How does an applicant prove the amenity and good order of a locality to obtain a licence for the sale and supply of alcohol? This was the question before the recent High Court decision in Re Venus NZ Limited1.  The relevant statutory provisions in ss 105(1)(h) and 106 of the Sale and Supply of Alcohol Act 2012 (“the Act”) provide that the Alcohol Regulatory and Licensing Authority (ARLA) or Licensing Committee are required to form an opinion as to whether the amenity and good order of a locality would be likely to be reduced to a more than minor extent by the effects of the issue of the licence.

Facts

Venus NZ Ltd applied for an off-licence in Raglan to be known as “Bow Street Liquor”. It was intended to trade as a bottle store with unexceptional opening hours. Six existing off-licence premises were within 200 metres of the proposed location. There were also seven on-licensed premises and one club licensed premises within a 200 metre radius. This high density of licensed premises and the fear of the proliferation of licensed premises was of concern to locals who submitted and also to the Licensing Inspector and Medical Officer of Health due to the small commercial area of Raglan.

Alcohol and Regulatory Licensing Authority

The application before ARLA was not opposed by the Police and although there were 64 objections by members of the public, only one objector appeared at the subsequent hearing. ARLA, nonetheless, declined the application for an off-licence. ARLA was persuaded that the nearby fish and chips shop as well as an adjoining bakery would “act as a magnet for young people especially after school hours.”2  The Licensing Inspector was concerned that competitive price cutting could potentially encourage elevated levels of drinking despite the proposed premises being in a permanent liquor ban area. There was also concern with the nearby activities of Raglan Community House which works in the areas of suicide and violence prevention. ARLA held the potential for alcohol related harm was considerable. The applicant was said to give self-serving evidence.

As a matter of law, ARLA adopted a line of case law authority which held that there was an onus on an applicant to prove its case and that an applicant  must demonstrate that its application measures up against the criteria set out in ss 105 and 106 of the Act. This was based on the High Court decision in Page v Police where for suitability it was established “what is required is a positive finding. That implies an onus upon the applicant to demonstrate suitability.”3  This was extended by ARLA in its decision in Re Hari Om (2013) Ltd so that “there is [also] an onus on an applicant to satisfy the Authority that the issue of the proposed off-licence is unlikely to reduce the amenity and good order of the locality to more than a minor extent."4

All in all, while there was no evidence that the locality’s amenity and good order were badly affected at the time of the hearing, ARLA concluded that the obligation was on the applicant to satisfy ARLA that potential alcohol-related harm would be minimized. On the totality of the evidence, the decision concluded that the object of the Act could not be achieved by granting the application.

High Court

Justice Heath in the High Court recorded the inconsistencies of the findings made by ARLA that there was “no evidence as to alcohol-related harm”5  at the same time that “the amenity and good order of the locality would be reduced by the grant of the application.”6

In looking to onus, His Honour rejected the approach taken by ALRA. It found relevantly:7

“[53]… It seems to me that [the (sic)] question whether amenity and good order will not be materially reduced is one on which a judgment must be formed by the Authority, on the facts of a specific case, as opposed to something than an applicant is required to prove on a balance of probabilities. The difficulties inherent in proving a negative support that view.”

In the High Court’s view, no onus exists for whether the amenity and good order of a locality would be likely to be reduced to more than a minor extent. The wording of s 105(1)(h) requires ARLA to form an “opinion.” There is an underlying assumption that ARLA will exercise an inquisitorial role. The need for a judicial body to form an independent opinion is conceptually different from a decision that is based on whether or not an applicant has established on a balance of probabilities that a relevant fact has been proved. An onus would be inconsistent with the evaluative nature of ss 105(1)(h) and 106 of the Act.

There was, therefore, an error of law in requiring the applicant to establish that the amenity and good order criterion had been established. Rather, ARLA was obliged to inquire into that consideration and to form its own opinion on the basis of the evidence adduced. When combined with additional evidence relating to suitability, the Court held that there was no basis on which the off-licence could be refused.

Comment

As noted in the High Court’s decision, it is very difficult for an applicant to demonstrate that the effects of granting a licence will not reduce the amenity and good order of a locality to more than a minor extent if there is no evidence as to the present level of amenity and good order.  That difficulty is no less where, as in the Venus situation, the evidence before ARLA was that there was no evidence of any alcohol related harm or disorder affecting the amenity of the locality.

It is hoped that the emphasis on inquisitorial procedures for ARLA in the High Court’s decision will bring about changes in the way in which evidence is adduced in relation to the amenity and good order of a locality. These inquisitorial procedures align with s 201 of the Sale and Supply of Alcohol Act 2012 which provides that ARLA and licensing committees are treated as being Commissions of Inquiry under the Commissions of Inquiry Act 1908.

The decision weakens the adversarial tone of ALRA in favour of a fact-finding approach. It is up to ARLA (and/or the Licensing Committee) to form an opinion on whether the amenity and good order of locality would be likely to be reduced by more than a minor extent by the effects of the issue of the licence. This approach will represent a welcome change for applicants who have previously faced the difficulty of producing evidence where there actually may not be anything to produce.

 

[1] Re Venus NZ Limited [2015] NZHC 1377.

[2] Re Venus NZ Ltd [2014] NZARLA PH 762 at [28].

[3] Page v Police (HC Christchurch, CP84/98, 24 July 1998, Panckhurst J) at [32].

[4] Re Hari Om (2013) Ltd [2014] NZARLA PH 159 at [30].

[5] Re Venus NZ Ltd [2014] NZARLA PH 762 at [40].

[6] At [41].

[7] Re Venus NZ Limited [2015] NZHC 1377 at [53].


Further information