Music Talking Pty Ltd as trustee for the Orlando Farese Family Trust v Villis Group Services

[2011] SASCFC 142

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

MUSIC TALKING PTY LTD AS TRUSTEE FOR THE ORLANDO FARESE FAMILY TRUST v VILLIS GROUP SERVICES & ORS

[2011] SASCFC 142

Judgment of The Full Court

(The Honourable Justice Anderson, The Honourable Justice Kelly and The Honourable Justice Stanley)

1 December 2011

LIQUOR LAW - LICENSING - CONDITION OF PREMISES

LIQUOR LAW - LICENSING - LICENSING TRIBUNALS GENERALLY - REVIEWS, APPEALS AND CASES STATED - SOUTH AUSTRALIA

LIQUOR LAW - LICENSING - NATURE AND EXTENT OF LICENSEE'S RIGHTS

Appeal against decision of Licensing Court judge reducing trading hours of appellant's business - complaints were made to the Licensing Court regarding noise emanating from the licensed premises and the behaviour of patrons making their way to and from the premises - whether noise and behaviour is unduly offensive, annoying, disturbing or inconvenient to complainants - whether the matter should be remitted to the Licensing Court judge to consider the question of separate trading hours for the ground floor of the premises.

Held: Appeal allowed solely for the purpose of remitting the matter to the Licensing Court judge for further consideration of the question of separate trading hours for the ground floor of the premises - appeal dismissed in all other respects.

Liquor Licensing Act 1997 (SA) s 23 and s 106; Development Act 1993 (SA), referred to.
Vandeleur & Ors v Delbra Pty Ltd & Liquor Licensing Commissioner (1988) 48 SASR 156, applied.

MUSIC TALKING PTY LTD AS TRUSTEE FOR THE ORLANDO FARESE FAMILY TRUST v VILLIS GROUP SERVICES & ORS
[2011] SASCFC 142

Full Court:  Anderson, Kelly and Stanley JJ

1. ANDERSON J.

   Introduction

2. This is an appeal from the decision of a Licensing Court judge reducing the trading hours of “Heaven” nightclub. The premises are situated at 200 Pulteney Street, Adelaide on the north-east corner of Flinders Street and have traded as Heaven since late September 2010. The premises were previously known as St Paul’s reception and function centre and had operated under a previous licensee as a reception centre for over 20 years. St Paul’s was authorised to trade until 5.00 am during the week and 6.00 am on Saturday and Sunday, although it rarely did so.

3. The licensed premises are within a Mixed Use Zone in the development plan for the City of Adelaide. The licence formerly held by St Paul’s and now by Heaven is a Special Circumstances Licence.

   Background

4. Complaints were made to the Licensing Court regarding noise emanating from the premises, pursuant to s 106 of the Liquor Licensing Act 1997 (SA) (“the Act”) which I set out later. There are several different rooms or areas within the very large licensed premises. The appellant, being the owner and operator of Heaven, pursuant to the Special Circumstances Licence (“licence”) conducts live entertainment in different nominated areas of the licensed premises. The overall capacity of the venue has been fixed in excess of 1,000 patrons and trading was allowed under the original terms of the licence until 5.00 am on weekdays and until 6.00 am on Saturday and Sunday as was the case with the previous licensee. It appears that the main business of Heaven is transacted on a Saturday night and into Sunday morning when the premises operate up to their maximum capacity.

5. Apart from the complaints of noise there were also complaints of patron disturbance, including disorderly behaviour in the areas surrounding the premises, broken glass and patrons’ general noise level on leaving the premises.

6. Mr Villis, who operates a business and owns premises immediately to the north of Heaven on Pulteney Street, complained to the court about the noise, as did nearby residents Mr and Mrs Sachse. The Adelaide City Council intervened on the complaint, as did the Commissioner of Police in accordance with s 106(2) of the Act. The Commissioner of Police was represented in the Licensing Court to protect the public interest, but was not represented before this Court.

   Section 106 complaints

7. The section reads:

   106—Complaint about noise etc emanating from licensed premises

   (1)If—

   (a)     an activity on, or the noise emanating from, licensed premises; or

   (b)     the behaviour of persons making their way to or from licensed premises,

   is unduly offensive, annoying, disturbing or inconvenient to a person who resides, works or worships in the vicinity of the licensed premises, a complaint may be lodged with the Commissioner under this section.

   (2)     A complaint under this section may be lodged by—

   (a)     the Commissioner of Police; or

   (b)     the council for the area in which the licensed premises are situated; or

   (c)     a person claiming to be adversely affected by the subject matter of the complaint.

   (3)A complaint cannot be made under subsection (2)(c) unless—

   (a)     the complainant is authorised to make the complaint by at least 10 persons who reside, work or worship in the vicinity of the licensed premises; or

   (b)     the Commissioner is satisfied that the nature or gravity of the complaint is such that it should be admitted despite non-compliance with paragraph (a).

   (3a)If a complaint is lodged with the Commissioner under this section—

   (a)     the Commissioner must cause a copy of the complaint to be served on the licensee of the licensed premises to which the complaint relates no later than 7 days after its lodgement; and

   (b)     no conciliation meeting or other hearing may be held on the complaint until the period of 14 days has elapsed from the day of that service.

   (4)Unless either party to the proceedings on a complaint requests that the matter proceed direct to a hearing and the Commissioner is of the opinion that good reason exists for concurring with the request, the Commissioner must endeavour to resolve the subject matter of the complaint by conciliation and—

   (a)     the Commissioner may, before or during the course of the conciliation proceedings, make an interim order about the subject matter of the complaint; and

   (b)     if the matter is settled by conciliation, the Commissioner may make a final order against the licensee reflecting the terms of the settlement,

   (and the terms of an interim or final order under this subsection become conditions of the licence).

   (5)If the subject matter of the complaint is not to be conciliated, or is not resolved by conciliation, as the case may be—

   (a)     if the parties to the proceedings request the Commissioner to do so—the Commissioner must determine the matter; and

   (b)     in any other case—the Commissioner must refer the matter for hearing and determination by the Court.

   (6)In hearing and determining a complaint under this section, the Commissioner or the Court, as the case may be—

   (a)     must give the complainant, the licensee and any other person whom the Commissioner or the Court thinks fit to hear an opportunity to be heard; and

   (b)     must take into account—

   (i)the relevant history of the licensed premises in relation to other premises in the vicinity and, in particular, the period of time over which the activity, noise or behaviour complained about has been occurring and any significant change at any relevant time in the level or frequency at which it has occurred; and

   (ii)the unreasonableness or otherwise of the activity, noise or behaviour complained about; and

   (iii)the trading hours and character of the business carried out by the licensee on the licensed premises; and

   (iv)the desired future character of the locality in which the licensed premises are situated as stated in any relevant Development Plan under the Development Act 1993; and

   (v)whether or not any environment protection policy made under Part 5 of the Environment Protection Act 1993, or guidelines published by the Environment Protection Authority established under that Act, applicable to the provision of live music on the licensed premises have been complied with; and

   (vi)any other matter that the Commissioner or the Court considers relevant.

   (6a)On completing the hearing of the complaint the Commissioner or the Court, as the case may be, may—

   (a)     dismiss the complaint; or

   (b)     make an order against the licensee resolving the subject matter of the complaint.

   (7)The order may add to or vary the conditions of the licence.

   (8)If a proposal for settlement of the subject matter of the complaint is made in the course of proceedings before the Commissioner, evidence of the proposal is inadmissible in proceedings before the Court.

   (9)     An interim order of the Commissioner under this section continues in force until the making of a final order on the complaint by the Commissioner or the Court, or earlier revocation of the interim order by the Commissioner or the Court.

8. A conciliation took place but was unsuccessful in resolving the matter.

   The hearing of the complaints

9. At the hearing in the Licensing Court, the judge found that the complaint by the Villis Group could be resolved by imposing appropriate conditions on Heaven’s licence. Mr Villis appeared in person before this Court and agreed with that aspect of the judge’s finding.

10. The Licensing Court judge found that the complaint made by the Corporation of the City of Adelaide was not made out.

11. However, the judge found that a complaint made by Mr and Mrs Sachse was made out. They lived in a townhouse in Ifould Street, Adelaide which is the next street south of Flinders Street and runs in an easterly direction from Pulteney Street. The complaint by Mr and Mrs Sachse related to both excessive noise and the increased activity and noise from patrons coming and going from the premises early in the morning.

12. It should be noted that s 106(3)(a) qualifies s 106(2)(c). Mr Sachse was a person claiming to be adversely affected and made his complaint consistent with the provisions of s 106(3)(a) by obtaining authorisation from ten persons who resided in the vicinity. These ten residents lived further east along Ifould Street ad have each signed a petition in which they too claim to be adversely affected by the noise emanating from Heaven. The Liquor Licensing Commissioner can in any event admit the complaint of one person if satisfied pursuant to the terms of s 106(3)(b). The Act contemplates that a single person who is adversely affected can complain even though Mr Sachse obtained the authorisation of ten other persons.

13. After hearing the matter and finding that the complaint by Mr and Mrs Sachse was made out the judge imposed restrictive conditions in relation to Heaven’s trading. He ordered that entertainment in the whole of the premises cease at 1.00 am and that all patrons were required to leave the premises by 3.00 am. As can be seen, this is a substantial restriction on the hours under which the licensee previously operated. There were numerous conditions attached to the licence by the judge, the only relevant ones for present purposes being the conditions relating to loud music and setting the noise at a certain decibel level above the level of any background noise.

14. The judge found that significant problems relating to noise arose after the appellant commenced operating its business at the premises in September 2010. Although he indicated that some abatement of noise had been achieved by measures taken by the appellant, it was nevertheless still a significant problem in the judge’s mind. The judge believed that the appellant had been given sufficient opportunity to deal with the noise problems but had failed to implement any satisfactory measures to prevent inconvenience to nearby residents. He relied on the evidence of Mr Sachse which he accepted in its entirety.

15. Mr Sachse had given evidence that when the premises operated as a function centre there were few functions and the premises did not cause any undue disturbance. The main complaint from Mr Sachse in relation to Heaven was the loud bass noise from the entertainment music. He said that this both prevented he and his wife from getting to sleep and, when awakened by the music, prevented them from going back to sleep.

16. Mr Sachse’s main complaint related to the noise levels emanating from Heaven on Saturday nights. Mr Sachse has taken his own measures to reduce the disturbance from the noise levels. The Sachses’ bedroom windows have been double glazed but Mr Sachse indicated that this has not significantly reduced the disturbance from the loud noise. He also made a number of complaints to the appellant before lodging his complaint with the Commissioner.

17. His Honour found at [57]:

    I have no hesitation in accepting the truthfulness and accuracy of what Mr Sachse said. In my view, he has not been unreasonable or inflexible in his approach to these problems. He has been very measured and sensible. I found the problems being experienced by him (and his wife) are not limited to them. In my view, the noise level of the music coming from Heaven (as it undoubtedly is) is quite unreasonable and, frankly, unnecessary.

18. This finding includes Mr Sachse’s conversations with others who have experienced similar problems. The judge said at [54]:

    [54]Mr Sachse said he has spoken with others who have had similar problems and complaints. Because this material comes second-hand, I place less weight upon it than I would otherwise do (T62-62). I admitted an email from another resident (Exhibit C1) along Ifould Street detailing similar problems. I have treated that as having less weight because it has not been tested by cross-examination, but I do not regard him as a lone voice.

19. The judge is entitled to do this under s 23 of the Act which relieves him from being bound by the rules of evidence.

20. The appellant called a Mr Madden, an acoustic engineer, to give evidence. Mr Madden indicated how various changes had been made by the appellant to the amplifying equipment with the result that the noise level has been reduced. He did not take readings from inside the residence of Mr Sachse because Mr Sachse did not allow him to do so.

21. Mr Sachse was of the view that the appellant would not act to reduce the noise levels no matter what the readings taken by Mr Madden were. That is, it was of no consequence what the readings were from inside his residence because the noise problems would continue as they had following his various complaints.

22. The judge found that despite Mr Madden’s evidence as to any changes made by the appellant to reduce the noise impact, his evidence did not address the issues of what the readings were on what the judge called “particularly noisy nights”. The judge took account of the fact that the readings were taken on nights when the appellant was aware that recordings were being made to test the noise level.

23. The judge explained the operation of the premises by reference to the evidence of Mr Farese. He said at [80]:

    [80]Mr Farese explained how Heaven operates at present. He explained that it caters for a large cross-section of the community and that the various areas and rooms play different music. He said the premises are at capacity between about 1.00 am and 4.00-4.30 am. Although the capacity is 1080, the number of patrons going through the premises on a Saturday night ranges from 1,000 and 1,700. He said of the people who were attracted to the premises, about 70 per cent came after 1.00 am and that there was only any real influx after 11.00 pm. Further, he said that, if live entertainment ceased at 1.00 am, then no-one would come after that time. He said that scenario (which would include closing at 3.00 am) would be financially disastrous for him and others who worked there.

24. It appears from Mr Farese’s evidence that he believed if live entertainment ceased at 1.00 am then Heaven would lose patrons. I am sure that is so. He said that that would make the situation financially disastrous. There is no evidence to support this claim.

25. Mr Farese acknowledged that one of the major problems is the roof of the heritage building. It is a substantial old church with a cathedral roof. He gave evidence before the Licensing Court judge that sound proofing the roof, if indeed he was able to obtain the required planning approval to do so, would cost him approximately $125,000. Again, I am not sure about the economic viability of this option because there was no information before the judge about the profitability of the business.

    Arguments on appeal

26. Mr Roder SC for the appellant argued that the judge wrongly took account of the Adelaide City Council’s informal liquor licensing policy rather than the Development Plan under the Development Act 1993 (SA). Mr Roder did finally accept that the informal liquor licensing policy had some relevance although he submitted the judge erred in failing to take account of the desired character statement for the locality. Under the Council’s Development Plan, entertainment was stated as a desired objective.

27. Mr Roder argued that the judge placed undue emphasis on the Council’s informal liquor licensing policy and did not place enough weight on the required balance between residential development and commercial operations involving late night entertainment under the Development Plan. In particular he submitted that the reduced trading hours imposed by the judge simply reflected the Council’s desire, as evidenced by the liquor licensing policy, to implement those hours across the board.

28. Mr Henry SC for the Council submitted, in a careful analysis of the plan, that Mr Roder’s submissions were not soundly based. In the view I take, it is not necessary to decide who is correct. This is not a planning appeal and the only real relevance is that entertainment is permitted in the area. Mr Henry was really responding to what he regarded as inaccurate statements as to the effect of the plan from the point of view of late night entertainment in licensed premises.

29. Mr Roder also complained that His Honour in effect only acted on the evidence of one resident, namely Mr Sachse, and that he took into account Mr Sachse’s subjective views rather than assess the disturbance in an objective way.

30. The relevant test set out by the judge in his reasons at [30] and [31] is as follows:

    [30]Counsel referred to the case of Hackney Tavern Nominees Pty Ltd v McLeod (1983) 34 SASR 207. That case dealt with the meaning of s 86d of the Licensing Act 1967-1982, a section with the same general intent as s 106, but in different terms. That section included the phrase “…unduly disturbs or inconveniences persons who reside in the vicinity of the licensed premises”. On appeal, the court accepted what was said at first instance as to the meaning of “undue”, that is, “… not appropriate or suitable; going beyond what is appropriate, warranted or natural; excessive” (at p 212).

    [31]Although in a different legal and factual setting the discussion in the Hackney Tavern case was accepted in Vandeleur and Others v Delbra Pty Ltd and Liquor Licensing Commissioner (1988) 48 SASR 156. There, King CJ, in discussing a similar provision (s 114) under the Liquor Licensing Act 1985, said (at 160):

    Clearly the remedies contained in s 114 cannot be availed of where the noise or behaviour does not exceed what is to be reasonably expected from the conduct of licensed premises of the particular class. Those remedies can only be available where the noise or behaviour goes beyond what is naturally to be expected and where the consequent offence, annoyance, disturbance or inconvenience exceeds what those who reside, work or worship nearby can reasonably be expected to tolerate.

    (See also Synagogue 2 [1999] SALC 19 (19 July 1999) involving a s 106 complaint where, curiously, the complainants were Mr and Mrs Heaven.)

1. It is not suggested by Mr Roder that His Honour posed for himself the incorrect test. In my view His Honour posed for himself the correct test.

2. Mr Roder submitted that although the judge posed the correct test, he misapplied it because he applied a subjective test rather than an objective test, That is, the judge took into account Mr Sachse’s subjective perceptions in determining that the noise emanating from the premises was “undue” in the circumstances.

3. I disagree with that submission. His Honour, in my view, correctly weighed up the evidence not only of Mr Sachse but of other residents who signed the petition. I refer again to His Honour’s remarks at [54]. He inspected the residential area and formed a view of the evidence which accords with the test set out by King CJ in Vandeleur. His Honour found that the noise level exceeded that which is to be reasonably expected and that finding was available on the evidence. In my view, His Honour’s approach did not involve applying a subjective test as argued by Mr Roder.

4. Mr Roder also argued that the orders made by the Licensing Court judge went well beyond what was required to prevent undue noise disturbance to nearby residents. He submitted that the licence conditions imposed by His Honour, made by consent in the form of exhibit L28, adequately dealt with the issue of undue noise and were sufficient to answer the complaint. It was submitted that His Honour’s decision to close down the whole of the premises from providing live entertainment from 1.00 am was “drastic” having regard to all the evidence. Mr Roder also submitted that such an order was inappropriate given that there was no evidence pointing to any disturbance emanating from the lower level of the premises.

5. Mr Roder pointed out that it must be that the noise causing the disturbance was emanating from the upper level only. That is because the lower levels have a roof and another whole floor above them. He submitted that the judge did not take account of the fact that the upstairs noise problem was independent of the activities conducted on the lower levels and therefore trading should be permitted on the lower levels on the terms of the original licence. This would be so because no submission was made before the judge along those lines. This matter was apparently not raised before the Licensing Court judge but it was argued on appeal for the first time.

6. In support of his claim that the order was “drastic” Mr Roder pointed to the following matters:

   the Plan provisions;

   the actions taken by the licensee to address noise and patron issues;

   the absence of any evidence about music noise disturbance other than from Mr Sachse;

   the acceptance by Mr Villis that the licensee had resolved the earlier noise issues and made “good efforts” relating to noise;

   the absence of any acoustic measurements over accepted levels;

   the consent conditions relating to noise;

   Mr Sachse’s refusal to agree to double glazing at the licensee’s expense and acoustic measurement in his apartment;

   the fact that the premises only operated one day of the week;

   the uncontested evidence that playing music in this venue for extended hours was not inherently incompatible with other uses within the Mixed Use Zone and there was no intractable problem with noise emissions;

   the fact that the licensee has no record of prior noise disturbance findings or breaching condition. The licensee ought to have been given an opportunity to respond further to the findings of the Court (which it contested) rather than being shut down; and

   the fact that a licence was and is in existence in the said premises which contemplates live entertainment being conducted on the premises until 6.00 am catering for over a thousand people.

7. Mr Roder submitted that the evidence does not show that any music played downstairs would pose any undue disturbance or annoyance to Mr Sachse or the other residents. There is simply no evidence on that topic. He indicated that his instructions were that the venue could operate so that music could be played in the lower levels after it was shut down in the upper level. At the moment the judge has ordered the cessation of entertainment from 1.00 am which of course includes live music.

8. Mr Firth, who appeared as counsel for Mr and Mrs Sachse, submitted on this last point that if this Court thought there was any merit in the suggestion that the conditions should be varied so as to allow entertainment on the lower level only, beyond the hours fixed by the judge, and therefore vary the conditions imposed by the judge, the parties should be given an opportunity of addressing that fact by a further hearing and the calling of evidence, if necessary, before the Licensing Court judge. As I have said, the judge was simply not addressed on this point.

   Conclusion

9. Having reviewed the evidence and taken into account the arguments put by all parties, it seems to me that the trial judge’s reasoning and his application of the law to the facts is correct. His Honour appears not to have considered the question of separate hours for the downstairs premises. It does not appear that His Honour has considered any option involving the permission of entertainment downstairs in accordance with the trading hours under the original licence, but restricting live entertainment upstairs. It was not an issue in the Licensing Court.

10. Although no submissions were made on that aspect, because of the apparent harshness of the orders made by the judge, it is my view the matter should be sent back to the judge with a direction that he should consider the question of licensing the premises with a differentiation between the lower and upper levels. It is my view that there is no evidence at present to justify any variation of conditions on the lower level from those that were previously operating, namely trading until 5.00 am during the week and 6.00 am on Saturday and Sunday.

11. The points made by Mr Roder and set out at [36] above are indicative of the harshness of the order as it now stands.

12. In relation to the upper level of the premises, it seems to me that on the evidence called before the judge he has made a correct assessment of the impact of that noise upon residents and in particular Mr Sachse. I do not accept that it is only Mr Sachse’s complaint. His complaint was, as the judge found, representative of others who lived nearby. I consider that the judge has correctly applied the correct test.

13. I should also add that the Court took an inspection of the premises and its surrounds for a better understanding of the evidence. The Court inspected Mr Sachse’s townhouse. It is easy to see how the noise level from the licensed premises would be louder at Mr Sachse’s residence because of the similar height of his residence and the upper roof level of the licensed premises where the loud music is played.

14. It is in the hands of the appellant as to how it should deal with this noise problem. If it wishes to reduce the noise problem in the upper level and reapply for a variation of conditions then any further decision would be subject to the evidence it produced as to the likely effect of any future noise reduction measures. It may be that the appellant simply has to soundproof the roof if it wishes to regain longer trading hours upstairs. That will remain a commercial decision for the licensee.

15. However, for the present time the order of the Court I would propose is that the appeal is allowed solely for the purpose of sending the matter back to the judge for further consideration of the question of the trading hours for the lower level. The judge should hear such further evidence from all parties that is required to establish the level of the sound emanating from the ground floor. Until that matter is resolved it is my view that the hours as fixed by the judge should remain for the upper level only. It is my view that the licensee should have the immediate right to trade on the terms of his previous special circumstances licence, namely in the lower area of the premises until 6.00 am on Saturdays and Sundays. That of course could be varied, if on hearing further evidence, the judge was of the opinion that the hours on the lower level should be reduced.

16. KELLY J. I agree with the orders proposed by Anderson J for the reasons which he has given.

17. STANLEY J.         I have had the advantage of reading the draft reasons of Anderson J. I agree with His Honour’s reasons and proposed orders.