Kordister Pty Ltd v Director of Liquor Licensing - [2010] VCAT 277 - VCAT 2010 case summary — Zoe

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Kordister Pty Ltd v Director of Liquor Licensing

[2010] VCAT 277

Victorian Civil and Administrative Tribunal|2010-03-09

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At a glance

Source facts

Court

Victorian Civil and Administrative Tribunal

Decision date

2010-03-09

Source

Original judgment source is linked above.

Judgment (61 paragraphs)

[1]

The applicant called evidence which either contradicted or explained conduct referred to in the last paragraph. However, Mr Morris submitted that even if I find that the applicant has sought to minimise the impacts on the community and to mitigate harm that late night trading causes, that would not be sufficient reason for the applicant to be successful in this review application.
Mr Morris also submitted that the late trading of the Exford bottleshop caused or contributed to anti-social behaviour, street violence, domestic violence, hospital admissions, vandalism and property damage, theft, public drinking, groups of people congregating and arguing and vomiting and urinating in public areas.
The respondent called leading constable Lisa Bolton who, by a series of dots on a map, demonstrated that the area around the Exford is a "hot spot" where a number of assaults take place. However, the incidents referred to by the dots are not necessarily caused by the applicant and were not shown to relate to the applicant's bottleshop.
The respondent and the joined party also called Pier de Carlo who is Director of Policy, Planning and Strategy, Mental Health and Drug Division, Department of Health, who gave evidence of government policy and the efforts that have been made to reduce problems of alcohol in the community and improve the general amenity of the relevant area. Further, he gave evidence of associated social harms related to alcohol. He also linked operating hours and alcohol to various harms in particular packaged alcohol, and he stated :

[2]

[33]

Mr Morris stated that it is very likely that the persons who would purchase alcohol from the applicant's bottleshop would fit into a category where persons do not keep a ready supply of alcohol. He stated that after 11:00pm it is likely that the persons would be relatively young (under 25) and would be out for a good time in the clubs of Melbourne. He also referred to the practice of pre-loading, which involves patrons of nightclubs buying alcohol before they enter the nightclub from a bottleshop and consuming that alcohol before they enter the nightclub so that they would not have to pay the extra price for drinks which the nightclubs would charge. He also referred to a practice of side-loading, which is where the patrons of nightclubs leave the nightclub for a short time, purchase alcohol from a bottleshop and then re-enter the nightclub after the alcohol has been consumed. Mr Morris also referred to a practice of end-loading, where customers from nightclubs would buy alcohol after leaving the nightclub in the early hours of the morning.
On the other hand, Mr Hart gave evidence that the bottleshop is used by people who finish work late at night and wish to have a bottle of wine with their dinner which may be at a restaurant or at the person's home. Mr Hart also referred to the fact that there are many visitors to the City of Melbourne and, in particular, the Russell Street/China town area, and that those visitors would wish to buy packaged liquor after 11:00pm in order to take back to their hotel rooms to consume.
The authorities make it clear that it is difficult to place generalised reports - such as the Allen Report and the Marsden Jacob Associates Report - in a position where they can be relevant to site specific situations such as the Exford. Further, Mr de Carlo's evidence does not go so far as to be site specific in relation to the Exford either.
In Nardi v Director of Liquor Licensing [2005] VCAT 323, his Honour Judge Bowman was considering an application for a packaged liquor licence by Woolworths at one of its supermarkets. His Honour made it clear that expert evidence in relation to harm minimisation needs to be treated with considerable caution. His Honour stated at paragraph 18 et eff :

[39]

While it is clear that people may consume alcohol in the street after the same is purchased from the applicant's bottleshop, it is far from clear that the purchase of such alcohol is used for the purpose of what Mr Morris described as pre-loading, side-loading or back-loading. Drinking in the street does not necessarily amount to harmful effects of alcohol or even detriment to the community. At its highest, it is a breach of a local law.
It is clear that Melbourne does have many visitors, and it is important for those visitors to be served with packaged alcohol at times when they may require it. Otherwise, Melbourne may be at risk of losing its reputation of a vibrant international city.
The evidence in relation to the incidents that were raised by the respondent and joined party and attempted to be linked to the bottleshop do not, when analysed, in my view, appear to be very serious. A number of them related to breaches of the local law, however, very few infringement notices were issued to the people who consumed alcohol. One would have thought if the joined party wished to take the matter seriously, every person who was observed consuming alcohol in the streets of the Melbourne CBD should be issued with an infringement notice. However, quite the contrary view seems to have been taken.
For a hotel that has been kept under extensive surveillance for a period of almost two years, and there were only minor breaches of the law by that establishment, it would appear to me that the hotel is taking its responsibilities as a liquor supplier very seriously and has done almost all that could be expected of it in only serving customers that were entitled to be served and warning those customers about other breaches of the local laws that they should not breach.
I do not accept Mr Morris' submission that this bottleshop has caused the anti-social behaviour to which he referred being street violence, domestic violence, hospital admissions, vandalism and property damage, theft, public drinking, groups of people congregating and arguing in the streets and vomiting and urinating in public places. In my view, there is little or nothing to link the conduct of the bottleshop to the vices referred to by Mr Morris, perhaps save and except for street drinking. There are many licensed establishments in Melbourne and the behaviour that Mr Morris refers to is more likely to be coming from the larger nightclubs where people stay until the early hours of the morning and leave the nightclub in a drunken state. As Mr Canavan correctly stated :

[57]

While I agree that the evidence of the applicant could have been presented differently and supported by accounts, that is not to say that I cannot be satisfied that reducing the hours of the bottleshop to 11:00pm closing would have a serious effect on the economic viability of the Exford.
I am satisfied that the Exford bottleshop is very busy after 11:00pm. I am also satisfied, and it was not challenged, that the Exford bottleshop charges premium price for its liquor, far in excess of the price that would be charged by a liquor shop trading in suburban Melbourne. This fact, together with the evidence that the bottleshop is extremely busy after 11:00pm, would indicate that the bottleshop is a large source of profit for the proprietor of the Exford and a restriction on its present closing hours would have a serious effect on their ultimate profit from the hotel.
During the hearing, I indicated to the parties that I would be grateful if they could make submissions on whether a reduction in the licensed hours of the applicant pursuant to s 29 of the Act would have serious effects on the viability and value not only of the applicant's premises but of other liquor premises throughout Victoria. Put a different way, if the respondent and joined party were to succeed in this application, mortgage institutions, who are lending licensed premises on the value of the business, would be wary of lending in the future, as an application pursuant to s 29 of the Act could vastly decrease the value of the business. Further, licensees would be reluctant to spend money on renovations and beautification of present licensed premises, because the hours that those premises are trading could be reduced.
In Caminiti v Victorian Taxi Directorate [1996] VICCAT 105, unreported 25 March 1996, Macnamara DP, was concerned with an application for a metropolitan hire car licence. One of his reasons for refusing the licence was that it would have an effect of diminishing the value of other such licences in Victoria which could have serious economic consequences. He said :

[58]

... Section 143 specifically requires the decision maker to give due consideration also to the interests of incumbent members of the industry. The sale agreement between Parkline and the Williamsons attributed $80,000 of the purchase price to the three metropolitan hire car licences and the special purpose vehicle licence. Mr Paul Caminiti conceded that a special purpose vehicle licence was worth less than a metropolitan hire car licence. Accordingly, implicit in that allocation is a valuation of the metropolitan hire car licences at something in excess of $20,000. In the matter Johannes Benjamin Boss Service Panel Works Pty Ltd and Norman Franklin Allen v Vincent and Frank Santoro an unreported decision of 3 July 1991, Tadgell J. in the Supreme Court considered a challenge to the decision of the authority then operating the tow truck licence system. The authority was required by the statute to act in accordance with the public interest formulated in a manner similar to the way it is formulated in Section 143 of the Transport Act. His Honour found that the licensing authority had not taken into account any relevant consideration by regarding as significant monies paid by existing licence holders for the acquisition of their licences and the previous licensee. ... Once licences become valuable assets in companies, balance sheets may be the subject of security arrangements with financiers. Their values certainly represent an important element of the stability of businesses. That value would be undermined if new licences were issued by the licensing authority without any premium. This would undermine or destroy the value which is bound up in existing licences. In considering the interests of the public on this issue, it is necessary to consider the effect of aggregation. The evidence shows that there are at present 417 metropolitan hire car licences. It is difficult to see that the issue of three more such licences would in itself, subvert the value of the existing 417; however if a view is adopted which says that no individual issue of licence can have a material affect, it would open the way for the issue of a multiplicity of new licences, which in total certainly would have a material affect upon the value of the existing licences

[60]

Mr Morris submitted that the case of Caminiti was irrelevant to the present application. He said that in cases of hire car licences and other licences such as abalone licences, it was the licence itself that permitted the carrying on of the particular activity, eg, operating a metropolitan hire car or harvesting abalone from the sea.
He said that liquor licences were entirely different because the liquor licence are attached to the land and, as a consequence, when a liquor licence was sold or a business mortgaged, it was the shop or premises where that liquor licence operated from that had the entitlement.
In my view, the distinction drawn by Mr Morris is a distinction without a difference. Clearly, a hotel without a liquor licence would be worth far less than a similar hotel with a liquor licence. By the same token, a bottleshop or supermarket with a licence would be worth considerably more than a similar premise without a licence. It necessarily follows that if the profit that is earned from a business is decreased by the removal of a liquor licence then, the value of that business will be decreased. That will, in turn, have an effect on the ability of proprietors of such a business to renew finance commitments or obtain finance in future. It would not be surprising that if s 29 was used to restrict the hours of business of licensed premises generally, the value of the business being conducted on those premises would be decreased. Even the possibility of a s29 application such as this being made, would make it far more difficult for any operator or prospective operator of a licensed premises to obtain finance or to obtain finance at the level at which they could be obtained at the moment. Put in another way, lenders would be "scared off".
It necessarily follows that if the scenario, which I have outlined above, were to happen, there could be serious effects on the liquor industry in Victoria. Many liquor purveyors, who are providing a positive benefit to their communities, may be forced out of business or the viability of their business would be reduced to such an extent that the facilities which they provide the public would also be reduced.
I was told that this was only the second application made by the Police in relation to restriction of a licence pursuant to s 29 of the Act. The other application was settled before it was heard. Therefore, it is likely that if the applicant was to fail in this application, prospective lenders would make obtaining finance for liquor businesses more difficult and more restrictive and, as a result, the amenities provided by purveyors of liquor may be reduced.
Therefore, the success of the respondent and joined party's action herein, could have a serious effect on the amenity of liquor outlets in Victoria. To use the words of s 4(1)(b), it would detrimentally affect the facilitation of "the development of a diversity of licensed facilities reflecting community expectations". It would also have an effect on the objects referred to in s 4(1)(c) in that it would detrimentally contribute to the responsible development of the liquor and licensed hospitality industries.
The view that I have expressed above in relation to an application made by the police pursuant to s 29 of the Act must be looked at in the whole circumstances of the situation of the licensed premises. Economic considerations are not by themselves a complete defence to a s 29 request by the police in all circumstances. However, they are matters to be taken into account and given such weight as is appropriate in all the circumstances of the proceeding.
Taking these matters into account, I find that to refuse the applicant's application would have a serious detrimental effect on the economic viability not only of the applicant but of many other liquor outlets in Victoria.
This is not to say of course that those in the liquor industry that operate contrary to the Act or in a way that is contrary to the harm minimisation provisions of the Act cannot be dealt with. Clearly, the provisions of Part 6 Division 1 of the Act are applicable. Further, if the legislature desires to restrict particular hours of business of liquor premises, it may do so by regulation or by amendment of the Act. It is noted that there has been a restriction for approximately 2 years on granting late night venues a licence to operate after 1:00am except in special circumstances.

Kordister Pty Ltd v Director of Liquor Licensing

At a glance

Court

Decision date

Source

Judgment (61 paragraphs)

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Cases Cited (1)

Kordister Pty Ltd v Director of Liquor Licensing (Occupational and Business Regulation) [2010] VCAT 277 (9 March 2010)