HARDING HOTELS PTY LTD & ORS v JATADD PTY LTD No. SCCIV-01-1425 [2001] SASC 439

DOYLE CJ: This is an appeal by leave against a decision of the Licensing Court.

The Licensing Court Judge granted an application for a retail liquor merchant's licence pursuant to s 37 of the Liquor Licensing Act 1997 (SA) ("the Act") for premises at Strathalbyn. Strathalbyn is a rural town about 60 kilometres by road, south-east of Adelaide.

The appeal raises two issues. The first is whether the Judge erred in making findings, on the evidence before him, that the applicant had satisfied the Judge that existing licensed premises in the locality "do not adequately cater for the public demand for liquor for consumption off licensed premises and the licence is necessary to satisfy that demand": s 58(2) of the Act. Mr Firth, counsel for the appellant, conceded that if the findings which the Judge made were properly made, they provided a basis for the grant of the licence. The second issue is the significance of the fact that fifteen months before making his decision the Judge had refused an application by the same applicant for the same kind of licence in respect of the same premises at Strathalbyn. It was common ground before the Judge and on appeal that in the period of fifteen months there had been no significant change affecting the public demand for liquor in the locality and the ability of the existing premises to cater for that demand. Mr Firth argued that, in those circumstances, the Judge should have exercised his discretion to refuse the application.

What follows is taken from the Judge's reasons in the first application and in the second application.

Strathalbyn is a town of about 3,000 people. An additional 3,700 people live within about ten to fifteen kilometres of Strathalbyn. The Judge treated the town and the surrounding area within a radius of about fifteen kilometres as the relevant locality, and I will refer to it as the locality. Strathalbyn is the shopping centre for the bulk of the people living in the locality. Many of the people in the locality who have paid employment work out of the locality, in Adelaide and in other places. But, presumably, many people also work in the locality. The Judge found that people in the locality make occasional use of larger shopping centres outside the locality, such as those at Mt Barker, Victor Harbor and Adelaide. The evidence supported that finding, and indicated that people who went to these places regularly made reasonably regular use of them for shopping. Commonsense also suggests that people in the locality would, occasionally, make special shopping trips to larger centres outside the locality.

There are a number of hotels in Strathalbyn itself, in the locality and outside the locality. The Judge proceeded on the basis that with one exception these hotels could be put to one side, because of their very limited facilities for the sale of liquor for consumption off the premises. This approach was not challenged on appeal.

There is only one outlet that required consideration. It is the Commercial Hotel in Strathalbyn. It has a drive-in bottle department and a walk-in bottle department. As would be expected, for the purposes of the application attention was focused on the walk-in bottle department.

In his first decision the Judge described this as "small and rather cluttered." He said:

"It is not particularly attractive in its setting but it certainly does not repel. Its range of liquor seems to me, for the locality, to be pretty well sufficient. In saying that I bear in mind all of the evidence which was tendered to suggest otherwise."

In his second decision the Judge found that since the first decision the licensee of the Commercial Hotel had changed, and the range of liquor in the walk-in had improved "to some small extent." He commented that, if anything, it was rather more cluttered than before, because of the increased stock. He noted that it was still "unattractive", and that moving around in the walk-in "could prove awkward" if a number of customers were in the shop at one time.

As was appropriate, in each case the Judge considered the standard of the premises at the Commercial Hotel, and the range of liquor available there. I have already referred to his findings relating to the standard of premises.

In relation to the standard of the premises, he said that the premises were "generally adequate" for a country town hotel. He made the point that it was not practicable for such a hotel to provide the facilities for the sale of bottled liquor that would be expected in a city or a major country town. In the end, nothing turns on this, but if there is a sufficient demand in a country town for premises for the sale of bottled liquor that meet the standards commonly met in cities and large towns, it is no answer to such a case to say that this cannot be expected in a country town. I suspect that what the Judge meant, as his second decision implies, is that often in a country area there will not be a sufficient number of people wanting substantial premises with a wide range of liquor to justify the grant of a licence, and if that is the case, it follows that the licence should not be granted. I mention this matter merely to emphasise that if there is a sufficient demand, people who live in the country are as entitled to facilities of a high standard as people in the city.

I return to the findings. Having heard a number of witnesses, the Judge found in the first decision that their demand for liquor was met by the Commercial Hotel and other local outlets. Only one of the witnesses was a person with a "wide ranging taste in wine." The Judge accepted that this witness's demands were not being met in Strathalbyn, and that there would be other people like this witness in the locality, but the Judge was not satisfied that this witness represented "a significant community." Accordingly, he refused the application.

In the second decision he again found the walk-in at the Commercial Hotel to be adequate. Complaints about its small size, and the difficulty moving around it, and the cluttered nature of its stock, were described as "matters of simple inconvenience." In other words, correctly distinguishing between the ability to obtain liquor, and the circumstances under which it was obtained, the Judge treated complaints about the circumstances under which the liquor was obtained as being of less significance than the availability of liquor itself. That is consistent with the approach that has been taken to applications under s 58(2) of the Act: see, for example, Woolies Liquor Stores Pty Ltd v Carleton Investments Pty Ltd (1998) 73 SASR 6 at 10-12.

Not surprisingly, on this occasion the applicant based its case on evidence of a number of witnesses who expressed a demand for a better range of liquor than was available at the Commercial Hotel. The Judge was clearly aware of the need to avoid the Court being manipulated or unduly influenced by the selection of a different group of witnesses, hand-picked to meet a gap exposed in his first decision. He referred to an earlier decision of this Court, Angas Park Cellars Pty Ltd v Nuriootpa Vine Inn Hotel Motel Pty Ltd [2000] SASC 302 at [14]- [15], where this Court cautioned against the Licensing Court departing from an earlier ruling. The Judge went on to say:

"Indeed I have scrutinised this new case very carefully and warned myself of the dangers inherent in 'needs' evidence and the partisanship involved therein."

It cannot be said that the Judge was not mindful of the need for care.

The Judge made a significant comment about his finding, in the first decision, that he was not satisfied that a significant number of people in the locality wanted a wider range of liquor than was available at the Commercial Hotel. He said:

"In the last case I could only find one witness who had a wide ranging taste in wine and for whom the Commercial Hotel did not adequately cater. All other witnesses, for various reasons, were found to be adequately catered for in the range of liquor to be found in the Commercial Hotel. In a nutshell only one actually required a wide range of liquor over which to exercise a choice and the others did not. The Commercial Hotel was adequate for the latter. Whilst I felt sure that there would have been others in the 'wide range and choice' category I did not feel confident or persuaded that a significant number in the locality were in this category. If I had been so satisfied I think I would have granted the licence."

Turning then to the evidence before him in the second case, the Judge said:

"This time, and I am in no doubt about this I have at least seven or eight persons (who are, so I find, perfectly reasonable and representative of others) in the 'wide range and choice' category. Far different from the earlier case. The balance of the witnesses (again reasonable and representative) more in the 'lesser range' category. The Commercial Hotel obviously meets the latters demand adequately. Not so the former and I will expand on this. It is a matter of judgement as to whether this group is of such significance as to call for the grant of the licence sought. It can only be a matter of consideration of the strength of the evidence and my experience of like cases in this jurisdiction. I am fairly confident in finding that the requisite significance has been established."

This passage makes it clear that the Judge was careful to consider whether the relevant witnesses were representative of a significant part of the public in the locality, and also makes it clear that the Judge was using his own experience in the jurisdiction, as was appropriate. He went on to conclude that there was a significant part of the public whose demands for liquor were not adequately met. He commented, referring to the licensee of the Commercial Hotel:

"Cross examination of the licensee of that hotel made it perfectly clear to me that it is significantly narrow in its range not only for those wanting to buy mid range or expensive wines but also those wanting to exercise a reasonable choice over a range of the cheap variety."

He made a further finding, to a similar effect, shortly thereafter.

On the basis of those findings he granted the application.

On these findings, there is a firm basis for the decision reached by the Judge, consistently with the approach to the application of s 58(2) of the Act that I outlined in Woolies Liquor Stores at 10-12. The premises at the Commercial Hotel were not of a standard generally demanded by the public, and on the Judge's finding were barely adequate judged by contemporary standards. As I explained in the case just cited, the focus of s 58(2) is more on the demand for and availability of liquor, than it is on the manner in which the liquor is made available. But that matter is not irrelevant in the application of s 58(2). Most importantly, the Judge found that a significant part of the local population comprising about 6,700 people, wanted a better range of liquor than was available at the Commercial Hotel. The demand which was expressed by the witnesses, found to be representative of that group, was a demand which is a reasonable one having regard to contemporary standards. The demand was one not capable of being met by the existing premises. Accordingly, unless the findings are erroneous, the decision should stand.

Are the findings supportable by the evidence? Mr Firth suggested that a number of the witnesses satisfied their demand for liquor outside the locality "habitually and contentedly", to use a term found in the cases. Another way of putting it is to say that the witnesses satisfied their demand for liquor outside the locality by choice, and were likely to continue to do so even if the licence was granted. He also submitted that a number of the witnesses expressed a demand for wine costing less then about $10 a bottle, and that in this price range the Commercial Hotel offered an adequate range.

I have read the evidence of the witnesses called by the applicant before the Licensing Court. Their evidence reveals consistent complaints about the size and layout of the Commercial Hotel walk-in. It is often referred to as cluttered or crowded, and as not being a satisfactory place for the purchase of liquor. This evidence is reflected in the Judge's findings. There are also fairly consistent complaints about the range of liquor available, referring mainly to bottled wine. I agree that the case made out by the applicant was not a strong one. My impression is that the Commercial Hotel offers a fair range of wine. But the fact remains that there are regular references in the evidence to a demand for a better range than was available at the Commercial Hotel. I accept that in cross-examination Mr Firth established that some of the complaints about the range were not substantiated, because some of the witnesses seemed unaware of the range available at the Commercial Hotel. But a substantial body of complaint about the range at the Commercial Hotel remained. As well, the Judge was entitled to and did use his experience in assessing the force of the evidence that he heard. He was clearly of the view that the complaints made were, by contemporary standards, reasonable complaints.

In my opinion the key findings that the Judge made were open to him on the evidence.

It is true that in his first decision the Judge said that the range of liquor was "pretty well sufficient" for the locality. And in the second decision he said that the range was "simply well short of reasonable expectation." But those conflicting findings are the result of the assessment of the evidence before him, and as the Judge pointed out, the evidence in the two cases differed.

This Court has previously referred to the desirability of the Licensing Court having regard to objective features of the locality, the makeup of the population and the Court's own expertise, when assessing the demand for liquor, and not paying undue regard to evidence of demand from witnesses. This is because of the way in which the witnesses can be hand-picked, and because of the subjective nature of their evidence: see, for example, Liquorland (Australia) Pty Ltd v Hurley's Arkaba Hotel Pty Ltd & Ors [2001] SASC 232; (2001) 80 SASR 59 at [107]. On the other hand, the calling of witnesses from the locality is a permissible means of proving that the public demand for liquor is not adequately catered for by existing premises in the locality. Perhaps the main point to emphasise is the need to pay careful attention to the objective features of the locality, and to the makeup of the local population, when considering whether the need witnesses are representative of a significant part of the public in the locality.

Be that as it may, the Judge was clearly aware of the need for care in deciding whether the need witnesses presented to him were representative of a significant part of the public in the locality, and he made it clear that he did make use of his own knowledge and experience in arriving at his assessment.

For all those reasons, I would not interfere with the findings.

The Licensing Court should be slow to depart from a previous recent decision, if a second application is made for a licence in respect of premises after a refusal of an application. In the ordinary course of things one would expect the Court to grant a second application only if there is good reason to think that there has been a change in the public demand for liquor in the locality, or in the ability of the licensed premises in the locality to cater for that demand. The making of repeated applications, the evidence in support of the applications being adjusted to cover gaps exposed in an earlier decision, is not in the public interest, and is not fair to existing licence holders in the locality. In the present case the second application must have been presented on the basis that the evidence led in the first application did not reliably establish the nature of the public demand for liquor in the locality, and that the evidence in the second application would do so.

There is an obvious danger of an argument like this being used to justify what is no more than the presentation of an improved case, learning from experience. But, in my opinion, it would only be in an extreme situation, if at all, that trial Judge of the Court could refuse to entertain a second application. And the Judge must be mindful that the Licensing Court is dealing with an application for a licence required to meet a public demand, and accordingly is concerned with the public interest, not just with private interests. And it is possible that there will be cases, as this one appears to be, in which the evidence on a second application satisfies the Court that its earlier conclusions as to the nature and extent of the public demand for liquor in the locality were not correct, even though fairly based on evidence previously presented to it.

I am conscious of the fact that the outcome may seem unfair to the licensee of the Commercial Hotel. But the Judge was clearly alive to the matters that called for caution in this case. In the end he was satisfied on the evidence that his earlier finding about the public demand for liquor could not be made again, and it follows that it was open to the Judge to grant the application.

In saying that I do not overlook the fact that by s 53 of the Act the Court has a very wide discretion, which discretion it can exercise to refuse an application even though a basis for the grant of the application has been made out. But in my opinion the fact that an earlier unsuccessful application had been made by this applicant is not, of itself, a sufficient basis for refusing the application, and that appears to me to be the only matter supporting an exercise of the discretion to refuse to grant the licence sought.

29. MARTIN J: I agree that the appeal should be dismissed for the reasons given by the Chief Justice.

30. BESANKO J: I agree that the appeal should be dismissed for the reasons given by the Chief Justice.