Woolworths New Zealand Limited v Alcohol Regulatory and Licensing Authority
[2020] NZHC 971
•13 May 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2017-404-2760
CIV 2017-404-2538
CIV 2017-404-2715[2020] NZHC 971
UNDER The Judicial Review Procedure Act 2016 IN THE MATTER
of section 81 of the Sale and Supply of Alcohol Act 2012 (“Act”) in relation to an application to review statutory decision of the Alcohol Regulatory and Licensing Authority in relation to appeals on the Auckland District Council’s Provisional Local Alcohol Policy (“PLAP”) under the Act
BETWEEN
WOOLWORTHS NEW ZEALAND LIMITED
First Applicant
Continued over
Hearing: 11-15 February 2019, 20 February 2019, 20 & 21 June 2019
Further submissions 3 July 2019, 2 August 2019, 12 August 2019
Appearances:
J Cooper QC, A Braggins and C F Timbs for First Applicant R Hooker and M Martin for Second Applicant
I Thain and I Scorgie for Third Applicant No appearance for First Respondent
P McNamara and T Fischer for Second Respondent D R La Hood, Medical Officer of Health
V McCall for First Respondent, abides the decision of the Court
Judgment:
13 May 2020
JUDGMENT OF DUFFY J
This judgment was delivered by me on 13 May 2020 at 10 am pursuant to
Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar
WOOLWORTHS, REDWOOD & ORS v ALCOHOL REGULATORY AND LICENSING AUTHORITY [2020] NZHC 971 [13 May 2020]
REDWOOD CORPORATION LIMITED
Second Applicant
FOODSTUFFS NORTH ISLAND LIMITED
Third Applicant
ALCOHOL REGULATORY AND LICENSING AUTHORITY
First Respondent
AUCKLAND COUNCIL
Second Respondent
THE MEDICAL OFFICER OF HEALTH
Third Respondent
[1] Redwood Corporation Limited (Redwood) is the plaintiff in one of three judicial review proceedings that were heard together before me, but not joined. The plaintiffs in each of those proceedings sought judicial review of the decision of the Alcohol Regulatory Licensing Authority (ARLA) on their appeals against elements of the Auckland Council’s Provisional Local Alcohol Policy (PLAP).
[2] The Auckland Council (the Council) opposed those judicial review proceedings as did the Medical Officer of Health, who was joined as an interested party in the proceedings.
[3] On 27 February 2020, I delivered judgment on the judicial review proceedings brought by the two other plaintiffs, Woolworths New Zealand Limited (Woolworths)1 and Foodstuffs North Island Limited (Foodstuffs), their judicial review claims were allowed and ARLA was directed to reconsider its decisions regarding the impugned elements of the PLAP.2
[4] Woolworths and Foodstuffs’ judicial reviews were dealt with separately because there were common features in those proceedings: namely, they challenged elements of the PLAP relating to off-licences. Redwood is the holder of an on-licence. Some of the arguments it makes are different from those made by Woolworths and Foodstuffs, however, some of the complaints Redwood makes about ARLA’s decision-making are much the same as those made by the others. Accordingly, this judgment should be read together with the earlier judgment.
[5] Redwood is the owner and operator of the Pelican Club, which is a licensed brothel situated on the western side of Newton Road. The Pelican Club has operated for over 20 years between the hours of 8am and 4am and during this time it has held a licence that allows for the sale of alcohol between those hours. Its business operation has never been associated with alcohol related harms.
1 Woolworths New Zealand Limited was formerly known as Progressive Enterprises Limited, which is the name used in the decision under review.
2 Woolworths New Zealand Ltd v Alcohol Regulatory and Licensing Authority [2020] NZHC 293. (Woolworths).
[6] The Pelican Club’s physical location is important for present purposes because under the PLAP it is situated outside the designated City Centre (the City Centre), and the PLAP imposes a closing hour limit of 3am on all on-licence holders outside the City Centre. Whereas, on-licence holders within the City Centre are subject to the same 4am closing hours restriction as is stipulated in s 43 of the Sale and Supply of Alcohol Act 2012 (SSA).
[7] The Pelican Club has always operated until 4am and whilst the sale and supply of alcohol is not the primary business, the availability of alcohol is one of the features of the services it provides to its customers. The 3am closing restriction the PLAP imposes will adversely affect the Pelican Club because those persons who typically use its services between 3am and 4am will no longer be able to enjoy the supply of alcohol. This will place the Pelican Club at a competitive disadvantage with licensed brothels that operate within the City Centre. Hence Redwood’s appeal to ARLA, and following the appeal’s dismissal the commencement of this judicial review proceeding.
Background
[8] Under the SSA territorial authorities can choose to adopt local alcohol policies. If they do they must commence the process by adopting a draft local alcohol policy (DLAP), and they must then follow the special consultative procedures set out in the Local Government Act 2002. Once this process is completed they then take time to consider the submissions received, and in accordance with the process set out in the SSA they may formulate a PLAP.
[9] When the Council prepared its DLAP it designated a “City Centre” for the Auckland region and a series of other areas, which it called “priority overlay areas” and “neighbourhood centres”. A line was drawn down the centre of Newton Road designating this as one of the boundaries of the proposed City Centre; the eastern side of the road was within the City Centre, whereas, the western side was not. For the Pelican Club this was significant because it is located on the western side of Newton Road. It appeared before the Council and submitted the boundary line should be extended to include the western side of Newton Road within the City Centre.
[10] However, the designation of the City Centre boundaries was generally contentious and after the hearings had closed and the Council came to formulate the PLAP it decided to adjust the City Centre boundaries in the DLAP, with the result that in relation to the relevant boundary affecting Redwood it was moved from the middle of Newton Road to Karangahape Road. Thus, Redwood found it was even further away from the proposed City Centre than was the case under the DLAP.
[11] Redwood appealed to ARLA against the proposed maximum trading hours for new and existing on-licences outside the City Centre and against the boundary of the City Centre as defined by the PLAP. In this regard Redwood appealed against the exclusion of the “mixed-use” business area on Newton Road, between the North- western Motorway and Symonds Street, from the City Centre on the ground the boundary was arbitrary because it was defined by reference to the “City Centre” zone of the Auckland Unitary Plan rather than by reference to evidence of harm caused by the “excessive or inappropriate consumption of alcohol beyond the boundary.”
ARLA’s decision
[12] There were a number of appeals against the PLAP. ARLA delivered one decision in which it dealt with all appeals. The decision falls into two parts: first it deals in a general way with the law and the appropriate approach on appeal; secondly, it specifically addresses the various elements of the PLAP that were under appeal and the arguments the respective parties made about those elements.3
[13] The approach that ARLA took and the general findings that it made on the various appeals it heard against the PLAP were dealt with by me in Woolworths. The findings that I made and the reasoning in support thereof are relevant here as well. Where that is so I propose simply to refer to the findings I made in Woolworths, with reference back to the parts of that judgment which provide the reasons for them. It follows that certain grounds of judicial review on which Redwood relies will have already been determined by the findings that I made in Woolworths.
3 See [40] – [45] of Woolworths for a more detailed discussion of ARLA’s approach to its decision.
[14] Similarly, with ARLA’s decision on the specific elements of the PLAP under appeal sometimes the grounds of appeal and arguments advanced by Woolworths and Foodstuffs overlap with Redwood’s appeal, in which case the reasoning given here should also be read in context with the relevant passages of the Woolworths judgment. But otherwise ARLA’s findings on the specific grounds of appeal raised by Redwood require separate attention.
[15] ARLA’s decision refers specifically to Redwood’s appeal twice. First, in relation to the PLAP’s designation of the boundaries of the “City Centre”, in particular the boundary running along Karangahape Road as this excluded the Pelican Club from being within the City Centre zone. Secondly, the imposition of 3am as the maximum closing hour for on-licences outside the City Centre.
[16] Redwood argued on appeal that the City Centre boundaries were defined arbitrarily. ARLA rejected this argument finding that:4
Similarly, [ARLA] does not consider that it has been established that the City Centre boundary has been defined arbitrarily simply because it is defined by reference to the Auckland Unitary Plan. The city centre was defined by reference to alcohol-related harm first and referenced against the Unitary Plan boundary to more easily implement the policy. (emphasis added)
[17] The above was one of the reasons that led ARLA to conclude that the definition of the City Centre was not “unreasonable in light of the object of the [SSA]”;5 this being the sole test on appeal to ARLA.
[18] Redwood also argued against the 3am closing hour restriction. It contended there was “no evidential basis for imposing an arbitrary reduction of one hour in the closing time for on-licences.” Further, that to so restrict the closing hours creates “an economic advantage for businesses holding on-licences that happen to be within the defined City Centre”. Here Redwood repeated its argument that the boundaries of the City Centre were arbitrary and unexplained because: (a) they bore no relationship to the safe, and responsible sale, supply and consumption of alcohol; and (b) they were not based on evidence of harm caused by excessive or inappropriate consumption of
4 At [83] of Redwood Corporation Ltd v Auckland City Council [2017] NZARLA PH 247-254. (ARLA’s Decision).
5 At [85] of ARLA’s Decision.
alcohol beyond those boundaries. From this Redwood argued that the closing hour restriction element was a disproportionate or excessive response to a perceived problem. ARLA rejected this argument.6
[19] ARLA reviewed Redwood’s evidence and arguments finding that: (a) the evidence of Redwood’s expert witness Mr Grala was misplaced as it appeared to ARLA to be directed at whether the Pelican Club’s business was permitted under the Auckland Unitary Plan’s City Centre and “Mixed Business Use Zone”; (b) Redwood had not “established” that the Council had not paid regard to its district plan, as it was required to do by s 78(2)(a) of the SSA; (c) Redwood did not consider the 3am closing was supported by the “plan”, but this was not the test ARLA was required to apply;
(d) ARLA repeated its earlier finding that the City Centre definition was not arbitrary; and (e) Redwood’s arguments about the adverse economic consequences it would suffer from reduction of the on-licence closing hours, and those consequences not being felt by on-licences within the City Centre zone, was not supported by evidence in respect of those other premises.7 All of which led ARLA to conclude:8
The onus of proof being on the appellant, [ARLA] does not consider that Redwood… has established that 3.00am is unreasonable in light of the object of the [SSA]. And as already noted, [ARLA] has no jurisdiction to grant the primary relief sought by Redwood … namely the deletion of clauses 5.3.1 and
5.3.2 from the PLAP. (emphasis added)
[20] Accordingly, Redwood’s appeal was dismissed. Hence the judicial review proceeding.
Did ARLA err in the way it determined Redwood’s appeal
[21] In its statement of claim Redwood pleads the existence of a number of errors of law or instances of “irrational” decision-making on the part of ARLA, all of which are denied by the Council.
[22] One of those errors is that ARLA erred in law when it determined there was an onus of proof on appellants to prove that any particular element of a PLAP was
6 At [185] of ARLA’s Decision.
7 See discussion at [188] of ARLA’s Decision.
8 At [190] of ARLA’S Decision.
unreasonable in light of the object of the SSA. With Redwood’s appeal against the 3am closing hours for on-licences outside the City Centre zone, ARLA expressly found that Redwood had failed to discharge this onus of proof. Secondly, in a more general way ARLA used the language of proof when it stated that it did not consider it had been established that the City Centre boundaries were defined arbitrarily.9
[23] Of key importance here is the finding in Woolworths that an appellant before ARLA bears no onus of proof when it comes to advancing its appeal.10 This finding and the reasons on which it relies are equally applicable here to Redwood.
[24] The Council argues that ARLA’s references to onus of proof do not invalidate its decision. Here the Council seeks to distinguish between different types of burdens of proof (a) evidential; (b) legal burden or burden of persuasion; and (c) tactical burden. The Council argues there is no suggestion ARLA thought an “evidential threshold” must be crossed to enable consideration of appeals. However, that is at odds with how ARLA expressed itself at [31] of the decision, when it referred to not only the onus of proof being on an appellant but also went on to refer to the “standard of proof [being] on the balance of probabilities”.11 This suggests to me that ARLA was incorrectly applying an evidential burden of proof requirement as well as a legal burden of proof because ARLA was expecting them to adduce evidence that met the civil standard of proof in order for them to meet the appeal test. Indeed at [189] and
[190] of its decision ARLA seems to be saying just that in relation to Redwood.
[25] The Council refers to ARLA’s reference in [31] of its decision to what it had earlier said in Hospitality New Zealand Incorporated v Tasman District Council and particularly places emphasis on the second sentence:12
The onus on the appellant to satisfy the Authority that the appealed element is unreasonable in light of the object of the Act. The very wording of the ground of appeal places that onus on the appellant. Should an applicant fail to
9 At [83] of ARLA’S Decision.
10 Woolworths at [64] and [117]. See also Re Venus NZ Limited [2015] NZHC 1377, [2015] NZAR 1315 and Lower Hutt Liquormart Ltd v Shady Lady Lighting Ltd [2018] NZHC 3100 and see Medical Officer of Health (Wellington Region) v Lion Liquor Retail Ltd [2018] NZHC 1123, [2018] NZAR 882.
11 See ARLA’s Decision at [31].
12 Hospitality New Zealand Incorporated v Tasman District Council [2014] NZARLA ph 846.
discharge its onus on the balance of probabilities then there would be no need for a Territorial Authority respondent to do anything.
[26] The Council argues that ARLA was correct to read the language of s 83 of the SSA as being consistent with “a burden of proof” or “a burden of persuasion” on an appellant. The Council argues that the reference in s 83 to the requirement to “satisfy” ARLA that an element is unreasonable in light of the object of the Act means in all likelihood that an appellant will need to persuade the Authority of this through evidence and legal argument. This leads the Council to argue that the more accurate description of the burden that ss 81 and 83 impose on an appellant is a tactical burden in the sense appellants will need to produce evidence of unreasonableness if their appeal is to succeed. I do not find these arguments persuasive.
[27] The language of s 81 does not suggest the imposition of any onus of proof on an appellant. Nor does the language in s 83. The requirement in s 83 for ARLA to dismiss an appeal against an element of a PLAP if it is not satisfied that the element is unreasonable in light of the object of the SSA is more consistent with ARLA having an inquisitorial and evaluative role, which requires ARLA to satisfy itself the appeal test is met rather than to expect to be so satisfied by an appellant. As I found in Woolworths:13
The short point is that in both instances ARLA is asked to form an opinion on whether certain statutory criteria are satisfied or not, which is an evaluative task that does not lend itself to questions of proof.
[28] The Council also refers to Austin Nichols & Co v Stichting Lodestar14 where Elias CJ stated that in either a general appeal conducted on the basis of the record of the Court or Tribunal appealed from or a de novo appeal:
The appellant bears an onus of satisfying the appeal Court that it should differ from the decision under appeal.
[29] The Council submits that this statement is consistent with the statements of ARLA that appellants carry the onus of proof. However, I consider an “onus of satisfying the appeal Court” to which Elias CJ referred is different from an onus of proof with the attendant standard of balance of probabilities, which is what ARLA
13 See [66] of Woolworths.
14 Austin Nichols & Co v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at 147.
states in its decision it was imposing.15 Accordingly, I reject this argument from the Council.
[30] Finally, the Council argued that even if ARLA had erred in relation to imposing an onus of proof on Redwood the error was immaterial because there was at least a tactical burden on the appellants to satisfy ARLA that the appealed arguments were unreasonable in light of the object of the SSA. I reject this argument. The way in which ARLA referred to the onus of proof and standard of proof is more consistent with it viewing the burden as an evidential or legal burden of proof. How ARLA viewed the burden is important here because that will have coloured how ARLA saw Redwood’s appeal in relation to this burden. Moreover, ARLA did not provide reasons for rejecting the substantive bases of Redwood’s appeal rather it found the appeal failed because redwood had not discharged the burden of proof. This is consistent with ARLA viewing the burden of proof to which it referred as an evidential or legal burden, because in such cases failure to discharge the burden of proof is a complete answer for rejecting a party’s case. Whereas failure to discharge a tactical burden to satisfy an appellate body to accept one’s arguments would usually be met with a decision in which the failure to persuade was noted and with reasons given to explain why those arguments lacked merit and were therefore unpersuasive.
[31] The Council argues that the alleged error was also immaterial because the Council had produced substantial and extensive evidence that the elements in question were not unreasonable in light of the object of the SSA. Here the Council argues that its case before ARLA did not rely on the appellants being unable to meet the burden of proof.
[32] The Council also submits that ARLA only once expressly referred to an onus or burden of proof when reaching its ultimate conclusions under s 83 and this was in relation to the elements appealed against by Redwood.16 The Council submits that in the analysis leading up to that conclusion the reasoning shows that ARLA was not satisfied that the element under appeal was unreasonable in light of the object of the SSA and conversely was satisfied that the City Centre boundary used to determine
15 At [31] of ARLA’s Decision.
16 see [190] of ARLA’s Decision.
where 4am on-licence closing would be allowed was not arbitrary. I reject this argument.
[33] There are other passages in ARLA’s decision where it refers to an appellant having failed to “establish” something, which is consistent with ARLA requiring proof from an appellant.17 Further, I do not read the analysis in the paragraphs preceding
[190] to suggest ARLA undertook the evaluative task it was required to take for Redwood’s appeal.
[34] At [189] ARLA expressly finds Redwood had failed to adduce evidence of economic harm because of licensed brothels in the City Centre being able to sell and supply alcohol until 4am, which is a further example of ARLA regarding Redwood as having the onus to prove the s 83 test was met.
[35] At [188] ARLA referred to Redwood’s evidence from Mr Grala and then found that Redwood had not “established” that the Council had failed to have regard to the Auckland Unitary Plan, which is yet another example of ARLA regarding Redwood as bearing an onus of proof to do so.
[36] Accordingly, I am satisfied that ARLA erroneously applied a burden of proof requirement to the civil standard of proof to Redwood’s appeal. By rejecting the arguments Redwood advanced on appeal for want of proof, ARLA has erred in law, and this error taints the overall way in which ARLA determined Redwood’s appeal. It also makes the decision unreasonable as it can be said that no reasonable decision- maker exercising ARLA’s statutory powers would act in this way. Save for the discretionary nature of relief in judicial review proceedings, such error alone would be enough reason to set aside ARLA’s decision on Redwood’s appeal and to require ARLA to reconsider the appeal. It is, however, necessary to consider the other grounds because their outcome has bearing on the nature of relief and they may influence ARLA’s reconsideration of the appeal.
[37] For completeness, I observe that even it were to be accepted that ARLA’s rejection of Redwood’s appeal on the ground it had failed to discharge the onus of
17 See [31], [46], [47], [83], [122], [146], [177], [188] and [189] of ARLA’s Decision.
proof it bore was no more than a reference to a tactical burden of proof, which is the Council’s submission, that would not save the decision. If it were simply a matter of Redwood failing to persuade ARLA to accept its arguments, ARLA would then be open to the criticism that it had failed to provide reasons for rejecting Redwood’s arguments. The legal requirement for ARLA to provide reasons for rejecting an appellant’s case is set out in Woolworths.18 There is nothing in the passages of ARLA’s decision relevant to Redwood’s appeal that expressly explains why the various arguments that Redwood advanced before ARLA were rejected, nor is there anything that would permit that outcome to be learned inferentially. The omission to give reasons is re-visited below when I deal with Redwood’s various other grounds of review, including those that engage the legal requirement for ARLA to give reasons.
The balance of Redwood’s grounds of review
[38] Redwood pleads a series of grounds of review each of which will be dealt with in turn below.19 During the hearing Redwood acknowledged that the general thrust of its case against the PLAP could be looked at overall in three different ways. First, that Redwood should have been included in the City Centre. Secondly, that because there was more alcohol-related harm in the City Centre on-licence holders located within that zone should also be restricted to the same 3am closing hours as Redwood. Thirdly, that because there was no evidence of alcohol-related harm in the Newton Road area where the Pelican Club was located, its closing hours should be 4am like those in the City Centre. Redwood contends that however its case is looked at the present outcome can be viewed as unreasonable for Redwood. Further, ARLA never conducted any examination of the PLAP in terms of Redwood’s case.
[39] The three ways of viewing its case that Redwood identified at the hearing do not fit easily with the allegations Redwood makes in its statement of claim. Those allegations are expressed in a different way which seemingly combines Redwood’s complaint that ARLA failed to see that it was unlawful/unreasonable for the Pelican Club not to be included in the City Centre with the complaint that ARLA failed to see that the closing hours restriction for on-licences outside the City Centre was
18 See Woolworths at [98] – [104].
19 The statement of claim referred to here is the second amended statement of claim dated 29 March 2019.
unlawful/unreasonable. Moreover, there are allegations in the statement of claim that fall outside the scope of the three ways in which Redwood expressed its case in its submissions.20 As Redwood never expressly abandoned those allegations I consider they need to be dealt with. Accordingly, I propose to work through the allegations as they are expressed in the statement of claim, that being the document that properly frames Redwood’s case.21
Ground one
[40] At paragraph 31(a) of its statement of claim Redwood pleads that ARLA failed to consider whether the Council followed a procedurally fair and/or correct process when it drafted the PLAP. Redwood alleges that in various ways the Council’s process did not comply with the requirements of the special consultative procedure and the Council’s general obligations under the Local Government Act 2002. For the reasons set out below I find this ground of review fails.
[41] The Council argues that ARLA is not obliged to consider whether the Council followed the correct decision-making process and that Redwood wrongly seeks to elevate such matters to being mandatory relevant considerations that ARLA must take into account. For the reasons set out below I reject this argument.
[42] In Woolworths I referred with approval to ARLA’s finding that it viewed grounds of appeal alleging illegality to be within the statutory appeal test (unreasonable in light of the object of the SSA) because illegality must always evidence unreasonableness.22 The same principle applies here as well. Accordingly, I am satisfied that in principle a territorial authority’s material failure to comply with the statutory process for formulating a PLAP would lead to a PLAP that was unreasonable in light of the object of the SSA. The same reasoning applies when a
20 The allegation about ARLA wrongly applying a burden of proof test, the success of which has been pivotal to the outcome of Redwood’s proceeding, does not fall within any of the three ways Redwood identified in its submissions.
21 In Price Waterhouse v Fortex Group Ltd CA179/98, 30 Nove,ber 1999 at 13 the Court of Appeal described pleadings as an “essential road map for the Court and the parties”. In saying this, the Court of Appeal rejected the idea that the exchange of briefs of evidence before trial could cure any lack of particularity in the pleadings.
22 See Woolworths at [62]; see also Wolf v Minister of Immigration [2004] NZAR 414 (HC) where the Court found that whether a decision is unreasonable includes the process used to reach a decision.
territorial authority fails to follow the statutory process for a DLAP and the error tracks through to a PLAP. It follows that in principle an appellant can raise questions of illegality and procedural impropriety before ARLA and expect to have those questions resolved on appeal.
[43] However, in the present case there is nothing in ARLA’s decision to suggest that Redwood ever ran such arguments before ARLA. Redwood is alleging that ARLA has failed to consider matters that I find were not advanced before ARLA on appeal. In such circumstances ARLA cannot be said to have erred in law or acted unreasonably for failing to consider matters it was never asked to consider.
[44] Further, Redwood has chosen to limit its judicial review to a review of ARLA’s decision-making. The grounds of review advanced in the statement of claim do not extend to any direct examination of the Council’s conduct when drafting the DLAP or later when formulating the PLAP. Accordingly, the complaints Redwood makes in its submissions regarding how the Council went about drafting the DLAP and formulating the PLAP after the special consultative process cannot be pursued absent a pleading that properly allows the Council’s conduct in this regard to be examined.
[45] During the first hearing of Redwood’s judicial review in February 2019 its proceeding was adjourned because there was insufficient time to hear all the judicial reviews in the trial time allocated and because Redwood had then raised arguments in its submissions that were not pleaded in its then statement of claim. The adjournment and the resumed hearing in June 2019 gave Redwood ample time to reconsider its case and amend its statement of claim, which it did. Despite this, at the hearing in June 2019 some of the arguments advanced by Redwood went beyond the scope of its latest statement of claim. This is such an example. I consider that Redwood has had sufficient opportunity to ensure its case is properly pleaded, and where it has strayed beyond the bounds of pleadings I find it is not open to Redwood now to pursue those arguments.
Ground two
[46] At paragraph 31(b)(i) Redwood pleads that ARLA erred in law when it admitted evidence from the Council that was not before the Council when it adopted
the PLAP. Here Redwood essentially challenges the de novo approach that ARLA takes to the appeals before it. Redwood contends that given the limitations of the special consultative process, which gave submitters discrete time-restricted opportunities to make submissions on the DLAP to the Council, those who were unsuccessful and so chose to appeal to ARLA should have the opportunity to present ARLA with evidence in support of their appeals. But the Council should not be able to adduce evidence in response. Redwood advanced no authority directly relevant for this proposition.
[47] To support its submission that the Council cannot and should not provide additional material, explanations, reasons or evidence when opposing an appeal before ARLA, Redwood relied on decisions such as Austin Nichols & Co v Stichting Lodestar,23 and Weal v ACC,24 which generally deal with appeal principles. Redwood also referred to Taylor v Chief Executive of the Department of Corrections25 (which was a judicial review proceeding) where the Court of Appeal referred to the number of affidavits filed in the High Court and stated that in judicial review the decision- maker “must refrain from descending into ex post facto justification in an attempt to improve on the original decision. The Court will give little weight to such explanations in the absence of compelling reasons”.26 In addition, Redwood referred to a passage from the New Zealand Judicial Review Handbook which referred to various authorities that discouraged the filing in judicial review proceedings of ex post facto evidence from a decision-maker. I do not find Redwood’s arguments to be persuasive, nor do I consider the authorities on which it relies to be relevant. Instead, I prefer the submissions of Woolworths and the Council that an appeal before ARLA is a de novo hearing.
[48] As was recognised by the Court of Appeal in Chief of the New Zealand Customs Service v Jury27 all appeal rights are statutory and the nature of an appeal
23 Austin Nichols & Co v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
24 Weal v ACC HC Wellington CIV-2011-485-000912, 29 September 2011 where this Court relying on a passage in Austin Nichols & Co v Stichting Lodestar stated that “the appeal is usually conducted on the record of the Court of first instance.
25 Taylor v Chief Executive of the Department of Corrections [2015] NZCA 477, [2015] NZAR 1648.
26 At [33].27 Chief Executive of the New Zealand Customs Service v Jury [2017] NZCA 356, [2017] 3 NZLR 745 at [52].
right will be shaped by any statutory provision that bears upon it. Further, a de novo appeal right can be expressed or implied.28
[49] Section 81 of the SSA does not specify whether appeals against a PLAP are de novo or by way of rehearing, nor is there any guidance provided in the Sale and Supply of Alcohol Regulations 2013. However, there are recognised indicators of when an appeal is intended to be heard de novo and these are present here.29
[50] First, there is s 81(6) of the SSA, which provides that the territorial authority concerned is a respondent in the appeal. This suggests Parliament intends that territorial authorities can be heard and take an active role in appeals against their PLAPs rather than is the case in general appeals, which proceed by way of rehearing,30 or appeals against the exercise of a discretion.31
[51] Secondly, s 201 of the SSA provides that ARLA operates as a Commission of Inquiry, with any necessary modifications. In this way ARLA is given an inquisitorial role, which necessarily includes hearing and receiving evidence.
[52] Thirdly, s 205 of the SSA specifically provides in relation to an appeal under s 81, that the appellant and any person authorised in that behalf by a territorial authority may call, examine and cross-examine witnesses. The inclusion of this provision is, in my view, a clear indication the appeal before ARLA is to proceed as a de novo hearing because in appeals by way of rehearing the ability to call, examine and cross-examine witnesses is dependent on whether the appellate body grants leave to adduce “fresh” evidence.
[53] Fourthly, s 207(1) of the SSA provides that ARLA may receive as evidence any statement, document, information or matter that in its opinion may assist it to deal effectively with any matter before it; whilst s 207(2) makes the Evidence Act 2006 applicable, but subject to s 207(1) of the SSA. This also suggests to me that Parliament contemplates that ARLA will hear appeals under s 81 de novo.
28 See Shotover Gorge Jet Boats Limited v Jamieson [1987] 1 NZLR 437 (CA).
29 See Chief of New Zealand Customs Service v Jury [2017] NZCA 356, [2017] 3 NZLR 745 at [52].
30 Austin Nichols & Co v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
31 Kacem v Bashir [2010] NZSC 1112, [2011] 2 NZLR 1.
[54] Fifthly, s 157(1) of the SSA applies to appeals from District Licensing Committee decisions and expressly states that those appeals are by way of rehearing. The absence of any express reference in s 81 to appeals being by way of rehearing implies they are intended to be treated differently from appeals under s 157(1).
[55] There are additional factors that support the view that appeals under s 81 are de novo hearings. First, there has been no hearing in relation to the decision appealed from. Instead s 79 of the SSA provides that territorial authorities who wish to adopt a LAP must first produce a DLAP using the special consultative procedure under s 83 of the Local Government Act 2002. Then if the territorial authority concerned wants to continue with a local alcohol policy it first formulates a PLAP.32 The process is entirely different from those that occur before a District Licensing Committee, the decisions of which are subject to appeals by way of rehearing.
[56] The special consultative procedure simply requires territorial authorities to provide a reasonable opportunity for people to present their views on a DLAP, which is typically five to ten minutes to present their submissions orally. The process does not require any opportunity for submitters to present evidence on oath or to cross- examine the territorial authority’s or other parties’ witnesses. Territorial authorities do not record the oral presentations they receive, the findings they have made, or answers to questions they have asked. Territorial authorities do not have powers of commission of inquiry, which means they may not receive the same quality of information as ARLA.
[57] Given the nature of the special consultative procedure, restriction of an appeal before ARLA to a general rehearing appeal would deny the appellants a proper opportunity to be heard and to challenge the evidence they dispute, particularly in relation to any new or amended elements of the PLAP that were not part of the DLAP provided for consultation.
[58] Redwood acknowledges that appellants are entitled to present new evidence before ARLA, thus it recognises the SSA permits this much. Despite such recognition, Redwood maintains that the Council can only present the information, evidence and
32 See s 79 of the Sale and Supply of Alcohol Act 2012.
reasoning it applied when formulating the PLAP. Such an approach does not accord with appellate principles of any type. It would be unworkable and procedurally unfair if appellants were entitled to present what is essentially fresh evidence before ARLA, but the Council was not permitted to present evidence in response. Procedural fairness would require the Council to be entitled to adduce evidence to respond to the appellants points on appeal, evidence and submissions provided.
[59] Finally, the test to be applied by ARLA on an appeal is that set out in s 83. It involves an evaluative assessment that must be made independently by ARLA. I accept Woolworth’s submission that there is no good reason why in making that assessment ARLA should be limited to the unsworn information that was before the Council, even if that information was wrong, untested, incomplete and was no longer the best information available.
[60] Accordingly, I am satisfied that ARLA is right to hear the appeals before it de novo. It follows that this ground of judicial review fails.
Ground three
[61] At paragraph 31(b)(ii) Redwood pleads that ARLA erred in law by failing to consider and analyse the reasons as recorded by the Council for adopting the PLAP. This is also something that Redwood appears not to have raised before ARLA. However, Woolworths did, albeit in a different guise.33 Between [44] and [47] of its decision ARLA addresses this aspect of Woolworth’s appeal. Ultimately at [47] ARLA concluded that, whilst reasons from the Council may, amongst other things, assist ARLA’s consideration of the appeal, the Council is not required to justify the elements under appeal. On the other hand, a lack of reasons cannot prevent the Council, when before ARLA, from justifying an element of the PLAP.
[62] Then at [47] of its decision ARLA wrongly mixes its response to Woolworths’ arguments that the Council is required to give reasons for its PLAP with ARLA’s
33 Woolworths’ argument as recorded by ARLA at [44] and [45] was that there is a difference between the reasons the Council provides in the explanatory note to the PLAP and the Council’s reasons given after the development of the PLAP and in particular after it has viewed the evidence of the parties on appeal. Woolworths did not challenge ARLA’s response to this aspect of Woolworths appeal. Accordingly, the issue was not dealt with in Woolworths.
erroneous view that appellants carry a burden of proof that requires them to prove an impugned element satisfies the statutory test for appeal. This in turn leads ARLA to conclude erroneously that whether the Council has given sufficient reasons to support its PLAP is not something that can relieve an appellant of the burden of proving its case.34 ARLA’s conclusions on this topic are so influenced by its erroneous view that appellants bear an onus of proof that it is difficult to untwine the two issues.
[63] In any event, as Redwood pleads this error I cannot see how it can advance Redwood’s case. Nowhere in the statement of claim is there any reference to or identification of reasons given by the Council that Redwood contends either should have been considered by ARLA or which were wrongly considered by ARLA, let alone what impact these might have had on Redwood’s appeal. Unless the general language of the pleaded error is put into such context, it is impossible to make anything of this ground of review. Accordingly, this ground of review fails.
Ground four
[64] At paragraph 32 of the statement of claim Redwood pleads that ARLA erred in fact and in law and reached an irrational decision when it determined the PLAP was not unreasonable in light of the object of the SSA when it provided that the maximum trading hours for on-licences in the City Centre would be from 8am until 4am the following day. Redwood then pleads a series of particulars that allege: (a) that the purpose and function of a PLAP is to reduce alcohol related harm; (b) there was much undisputed evidence before ARLA of alcohol related harm in the City Centre; (c) the default hours of the SSA provide for 4am closing hours; (d) there was no evidence of alcohol related harm from the Pelican Club or its surrounds in Newton Road; (e) there was no logic or rationality in excluding the Pelican Club from the City Centre zone; and (f) the fact the Council had adopted other initiatives in the City Centre was not relevant to the issue of alcohol related harm in that zone and defining the City Centre and Newton Road.
[65] With this pleading Redwood attacks an element of the PLAP that does not apply to it, because the Pelican Club is located outside of the City Centre zone. But
34 At [46]-[47].
then Redwood alleges a series of contrasting particulars, which are seemingly designed to show that there is more alcohol related harm in the City Centre zone than the Pelican Club’s location. This leads Redwood to the point of alleging there is no logical or rational basis to exclude the Pelican Club from the City Centre zone. I do not consider this logically follows. The definition of the City Centre needs to reflect an area that is recognisable as the City Centre. Newton Road, where the Pelican Club is situated, is currently in the PLAP’s City Centre Fringe zone, which reflects the location’s proximity to the City Centre, the boundary of which cannot be adjusted simply to permit the Pelican Club to enjoy 4am closing hours. I am satisfied that the argument fails on the merits. The better view might be that there is no logical or rational basis for applying more restricted closing hours to the Pelican Club’s location given the absence of alcohol related harm associated with it and its environs when compared with the City Centre. However, Redwood does not assert this as part of the allegations in paragraph 32 of the statement of claim.
[66] Moreover, paragraph 32 of the statement of claim is focused on what Redwood described at the hearing as the second way of viewing its case. In this regard Redwood argues for on-licences in the City Centre to be limited to the same closing hour restriction as on-licences outside that zone. This ground of review faces a fundamental obstacle in terms of the requirements of procedural fairness. There are many on- licences located within the City Centre. If Redwood were to succeed in the present ground of review that would restrict those on-licences to 3am closing hours. A reduction in their closing hours by one hour may adversely affect their interests. However, they have not been joined to Redwood’s proceeding nor have they been served with a copy of Redwood’s proceeding. There is nothing to indicate to me that they are aware they are at risk of losing the benefit of the closing hours they currently enjoy under the PLAP. Whilst other appellants before ARLA had sought to have the closing hours of City Centre on-licences reduced, their appeals were unsuccessful, and they have made no challenge to ARLA’s decision. Redwood is now the only party who, as part of its judicial review claim, would seek to have the closing hours of on- licences in the City Centre reduced.
[67] Any finding in favour of Redwood on this ground of review would contravene the principle established in Minister of Education v Deluxe Motor Services35 where the Court of Appeal found that the judicial review by an unsuccessful tenderer of school bus contracts had miscarried through the failure to join the successful tenderers in the proceeding. The interests of the successful tenderers were directly affected by the judicial review proceeding and so the Court of Appeal found natural justice required that those tenderers be given an opportunity of being heard. Because they had not been made parties to the proceedings the High Court judgment was vacated, and the proceedings were remitted to the High Court for the joinder of the successful tenderers as parties and for further hearing. Accordingly, I am satisfied this ground of review is not open to Redwood given its failure to join the potentially affected persons.
[68] It follows that the ground of review set out at paragraph 32 of the statement of claim fails.
Ground five
[69] At paragraph 33 of the statement of claim Redwood pleads that ARLA erred in law when it found that the availability of other potential policy responses to alcohol related harm in Auckland does not make an element unreasonable in light of the object of the SSA. ARLA’s finding needs to be read in context. First, the argument there were better policy responses available than what was contained in the PLAP was never part of Redwood’s appeal before ARLA. Secondly, this finding by ARLA was made in the context of ARLA considering arguments from the Police, the Medical Officer of Health and Alcohol Healthwatch, all of whom had appealed against the 4am closing hours for the City Centre. They wanted the closing hours to be reduced to less than the 3am time provided in the DLAP.
[70] No-one disputed there was evidence of alcohol related harm in the City Centre. The issue in dispute was how to manage this harm constructively. The Council supported the 4am closing hours and argued that they worked to reduce any spike in alcohol related harm that might come from earlier closing hours. The Council also
35 Minister of Education v Deluxe Motor Services (1972) Ltd [1990] 1 NZLR 27 (CA) at 34.
argued that it had implemented other initiatives to reduce alcohol related harm in the City Centre, such as reducing the closing hours of off-licences in that zone to 9pm.
[71] Against this background ARLA concluded that the test in s 83 was not whether some element other than the current element under appeal would be a better policy response to the issue being addressed.36 Also the degree to which an element achieves the policy of the SSA is not for ARLA to determine; its role is limited to assessing an impugned element against the statutory test for appeal.37 I agree.
[72] However, that is not to say that other policy responses cannot be put forward by an appellant as a means of showing the chosen policy response in the element under appeal is unreasonable in light of the object of the SSA. It is all a matter of how potential alternative responses are presented; simply to contrast them as more preferable or better able to achieve the object of the SSA than the element under appeal will not work. But, if in contrast with the element under appeal they show it to be an excessive, heavy handed reaction to the issue the impugned element is intended to address, such an outcome may then reveal the impugned element to be unreasonable in light of the object of the SSA. However, this ground of review is unrelated to that pleaded by Redwood and so does not advance Redwood’s case. Accordingly, it fails.
Ground six
[73] At paragraph 34 of the statement of claim Redwood pleads that ARLA “erred in law in its interpretation and application of the test of whether the PLAP insofar as [Redwood] was affected by the PLAP was unreasonable”. Redwood then pleads a series of particulars alleging the “proposed measures” were: (a) a disproportionate and excessive response to perceived problems; (b) partial or unequal in their operation between licence holders. Then as part of the particulars Redwood pleads that: (c) “an element of [the] PLAP is manifestly unjust or discloses bad faith”; or (d) is “an oppressive or gratuitous interference with the rights of those affected”; or (e) “relevant evidence was incorrectly weighed by ARLA”. This is a rather scatter gun allegation. However, its premise as stated in the main part of the allegation is wrong.
36 At [176]-[177].
37 At [177].
[74] The appeal test is not to be assessed in terms of whether all or any of the elements of a PLAP are unreasonable in light of the object of the SSA insofar as a particular appellant is affected by them. A PLAP is the forerunner to a Local Alcohol Policy, which is something that is intended to have general application to all relevant persons in the territorial district to which it applies. The appeal test in s 83 has to be applied in a way that recognises the general character of such policies. It requires ARLA to make an objective determination as to whether an element of the PLAP under appeal is unreasonable in light of the object of the SSA. How such elements might impact on individual licence holders is not something to be taken into account. In order to achieve the purposes of the SSA, elements of PLAPs may necessarily impact differently on individual licence holders. Because the main premise of this allegation is flawed I do not propose to go further and address the various particulars related to it. I find that this ground of review fails.
Ground seven
[75] At paragraph 35 of the statement of claim Redwood pleads that ARLA erred in its assessment of the evidence from the Council’s witnesses. This is because those witnesses were witnesses of fact, not expert witnesses; witnesses whose evidence was subjective not objective; and in the case of the Council’s witness Ms Turner her evidence was subjective and influenced by personal circumstances.
[76] Redwood argues that ARLA erred in its assessment of the evidence from the Council’s witnesses in particular Ms Turner and also a Ms Hansen. These persons gave evidence in which they expressed opinions either their own or from other persons on the extent of and location where excessive consumption of alcohol and alcohol- related harms were to be found. Redwood complains about this evidence on the ground ARLA treated the evidence of the Council witnesses as expert and gave incorrect weight to their evidence. Redwood contends the Council witnesses and in particular Ms Turner and Ms Hansen were witnesses of fact with experience, but they could not be regarded as providing independent evidence as both had been extensively involved in the writing of the DLAP and the PLAP. Accordingly, Redwood submits they could not qualify as expert witnesses in terms of s 25 of the Evidence Act 2006. Redwood refers to s 4(1) of the Evidence Act which requires that an expert have
“specialised knowledge of skill based on training, study or experience”, and expert evidence, defined in the same section as “evidence of an expert based on the specialised knowledge or skill of that expert and includes evidence given in the form of an opinion”.
[77] Redwood also argues there is no expertise required when it comes to choosing where a boundary is to be drawn. Whilst Ms Turner and Ms Hansen may be qualified local government employees, Redwood contends that does not make them experts. Redwood further argues that Ms Turner, who was significantly involved in the writing and formulation of the DLAP and the PLAP in her evidence has become an advocate for the PLAP. In this regard Redwood contends that Ms Turner was so committed to the project that her evidence is tainted by her extensive commitment in the drafting and formulation of the DLAP and the PLAP. Much the same, Redwood says, can be said of Ms Hansen’s evidence. Redwood relies on the commentary in Cross on Evidence of the admissibility of expert opinion evidence in s 25 and also refers to the decision in Yandina Investments Ltd v ANZ Bank Limited,38 that a person involved in the preparation of a scheme cannot be independent and cannot be an expert.
[78] Redwood makes a further submission in relation to one aspect of Ms Turner’s evidence, that is regarding her evidence that she considered including Newton in the City Centre was not warranted. She gave reasons for this when cross-examined. Redwood argues the reasons were not the reasons of the Council since they were not placed before the Council for adoption. Redwood also argues that Ms Turner is someone who lives in direct proximity to the Pelican Club and she “as a matter of gender would not approve of the business of the Pelican Club.” Redwood then refers to evidence from Ms Turner in which she explained why, in her view, Newton Road was not within the City Centre, namely, “It is an area with commercial and residential uses. It does not share licensing or land use characteristics with the City Centre. For example, there are only two licensed premises on Newton Road one of which is a brothel and the other of which is a tavern on the corner of Newton Road and Symonds Street that is within the City Centre Fringe.” Ms Turner concluded that extension of
38 Yandina Investments Ltd v ANZ Bank Ltd [2012] NZHC 1389, (2012) 25 NZTC 20,129 at [88].
the City Centre boundary for the benefit of one or both of those premises was not warranted.
[79] Redwood also refers to independent witnesses the Council called to support the PLAP. Some of those persons Redwood considered should not have been categorised as giving expert evidence, whereas others evidence was within that category. The objection Redwood made here was in reliance on its other ground of judicial review that the nature of appeals before ARLA preclude the Council from presenting evidence that did not form part of the DLAP decision.
[80] I consider this ground of review fails. As an appellate body that has the character of a commission of inquiry there is greater laxity in ARLA receiving evidence than with a court of law. Further, s 207 of the SSA gives ARLA wide powers to admit evidence. The Council relies on s 201 of the SSA which gives ARLA the status of a commission of inquiry and the wide-reaching powers to accept evidence given under s 207 of the SSA to counter Redwood’s arguments. I accept that submission, and I accept the submission which follows from it that the SSA provides ARLA with powers to accept and give weight to evidence from persons like Ms Hansen and Ms Turner if ARLA considers such evidence may assist it to deal with the matter before it. The requirements of s 25 of the Evidence Act need to be read with ss 201 and 207(1) of the SSA in mind. I see no objection to witnesses such as Ms Turner and Ms Hansen providing evidence of fact and evidence of opinion.
[81] I acknowledge that Ms Turner in particular gave opinion evidence as well as factual evidence, however, that related to the likely outcome of certain policy interventions the PLAP is intended to achieve. In Smith v Attorney-General the Court of Appeal found that expert witness evidence is not rendered inadmissible because the witness is also a witness as to fact or is associated with one of the parties.39 A similar point was made in Belcher v Chief Executive of the Department of Corrections.40 Moreover, in ANZ National Bank Ltd v Commissioner of Inland Revenue, this Court found that the independence or lack of independence of expert witnesses goes to the
39 Smith v Attorney-General [2010] NZCA 258 at [40].
40 Belcher v Chief Executive of the Department of Corrections [2007] 1 NZLR 507 (CA) at [97].
weight to be attributed to the evidence rather than being a ground for exclusion.41 Further, for Redwood to suggest that Ms Turner was biased because she lives in close proximity to the Pelican Club and is of the female gender is an assertion without merit or foundation.
[82] I consider that Yandina Investments Ltd v ANZ National Bank Ltd, the case relied upon by Redwood in support of this ground of review, is distinguishable as the facts and reasoning of that case are quite different from the circumstances in which Ms Turner and Ms Hansen gave evidence.42
[83] Redwood’s pleading that ARLA erred in its assessment of the evidence from the Council’s witness can therefore only be relevant to whether ARLA gave such weight to the evidence of those witnesses that the decision was rendered unreasonable.43 That is the only way that I can see a complaint about the evidence from the Council’s witnesses could render ARLA’s decision susceptible to judicial review. However, that has not been clearly pleaded in the statement of claim nor do I think any such claim could be made out.
[84] Accordingly, I am satisfied the ground of review at paragraph 35 of the statement of claim fails.
Ground eight
[85] At paragraph 36 of the statement of claim Redwood pleads that ARLA’s decision was partial or unequal as between licence holders because it treated the Pelican Club as equivalent to an on-licence holder whose sole business was the sale and supply of alcohol, which is known to give rise to alcohol related harm, whereas the Pelican Club sells and supplies alcohol in connection with its primary business, which is not linked to alcohol related harm.
41 ANZ National Bank Ltd v Commissioner of Inland Revenue (2005) 22 NZTC 19,587 (HC) at [22]- [24].
42 Yandina Investments Ltd v ANZ Bank Ltd [2012] NZHC 1389, (2012) 25 NZTC 20,129.
43 See Issac v Minister of Consumer Affairs [1990] 2 NZLR 606 (HC) at 635 citing Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 66 ALR 299 at 309-310.
[86] The difficulty for Redwood here is that the SSA makes no distinction between those on-licence holders whose main business is the sale and supply of alcohol and those for whom the sale and supply is ancillary to their main business. I acknowledge an on-licence bar that operates primarily to sell and supply alcohol is more likely to be associated with excessive consumption of alcohol, and therefore alcohol related harms, than is a business like the Pelican Club. However, the SSA does not permit such distinctions to be drawn between on-licence holders. In this regard the SSA differs from how it treats off-licences as there it permits two discrete types: these can be generally referred to as the supermarket type sellers, which are limited to selling wine, beer and mead products, and the bottle store types, which can sell all types and strengths of alcoholic beverages. Accordingly, the alleged partial or unequal treatment that Redwood identifies flows from the SSA, in particular the absence of a provision which distinguishes between different types of on-licence holders. I find this ground of review fails.
Ground nine
[87] Redwood then pleads five allegations, all of which are individually focussed on how the PLAP has adversely affected Redwood. First, at paragraph 37 of the statement of claim Redwood pleads that ARLA’s decision is irrational because it provides an advantage to businesses in the City Centre that are the same or similar to the Pelican Club by permitting those in the City Centre to operate for longer hours. Secondly, at paragraph 38 Redwood pleads that defining the City Centre by reference to the Auckland Unitary Plan has resulted in an oppressive or gratuitous interference with the existing rights of Redwood as the licence holder and operator of a non- alcoholic business of long standing with no evidence of generating alcoholic related harm. Thirdly, at paragraph 39 Redwood pleads that the definition of the City Centre has resulted in an oppressive or unreasonable restriction on Redwood as a business outside the City Centre in comparison to other businesses within the City Centre. Fourthly, at paragraph 40 Redwood pleads there was no evidence either before the Council or ARLA that the operations of the Pelican Club gave rise to any alcohol related harm. Then at paragraph 41 Redwood pleads that ARLA’s decision is unreasonable in light of the SSA and generally and for failing to give adequate reasons. I consider these grounds of review all act variously and generally as an attack on the
reasonableness of ARLA’s decision, both in relation to the definition of the City Centre and the closing hours restriction for on-licences outside the City Centre. I propose, therefore, to deal with them globally.
[88] The first step is to take note of the way in which ARLA records Redwood’s appeal and the appeals generally in relation to elements relevant to Redwood. This will reveal how Redwood presented its case on appeal and ARLA’s response.
[89] At [28] of its decision ARLA set out the various elements under appeal, which included:
(a)At [28] (a) clauses 2.1.1 and 2.1.2 which related to the “definition and extent of the City Centre…”; and
(b)At [28] (i) clauses 5.3.1 (maximum trading hours for new and existing on-licences outside the City Centre).
[90] Accordingly, [28] suggests that ARLA was faced with separate challenges against the City Centre definition and the decision to limit on-licences outside this zone to 3am closing hours.
[91] Between [63] and [85] of its decision, which come under the heading “definition and extent of City Centre…clauses 2.1…” ARLA set out the arguments against the definition of this zone, including Redwood’s argument at [73] about the boundary excluding the Pelican Club being arbitrarily defined. At this time ARLA was focussed on addressing all arguments about how the City Centre definition was arrived at. From [74] to [79] ARLA sets out the evidence it heard and then from [80] to [85] ARLA set out its findings, including at [83] the finding it did not consider it had been established that the City Centre had been defined arbitrarily. This finding must relate to Redwood’s appeal against the definition of the City Centre.
[92] Then at [181] of its decision ARLA referred to Redwood’s submission the closing hours should not be reduced and says that “in effect, [Redwood] is appealing the exclusion of its property, the Pelican Club, from the City Centre as that means the
maximum trading hours for its premises are 3am instead of 4am.” There is no explanation given by ARLA for why it reaches this conclusion. It does not seem to me to be logically inevitable. It was open to Redwood to appeal against the 3am closing hours simply on the ground the absence of alcohol related harm in the City Centre Fringe zone it occupied, particularly in comparison with on-licences in the City Centre, supported the City Centre Fringe zone having 4am closing hours as well. This seems to me to link directly with the appeals noted at [28](i) of ARLA’s decision.
[93] ARLA next at [182] expressly referred to Redwood’s submission that “there is no evidential basis for imposing an arbitrary reduction of one hour in the closing time for on-licences”. This submission from Redwood can only relate to the reduced closing hours for on-licenses outside the City Centre. Redwood was right that there was no evidence of excessive alcohol consumption and consequential alcohol related harm where the Pelican Club was located or elsewhere in relation to the City Centre Fringe zone. There was no dispute about this.44
[94] Accordingly, I am satisfied that Redwood advanced its appeal on two grounds. However, ARLA mixed those grounds together45 and compounded this error by then wrongly finding that Redwood had failed to discharge the onus of proof that it bore. In short, ARLA asked itself the wrong legal question and by doing so it failed to address properly the grounds of Redwood’s appeal. All of which has led to ARLA acting unreasonably in the sense that no reasonable decision-maker charged with ARLA’s appellate responsibilities would act in this way.
[95] There are further matters of concern regarding how ARLA approached Redwood’s appeal, which are relevant to the allegations at paragraphs 37 to 41 of the statement of claim.
[96] Between [162] and [175] of its decision ARLA referred to the extensive evidence that showed excessive consumption of alcohol and alcohol-related harm in the City Centre both in relation to on-licences and off-licences. Between [133] and
[144] ARLA referred to some evidence of alcohol related harm relevant to off-licences
44 See submissions of the Council dated 13 June 2019 at [2.78].
45 See [181] of ARLA’s Decision.
in the City Centre and the priority overlay areas.46 As a generalisation it can be said that in the Auckland region excessive alcohol consumption and alcohol-related harm is intensified in the City Centre, where there are concentrations of young adults, and in other areas which are also associated with poverty and deprivation (these were generally contained in the priority overlay areas of the PLAP). Thus, the available evidence of alcohol-related harm related to on-licences and off-licences in the City Centre and off-licences in the priority overlay areas. There was no such evidence relevant to on-licences outside the City Centre, and in particular in the City Centre Fringe zone where the Pelican Club was located.
[97] At [182] ARLA referred to Redwood’s submission that the closing hour restriction on on-licences outside the City Centre created an economic advantage for business holding on-licences within the City Centre. Redwood went on to submit that the “unexplained and arbitrary” decision to confine the area where on-licences can trade bore no relationship to the safe and responsible, sale supply and consumption of alcohol and was not based on any evidence of harm caused by excessive or inappropriate consumption of alcohol. This led Redwood to submit that given the absence of any linkage to alcohol-related harm, the closing hour restriction was a disproportionate or excessive response to a perceived problem. This submission also can only relate to a general challenge to the reasonableness (in terms of the test in s 83 of the SSA) of reducing the closing hours to 3am outside the City Centre, and in particular for the City Centre Fringe zone occupied by the Pelican Club.
[98] At [183] ARLA referred to evidence from Redwood in which the manager of the Pelican Club had said that it would be severely disadvantaged if the PLAP is adopted because the Pelican Club would then be out of step with every other brothel with which it competed, from which I infer those competitors are based in the City Centre. The manager also gave evidence that whilst the quantity of alcohol sold in the Pelican Club is not significant, it is a residual source of income for that business and is an essential part of the experience for its clients. This evidence is relevant to a general attack on the reasonableness of the 3am closing hours for on-licences outside the City Centre.
46 See Woolworths at [78] – [86]
[99] At [184] ARLA referred to Redwood’s evidence from Mr Grala, a senior planner and Auckland planning manager at Harrison Grierson. His evidence was that the provision of sexual services are a permitted activity under the Auckland Unitary Plan for both the City Centre and the business mixed use zone in which the Pelican Club is located. In his opinion, having regard to the objectives and policies of the two zones, he did not consider there was support in them for a restriction on the supply of alcohol trading hours in the PLAP’s City Centre Fringe area. Mr Grala also gave evidence that the Resource Management Act required local authorities to avoid trading competition effects in the preparation of their district plans or in this case, Unitary Plan.
[100] ARLA’s reference to the arguments and evidence from Redwood satisfies me that Redwood advanced its appeal on two bases: (a) an attack on the definition of City Centre; and (b) an attack on the closing hour restrictions for on-licences outside the City Centre.
[101] ARLA then dealt with the submissions from the Police, Medical Officer of Health and Alcohol Watch, all of whom wanted the closing hours for on-licences restricted to a greater extent than was proposed in the PLAP. ARLA’s reasons for dismissing those appeals are not relevant here.
[102] ARLA next turned to determining Redwood’s appeal. At [188] ARLA referred to s 78(2)(a) of the SSA, which requires the Council when producing a DLAP to have regard, amongst other things, to the objectives and policies of its district plan or as in this case the Auckland Unitary Plan. The definition of City Centre in the PLAP corresponded with the definition of City Centre in the Auckland Unitary Plan. The Pelican Club was noted as being in the mixed business use zone in the Auckland Unitary Plan. ARLA stated that the issue was not whether the services of the Pelican Club are permitted activities under the Auckland Unitary Plan for both the City Centre and the business mixed use zone rather:47
[Redwood] has not established that the Council has not had regard to its District Plan. Rather, [Redwood] does not consider that the 3am closing proposed is supported by the plan. Whether it is or is not is not the test
47 At [188] of ARLA’s Decision.
[ARLA] is required to apply. In any event [ARLA] does not agree that the definition of the City Centre is arbitrary as submitted by [Redwood]. As already discussed, the City Centre was not defined by sole reference to the Auckland Unitary Plan. [ARLA] is satisfied that the City Centre was defined by reference to alcohol-related harm in the first instance and the Unitary Plan boundary was adopted to make the policy more easily able to be implemented.
[103] The idea that the Council had not had regard to the Auckland Unitary Plan seems to me to be something that was inferentially available from Mr Grala’s evidence. The Pelican Club was in a mixed business use zone of the Auckland Unitary Plan, which permitted it to operate until 4am. Absent evidence of reason to depart from the closing hour restrictions in the SSA it reasonably could be expected that the licensing provisions of the PLAP would align with the permitted business operations in the Auckland Unitary Plan. That the Council had formulated a PLAP with a closing hour restriction for the City Fringe zone that did not align with the permitted operating hours under the Auckland Unitary Plan, and therefore to this extent was at odds with the Auckland Unitary Plan, is something that is capable of inferentially suggesting that the Council did not have regard to the objectives and policies of the Auckland Unitary Plan. Accordingly, I consider ARLA was wrong to dismiss Mr Grala’s evidence in the way that it did.
[104]Then at [189]:
While [Redwood] submits that the economic impact on it will [not] be shared by other premises for whom the national maximum default hours apply, it has not adduced any evidence in respect of these other premises.
This led to ARLA’s conclusion that Redwood had failed to discharge the onus of proof it carried to establish the appeal test.48
[105] I consider that ARLA erred in the following ways: First, it never conducted an evaluation of whether the definition of City Centre was unreasonable in light of the object of the SSA. Here it was led astray by its misunderstanding that Redwood was subject to an onus of proof.
[106] Redwood contends that ARLA failed to have regard to the City Centre definition not being based on alcohol related harm. However, I do not see why the
48 See [190].
definition of the City Centre needed to be based on the presence or absence of alcohol- related harm. Section 77(1)(a) permits a LAP, and therefore a PLAP as well, to include a policy on the location of licensed premises by reference to broad areas. This is the statutory provision relevant to defining areas such as the City Centre. When drafting a policy, the council is required to consider s 78 of the SSA. This section includes a series of factors, of which the “nature and severity of alcohol-related problems in the district” is but one factor. Other factors are the objectives and policies of the Unitary District Plan, here, the Auckland Plan, the number of licences of each kind of premises in the district, their location and opening hours, the demography of the district’s residents and the demography of visitors to the district.49 These other factors all bear on how a district’s City Centre can be identified.
[107] It is understandable that the Council would seek to align the defined City Centre in the PLAP with the defined City Centre in the Auckland Unitary Plan. It is hard to see how the city could operate effectively if those two zones did not align. Accordingly, in principle I see nothing wrong with the way in which the Council arrived at the definition of the City Centre. Further, I consider Ms Turner provided convincing evidence for why Newton Road would be excluded from the City Centre.50 It would be wrong for that definition to be tailored to accommodate the Pelican Club, just so that it could enjoy longer closing hours. However, the point here is that ARLA never properly addressed Redwood’s appeal against how the City Centre was defined. The question as to whether this definition was unreasonable in light of the object of the SSA was never properly identified let alone answered. This is both an error of law and it results in ARLA’s decision being unreasonable.51
[108] Secondly, ARLA never considered whether it was unreasonable in light of the object of the SSA for all on-licences throughout the Auckland region that were located outside the City Centre, and in particular those in the City Centre Fringe zone, to be restricted to 3am closing hours. The Council points out in its submission that Redwood is the only on-licence outside the city centre to object to the 3am closing hours. It may well be that on-licences outside the City Centre have their own reasons
49 See s 78(2)(b) to (g) of the Sale and Supply of Alcohol Act 2012.
50 See [78] herein (this paragraph sets out her evidence on this topic).
51 In terms of the test of unreasonableness no reasonable decision-maker would arrive at such a decision. See discussion in Woolworths at [56] to [63].
for not wanting to trade beyond 3am. However, the fact that no-one else outside the City Centre zone wants to trade beyond 3am is not a proper basis for a 3am restriction in my view. As found in Woolworths I consider that the SSA strikes a balance between allowing safe and responsible consumption of alcohol and minimising the harm caused by excessive or inappropriate consumption.52 Further, that the provisions for the sale, supply and consumption of alcohol in the SSA must be understood to indicate Parliament’s view on what will generally achieve the SSA’s purpose and object.53 I consider the provisions set out in the SSA to provide a general default standard from which there should be reason found for departure.54
[109] It follows that unless there is evidence to suggest the SSA’s general provisions may require tailoring in order to meet the specific features of individual communities the purpose and object of the SSA will be met by adherence to the statutory provisions. The absence of evidence showing incidents of excessive alcohol consumption or alcohol-related harm in the City Fringe zone, where the Pelican Club is located, suggest to me that there would be no reason to depart from the SSA’s general provisions for closing hour restrictions. It may be that the City Fringe zone occupies a wider area and that there is alcohol related harm in other parts of at that zone that would warrant an adjustment from the default provisions for trading hours. However, I have seen no reference to any such evidence.
[110] In Re Erebus Royal Commission; Air New Zealand Ltd v Mahon the Privy Council said in relation to Commissions of Inquiry that their decisions must be based upon evidence that has some probative value. This requires that the “decision to make the finding must be based upon some material that tends logically to show the existence of facts consistent with the finding and that the reasoning supportive of the finding, if it be disclosed, is not logically self-contradictory”.55 Whilst this was said in relation to the judicial review ground of breach of the rules of natural justice, I consider the statement is equally applicable to an assessment of whether ARLA’s decision is unreasonable or not. Here ARLA has dismissed Redwood’s appeal against the imposition of a 3am closing restriction in circumstances where there was no
52 See Woolworths at [54].
53 See Woolworths at [55].
54 See Woolworths at [55].
55 See Re Erebus Royal Commission; Air New Zealand Ltd v Mahon [1983] NZLR 662 (PC) at 671.
evidence to suggest that on-licences in the City Centre Fringe zone from which the Pelican Club operated warranted a reduction from the statutory closing hours. Because of the way ARLA approached its decisions the reasons for this outcome are not apparent, nor are they inferentially available.
[111] Section 78 of the SSA requires territorial authorities when producing a DLAP to have regard to, amongst other things, the number of licenses of each kind held for premises in its district and the location and opening hours of each of the premises.56 I consider that when ARLA is required to assess whether a PLAP passes the appeal test or not it too should take account of the factors set out in s 78. Had ARLA done so here it would have recognised that the opening hours of the Pelican Club extended beyond the closing hours the PLAP proposed for on-licences in the City Centre Fringe zone. Thus, bringing into contention whether it was appropriate for the closing hours in that zone to be reduced from 4am to 3am, when there was seemingly no evidence of alcohol related harm in that zone, and an existing on-licence holder was operating its business at hours which exceeded the proposed closing hour restriction.
[112] In Woolworths I referred to the breadth and diversity of the Auckland region, which is the largest and most populated territorial authority district in the country.57 In the present circumstances it is difficult to see why all on-licenses in the Auckland region that are located outside the City Centre should be subject to stricter closing hours than the SSA provides for on-licences. There was no evidence to show the level of alcohol-related harm outside the City Centre was constant across the Auckland region and of such character that such a wholesale departure from the closing hours in the SSA was warranted. Yet that is what the PLAP provides. Further this single treatment of the areas outside the City Centre does not follow from the PLAP recognising no other zones. Apart from the City Centre the PLAP defines other zones in the Auckland region: these being the City Centre Fringe, Priority Overlay areas, Metropolitan Centres and Neighbourhood Centres. Thus, the PLAP allows division of the Auckland region into various identifiable zones, which in principle might be permitted different trading hours.
56 See s 78(2)(b).
57 At [6].
[113] Further the history of the PLAP’s development shows that initially when still a DLAP the chosen closing hours for on-licences were 3am for the City Centre and 2am for other parts of the Auckland region. Then when the Council considered the problems associated with a spike in persons leaving City Centre on-licences at 3am would be mitigated by a 4am closing hour this became the adopted closing hour in the PLAP. The reason for the alteration related purely to circumstances relevant to the City Centre yet the decision was then made to increase the closing hours for on- licences outside the City Centre by one hour. Why the one-hour difference between City Centre on-licences and those in other parts of the region was first chosen and why it remained a feature throughout the evolution from DLAP to PLAP is not known. This circumstance suggests the chosen temporal relationship between the closing hours for the City Centre and the other parts of the Auckland region was arbitrarily determined and bore little if any relationship to local conditions throughout the region. However, ALRA never questioned if this is what underlay the chosen closing hours, which is essentially what Redwood was seeking in its appeal. In short, ARLA failed to address why it considered it was not unreasonable in light of the object of the SSA for every on-licence in every part of the Auckland region other than the City Centre to be subject to 3am closing hours.
[114] Because ARLA never squarely addressed the issue of whether the closing hours as they affected an on-licence located outside the City Centre were unreasonable in terms of the s 83 appeal test, there are no reasons given for why ARLA considers it not to be unreasonable in light of the object of the SSA for all on-licences in the Auckland region outside the City Centre to be restricted to 3.00 am closing hours. I acknowledge that no other on-licence holders have appealed the imposition of this restriction, but I do not see why the decisions of on-licence holders, as to what they consider to be appropriate operating hours for their businesses, should influence and lead to an overall mandatory reduction in closing hours for every on-licence holder outside the City Centre. Once the PLAP moves to a LAP it remains in force for six years and applies to all licence-holders both present and future. In my view any departure from the statutory closing hours needs to be grounded in reasons that show application of the statutory closing hours would not achieve the object and purposes of the SSA.
[115] The Council argued that the absence of site-specific evidence of alcohol- related harm at Newton Road or the Pelican Club is of no moment because the PLAP was formulated for the entire Auckland region and there was evidence of alcohol- related harm within the region. I reject this argument. It overlooks the fact that none of the evidence about alcohol-related harm was linked to anywhere near the Pelican Club or anywhere else in the City Centre Fringe zone. Given the size and diversity of the Auckland region, the fact there is evidence of alcohol-related harm elsewhere in Auckland does little to advance matters when it comes to assessing whether it was unreasonable in light of the object of the SSA for on licences in the City Centre Fringe zone to be made subject to more restricted closing hours than the SSA imposes.
[116] Further the Council referred to the Court of Appeal’s decision in My Noodle where the Court upheld the conclusion that the policy and desirability of a common closing time outweighed other relevant considerations.58 However, in Woolworths I found this reasoning in My Noodle was distinguishable from and therefore not applicable to the present circumstances.59 This was because the Court of Appeal was referring to a trading hours restriction which applied to all types of alcohol suppliers in Queenstown. The size of the locality was relevant. Without a blanket restriction the restriction’s effect could be subverted. That outcome is not likely in a region as large and diverse as Auckland.
[117] The difficulty the Council faces here in defending ARLA’s decision is that ARLA did not address the imposition of the 3am closing hours restriction in terms of the s 83 appeal test, so there are no reasons to explain why ARLA rejected Redwood’s Appeal.60 ARLA’s answer was that Redwood had failed to discharge the burden of proving the closing restriction was unreasonable in light of the object of the SSA.
[118] The Council also argued that the primary reason for not reducing the closing hours of the City Centre, which was accepted by ARLA, was that a 3am closing hour restriction would result in a spike in alcohol-related harm, which is prevalent in the
58 My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 564, [2010] NZAR 152.
59 See Woolworths at [115].
60 The importance of reasons to explain a decision by ARLA and the impact of a failure to provide adequate reasons is addressed in Woolworths at [98] to [116]. Whilst those paragraphs relate to off-licences not being provided with reasons to explain the reduction in their closing hours the legal principles in issue apply equally to on-licences as well.
City Centre, because more persons would be leaving on-licences at the one time. The Council argued that the same could not be said of the zones outside the City Centre and in particular “Eden Terrace” which is within the City Centre Fringe zone and is where the Pelican Club is located. The Council seems to be suggesting that this means there was no reason not to reduce the closing hours to 3am. However, this is to look at the matter wrongly. I consider there has to be reason to depart from the statutory trading hours, given they represent Parliament’s view on how the object and purpose of the SSA is best achieved,61 and therefore absent such reason it is difficult to see how any reduction in trading hours can be said not to be unreasonable in light of the object of the SSA.
[119] It follows that for the reasons expressed herein ARLA has reached an unreasonable decision because it failed to address the right question and it failed to address the two grounds of Redwood’s appeal discretely. This is something that no reasonable decision-maker would do.
[120] Accordingly, the question to be asked is: absent evidence of alcohol-related harm in the subject and perhaps neighbouring areas is it unreasonable in light of the object of the SSA to require on-licences in that area to be subject to earlier closing hours than Parliament considers appropriate to meet the object and purpose of the SSA.62
Conclusion
[121] As discussed at [36] herein, Redwood is successful in its claim for review on the ground that ARLA erroneously applied a burden of proof requirement to the civil standard of proof to Redwood’s appeal. By rejecting the arguments Redwood advanced on appeal for want of proof, ARLA erred in law, tainting the appeal. This also made the decision unreasonable as it can be said that no reasonable decision- maker exercising ARLA’s statutory powers would act in this way. Again, as noted earlier, this error alone is enough reason to set aside ARLA’s decision on Redwood’s
61 See discussion in Woolworths at [51] to [55].
62 I have included the potential to consider neighbouring areas because if an area has no evidence of alcohol related harm but abuts an area where there is alcohol related harm to a degree that would warrant reducing the statutory trading hours; the proximity of this harm may provide good reason to apply more restricted trading hours to the neighbouring area as well.
appeal and to require ARLA to reconsider the appeal. However, I have also proceeded to address Redwood’s remaining grounds of review. In regard to those grounds, all except that described under the heading “ground nine” were unsuccessful.63
[122] Thus, the other ground on which Redwood’s claim for review succeeds is that described under the heading “ground nine” at [87] herein. In relation to that ground ARLA erred in various respects. First, it never conducted an evaluation of whether the definition of City Centre was unreasonable in light of the object of the SSA. Here it was led astray by its misunderstanding that Redwood was subject to an onus of proof.
[123] Secondly, ARLA never considered whether it was unreasonable in light of the object of the SSA for all on-licences throughout the Auckland region that were located outside the City Centre, and in particular those in the City Centre Fringe zone, to be restricted to 3am closing hours. This was in circumstances where there was no evidence to suggest that on-licences in the City Centre Fringe zone from which the Pelican Club operated warranted a reduction from the statutory closing hours. In addition, because of the way ARLA approached its decisions the reasons for this outcome are not apparent, nor are they inferentially available.
[124]It follows that the key questions ARLA must ask itself are:
(a)Is the definition of City Centre unreasonable in light of the object of the SSA; and
(b)absent evidence of alcohol-related harm in the subject and perhaps neighbouring areas is it unreasonable in light of the object of the SSA to require on-licences in the City Fringe area to be subject to earlier closing hours than Parliament considers appropriate to meet the object and purpose of the SSA.
63 See my conclusions at [43] – [45], [60], [63], [68], [72], [74], [84] and [86] herein for the grounds identified as ground one – eight.
[125] In assessing these questions Redwood is not subject to an onus of proof, rather, after evaluating the material provided in relation to these key questions ARLA must satisfy itself the appeal test is met. And it must provide reasons that explain the outcome it has reached.
Discretion to grant relief
[126] The flaws in ARLA’s decision on Redwood’s appeal are such that in my view the decision on Redwood’s appeal must be set aside in its entirety and sent back to ARLA to be re-considered.
Result
[127] Redwood is entitled to relief under s 16 of the Judicial Review Procedure Act 2016. Pursuant to that section the subject decision on which it seeks review is set aside.
[128] Pursuant to s 17 of the Judicial Review Procedure Act the subject decision is remitted back to ARLA for reconsideration and determination in its entirety. In doing so ARLA is to act in accordance with the reasoning and findings of fact and law set out in this judgment, and in particular at [124] and [125] above.
[129]The parties have leave to file memoranda on costs.
Duffy J
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