Medical Officer of Health (Wellington Region) v Lion Liquor Retail Ltd
[2018] NZHC 1123
•18 May 2018
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-Ā-TARA ROHE
CIV-2017-485-506
[2018] NZHC 1123
IN THE MATTER of an appeal under s 162 of the Sale and Supply of Alcohol Act 2012 BETWEEN
THE MEDICAL OFFICER OF HEALTH (WELLINGTON REGION)
Appellant
AND
LION LIQUOR RETAIL LIMITED
Respondent
NEW ZEALAND POLICE
Interested Party
Hearing: 26 October 2017 Appearances:
G Allan, D R La Hood and B Curtis for Appellant
A A Arthur-Young and M J Doesburg for Respondent
Judgment:
18 May 2018
JUDGMENT OF CLARK J
Pursuant to r 11.5 of the High Court Rules I direct the delivery time of this judgment is
4:00 pm on 18 May 2018
THE MEDICAL OFFICER OF HEALTH (WELLINGTON REGION) v LION LIQUOR RETAIL LIMITED [2018] NZHC 1123 [18 May 2018]
Introduction
[1] A short distance from Courtenay Place, on the edge of Wellington’s entertainment precinct, Lion Liquor Retail Ltd (Lion) operates an off-licence bottle store known as Liquor King Kent Terrace. As permitted by the conditions of the licence Liquor King operated between 8.00 am and 11.00 pm seven days a week. When Lion applied to renew the licence in 2016 the Wellington District Licensing Committee (DLC) renewed the licence subject to a condition that alcohol could not be sold or supplied on Fridays or Saturdays after 9.00 pm.1
[2] Lion appealed to the Alcohol Regulatory Licensing Authority (Authority). The Authority allowed the appeal and modified the condition to permit Lion to sell alcohol until 11.00 pm on Fridays and Saturdays.2
[3] The Medical Officer of Health3 and New Zealand Police challenge the Authority’s decision.4 They say the Authority failed to recognise the evaluative and inquisitorial approach required of it by the Sale and Supply of Alcohol Act 2012 (the Act or 2012 Act) and that it erred in its approach to the application which was for renewal of a licence rather than an application for a licence. Further, it is said the Authority’s decision is “unsupportable” on the evidence and is plainly wrong.
[4]Two principal issues are raised by the appeal:
(a)whether the Authority applied the correct legal test in setting the trading hours condition; and
(b)whether the Authority erred in its conclusion there was an insufficient evidential basis to maintain the hours condition.
1 Re Lion Liquor Retail Ltd [2016] NZDLCWN 1572 at 51.
2 Lion Liquor Retail Ltd v Medical Officer of Health [2017] NZARLA PH 170 at [72].
3 The Medical Officer of Health, Wellington Region, is Dr Stephen Palmer.
4 The Medical Officer of Health and New Zealand Police are, together, referred to as the “reporting agencies”.
Background
[5] Lion is the retail arm of Lion Beer, Spirits & Wines (NZ) Ltd. Lion has a long history of alcohol retailing in New Zealand. It operates 39 retail stores nation-wide. One of the stores is Liquor King Kent Terrace.
[6] Liquor King Kent Terrace has been in operation since 1993. The store is highly visible on a prominent location on the corner of Kent Terrace and Elizabeth Street, at the edge, as previously described, of the Courtenay Place entertainment precinct. Liquor King is 170 m from Clyde Quay Primary School which shares with Liquor King the block on Elizabeth Street. There is a liquor ban in the area.
[7] The premises compromise a ground level floor space of approximately 200m2 with displays of alcohol, chillers, a craft beer filling station and an office. Liquor King has 14 car parks adjacent to Kent Terrace. Within a 500m radius there are approximately 130 on-licensed premises and 13 off-licensed premises.
Decision of the Wellington DLC
[8] The DLC heard evidence and submissions over two days. Evidence by way of written brief and oral evidence was given by:
· Mr Fowlie, the branch manager of Liquor King Kent Terrace;
· Mr Joseph, Liquor King’s southern regional manager;
· Dr Palmer, the Medical Officer of Health;
· Sergeant Rapira-Davies representing the New Zealand Police; and
· Mr Christie, a local resident who filed a notice of objection.
[9] Mr Guruvayurappan, the Licensing Inspector, appeared but did not oppose the application and made no submissions.
[10] The DLC considered there was sufficient evidence to support a reduction in sale hours on Fridays and Saturdays. The DLC based its conclusion on a range of factors including rates of alcohol-related harm reflected in the Police and hospital data; Liquor King’s location in a significant centre of alcohol consumption close to residential dwellings and a primary school; and the evidence from Mr Christie as to the real consequences for the neighbouring community from off-licence alcohol consumption later in the evenings and weekends.5
[11] While the evidence supported a reduction in hours on Fridays and Saturdays, the DLC did not consider the evidence supported reduced hours on other days of the week. Any further reduction would not be proportionate to the identified harm.6
[12] Accordingly, the DLC renewed the licence subject to seven conditions two of which Lion appealed to Authority:
(a)a condition that alcohol may be sold on, or delivered from, the premises only on Friday and Saturday between 8.00 am and 9.00 pm; and
(b)a condition that all carry bags in which alcohol is sold to retail customers must be branded on at least one face of the bag with Liquor King branding.
Decision of the Alcohol Regulatory and Licensing Authority
[13] The Authority heard the appeal on 27 April 2017 and issued its decision on 12 May 2017.
[14] The Authority set out the background to the appeal before it, including the nature of the objection by Mr Christie. Mr Christie opposed renewal on the basis of trading hours. After setting out the grounds of appeal and the relevant provisions of the Act the Authority turned to the evidence and submissions.
5 Re Lion Liquor Retail Ltd, above n 1, at [182].
6 At [183].
Evidence and submissions
[15] Lion’s position before the Authority was that the causal nexus required the alcohol-related harm to be related to the specific trading hours condition. No logical link or causal nexus could be drawn between the evidence of alcohol-related harm and Liquor King’s trading until 11.00 pm on Friday and Saturday nights. The evidence was “too general”. Lion accepted there was evidence of alcohol-related harm within a 500m radius of its premises and this area encompasses approximately 130 bars, nightclubs and 12 other off-licences. But it submitted that if its store closed earlier customers would either purchase alcohol earlier or purchase from other nearby stores which remained open. Consequently, the benefit of reduced hours of alcohol sale would be lost. This created an uneven playing field. Restricting the sale hours on Friday and Saturday nights was arbitrary and unjustified.
[16] In essence, the Medical Officer of Health’s position before the Authority was that users in the locality of the premises are especially vulnerable to alcohol-related harm either as consumers, residents or victims of alcohol-related violence. The Medical Officer of Health adduced evidence to demonstrate the vulnerability of the relevant community of users served by the premises. As alcohol supplied through off- licences is a significant contributor to alcohol-related harm the location and characteristics of the Lion’s premises make it a likely contributor to alcohol-related harm in the locality on Friday and Saturday nights.
[17]The Authority summarised the evidence before the DLC in the following way:
(a)The age demographic in the area of the premises is of a greater number of younger people in their late teens and twenties than the national profile.7
(b)Alcohol-related attendances at Wellington Hospital Emergency Department are higher for people living in the locality of the premises than in Wellington generally.8
7 Lion Liquor Retail Ltd v Medical Officer of Health, above n 2, at [40].
8 At [40].
(c)Research showed that by comparison with adult drinkers, younger drinkers (aged 18 to 24) are more likely to consume alcohol outside the home.9
(d)The attendances of younger people, females and males, at the Emergency Department peak early on Sunday morning and Saturday morning (in that decreasing order of magnitude). In Dr Palmer’s opinion the majority of alcohol-related attendances relate to binge drinking.10
(e)With the exception of one incident linking the purchase of alcohol from Liquor King to the hospital admission of a 19-year-old female the hospital admission data did not identify the source or time of purchase of alcohol.11
(f)A total of 1626 calls for Police assistance over the year were for assistance for alcohol-related incidents within a 500m radius of the premises. Of the calls for assistance between 9.00 pm and 11.00 pm, 171 calls for assistance were within 500m of the premises. Police believed the concentration of calls between the hours of 9.00 pm and
11.00 pm to be largely attributed to off-licences.12
(g)Over 960 alcohol infringement offence notices were issued during 2015 for breaches of the alcohol ban area “many” of which were issued within 500m of Lion’s premises.13
(h)There was evidence of a vulnerable neighbourhood due to the presence of low-income boarding houses, schools and child care centres.14
9 At [41].
10 At [42].
11 At [44].
12 At [45]–[46].
13 At [47].
14 At [48].
(i)The data showed twice the number of people who come to Police attention do so following the consumption of off-licence alcohol compared to alcohol purchased in on-licensed premises.15
(j)Mr Christie gave evidence of litter, noise and the personal impact of vandalism and disturbances at night from drunk people. While Mr Christie could not say definitively the alcohol was sourced to Lion’s premises, in his view the evidence strongly implicates the premises “as the trail of discarded cans and bottles … is continuous from the premises to the nearby school.”16
Reasoning
[18] The Authority regarded it as “evident” from its consideration of two High Court decisions that:17
… the causal nexus which needs to be established is between the granting of the application for a licence (or in this case, a renewed licence), and the object of the Act contained in s 4(1). That is, a DLC needs to consider whether there is anything to suggest that granting the application will be contrary to the safe and responsible sale, supply and consumption of alcohol, or that granting the application will result in harm caused by the excessive or inappropriate consumption of alcohol such that that harm should be minimised.
[19] The Authority accepted there was undoubted evidence of excessive or inappropriate consumption of alcohol in the locality of the premises or in the Courtenay Place entertainment precinct more generally. The data did not, however, constitute evidence that excessive or inappropriate consumption of alcohol and increased alcohol-related harm would result from the renewal of Lion’s licence.18
Or, put the other way, there is no ‘causal’ nexus between the grant of this renewal licence and general incidence of [alcohol-related harm] in the locality established by the respondents and objector.
15 At [49].
16 At [51].
17 At [58].
18 At [61].
[20]The Authority considered that, in a licensing application such as this —19
… what is required is consideration of whether the proposed operation of the premises which is the subject of the application is likely to lead to harm caused by the excessive or inappropriate consumption of alcohol. In the case of a renewal, this includes consideration of how the premises have operated to date.
[21] The Authority emphasised the requirement for a necessary “link between the premises to the risk of excessive or inappropriate consumption at more than a generic level”.20
Grounds of appeal
[22] In its notice of appeal Lion contends the Authority erred in law in the following respects:
(a)The Authority applied the wrong test in determining what evidence was capable of establishing that a renewal of Lion’s licence would be contrary to the object of the Act.
(b)The Authority erred in the approach to be taken in renewal applications as opposed to initial applications.
(c)The Authority erred in regarding the evidence of the Police and the Medical Officer of Health as capable of establishing only:
(i)a positive correlation between alcohol consumption and alcohol-related harm or a positive correlation between the sale of alcohol from off-licences and alcohol-related harm.
(ii)the general proposition that alcohol from off-licences can be linked to alcohol-related harm and that vulnerability in the community is a result of alcohol availability.
19 At [61].
20 At [63].
[23]The appeal is said to give rise to two questions of law:
(a)In setting the mandatory conditions relating to the days and hours of operation under s 116(2)(a) of the Act, did the Authority fail to apply the correct legal test for imposing those conditions?
(b)Was the Authority’s conclusion that there was an insufficient evidential basis to maintain the hours condition under appeal a conclusion that was insupportable on the evidence and/or plainly wrong?
Principles governing appeal
[24] This an appeal under s 162 of the Act. Appeals against the decision of the Authority under s 162 are appeals on questions of law. Such appeals are of limited scope. The decision of Kόs J in Triveni Puri Ltd v Commissioner of Police21 has been cited in support of the proposition that on appeal under s 162 the Court is not bound by the Authority’s opinions merely because it is a specialist tribunal. The High Court is bound to reach its own independent conclusion.
[25] I observe that Triveni Puri was an appeal under s 138 of the Sale of Liquor Act 1989. Section 138 of the 1989 Act provided for appeals to the High Court against decisions of the Authority on grounds of unsuitability. Section 162 of the 2012 Act is a quite different appeal provision. It limits appeals to questions of law. In Christchurch Medical Officer of Health v J & G Vaudrey Ltd Gendall J decided:22
… an 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.
21 Triveni Puri Ltd v Commissioner of Police [2012] NZHC 2913, [2013] NZAR 88 at [19].
22 Christchurch Medical Officer of Health v J & G Vaudrey Ltd [2015] NZHC 2749, [2016] 2 NZLR 382 at [17].
Statutory framework
[26] The 2012 Act implemented the Government’s response to the Law Commission’s report Alcohol in Our Lives: Curbing the Harm.23 The Legislature recognised excessive drinking and intoxication was contributing to New Zealand’s crime rate, injury rate, and road crash statistics and was effecting the nation’s overall level of health. It also recognised regulation alone would not turn around New Zealand’s excessive drinking culture.24
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.
[27]The policy objectives of the Bill were to:
·Reduce excessive drinking by young people and adults;
·Reduce the harm caused by alcohol use, including crime, disorder, public nuisance and negative public health outcomes;
·Support safe and responsible sale, supply and consumption of alcohol;
·Improve community input into local alcohol licensing decisions; and
·Improve the operation of the alcohol licensing system.
[28] These policy objectives were enacted in s 4, the object provision. Section 4 provides:
4 Object
(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
23 Law Commission Alcohol in Our Lives: Curbing the Harm (NZLC R114, 2010), a report on the review of the regulatory framework for the sale and supply of liquor.
24 Alcohol Reform Bill 2010 (236–1) (explanatory note) at 1.
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).
[29] There are two important features of the object provision that distinguish it from the object of the predecessor 1989 Act. First, one of the two objects of the 2012 Act is to minimise alcohol-related harm. By comparison the object of the 1989 Act was to establish a system of control over the sale and supply of liquor with the aim of “contributing to the reduction of liquor abuse”.25
[30] The second point is that harm is very broadly defined. Section 4(2) mirrors the definition of “alcohol-related harm” in s 5. Where the 1989 Act was concerned to reduce liquor “abuse” the concept of “harm” is central to the 2012 Act. The harm caused by excessive or inappropriate consumption of alcohol not only includes any crime, damage, disorderly behaviour, illness or injury directly or indirectly caused, or directly or indirectly contributed to by the excessive or inappropriate consumption of alcohol, but any harm to society generally or the community.
[31] Part 2 of the Act provides for the sale and supply of alcohol generally. Subpart 1 provides for four kinds of licence, the requirements for each, the authority to hold licences, and restrictions and conditions on licences. Subpart 2 provides for local alcohol policies which any territorial authority may have in relation to the sale, supply or consumption of alcohol within its district.
[32] The licensing process is provided for in subpart 3 which applies to on-licences, off-licences and club licences. An application for a licence is made to a licensing committee. A licensing committee must send a copy of every application for a licence to the Police, Medical Officer of Health and the Licensing Inspector appointed in the territorial authority’s district.26 Section 105 sets out the criteria for the issue of a licence:
25 Sale of Liquor Act 1989, s 4(1).
26 Sale and Supply of Alcohol Act, s 103.
105 Criteria for issue of licences
(1)In deciding whether to issue a licence, the licensing authority or the DLC 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.
[33] Particular discretionary and compulsory conditions for off-licences are provided in s 116. Every off-licence issued must be subject to a condition stating the days on which and the hours during which alcohol may be sold.27 Conditions may be varied under s 120 of the Act.
[34] Applications for renewal of a licence are made under s 127. As for applications for a licence there may be objections to renewal28 and enquiries by the Police, Medical Officer of Health and Inspector.29 The criteria for renewal of a licence are substantially the same as the criteria for issue of a licence in s 105. Criteria for renewal are set out in s 131:
131 Criteria for renewal
(1)In deciding whether to renew a licence, the licensing authority or the DLC concerned must have regard to the following matters:
(a)the matters set out in paragraphs (a) to (g), (j), and (k) of section 105(1):
(b)whether (in its opinion) the amenity and good order of the locality would be likely to be increased, by more than a minor extent, by the effects of a refusal to renew the licence:
(c)any matters dealt with in any report from the Police, an inspector, or a Medical Officer of Health made by virtue of section 129:
(d)the manner in which the applicant has sold (or, as the case may be, sold and supplied), displayed, advertised, or promoted alcohol.
(2)The authority or committee must not take into account any prejudicial effect that the renewal of the licence may have on the business conducted pursuant to any other licence.
[35]Conditions on renewed licences are imposed under s 132.
27 Section 116(2)(a).
28 Section 128.
29 Section 129.
Question 1: did the Authority fail to apply the correct legal test in setting the hours of operation?
Appellants’ submissions
[36] Taking an overview of the Authority’s errors, the Medical Officer of Health was critical of the Authority’s failure to note many of the principles applicable to its appellate function. Mr Allan, counsel for the Medical Officer of Health, identified many such “failings” in the Authority’s decision. For example the Authority did not expressly acknowledge that there is no presumption an existing licence will be renewed and that the task is an evaluative one in which notions of onus of proof are unlikely to be helpful. The Authority failed to interpret the object of the Act and it failed to recognise the precautionary principle.
[37] More particularly, Mr Allan submitted the Authority misunderstood the nature of the evaluative exercise it was required to undertake. It was wrong for the Authority to dismiss the reporting agencies’ evidence and instead to require proof of a causal nexus between the grant of this renewal and the incidence of alcohol-related harm in the locality.
[38] The reporting agencies maintain that given the risks presented by established levels of alcohol-related harm associated with the phenomena of pre-loading and side- loading in and around Courtenay Place, reducing the availability of alcohol from Liquor King on Friday and Saturday nights was clearly rational in terms of helping to achieve the object of the Act.
Respondent’s submissions
[39] The respondent rejects the appellants’ contentions that the Authority failed to take into account relevant principles. In Lion’s submission, the reporting agencies’ arguments reflect a dissatisfaction with the Authority’s evidential findings. In the context of an appeal on a question of law Mr Arthur-Young submitted the Court should be cautious to avoid engaging with the factual challenges which the appellants mount. There is nothing in the Authority’s decision to suggest it applied the wrong approach. The Authority is a specialist tribunal and it carefully and thoughtfully summarised the data brought before it by the Medical Officer of Health and Police.
[40] In particular, the Authority placed no burden of proof on the reporting agencies and it correctly interpreted and applied the relevant statutory provisions. As to its alleged failure to apply the precautionary principle Mr Arthur-Young submitted the principle is not a mandatory relevant consideration but a tool the Authority may apply in appropriate circumstances. The precautionary principle is not a panacea for a lack of evidence.
[41] Finally, Lion submits the cases upon which the reporting agencies rely are distinguishable.
Assessment
[42] I do not accept that the mere omission of references to relevant case law or principles constitutes an error of law. It may be evident from a judicial body’s decision that, even without recitation of relevant case law and principles, the applicable law nevertheless has been applied and a correct analytical approach taken. I also accept Mr Arthur-Young’s submission that there is no obligation for a decision-maker to address every piece of evidence or argument raised.30
[43] On any analysis of the Act, and the various functions of the bodies making decisions under it, the object of the Act is the first criterion when considering applications for renewals. What the Court of Appeal described as the “modest object” of the Sale of Liquor Act 1989 has been replaced by a new Act signalling “a new community-oriented approach incorporating both purpose and object provisions”.31 Decision-making in the context of Lion’s application is essentially rooted in a risk assessment. The factors to be considered in the course of assessing an application for a licence or for renewal, as the appellants submitted, stand to be assessed in terms of their potential impact upon the prospective risk of alcohol-related harm.
[44] An application for renewal of a licence is to be assessed in light of a range of factors relevant to the particular application. There is no one test. Regard must be
30 Manukau City Council v Trustees of Mangere Lawn Cemetery (1991) 15 NZTPA 58 (HC) at 61 cited in Auckland Medical Officer of Health v Birthcare Auckland Ltd, above n 37, at [106].
31 J & G Vaudrey Ltd v Canterbury Medical Officer of Health [2016] NZCA 539, [2017] 2 NZLR 334 at [22]–[23].
had to the object of the Act and the statutory criteria for renewal. The criteria relevant to this application include the suitability of the applicant, the days on which and the hours during which the applicant proposes to sell alcohol, the design and layout of the premises, and the matters dealt with in the reports from the Police and Medical Officer of Health.32 There is also to be regard for the amenity and good order of the locality and whether it would be likely to be increased by more than a minor extent, if a renewal were refused.33
[45] The statutory provisions must be applied in a way that promotes the twin statutory objects which are that the sale, supply and consumption of alcohol should be undertaken safely and responsibly and that alcohol-related harm should be minimised. The aim of minimisation requires alcohol-related harm to be reduced to the smallest amount, extent or degree.34
[46] No party contests that the proper approach to the application is evaluative and merits based.35 The following further principles may be taken from the cases:
(a)There is no presumption that an application for a licence will be granted or that a licence will be renewed.36
(b)This is made reasonably plain by the fact the approach to renewal is virtually the same as the process engaged by an application for an initial licence.37
(c)A licensing committee or Authority, after having regard to the criteria for renewal in s 131, is then to step back and consider whether there is any evidence indicating that granting the application will be contrary to
32 Section 131(1)(a), criteria for renewal including those matters set out in s 105(1) relating to criteria for issue.
33 Section 131(1)(b).
34 Re Penoy Spirits Ltd [2014] NZARLA PH 697 at [19] adopting the New Shorter Oxford English Dictionary definition; Linwood Food Bar Ltd v Davison [2014] NZHC 2980 at [18].
35 Christchurch Medical Officer of Health v J & G Vaudrey Ltd, above n 22, at [54].
36 At [55].
37 Auckland Medical Officer of Health v Birthcare Auckland Ltd [2015] NZHC 2689, [2016] NZAR 287 at [48].
the statutory object in s 4.38 Or, as Heath J articulated a “test”:39
Although the “object” of the 2012 Act is stated as one of 11 criteria to be considered on an application for an off-licence, it is difficult to see how the remaining factors can be weighed, other than against the “object” of the legislation. It seems to me that the test may be articulated as follows: is the Authority satisfied, having considered all relevant factors set out in s 105(1)(b)–(k) of the 2012 Act, that grant of an off-licence is consistent with the object of that Act?
(d)The breadth of the Authority’s functions suggests the application of rules involving onus of proof may be inappropriate.40 Similarly there is no onus on the reporting agencies to prove the application should not be granted.41
(e)The criteria for the issue of licences, and for renewal, are not to be interpreted in any narrow or exhaustive sense. The Authority may take into account anything which, from the terms of the statute as a whole, appears to be regarded by the legislature as relevant to licence conditions and the terms on which they should be granted. “That must include the statutory object referred to in s 4.”42 The matters raised by s 4 are to be approached on a nationally consistent basis.43
(f)The Authority is not required to be sure that particular conditions will reduce liquor abuse:44
It is entitled to apply the equivalent of the precautionary principle in environmental law. If there is a possibility of meeting the statutory objective … then it is entitled to test whether that possibility is a reality.
[47] To assist the risk assessment the legislature has given the reporting agencies a prominent role. Every application for a licence or for a renewal of a licence must be
38 At [50].
39 Re Venus NZ Ltd [2015] NZHC 1377, [2015] NZAR 1315 at [20].
40 At [60]; and Auckland Medical Officer of Health v Birthcare Auckland Ltd, above n 37, at [52].
41 Auckland Medical Officer of Health v Birthcare Auckland Ltd, above n 37, at [113].
42 Walker v Police HC Wellington AP87/01, 31 May 2001 at [29] approved in My Noodle Ltd v Queenstown Lakes District Council [2009] NZCA 564, [2010] NZAR 152 at [67].
43 Walker v Police, above n 42, at [29].
44 My Noodle Ltd v Queenstown Lakes District Council, above n 42, at [74].
sent by the relevant licensing committee to the Police, Inspector and Medical Officer of Health.45 Those bodies have an obligation to enquire into the application.46 If there is no objection no report needs to be filed. If, however, there is any opposition to the application a report must be filed within 15 working days of receiving the application.47 Those reports become matters to which the Authority or licensing committee “must have regard”.48
[48] There is every indication from the Authority’s decision that it did, indeed, take note of the reports of the Medical Officer of Health and Police. I see no error in that aspect of the Authority’s approach (I return to the Authority’s approach to the evidence in the discussion of the second question of law.) However, the Authority drew an impermissible distinction between the approach to be taken on a renewal application and the approach to be taken on an application for a licence. The Authority stated:49
In the context of a renewal application, a proposal to change trading hours on renewal … where there is little or no issue about the manner in which the applicant has operated its licence in the past, must be able to be explained by some evidence demonstrating abuse as a result of the granting of the renewal on those terms. This is not because there is a presumption that the hours of any licence will be the national maximum default hours set out in s 43 of the Act, but because any change in conditions should not be arbitrary.
[49] The Authority assumed an evaluation of the criteria in ss 105 and 131 required a balance between allowing the safe and responsible sale, supply and consumption of alcohol, and minimisation of alcohol-related harm.50
[50] In my view, the Authority’s concern to achieve a “balance” led the Authority into error. Lion had expressed concern, reflected in its submissions before the Authority and in this appeal, at a potential loss of customers and market share if the hours during which it could sell alcohol were reduced. The Authority’s conclusions on this point effectively see the twin elements of the statutory objective as requiring to be in balance when s 4 requires both of the twin objectives to guide the application of the legislation. But the Act is clear. In deciding whether to renew or grant a licence
45 Sale and Supply of Alcohol Act, s 103(1).
46 Section 103(2).
47 Section 103(4).
48 Section 131(1)(c).
49 Lion Liquor Retail Ltd v Medical Officer of Health, above n 2, at [64].
50 At [63].
the Authority and DLC “must not take into account any prejudicial effect that the renewal of the licence may have on the business conducted pursuant to any other licence.51 As McGechan J observed in Buzz & Bear Ltd v Woodroffe:52
Any licensee takes a licence under risk that conditions may change, and a report may recommend adjustment. There is no asset protected for all time whatever may happen outside.
[51] Or, as the DLC observed, the Legislature’s expectation that alcohol-related harm will be minimised “does not yield to a licensee’s commercial or equitable interests”.53
[52] An appropriate framework when a licensing committee or authority is considering an application to grant an off-licence, or an application for renewal, contemplates the decision-maker considering:54
(a)the criteria in s 131;
(b)any reports presented by the Police, Medical Officer of Health and licensing inspector following their respective inquiries into the application; and
(c)any objections filed in accordance with the statutory requirements for objections to renewal.
Having considered all of that information the Authority must stand back and determine whether the application should be granted (whether on conditions or not) or refused. This step requires the Authority to form a view on whether there is any evidence to suggest that granting the application will contrary to s 4(1), increase the risk of alcohol abuse. While a causal nexus is required between such evidence and the relevant risk, it is unnecessary to qualify the nature of the link by reference to such words as “powerful” or “direct”.
[53] The Authority erred in formulating as the test: “whether a change in the premises closing hour can be said to be a rational response to the probability of a
51 Sale and Supply of Alcohol Act, s 131(2).
52 Buzz & Bear Ltd v Woodroffe [1996] NZAR 404 at 410.
53 Re Lion Liquor Retail Ltd, above n 1, at [88].
54 Otara-Papatoetoe Local Board v Joban Enterprises Ltd [2012] NZHC 1406, [2012] NZAR 714 at [31].
greater degree of abuse associated with the premises resulting from the grant of the renewal”.55 That approach tends to favour perpetuation of the status quo for Lion rather than responding to the risks of alcohol-related harm which the evidence established and to which it can reasonably be inferred from the evidence, the premises contribute. In the face of those facts the Act requires a response which is aimed at minimising – that is, reducing to the smallest, amount, extent or degree – alcohol- related harm.
Question 2: Did the Authority err in its conclusion there was an insufficient evidential basis to maintain the hours condition?
Appellants’ submissions
[54] The appellants’ case is that the Authority’s decision was unsupported by the evidence. The appellants point to the following particular conclusion which the Authority reached:56
Evidence of vulnerability of the community is not sufficient to alter a premises operating in the absence of some link between the operation of those premises trading hours and that vulnerability.
[55] The reporting agencies’ submit they did not advance argument simply on the basis that users of the Courtenay Place entertainment precinct and nearby residents were vulnerable to alcohol-related harm. Nor did their evidence establish merely that the relevant community of users and residents were “vulnerable” or merely “that alcohol from off-licences can be linked to [alcohol-related harm] and that vulnerability in the community is a result of alcohol availability”.
[56] The Authority’s ultimate conclusion that there was no evidence of anything beyond the general proposition that alcohol from off-licences can be linked to alcohol- related harm and that vulnerability in the community is the result of alcohol availability is, in the appellants’ submission, plainly wrong. The conclusion is not only unsupported by the evidence but contradicted by the evidence.
55 Lion Liquor Retail Ltd v Medical Officer of Health, above n 2, at [65].
56 Lion Liquor Retail Ltd v Medical Officer of Health, above n 2, at [66].
Respondent’s submissions
[57] Mr Arthur-Young submitted an appellate court should take a cautious approach to an appeal from the Authority in light of its specialist tribunal status. Counsel cited the comments of Lord Donaldson MR to the effect that it did not matter the degree of certainty with which an appellate court considers it might have reached a different conclusion. What matters is whether the decision under appeal was a permissible option.57
[58] The respondent says the Authority plainly had regard to the matters raised in the reports from the Police and Medical Officer of Health. The Authority’s decision includes a summary of their submissions and evidence. The Authority did not err by failing to summarise every piece of evidence or every argument raised. The Authority delivered an unusually long decision and its decision was available to it on the evidence.
[59] The Authority was cognisant of the evidence and the nature of the locality including the presence of other off and on-licenses where alcohol can be acquired late at night. In this context, it was permissible for the Authority to find the required causal nexus between Liquor King ceasing trading at 9.00 pm rather than 11.00 pm on Fridays and Saturdays, and a reduction of alcohol-related harm, was not made out.
Assessment
[60] The Authority saw the issue as being whether the DLC was required to establish a causal nexus between the premises and the trading hour condition to be imposed, and whether the evidence established that nexus.58 The Authority regarded it as evident from the case law59 that the causal nexus is between the grant of (in this case) a renewed licence and the statutory object in s 4. In terms of identifying the relevant nexus, the Authority was correct. Once the causal nexus was identified the
57 Piggott Brothers & Co Ltd v Jackson [1992] ICR 85 at 92 cited in Bryson v Three Foot Six Ltd
[2005] NZSC 34, [2005] 3 NZLR 721 at [27].
58 Lion Liquor Retail Ltd v Medical Officer of Health, above n 2, at [52].
59 At [57]–[58] citing Auckland Medical Officer of Health v Birthcare Auckland Ltd [2015] NZHC 2689.
next step requires an evaluation of the evidence in order to assess the degree and nature of alcohol-related harm that is potentially linked to the licence.
[61] The Authority’s assessment of the evidence was that there was no causal nexus between the renewal of the licence and the “general incidence of ARH in the locality”.60 In apparently requiring a “positive correlation” between the proposed operation of the premises and alcohol-related harm the Authority seemed to require Liquor King to be at the centre of the harm.
[62] The reporting agencies do not contend that Liquor King is the sole originator of the alcohol-related harm which the evidence establishes in the locality. Rather, it is Liquor King’s risk profile that is relevant. Dr Palmer’s evidence was of a “high-risk demographic” and that off-licences in Wellington are the leading source of alcohol consumed by persons who present at Wellington Emergency Department with alcohol- related conditions. Liquor King is located at the boundary of two area units:
Willis Street — Cambridge Terrace and Mt Victoria West.61
[63] The unusual demographic is due to the significant tertiary student population in these area units. Dr Palmer’s evidence was that the 18 to 29-year age band is considered to be the high-risk demographic with regard to acute alcohol-related harm. Most other area units in Wellington City, he said, do not have such extreme levels of the high-risk demographic.
[64] Dr Palmer’s evidence was based on data for alcohol-related attendances at the Emergency Department at Wellington Hospital over six years. While it is not possible to link individual alcohol-related attendances to specific off-licences it is known that more than three-quarters of all alcohol consumed is sourced from an off-licence. Liquor King’s location is on the edge of the problematic Courtenay Place entertainment precinct which is characterised by binge drinking off-licence alcohol through pre- and side-loading, of RTDs in particular. Dr Palmer did not attempt to link specific alcohol-related harm to specific off-licences. Nor do I regard it as
60 At [61].
61 An area unit is drawn from a census description of a “Census Area Unit”. An area unit geographically represents a small suburb within a much larger district, town or city.
necessary.62 The data and observational and opinion evidence of the reporting agencies:
(a)identified the notoriously excessive incidence of alcohol-related harm to users and residents in the locality in the hours before midnight on Friday and Saturday nights; and
(b)linked the risk of continued alcohol-related harm to alcohol supplied at those times by off-licenced premises. As Liquor King is one of only two major liquor stores in the Willis Street–Cambridge Terrace “area unit” and as Liquor King, but not the nearby Chaffers New World, supplies products clearly associated with alcohol-related harm it was difficult to imagine Liquor King is “not making a key contribution” to the high number of alcohol-related attendances in the area.
[65] The primary conclusion to be drawn from the evidence is that there can be no realistic doubt the premises contributes to some of the alcohol-related harm in the locality. Given the proximity of the premises to the entertainment precinct and the reasonable distance of other off-licences to those same consumers it can reasonably be accepted that alcohol will be purchased from the premises for pre-and side-loading. The Police evidence was that the two busiest suburbs in Wellington for alcohol-related crime are Te Aro and Wellington Central where Liquor King is located. Further, most CBD alcohol-related crime occurs in Courtenay Place and in close proximity to the premises. Liquor King supplies products clearly associated in the evidence with alcohol-related harm and breaches of liquor bans.
[66] Liquor King failed a controlled purchase operation involving sales to two 17- year olds. That issue has been resolved to the satisfaction of the Medical Officer of Health.
[67] There is no challenge to the suitability of the operations or the professionalism of the operator. Nevertheless, in this statutory setting the professionalism of the
62 See Otara-Papatoetoe Local Board v Joban Enterprises Ltd, above n Error! Bookmark not defined., at [31].
operator becomes subordinate to the extreme alcohol-related harm which is evidenced. Mr La Hood drew attention to the DLC’s observation that a licensee may be a model operator but if its products are consumed after sale in a harmful way the operator may bear the consequences by way of restrictions on the licence.63 The observation is well made. The Act looks to minimise alcohol-related harm. Where there is an evidential foundation enabling a link to be drawn between a real risk of alcohol-related harm and the grant or renewal of a licence, the harm must be minimised not ignored or condoned.
[68] In the face of such evidence the Act does not countenance the continuation of high levels of alcohol-related harm. The Act requires minimisation of the alcohol- related harm. The task of the DLC was to respond to the risk and it did so. It is not necessary to establish, as the Authority required, that the proposed operation “would be likely to lead to” alcohol-related harm.64 To require demonstration of a link to this degree of specificity is not much different from requiring proof. Requiring proof of “a causative link is not only unrealistic but is contrary to the correct legal position”.65
[69] I accept the submissions on behalf of the appellants. The Authority consistently emphasised what the evidence did not show or did not prove at the expense of what the evidence demonstrated.
[70] It was sufficient to engage the requirement to minimise alcohol-related harm that the evidence implicates the premises. The Authority erred in requiring evidence of demonstrable historical harm. Rather, it was required to assess risk which by definition is future risk. In that regard, there was extensive evidence of the alcohol- related harm associated with this locality on Friday and Saturday nights. In fact, the DLC in its decision described the evidence as compelling. Having read the evidence I agree with that assessment.
[71] With respect to the Authority I am of the view it both misdirected itself and reached a conclusion which I consider contradicts the true and only reasonable
63 At [141].
64 Lion Liquor Retail Ltd v Medical Officer of Health, above n 2, at [61].
65 Auckland Medical Officer of Health v Birthcare Auckland Ltd, above n 37, at [61]–[62].
conclusion available on the evidence. The Authority thereby committed an error of law.66
Summary
[72] On hearing an appeal, the High Court may confirm, modify or reverse the decision appealed against.67 The power to “reverse” a decision includes the revocation or annulment of a decision.68 The Authority’s decision will be set aside. The decision of the DLC is restored for the following reasons.
(a)The legislative framework enacted by the 2012 Act was intended to restrict rather than relax drinking laws. The legislative measure proceeded on the basis of clear evidence showing a link between the availability of alcohol and alcohol-related harm.69
(b)Consequently, national maximum trading hours were reduced. Off- licence trading hours are significantly less than the hours during which on-licenced premises may supply alcohol.
(c)Regulating the availability of alcohol through restrictions on trading hours was one of the policy levers the Law Commission recognised as being available to reduce alcohol-related harm especially in relation to off-licence premises.70
(d)The DLC correctly took account of the correlation between reduced hours and reduce alcohol-related harm. Indeed, Lion’s own witness accepted that with the reduction in national “default” hours there had been a reduction in overall alcohol-related harm.71
(e)In all the circumstances the trading hours condition which the DLC
66 Cf Vodafone New Zealand Ltd v Commerce Commission [2011] NZSC 138, [2012] 3 NZLR 153 at [58]
67 Sale and Supply of Alcohol Act, s 161(7).
68 J & C Vaudrey v Canterbury Medical Officer of Health, above n 31, at [77].
69 As observed by the Hon Judith Collins when moving the third reading of the bill.
70 Law Commission, above n 23, at [9.40]–[9.49].
71 Re Lion Liquor Retail Ltd, above n 1, at [187]–[188].
imposed to minimise the established alcohol-related harm in the locality was principled. The DLC did not have to be sure the condition would, in fact, minimise alcohol-related harm. It was entitled to test the possibility.72
Result
[73]The appeal is allowed.
[74]The questions of law are answered as follows:
Question 1: did the Authority fail to apply the correct legal test in setting the hours of operation?
Yes
Question 2: Did the Authority err in its approach to the evidential foundation required for its conclusion?
Yes
[75] Having succeeded in their appeal the appellants are entitled to costs. If costs are unable to be agreed between the parties they may file memoranda not exceeding five pages.
Karen Clark J
Solicitors:
Luke Cunningham Clere, Wellington for Appellant Russell McVeagh, Auckland for Respondent
72 As the Court of Appeal observed in My Noodle Ltd v Queenstown Lakes District Council, above n 42, at [74] the Authority and, I add, the DLC is entitled to apply the equivalent, in environmental law, of the precautionary principle.
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