Rainger v General Distributors Limited
[2019] NZHC 3483
•20 December 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-852
[2019] NZHC 3483
BETWEEN WILLIAM RAINGER
Appellant
AND
GENERAL DISTRIBUTORS LIMITED
Respondent
Hearing: 29 October 2019 Appearances:
C P Browne & A G Holden for Appellant
A A Arthur-Young & L J Eaton for Respondent
Judgment:
20 December 2019
JUDGMENT OF PAUL DAVISON J
This judgment was delivered by me on 20 December 2019 at 2:00 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Wilson Harle, Auckland
Russell McVeagh, Auckland
RAINGER v GENERAL DISTRIBUTORS LIMITED [2019] NZHC 3483 [20 December 2019]
Introduction
[1] The respondent, General Distributors Ltd (GDL), operates a supermarket from premises in Lake Road, Hauraki Corner, Auckland, known as “Countdown Hauraki” (the premises). It holds an off-licence pursuant to the Sale and Supply of Alcohol Act 2012 (the Act). On 11 September 2018 the Auckland District Licensing Committee (the Committee) delivered a decision granting GDL’s application for renewal of its off-licence with a single alcohol area (SAA) as proposed by GDL. The approved SAA of GDL’s premises includes display units on which alcohol may be displayed at the end of the aisles.1
[2] The SAA is described by reference to a floor plan of the premises showing the entrance, checkout counters, aisles and shelving. The area of the SAA is marked on the floor plan, and comprises an area within aisle 2 which extends along part of both sides of that aisle to include the ends of the aisle. The SAA does not, however, include the respective sides of the end-of-aisle shelving which face onto the aisles on each side of aisle 2.
[3] The Medical Officer of Health (MoH), Dr William Rainger (the appellant), opposed GDL’s application for renewal of its licence on the grounds that the proposed SAA did not satisfy the requirements of s 112(1) of the Act as it did not limit the exposure of shoppers to alcohol so far as reasonably practicable. In particular, this was because the application allowed the display of alcohol in an end-of-aisle position adjacent to, and in sight of, customers using the main pedestrian thoroughfare along the rear of the supermarket premises.
[4] The appellant appealed to the Alcohol Regulatory and Licensing Authority (the Authority). In its decision of 18 April 2019, the Authority dismissed the appellant’s
1The SAA is described by reference to a floor plan (Annexure 1) of the premises showing the entrance, checkout counters, aisles and shelving. The area of the SAA is marked on the floor plan, and comprises an area within aisle 2 which extends along part of both sides of that aisle and includes the ends of the aisle at the rear of the store. The SAA does not however include the respective sides of the end-of-aisle shelving which face onto the aisles located on either side of aisle 2.
appeal.2 The appellant now appeals to the High Court pursuant to s 162 of the Act on questions of law relating to the Authority’s decision.
[5] The primary issue arising in the appeal is what approach a licensing committee or licensing authority should take when evaluating whether a proposed SAA limits exposure to alcohol products or advertising so far as is reasonably practicable. This turns on whether ss 112(1) and 113(2) give a licensing committee or licensing authority power to describe and define the SAA so as to exclude end of aisle displays in order to limit shoppers’ exposure to displays and promotions of alcohol, and where the exclusion of aisle ends is a reasonably practicable alternative to their inclusion.
[6] A further significant issue arising in this appeal concerns the approach to be taken by the Authority when assessing the proposed single alcohol area at the premises, and whether the Authority correctly applied s 112(1) of the Act when approving GDL’s SAA, which includes two aisle-ends where alcohol can be displayed. The appellant contends that when describing and defining the SAA, the Authority ought to have applied s 112(1) and excluded the aisle ends from the alcohol area so as to limit the exposure of the alcohol to shoppers passing along the thoroughfare at the rear of the store.
Background
[7] GDL was granted an off-licence in 2014, and on 30 October 2015 it applied for renewal of the licence to cover the period between 8 December 2015 and 8 December 2018. The SAA condition attached to the off-licence granted in 2014 is the same as was proposed by GDL as regards the present application. Determination of the renewal application was delayed in order to await a decision of the High Court in Christchurch Medical Officer of Health v J & G Vaudrey Limited,3 and subsequently of the Court of Appeal in J & C Vaudrey Limited & Anor v Canterbury Medical Officer of Health4 in which the High Court and Court of Appeal considered the correct interpretation and application of s 112(1) of the Act.
2 Rainger v General Distributors Limited [ 2019] NZARLA 52.
3 Christchurch Medical Health Officer of Health v J & G Vaudrey Ltd [2015] NZHC 2749.
4 J & C Vaudrey Ltd v Canterbury Medical Officer of Health [2016] NZCA 539.
[8] As required by the Act, the appellant, as MoH, was sent a copy of the GDL licence renewal application and, having carried out his own inquiries, filed a report with the Committee on 25 November 2015.5 In his report the appellant objected to the proposed SAA on the grounds that it contained aisle-end displays which placed alcohol in the direct view of customers walking along the rear thoroughfare of the store which is a high traffic area. The appellant maintained that the proposed SAA did not limit the exposure of shoppers to alcohol so far as reasonably practical, because a reasonably practical alternative was possible which would result in a lesser degree of exposure of alcohol to shoppers with no reduction of shelf space. The alternative suggested by the appellant was an SAA which excluded the end-of-aisle display of alcohol, but which extended the length of the inwards facing aisle space so as to provide equivalent shelf space as used for the end-of aisle displays.
[9] At the hearing before the Committee the appellant gave evidence regarding alcohol related harm. He also called two other witnesses, Dr Bodo Lang and Mr Ying Li.
[10] Dr Bodo Lang has a doctorate in marketing and is Head of the Department of Marketing at the Auckland Business School. He gave evidence to the Committee and said that end-of-aisle displays in supermarkets have a major impact on sales. He said that while typically only two per cent of all items in a supermarket are promoted through end of aisle displays or other special displays, such items comprise around 30 per cent of all supermarket sales. He explained that one of the reasons for this is that supermarket shoppers tend to dip in and out of aisles, and consequently the end-of- aisle displays are located in a position that has some of the highest levels of foot traffic in supermarkets. The end-of-aisle alcohol displays in the SAA are also located at the rear of the supermarket adjacent to the perimeter thoroughfare along which many shoppers pass, thereby increasing exposure of the alcohol on display to those shoppers. Dr Lang said that studies showed that doubling shelf-space increases sales moderately, while a special end-of-aisle display while maintaining the normal shelf-space will dramatically increase sales.
5 Sale and Supply of Alcohol Act 2012, ss 103 (3) and 129.
[11] Mr Ying Li is a Compliance Officer employed by the Auckland Regional Public Health Service and holds a Post Graduate Diploma of Public Health from the University of Auckland. He carried out an inspection of the premises and gave evidence on behalf of the appellant regarding the proposed SAA. He said that in his opinion, the proposed display of alcohol was not limited so far as reasonably practicable. Mr Li recommended that in order to satisfy the purpose set out in s 112(1) of the Act and limit the exposure of alcohol to a reasonably practicable extent, the SAA should be amended to remove both the two end-of aisle areas from the SAA and stipulate the placement of non-alcohol products at the aisle ends.
The Committee’s Decision
[12] In its decision, the Committee noted that the Court of Appeal in Vaudrey had explained that the requirement for a licencing committee to “have regard to” s 112(1), as mandated by s 113(1) of the Act, imposes an obligation on the committee to give genuine attention and thought to the specific purpose set out in s 112(1).6 The Committee said:
[34] ….We are not required to give effect to that specific purpose. If, having regard to the section 112(1) purpose, we consider that the proposed SAA is incompatible with that purpose, we are entitled, but not obliged, to take that into account in the decision to approve, decline or propose an amendment to the description of the SAA proposed in the application.
[35] In terms of the specific purpose set out in 112(1) the High Court held that the words “so far as reasonably practicable” is primarily factually orientated. The requirement is not absolute. Inherent in the concept of “reasonably practicable” is the notion of proportionality; the benefit to be obtained must be weighed against the sacrifices obtained in securing the benefit. Such a weighing exercise is able to engage various issues, including the expenditure, time involved, difficulty and inconvenience (sacrifices), as balanced against the desired objective of limiting exposure (benefit).
[36] We are satisfied that the proposed SAA is a single area and does not contain any part of a prohibited area. The only matter at issue in this application is whether the end-of-aisle displays are located in a position so as not to limit exposure of shoppers to alcohol. In assessing the proposed SAA we must consider whether the SAA in relation to the location of the end-of- aisle displays limit, so far as reasonably practicable, the exposure of shoppers to displays, promotions and advertisement of alcohol under section 112(1). We heard opposing arguments from the applicant on the one hand and the MoH, on the other.
6 In the matter of an application by General Distributors Ltd Q/OFL/53/2015, 11 September 2018.
…
[39] Having considered the submissions and evidence of all the parties two Committee members favoured the position of the applicant and did not consider that the end-of-aisle displays should be excluded from the proposed SAA. The two Committee members who favoured the position of the applicant gave genuine thought and attention to the purpose set out in section 112(1) in relation to the location of the end-of-aisle displays and the exposure of shoppers to that fridge at the premises. Furthermore, the Committee members undertook a balancing exercise of all the relevant matters.
[40] The reasoning for their position includes the following:
(a)The Act does not require that alcohol be excluded from viewing by shoppers;
(b)The sacrifices which the applicant must make outweigh the benefits to be gained from excluding the end-of-aisle displays from the proposed SAA;
(c)The exposure of shoppers to the end-of -aisle displays is limited in nature when compared to the supermarket as a whole.
(f)[sic] Shoppers can avoid walking past the end-of-aisle displays;
(g)Removing the end of aisle displays from the SAA will not result in a material reduction in exposure to displays and promotion of alcohol;
(h)Removing the end-of-aisle displays from the SAA would result in a limited reduction in exposure to displays and promotion of alcohol;
(i)The SAA is small;
(j)The premises are small and as such there are limited option[s] for the SAA;
(k)The dense end style racking for the end of aisle displays limit exposure.
(l)As customers pass the SAA, they will see alcohol on the shelving inside the aisle, whether or not there are end of aisle displays;
(m)The alcohol shelving is surrounded by shelving for non- alcoholic products, including two shelving areas to screen the end of aisle displays. This shelving limits [or] has the effect of limiting exposure to customers in the entrance aisle or beyond the second aisle of the premises; and
(n)The legislation does not place upon sections 112 to 114 the full burden for regulating the sale and supply of alcohol in
order to achieve the object of the Act. The Act’s regulation is effected through many other provisions (eg [sic] restrictions on the kinds of alcohol products to be sold by supermarkets, trading hours).
…
[44] In making this decision we have considered section 112(1) and, by majority, are of the view that the location of the proposed SAA at the premises limits ( as far as is reasonably practicable ) the exposure of shoppers to displays and promotions of alcohol, and advertisements for alcohol.
[13] The dissenting member of the Committee was of the view that the end-of-aisle displays should be excluded from the proposed SAA. She considered that the SAA was not consistent with the statutory purpose of limiting the exposure of shoppers to displays and promotions of alcohol as far as reasonably practicable because there was an alternative position for the alcohol displays on the end-of-aisles which would limit exposure materially better than what was proposed, and which would be reasonably practicable to implement.
The Authority’s decision
[14] The appellant appealed the Committee’s decision to the Authority on the ground that the Committee erred in finding that the proposed SAA (which included the aisle ends) would limit the exposure of shoppers to displays and promotions of alcohol so far as is reasonably practicable. The Authority delivered its decision on 18 April 2019 dismissing the appeal.7 The Authority identified the issue in the appeal as being whether the Committee properly exercised its judgment about whether the SAA limits the exposure of shoppers to alcohol so far as reasonably practicable given that it included end-of-aisle displays. If not, whether the SAA should be described so as to exclude the area where the end-of-aisle displays are located and whether a condition should be imposed preventing end-of-aisle displays. The Authority said:
[63] It is clear from the submissions of [the] Medical Officer of Health that his primary concern is to remove the end-of-aisle displays. It is the fact of these displays that the Medical Officer of Health objects to, and it is because of them that the Medical Officer of Health considers that the SAA has not been described consistent[sic] with the purpose in s 112(1) of the Act.
7 Rainger v General Distributors Ltd [2019] NZARLA 52.
[15] After referring to Medical Officer of Health v G & B Hasler8, where Clark J held that ss 112-114 are concerned with shoppers’ exposure to alcohol, not the arrangement of alcohol on shelving or displays within the SAA, the Authority concluded:
[68] It is clear from this that a proposed SAA will not be inconsistent with the prescription in s 112(1) simply because of the existence of end-of-aisle displays within that SAA.
[69] The fact that this is a renewal application and the configuration of the shelving is apparent in a way it might not have been had this been a new application, should not see the SAA, as the delineation of the perimeter of the proposed area on a plan of the premises, conflated with the configuration of the shelves within the area.
[16] The Authority also addressed a submission made by the MoH that the determination of whether a SAA limits exposure so far as is reasonably practicable requires a comparison of the benefits of reduced exposure of the proposed SAA against the sacrifices to be occasioned, relative to the benefits and sacrifices associated with other alternative proposals. The Authority observed:
[77] This is not what the principles associated with the prescription ‘so far as is reasonably practicable’ require. Comparing the proposed SAA with the alternative SAA suggested by the Medical Officer of Health amounts to asking whether the ratio of benefits or sacrifices for the Medical Officer of Health proposal is greater than the ratio of benefits and sacrifices of the GDL proposal. In situations where other objectors might also put forward alternative proposals, this exercise would be multiplied accordingly.
[17] The Authority also referred to its site visit to GDL’s supermarket to observe the proposed SAA. It said:
[107] Having regard to the drivers of exposure, from its site visit the Authority is of the view that the end-of-aisle displays are not highly visible from a variety of angles and distances. They are not visible outside the SAA itself, nor from the race course9 until one is virtually upon them. Even with the removal of the end-of-aisle ends, the width of the aisles is such that alcohol product will remain visible from the race course without having to enter into the SAA . This means that in the circumstances any additional benefit from removing the end-of-aisle displays is likely to be overstated from the perspective of exposure. Aside from the issue of end-of-aisles, there is no objection to displays of alcohol within the aisle including those which protrude into the aisle.
8 Medical Officer of Health v G & B Hasler [2018] NZHC 1208 at [44] and [48].
9 The pedestrian thoroughfare running around the perimeter of a supermarket is known as, “the race course”.
[108] In terms of the concerns of Mr Li that having the end-of-aisles open on three sides would create a high level of exposure, this has since been mitigated by the use of dense ends. Consequently, it is no longer the case that shoppers will be exposed to end-of-aisle displays from a variety of angles and distance.
[18]The Authority ultimately concluded:
[115] The Authority is satisfied that the [District Licencing Committee] recognised the test it was required to apply, and that in describing the SAA to limit (so far as reasonably practicable), the exposure of shoppers to displays and promotions of alcohol, the [District Licencing Committee] appropriately balanced the benefit sought to be secured and the sacrifices that would be occasioned by securing that benefit. The Authority is satisfied that in doing so it was not required to exclude the end-of-aisle displays from the SAA.
The grounds of appeal
[19]The appellant claims that the Authority:
(a)failed to apply the correct standard for a general appeal by failing to reach its own view on the merits, and treated the appeal as an appeal against the exercise of a discretion;
(b)wrongly concluded that the likely manner of the display of alcohol within the SAA is irrelevant to assessing whether the proposed area limits exposure so far as reasonably practicable;
(c)wrongly treated the objection by the MoH to the proposed SAA as merely an objection to the manner of display because it included end- of-aisle displays. The appellant says that the objection was to location of the SAA based on the area’s proximity to the supermarket perimeter and the inherent nature of display at aisle ends;
(d)wrongly concluded that because end-of-aisle displays are inherently objectionable, their inclusion within a SAA was not relevant to the Committee’s assessment. By doing so the Authority reduced the s 112(1) assessment to a determination of whether aisle ends were absolutely prohibited in an SAA or permitted, rather than considering
the extent of exposure to alcohol products created by the proposed SAA;
(e)failed to correctly apply s 112(1) by holding that the aim of the provision was limitation of shoppers’ exposure to alcohol “to some extent”, and not limitation of exposure “so far as reasonably practicable”;
(f)by declining to undertake a comparative assessment to determine whether the proposed SAA does limit exposure so far as is reasonably practicable when the proposed SAA is opposed by reference to an alternative SAA, and by reference to that alternative.
[20] From these grounds of appeal the appellant draws and identifies five questions of law, which are:
(a)Did the Authority adopt the correct approach to the appeal?
(b)Is the likely manner of display within a proposed single alcohol area relevant to the assessment of whether the proposed area limits exposure so far as is reasonably practicable?
(c)Is the inclusion of aisle-ends in the proposed single alcohol area relevant to the assessment of whether the proposed area limits exposure so far as is reasonably practicable?
(d)Does the purpose set out in s 112(1) aim at limiting exposure to “some extent” only?
(e)Did the MoH’s opposition inherently require comparison of the proposed single alcohol area and the suggested alternative area, against the s 112(1) purpose? Did the appellant’s submission in that regard amount to advancing an absolute standard involving mere practicability?
[21] In my analysis and evaluation of the parties’ submissions, I will address each question separately.
The appellant’s submissions
[22] In his submissions, Mr Browne rearranged the order of the five questions of law in accordance with the appellant’s ranking of their importance. He first addressed the two questions posed in (e):10 whether the MOH’s opposition to the GDL application inherently required the Authority to undertake a comparison of the GDL proposed single alcohol area and the alternative area, against the s 112(1) purpose? And, did the appellant’s submission in that regard amount to advancing an absolute standard involving mere physical possibility?
[23] Mr Browne for the appellant says that shoppers’ exposure to displays and promotions of alcohol positioned at aisle ends is materially greater than is the case where end-of-aisle displays are not used. To this end, the MoH had proposed an alternative SAA that would reduce the level of exposure of alcohol products to customers. This involved removing aisle ends from the SAA and extending the length of the shelf space along the inward facing aisles. This resulted in no reduction of shelf- space, and a lower degree of exposure by shoppers to the alcohol displays.
[24] He submits that where an alternative perimeter of the SAA can be applied which is both reasonably practicable and which limits shoppers’ exposure to alcohol displays and promotion to a greater extent than that proposed by the applicant, that alternative should be adopted consistent with the “purpose provision” contained in s 112(1). At the very least, the Authority should have undertaken a comparison between GDL’s proposed SAA and the MoH’s alternative. Mr Browne submits that as a matter of logic, such a comparison is the only way to determine whether GDL’s proposed SAA limits shoppers’ exposure to alcohol displays so far as is reasonably practicable. Mr Browne says that without consideration of a suggested alternative, a proposed SAA will be assessed in isolation. However, if there is a reasonably practicable alternative which would more effectively limit shoppers’ exposure to alcohol displays, then the decision-maker would necessarily have to conclude that the
10 At [20](e) above.
proposed SAA would not limit the exposure of shoppers to displays of alcohol products so far as reasonably practicable. Conversely if there are no reasonably practicable alternatives which limit exposure more effectively than that which is proposed in the SAA, then the proposed SAA may be found to be consistent with the statutory purpose.
[25] The appellant therefore submits that the Authority erred by rejecting the MoH’s submission that it was required to compare the SAA proposed by GDL with the alternative SAA proposed by the MoH in order to determine whether the MoH’s alternative was a reasonably practicable alternative which would more effectively limit the exposure of shoppers to displays and promotions of alcohol compared to the SAA proposed by GDL.
[26] The appellant further submits that the Authority was wrong to consider that adopting a comparative approach would rapidly become absolute in nature “as it suggests the optimal SAA is the proposal which provides the most reduced exposure relative to other options.”11 Mr Browne submits that the comparative approach is not absolute in nature as any alternative is subject to the “reasonably practicable” qualification. He says that adopting a comparative approach does not assume that no exposure should be allowed, or that exposure must be limited to an extent which is “physically possible”. Mr Browne submits that by rejecting the adoption of a comparative to the alternative area proposed, the Authority treated the alternatives as being irrelevant to its evaluation of the applicant’s proposed SAA, and as a consequence disregarded an important and relevant consideration.
The respondent’s submissions
[27] Ms Arthur-Young submits that the Authority did not fail to undertake a comparison of the GDL and MoH proposed SAAs. She says that the Authority undertook the required evaluative exercise which included considering the effect of removing the end-of-aisle display units from the alcohol area. Counsel notes that having considered the effect of removing the end-of-aisle displays from the alcohol area, the Authority concluded that doing so would not achieve any significant
11 At [78]
reduction of the level of exposure of shoppers to alcohol displays as the alcohol products would remain visible to shoppers on the race course without them having to enter the alcohol area because of the width of the aisles.12
[28] Ms Arthur-Young submits that the words “so far as is reasonably practicable” in s 112(1) do not create an absolute standard, and the possibility of doing something other than what is proposed does not mean that it is reasonably practicable to do so. She notes that the Authority said that the comparative exercise proposed by the appellant would require it to make a comparison of the benefits of reduced exposure of the proposed SAA against the sacrifices required to be made, relative to the benefits and sacrifices associated with other alternative proposals, and submits that the Authority correctly concluded that a comparative assessment of alternative areas in order to determine which area limits exposure to the greatest extent is not required by the Act.
[29] Ms Arthur-Young further submits that where a Council or Authority considers that end-of-aisle displays should not be permitted, the decision-maker can use the power conferred by s 117 to impose reasonable conditions which prohibit displaying or promoting alcohol by means of end-of-aisle displays. She refers to a recent decision of the Authority in General Distributors Limited v Medical Officer of Health (Bay of Plenty) in which the Authority upheld a decision of a District Licensing Committee to impose a condition which stipulated that the single alcohol area “ shall contain no end-of-aisle displays of alcohol that face out from the SAA and into the main shopping area of the premises.”13 Counsel submits that the use of s 117 and the imposition of conditions is the correct way to address concerns regarding the effect of end-of-aisle displays in those particular situations where it is considered necessary to limit exposure of shoppers to alcohol displays.
12 At [107]
13 General Distributors Limited v Medical Officer of Health (Bay of Plenty) [2019] NZARLA 200.
ANALYSIS
Question 1: Is a comparative assessment of alternative proposed alcohol areas required?
[30] The Authority addressed the MoH’s submission regarding undertaking a comparative assessment as follows:
[76] In the present appeal, the position of the Medical Officer of Health is that the determination of whether a SAA limits exposure so far as is reasonably practicable requires a comparison of the benefits of reduced exposure of the proposed SAA against the sacrifices to be occasioned, relative to the benefits and sacrifices associated with other alternative proposals.
[77] This is not what the principles associated with the prescription ‘so far as is reasonably practicable’ require. Comparing the proposed SAA with the alternative SAA suggested by the Medical Officer of Health amounts to asking whether the ratio of benefits and sacrifices of the GDL proposal is greater than the ratio of benefits and sacrifices of the GDL proposal. In situations where other objectors might also put forward alternative proposals, this exercise would be multiplied accordingly.
[78] Such an approach rapidly becomes absolute in nature as regards the degree of exposure, as it suggests the optimal SAA is the proposal which provides the most reduced exposure relative to other options. Such a position not only approaches the ‘physically possible’ standard which is contrary to the principles summarised by Gendall J, but it is not supported by the plain reading of s 112(1). Nowhere in s 112-114 is there a requirement to describe the ‘best’ SAA relative to other possible configurations of the premises.
[79] Moreover, contrary to the submission of the Medical Officer of Health, it is implicit in the nature of the prescription to limit exposure so far as is reasonably practicable, that exposure will only be limited to ‘some extent’ as against an absolute standard. However, there is no such absolute standard. As Gendall J put it, the requirement is neither absolute nor de minimis. What the evaluative task requires is judgement about whether the ‘extent’ of the limitation is insufficient, too severe or appropriate in the circumstances. Ultimately, where the limitation is not acceptable to the decision-maker, the decision-maker must decline the application.
[31] The Authority said that adopting a comparative approach suggests that the objective is to determine the “optimal SAA” – the option which provides the most reduced exposure relative to other options. The Authority considered that such an approach is not supported by a plain reading of s 112(1) and that there is no requirement in ss 112-114 for the Authority “to describe the “best” SAA relative to other possible configurations of the premises.”14
14 At [78]
[32] In reaching this conclusion the Authority also drew on earlier observations of the Authority in Vaudrey and Bond Markets Limited v Christchurch District Licensing Inspector and ors, in which it had said:15
[54] The issue is not whether another area might limit the exposure of shoppers to displays of alcohol to a significantly greater extent that the area proposed by Bond. Rather, the consideration for the Authority is whether the area plan proposed by Bond limits, so far as is reasonably practicable, the exposure of shoppers to displays, promotions and advertisements of alcohol. The primary focus is on the proposal put forward by Bond. In the first instance, the Authority is not engaged in a comparative exercise between the applicant’s proposal, the Inspector’s proposal, the DLC’s proposal or some other possible area.
[55] Accordingly, the Authority cannot propose an alternative area before it first forms a view on Bond’s proposed area. Other options may come to the fore if the Authority is not satisfied with Bond’s proposal. But that is a second step after having first the proposal in the application by Bond. Then, if after having undertaken the evaluative exercise described by Gendall J, other options are not acceptable, the Authority must decline the application.
[33] The Court of Appeal in Vaudrey considered the purpose provision contained in s 112 (1) and explained the application of s 113(1) as follows:16
[40] In our view, the correct construction of s 113 is that in performing the function in s 113(2) of describing the single area, the decision-maker is subject to the dual directives set out in s 113(1) and (5). Section 113(5) prescribes two prerequisites about which the decision-maker must form an opinion before the single area may be described.
[41] The obligation imposed by s 113 (1), while mandatory, is not as absolute in nature as the s 113(5) prerequisites. The requirement to “have regard to” a matter imports only an obligation to give genuine attention and thought to the stipulated matter. …..Indeed the phrase imposes a somewhat less onerous obligation than the stronger formula “have particular regard to”.
[42] Similarly, in the context of s 113(1), it would not be sufficient for the [District Licensing Committee] to reach a conclusion on the perimeter of the single area simply because it formed the opinions required under s 113(5)(a) and (b) unless the [District Licensing Committee also specifically had regard to the purpose stipulated in s 112(1).
….
[44] Although not required to “give effect to” that specific purpose, when forming the s 113(5) opinions and in undertaking the s 113(2) description it is a matter for the decision-maker to consider whether and to what extent the proposed single area limits, so far as reasonably practicable, shoppers
15 Bond Markets Ltd v Christchurch District Licensing Inspector and ors [2017] NZARLA PH 294- 295.
16 J & C Vaudrey Ltd v Canterbury Medical Officer of Health [2016] NZCA 539.
exposure to alcohol displays, promotions, and advertisements. If, having regard to the s 112(1) purpose, the decision-maker considers that the proposed single area is incompatible with that purpose, the decision-maker is entitled, but not obliged, to take that into account in the decision to approve, decline or propose an amendment to the description of the single area proposed in the application.
[45] Consequently, the answer to question 1 is that s 113(1) directs the decision-maker to give genuine attention and thought to the purpose stated in s 112(1) in describing the single alcohol area. The decision-maker must take into account the purpose of limiting so far as reasonably practicable the extent of shoppers’ exposure to alcohol displays, promotions and advertisements in describing the alcohol area.
[34] As explained by the Court of Appeal in Vaudrey, and as is clear from the wording of s 112(1), the purpose of ss 112 – 114 regarding the granting of off-licences and describing alcohol areas is that the alcohol area must be located or positioned in the store in such a place that it will limit the exposure of shoppers in supermarkets to displays and promotions of alcohol, so far as is reasonably practicable. In order to determine whether an applicant’s proposed SAA meets this test, the decision-maker will necessarily need to have regard to any alternative description that is reasonably practicable.
[35] Section 113(2) stipulates that an alcohol area must be described by means of a plan of the footprint of the premises showing the configuration and arrangement of the premises and the perimeter of the area, and I respectfully agree with the reasoning and conclusion of Clark J in Medical Officer of Health ( For the Manawatu District ) v G & B Hasler Limited, in which she noted in relation to s 113(2) that:17
[44] Subsection (2) draws a clear distinction between the requirement for a plan of the footprint of premises showing the configuration and arrangement of the premises, and the bare requirement to show the perimeter of the alcohol area. The reason for the distinction is obvious:
…
(e) Manifestly, the layout of shelving and alcohol within the alcohol area, has no bearing on the decision to position the alcohol area. Sections 112-114 are concerned not with the arrangement of shelving or displays within the area but with limiting the exposure of shoppers to displays of alcohol and that is achieved ( principally ) by ensuring its perimeter is not in an impermissible section of the store. It is for this reason
17 Medical Officer of Health (for the Manawatu Health District) v G & B Hasler Ltd [2018] NZHC 1208.
that the bare perimeter of the alcohol area is to be shown on the plan accompanying the licence application. Details of configuration and arrangement such as those required for the premises are inapplicable to the space within an alcohol area.
[36] However, while the process of describing the alcohol area pursuant to s 113(2) requires the decision-maker to be satisfied that the provisions of s 113(5)(a) and (b) are met, the additional third step of the decision-maker in considering whether the proposed area limits shoppers’ exposure to alcohol so far as is reasonably practicable can also involve the decision-maker considering the effect of any end-of aisle displays located within the proposed area. In particular, the decision-maker may consider the likely effect of those displays on shoppers’ exposure to alcohol, including whether an alternative suggestion of the perimeter of the proposed area should be adopted which would better achieve the purpose of limiting that exposure. By considering, and where appropriate, adopting such an alternative alcohol area perimeter, the decision-maker is not, in my view, engaging in a process of prescribing the layout of shelving and position of alcohol within the area, but rather is describing the area, and specifically its perimeter, in a way that gives effect to the s 112(1) purpose.
[37] I do not agree with the Authority that by engaging in a process of considering and comparing alternative options for describing an alcohol area, the decision-maker will be undertaking a process that “rapidly becomes absolute in nature as regards the degree of exposure, as it suggests thee optimal SAA is the proposal which provides the most reduced exposure relative to other options”, and that where other objectors also put forward alternative proposals the exercise of assessing the ratio of benefits and sacrifices relevant to each proposal would be multiplied accordingly. The process of assessing how effective a proposed alcohol area is in terms of limiting shoppers’ exposure to displays and promotions of alcohol compared to one or even more than one other proposed area is unlikely to be complicated or difficult. Where an alternative proposed area can be shown to be a reasonably practicable option which will limit exposure of shoppers to displays and promotions of alcohol to a greater degree than the applicant’s proposed area, then that will be a relevant consideration for the decision-maker to take into account when deciding whether to approve or reject the applicant’s proposed SAA.
[38] The existence of a proposed alternative alcohol area and how effective it would be at limiting the exposure of shoppers to alcohol displays and promotions will be relevant to the decision-maker’s decision as to whether or not to grant or reject the SAA application, as it may well inform the issue of whether the area proposed by the applicant does limit the exposure of shoppers to alcohol displays so far as is reasonably practicable. In assessing whether the alcohol area proposed by the applicant is acceptable, the decision-maker is entitled to take all relevant considerations into account including the comparative effectiveness as regards the s 112(1) purpose of an alternative proposed alcohol area. The comparison will involve consideration of the alternative and identified area proposed by an objector. As the Court of Appeal in Vaudrey noted:
[54] We accept that the decision-maker cannot unilaterally describe a single area which is beyond the perimeter of the area proposed by the applicant. Were it otherwise, the decision-maker could in effect redesign the layout of the store. However the decision-maker is not fettered by the plan and single area perimeter proposed by the applicant. The applicant does not have the ability in effect to dictate where in the store the single area location will be.
[55] If the decision-maker does not accept the single area proposed by the applicant or a sub-area within that perimeter, it has two options. One is to decline the application. The other is to indicate to the applicant that it would be minded to grant the application if a revised plan was submitted incorporating a single area acceptable to the decision maker at another location within the store.
[39] It is clear from the process described by the Court of Appeal that in the course of undertaking the three step evaluative assessment described by Gendall J,18 and determining the suitability of the area proposed by the applicant, the decision-maker is not precluded from considering an alternative single alcohol area.
[40] Accordingly, in my view, where an objector has proposed an alternative SAA it is necessary for the decision-maker to consider the proposed alternative and assess whether it is reasonably practicable, and to compare the benefits and sacrifices arising from the adoption of that alternative proposal with those relevant to the applicant’s proposed area in light of the purpose of limiting shoppers’ exposure to displays of alcohol so far as is reasonably practicable. In my view such an approach is consistent
18 Christchurch Medical Officer of Health v J & G Vaudrey Ltd [2016] 2NZLR 382 at [61]; J & C [sic] Vaudrey Ltd v Canterbury Medical Officer of Health [2017] 2 NZLR 334 at [58].
with the obligation on the decision-maker to take all relevant considerations into account. Such an assessment of the relative merits of each proposal in terms of how effectively they would limit shoppers’ exposure to displays of alcohol will enable the decision-maker to make a better informed decision as to whether to approve or reject the SAA as proposed by the applicant, or approve the proposed alcohol area subject to conditions imposed pursuant to s 117.
[41] Accordingly, the answer to the question: Was a comparative exercise required? is: yes.
[42] The answer to the question: Did the appellant’s submission in that regard amount to advancing an absolute standard involving mere possibility? is: no.
Question 2: Does the purpose set out in s 112(1) aim at limiting exposure to “some extent” only?
[43] In my view the answer to the question is clear from the terms of s 112(1) itself. Section 112(1) clearly states that the purpose of ss 112 – 114 is to limit the exposure of shoppers to alcohol displays and promotions “so far as is reasonably practicable”. The degree and the extent by which the exposure is required to be limited will be assessed by reference to what is reasonably practicable in the circumstances of that particular situation. It appears that by using the phrase “to some extent”, the Authority was distinguishing between an absolute standard of limiting exposure, and some lesser level of limitation. The extent to which the SAA will limit shoppers’ exposure will vary having regard to the individual circumstances, and it is clear that the purpose in s 112(1) is not intended to require more than what is considered to be reasonably practicable. The clear objective of s 112(1) is to limit shoppers’ exposure to displays of alcohol so far as is reasonably practicable, and not to impose an absolute standard prohibiting exposure or visibility altogether. A SAA will therefore always limit shoppers’ exposure to displays of alcohol “to some extent” - that being less than would be the case if all exposure was prohibited. However, the clear objective of s 112(1) is the limitation of exposure to shoppers so far as is reasonably practicable.
[44] Accordingly, the answer to the question: Does the purpose set out in s 112(1) aim at limiting exposure to “some extent” only? is: no. The purpose set out in s 112(1)
is aimed at limiting exposure of shoppers to displays of alcohol, so far as is reasonably practicable.
Question 3. Is the likely manner of display within a proposed single alcohol area relevant to the assessment of whether the proposed area limits exposure so far as is reasonably practicable?
[45] While the manner in which alcohol is displayed and promoted within the perimeter of an alcohol area is generally not a matter which is relevant to the assessment of a SAA, where the likely manner of display within the SAA will have a direct bearing on the issue of whether the proposed SAA will limit the exposure of shoppers to alcohol so far as reasonably practicable, then in my view that will be a relevant consideration to be taken into account.
[46] Accordingly, the answer to the question: is the likely manner of display within a proposed SAA relevant to the assessment of whether the proposed are limits exposure so far as is reasonably practicable? is: yes.
Question 4. Is the inclusion of aisle-ends in the proposed single alcohol area relevant to the assessment of whether the proposed area limits exposure so far as is reasonably practicable?
[47] Because of their greater marketing impact compared to other shelving and displays, the inclusion of aisle-ends in an alcohol area may be relevant to the issue of whether the proposed alcohol area limits exposure of shoppers to alcohol displays so far as reasonably practicable. Whether they are relevant will depend on the circumstances in each case and the degree to which the effect that they may have bears upon the issue of limiting the exposure of shoppers to displays of alcohol so far as is reasonably practicable.
[48] For example, in GDL v Medical Officer of Health (Bay of Plenty), the Authority described the significance of the end-of-aisle displays as follows:19
[59] Having itself viewed the premises, the Authority is satisfied that this is a view that was open to the DLC. As a consequence of the four ends-of-aisles, the display the display and promotion of alcohol is pronounced and confronting to shoppers outside the SAA. As already noted, not only are end-
19 General Distributors Ltd v Medical Officer of Health (Bay of Plenty) [2019] NZARLA 200.
of-aisle displays visible from outside the SAA, they are visible before one even enters the store proper.
[49] The Committee in that case addressed its concern by granting the application for a SAA but imposing a condition pursuant to s 117 which stipulated that the SAA “shall contain no end-of aisle displays of alcohol that face out from the SAA and into the main shopping area of the premises.” 20
[50] Accordingly, the answer to the question: Is the inclusion of aisle-ends in the proposed single alcohol area relevant to the assessment of whether the proposed area limits exposure so far as is reasonably practicable? is: yes, where by reason of the location and prominence of the end of aisle displays, the decision-maker considers that by reason of the location of the SAA and its proximity to passing shoppers in the supermarket, the level of shoppers’ exposure to alcohol displays is not limited so far as is practicable.
Question 5. Did the Authority apply the correct standard for deciding a general appeal?
[51] The final ground of appeal is that the Authority failed to apply the correct standard of a general appeal by failing to reach its own view on the merits and treated the appeal as if it were an appeal against the exercise of a discretion.
[52] Mr Browne submits that the appeal before the Authority was a general appeal and not an appeal from the exercise of a discretion. He notes that pursuant to s 157(1) of the Act, appeals to the Authority are to proceed by way of rehearing. The Authority has a discretion to rehear the evidence of witnesses who gave evidence before the Licencing Committee and to hear and receive further evidence on questions of fact.
[53] He submits that the Authority erred by treating the appeal as an appeal against discretion and by framing the issue arising from the appeal as being whether the Licencing Committee had “properly exercised its judgment” about whether the SAA limits the exposure of shoppers to alcohol so far as reasonably practicable. Counsel
20 General Distributors Limited v Medical Officer of Health (Bay of Plenty) [2019] NZARLA 200, at [3].
submits that the Authority failed to adopt the correct approach for the appeal and failed to reach its own view on the merits of the appeal as it was required to.
[54] Mr Browne says that the Authority’s error “permeated” its decision, as is clear from its finding that the decision of the Licencing Committee was one which was “open to [it] on the evidence.”21 He submits that the question for the Authority was not whether the Committee’s conclusion on the evidence was open to it, but whether having reviewed all the evidence it considered whether the proposed SAA limited the exposure of shoppers at the supermarket so far as is reasonably practicable. He further submits that the Authority’s findings and observations, concluding that the Committee had recognised the test it was required to apply and had appropriately balanced the benefit sought to be secured and the sacrifices that would be occasioned by securing that benefit, are not mere errors in the language used by the Authority in explaining its reasons. They show that the Authority failed to undertake the task of reaching its own opinion on the merits of GDL’s licence renewal application, and which required it to make its own evaluative assessments.
The Respondent’s submissions
[55] Ms Arthur-Young submits that the Authority understood and applied the correct approach to determining the appeal. She submits that the Authority properly determined that, based on its own assessment of the evidence, the MoH’s appeal should be dismissed. Counsel says that it is apparent that the Authority undertook an assessment of the evidence before it and found: that the evidence of Dr Lang was not “of direct assistance in determining whether the SAA limits so far as is reasonably practicable the exposure of shoppers to alcohol”22; that the appellant’s evidence did not establish a link between the harm caused by alcohol and the renewal of the respondent’s off-licence; that the evidence given by Mr Radich on behalf of the respondent accorded with the Authority’s observations of the premises and, in particular, that there was evidence there would be a cost in re-laying the store should the SAA be reduced in size by the removal of the end-of-aisle displays.
21 At [114]
22 At [106].
[56] Ms Arthur-Young submits that based on its own assessment of the evidence, a site visit to the premises and the submissions presented to it, the Authority had dismissed the appeal and confirmed the Licencing Committee’s decision.23
[57] The proper approach to determining an appeal under ss 152-158A is made clear by s 157: an appeal from a decision of a Licencing Committee is a general appeal to proceed by way of rehearing. The Supreme Court explained in Austin, Nichols & Co Inc v Stichting Lodestar that:24
[16] Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court’s opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court’s assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.
[58] The Supreme Court also observed that where a tribunal has had a particular advantage such as technical expertise or the opportunity to assess the credibility of witnesses, an appellate court may rightly hesitate to conclude that findings of fact or fact and degree are wrong. I note, however, that was not the situation here where the Authority was as much a specialist body with experience in the field of alcohol regulation as was the Committee. The Supreme Court also said:25
[An appellate court] may take the view that it has no basis for rejecting the reasoning the tribunal appealed from and that its decision should stand. But the extent of the consideration an appeal court exercising a general power of appeal gives to the decision appealed from is a matter for its judgment. An appeal court makes no error in approach simply because it pays little explicit attention to the reasons of the court appealed from, if it comes to a different result. On general appeal, the appeal court has the responsibility of arriving at its own assessment of the merits of the case.
[59] I find that the Authority did refer to and consider the evidence for itself, and having done so it appears to have made its own assessment of the merits of the appeal. It does not matter that it was the same conclusion reached by the Committee. By finding the Committee properly exercised its judgment on whether the SAA limits the
23 At [112] and [117].
24 Austin, Nichols & Co Inc v Stichting Lodestar [2001] NZSC 103, [2008] 2 NZLR 141.
25 At [5]
exposure of shoppers to alcohol so far as is reasonably practicable, and by finding that the Committee’s conclusion, that it was not necessary to exclude the end-of-aisle displays from the SAA, was open to it on the evidence, the Authority expressed itself in terms that plainly show that it was addressing whether the Committee itself had adopted the correct approach and whether it had made a decision that was supported by evidence. This is made clear by the terms in which the Authority expressed its conclusion by saying:
[115] The Authority is satisfied that the DLC recognised the test it was required to apply, and that in describing the SAA to limit (so far as is reasonably practicable), the exposure to shoppers to displays and promotions of alcohol, the DLC appropriately balanced the benefit sought to be secured and the sacrifices that would be occasioned by securing that benefit. The Authority is satisfied that in doing so it was not required to exclude the end- of-aisle displays from the SAA.
[60] It further appears from its decision that the Authority accepted that the Committee had adopted the correct approach and based its decision on sufficient evidence and consequently, the Authority was not minded to disturb the Committee’s findings.
[61] However, deciding that the Committee’s decision was one which was open to it on the evidence addresses a quite different issue than that of the Authority independently assessing the evidence and merits of the renewal application and reaching its own conclusion.
[62] While the Authority’s conclusion expresses its approval of the Committee’s recognition of the test it was required to apply and the process it adopted by balancing the benefits and sacrifices of the SAA, it does not directly express the Authority’s own independent view of the merits of the renewal application.
[63] In my view, by adopting that approach the Authority failed to discharge its responsibility of arriving at its own assessment of the merits of the renewal application and the proposed SAA. I consider that the Authority’s approach falls short of discharging the responsibility it had of arriving at its own independent assessment of the merits of the case and expressing its reasons for doing so as it is required to do.
[64] Accordingly, I find that the Authority erred in law by adopting an incorrect approach and by failing to undertake is own independent assessment of the merits of the GDL renewal application.
Result
[65]The appeal is allowed and the decision of the Authority is set aside.
[66] The GDL application is remitted back to the Authority for reconsideration and determination in accordance with this Court’s findings and answers to the questions posed by the appeal as follows:
(a)Question 1(part 1): Is a comparative assessment of alternative proposed alcohol areas required? - Yes.
(b)Question 1 (part 2): Did the appellant’s submission in that regard amount to advancing an absolute standard involving mere possibility?
– No.
(c)Question 2: Is the likely manner of display within a proposed SAA relevant to the assessment of whether the proposed are limits exposure so far as is reasonably practicable? – Yes.
(d)Question 3: Is the likely manner of display within a proposed SAA relevant to the assessment of whether the proposed are limits exposure so far as is reasonably practicable? – Yes.
(e)Question 4: Is the inclusion of aisle-ends in the proposed single alcohol area relevant to the assessment of whether the proposed area limits exposure so far as is reasonably practicable? – Yes.
(f)Question 5: Did the Authority apply the correct standard for deciding a general appeal? – No.
Paul Davison J
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