Jattadd Pty Ltd v the Liquor Licensing Commissioner and Sherriff Pty Ltd No. SCGRG 93/246 Judgment No. 4146 Number of Pages 5 Liquor Licensing

[1993] SASC 4146

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(1), OLSSON(2) AND DEBELLE(3) JJ

CWDS
Liquor - licensing - removal of Retail Storekeepers Licence - s.38 Liquor Licensing Act - whether public demand cannot be met by existing facilities - s.59 - discretion of Licensing Court - likely closure of nearby hotel as ground for refusal of removal.

HRNG ADELAIDE, 8-9 July 1993 #DATE 1:9:1993
Counsel for appellant:     Mr S Walsh QC
Solicitors for appellant:    Norman Waterhouse
Counsel for respondent:     Mr J L Firth
Solicitors for respondent: Kelly and Co

ORDER
Appeal dismissed.

JUDGE1 KING CJ This is an appeal against a decision of the Licensing Court refusing an application by the appellant for the removal of its retail liquor merchant's licence from premises situate at 87 Payneham Road, St Peters, to premises situate at Shop 43, Marden Shopping Complex, Lower Portrush Road, Marden. 2. The applicant operates a profitable bottleshop at its existing premises. Its general manager, Mr Carbone, however, sees advantages in transferring the licensed premises to the Marden Shopping Centre. This is not surprising. The Marden Shopping Centre is a busy shopping centre with a floor area of 5,640 square metres which includes 600 square metres occupied by a Woolworths Supermarket. Moreover the shopping centre is currently under redevelopment at its northern end to accommodate a second supermarket to be operated by Franklins, with an area of 1,420 square metres, and specialty shops occupying 170 square metres. With the redevelopment, it is anticipated that the catchment population will be in the order of 40,000 persons. A substantial proportion of the persons residing in that catchment area are of Italian origin or background. The applicant desires to establish in the shopping centre a commodious modern bottleshop adequately attended and stocking some 3,000 lines of wines and spirits. It would in particular stock a range of lines of wines and spirits particularly sought by Italian customers. Marden Shopping Centre is situate on the corner of Payneham Road and Lower Portrush Road. The objector is the licensee of the Payneham Tavern which is also situate on the northern side of Payneham Road about 500 metres to the west. Naturally a significant number of shoppers at the Marden Shopping Centre procure their packaged liquor requirements at the Payneham Tavern. Some no doubt procure those requirements from other liquor outlets, which are situate at a distance of two kilometres and more from Marden Shopping Centre. 3. By virtue of s.67(1) of the Liquor Licensing Act 1985, the applicant was required to satisfy the Court that, "having regard to the licensed premises already existing in the locality in which the premises or proposed premises to which removal of the licence is sought are, or are proposed to be, situated, a licence of the class to which the application relates is necessary in order to provide for the needs of the public in that locality." 4. His Honour the Licensing Court judge thought that "Section 67 is probably overcome given the expressed tastes and preferences" of witnesses called in the case. 5. A more substantial obstacle to the appellant's success was presented by the provisions of s.38(1) which, so far as material, is as follows: "a retail liquor merchant's licence shall not be granted in respect of, or removed to, premises unless the licensing authority is satisfied that the public demand for liquor in the locality in which the premises are situated cannot be met by other existing facilities for the sale of liquor." 6. The distinction between the tests under s.67 and s.38 was explained in Lincoln Bottle Shop Pty Ltd v Hamden Hotel Pty Ltd (No.2) (1981) 28 SASR 458 at p.460 as follows:
    "The former test is more stringent because it requires
    the Court to be satisfied, not merely, as with the latter test,
    that the licensing of the premises is required for the needs of
    the public having regard to licensed premises existing in the
    locality, but that the public demand for liquor cannot be met by
    the existing facilities. Matters of taste, preference and
    convenience which might be relevant to the test under s.47(a) have
    no relevance to the test under s.22(2). 'The word "cannot" in the
    sub-section does not denote absolute physical impossibility. A
    demand for liquor within the locality which can only be met within
    the locality with extreme difficulty or hardship would be enough':
    Tomley Investment Co. Pty. Ltd. v. Victoria (Tapleys Hill)
    Pty. Ltd. and Flagstaff Hotel Pty. Ltd. (1978) 17 SASR
    584, per Bray CJ at p 587. Mere inconvenience is not enough
(Papadopoulos v. The Opal Inn Pty. Ltd. (1972) 3 SASR 348
    per Bray CJ at p 351), but, in my opinion, if the liquor of the
    type demanded by the public is not provided by the existing
    facilities in a way which makes it available, in a reasonable and
    realistic sense, to the members of the public requiring it, it can
    properly be said that the public demand for that type of liquor
'cannot be met' by those facilities." 7. Although some of the patrons of the Marden Shopping Centre may have their demand for liquor met by liquor outlets located two or three kilometres from the Shopping Centre, the majority of those patrons, if the present licence is not removed, can only have their demand for liquor met in a reasonable and realistic sense if the Payneham Tavern is able to meet that demand. The learned Licensing Court judge considered that the public demand for liquor could be met by the existing facilities and held that the test under s.38 had not been satisfied. 8. Mr Walsh QC for the appellant challenged that finding and there is a good deal of force in his arguments. Marden Shopping Centre is a large shopping centre catering for a substantial customer catchment. Contemporary shopping habits and tastes cannot be ignored in determining whether the demand for liquor can be met by existing facilities. There is undoubtedly a contemporary demand for liquor at the point at which the customers do their other shopping. This is especially so in the case of elderly people and others who do not drive motor cars. There was also proved a special need on the part of customers with an Italian background for certain types of wines and spirits which would be available at the applicant's proposed premises. The critical question before the judge on this aspect of the case was whether this public demand for liquor could be met at the Payneham Tavern. 9. The Payneham Tavern is a relatively small hotel and is not well designed. It has a bar and dining facilities. The principal packaged liquor facility is the drive in bottle department which is well stocked with the lines of liquor usually in demand at a drive in bottle facility. Adjacent to the drive in is a walk in bottleshop. There is an entrance to this bottleshop behind the drive in counter and another entrance from the car park. The lighting and manning of the walk in bottle shop were strongly criticised by Mr Carbone in his evidence and by counsel before us. His Honour rejected the more trenchant criticisms. It is clear, however, that there are times when the door from the car park is locked and it is necessary for customers to seek the assistance of the drive in bottle attendant to gain access to the walk in bottleshop. The bottleshop stocks between 900 and 1,000 lines. The findings of the learned Licensing Court judge on this point were as follows:
    "So, in the end, I hold that, as a matter of probability,
     this is an authentic attempt to meet the public demand and is not
    a case of 'tissying up' premises for the purposes of the case
    alone and then reverting back to a storage room when the
    application is refused. I must add that on the 'view' I gained
    the impression of a quite attractive and well stocked walk in
    bottleshop. I further find that the 'walk in' at the hotel and
    the stock within it does meet the demand expressed by the
    representative witnesses in a reasonable and realistic sense if
    they choose to use it. I emphasise the if because those who know
    of it show no great desire to pursue their needs within it. But
    the fact is it is there and has sufficient range - just - to
    satisfy most in the community under discussion. It is perhaps a
    trifle 'light on' for the special needs of the greater than
    average Italian population but by and large meets every other
    expressed demand. The Italians, on their own and with the limited
    lack of some specialised Italian liqueurs, cannot carry the day
for the applicant." 10. Mr Walsh QC for the appellant attacked the learned judge's findings as to the adequacy of the packaged liquor facilities at the Payneham Tavern. His findings, however, were an assessment made after hearing evidence and visiting the premises. They were an assessment made by the judge of the specialist court who is best qualified to assess the adequacy of facilities. I accept his Honour's description of the facilities at the Payneham Tavern. 11. Accepting that facilities at the Payneham Tavern are as described by the learned Licensing Court judge, there remains a serious question as to whether they can meet the public demand for liquor having regard to contemporary habits and tastes. Mr Whallin, the managing director of the objector company, himself agreed that the Marden Shopping Centre needs a bottleshop. This is, I think, a finely balanced decision, but, in the end, I have reached the conclusion that this Court should not disturb the finding of the specialist tribunal on the point. 12. Even if the appellant had been able to overcome the s.38 obstacle, he was still confronted with the necessity of obtaining the Licensing Court's exercise of discretion in his favour. Section 59(1) of the Act is as follows: "Subject to this Act, the licensing authority has an unqualified discretion to grant or refuse an application under this Act on any ground, or for any reason, that the licensing authority considers sufficient." 13. Judgments in the High Court in Dalgety Wine Estates Pty Ltd v Rizzon
(1979) 141 CLR 552 per Steven J at 566-7 and Mason J at 571-2, as well as many cases in this Court, have stressed the width of the discretion conferred on the Licensing Court by this section and its predecessor. In this case the learned Licensing Court judge indicated that, if the s.38 test had been met, he would nevertheless have refused the application in the exercise of his discretion. His finding was that grant of the application would have the effect of closing the hotel or at the very least of reducing its services. He considered that that was sufficient reason for refusing this application. 14. Mr Walsh QC challenged the factual basis for that contemplated exercise of discretion. Mr Carbone's evidence was that in his view removal of the applicant's licence to the Marden Shopping Centre would have little effect upon the Payneham Tavern. He considered that such diminution of custom as would result from the presence of the bottleshop in the Marden Shopping Centre would be offset by the additional passing trade which the Payneham Tavern would attract as a result of the closing of the applicant's present premises further west along Payneham Road. Mr Whallin's assessment of the situation was very different. He considered that the affect upon the Tavern's trade would be disastrous. 15. The second respondent, when it acquired the Payneham Tavern in November 1988, invested a substantial amount of money in improving its facilities. It has been operating at a loss. Some progress has been made in turning the business around. Mr Whallin, who had hoped not to have to play an active role in the operation of the Tavern, has found it necessary, in order to save wages, to attend at the Tavern seven days a week. The consequent reduction in the wages bill and other economies have seen an improvement in the figures, but it is still operating at a loss. Mr Whallin hopes that if his present volume of business can be maintained and he can gain reduction in the rent and some benefit from the introduction of poker machines, the Tavern can be operated at a profit. He considers that introduction of a modern bottleshop in the Marden Shopping Centre would greatly affect the custom of the Tavern and would be a fatal blow resulting in its closure. 16. The learned Licensing Court judge made his assessment based upon the evidence and his experience in that jurisdiction. He considered that the effect on the Tavern of the removal of the licence would be "quite devastating and will as a matter of probability destroy the viability of this hotel's business." He rejected Mr Carbone's view that the maximum loss of custom would be 10 per cent with a 10 per cent corresponding gain. The learned judge's conservative estimate of the impact of the removal was double Mr Carbone's 10 per cent. He summarised his findings as follows:
    "But even a ten per cent loss on this hotels figures must
    impact so heavily that its very viability is at enormous risk if
    not destroyed. I cannot, consistently with my duty, permit this
    to occur to the detriment of the public. It is suggested that
    many things might occur given this hotel's financial position. It
    might improve with the advent of poker machines. Its landlord may
    not renew the lease. Its landlord may decide to demolish and sell
    the valuable land - and so on. But my duty is clear. I look at
    the here and now. The grant of this licence will undoubtedly to
    my mind make that which is continuing to trade, albeit at a loss,
    utterly unviable in the immediate future. I must not, it seems to
    me, make a decision, which effectively will close a hotel or at
    the very least reduce its services substantially and which is and
    are presently needed by the public in that area. If any of the
    possible predictions come to fruition so be it. But no act of
mine should cause a hotels closure in these circumstances." 17. I think that the view of the judge in the specialist tribunal as to the likely impact of the removal upon the Payneham Tavern must be respected. I see no reason why this Court should interfere with his Honour's finding. The likelihood that the grant of the application would result in the public in the locality being deprived of its only hotel was clearly an important factor in the exercise of the discretion. An important reason for the conferral of this unqualified discretion on the Licensing Court is to enable it to weigh the advantages to the public of the grant of a licence or removal, against any detriments which the public might suffer in consequence of the grant or removal. The object is the provision of an adequate and properly balanced system of liquor outlets to meet the needs of the public. Even where grounds are made out for the grant of an application for a liquor facility, the grant of that facility may be seen to operate on balance to the detriment of the public. The likely closure of the hotel is a proper ground for the exercise of the discretion against the grant of this application, and, if the s.38 test had been met, the learned judge would have been fully justified in refusing the application in the exercise of his s.59 discretion. 18. In my opinion this appeal should be dismissed.

JUDGE2 OLSSON J I agree.

JUDGE3 DEBELLE J For the reasons given by the Chief Justice I would dismiss this appeal.