Lower Hutt Liquormart Limited v Shady Lady Lighting Limited
[2018] NZHC 3100
•28 November 2018
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2018-485-494
[2018] NZHC 3100
BETWEEN LOWER HUTT LIQUORMART LIMITED
Appellant
AND
SHADY LADY LIGHTING LIMITED
Respondent
Hearing: 15 October 2018 Counsel:
J H Wiles for the Appellant
A G Sherriff and L E S Grey for the Respondent
Judgment:
28 November 2018
JUDGMENT OF CHURCHMAN J
Introduction
[1] Situated on the edge of Lower Hutt’s commercial district, Rutherford Street runs parallel to the Hutt River. The riverbank area, which plays host to a market on weekends, is popular with joggers and dogwalkers by day, but attracts a somewhat less salubrious crowd by night.
[2] Lower Hutt Liquormart Limited (LHL), trading as Blackbull Liquor, applied for and was granted an off-licence at 1 Rutherford Street by the Hutt City District Licensing Committee (the DLC) under s 100 of the Sale and Supply of Alcohol Act 2012 (the Act). On appeal to the Alcohol Regulatory and Licensing Authority (the Authority), this decision was reversed.
[3] LHL challenges the Authority’s decision. Along with the respondents’ cross- appeal, the following five principal issues arise:
LOWER HUTT LIQUORMART LIMITED v SHADY LADY LIGHTING LIMITED [2018] NZHC 3100
[28 November 2018]
(a)Are the proposed premises within a vulnerable area?
(b)Is the applicant a suitable person?
(c)Is the amenity and good order of the locality likely to be reduced by more than a minor extent?
(d)What are the legal tests to be applied to factual evidence and speculative evidence?
(e)Is there a requirement to consider whether granting an application will benefit the community as a whole?
[4] A further issue arises as to the standard of proof to be applied to alcohol licensing matters.
[5] This judgment will first outline the statutory framework for the regulation of alcohol licences. The decisions of both the DLC and the Authority will next be briefly traversed, following which the grounds for this appeal will be set out, along with the principles governing such an appeal and the standard of proof required. The discussion will then address the issues raised by this appeal under the headings of vulnerability, suitability, amenity and good order, the legal tests for factual and speculative evidence, and benefit to the community as a whole.
Sale and Supply of Alcohol Act 2012
[6] The Act was implemented in response to a report by the Law Commission, Alcohol in our Lives: Curbing the Harm published in 2010 which followed on from a 2009 Law Commission report, Alcohol in our Lives: An Issues paper on the Reform of New Zealand’s Liquor Laws.1 The Legislature recognised excessive drinking and intoxication was contributing to New Zealand’s crime rate, injury rate and road crash statistics and was affecting the nation’s overall level of health. While it was
1 Law Commission Alcohol in our Lives: An Issues paper on the Reform of New Zealand’s Liquor Laws (NZLC IP15, 2009); Law Commission Alcohol in our Lives: Curbing the Harm: A Report on the Review of the Regulatory Framework for the Sale and Supply (NZLC R114, 2010).
acknowledged that regulation alone would not turn New Zealand’s excessive drinking culture around, it was said that:2
Legislative settings can, however, support a safe and responsible drinking culture through controls on the availability of alcohol, requirements for safe and responsible licensed premises, and the management of alcohol in public.
[7] Included in the Act was a new purpose provision, no such section having been in the repealed Sale of Liquor Act 1989 (the 1989 Act). This section, which makes it plain that the Act is intended to reform the law and to introduce a new system of control of not only the sale and supply of alcohol but also of its consumption, provides as follows:
3Purpose
(1)The purpose of Parts 1 to 3 and the schedules of this Act is, for the benefit of the community as a whole,—
(a)to put in place a new system of control over the sale and supply of alcohol, with the characteristics stated in subsection (2); and
(b)to reform more generally the law relating to the sale, supply, and consumption of alcohol so that its effect and administration help to achieve the object of this Act.
(2)The characteristics of the new system are that—
(a)it is reasonable; and
(b)its administration helps to achieve the object of this Act.
[8] Major changes were also introduced in the object section. Section 4(1) of the 1989 Act stated that its object was “to establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse”. Whereas the 1989 Act was concerned to reduce liquor “abuse”, the concept of “harm” is central to the new Act and is very broadly defined.3 The Act’s two objects are as follows:
2 Alcohol Reform Bill 2010 (236-1) (explanatory note) at 1.
3 The definition of alcohol-related harm contained in s 5 of the Act closely mirrors that of s 4(2).
4Object
(1)The object of this Act is that—
(a)the sale, supply, and consumption of alcohol should be undertaken safely and responsibly; and
(b)the harm caused by the excessive or inappropriate consumption of alcohol should be minimised.
(2)For the purposes of subsection (1), the harm caused by the excessive or inappropriate consumption of alcohol includes—
(a)any crime, damage, death, disease, disorderly behaviour, illness, or injury, directly or indirectly caused, or directly or indirectly contributed to, by the excessive or inappropriate consumption of alcohol; and
(b)any harm to society generally or the community, directly or indirectly caused, or directly or indirectly contributed to, by any crime, damage, death, disease, disorderly behaviour, illness, or injury of a kind described in paragraph (a).
[9]Summarising both ss 3 and 4 of the Act, the Court of Appeal said:4
[23] The new Sale and Supply of Alcohol Act signals a new community- oriented approach incorporating both purpose and object provisions. A key purpose of the Act is to put in place, for the benefit of the community as a whole, a new system of control over the sale and supply of alcohol. The characteristics of the new system are that it is reasonable and its administration helps to achieve the object of the Act.
[24]Section 4(1) provides that the object of the Act is that:
(a)the sale, supply, and consumption of alcohol should be undertaken safely and responsibly; and
(b)the harm caused by the excessive or inappropriate consumption of alcohol should be minimised.
[25] Unlike s 35 of the Sale of Liquor Act, the list of criteria which must now be considered in applications for off-licences includes as the first criterion the object of the Act.
[10] Section 105 of the Act sets out the criteria for consideration in respect of licences:
4 J & C Vaudrey Ltd v Canterbury Medical Officer of Health [2016] NZCA 539, [2017] 2 NZLR 334 (citations omitted).
105 Criteria for issue of licences
(1)In deciding whether to issue a licence, the licensing authority or the licensing committee concerned must have regard to the following matters:
(a)the object of this Act:
(b)the suitability of the applicant:
(c)any relevant local alcohol policy:
(d)the days on which and the hours during which the applicant proposes to sell alcohol:
(e)the design and layout of any proposed premises:
(f)whether the applicant is engaged in, or proposes on the premises to engage in, the sale of goods other than alcohol, low-alcohol refreshments, non-alcoholic refreshments, and food, and if so, which goods:
(g)whether the applicant is engaged in, or proposes on the premises to engage in, the provision of services other than those directly related to the sale of alcohol, low-alcohol refreshments, non-alcoholic refreshments, and food, and if so, which services:
(h)whether (in its opinion) the amenity and good order of the locality would be likely to be reduced, to more than a minor extent, by the effects of the issue of the licence:
(i)whether (in its opinion) the amenity and good order of the locality are already so badly affected by the effects of the issue of existing licences that—
(i)they would be unlikely to be reduced further (or would be likely to be reduced further to only a minor extent) by the effects of the issue of the licence; but
(ii)it is nevertheless desirable not to issue any further licences:
(j)whether the applicant has appropriate systems, staff, and training to comply with the law:
(k)any matters dealt with in any report from the Police, an inspector, or a Medical Officer of Health made under section 103.
(2)The authority or committee must not take into account any prejudicial effect that the issue of the licence may have on the business conducted pursuant to any other licence.
[11] As to the amenity and good order of the locality, s 106 sets out the matters to which regard must be had in reaching the opinion required by s 105(1)(h), relevantly providing as follows:
106Considering effects of issue or renewal of licence on amenity and good order of locality
(1)In forming for the purposes of section 105(1)(h) an opinion on whether the amenity and good order of a locality would be likely to be reduced, by more than a minor extent, by the effects of the issue of a licence, the licensing authority or a licensing committee must have regard to—
(a)the following matters (as they relate to the locality):
(i)current, and possible future, noise levels:
(ii)current, and possible future, levels of nuisance and vandalism:
(iii)the number of premises for which licences of the kind concerned are already held; and
(b)the extent to which the following purposes are compatible:
(i)the purposes for which land near the premises concerned is used:
(ii)the purposes for which those premises will be used if the licence is issued.
Decision of Hutt City DLC
[12] A hearing was held before the DLC on 20 October 2017. Letters of objection and reports, along with evidence by way of written brief and oral evidence, from the following people were considered:
(a)Mr Sharma, for LHL;
(b)Mr Mead, the Licensing Inspector for Hutt City Council;
(c)Sergeant Benge, Alcohol Harm Reduction Officer, representing Wellington District Police;
(d)Dr Palmer and Dr McKenzie, for the Medical Officer of Health (MOH) for the Hutt Valley District Health Board;
(e)Mr Smith, the owner of Shady Lady Lighting Limited (SLL), which is located next door to the proposed site; and
(f)Ms Emms, Mr Patel and Ms McKone, all local residents.
[13] Mr Govina, an Environmental Health Manager, appeared but made no submissions that were referred to in the decision of the DLC.
[14] The DLC noted that Mr Sharma and Mr Singh, the directors of LHL, jointly own and operate eight other off-licences in New Zealand in Upper Hutt, Porirua, Paraparaumu, Whanganui (three stores), Whanganui East and Hawera. They both have previous convictions from over six years ago but, while they would oversee the store, neither would manage it, instead employing suitable managers. Mr Sharma gave evidence before the DLC that LHL would compete by selling international wines that were not available in supermarkets, along with craft beers and top shelf spirits. While the store would stock an entire range of Ready to Drink beverages (RTDs), they would not be on display. There would be no external advertising outside the store. The proposed market was people working in the Hutt or Wellington who were going home, the proposed site being in a good strategic location on a major distributor road.
[15] LHL’s application for an off-licence was opposed by the MOH on various grounds, including the proliferation of off-licences in the area and that the issue of the licence would be likely to reduce the amenity and good order of the locality by more than a minor extent.
[16] Public notification resulted in ten objections from neighbouring businesses and residences, with objectors raising concerns as to the proposed off-licence’s proximity to sensitive sites,5 youth drinking at the riverbank, an increase in the incidence of crime, and the availability of liquor from other nearby off-licences.
5 In the immediate vicinity of the proposed site was a proposed development containing a birthing centre, early childhood centre and a medical centre (which is now open), and a retirement village. A college for Year 7-13 students is 450m away.
[17] Despite these objections, in a decision dated 9 November 2017, the DLC concluded that it was satisfied as to the matters to which it must have regard as set out in ss 105 and 106 of the Act, granting LHL an off-licence, subject to the following conditions:
(a)the trading hours for the sale and supply of alcohol at the premises will be from 9.00 am to 10.00 pm daily;
(b)staff/managers will have a clear view of all the premises from either behind the counter, mirror or CCTV camera;
(c)no external advertisements will occur on the premises;
(d)no RTDs will be on the floor display, only in the chiller;
(e)no single sales of RTD beverages will occur from the premises;
(f)no slushy RTD drinks are to be sold from the premises;
(g)no price reduction/discount of more than 25% will be given;
(h)application for licence renewal can be made in one year; and
(i)that a well-run off-licence such as LHL should not see any increase in breaches of the Alcohol-Free Zones or disorder.
Decision of the Alcohol Regulatory and Licensing Authority
[18] On 20 November 2017, SLL and Mr Patel filed separate appeals with the Authority against the decision of the DLC to grant the off-licence, arguing that:
(a)it was contrary to both the object and the purpose of the Act;
(b)it failed to take relevant evidence into account and wrongly held some evidence to be speculative;
(c)it did not consider the number of premises for which licences are already held and the purposes for which land near the premises concerned is used;
(d)it did not identify how granting the application would promote the object of the Act; and
(e)the licence was granted in reliance upon ambiguous, meaningless or unenforceable undertakings and conditions.
[19] The Authority found that the DLC, in not forming an opinion about the effect of the issue of the licence on the amenity and good order of the locality, erred.6 However, it determined that it was not required to take the additional step of evaluating the factors in s 105(1)(b)-(k) of the Act identified as relevant against the purpose of the Act and to ask if the Authority is satisfied that the grant of an off-licence will benefit the community as a whole. It stated that:7
While the criteria for the issue of licences are not to be interpreted in any narrow or exhaustive sense, it would not be correct to take this to mean that the words “for the benefit of the community as a whole” are to be imported from s 3 into the list of matters in s 105 of the Act to which a DLC or the Authority must have regard.
[20] The Authority said that the approach to s 105 is clear and can be applied without reading the statutory purpose into it as if it were an additional mandatory consideration.8 The purpose of the Act reflects Parliament’s rationale for the Act and, while it is a tenet of the purposive approach to statutory interpretation that where possible the Act should be interpreted to give effect to its purpose, there is no ambiguity as to the meaning of the criteria in s 105.9
[21] At [127], the Authority held that the vulnerability of the area raises the threshold of suitability in terms of whether the grant of the licence will result in an increase in alcohol-related harm. It then said:
6 Shady Lady Lighting Ltd v Lower Hutt Liquormart Ltd [2018] NZARLA 198-199 at [69]-[70].
7 At [72].
8 At [74].
9 At [75].
[128] That the issue of the licence is compatible with the object of the Act is contrary to the evidence before the DLC, particularly that of Dr Palmer who gave evidence that the area in which the premises are proposed to be located are [sic] in an area that is in the high risk category in respect of health harm from the inappropriate consumption of alcohol. His evidence goes to the vulnerability of the locality. The Authority accepts that a further bottle store will not help minimise the alcohol-related harm already existing in the immediate locality.
[22] Given the vulnerability of the locality, the Authority concluded that the issue of the licence, even with the undertakings made and conditions imposed, was not capable of meeting the object of the Act.10 It allowed the appeal, declining to grant LHL an off-licence (the decision).11
Grounds of appeal
[23] LHL says that, in arriving at its decision, the Authority consistently emphasised evidence that did not prove, to the legislative requirements, that the area is at risk and vulnerable, and that the issue of an alcohol licence to the applicant is incompatible with the Act. It says that the Authority erred in stating that the DLC did not reach an opinion on the amenity and good order of the locality in which the proposed premises were to be situated. Further, it claims the Authority confused, and thereby misapplied, the legal tests required for factual and speculative evidence.
[24] LHL claims that the decision is erroneous in both fact and law, contending the Authority wrongly exercised its discretion in allowing the appeal in the following respects:
(a)issuing the licence was capable of meeting the object of the Act;
(b)issuing the licence was not likely to reduce the amenity and good order of the locality by more than a minor extent;
(c)no evidence was presented by the respondents justifying adverse findings to the contrary;
10 At [131].
11 At [132].
(d)no evidence to the required standard was presented by any other witness at the hearing before the DLC;
(e)there was no reason to find that the DLC did not have sufficient regard to the s 105 of the Act criteria;
(f)there was no evidence to the required standard to justify a conclusion that granting a licence would not help minimise alcohol-related harm and/or increase alcohol-related harm; and
(g)the Authority’s findings as to vulnerability at [127]-[128] are contrary to fact and applicable law.
[25]LHL’s appeal therefore raises the following four principal questions:
(a)Was the Authority entitled the reach the conclusion on the evidence before it that the proposed premises was within a vulnerable area?
(b)Was the Authority entitled to reach the conclusion on the evidence before it that the applicant was not a suitable person?
(c)Was the Authority entitled to reach the conclusions it did on the evidence before it as to the amenity and good order of the locality in which the proposed premises were to be situated?
(d)Did the Authority misapply the legal tests to be applied to factual evidence and speculative evidence?
[26] The first respondent, SLL, also appeals against the Authority’s refusal to evaluate the evidence against the purpose of the Act by asking the question, “Will the grant of this licence benefit the community as a whole?”. It is argued that the Authority’s conclusion is an error of law in that it is contrary to s 5 of the Interpretation Act 1999 and s 3 of the Act.
[27]This is said to give rise to the question:
In determining whether or not to grant a new off-licence, is a DLC or the Authority required, after completing its evaluation of the evidence against the criteria contained in s 105, and having formed any necessary opinions under ss 105 and 106, and in addition to standing back and considering whether or not granting the application will be contrary to the object in s 4 of the Act, to consider whether or not granting the application will be “for the benefit of the community as a whole” as pursuant to s 3 of the Act?
Appeal to the High Court
[28] Section 162 of the Act, which provides for appeals against a decision of the Authority to the High Court, limits the right of appeal to points of law only. In Christchurch Medical Officer of Health v J & G Vaudrey Ltd, Gendall J stated:12
[A]n appeal pursuant to s 162 of the Act … is limited to points of law alone. This court will not interfere with a decision unless it can be shown that the decision maker erred in law, accounted for irrelevant matters, failed to account for relevant matters, or was plainly wrong. Factual challenges, whether raised squarely or obliquely, will not be entertained on appeals of this kind, save to the extent they are capable of establishing that the decision appealed is plainly wrong. This is necessarily a very high threshold.
[29] The Court cannot draw its own conclusions on the evidence or substitute its view for that of the Authority, unless it concludes that the Authority made a factual finding that was so unsupportable and so untenable as to amount to an error of law.13 Conclusions open to the Authority are not challengeable in the Court.
[30] The appellant bears the onus of satisfying the appellate court that it should differ from the decision and it is only if the appellate court considers that the decision is wrong that it is justified in interfering with it.14
Standard of proof
[31] In the first application to be considered by the Authority under s 105, the Authority said:15
[32] Section 105(1) of the Act commences with the mandatory admonition that the Authority is required to have regard to the matters set out in that
12 Christchurch Medical Officer of Health v J & G Vaudrey Ltd [2015] NZHC 2749, [2016] 2 NZLR 382 at [17].
13 Auckland Medical Officer of Health v Birthcare Auckland Ltd [2015] NZHC 2689, [2016] NZAR 287 at [87].
14 Austin, Nicols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [4].
15 Re RS Dhillon Ltd [2013] NZARLA PH 920.
subsection. This means that each of those criteria must be considered. If the applicant fails to give evidence as to some of those matters which are only within its knowledge, then the Authority cannot have regard to those matters. An applicant for an off-licence must prove its case. If it fails to do so, then the Authority is unable to grant the application. The standard of proof is the civil standard, namely on the balance of probabilities.
[32] The onus and standard of proof required has since been the focus of judicial discussion, and is at issue in this case.
[33] Counsel for LHL, Mr Wiles, relying on the case of Triveni Puri Ltd v Commissioner of Police, in which Kós J stated that the standard of proof must be very close to that of a criminal prosecution, submits that the DLC and the Authority must apply a sufficiently demanding evidential test when determining if an application should be declined.16
[34] Counsel for the respondents, Mr Sherriff, however, submits that reliance in this instance on the Triveni Puri Ltd case is misplaced and wrong as that case concerned a licence the Authority had refused to renew because it had found the grounds of an enforcement application for cancellation proven. That appeal was brought pursuant to s 138 of the 1989 Act, a provision that is not of relevance to this case, s 139 being the equivalent provision to s 162 of the Act. Those features, it is said, distinguish that case from this one.
[35] Mr Sherriff submits that the law as to the standard of proof in civil proceedings where the consequence involves some form of penal sanction, which enforcement proceedings arguably do, remains that of Z v Dental Complaints Assessment Committee, in which McGrath J said:17
[102] The civil standard has been flexibly applied in civil proceedings no matter how serious the conduct that is alleged. In New Zealand it has been emphasised that no intermediate standard of proof exists, between the criminal and civil standards, for application in certain types of civil case. Balance of probabilities still simply means more probable than not. Allowing the civil standard to be applied flexibly has not meant that the degree of probability required to meet this standard changes in serious cases. Rather, the civil standard is flexibly applied because it accommodates serious allegations
16 Triveni Puri Ltd v Commissioner of Police [2012] NZHC 2913 at [24]-[25].
17 Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1 (citations omitted).
through the natural tendency to require stronger evidence before being satisfied to the balance of probabilities standard.
[36] There is no such standard of proof as one that is “very close to that of a criminal prosecution”, Mr Sherriff submits, either for enforcement proceedings under the Act or for first time licence applications. He submits that the nuanced civil standard applies only where there is a penal sanction such as cancellation or suspension and is not relevant to applications for a new licence in currently unlicensed premises. A point has been reached where the orthodox judicial consensus is that notions of standard of proof and onus of proof have little or no relevance and application to the inquisitorial evaluative decision-making process under this Act when a DLC or the Authority is considering whether or not to grant a new off-licence.18
[37] A review of the case law Mr Sherriff has brought to the attention of the Court supports his submissions on this point. In Re Venus NZ Ltd, Heath J said:19
There is an underlying assumption … that the Authority will exercise an inquisitorial role in determining the appropriateness of the grant of a particular licence having regard to all relevant factors. Although the 2012 Act does not express the powers of the Authority in that way, the breadth of its functions, (which go beyond judicial determinations) suggests that the application of rules involving onus of proof may not be appropriate…
[38] Likewise, in Medical Officer of Health (Wellington Region) v Lion Liquor Retail Ltd, Clark J said:20
The breadth of the Authority’s functions suggests the application of rules involving onus of proof may be inappropriate. Similarly there is no onus on the reporting agencies to prove the application should not be granted.
[39] It is my view that, given this is a case brought under s 162 of the Act and concerns a decision of the Authority to decline a new off-licence, the case law clearly indicates that rules as to onus of proof will be of little relevance.
18 Re Venus NZ Ltd [2015] NZHC 1377, [2015] NZAR 1315 at [52]-[61]; Auckland Medical Officer of Health v Birthcare Auckland Ltd, above n 13, at [52] and [113]-[114]; Christchurch Medical Officer of Health v J & G Vaudrey Ltd, above n 12, at [53]-[56]; Medical Officer of Health (Wellington Region) v Lion Liquor Retail Ltd [2018] NZHC 1123, [2018] NZAR 882 at [46(d)].
19 Re Venus NZ Ltd, above n 18, at [60] (citation omitted).
20 Medical Officer of Health (Wellington Region) v Lion Liquor Retail Ltd, above n 18, at [46(d)] (citations omitted).
Discussion
Vulnerability of the area
[40] The issue for determination here is whether the Authority’s conclusion on the vulnerability issue at [128] of the decision, quoted above, was open to it as an evaluative decision maker on the evidence before it.
[41] Mr Wiles submits that the evidence adduced to support the position of the MOH, one of the required statutory reporting bodies, that the proposed site of LHL’s liquor licence was located in a highly vulnerable area, did not demonstrate or prove this to the Act’s requirements. He argues that, on the questions that fell within the purview and expertise of the MOH, there was no factual evidence that demonstrated LHL should not be granted a licence. Mr Wiles submits that the Authority was incorrect in the inferences it drew from the evidence and that this is an error of law.
[42] Mr Sherriff submits that the conclusion reached by the Authority as to vulnerability was inevitable and the only reasonable conclusion available, having regard to the weight, cogency and volume of evidence.
[43] Mr Wiles’ first point of concern is that the MOH gave no evidence of vulnerability from emergency admissions data from Hutt Central Hospital. However, as to hospital admissions, the transcript of evidence before the DLC records that Dr Palmer said:
Unfortunately, Hutt Hospital has not collected ED department statistics so they are now required to and they have started that but it is too early to look at the statistics.
[44] He went on to say that “considerable progress” had been made in that regard. He also produced an attachment which contained the following paragraph:
The [MOH] also notes that the area unit where this premises is situated (Hutt Central) has high levels of alcohol related health harm. The health data relates to hospital discharges in the greater Wellington region … corresponding with residents who live in the area surrounding this proposed off-licence, and has been collated over seven financial years from 1 July 2009 to 30 June 2016. This data shows that admissions wholly attributable to alcohol (such as alcohol intoxication, alcohol dependency and alcoholic liver disease) for residents aged 15 years and over are in the top 10% highest for both numbers
and rates within the whole of the Wellington region and the numbers are the second highest of the Hutt City area units. …
[45] Therefore, it is my view that the MOH presented what evidence from emergency admissions data was available. This appears to have been the best that could be done in the circumstances.
[46] Mr Wiles’ second point of concern was that the MOH gave no evidence as to amenity and good order, this being accepted as the responsibility of the Police. However, while Dr Palmer stated in his brief of evidence that he regarded the Police as the lead reporting agency on this subject, he noted that the Police and the Licensing Inspector had not raised any amenity and good order concerns, and then said:
[70] … The location of the premises is adjacent to the riverbank area, an area associated with previous incidents of breaches of liquor bans and other incidents. It is noted that the licensing inspector’s report states that this was also a concern raised by the residents of Riverleigh Retirement Home.
[71] In the background paper supplied by Hutt City Council Officers for the Control of Liquor in Public Places Bylaw Review … it was stated that in the 6 months prior there had been a significant rise in incidents of public place drinking, which has been more noticeable in Central Lower Hutt.
[72] We are provided with the Safe City Ambassador Incident notifications for the area surrounding this proposed premises… The data shows an increasing trend of the number of incidents reported as follows:
July 2015 – June 2016
Property Damage: 13
Breach of Liquor Ban: 4 Disorderly Behaviour: 0
Antisocial Behaviour: 1
July 2016 – June 2017
Property Damage: 20Breach of Liquor Ban: 7 Disorderly Behaviour: 1
Antisocial Behaviour: 1
…
[73] The impact of an additional premises in proximity to an area with a trend of already increasing levels of incidents either directly or potentially associated with alcohol, needs to be considered. There is a risk that an additional premises adjacent to the affected area could further exacerbate the number of incidents, even with a bylaw to manage alcohol in public places.
[74] The impact on amenity and good order is not something that can be determined prospectively…
[47] A third concern raised by Mr Wiles was that the evidence concerning the “normalisation” issue was that collated by the Law Commission looking at the effect of supermarkets selling alcohol alongside groceries. In relation to normalisation, Dr Palmer referred to evidence from both research and the Law Commission. While the report from the Law Commission was looking at supermarkets, the key point of his evidence relating to this research was that the proposed premises is in an area deemed to be sensitive because of the early childhood centres and the new birthing centre.
[48] Mr Wiles’ next point was that the MOH’s primary concern in opposition to the licence was that customers from high risk areas would drive to LHL’s proposed premises to purchase their alcohol. It is my view that it is an unfair characterisation of Dr Palmer’s evidence to say this was his primary concern. While he did express concern about customers driving from high risk areas, his specialist advice was summed up in the following paragraph of his brief of evidence:
In formulating my specialist advice, I take into account the central location of the proposed liquor store and the ease of access by motor vehicle. Also, I base my advice on a good understanding of the alcohol literature and my experience in investigating the incidence and prevalence of local risk factors and local levels of alcohol-related harm. It is my considered opinion that this additional liquor store will lead to increases in excessive and inappropriate consumption of alcohol. I predict that these increases will not minimise alcohol-related harm either in Hutt Central or Boulcott, nor in the broader community that will be served by the liquor store. It [is] more likely that alcohol-related harm will increase specifically in the immediate locality and in the wider areas.
[49] A related concern of Mr Wiles was that the MOH stated that customers, who already had bottle stores in their locality, would drive past them so that they could purchase their alcohol from LHL’s bottle store. He cites the following paragraphs from the transcript:
THE CHAIR: So, you are suggesting to us that people are going to travel past existing bottle store premises in Naenae and Taita to purchase at this place on a regular basis?
DR PALMER: Well, most customers, I would imagine, would be – that would not be the sole purpose of their travel. Like, most of the supermarkets are in the Hutt Central area. People from even Naenae and Taita are going to be drawn into the Central Hutt to do their other shopping and purchasing their groceries from the supermarket. There just – I think it is really difficult to tell. I also asked Mr Smith about his thoughts on that.
[50]The transcript continues as follows:
THE CHAIR: Well, he said a significant number of his customers came from Wellington.
DR PALMER: Well, I am sure that there may be customers of this premise that will be from Upper Hutt or from Wellington or even possibly over in Porirua, just being strategically located to that main arterial route.
[51] Mr Wiles has, again, mischaracterised Dr Palmer’s evidence. His evidence of remote, driving customers, was contextualised by the centrality of the proposed location, which would attract passing customers, not consumers who drove past other stores deliberately to visit the proposed store.
[52] Mr Wiles’ next point of contention was that the MOH accepted that there is no evidence supportive of where people buy their alcohol. The relevant portions of the transcript to which he appears to point in support of this contention are as follows:
CR EDWARDS: … There is no evidence that can be presented that could say that this particular outlet, people travelling past it and potentially buying alcohol, are more likely to have come from high risk matrix areas, like Naenae South and Naenae North than low risk ones. There is no way that can be shown?
DR PALMER: No.
…
MR WILES: Dr Palmer, following on from some questionings from Madam Chair, it would appear then that you cannot say or speculate what proportion or percentage of customer, if any, are likely to come from high risk areas, such as Taita, Naenae or Moera, can you?
DR PALMER: No.
[53] Mr Sherriff, however, submits that Dr Palmer’s evidence was to the contrary, giving as an example of this the statement from his brief of evidence that, “Research from Day 2012 confirmed a shorter travel distance to the nearest off-licence resulted in higher levels of serious crime.” He also notes that the research (from New Zealand) relied upon by Dr Palmer was produced in full by Mr Smith and links proximity to outlets with alcohol-related harm and crime.
[54] It is my view that, while Dr Palmer did, in fact, accept that there is no specific evidence available as to where people in the Hutt buy their alcohol, or where
prospective customers for the proposed premises would come from, the lack of this evidence was not, on its own, such as to mean that the Authority was unable to conclude that the area was high-risk and vulnerable. Direct evidence not being available, Dr Palmer was entitled to draw on his experience and knowledge of the area as to what was likely to be the case.
[55] Mr Wiles seventh point of concern was that the MOH suggested that you cannot link alcohol-related harm to a specific licence, only that you can start to look at ways of measuring the harm. As to this causal-nexus argument, Dr Palmer stated, “It is impossible to identify a causal-nexus for a liquor store that does not exist.” It is hard to see the relevance of this point to the issue identified by Mr Wiles as to whether the area was a high-risk, vulnerable area. One specific licence causing the harm seems not to be the issue, it is the fact of yet another off-licence adding to the harm in an area already well-serviced by off-licences. As Dr Palmer said in his brief of evidence:
The above evidence about risk and vulnerability, the high levels of alcohol- related harm, and the object of the Act does bring into question the merit of even considering an additional liquor store in the central city.
[56] Mr Wiles’ eighth point of concern was that the MOH accepted that a primary driver of alcohol-related harm is the association with low price and density, relying upon the following passage from the transcript:
I would just like to comment that there is extensive international and New Zealand research evidence around the closer you are to an alcohol outlet the greater the hazardous drinking, the association with density and the link to low price. …
[57] Finally, Mr Wiles complained that while Dr Palmer said that the closing of the Mill, an off-licence in the area, had been a positive step contributing to the object of the Act, the Authority noted that his “evidence did not elaborate on this further”.21
[58] Dr Palmer, representing the MOH, is an expert in this field. He did not need to demonstrate or prove anything. His statutory role was to bring relevant evidence to the decision-maker. The Authority was entitled to rely upon his expert specialist conclusions. Based on the totality of the MOH evidence as to vulnerability, the
21 Shady Lady Lighting Ltd v Lower Hutt Liquormart Ltd, above n 6, at [99].
Authority was well within its discretionary evaluative boundaries to reach the conclusion that the area was high risk and vulnerable.
Suitability of the applicant
[59] The suitability of an applicant, which is a criterion required under s 105(1)(b) of the Act, had long been a pre-requisite to obtaining a licence to sell liquor under prior legislation. As long ago as 1998, Pankhurst J, describing the concept in relation to licensing, said the following:22
[T]he applicant for an on-licence must demonstrate his or her suitability. In other words what is required is a positive finding. That implies an onus upon the applicant to demonstrate suitability. Such suitability is not established in a vacuum but in the context of the particular case: for example the place, the intended business (here in a difficult central city location), the nature of the business itself, the hours of operation and the intended activities, provide the basis for the assessment of the individual.
[60] Holland J had earlier observed that suitability was a well understood concept and should be applied in a fact specific context,23 an approach which Dobson J more recently approved, saying:24
[30] I respectfully agree with Holland J’s practical observations to the effect that “suitability” is commonly used and is well understood so that it is unhelpful to draw on the way it may have been applied in different factual circumstances. Suitability is a relatively broad concept and, in the context of an assessment of an application under s 13 of the Act, it relates to the suitability of the applicant to be granted the privilege of an on-licence to dispense liquor. The decision-maker would run the risk of excluding matters that are relevant to the suitability of an applicant if the analysis of that criterion focused solely on the applicant’s proposals as to how the business is to operate. Although the weight to be given to individual components of the assessment of suitability will vary in each case, the decision-maker errs if it excludes indicators of an applicant’s suitability or unsuitability that are not reflected in the applicant’s proposal as to how the business will operate.
[61] In the decision, the Authority, in discussing the issue of the applicant’s suitability, quoted the following passage from Re Nischay’s Enterprises Ltd:25
22 Page v Police HC Christchurch AP 84/98, 24 July 1998 at 9.
23 Re Sheard [1996] 1 NZLR 751 at 755.
24 Police v Casino Bar (No 3) Ltd [2013] NZHC 44, [2013] NZAR 267 (citation omitted).
25 Shady Lady Lighting Ltd v Lower Hutt Liquormart Ltd, above n 6, at [126], quoting from Re Nischay’s Enterprises Ltd [2013] NZARLA 837 at [54].
Traditionally, [the test of suitability] has been interpreted as meaning whether or not an applicant will comply with the penal provisions of the Act. In fact, the test is much wider. To carry out the responsibilities that go with the holding of a licence includes whether or not liquor abuse issues are likely to arise. Thus, it includes the object of the Act as set out in s 4. The Sheard test is not simply about how a business is likely to operate in the future. It is dependent on an assessment of the more generalised factors referred to in the previous paragraph.26 It includes how a licensee will deal with liquor abuse issues that may arise from the establishment of the business.
[62] Mr Wiles submits that the applicant’s suitability was not challenged evidentially and the fact that the directors of LHL were associated with several other successful off-licences attested to their ability to minimise alcohol-related harm and attendant risks. He relies on Rational Transport Society Inc v New Zealand Transport Agency in which it was held that, “Appropriate means suitable and there is no need to place any gloss upon that word by incorporating that it be superior.”27
[63] Mr Wiles further submits that the Authority’s finding that the area was vulnerable, which was not accepted, should not have raised the threshold of suitability of the applicant and the Authority was incorrect at law to find that it did. The applicant was an appropriate person and is therefore suitable as envisaged by the Act.
[64] Mr Sherriff, however, frames this somewhat differently, as being an issue, rather, of whether or not an applicant’s engagement with the proposed community is relevant to suitability. He argues that it has long been established in alcohol licensing that an ability to relate to the community in which an applicant proposes to operate goes to suitability.28 The vulnerable aspects of a community and how an applicant proposes to respond are part of that suitability. As to the applicant’s suitability not having been challenged evidentially, Mr Sherriff disputes this, noting that Mr Sharma, the principal of LHL, was specifically cross-examined and challenged on this aspect of suitability and had, in fact, previously been refused an off-licence on suitability grounds through another company for failing to engage with the Johnsonville
26 i.e. the character and reputation of the applicant, its previous operation of premises, its proposals as to how the premises will operate, its honesty, its previous convictions, matters raised in reports from reporting agencies and whether the grant of the licence will result in the reduction or an increase in liquor abuse.
27 Rational Transport Society Inc v New Zealand Transport Agency [2012] NZRMA 298 (HC) at [45].
28 See, for instance, Re Nischay’s Enterprises Ltd, above n 25, at [50]-[54] and [60]; Re RS Dhillon Ltd, above n 15, at [40]-[50].
community and his lack of understanding of that community. He, therefore, well knew before this application that (a) vulnerability and (b) engaging with the community were relevant factors to suitability.
[65] As noted above, I find no fault with the Authority’s reasoning in coming to the conclusion that the area in which the proposed premises is to be located is one which can be categorised as vulnerable. While it is on the edge of the commercial district, the location is in close proximity to residential areas of the city and the transcript clearly records that Mr Sharma, when questioned as to his engagement with the community, conceded that he had only consulted with local businesses and not the local community residents. The lack of engagement, beyond businesses in the immediate proximity, is a factor that the Authority was entitled to count against the applicant’s suitability to hold an off-licence. I find no error of law arising from the Authority’s conclusion at [127] that the vulnerability of the area raises the threshold of suitability, nor with their finding that the applicant’s failure to engage with residents of that vulnerable area contributed to his not being a suitable person to hold an off- licence.
Amenity and good order
[66] Not only is the amenity and good order of the locality an integral part of two of the mandatory criteria to be considered in s 105(1) of the Act, namely s 105(1)(h) and (i), s 106(1) is also provided as a legislative aid, detailing the factors to which decision makers must have regard in forming an opinion as to the amenity and good order of the locality.
[67] Mr Wiles submits that the Authority erred in law in stating that the DLC did not reach an opinion on amenity and good order through not having sufficient regard to the criteria stipulated by s 105(1)(a)-(k) of the Act, thereby enabling the meeting of the object of the Act in s 4. He argues that the DLC did, in fact, acknowledge the requirements of the criteria specified in s 105(1)(a)-(k) throughout its decision, and was cognisant of the amenity and good order requirement, comprehensively considering the evidence in arriving at its conclusion that the object of the Act had been fulfilled.
[68] Mr Sherriff submits that this is not an appeal or review of the DLC decision, but rather an appeal against the decision of the Authority. As to what error of law there is to be complained of in the decision, Mr Sherriff submits that none is identified in LHL’s submissions by reference to any paragraph in the decision. The Authority based its opinion on its earlier consideration of the evidence of Ms Emms,29 Mr Smith30 and Ms McKone,31 concluding that the evidence was cogent.32 This conclusion was not unsupported by evidence, it did not fail to account for other relevant evidence and it was not based on irrelevant evidence. It was a conclusion open to the Authority and, therefore, there was no error of law.
[69] It is my view that, while the DLC did reference the s 105(1) criteria throughout its decision, the Authority was correct in concluding that the DLC did not explicitly reach an opinion on amenity and good order. The Authority, however, did consider the evidence provided and arrived at a conclusion based upon that evidence that was open to it. There was no error of law made regarding the amenity and good order of the locality in which the proposed premises were to be situated.
Legal tests for factual and speculative evidence
[70] Mr Wiles submits that the evidence canvassed by both the DLC and the Authority can be categorised as either factual or speculative. He argues that the factual evidence can and should have a standard applied to it, relying on Z v Dental Complaints Assessment Committee.33 Decision making in the context of an application for a liquor licence, he submits, is essentially rooted in a risk assessment relative to alcohol related harm and, to assist in this risk assessment process, the legislature has given the reporting agencies a prominent role,34 their reports being matters to which the DLC or the Authority must have regard.35 To fulfil its evidentiary and evaluative functions, the Authority must consider whether there is any evidence indicating that the granting of a licence application will be contrary to the s 4 object
29 Shady Lady Lighting Ltd v Lower Hutt Liquormart Ltd, above n 6, at [110]-[114].
30 At [115]-[118].
31 At [120]-[123].
32 At [129].
33 Z v Dental Complaints Assessment Committee, above n 17.
34 Medical Officer of Health (Wellington Region) v Lion Liquor Retail Ltd, above n 18, at [43] and [47].
35 Sale and Supply of Alcohol Act 2012, s 131(1)(c).
of the Act. In order to do this correctly, Mr Wiles submits the Authority will need to distinguish the standard of proof applied to factual evidence and the test applied to future risks in the form of a risk assessment.36
[71] In terms of which evidence supplied to the Authority comes within each category, Mr Wiles submits that the submissions from the MOH dealt predominantly with factual evidence, but fell far short of demonstrating the risk required to refuse the granting of a licence to LHL. The evidence presented from the lay witnesses, however, he submits falls within the category of speculative evidence and, while it should not be ignored, it should be subjected to a legal test that is objective in assessing possible future alcohol related risk for the purpose of assessing whether the amenity and good order of the locality would be likely to be reduced to more than a minor extent.
[72] Mr Wiles submits that there should be a comparison with other off-licences as to whether, given the undertakings of LHL, its off-licence would cause the same effects as the other off-licences. If it is found that the effect were the same or less, then those effects could be disregarded. If they were held to be higher, then the question must be: is the higher effect, higher in more than a minor way? Only then, could the application for the licence fail the requirement of s 105(1)(h). In failing to undertake such a legal test to the evidence of the community members who voiced their opposition, Mr Wise submits that the Authority made an error of law.
[73] As noted above, notions of standard of proof and onus of proof have little or no relevance and application to the inquisitorial, evaluative decision-making process when an Authority is considering whether or not to grant a new off-licence. Although, when having regard to the s 105 criteria in considering whether an application is consistent with the object of the Act, the view of the decision-maker must be supported by evidence, what is required is no more than that the decision-maker is reasonably satisfied of any evidence put to it, having regard to the nature and consequence of the facts in question.
[74] It is my view that neither the evidence of Ms Emms nor of Ms McKone is speculative in nature, one describing the locality in which she and her family reside
36 Re Venus NZ Ltd, above n 18, at [20].
and the concerns she holds over the addition of another off-licence in their community, while the other goes to the issues experienced along the riverbank prior to the closure of another off-licence in the area, and her impressions of how the area has since improved.
[75] Mr Smith, as a neighbouring retailer, gave evidence of the businesses in the vicinity and how another off-licence would impact on those interests. He also spoke of walking along the riverbank, of how he would often find bottles which he places in the bin, and of his fears that a liquor store would increase crime in the area, producing research which concluded that greater access to alcohol outlets was associated with increased crime and alcohol-related harm. While this evidence in regards to crime is arguably speculative, it is backed up with research. As to the weight the Authority gave to their evidence, such weight is a matter of discretion and does not reach the threshold of an error of law.
The community as a whole
[76] Mr Sherriff also raises an additional point of law, appealing against the Authority’s refusal to evaluate the evidence against the purpose of the Act in s 3 by asking the question, “Will the grant of this license benefit the community as a whole?” He states that none of the prior legislation dealing with liquor or alcohol had included a specific purpose section which, he submits, raises the question as to whether the new, first time inclusion of a specific purpose section is surplusage or operative. What place in licensing evaluative processes should the introductory phrase “for the benefit of the community as a whole” have in a new system of reforming legislation?
[77] Mr Sherriff submits that this statutory purpose is an additional yardstick and a complementary tool to the s 4 object when standing back and evaluating the evidence relating to the ss 105 and 106 criteria and the s 4 object. In short, achieving both of the twin objects in s 4(1) should also result in a benefit to the community as a whole. He submits that the community benefit endpoint must underpin the evaluation at some point in the process, “either at the back-end as stand back or at the front-end as part of a ss 105 and 106 evaluation.”
[78] In the decision, the Authority considered that this additional step was not required,37 saying:
[72] While the criteria for the issue of licences are not to be interpreted in any narrow or exhaustive sense, it would not be correct to take this to mean that the words “for the benefit of the community as a whole” are to be imported from s 3 into the list of matters in s 105 of the Act to which a DLC or the Authority must have regard.
[73] As Tipping J said in Waitakere City Council v Khouri, it is elementary that statutes are to be given their literal meaning unless there is no such meaning, or the Court is satisfied that there is another meaning properly available on the words used which would better fulfil the policy and purpose of the legislation. Section 105(1) specifically makes the object of the Act a mandatory consideration but does not do the same in respect of the purpose of the Act. (citation omitted)
[79] Mr Sherriff, however, states that the Court of Appeal decision that the Authority relied on in rejecting his submission concerned the Local Government Act 1974, which had a very lengthy long title but did not contain a purpose section, whereas Parliament has included a purpose provision in the Act.
[80] The Act sets out the criteria which are mandatory considerations under s 105(1) of the Act, including the object of the Act at s 105(1)(a). Those mandatory considerations do not include the purpose of the Act. To import an additional requirement to stand back and consider whether the licence would benefit the community as a whole would be contrary to s 5 of the Interpretation Act 1999. It is my view that the Authority was correct to determine that this was unnecessary.
Conclusion
[81] In conclusion, for the reasons set out above, the Authority did not err in determining that the proposed premises were within a vulnerable area, the applicant was not a suitable person, the amenity and good order of the locality were likely to be reduced by more than a minor extent, and there is no requirement to consider whether granting an application for an off-licence will benefit the community as a whole. In terms of the legal test to be applied, notions of standard of proof or onus of proof have
37 Shady Lady Lighting Ltd v Lower Hutt Liquormart Ltd, above n 6, at [71].
little relevance in alcohol licensing matters, and the weight accorded to evidence, be it factual or speculative, is a matter of discretion for the decision-maker.
[82]Therefore, both the appeal and cross-appeal are dismissed.
[83] I invite the parties to agree costs but, in the absence of agreement, the respondent is to file submissions within 14 days of the date of this decision, with the appellant having 14 days to reply. A decision will then be made on the papers.
Churchman J
Solicitors:
Jefferies Law, Wellington for the Appellant
Buddle Findlay, Wellington for the Respondent
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