Liquorland (Aust) Pty Ltd v Woolies Liquor Stores Pty Ltd - [2014] SASCFC 87

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
LIQUORLAND (AUST) PTY LTD v WOOLIES LIQUOR STORES PTY LTD AND ANOR
[2014] SASCFC 87
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Sulan and The Honourable Justice Parker)
5 August 2014
GAMING AND LIQUOR - ADMINISTRATION - LIQUOR LICENSING - REMOVALS - HEARING OF APPLICATION AND POWERS OF LICENSING AUTHORITY - OBJECTIONS AND GROUNDS FOR GRANT OR REFUSAL
GAMING AND LIQUOR - ADMINISTRATION - LIQUOR LICENSING - APPLICATION FOR A LICENCE - APPLICATION HEARING - MATTERS FOR CONSIDERATION - REQUIREMENTS OF NEIGHBOURHOOD OR LOCALITY
GAMING AND LIQUOR - ADMINISTRATION - LIQUOR LICENSING - APPLICATION FOR A LICENCE - APPLICATION HEARING - POWERS OF LICENSING AUTHORITY - DISCRETION TO GRANT OR REFUSE LICENCE
Appeal against an order of the Licensing Court refusing an application under the Liquor Licensing Act 1997 (SA) to remove a retail liquor merchant’s licence from a site in Athelstone to a new site in Newton about 2.6 km away by road.
Whether the trial judge erred in finding that the two sites were not in the same locality for the purposes of s 61(2) of the Act. Whether the court should exercise its general discretion under s 53(1) of the Act to refuse the removal application.
Held (Parker J; Kourakis CJ and Sulan J agreeing) allowing the appeal:
The determination of locality does not necessitate the fixing of precise boundaries. The task requires identification of the area from which demand for liquor might, at least in part, be met by the licensed premises. The trial judge erred in relying on evidence identifying a “local community” to determine the locality of the Athelstone site. Appeal allowed; judgment of the Licensing Court set aside.
The evidence established that the persons living near the proposed site would formerly have used the Athelstone store to supply part of their liquor needs. The proposed site is within the locality of the Athelstone site. There is no basis to exercise the discretion under s 53(1) to refuse the removal application. Application for removal approved.
Liquor Licensing Act 1977 (SA) s 3(1)(e), s 53(1), s 61(2), referred to.
Nepeor Pty Ltd v Liquor Licensing Commission (1987) 46 SASR 205, applied.
Liquorland (Australia) Pty Ltd v Lindsey Cove Pty Ltd (2002) 81 SASR 337, distinguished.
Liquorland (Australia) Pty Ltd v Hurley's Arkaba Hotel Pty Ltd (2001) 80 SASR 59; Saturno's Newton Cellars [1998] SALC 15; Yama Pty Ltd (Vintage Cellars) (Unreported, Licensing Court of South Australia, Hume J, 12 December 1986); Lovell v New World Supermarket Pty Ltd (1990) 53 SASR 53; Taverns of SA Pty Ltd v L E Sat Nominees [2001] SASC 1; Woolies Liquor Stores Pty Ltd v Marden Cellars [2000] SASC 11; Tomley Investment Co Pty Ltd v Superintendent of Licensed Premises (1979) 21 SASR 176; Woolies Liquor Stores Pty Ltd v Seaford Rise Tavern (2000) 76 SASR 290, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"locality", "same locality"

LIQUORLAND (AUST) PTY LTD v WOOLIES LIQUOR STORES PTY LTD AND ANOR
[2014] SASCFC 87
Full Court: Kourakis CJ, Sulan and Parker JJ

KOURAKIS CJ: I would allow the appeal for the reasons given by Parker J and join in the orders his Honour proposes.
I add the following observations. A quarter of a century has passed since the decision of this Court in Nepeor Pty Ltd v Liquor Licensing Commission.[1]In that time the Australian economy has been substantially restructured with a strong emphasis on reduced regulation and increased competition. Competition in the retail sector, and increased mobility, has extended the catchment areas of stores. These developments have reinforced the admonitions in the judgment given in Nepeor cited in the judgment of Parker J.
[1] (1987) 46 SASR 205.
SULAN J: I would allow the appeal. I agree with the reasons of Parker J and the orders he proposes.
PARKER J: This is an appeal against an order of the Licensing Court refusing an application under the Liquor Licensing Act 1997 to remove a retail liquor merchant’s licence from the Athelstone Shopping Centre at 320 Gorge Road, Athelstone to 81 Newton Road, Newton. The two sites are about 2.6 km apart by road (or a few minutes driving time).
The first issue raised in the appeal was whether the learned trial judge erred in finding that these two sites are not in the same locality for the purposes of s 61(2) of the Act. If the two sites are found to be in the same locality, the second issue is whether the court’s general discretion under s 53 should be exercised to refuse the removal application.
The first respondent, Woolies Liquor Stores Pty Ltd, and the second respondent, Salia Property Pty Ltd, objected to the proposed removal. The second respondent owns the Centro Newton Shopping Centre (also referred to as Newton Central). It took no active part in the appeal but adopted the submissions of the first respondent.
For the reasons that follow, I would uphold the appeal and set aside the order of the Licensing Court. I consider that the Full Court should decide the application rather than remit it to the Licensing Court. I consider that the two sites are in the same locality. I would not exercise the court’s discretion to refuse the application.
The Liquor Licensing Act 1997
The question of whether the Athelstone and Newton sites were in the same locality arose under s 61(2) of the Act. This provides that:
61—Removal of hotel licence or retail liquor merchant's licence
...
(2) An applicant for the removal of a retail liquor merchant's licence must satisfy the licensing authority that the licensed premises already existing in the locality to which the licence is to be removed do not adequately cater for the public demand for liquor for consumption off licensed premises and the removal of the licence is necessary to satisfy that demand.
The Full Court held in Liquorland (Australia) Pty Ltd v Hurley’s Arkaba Hotel Pty Ltd[2] that the requirement to satisfy the licensing authority that existing licensed premises do not adequately cater for public demand only applies where it is proposed to remove the licence outside the locality of the existing premises. It was common ground between the parties at first instance and on appeal that if the proposed Newton site was within the locality of the former Athelstone liquor store the only issue to be determined was whether the court ought to exercise its general discretion under s 53(1) of the Act to refuse the application in the public interest.
[2] [2001] SASC 232; (2001) 80 SASR 59.
Section 53(1) provides as follows:
53—Discretionary powers of licensing authority
(1) 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, the licensing authority considers sufficient (but is not to take into account an economic effect on other licensees in the locality affected by the application).
Background
The appellant, Liquorland (Australia) Pty Ltd, is part of the Coles Group. Both it and the first respondent are major participants in the liquor industry in South Australia.
The following witnesses were called by the appellant:
·Mr Jeffrey Smith, a planning consultant;
·Mr Curtis Field, a senior executive employed by the Coles Liquor Group; and
·Mr Sean Stephens, an economist.
Those of the witnesses called by the first respondent mentioned in this judgment are:
·Mr Graham Burns, a planning consultant;
·Mr Gavin Duane, an economist;
·Mr Scott Trezise, an area manager for Woolworths Supermarkets;
·Mr Anthony Smith, a senior executive with Woolworths Ltd; and
·Four local residents, one of whom owned a local business.
Mr Field gave evidence that the appellant operates more than 30 Liquorland stores in this State. These are relatively small stores with from five to eight staff. Its First Choice stores are substantially larger. They focus on the sale of premium wines and employ about fifteen to twenty staff. There are three such stores in South Australia and a further two are proposed in addition to that intended for the Newton site if the appellant succeeds in this appeal.
Mr Anthony Smith stated that the first respondent owns 100 liquor licences in South Australia. Of these, 89 are BWS stores and 11 trade under the name of Dan Murphy’s.
Mr Field and Mr Anthony Smith agreed that First Choice and Dan Murphy’s are immediate competitors. While the range of liquor offered in Dan Murphy’s stores is slightly larger than that of First Choice, both offer a substantially greater range than traditional bottle shops. They also offer lower prices than traditional shops and their staff are trained to give advice about premium wines. Their sites are located on the outbound side of major roads and provide easy car parking.
The suburban area
The premises at 320 Gorge Road were located in the Athelstone Shopping Centre. The Centre includes a Woolworths supermarket, a post office, a medical centre and about ten other shops and businesses. The appellant traded at that site under the name of Liquorland and closed the business on 16 September 2012. Its former store has been converted to a gymnasium.
The evidence of Mr Field was that the Athelstone store had been closed because of insufficient turnover, a decline in trade, an expected further decline and an increase in rent. In his opinion the decline had been caused by the opening of a Cellarbrations liquor store close to the Rezz (formerly Reservoir) Hotel at Newton, some 1.2 km from the Athelstone site. A further decline was expected due to the opening of a Dan Murphy’s liquor store at the Highbury Hotel several kilometres distant by road from the Athelstone site. Mr Field stated that the decision to close the Athelstone store was made independently of the proposed opening of the First Choice store. He also stated that the Athelstone site would not have been suitable for a First Choice store because of a lack of space and insufficient car parking.
Newton Road is the western boundary of the suburb of Newton. The site at 81 Newton Road is currently vacant. It is located on the corner of Newton and Clairville Roads. The proposed First Choice store would be located on the eastern side of Newton Road immediately to the south of, but separate from, the Centro Newton Shopping Centre owned by the second respondent. That centre includes a Target store, a Foodland supermarket and a BWS liquor store operated by the first respondent.
The first respondent also operates a BWS liquor store in the Newton Village Shopping Centre located 2.19 km by road to the south at the junction of Stradbroke and Montacute Roads. That centre includes Coles and Woolworths supermarkets.
Evidence of shopping patterns
Both the appellant and the first respondent called much evidence about shopping patterns in Athelstone and nearby suburbs.
The evidence of the economists, Sean Stephens (called by the appellant) and Gavin Duane (first respondent) was directed at identifying the locality on the basis of primary and secondary trade areas.
As explained by Mr Stephens, the primary area is typically proximate to the relevant retail site and represents the area in which it receives a higher level of market share. The secondary area is typically a little further away and involves a lower market share. It is expected that 80% to 90% of sales would come from the primary and secondary trade areas.
Mr Stephens noted that the Athelstone, Centro Newton and Newton Village shopping centres were located within approximately 2.5 km of each other and were easily accessible to residents living in the general area. That included all residents living in the suburbs of Athelstone and Newton. In his opinion, the typical shopping pattern in urban areas is that most residents will regularly use, or be familiar with, all centres located within an approximate radius of three kilometres from their residence. It should not be assumed that consumers will only visit the nearest shopping centre. They visit several centres in order to meet their retail and other needs. A wide range of personal and social factors influence individual shopping behaviour.
For those reasons Mr Stephens considered that persons living in an area bounded to the west by Newton Road, to the north by the River Torrens, to the east by the Adelaide Hills and the south by Montacute Road would visit all three shopping centres. In the opinion of Mr Stephens for many shoppers the choice of supermarket visited was heavily influenced by specials on offer, loyalty schemes and petrol discounts. At least on this question, the evidence of Mr Duane and Mr Tresize was to much the same effect.
In Mr Stephens’ opinion, persons living in the western part of the area around Centro Newton would regard the Athelstone Shopping Centre as a potential destination that may have led them to visit the former Liquorland store. Mr Stephens also noted that Gorge Road comprised the main east–west road link and there were no traffic lights on Gorge Road east of Newton Road. Thus Gorge Road provided a direct and easy connection between the Athelstone Shopping Centre and the proposed site of the First Choice store. The driving time between the two locations was about four minutes. That fell well within the seven minute “convenient” driving time often relied upon in retail analysis.
Much of the evidence given by Mr Stephens was based upon Flybuys (ie a trader loyalty program) data relating to the Athelstone Liquorland store. The trial judge noted that this data was not necessarily representative of all customers. While I regard that observation as correct, in my view (contrary to that of the trial judge) the evidence of Mr Stephens, and also that of Mr Duane, does assist in determining the locality.
The Flybuys data showed that 10% of the adult population of the suburb of Paradise, 6% in Newton and 4% in Rostrevor had visited the Athelstone Liquorland store in the year ended 31 March 2012. That may be compared with the 31% of adults living in Athelstone who had made purchases. However, only 1% of the adult population of Campbelltown, located immediately west of Newton Road, had visited the Athelstone store.
Mr Stephens considered that the natural boundary of the locality of the Athelstone store was Newton Road. In his opinion its primary trade area had been the suburb of Athelstone while the secondary trade area incorporated Paradise, Rostrevor and Newton (although certain areas of Paradise and Rostrevor were excluded).
Mr Duane relied upon the same Flybuys data as Mr Stephens. However, he pointed out that the latter’s evidence did not show how regularly persons living in the identified suburbs visited the Athelstone store and nor did it reveal whether spending varied between residents of different suburbs. While I regard that criticism as valid, the evidence of Mr Stephens does show that residents of Paradise, in particular, and to a lesser degree, Newton and Rostrevor had patronised the former Liquorland store, albeit to a much more limited extent than Athelstone residents.
The evidence of the Woolworths executives
Mr Anthony Smith is the national business development manager for liquor licences with Woolworths Ltd. In his opinion the catchment area for each of the Athelstone, Centro Newton and Newton Village shopping centres would be 3.5 km. In the case of Dan Murphy’s the catchment area would be about 5 to 7 km but that might be reduced by competition. It is unclear from Mr Smith’s evidence whether he was referring to primary or secondary catchment areas.
Mr Trezise, the Woolworths local area manager, sought to identify the primary and secondary catchment areas for the Athelstone supermarket based upon usage of Everyday Rewards loyalty cards. About 34% of customers at the Athelstone supermarket used the cards. Of these, 70% lived in Athelstone.
Mr Trezise suggested that the primary catchment area could be identified by those persons who used Everyday Rewards cards at Woolworths Athelstone at least 35 times annually. He could not explain why the primary catchment area had been set on that basis. In his opinion the primary catchment area only extended to Stradbroke Road, a little more than one kilometre to the west of the Athelstone Shopping Centre. The secondary catchment area would comprise those who used the cards between 5 and 35 times each year. The western boundary of the secondary area was a little to the east of the proposed site of the First Choice store.
Expert evidence - Jeffrey Smith
The appellant called Mr Jeffrey Smith, a planning consultant. He considered that as a starting point the locality should be defined by a radius of 2.5 km. That took into account travel distance and time and his understanding that the Licensing Court had previously used a benchmark of five to seven minutes travel time which, on his estimation, equated to 2.5 km. He also stated that the locality was constrained by the presence of the River Torrens to the north and the Black Hill Conservation Park and Mount Lofty Ranges to the southeast and east.
The radius of 2.5 km selected by Mr Smith almost reached Newton Road in the vicinity of the proposed First Choice store, but fell slightly to the east of that site. Under cross-examination Mr Smith conceded that there was some potential for the limit of the locality to be further east towards Stradbroke Road.
Mr Smith also stated that due to the range of facilities available in the vicinity of the Centro Newton Shopping Centre and the road network connecting to that centre, it was readily accessible to and frequented by the residents of Athelstone. Residents of Newton and Paradise would shop at the Athelstone Shopping Centre from time to time.
Expert evidence - Graham Burns
The first respondent called Mr Graham Burns, a planning expert. The starting point of his analysis was the decision of the Licensing Court made in 1986 when it first approved the issue of a retail liquor merchant’s licence at the Athelstone Shopping Centre. I will refer to that decision later. Mr Burns agreed with Mr Jeffrey Smith that physical barriers constrained the locality to the north, east and southeast. Mr Burns noted that the Licensing Court had held in 1986 that the western boundary of the locality was a little to the east of what was then the Arrow Shopping Centre (now Centro Newton) but had also described the Arrow Cellars as being just within or just without the locality.
In Mr Burns’ opinion the western boundary of the locality had changed since 1986 and would not now extend further west than Stradbroke Road. That was because of the upgrade of the BWS store at Centro Newton and the opening of the BWS at Newton Village and the Cellarbrations bottle shop.
Mr Burns analysed loyalty program data relating to the catchment area of the Woolworths supermarket at Athelstone. In his opinion there would be a close correlation between shoppers using the Woolworths supermarket and the adjacent Liquorland store as it was likely that they would have called at both “as part of a one stop shopping experience”. In Mr Burns’ view the primary catchment area extended west to Stradbroke Road and the Thorndon Park reservoir. The secondary area fell “well short” of Newton Road.
Mr Burns also advanced an alternative opinion that if the locality was to be defined on the basis of a radius it would be appropriate to set it at “two or so kilometres”. He based that opinion on the decision of the Licensing Court in 1998[3] relating to what is now the BWS store at Newton Village.
[3] Saturno’s Newton Cellars [1998] SALC 15.

Mr Burns placed significant emphasis in his evidence, particularly in cross-examination, on identification of the locality by reference to the distinct local community. That local community could be defined by those persons who could be expected to use the Athelstone Shopping Centre for their day to day and weekly shopping needs as well as for medical, postal and other like services. At another point Mr Burns stated that the issue was to identify “the community of interest in Athelstone”.
The evidence given by residents
The respondent called four local residents to give evidence about their use of the Liquorland store at Athelstone and their attitude to its closure. They each lived very close to the store. The tenor of their evidence was that its closure had caused them some inconvenience. While they preferred not to shop at Centro Newton, they each visited the Target store at that centre from time to time. Each also made purchases at the fruit and vegetable store in that location at a frequency ranging from “sometimes” to weekly.
One of the local residents, Mr Cox, was also the owner of a small business in the Athelstone Shopping Centre. Some 90% or more of his customers lived in Athelstone and he described them as being part of a village community. The same witness did not regard Centro Newton as being in his locality. Another witness expressed the contrary view based upon the presence of the Target store and the fruit and vegetable shop.
Earlier Licensing Court decisions
The Licensing Court had identified the locality in two earlier judgments relevant to this matter. Yama Pty Ltd (Vintage Cellars)[4] concerned the grant of the retail liquor merchant’s licence for the Vintage Cellars store at the Athelstone Shopping Centre. Those premises later became the Liquorland store. The court noted that some areas of land in Athelstone were still used for market gardening although most of the suburb was then devoted to housing. While the northern and eastern boundaries of the locality were fixed by the River Torrens and the Adelaide Hills, the boundaries of the locality to the south and west were “somewhat indeterminate”. The court held that the eastern and south-eastern boundary ran a little to the east of what was then the Arrow Shopping Centre (now Centro Newton) and that its southern boundary would touch what is now Newton Village although it may possibly extend further.
[4] (Unreported, Licensing Court of South Australia, Hume J, 12 December 1986).
The court took into account the availability of liquor from what is now the BWS store at Centro Newton and what is now the Rezz Hotel. The BWS store was held to be either just inside or just outside the locality.
The judgment of the Licensing Court in Saturno’s Newton Cellars[5] related to the grant of a licence for what is now the BWS store at Newton Village. The extent of the locality was not contested. It was held to be an area perhaps two or so kilometres radius from the Newton Village. That included the Athelstone Shopping Centre.
[5] [1998] SALC 15.
Several witnesses noted that since those judgments were handed down the Athelstone Shopping Centre has twice been expanded, housing has continued to replace market gardening and the number of licensed premises and the services they offer have changed. Thus, little assistance can be drawn from those decisions.
The reasons of the trial judge - locality
His Honour stated that the focus of the court must be upon determining the physical locality of the patrons, excluding passing trade, whom might be expected to use the existing premises. It was then necessary to ask whether the proposed premises were within the same locality.
His Honour held that the approach taken by Mr Burns in identifying the local community by reference to the catchment area of the Woolworths supermarket at the Athelstone Shopping Centre was more logical than that advanced by Mr Jeffrey Smith. The trial judge also noted that there was an inconsistency in the latter’s evidence in that he had conceded that the Athelstone Shopping Centre was smaller and less likely to have the same catchment area as Centro Newton but maintained that the locality for both comprised a 2.5 km radius.
His Honour considered that the approach taken by Mr Burns was supported by the evidence given by the local residents, particularly the small business owner, Mr Cox, and by the evidence of Mr Trezise. I understand that to be a reference to Mr Tresize’s evidence about the primary catchment area. On that basis his Honour held that the proposed Newton site was not within the locality of the Athelstone Shopping Centre.
The respondent’s submissions on the appeal
Senior counsel for the respondent submitted that the Licensing Court was entitled to use its own specialist knowledge[6] and its decision should not lightly be interfered with.[7] The respondent further contended that the issues involved in determining the locality are essentially matters of fact.[8] The decision of the specialist tribunal will ordinarily be final on questions of fact.[9]
[6] Lovell v New World Supermarket Pty Ltd (1990) 53 SASR 53 at 58.
[7] Taverns of SA Pty Ltd v L E Sat Nominees Pty Ltd [2001] SASC 1 at [19].
[8] Woolies Liquor Stores Pty Ltd v Marden Cellars [2000] SASC 11 at [5].
[9] Tomley Investment Co Pty Ltd v Superintendent of Licensed Premises (1979) 21 SASR 176 at 178 (King CJ).
Counsel also referred to the observation by Debelle J in Woolies Liquor Stores Pty Ltd v Seaford Rise Tavern[10] that the purpose of defining the locality was not to fix lines on a map but to focus attention upon the local, as distinct from the purely general, character of the public demand.[11] This necessarily imprecise process was no more than a means to the end of identifying the relevant public demand.
[10] [2000] SASC 116 at [48]; (2000) 76 SASR 290 at 299.
[11] ee also King CJ in Nepeor Pty Ltd v Liquor Licensing Commission (1987) 46 SASR 205.
In essence the respondent’s counsel submitted that the relevant public demand and thus the locality was synonymous with the primary catchment area of the Athelstone Liquorland store. The bulk of purchasers using the store had lived in Athelstone. The locality was not enlarged simply because some Athelstone residents chose to shop at Centro Newton or to travel further to visit a Dan Murphy’s or First Choice store. It was also not relevant that some persons from beyond the primary catchment area shopped at Athelstone. Those customers of the Athelstone store who were passersby, attracted to it by a customer loyalty program or who chose to shop there while making use of other facilities could not be taken into account in determining the locality.
Those contentions were said by counsel to be supported by the approach of the expert witness, Mr Burns, and the objective evidence. The latter included the concession made by the expert witness, Jeffrey Smith, and the evidence given by the local residents and businessman.
Counsel submitted that the trial judge had applied the correct test. His Honour’s exclusion of the secondary catchment area in determining locality did not amount to the creation of a new test.
The Full Court decision in Nepeor
The factors that must be taken into account in deciding the question of locality under the Liquor Licensing Act has been considered on many occasions by this Court.[12] The leading authority is the decision of the Full Court in Nepeor Pty Ltd v Liquor Licensing Commission.[13]
[12] See Liquorland (Australia) Pty Ltd v Hurley’s Arkaba Hotel Pty Ltd [2001] SASC 232 at [43]; (2001) 80 SASR 59 at 63 – 64 (Perry J) and the cases cited therein.
[13] (1987) 46 SASR 205 (“Nepeor”).
In Nepeor King CJ held that the word “locality” was not intended to identify an area delineated by definitive boundaries. The purpose of the word was to focus attention upon the local, as distinct from purely general, character of the public demand.[14]
[14] Ibid at 206 – 207.
King CJ also stated in Nepeor that the task is to identify the area from which demand for liquor “might be expected to be met at least in part by the proposed licensed premises”.[15]
[15] Ibid.
Von Doussa J (with whom King CJ and Bollen J agreed) held in Nepeor that the notion of “locality” was far too indefinite and flexible to permit it to be marked out precisely on a map as a matter of course.[16] Von Doussa J went on to state that the word “locality” should be treated in a much less exacting manner than had previously been the case. Most importantly his Honour held:
I consider the word is used in the Act to denote, in a general way, the fact of being local, or neighbouring, as opposed to distant or remote. Often the “locality” is, as a matter of fact, not a matter for dispute as the relevant area is geographically discrete, as, for example, in the case of a country town [case references omitted]. In other cases, particular physical features of the area, such as a river, or some other significant obstruction to the free movement of people, might provide the basis for including or excluding particular areas from consideration in a precise way. However, in a case like the present one, where the proposed premises are within a built up region which, on any view, extends well beyond areas which could conceivably be relevant to the enquiry, precise delineation or definition, will rarely be possible. Nevertheless, if the concept and purpose of the section is recognised, it is capable of rational application in a practical way.
Section 38(1)[17] assumes that the applicant will endeavour to establish a “public demand” which the licensing of the proposed premises will meet. The meaning of the word “public” is also elusive. It is related to the concept of “locality”. In a different setting, Barwick CJ, in Lee v Evans (1964) 112 CLR 274 at 285-286, related the notion of “public” to an “area of the community”, the magnitude of the area depending upon the context in which the word “public” appeared in the particular enactment. In my opinion, in s 38(1) “public demand” is descriptive of a demand emanating from a sufficient area of the community to constitute the public, that is from people in the “locality”. The evidence of the applicant should indicate the “catchment area”, an expression used by counsel, from which the alleged public demand arises; or more accurately, the places from which the people come whose demands aggregate to constitute the “public demand”. The evidence will, in a particular case, identify “the public” and in turn the “locality”.[18]
[16] Ibid at 214.
[17] of the Liquor Licensing Act 1985.
[18] Ibid at 215 – 216.
Von Doussa J also held in Nepeor that it was no longer possible to approach the question of locality with preconceived notions that the relevant “locality” will be a confined area limited by practical restrictions on travel.[19]
[19] Ibid at 216.
The Full Court concluded in Nepeor that the locality of a liquor store located at the Tea Tree Plaza Shopping Centre comprised the area from where people primarily travelled to that centre to shop. That was the entire area of the City of Tea Tree Gully.
Error - locality
Section 61(2) requires the locality to be identified rather than the local community. Nepeor makes clear that the test for determining locality is, in the words of King CJ, identification of the area from which demand for liquor might, at least in part, be met by the licensed premises.[20] Von Doussa J adopted the term “catchment area” to describe the same concept.[21]
[20] Ibid at 206 – 207.
[21] Ibid at 216.
I consider that the trial judge fell into error by adopting the approach of Mr Burns which focused on identification of a “local community” rather than the locality in the sense identified by the Full Court in Nepeor. The support his Honour drew for that approach from the evidence of the local residents, particularly Mr Cox, showed the same error.
The evidence established that the Athelstone store also supplied to some extent the liquor needs of persons living in the suburbs of Newton, Paradise and Rostrevor. Thus, the locality extended beyond the Athelstone community.
I would uphold the appeal. Rather than expose the parties to further costs and delay by remitting the matter back to the Licensing Court, I consider it appropriate for this Court to determine the locality. I now turn to that task.
The locality
Much of the evidence called by both the appellant and the first respondent contended that the western boundary of the locality could be precisely identified. Witnesses called by the appellant sought to place the western boundary at Newton Road while those called by the respondent contended that it should not go past Stradbroke Road. The distance between the junctions of those two roads with Gorge Road is about 1 km. The evidence given about the western boundary of the locality, and the submissions based upon that evidence, at times paid little regard to the warnings by King CJ and Von Doussa J in Nepeor that in an urban area where there is no natural boundary a locality could not be marked out precisely on a map.
The clear weight of the evidence is that the majority of customers of the former Liquorland store at Athelstone came from that suburb. However, given the test articulated in Nepeor, it is of crucial importance that the store also supplied persons living in the adjacent suburbs of Newton, Paradise and Rostrevor, albeit to a much lesser extent. The evidence also established that persons living in those suburbs used, at least to some extent, each of the three local shopping centres at Centro Newton, Newton Village and Athelstone and also the liquor stores at those centres.
Because the test applied in Nepeor requires identification of the area in which demand for liquor might be met at least in part by a licensed store, it is appropriate to take into account evidence of the secondary catchment area supplied by those premises. While I accept the correctness of the submission by counsel for the respondent that passing trade ought not to be taken into account when determining locality, I do not consider to be correct his submissions that persons attracted to a liquor store by a loyalty program or by other facilities offered in the same shopping centre, cannot be taken into account. What may attract those customers to a particular store does not matter. The relevant consideration is their use of that store to supply at least part of their liquor needs.
The locality should not be limited to the primary catchment area of the relevant licensed premises. The Nepeor test of determining locality by reference to the area from which residents use the premises to supply at least part of their liquor needs necessarily includes the secondary catchment area.
In light of the admonition by King CJ and Von Doussa J in Nepeor against the fixing of overly precise boundaries for a locality, and in light of the evidence available, I will not attempt to fix a precise limit to the locality of the Athelstone Liquorland store. It is sufficient to hold that the site proposed by the appellant for its First Choice store on the corner of Newton and Clareville Roads is within the locality of the Athelstone store on the basis that persons living near the proposed new store would formerly have used the Athelstone store to supply part of their liquor needs.
Discretion
A further question arises as to whether it is appropriate to exercise the discretion conferred by s 53 to refuse the application. While it was not strictly necessary for him to do so, the trial judge considered that question. His Honour held that if he had wrongly decided the location of the Athelstone store he would have exercised the court’s discretion under s 53 to refuse the application.
The basis for His Honour’s finding that the s 53 discretion should be exercised against the appellant was that licensees who hold a retail liquor merchant’s licence within or near a shopping centre that meets the local community’s wish for one stop shopping should be discouraged from withdrawing that facility merely to take advantage of a more commercially attractive opportunity elsewhere within the locality. That was particularly so if the removal of the licence would significantly disadvantage the local community and simply offer the other community another retail facility albeit that it may provide a greater range of stock. Persons living around the Athelstone site had been significantly disadvantaged by being denied the capacity to obtain take-away liquor as part of their general food and grocery shopping. Their demand would not be met by the other existing liquor stores or by the proposed First Choice shop. His Honour concluded that a failure to exercise the discretion against the application would set an undesirable precedent of the type alluded to by Doyle CJ in Liquorland (Australia) Pty Ltd v Lindsey Cove Pty Ltd.[22]
[22] [2002] SASC 17; (2002) 81 SASR 337 (“Lindsey Cove”).
The decision of the Full Court in Lindsey Cove concerned the grant of a retail liquor merchant’s licence. The applicant was controlled by the same persons as a nearby hotel. That hotel had included a bottle shop which made substantial sales of take-away liquor. It was proposed to renovate substantially the hotel premises by replacing the bottle shop with extensions to the bar, dining and gaming facilities. A significant factor in the approval of the applicant’s liquor merchants licence was that the closure of the bottle shop at the hotel had created an unmet demand in the locality for take-away liquor.
The decision by the Licensing Court to approve the licence for the new bottle shop was appealed to the Full Court on the basis that the discretion under s 53(1) should have been exercised to refuse the application. In essence, the objectors submitted that the applicant had created the unmet demand that it sought to satisfy.
The undesirable precedent alluded to by Doyle CJ was that if the discretion was exercised in the favour of the applicant it might encourage other holders of hotel or retail liquor merchants licences to cease meeting an existing demand with a view to applying and obtaining an additional licence to meet that demand.[23]
[23] Ibid at [41]; 345.
Doyle CJ also held (with Martin and Besanko JJ agreeing) that the discretion under s 53(1) to refuse an application should be exercised for a purpose consistent with the Act and to advance or maintain the principles and policies found in the Act or which the court in its experience considered appropriate or necessary in the proper application of the Act. The discretion should not be used to provide protection to existing licensees, to penalise the applicant for making a shrewd commercial decision or to enforce some vague notion that the grant of the licence will result in the undue proliferation of licences.[24]
[24] Ibid at [27] – [28], [32]; 342 – 343, 344.
I consider that the reasons for the closure of the Liquorland store at Athelstone can be distinguished from those that led to an adverse exercise of the court’s discretion in Lindsey Cove. The evidence of Mr Field was that the Liquorland store at Athelstone had been closed because of insufficient turnover, a decline in trade, an expected further decline and an increase in rent. While Mr Anthony Smith suggested that Woolies would not have closed the store, the evidence did not establish that there was any attempt to manipulate licensing arrangements in the manner found impermissible by the Full Court in Lindsey Cove. To the contrary, the evidence of Mr Field, which was not effectively controverted, was that Liquorland had made a commercial decision. I consider the facts in Lindsey Cove to be distinguishable.
I also note the evidence of both Mr Field and Mr Anthony Smith that the proposed First Choice store would offer a substantially greater range of liquor than traditional bottle shops and at lower prices. That should advance the statutory object in s 3(1)(e) of encouraging a competitive market for the supply of liquor.

I do not consider that there is any basis for the Full Court to exercise the discretion under s 53(1) to refuse the application.
Conclusion
I would allow the appeal. I would set aside the judgment of the Licensing Court and the order made on 25 June 2013. I would order that the removal of the appellant’s retail liquor merchant’s licence from the Athelstone Shopping Centre at 320 Gorge Road, Athelstone to 81 Newton Road, Newton is approved.