Scott Cove Pty Ltd v Liquorland (Australia) Pty Ltd - [2004] SASC 396

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
SCOTT COVE PTY LTD & ANOR v LIQUORLAND (AUSTRALIA) PTY LTD
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Perry and The Honourable Justice Vanstone)
2 December 2004
LIQUOR LAW - LICENSING - APPLICATION FOR NEW LICENCE - HEARING OF APPLICATION - MATTERS FOR CONSIDERATION - WHETHER REQUIRED FOR NEEDS OF PUBLIC
Appeal against refusal of application for a retail liquor merchants licence - whether existing licensed premises in the locality do not adequately cater for the public demand for liquor - case based on alleged inadequacies in the range of packaged liquor available from the other existing retail liquor stores in the locality - assessment of evidence of "need" witnesses - held that appellants' case on need did not rise above matters of mere convenience and the Licensing Court correctly found that the onus under s 58(2) of the Liquor Licensing Act 1997 (SA) was not satisfied - appeal dismissed.
Sailmaster Tavern v Nemo Nominees Pty Ltd (Unreported) Judgment No S5266, 20 October 1995, Full Court of the Supreme Court SA; Liquorland (Australia) Pty Ltd v Hurley's Arkaba Hotel Pty Ltd and Ors (2001) 80 SASR 59; Harding Hotels v Jatadd (2001) 81 SASR 222; Mandamo Pty Ltd and Anor v Crystalcorp Developments Pty Ltd (Unreported) [2004] SASC 193; Woolies Liquor Stores Pty Ltd v Carleton Investments Pty Ltd and Ors (1998) 73 SASR 6; Woolies Liquor Stores Pty Ltd v Seaford Rise Tavern and Ors (2000) 76 SASR 290, considered.

SCOTT COVE PTY LTD & ANOR v LIQUORLAND (AUSTRALIA) PTY LTD
[2004] SASC 396
Full Court: Doyle CJ, Perry and Vanstone JJ

DOYLE CJ: I would dismiss the appeal.
I agree with the reasons given by Perry J for dismissing the appeal. In particular, I agree with his assessment of the evidence before the Judge of the Licensing Court. The Judge’s conclusions were correct, but it would have been helpful if the Judge had explained in more detail why he reached the conclusion that he did.
PERRY J: The appellants appeal by leave to this Court, from the dismissal by the Licensing Court of their application for a retail liquor merchants licence.
Background
The appellants are the licensees of a hotel known as the Regency Tavern, situated on the eastern side of Days Road at Regency Park.
Following the appellants’ acquisition of the Regency Tavern in about 1998, they effected substantial renovations and extensions. The facilities now offered by the hotel include a gaming room, a public bar, a lounge bar and a dining area.
The hotel does not include a bottle shop.
Before commencing the renovations the appellants sought to include a combined drive-in and walk-in bottle shop, but they were unable to obtain planning approval for that part of the proposed development. The only off premises sales of packaged liquor which the hotel is able to make, are conducted over the bar.
Given their inability to include a bottle shop in the hotel complex, the appellants turned their attention to vacant shop premises (“the proposed premises”) on the opposite side of Days Road, with respect to which they lodged the application now in question.
The door-to-door distance between the proposed premises and Regency Tavern is 88 metres.
Objections to the application were lodged by the respondent Liquorland (Australia) Pty Ltd (“Liquorland”), which owns a number of retail liquor stores throughout the metropolitan area, including two within the locality now in question, and by Mansfield Park Hotel Pty Ltd, which is the holder of a hotel licence with respect to premises known as Mansfield Park Hotel situated on Grand Junction Road at Mansfield Park.
The notices of objection contained a number of grounds, the most relevant of which for present purposes was that the grant of the application was not necessary in order to provide for the public demand for off-premises sales of packaged liquor in the locality.
Mr Graham Hobbs, a lawyer and director of the two appellant companies, who has substantial interests and experience in the hotel and retail liquor trade elsewhere in Adelaide and in Queensland, was the principal witness for the appellants.
He gave evidence of having conducted a study of the stock of other competing outlets in the locality, more particularly of the two retail liquor stores conducted in the locality by Liquorland. He was critical of what he described as the limited number of lines available in those stores, and the very limited range, particularly of table wines.
The appellants propose to carry a substantially wider range of liquor, over 1500 lines. The case was presented on the basis that there was a need for a wider variety of table wines particularly, than that which was available from the existing retail liquor outlets in the locality.
The proposed premises are comparatively small for a retail liquor store. The retail floor area would be a little over 96 square metres, which includes a 15 square metre cold room with display doors facing into the retail floor area.
It was part of the appellants’ proposal that because of the limited size of the proposed premises, it would store some of its stock in the Regency Tavern premises, and that it would assign staff from the Regency Tavern to service the proposed premises over lunch breaks and as they might otherwise be required.
At the hearing before the Licensing Court judge, apart from Mr Hobbs, the appellants called eight “need” witnesses. As well, they tendered a report prepared by Mr Burns, a planning expert, and called him to give oral evidence.
The report of another planning expert, Mr Jeff Smith, was tendered by the respondent. The respondent called one witness, Mark Ellyard, who was employed by the respondent as store support manager.
Effectively, Mr Ellyard supervises the operation of all of the respondent’s stores in South Australia.
The Licensing Court judge refused the application, on the basis that the appellants failed to satisfy the onus laid down in s 58(2) of the Liquor Licensing Act 1997 (“the Act”). That section provides:
“58(2) An applicant for a retail liquor merchant’s licence must satisfy the licensing authority that the licensed premises already existing in the locality in which the premises or proposed premises to which the application relates are, or are proposed to be, situated, do not adequately cater for the public demand for liquor for consumption off licensed premises and the licence is necessary to satisfy that demand.”
The locality
Days Road is a major road running in a north-south direction. It is more or less equidistant from and parallel to two other major roads, Churchill Road to the east and Hanson Road to the West.
The two planning experts, Mr Smith and Mr Burns, were in substantial agreement as to the relevant locality. Their opinion was accepted by the Licensing Court judge and was not seriously disputed by the parties, either at first instance or on the hearing of the appeal.
The accepted locality forms roughly a square area bounded by four roads, namely:
ŸHanson Road to the west
ŸGrand Junction Road to the north
ŸChurchill Road to the east
ŸTorrens Road to the south
Virtually the same area is encompassed if one was to draw a two-kilometre radius around the proposed premises.
Excluded from the locality otherwise bounded by the four roads to which I have referred, is a suburb known as Devon Park, which is a small triangular area bounded by Churchill Road and Torrens Road.
The suburbs comprising the locality are Mansfield Park, Woodville Gardens, Angle Park, Ferryden Park, Croydon Park, Dudley Park, Regency Park and a small part of the suburb of Kilburn.
The Regency Park Golf Course extends over an area bordering the eastern side of Days Road. The Regency Tavern is within the Days Road frontage of the golf course. The eastern perimeter of the golf course is bounded by South Road.
That part of the locality which extends east of South Road to Churchill Road, is an area which is almost entirely industrial, with very little residential housing.
Adjacent to the southern side of the Regency Park Golf Course is the institution known as the Regency Institute of TAFE (“Regency TAFE”). The southern boundary of the area occupied by Regency TAFE is about one kilometre from the subject premises.
North of the subject premises and on the western side of Days Road is an area occupied by Adelaide Greyhound Racing Club, on the western side of which is located the Parks Community Centre.
A feature of the locality is the Centro (Westfield) Arndale Shopping Centre (“Arndale Shopping Centre”) located on the corner of Hanson Road and Torrens Road.
The locality is well served by bus routes.
There is a community bus service operated by the Council, and several public bus routes.
Arndale Shopping Centre is a major bus interchange operating as a hub for the bus routes within the locality.
As well, Arndale Shopping Centre operates its own small bus service, available to people living or working within a 5 kilometre radius of the centre. The service operates during the day from Monday to Saturday. It picks up customers from their homes and transports them to and from the shopping centre. It operates in each suburb within the locality on a different set of days.
The locality is serviced by a number of major roads, largely in a grid pattern which, to use the description of Mr Smith, “provides a high level of connectivity throughout the locality”.
Within the locality, a large-scale development project is taking place. It is known as the Westwood Urban Renewal Project. It is a joint venture housing development between the South Australian Housing Trust, Urban Pacific Ltd and the City of Port Adelaide Enfield Council. The project involves the redevelopment of approximately six square kilometres situated within Ferryden Park, Mansfield Park, Woodville Gardens, Athol Park and Angle Park.
The project commenced in March 1999. It involves what is described as a continuous cycle of demolition and construction, moving progressively throughout the area.
Some 58 per cent of the dwellings within the area covered by the project were owned by the Housing Trust. The redevelopment will reduce that holding to about 24 per cent. Nearly 2,000 Housing Trust dwellings will be demolished to create about 2,400 new allotments, upon which new houses will be constructed. The project is due to be completed in 2014.
While ultimately it is likely that the residential population of the locality will be increased, census data indicated a reduction in the number of households from 6,133 in 1996 to 5,864 in 2001. That reduction probably explains the small decline which occurred in the population of the locality as a whole between the same years, from 15,059 to 13,783 persons.
In the area of the redevelopment which has been completed, there has been a marked increase in the average value of dwellings, coupled with a change from what was largely a blue collar area to a more middle class population. However, I understand the evidence of the two planners, Mr Smith and Mr Burns, to suggest that the change is more or less confined to the area so far covered by the completion of what is described as stage 1 of the Westwood redevelopment, and the impact on the locality as a whole does not at this stage seem great.
The conclusion expressed by Mr Smith in his report is as follows:
“The statistical data demonstrates that the population resident in the locality
-is declining in number
-demonstrates a high dependency ratio
-has a low level of vehicle ownership and is likely to be dependent upon public transport
-has low levels of household income
-occupies rental accommodation
-demonstrates an above average level of unemployment
-is likely to change markedly over the next few years
The data shows some impact arising from the Westwood development project in terms of employment type and household ownership. The real impact of these changes is not expected to be evident until the 2006 census.”
Existing licensed outlets
Apart from the Regency Tavern there are four other hotels which are in a position to service residents of the locality. They are all positioned on one side or other of roads at the perimeter of the locality.
The Finsbury Hotel fronts Hanson Road on its west side, a short distance north of the Westfield Shopping Centre.
The Mansfield Park Hotel is on the southern side of Grand Junction Road, towards the north-western corner of the locality.
The two other hotels front Churchill Road on its western side. They are the Albion Hotel and Reepham Hotel.
All four hotels have drive-in bottle departments. It was common ground on the hearing of the application in the Licensing Court that the range and accessibility of stock available in the bottle departments of the hotels was such, that if they were the only outlets to be considered for the purposes of s 58(2) of the Act, the appellants would satisfy the onus imposed by that section.
Given that concession, attention focused on the two existing retail liquor stores situated within the locality. They are both conducted by Liquorland.
One of them is the Liquorland store located within the Arndale Shopping Centre.
The other is the Liquorland Mansfield Park, which fronts Hanson Road roughly mid-way between its intersection with Torrens Road to the south and Grand Junction Road to the north.
As to those two outlets, the Licensing Court judge in his reasons for decision commended:
“The evidence before me as to their range of liquor is perfectly clear. Both stock a rather limited range of wines, particularly and generally of commercial quality and price. One of the questions before me is whether a significant section of the population in the locality reasonably want better (in other words the present liquor supply is inadequate).”
He further commented:
“This is a case based on range of liquor rather than reasonable complaints as to distance, parking and so on, which is common in a lot of other cases. I find, on the evidence that apart from liquor range, none of these people [the need witnesses] can have valid complaints about other factors affecting their ability to get liquor. Some mention difficulties but objectively they amount to very little. Indeed this population has the benefit of a very large shopping centre and can ‘one stop shop’ if they so desire albeit within ordinary shopping hours. The question really is whether these people’s demand for liquor is (rangewise) inadequately catered for by the existing licensed premises.”
There was much evidence as to the range of liquor available from the two Liquorland bottle shops.
Mr Hobbs had visited both of them on more than one occasion and prepared some notes as to the range of liquor, particularly table wine, available at each. He suggested that the range available from both shops compared unfavourably with the stock list proposed for the subject premises.
Furthermore, several of the so-called “need” witnesses spoke of their dissatisfaction with some aspects of the range of liquor available at the Liquorland stores.
Neither Liquorland store stocked many, if any, table wines in the $15 to $30 range, which was a range which would be well covered by the lines which the appellant proposed to stock.
The witness Mr Ellyard explained the policy of Liquorland in stocking its stores. One of his responsibilities is to monitor the range of liquor and the stock of liquor at all of the South Australian Liquorland stores.
He said that the company surveyed the stock movements in each store every 13 weeks. He said:
“We go through and survey them and we work out whether that line is selling or not selling and then we hold those lines over for another 13 weeks, so every six months or every 26 weeks lines were evaluated whether they stay or they move on.”
He gave examples of Liquorland stores where there had been substantial variations in the range of stock effected over a relatively short period of time, in order to cope with changes in demand.
He said that so far as the two stores now in question are concerned, the range of liquor offered has varied over a period of time in response to the monitoring process.
The effect of his evidence was that if, for example, the Westwood development gave rise to a change in the demand at the two shops within the locality, further changes would be made in the stock to meet the changed demand.
So far as the Liquorland store located in the Arndale Shopping Centre is concerned, Liquorland was, at the time of the hearing in the Licensing Court, in the process of relocating it to another position in the centre where there would be more space.
In response to a direct question by the Licensing Court judge as to why there was not a wide range of liquor available at the Arndale store, Mr Ellyard’s evidence was:
“We tailor our range to suit the demands that are there on the day and it’s a situation of ensuring that we have quantity of the right products and not a little bit of everything.”
The need witnesses
The appellants called some eight witnesses said to be representative of those members of the public who have recourse to liquor outlets in the locality to satisfy their demand for packaged liquor.
Before dealing with their evidence, I repeat observations which I made in Sailmaster Tavern v Nemo Nominees Pty Ltd:[1]
“… the finding of a relevant need … 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, …”
[1] Supreme Court SA, Cox, Perry and Lander JJ, 20 October 1995 (unreported) No S5266 at pages 7-8.
In Liquorland(Australia) Pty Ltd v Hurley’s Arkaba Hotel Pty Ltd and Ors[2] I said:
“Although it is perfectly proper for the Licensing Court to take into account voiced demand or preferences by local residents, too much can be made of evidence of that kind.”
[2] (2001) 80 SASR 59 at 74 [107].
In Harding Hotels v Jatadd,[3] Doyle CJ observed:
“[21] This Court has previously referred to the desirability of the Licensing Court having regard to objective features of the locality, the makeup of the population and the Court’s own expertise, when assessing the demand for liquor, and not paying undue regard to evidence of demand from witnesses. This is because of the way in which the witnesses can be hand-picked, and because of the subjective nature of their evidence: see, for example, Liquorland (Australia) Pty Ltd v Hurley’s Arkaba Hotel Pty Ltd.[4] On the other hand, the calling of witnesses from the locality is a permissible means of proving that the public demand for liquor is not adequately catered for by existing premises in the locality. Perhaps the main point to emphasise is the need to pay careful attention to the objective features of the locality, and to the makeup of the local population, when considering whether the need witnesses are representative of a significant part of the public in the locality.”
[3] (2001) 81 SASR 222 at 227 [21]. See also Mandamo Pty Ltd and Anor v Crystalcorp Developments Pty Ltd (unreported) [2004] SASC 193 per Anderson J at [15]-[17] inclusive.
[4] Supra.

Turning to the need witnesses called by the appellants, two of them, Mr Murray and Mr Neary, regularly play golf at the Regency Park Golf Course. They both live near liquor outlets from which, apparently with little or no inconvenience, they were able to satisfy their requirements.
Another witness, Ms Thornton, lived at Dry Creek and worked in the city. One of her tasks was to purchase liquor for her employer. She regularly did so on a Saturday morning from Parafield Discount Liquor at Parafield. She described the proposed new store as a facility which would be very convenient to her. As Mr Beazley QC pointed out in argument, in her regular commuting to and from work she passed a number of well-stocked liquor stores.
Mr O’Reilly, a lecturer at Regency Park Hotel School, lives at Ingle Farm and is able to buy his liquor requirements at the Ingle Farm Liquorland store, although he spoke of the desirability of having a liquor store near to his place of work. His evidence, insofar as it related to his own personal requirements, made little or no contribution to the appellants’ case on need.
He stated, however, that there were 7,000 students at the Regency TAFE, of which 2,000 or 3,000 were in the Hotel School. Some students and some lecturers patronised the Regency Tavern. The inference was that they might well make use of the proposed facility.
However, such an inference was, to say the least, speculative. There was very little evidence-
Ÿas to the extent of the demand within the locality by lecturers and students;
Ÿas to the manner in which whatever demand the lecturers and students had, was being met; and
Ÿwhether it was conveniently met elsewhere.
The remaining four need witnesses were local residents who lived within close proximity to the proposed store. It is not surprising that they gave evidence that it would be more convenient to purchase liquor from a store which was near at hand. Overall, their needs were modest. Importantly, their evidence did not support the view that in satisfying their present needs, they were put to any hardship or even inconvenience.
The test under s 58(2) of the Act
The Court must consider whether the existing licensed premises “do not adequately cater for the public demand for liquor”.
In Woolies Liquor Stores Pty Ltd v Carleton Investments Pty Ltd and Ors,[5] Doyle CJ, with whose judgment Millhouse and Nyland JJ agreed, said:
“Those words suggest to me that the court is required to consider the accessibility of the existing premises to the public in the locality (matters such as distance, forms of transport available, time taken to get to existing premises and so on); the availability at the existing premises of the range of liquor demanded by the public, the standard of the existing premises and of the service provided there, and the existing shopping patterns and habits of the public to the extent that they bear on the accessibility of the existing premises. There may well be other matters, but these seem to me to be the matters most relevant in considering whether existing premises adequately cater for the public demand for liquor.
… the Licensing Court is to apply contemporary standards in deciding what distances one could reasonably expect customers to travel to obtain liquor, in deciding how much time one could reasonably expect them to spend getting to a liquor outlet, in deciding the amount of inconvenience that one could expect them to accept if, as will often be the case, a liquor outlet is not available at the place where they prefer to do most of their shopping, and in deciding the range of liquor and level of service that it is reasonable for them to expect. The court is required to determine not just what the public in the relevant locality want. If, whatever the public may want, there are existing premises that are capable of catering for the public demand for liquor, the court must decide, by reference to contemporary standards, whether, if the public are to satisfy their demand at those premises, it can be said that their demand is adequately catered for.
As was the case under s 22(2) of the Licensing Act, and s 38(1) of the 1985 Act, mere inconvenience in getting liquor from an existing outlet is not enough to justify the grant of a new licence. Nor is a mere preference to shop at a particular place, or a preference for ‘one-stop shopping’ enough to establish that existing premises do not adequately cater for the public demand. The fact that the public wish to purchase liquor at a proposed new outlet, or would prefer to be able to purchase their liquor at that outlet, does not of itself establish that existing premises do not adequately cater for the public demand. The court is required to assess that wish or preference by reference to contemporary standards to determine whether, if the demand for liquor is to be met at existing premises, it can be said that those premises do adequately cater for the public demand.”
[5] (1998) 73 SASR 6 at 11.
In this case, the aspect of the public demand for liquor which was central to the case as presented by the appellants focused on the range of liquor available from the other outlets, more particularly the respondent’s two liquor stores.
Insofar as some of the need witnesses spoke in disparaging terms of the range of bottled wine available from those stores, in the main they were witnesses who were living outside of the locality, who were meeting their requirements without significant inconvenience from stores closer to where they lived or work. Evidence from witnesses in that category could not take the appellants’ case very far.[6]
[6] As to the relevance of licensed premises outside the locality, see Woolies Liquor Stores Pty Ltd v Seaford Rise Tavern and Ors (2000) 76 SASR 290 per Doyle CJ at 295 and the cases there cited.
The evidence of Mr Ellyard suggests that there is no reason to suppose that the range of stock at the two Liquorland stores in question was not adequate to meet whatever genuine demand there is within the locality. The nature of the respondent’s general policy as to the stocking of their stores, and the manner in which Liquorland endeavours to keep pace with any changes in the demand, suggests that there is unlikely to be any substantial unmet demand for liquor outside the range which they provide.
I had the impression that the appellants may have attempted to make too much of the Westwood redevelopment. Clearly, that redevelopment is still in its infancy, and there is a long way to go before it will be completed. My reading of the evidence of the two planning experts who were called suggests that any impact which the development to date might have had on the demographics of the locality, is marginal.
Mr Firth for the appellants complained that the Licensing Court judge failed to make the necessary findings of fact to justify his conclusions; failed to place sufficient weight on the “demographic” evidence rather than relying on the oral evidence of “need” witnesses; did not give proper weight to the “need” witnesses; and took too narrow a view of the extent of the relevant “public” for the purposes of s 58(2).
It is true that, with respect to him, the Licensing Court judge’s treatment of the evidence and of the relevant issues was somewhat superficial.
In deference to Mr Firth’s submissions, I have read the whole of the evidence and perused all of the exhibits.
Neither party suggested that there were any serious issues as to credit which would put me at a disadvantage, compared with the Licensing Court judge, in evaluating the evidence for myself.
My own assessment of the evidence would lead me to the same view as that reached by the Licensing Court judge. The evidence of unmet demand was expressed in terms which did not extend beyond matters of mere convenience.
The Licensing Court judge correctly found that the appellants failed to satisfy the onus posed by s 58(2) of the Act.
Before parting with the matter, I should say that I regard one feature of the appellants’ application as posing a potential difficulty.
Given the relatively small size of the proposed premises, and the number of lines which it was intended to stock, the number of bottles or casks of each line held in the shop would be small. Mr Hobbs’ evidence was that there would be six bottles of each of the red wines, four bottles of each of the white wines, three of each of the spirits, and three of each of the casks.
Insofar as it was proposed that back-up stock would be stored at the Regency Tavern, if at any time in the future either the tavern or the proposed bottle shop operation came under separate ownership or control, a problem might well arise in maintaining an adequate depth of stock.
This consideration would be a relevant matter to be addressed if the case was otherwise made out, in the context of the exercise of the discretion under s 53(1) of the Act.
I would dismiss the appeal.
VANSTONE J: I agree that the appeal should be dismissed and with the reasons given by Perry J.