Kartika Holdings Pty Ltd v Liquor Stores Association of Western Australia (Inc)
[2008] WASCA 103
•7 MAY 2008
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: KARTIKA HOLDINGS PTY LTD -v- LIQUOR STORES ASSOCIATION OF WESTERN AUSTRALIA (INC) [2008] WASCA 103
CORAM: MARTIN CJ
McLURE JA
EM HEENAN AJA
HEARD: 21 FEBRUARY 2008
DELIVERED : 7 MAY 2008
FILE NO/S: CACV 129 of 2006
BETWEEN: KARTIKA HOLDINGS PTY LTD
Appellant
AND
LIQUOR STORES ASSOCIATION OF WESTERN AUSTRALIA (INC)
First RespondentMICHAEL WILLIAM GRANT & ANOR
Second RespondentsJETWAVE ENTERPRISES PTY LTD
Third RespondentDAVSCO INVESTMENTS PTY LTD
Fourth RespondentERSKINE PTY LTD
Fifth RespondentGENELLE INVESTMENTS PTY LTD
Sixth RespondentBERBAR NOMINEES PTY LTD
Seventh Respondent
ON APPEAL FROM:
Jurisdiction : LIQUOR LICENSING COURT OF WESTERN AUSTRALIA
Coram :GREAVES DCJ
Citation :RE CLAREMONT CLEANSKINS; LIQUOR STORES ASSOCIATION OF WESTERN AUSTRALIA (INC) -v- KARTIKA HOLDINGS PTY LTD [2006] WALLC 4
File No :LLC 11 of 2006
Catchwords:
Appeal - Liquor licensing - Director of Liquor Licensing granted a licence to the respondent to sell cleanskin wines exclusively - Liquor Licensing Court reversed decision of Director - Whether appeal involves a question of law - Whether trial judge misconstrued and misapplied s 38(2b) of the Liquor Licensing Act
Words and phrases - 'cleanskin' wines
Legislation:
Interpretation Act 1984 (WA), s 37(1)
Liquor Control Act 1988 (WA), sch 1A
Liquor Licensing Act 1988 (WA), s 28, s 28(3), s 28(5), s 38(1), s 38(2b)
Liquor and Gaming Legislation Amendment Act 2006 (WA)
Result:
Appeal allowed
Category: B
Representation:
Counsel:
Appellant: Mr C L Zelestis QC & Mr D Mossenson
First Respondent : Mr M H Zilko SC & Mr A D Wilson
Third Respondent : Mr M H Zilko SC & Mr A D Wilson
Fourth Respondent : Mr M H Zilko SC & Mr A D Wilson
Fifth Respondent : Mr M H Zilko SC & Mr A D Wilson
Sixth Respondent : Mr M H Zilko SC & Mr A D Wilson
Seventh Respondent : Mr M H Zilko SC & Mr A D Wilson
Second Respondents : Mr M H Zilko SC & Mr A D Wilson
Solicitors:
Appellant: Lavan Legal
First Respondent : Frichot & Frichot
Third Respondent : Frichot & Frichot
Fourth Respondent : Frichot & Frichot
Fifth Respondent : Frichot & Frichot
Sixth Respondent : Frichot & Frichot
Seventh Respondent : Frichot & Frichot
Second Respondents : Frichot & Frichot
Case(s) referred to in judgment(s):
Collector for Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280
Commissioner of Taxation v Miller (1946) 73 CLR 93
Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47
Hope v The Council of the City of Bathurst (1980) 144 CLR 1
Jericho Nominees Pty Ltd v Dileum Pty Ltd (1992) 6 WAR 380
Liquorland (Australia) Pty Ltd v Austie Nominees Pty Ltd (1999) 20 WAR 405
Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014
Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361
Re Claremont Cleanskins; Liquor Stores Association of Western Australia (Inc) v Kartika Holdings Pty Ltd [2006] WALLC 4
Re Subi Clean Skins; Doinwell Investments Pty Ltd v Liquorland (Australia) Pty Ltd [2004] WALLC 11; (2004) 37 SR (WA) 220
Timothy v Munro [1970] VR 528
MARTIN CJ:
Summary
In June 2005, Kartika Holdings Pty Ltd (Kartika) applied for the conditional grant of a liquor store licence for premises to be known as the 'One Stop Wine Shop' situated at 333 Stirling Highway, Claremont. Objections were lodged to the application on behalf of a number of holders of liquor store licences within the area determined to be affected by the application (the objectors). Kartika's application was heard in February 2006. In a decision delivered on 16 March 2006, the Director of Liquor Licensing (the Director) granted Kartika's application.
The objectors sought a review of that decision by the Liquor Licensing Court. That review was heard in July 2006. No further evidence was led on the hearing of the review. It was conducted entirely upon the basis of the transcript of the proceedings before the director. In a decision delivered on 29 September 2006, the trial judge upheld the objectors' application for review of the Director, and set aside the decision of the Director to grant Kartika's licence (Re Claremont Cleanskins; Liquor Stores Association of Western Australia (Inc) v Kartika Holdings Pty Ltd [2006] WALLC 4).
However, by then, Kartika's licence had been granted and it had commenced trading. Kartika appealed from the decision of the Liquor Licensing Court to this Court. The operation of the decision of the Liquor Licensing Court was stayed until the determination of this appeal. Accordingly, Kartika has continued to trade under the licence granted by the Director.
For the reasons given below, in my opinion, Kartika's appeal should be allowed, and the decision of the Liquor Licensing Court set aside, and in place of that decision, it be ordered that the objectors' application to review the decision of the Director be dismissed.
Background
Kartika sought a licence in respect of an area of 27m2 within a building also occupied by a food retail outlet known as Claremont Fresh. Kartika sought the licence in order to sell exclusively 'cleanskin' wines. These are wines sold in bottles which bear only one generic label - in this case 'Claremont Cleanskins' and which identify only the grape varieties used to produce the wine, and the region in which the grapes were grown. The name of the producer of the wine is not identified.
Ms Marie Cloughley is the sole director and shareholder of Kartika. She is also the sole director and shareholder of the company which was granted a liquor store licence to conduct a very similar retail operation in Subiaco (that was the subject of Re Subi Clean Skins; Doinwell Investments Pty Ltd v Liquorland (Australia) Pty Ltd [2004] WALLC 11; (2004) 37 SR (WA) 220). That licence was granted by the trial judge. In his reasons for that decision, the trial judge adopted the construction of the particular section of the Liquor Licensing Act 1988 (WA) (the Act) relating to the grant of liquor store licences (s 38(2b)(a)) suggested by Anderson J in Liquorland (Australia) Pty Ltd v Austie Nominees Pty Ltd (1999) 20 WAR 405 at 415.
At the time of the decision in Liquorland v Austie, and at the time of the decision now under appeal, s 38 of the Act relevantly provided:
38. Requirements for the grant or removal of a Category A licence
(1)An applicant for the grant or removal of a Category A licence must satisfy the licensing authority that, having regard to -
(a)the number and condition of the licensed premises already existing in the affected area;
(b)the manner in which, and the extent to which, those premises are distributed throughout the area;
(c)the extent and quality of the services provided on those premises; and
(d)any other relevant factor, being a matter as to which the licensing authority seeks to be satisfied,
the licence is necessary in order to provide for the reasonable requirements of the public for liquor and related services or accommodation in that area.
(2)Taking into account the matters referred to in subsection (1), the licensing authority in considering what the requirements of the public may be shall have regard to -
(a)the population of, and the interest of the community in, the affected area;
(b)the number and kinds of persons residing in, resorting to or passing through the affected area, or likely in the foreseeable future to do so, and their respective expectations; and
(c)the extent to which any requirement or expectation -
(i)varies during different times or periods; or
(ii)is lawfully met by other premises, licensed or unlicensed.
(2a)In considering what the reasonable requirements of the public may be for the purposes of an application under subsection (1) the licensing authority may have regard to -
(a)the subjective requirements of the public, or a section of the public, in the affected area for liquor and related services, whether those requirements are objectively reasonable or not; and
(b)whether the grant or removal of the licence will convenience the public or a section of the public in the affected area,
but the licensing authority may disregard either or both such considerations as it sees fit.
(2b)Notwithstanding anything else in this section -
(a)a liquor store licence shall not, other than in accordance with paragraph (b), be granted in respect of, or removed to, premises unless the licensing authority is satisfied that the reasonable requirements of the public for liquor and related services in the affected area cannot be provided for by licensed premises already existing in that area; and
(b)where application is made for the removal of a liquor store licence to premises situated not more than 500 metres from the premises from which the licence is sought to be removed, the licensing authority need not have regard to the reasonable requirements of the public for liquor and related services in the affected area.
(3)…
In Liquorland v Austie Anderson J (with whom Pidgeon and Wallwork JJ agreed) expressed views in respect of the construction of s 38(2b) which have been applied consistently since they were enunciated, by the Director, the Licensing Court, and the Supreme Court. Neither party to this appeal challenged the correctness of the views expressed by Anderson J as to the proper interpretation of s 38(2b). Accordingly, this appeal should be determined on the basis that those views correctly identify the proper approach to the construction of that section. Anderson J observed at 413 that s 38(2b):
'[P]lainly signifies a legislative intention that there be … a 'particular restraint' on the grant of liquor store licences.
After posing the question of the extent of the additional restriction imposed by s 38(2b), Anderson J observed that the only way that the intention of Parliament to impose a particular restraint on the grant of liquor store licences could be given effect is to give a narrower meaning to the phrase 'reasonable requirements … for liquor and related services' in s 38(2b) than is given to the same phrase in s 38(1) of the section. The meaning given by his Honour to that expression in s 38(2b) is evident from the following passage of his reasons at 415:
The correct test under s 38(2b)
Looking at the section as a whole, and having regard for the legislative history and the obvious legislative policy of special restriction in regard to liquor stores, I am of the opinion that subs (2b) is not concerned - in the way that subs (1) is - with the requirements of the public as to matters of taste, convenience, shopping habits, shopper preferences and the like, but is concerned with the requirements of the public for liquor itself.
I think that, on the proper construction of s 38, an applicant for a liquor store licence is required by subs (2b) to satisfy the licensing authority that the reasonable requirements of the public for liquor itself (or liquor of a particular type, such as bottled table wines) and related services cannot be provided for in the affected area by licensed premises already existing in the area; that is, cannot be provided for at all, or cannot be provided for without occasioning substantial difficulty or substantial inconvenience to the relevant public.
There are still questions of degree about which value judgments must be made. It remains a question for judgment in every case whether the licensing authority ought to be satisfied that the 'requirements ... for liquor and related services', in this narrower sense, 'cannot' be provided for by licensed premises already existing in the affected area. See, for example, Lincoln Bottle Shop Pty Ltd v Hamden Hotel Pty Ltd in which King CJ held that an existing outlet could not meet the demand in the area for wines because, although there was an ample quantity and good range in stock, the stock was not in a practical sense accessible to shoppers because it was kept in boxes in the store room.
The example given by Anderson J is illustrative of the proper approach to be taken to the construction of s 38(2b). It accepts that a licence could properly be granted pursuant to s 38(2b) even if there was another outlet within the affected area which carried the same quantity and range of stock, if the service provided by that outlet was not comparable because of the difficulty of accessing that stock. So, the example given illustrates that a qualitative difference in the nature or character of the service provided, could be sufficient to justify the grant of a licence under s 38(2b), even though the liquor actually sold by the two outlets was identical.
In Re Subi Clean Skins the trial judge considered that the application of that test required him to determine whether cleanskins were 'a type of liquor'. He concluded that cleanskins were a type of liquor, being bottled wine unbranded by the producer (at [9]). On the evidence adduced in that case, he concluded that the number of cleanskins offered to the public in the relevant affected area was very limited, and that there was a requirement within that area for the much more extensive range of cleanskins to be offered at the one location proposed by the applicant, with the related service of tasting upon request. He concluded the subjective evidence given in respect of that requirement was objectively reasonable, and further concluded that the evidence established an inadequacy in the range of cleanskins and related services at the licensed premises existing in the affected area where there was an established requirement for the more extensive range and associated services offered by the applicant. His reasons for that view appear at [18] ‑ [19]:
In making the value judgment in this case as I have identified it, it is in my opinion not to the point that the objector offers and other licensees existing in the affected area may offer a large range of branded products in addition to the limited range of cleanskins. Counsel for the objector sought to describe the distinction between cleanskins and branded products as a distinction in the manner of marketing bottled table wine generally. While that distinction may be so described, I have already found on the evidence that the applicant, the objector and the section of the public relied upon in this case all recognise cleanskin wines as a specific type of liquor. It is clear from the evidence and I find that one of the reasons for the distinction is the perception that a cleanskin wine is cheaper than the same or similar wine in its branded form.
In making the value judgment in accordance with contemporary standards in this case on the evidence, it is also material to take into account the related services that this applicant proposes to offer in conjunction with the sale and supply of cleanskin wines to which I have referred. I find on the evidence that those related services are not available at the moment at one location in this affected area in conjunction with a range of cleanskins such as that proposed.
The decision of the Director
The Director carefully reviewed the evidence which had been adduced by Kartika and the objectors. Unsurprisingly, he considered himself bound by the decision in Re Subi Clean Skins to conclude that cleanskin wines were a type of liquor for the purposes of the test to be applied under s 38(2b). Again unsurprisingly, he relied upon the passage from the reasons of the trial judge in Re Subi Clean Skins to which I have referred, to conclude that the evidence given by the objectors to the effect that they stocked a large variety of inexpensive branded wines was not to the point. Consistently with the views expressed by the trial judge in Re Subi Clean Skins, the Director was significantly influenced by the fact that the existing premises within the affected area did not singularly, or even collectively, provide anywhere near the range of cleanskin wines that were proposed to be provided at the one premises by Kartika. He therefore concluded that Kartika had satisfied the more stringent test imposed by s 38(2b) and granted the licence.
The decision of the Licensing Court
The reasons of the trial judge commence with a review of previous authorities, including, as the focus of particular attention, the decision of Anderson J in Liquorland v Austie. His Honour then considers the reasons for decision given by the Director of Liquor Licensing. The trial judge then observed (at [14]):
To determine the facts relevant to this issue in this case, it is necessary to consider the following questions on the evidence:
(a)What liquor products and related services does the applicant intend to sell and supply at the premises?
(b)Can cleanskin bottled table wines be identified as liquor of a particular type?
(c)What are the requirements of the public for the cleanskin bottled table wines and the related services proposed by the applicant in the affected area?
(d)Is the section of the public relied on significant?
(e)Can the requirements of that section of the public for the cleanskin bottled table wines and related services proposed by the applicant be provided for by licensed premises in the affected area at all, or without occasioning substantial difficulty or inconvenience to the relevant public?
The trial judge then reviewed the evidence. He cited the following passage from the evidence of Ms Cloughley (at [15]):
Tasting will be a very important service. Cleanskins are not established or known products, they can change frequently. Any one cleanskin wine may only be available for a short period of time. There are constantly new products available. This unknown and mysterious feature of cleanskins means that customers will frequently be unfamiliar with the product they are interested in purchasing. So to provide the best service tastings need to be available constantly. Any time that a customer requests to taste a wine, we will do so, within reason. This service has been very popular at Subi Cleanskins.
The trial judge characterised other parts of the evidence given by Ms Cloughley in the following terms (at [27]):
[During cross-examination] Ms Cloughley went on to accept the proposition that, whatever the source of the cleanskin bottled table wines to be sold and supplied at Claremont, the quality of that wine is equivalent to bottled table wines bearing the producer's label. She agreed the wine contained in the bottles sold and supplied at Claremont may not be a different type of wine from that available in bottles bearing the producer's label and otherwise available in the affected area. She said Claremont Cleanskins offers related services different from those otherwise available in the affected area.
When regard is had to the transcript of Ms Cloughley's evidence, it is clear that when the trial judge observes that the wine proposed to be sold 'may not be a different type of wine from that available in bottles bearing the producer's label', the word 'may' is being used in the sense of 'might'. Put another way, when regard is had to Ms Cloughley's evidence, it is clear that it was to the effect that she could not exclude the possibility that one or more of the wines proposed to be sold as cleanskin wines might have been produced by, and be the same as, wine sold under the producer's label in another outlet within the affected area.
After reviewing the evidence adduced on behalf of the objectors, the trial judge observed (at [41]):
I have already remarked that the applicant places considerable emphasis on the related services proposed to be sold and supplied at Claremont in conjunction with cleanskin bottled table wines. I find on the evidence that this range of related services is wider than that currently available in the affected area. That however, in my opinion, is not sufficient to satisfy the correct test under s 38(2b)(a) of the Act.
After reviewing the survey evidence which had been adduced, the trial judge answered the questions he had rhetorically posed at [14] of his reasons as follows (at [48]):
In answer to the questions at par 14, on the balance of probabilities I reach the following conclusions on the evidence.
(a)The applicant intends to sell and supply cleanskin bottled table wines and related services as described by Ms Cloughley at the premises.
(b)I find as a fact the cleanskin bottled table wines offered for sale and supply at Claremont Cleanskins may not be identified as liquor of a particular type different from that available in bottles bearing the producer's label and sold by the objectors.
(c)The evidence establishes a subjective requirement of a relevant section of the population in the affected area patronising Claremont Fresh Markets for the cleanskin bottled table wines and related services to be offered for sale and supply at the premises by the licensee.
(d)The section of the public relied on is that section of the public residing in and resorting to the affected area patronising the Claremont Fresh Markets and on the evidence is a significant section of the public.
(e)The subjective requirements of that section of the public for bottled table wines, cleanskin or otherwise, can be provided for by the licensed premises in the affected area without occasioning substantial difficulty or inconvenience to that section of the public, notwithstanding that the related services to be offered at Claremont Cleanskins are not available to the same extent in the affected area. I accept the evidence of the objectors, already referred to, that each stocks a range of bottled table wines bearing the producer's label in a price range similar to that sold and supplied by Claremont Cleanskins.
Because of the conclusions he had reached in pars (b) and (e), the trial judge allowed the application for review, set aside the decision of the Director of Liquor Licensing and put in its place a decision refusing Kartika's application.
The grounds of appeal
There are two grounds of appeal:
1.The Liquor Licensing Court erred in law by misconstruing s 38(2b)(a) of [the Act] in that it failed to determine that the reasonable requirements of the public for liquor and related services in the affected area may include requirements for a range of bottled wine and related services that are substantially different and/or differentiated (ie regarded by the relevant section of the public as substantially different) from other wine and related services required in that area.
2.The Court erred in law by misapplying the provisions of s 38(2b)(a) of [the Act], in failing to find that:
2.1the range of cleanskin wines and related services to be provided by the appellant constituted a distinct type of liquor and related services within that provision; and
2.2such liquor and related services cannot be provided for by existing licensed premises in the affected area or cannot be provided for without occasioning substantial difficulty or inconvenience to the relevant section of the public.
A question of law?
Section 28(3) of the Act relevantly provided that:
No appeal lies against a decision of the Court made on review of a determination made by the Director, except upon a question of law.
The objectors submit that although the grounds of appeal are expressed in terms that allege misconstruction and misapplication of the provisions of the Act, in substance, Kartika's attack is based upon findings of fact made by the trial judge. In response, counsel for Kartika accepts that unless the court concludes that the trial judge misconstrued s 38(2b) of the Act, Kartika's appeal must fail. Kartika submits that the misconstruction is not to be found in any explicit passage in the reasons for decision, but that error of statutory construction is implicit in the approach taken by the trial judge. That proposition is plainly 'a question of law' which brings Kartika's appeal within the jurisdiction of this Court.
In these circumstances it is unnecessary to consider at length the many cases dealing with the identification of a question of law (for a recent review of those cases see Paridis v Settlement Agents Supervisory Board[2007] WASCA 97; (2007) 33 WAR 361). The relevant principles are conveniently summarised by the Full Court of the Federal Court in Collector for Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287. Amongst those principles, established by a line of cases in the High Court, (Hope v The Council of the City of Bathurst (1980) 144 CLR 1 at 7 per Mason J, relying upon Hayes v Federal Commissioner of Taxation (1956) 96 CLR 47 at 51 and Commissioner of Taxation v Miller (1946) 73 CLR 93 at 97) is:
[T]hat where all the material facts are fully found, and the only question is whether the facts are such as to bring the case within the provisions properly construed of some statutory enactment, the question is one of law only.
That principle is pertinent to this case, because all the materials facts have been fully found. The only question is whether those facts are such as to bring the case within s 38(2b). That is another reason why Kartika's appeal is upon a question of law, and therefore within the jurisdiction of the court.
The issues in the appeal
The central issue in the appeal is whether the reasons for decision of the trial judge reveal an implicit error in the approach taken to the construction of s 38(2b). In my opinion, that error is evident from the questions rhetorically posed and answered in pars 48(b) and (e) read with the observation made in par 41, in the context of the findings of fact made.
In par 14(b), the trial judge poses the question of whether 'cleanskin bottled table wines can be identified as liquor of a particular type'. There are a number of errors of construction implicit in the significance attached to that question. The first is that there is no reason why the liquor which an applicant for a liquor store licence proposes to sell must be of a particular type in order to satisfy the test posed by s 38(2b). That proposition is evident from the example cited by Anderson J in Liquorland v Austieand to which I have referred.
The second error of construction implicit in the significance attached to this question is that it ignores the fact that s 38(2b)(a) refers to 'liquor and related services'. Kartika's case was put in precisely the same way as the case for the applicant had been put in Re Subi Clean Skins, in which emphasis was placed upon the interrelationship between the nature of the liquor being sold (bottled wine from an unidentified producer) and the service being provided (tasting upon request). The significance of that interrelationship was acknowledged by the trial judge in Re Subi Clean Skins in the passage I have set out. However, for reasons which are not elucidated, in this case, the trial judge expresses the view (at [41]) that the provision of related services of a kind which were wider than those currently available in the affected area, was not sufficient to satisfy the 'correct test' under s 38(2b)(a) of the Act. That observation is an explicit error of construction, as the example given by Anderson J in Liquorland v Austie reveals, because the related services proposed to be provided can provide a sufficient basis for meeting the more stringent test imposed by s 38(2b).
The erroneous approach to construction taken by the trial judge is further revealed by the answer given to the question posed (in par 14(b)) in par 48(b). That answer was directly contrary to the answer to precisely the same question which had been posed in Re Subi Clean Skins. So far as can be seen from the reasons for decision given by the trial judge in that case, there was no material difference in the evidence adduced in that case which is relevant to that topic. In each case, the wine proposed to be sold is bottled wine from an unidentified producer. In each case the evidence was that wine of that kind is perceived by consumers as having a price advantage over producer‑labelled wine of the same quality. The fact that Ms Cloughley acknowledged the obvious fact that she could not exclude the possibility that one or more of the cleanskin wines might have the same producer, and might be the same wine as is sold in a producer‑labelled bottle by another outlet within the affected area is not to the point of the issue posed by s 38(2b), not least because that fact could never be known to either the seller or purchaser of the cleanskin wine.
The evidence to the effect that producer‑labelled wines of the same quality and within the same price range as the cleanskin wines are available from outlets within the affected area, which evidence appears to have been significant in the decision of the trial judge, is equally irrelevant to the proper application of the test posed by s 38(2b). That evidence ignores the fundamental basis of Kartika's case, which was to the effect that the availability, in one place, of a very large range of cleanskin wines, which can be tasted upon request, provides a product and associated service which is different in character, and which is seen as being different in character by consumers, to the service provided by other outlets within the affected area. That proposition, which was fundamental to the decision, Re Subi Clean Skins, and was equally fundamental to the case advanced by Kartika, is not specifically addressed anywhere in the reasons for decision given by the trial judge. That omission provides another indication of an erroneous approach to the construction of s 38(2b).
No error is evident in the question posed by the trial judge in par 14(e) of his reasons. However, an error of statutory construction is evident from the answer given to that question in par 48(e) of the reasons when read with par 41.
In par 48(e), it is apparent that the evidence of the objectors to the effect that they stock a range of producer‑labelled bottled wines within a price range similar to that proposed by Kartika, led the trial judge to conclude that the reasonable requirements of the public could be met by the licensed premises in the affected area, despite the fact that the related services to be offered by Kartika were not available to the same extent. That conclusion reveals the same erroneous approach to the relevance of related services and the significance of the availability of a fundamentally different service (producer‑labelled wine within the same price range) as is evident in pars 14(b) and 48(b), to which I have already referred. The manner in which the trial judge concludes that the reasonable requirements of the public could be met by the existing outlets within the affected area reveals that he did not pose to himself the question which the proper construction of s 38(2b) requires to be addressed.
The disposition of the appeal
As I have concluded that the reasons given by the trial judge reveal an erroneous approach to the proper construction of the statutory provision he was required to apply, the next question which arises is what orders should be made as a consequence of that conclusion.
Since the decision of the trial judge, the Licensing Court has been abolished. Nevertheless, for reasons which I need not set out in detail, it would be possible for this Court to remit the matter for further consideration by the Liquor Commission created by the Liquor and Gaming Legislation Amendment Act 2006 (WA). The question is whether that course should be followed.
The trial judge found that the evidence established a subjective requirement of a relevant section of the population for the cleanskin bottled tabled wines and related services which were to be offered for sale and supply at Kartika's premises. He also found that the evidence established that to be a significant section of the public. The uncontested evidence also established that the liquor and related services proposed to be supplied by Kartika were different in character to the liquor and related services offered by other outlets within the affected area. That is because Kartika proposed to offer a much wider range of cleanskin wines (at least 75 types as compared to between 8 and 18 in the other outlet with the greatest range, and significantly less in all other outlets) together with the offer of tasting of any of those wines upon request (an offer not made by other outlets - although other outlets did offer tasting events from time to time). For the reasons I have given, the fact that, perhaps, one or more of the wines to be sold by Kartika might be the same as a producer‑labelled wine sold in another outlet, or is in the same price range as the wines offered by other outlets is, in the circumstances of the particular service proposed by Kartika, irrelevant.
In my opinion, the application of the proper construction of s 38(2b) to the findings of fact made by the trial judge, and the uncontested evidence before him, inevitably leads to the conclusion that Kartika had satisfied the test imposed by s 38(2b) of the Act. In those circumstances, no point or purpose would be served by remitting the matter to the Liquor Commission for further consideration. Rather, in those circumstances, the proper course is to allow the appeal, to set aside the decision of the trial judge, and in its place, substitute a determination that the objectors' application for review of the Director's decision be dismissed. The effect of those orders would be to leave the decision of the Director granting Kartika's licence in place.
McLURE JA: I agree with the Chief Justice that the appeal should be allowed, the decision of the trial judge quashed and the respondent's application for review dismissed. I propose to shortly state my reasons for decision.
The facts, grounds of appeal and relevant statutory provisions are set out in the reasons of the Chief Justice and not repeated here unless required for an understanding of these reasons. In March 2006 the Director conditionally granted to the appellant a liquor store licence authorising the sale of cleanskin wines from premises situated at Claremont Fresh. The respondents applied to the Liquor Licensing Court for a review of the Director's decision. Greaves DCJ allowed the review, quashed the decision of the Director and refused the appellant's application.
The appellant appealed to this court under s 28 of the Liquor Licensing Act 1988 (WA) (the Act). An appeal only lies on a question of law (s 28(2)). The appellant in this appeal contended that the trial judge made an error of law in misconstruing s 38(2b)(a) of the Act. The proper construction of s 38(2b) is a question of law.
The Act was extensively amended by the Liquor and Gaming Legislation Amendment Act 2006 (WA) (Amendment Act). The Amendment Act changed the name of the Act to the Liquor Control Act and repealed s 38 with effect from 7 May 2007. It also abolished the Licensing Court and established the Liquor Commission. The relevant transitional provisions are contained in sch 1A of the Liquor Control Act.
Under cl 4(2) of Sch 1A, if an appeal made to the Supreme Court under s 28 of the former Act has not been determined immediately before 7 May 2007, the appeal is to be determined under s 28 of the former Act.
The term 'former Act' is defined to mean the Act as in force immediately before 7 May 2007. The appellant commenced this appeal on 3 October 2006.
Schedule 1A is silent on the substantive law that is to be applied in the determination of this appeal.
The appellant relied on cl 5(1) of Sch 1A, however, that deals with the law to be applied by the licensing authority not this court.
In that event, s 37(1) of the Interpretation Act 1984 (WA) applies, with the consequence that the provisions of the former Act apply.
The central issue in the appeal is the scope of the requirement in s 38(2b)(a) that the reasonable requirements of the public for liquor and related services in the affected area (the first phrase) cannot be provided for by licensed premises already existing in that area (the second phrase).
It was accepted by the parties that the meaning of the second phrase is 'cannot be provided for without occasioning substantial difficulty or substantial inconvenience'.
The appeal raises the scope of the first phrase. The parties agree that the law is correctly stated in the judgment of Anderson J in Liquorland (Australia) Pty Ltd v Austie Nominees Pty Ltd (1999) 20 WAR 405, 414 ‑ 415 (Austie). Austie establishes that the first phrase: (1) has a narrower meaning than the same phrase in s 38(1) of the Act; (2) is not concerned, in the way that s 38(1) is, with the requirements of the public as to manner of shopping (shopping taste, convenience, preference); (3) is concerned with the requirements of the public for liquor itself. On this last point Anderson J said:
[A]n applicant for a liquor store licence is required … to satisfy the licensing authority that the reasonable requirements of the public for liquor itself (or liquor of a particular type, such as bottled table wines) and related services cannot be provided (415).
The trial judge approached his task as if Anderson J's words were of statutory force and effect. Ordinarily that is the wrong focus which should be on the statutory language. However, the approach taken by the trial judge is understandable in a context where the same phrase in a different subsection of the same section has been held to have a different meaning.
There are a number of further points to be made about Anderson J's reasons in Austie. He provides an example of matters that are outside the scope of the first phrase, being those relating to manner of shopping. Further, Anderson J's reference to liquor 'of a particular type' is an example of a matter within the scope of the first phrase. He does not purport to identify the outer limits of the scope of s 38(2b)(a). Moreover, it is significant that Anderson J identifies bottled table wine as an example of liquor of a particular type. It underscores the fact that the first phrase is not confined to the nature or characteristics of the liquor itself but extends to how the liquor is supplied (ie in a bottle). Indeed, the trial judge recognised that by taking into account the quality and price of the product the appellant would supply and compared it with that already available in the affected area. However, there is no justification for confining relevant matters to issues of quality, price and container.
It is apparent from Anderson J's example of bottled wine that the requirements of the public must relate to liquor. The requirements are not confined to the liquor content but includes other features which distinguish a liquor product in the retail market. That could include price, type (and source) of liquor, quality, range, container (bottle, can, cask), quantities or any combination thereof. So, for example, the exclusive sale of alcohol products in bulk to reduce costs and thus the price of liquor relevantly relates to liquor. What can distinguish a liquor product in the retail market is inherently flexible. Moreover, the requirements must not only relate to liquor they must also be objectively reasonable. A feature that materially distinguishes a liquor product in the retail market will ordinarily satisfy both objective requirements.
In this case the trial judge erroneously confined himself to only two matters being price and quality. The fact that the public could purchase bottled wine bearing a producer's label that was equivalent in quality and price to the cleanskins to be offered for sale by the appellant is not determinative.
The appellant proposes to exclusively sell a wide range of cleanskin bottled table wine. The label on the bottle does not disclose the name of the producer of the wine. Although the appellant could not rule out the possibility that one or more of the cleanskins to be offered for sale by the appellant might contain the same wine as that sold by other outlets in the affected area in a bottle bearing the producer's label, ordinarily cleanskins contain wine from producers, including Western Australian producers, not represented in the producer labelled table wine market.
The unchallenged evidence was that because cleanskins are not established or known products and because of the frequent change in product, the appellant would provide daily general and feature wine tastings and spontaneous tastings upon request. The trial judge found that the range of related services to be provided by the appellant was wider than that then available in the affected area but that was not itself sufficient to satisfy the test in s 38(2b)(a) of the Act. It is unnecessary to determine whether that is correct. The related services in this case are inextricably linked with the features that distinguish cleanskins from producer labelled wine, being that cleanskins contain wine produced by a diverse range of suppliers who are not ordinarily represented in the producer labelled wine market and sales do not depend on brand name or reputation. Further, the appellant will deal exclusively in cleanskins and stock a wide range. These features relate to liquor and together materially distinguish the liquor product available from the appellant in the retail market.
Accordingly, the trial judge erred in failing to take into account relevant factors as a result of misconstruing s 38(2b)(a) of the Act. I agree with the Chief Justice that the findings of fact made by the trial judge and the uncontested evidence before him inevitably leads to the conclusion that the appellant had satisfied the test imposed by s 38(2b)(a) of the Act. There is unchallenged authority in this State for the proposition that in such circumstances, there is power under s 28(5) of the former Act for this court to dismiss the respondents' application to review the decision of the Director: Jericho Nominees Pty Ltd v Dileum Pty Ltd (1992) 6 WAR 380, 399 ‑ 401. Thus, the appeal should be allowed, the decision of the Licensing Court quashed and the respondents' application for review dismissed.
EM HEENAN AJA: The reasons for decision of Martin CJ set out the background and history of proceedings before the Director of Liquor Licensing and on the subsequent appeal to the Liquor Licensing Court. It is unnecessary, therefore, for me to repeat any of that detail and I can, therefore, pass directly to the issues raised by the present appeal.
I agree, with respect, with the conclusion of both Martin CJ and McLure JA, for the reasons which their Honours give, that the decision of the Liquor Licensing Court made on review of the determination of the Director, as challenged by this appeal, gives rise to a question of law so that a right of appeal to this court lies under s 28(3) of the Liquor Licensing Act 1988 (WA).
All parties to the appeal accepted that the question of the proper interpretation of s 38(2(b)(a) of the Liquor Licensing Act 1988, in the terms which it applied at dates material to these proceedings, should be undertaken in accordance with the principles stated in Liquorland (Australia) Pty Ltd v Austie Nominees Pty Ltd (1999) 20 WAR 405, 415 and, in particular, as described by Anderson J in that case. No challenge of any kind was made to the approach to interpretation adopted by Anderson J (with whom Pidgeon and Wallwork JJ agreed) in that case and there is, therefore, no occasion now for this court to revisit that approach. However, as McLure JA has explained, the approach taken in Liquorland (Australia) Pty Ltd v Austie Nominees Pty Ltd does not identify the outer limits of the scope of s 38(2)(b)(a) and, in my respectful view, the interpretation there adopted is more illustrative than definitive. In that case the Full Court was faced with the difficulty of giving a slightly different interpretation to the phrase 'reasonable requirements … for liquor and related services' in the new subsection than in subs (1) as Anderson J described at 414. This is a departure from the canon of construction which treats language in a statute as having a consistent meaning wherever it appears - see Pearce & Geddes, Statutory Interpretation in Australia (6th ed, 2006) 117 ‑ 118 - in favour of the adoption of an interpretation which will give an effect to the legislation, particularly an amendment to legislation, which is in accordance with the purpose and policy that the amendment itself discloses: Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014, 1022. Such an approach to give effect to the purpose of the amendment is the preferred course to be taken when faced with difficulties of interpretation even if, by doing so, this encroaches upon the desirability of consistency within the Act of a particular word or phrase ‑ Timothy v Munro [1970] VR 528.
Once the approach to construction determined by the court in Liquorland (Australia) Pty Ltd v Austie Nominees Pty Ltd is applied, it follows for the reasons given by the Chief Justice, that this appeal should be allowed. I also agree that in such circumstances the appropriate order of this court should be that the decision of the Liquor Licensing Court be quashed and that the respondents' application for review to that court should be dismissed.
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