Liquor World decision at paragraph [26] the Authority referred to 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. The Authority stated that this research highlights ways of reducing harm from alcohol including restrictions on the days and hours of sale as follows:

“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:

(i) Minimum legal purchase age;

(ii) Government Monopoly of retail sales;

(iii) Alcohol taxes to increase the price;

(iv) Restrictions on hours or days of sale;

(v) Outlet density restriction; and

(vi) Licensing and enforcement to ensure compliance with these measures.”

[32] In the Liquorworld Limited decision the Authority used that research as justification in reducing trading hours.

[33] The above research and the report prepared by the Alcohol Advisory Council Of New Zealand “The Impacts of Liquor Outlets in Manukau City – Summary Report”- dated March 2010 also indicate that reducing outlet density is one of the strategies that can be applied to reduce the incidence of liquor abuse.

[34] One of the problems arising from an increase in outlet density in a low socio-economic area is that the profitability of all the other outlets in the area may be detrimentally affected by the newcomer. Whilst the suitability of the newcomer may be unquestionable, nevertheless, the reduction in profitability of other outlets may lead one or more of them into practices designed to boost profitability which are illegal under the Act. In particular, an increase in sales to minors could eventuate. This, was a concern of Inspector Hill and some of the other objectors. However, to reach this conclusion the Authority has to presume that the other licensees are so unsuitable as to react in this manner. Such a conclusion would be unfair and unjustifiable without specific evidence. There is not any.

[35] In these circumstances, insofar as the application itself is concerned, the Authority concludes that the application does meet the criteria set out in s.35(1) of the Act. Further, while there is the generalised evidence and research indicating that an increase in liquor outlets leads to liquor abuse, that evidence is not sufficiently specific to the instant case as to warrant the Authority concluding that the object of the Act will be frustrated if this application were granted. The facts of this case are quite different from those mentioned in the Plateau Group Limited decision. In that case, there was a direct causal nexus between the proposed establishment of an off-licensed shop and liquor abuse.

[36] The Authority has a duty to act reasonably; and recognises that generalised research and evidence, while useful, should not be used in a random manner to frustrate an application which otherwise meets all the statutory criteria. If there had been evidence, for example, that the market is absolutely saturated (and the evidence does not go as far as that) then a different conclusion might be tenable. The fact that the applicant, a successful businessman, wants to open the business in the existing market is powerful evidence that the market can cope with the new business.

[37] In these circumstances the application must be granted.

[38] Section 4(1) of the Act also applies when considering the imposition of conditions. Possibly in recognition of this, the applicant has agreed to reduce its trading hours so that the business will open at 10.00 am each day and close at 9.00 pm each day. These hours are less than those of its competitors. Whilst some of the objectors sought closing hours at 8.00 pm rather than 9.00 pm, the Authority is mindful of the obligation imposed by s.4(1) of the Act to act reasonably. In the Authority’s opinion to reduce the closing hours to 8.00 pm when most of the applicant’s competitors are not required to close until 10.00 pm or later would be unreasonable.

[39] Most of the objectors requested that the Authority prevent the applicant from operating its business on a Sunday. This aspect of their objections lost considerable force when it was appreciated that the proposed business cannot be seen from any of the churches in the vicinity. Again, the Authority is mindful of its obligation to act reasonably and considers that it would be unreasonable to require the applicant’s business to close when its competitors are open.

[40] Accordingly, the application is granted upon the condition that the business may only be open for the sale and supply of liquor from 10.00 am to 9.00 pm each day.

[41] The licence will not issue until the expiry of 20 working days from the date of this decision. That period is the time provided by s.140 of the Act for the lodging of a notice of appeal.

[42] The company’s attention is drawn to ss.48 and 115(3) of the Act obliging the holder of an off-licence to display:

• [a] A sign attached to the exterior of the premises so as to be easily read by persons outside each principal entrance, stating the ordinary hours of business during which the premises will be open for the sale of liquor; and
  
• [b] A copy of the licence, and the conditions of the licence, attached to the interior of the premises so as to be easily read by persons entering through the principal entrance; and
  
• [c] The name of the duty manager placed inside the premises so as to be easily read by persons using the premises.
  

DATED at WELLINGTON this 16TH day of November 2011

B M Holmes
Secretary

Gold Liquor.doc