Mandamo Pty Ltd v Crystalcorp Developments Pty Ltd - [2004] SASC 193

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
MANDAMO PTY LTD & ANOR v CRYSTALCORP DEVELOPMENTS PTY LTD
Judgment of The Full Court
(The Honourable Justice Duggan, The Honourable Justice Besanko and The Honourable Justice Anderson)
2 July 2004
LIQUOR LAW - LICENSING - APPLICATION FOR NEW LICENCE - HEARING OF APPLICATION - MATTERS FOR CONSIDERATION - WHETHER REQUIRED FOR NEEDS OF PUBLIC
Appeal against grant of hotel licence – whether hotel required for the needs of the public having regard to existing licensed premises in the locality – s58(1) of Liquor Licensing Act 1997 (SA) – whether relevant principles correctly applied – assessment of need against availability of residential licence under s33(1) – no warrant for interference with decision of specialist tribunal – appeal dismissed.
Liquor Licensing Act 1997 (SA) s58(1), s33(1), referred to.
Sailmaster Tavern and Ors v Nemo Nominees Pty Ltd, (Full Court, 20 October 1995, unreported); Nuriootpa Vine Inn and Anor v Licensing Court [1999] SASC 512, applied.
Angler's Inn Hotel/Motel v Taranto (1996) 188 LSJS 321; Cibolini Pty Ltd v Sullivans Hotels Pty Ltd [1999] SASC 326; Liquorland (Australia) Pty Ltd v Lindsey Cove Pty Ltd (2002) 81 SASR 337, distinguished.
Lovell v New World Supermarkets Pty Ltd and Anor (1990) 53 SASR 53, considered.

MANDAMO PTY LTD & ANOR v CRYSTALCORP DEVELOPMENTS PTY LTD
[2004] SASC 193
Full Court: Duggan, Besanko and Anderson JJ

DUGGAN J I agree that the appeal should be dismissed for the reasons given by Anderson J. I also agree with the views expressed by Besanko J in his reasons for judgment.
BESANKO J In my opinion, this appeal should be dismissed and I agree with the reasons for judgment of Anderson J.
I wish to make some brief observations on the principal argument advanced by the appellant on the appeal. The appellant submitted that in considering whether an applicant has established that a hotel licence is necessary in order to provide for the needs of the public in the relevant locality, the licensing authority is required to consider if the needs of the public, or at least some of those needs, could be satisfied by the grant of a licence for which proof of need is not a necessary precondition. If at least some of the needs of the public can be satisfied by the grant of another licence, then the question is whether what remains in terms of need is sufficient to justify the granting of a hotel licence.
In this case, the appellant’s argument fails because the findings of the specialist tribunal justify the conclusion that the requirements of s 58(1) of the Liquor Licensing Act 1997 were satisfied. Those findings are set out in the reasons for judgment of Anderson J and I need not repeat them. In addition, I would wish to make the observation that the proposition that regard is to be had to whether the needs of the public, or at least some of those needs, can be satisfied by another licence for which need is not a necessary precondition is not a rigid one, or one to be applied as if it was a mathematical formula. In considering whether need has been established, regard is had to the extent to which the particular needs established by the evidence might be satisfied by another licence. It is a factor, indeed perhaps an important one, but I do not think it is the decisive factor. There is nothing in Angler’s Inn Hotel/Motel & Others v Taranto(1980) Pty Ltd (1996) 188 LSJS 321 which suggests a contrary conclusion. The case upon which the appellant placed heavy reliance in the course of argument, Cibolini Pty Ltd v Sullivans Hotels Pty Ltd [1999] SASC 326, is not authority for a contrary view. First, that case was quite different from the present case because it was clear in that case that the predominant purpose of the proposed business was to provide meals (per Bleby J at [6] and [42]) and secondly, because Bleby J (with whom Wicks and Martin JJ agreed) made it quite clear that there was no invariable rule that if what was established, was, for example, that the only need was for bar facilities of a particular type, a hotel licence should not be granted (at [29]).
ANDERSON J This is an appeal by leave from a decision of the Licensing Court of South Australia in which the successful applicant applied for and was granted a certificate for a hotel licence in respect of premises to be erected and to be situated at Copper Cove Marina at Wallaroo.
The application in the Licensing Court was opposed by a number of hotels in Wallaroo who are the appellants in this Court. There was evidence called in the Licensing Court from a planner as to the locality for the purposes of the Liquor Licensing Act 1997 (SA) (“the Act”). The learned Licensing Court Judge found the locality included the township of Wallaroo, the marina area, North Beach, Point Riley and Palm Cove. There was evidence that it was a growing community and various statistics were provided to the court regarding the growth of the area and the marina itself.
The marina is already operational and the applicant sought a hotel licence at the marina for premises to be constructed.
Needs of the Public
The Licensing Court Judge considered the needs of the public in the locality by taking into account both the local community, those visiting the marina and in particular people arriving at the marina by boat, and tourists generally in deciding the question of the need for a licence.
His Honour had to make an assessment as to whether the requirements of s 58(1) of the Act had been satisfied. Section 58(1) provides:
“An applicant for a hotel licence must satisfy the licensing authority by such evidence as it may require that, having regard to the licensed premises already existing in the locality in which the premises or proposed premises to which the application relates are or are to be situated, the licence is necessary in order to provide for the needs of the public in that locality.”
The Licensing Court Judge said (at 2):
“The need expressed is rather unsurprising. People who come to the applicant’s site will be looking for accommodation and with that comes the usual demand of holiday-makers generally and ‘boaties’ for liquor and meals.”
His Honour also said further on (at 2):
“Clearly this is a growing community and there is also the local population of Wallaroo to be considered. Using my experience and the evidence I have no doubt that a significant section of the old population, that is Wallaroo, and most of the new population in those other areas I have mentioned are seeking these facilities also.”
His Honour had the opportunity of inspecting the existing facilities in the locality and as a result of his inspection made findings that the facilities provided by the existing hotels did not meet the contemporary needs of the public. He found specifically that three of them were well “down the scale even taking account of country conditions”. He described them as nearing the primitive stage. He singled out one which was better than the others, namely, The Angler’s Inn Hotel/Motel but found it was not up to the standard of a contemporary facility which was being sought by the public.
His Honour was also satisfied (at 3):
“… that a significant tourist element do not have their needs met in a contemporary way by the existing licensed premises. They simply are not adequate in contemporary terms.”
In relation to the needs of tourists, the comments of the Full Court in the Tonsley Hotel Pty Ltd v Whelan & Others (1982) 31 SASR 321 are relevant. Speaking of proving need, King CJ (at 325) discussed the concept generally and then moved to the topic of tourist demand when his Honour said:
“Individuals can speak of their own desires and needs, but the evidence of an individual proves very little beyond his own need or demand. This is true of permanent residents in a locality. Tourist demand is even harder to prove by the evidence of tourists, who, in the nature of things, are tourists for a limited time only.”
In Sailmaster Tavern and Ors v Nemo Nominees Pty Ltd, the Full Court, Cox, Perry and Lander JJ (20 October 1995, Judgment No 5266, unreported) again dealt with the concept of a voiced demand as against objective facts. Perry J with whom Cox and Lander JJ agreed said in relation to the equivalent section in the repealed legislation (at 7-8):
“Those circumstances illustrate that the finding of a relevant need for the purposes of s 63 does not necessarily turn upon the cogency of a voiced demand. On the contrary, there are many other factors to be taken into account, some of which stem from the objective geographic and demographic features of the relevant locality, the knowledge of the licensing authority, which may be presumed without the need for evidence being called, of the nature and scope of the trading operations of the other licensed premises in the locality, the general understanding of the licensing authority as to public preferences, tastes and needs, and its understanding of the general nature of the particular needs of sections of the community such as tourists. The fact that it has become customary in the Licensing Court, at least in contested applications, to call a number of lay witnesses to give evidence of voiced demand or of particular unmet ‘needs’, should not obscure the fact that in dealing with all applications the licensing authority is entitled to bring to bear its experience and understanding of the matters to which I have referred, and must be presumed to have done so, even though no express reference appears in the reasons for decision.”
Perry J also said in Nuriootpa Vine Inn & Anor v Licensing Court [1999] SASC 512 (at 3):
“[15]I have said before while sitting as a member of the Full Court, and I repeat, that there is a tendency in the Liquor Licensing jurisdiction to place too much emphasis on so-called need witnesses and lay evidence of demand. That type of evidence is relevant, but it tends to be very subjective and coloured by the natural leaning of many people to support any new facility however marginal the real case as to need might be. More important than evidence of that kind are the objective features of the locality and its demographics, coupled with the Licensing Court’s own expertise as to what the reasonable requirements of contemporary demand may be, considered in the light of a very stringent test for the grant of a retail liquor licence which is still a feature of the legislation.”
I respectfully adopt Perry J’s comments in both cases. In my view his Honour’s comments apply to both tourist and local need and especially where it is obvious to the specialist tribunal that the existing facilities in the locality do not meet contemporary standards.
There was criticism by some of the witnesses of the existing hotels in relation to the standard of meals provided and clearly this proposed hotel was intending to provide a more “upmarket eating facility”. It does appear from the Judge’s observations of the existing hotels that there was a need for this facility. The Judge’s observations confirmed the evidence of the “need” witnesses. I deal with the other aspects of “need” in paragraph 27 in my discussion of the residential licence.
There was therefore in my view a need established on the evidence for a higher standard hotel which could properly cater for contemporary needs of both the local population and the tourists including the “boaties” across the range of hotel facilities.
Specialist Tribunal
In this case, the Licensing Court Judge does specifically say how he looked at the matter. His Honour says (at 4):
“I have reached these conclusions on the evidence before me none of which has been shaken by the objectors to any significant extent and also my long experience in dealing with these cases. Much of what I have said relates to tourist need and it is notoriously difficult to provide direct evidence in this field. One has to also rely on what one knows of the needs of tourists that knowledge gained over many years sitting in this jurisdiction. Indeed I think that what I have said pretty well involves simply commonsense.”
His Honour had also said earlier (at 2):
“Using my experience and the evidence I have no doubt that a significant section of the old population, that is Wallaroo, and most of the new population in those other areas I have mentioned are seeking these facilities also.”
It must be remembered that the Licensing Court is a specialist tribunal headed by a judge very experienced in the jurisdiction. The same judge had been involved in a previous attempt in Wallaroo some time ago, namely, the application for the hotel referred to earlier, The Angler’s Inn Hotel/Motel. That matter was dealt with on appeal to this Court in Angler’s Inn Hotel/Motel v Taranto (1996) 188 LSJS 321.
The judge of the Licensing Court is “entitled to use his own knowledge and judgment to confirm, as it were, the needs and demand evidence” led before him. See Lovell v New World Supermarkets Pty Ltd & Anor (1990) 53 SASR 53 (at 58) per King CJ. Appeal courts traditionally have not lightly interfered with decisions of specialist tribunals and this Court has stated that principle on many occasions in relation to appeals from the Licensing Court.
Was a Residential Licence appropriate?
The appellant in this Court maintained that there was another licence which if granted, would have satisfied the needs expressed by the witnesses who gave evidence and that therefore there was no need for a hotel licence. The licence which was suggested as appropriate was the residential licence which is provided for in s 33 of the Act. Set out hereunder are the relevant parts of s 33(1):
“33(1)   A residential licence –
(a)     authorises the licensee to sell liquor on the licensed premises at any time –
(i)to a lodger for consumption on or off the licensed premises; and
(ii)to a diner in a designated dining area for consumption with or ancillary to a meal provided by the licensee in that area; and
(iii)to a person attending a reception for consumption in a designated reception area; and
(b)    if the conditions of the licence so provide – authorises the licensee to sell liquor on any day except Good Friday and Christmas Day for consumption on the licensed premises by persons –
(i)seated at a table; or
(ii)attending a function at which food is provided,
(but extended trading in liquor is not authorised under this paragraph unless an extended trading authorisation is in force).”
It was said that the only needs which could not be met by a residential licence were firstly the sales of takeaway liquor and secondly the consumption of liquor by members of the public whilst standing at a bar as distinct from being seated at the table.
The appellant focused on the decision in Angler’s Inn Hotel/Motel. In his reasons Debelle J, with whom Millhouse and Williams JJ agreed said (at 325):
“What can, however, be stated is that need for an hotel is not proved by identifying one small part of the overall trade of an hotel where, at the end of the day, all that is established is a preference to be able to drink liquor in a quiet lounge bar.”
In this case, the evidence in my view establishes that there is a demand for people who want liquor without a meal and without having to be seated. There is also evidence which indicates to me that although there might not be a need for a drive-in facility there is, nevertheless, a need for liquor to take off the premises. The residential licence could not satisfy this need and in my view therefore the Judge was quite entitled to come to the conclusion that he did. Witnesses did speak of the convenience of the takeaway bottle outlet at the marina. In fact the proposal was for quite a substantial walk-in bottle shop which would enable diners wishing to pay corkage to buy a special bottle to take to the restaurant and for the ‘boaties’ to purchase supplies. People also spoke of wanting both indoor and outdoor drinking areas and the desirability of coming off the boat and going straight into a bar for a drink.
In my view, this was not a case like the earlier Angler’s Inn Hotel/Motel decision.
The appellant also relied upon a decision of this Court in Cibolini Pty Ltd v Sullivans Hotels Pty Ltd [1999] SASC 326. In that case the applicant had applied for a hotel licence in relation to a restaurant style operation in a shopping centre on Unley Road. The judgment summarises that application as follows (at 1):
“[4]The nature of the establishment proposed to be conducted from the premises the subject of the application is similar to that of the Cibo Restaurant. It is to comprise a café style restaurant to seat up to 160 persons, a separate bar area to accommodate up to 60 persons, a rosticceria from which takeaway meals of the type served in the restaurant will be served and a bakery and pasticceria. The appellant also proposes to sell bottled liquor for consumption off the premises from a small bottle shop area.”
It can be seen therefore it was an unusual application and not on the face of it an obvious hotel. It was to cater for some of the more esoteric demands and was largely concentrating on food. That is not the case here. It is obvious to me as indeed it was to the learned Licensing Court Judge that both the locals and the tourists as a matter of commonsense would want a facility much better than that presently provided by the existing hotels where they could drink at a bar, and at the same time have access to a full range of hotel facilities but in contemporary surroundings.
In this case we have the situation of some run down hotels, one which has gone some distance in its upgrading but not far enough, as against a new modern facility catering for a full range of all hotel facilities in a setting which speaks for itself.
It is not like the cases presented in either Angler’s Inn Hotel/Motel or Cibolini. Bleby J in discussing the Angler’s Inn decision in his reasons in Cibolini said (at 10):
“[29]Whilst I do not suggest that Taranto was other than rightly decided, I would not be prepared to say that if bar facilities of a particular type was the only need demonstrated, a hotel licence should not be granted. In certain circumstances with a different kind of business that may be sufficient to justify the grant of such a licence. It might be shown to be a reasonable demand by emerging contemporary standards, and by giving due effect to matters of taste, convenience and preference. However, as Taranto demonstrates, whether the need required by s 58(1) is able to be shown may also depend on whether that need can be largely satisfied by some other form of licence for which proof of need is not necessary. It must be remembered that a hotel licence once granted, even if only to satisfy a limited need or “niche” market can always later be used for the wider purposes generally provided by a hotel. If that market can be satisfied otherwise, the particular need disappears. The obvious alternative licence to consider in this case is a restaurant licence.”
Having regard to the particular facts of that case, his Honour also said (at 12):
“[42]I approach this evidence against the background that the predominant activity of the business is the service of meals, and the fact that there is nothing to prevent liquor from being provided in the premises ancillary to a meal in some part of the premises other than at a table. I also bear in mind that there is nothing to prevent service to those who do not wish to have a meal so long as the liquor is provided for consumption by persons seated at a table. I also take into account that the type of table is not prescribed, that it need not necessarily be the same table or tables on which meals are served, and that the chairs provided for seating need not be dining chairs. When properly analysed, the principal needs and those consistently expressed by the witnesses could largely be fulfilled without a hotel licence, by a bar area of the type proposed with suitable furniture to meet the requirements of a restaurant licence. In short, the need could almost entirely be met by the grant of a restaurant licence. It would not be impossible to create a similar ambience to that desired by those who gave evidence. The range of unsatisfied need thus becomes negligible.”

I see nothing inconsistent with the comments made by Debelle J in Angler’s Inn Hotel/Motel and Bleby J in Cibolini. As indicated, I also believe that both those cases are clearly distinguishable from the present case.
Proliferation and Protection – The Discretion
The appellant also argued that the Licensing Court Judge failed to take into account the discretionary principles against the grant of a licence, being proliferation and protection from competition. It was suggested that the comments of Doyle CJ in Liquorland (Australia) Pty Ltd v Lindsey Cove Pty Ltd (2002) 81 SASR 337 (at 343) supported this argument. In paragraph 31 of that judgment Doyle CJ was rationalising the intention of s 58 in the current legislation. It must be remembered that any comments made by Doyle CJ were in the context of that case which was quite unusual. It was a case in which the operator of a hotel decided to close the bottle shop operation in the hotel to allow for poker machines and then, because there was no longer a bottle shop in the hotel, applied for a new one 200 metres down the road as a free standing retail liquor merchants licence. The comments made by Doyle CJ were made in his discussion of the discretion vested in the Licensing Court to prevent proliferation if the grant of a licence was contrary to the whole legislative scheme which controlled licensing in the State.
In any event, those comments must be read having regard to the paragraphs which preceded it and the paragraph which immediately followed it. There is nothing in those comments which causes me to think they should be applied automatically as a final barrier for an applicant to overcome in every application. Clearly matters of proliferation and competition will, in appropriate cases, be an overriding factor in the exercise of a discretion if the balance within the licensing system is likely to be adversely affected. That is not the case here.
Angler’s Inn Hotel/Motel – Proposal for Upgrading
Mr Costello, counsel for the appellant, suggested that the learned Licensing Court Judge disregarded evidence given by the owners of Angler’s Inn Hotel/Motel as to the situation of their upgrading plans.
We were directed by counsel to the learned Licensing Court Judge’s comments (at 3):
“The Angler’s Inn Hotel is much better and younger and promises to be, in time, even better still but on my view of it, it currently appeals as a very average facility with quite nice dining and gaming facilities but with no quiet lounge area for a drink and the front bar, which has not been substantially upgraded for years, is quite unattractive. Some of the need witnesses commented likewise. It is not, in my opinion, to be regarded as the contemporary facility being sought by the subject public.”
On first reading that passage might indicate that his Honour did not pay sufficient regard to evidence which showed that the owner of the hotel had in fact embarked on some plans to renovate the hotel. In fact some renovations had already taken place. However, the last section of the hotel which had not been attended to was the front bar and any upgrading was probably 12 months away at the time the owner gave evidence. Moreover no plans were actually produced to the court, as is quite often the case, to show how advanced the planned modernisation of that section of the hotel was. There was no application nor any plans which had been lodged with the council or the liquor licensing commissioner for approval. In that context therefore his Honour’s comments as set out above make perfect sense.
I am of the opinion that the evidence before the Licensing Court was persuasive of the proof of s 58(1) in a locality where the existing facilities fell far short of contemporary standards. It was as his Honour says a matter of simply commonsense, when the objective factors of the locality, including the demographics, were combined with the evidence of the “needs” witnesses.
In my view therefore the learned Licensing Court Judge was quite correct in granting the application and the appeal should be dismissed.