LIQUORLAND (AUST) v HURLEY'S ARKABA HOTEL & ORS No. SCCIV-00-1128 [2001] SASC 232

That conclusion can be tested in another way. The decision of the learned judge that s 38 is an insurmountable obstacle to the present application involves a finding that the public demand for liquor in the locality can be met without the applicant's existing licensed premises, notwithstanding that those premises help to meet the demand. That implies that its existing licence is redundant, which is in itself an anomaly; but there is a further anomaly, for it follows that the existing licence can continue to operate and meet the public demand in its present situation in the locality, but is not necessary to meet the demand in the locality as a whole if moved to a different part of the same locality.

The Act in my opinion should not be given a construction which leads to that unsatisfactory and extraordinary result, more especially when the test under s 67 has been satisfied, and in my view the better construction dictated by the language of s 38, and the significance of the word 'other', is to confine its operation, in the case of removal, to removal from one locality to a different locality, ie to the introduction of a new licence in the locality to meet the demand that is not being met by other licences in the locality."

A similar question arose in Woolies Liquor Stores Pty Ltd v Port Pirie Licensed Victuallers Association and Ors.[9] That case concerned the removal of a retail liquor merchant's licence from an address at Port Pirie to other premises about 200 metres away. Section 38 of the 1985 Act was not of application, as the two premises were less than 500 metres apart.

However, the provision in the 1985 Act which applied to removals generally was of application. That was s 67, the relevant terms of which were:

"(1) An applicant for the removal of a ... licence must satisfy the licensing authority by such evidence as it may require that, having regard to the licensed premises already existing in the locality in which the premises ... to which removal of the licence is sought are ... situated, a licence of the class to which the application relates is necessary in order to provide for the needs of the public in that locality.

(2) A reference in this section to licensed premises already existing in a locality extends to premises in that locality ... in respect ... to which a licence is to be removed, in pursuance of a certificate under this Part."

In Woolies Liquor Stores v Port Pirie Licensed Victuallers Association, the Full Court declined to follow the same line of reasoning as that which was adopted by Jacobs J with reference to s 38 of the 1985 Act. In his judgment, Matheson J, after citing the judgment of Jacobs J in Pandelis, observed:[10]

"In the case of Pandelis, the Licensing Court judge found that the requirements of s 67 had been met, and consequently the Full Court did not have to express a view on whether the section actually applied at all in that case. I agree, however, with Mr Firth, counsel for the respondents, that the judgment of Jacobs J appears to imply that s 67 was properly considered by the Licensing Court. Moreover, his Honour was at pains to stress differences in the wording and application of the two sections. Section 38 applies to an application for a new licence as well as for the removal of an existing licence. It looks to the ability of other licensed premises, whereas the word 'other' is not included in s 67. Further, as Jacobs said:

'What has to be determined under s 38 is whether the public demand for liquor (not the needs of the public) can be met without the intrusion of another licence into the locality.'

Section 67, unlike s 38, applies equally to removals under and over 500 metres. Section 38 only applies to retail liquor merchant's licences, whereas s 67 applies to all Category A licences, including hotel licences.

I also agree with Mr Firth that the fact that the proprietors of Jubilee Cellars have a retail liquor merchant's licence does not imply that there is a present need for that licence at the site in that locality. It mere implies that such a need existed when it was granted, and that the licensee is entitled to stay there, whether there is a present need or not. Needs may have changed since the original grant, and it seems to me entirely reasonable that Parliament intended that the court should look at need again when a removal is applied for, even if only to premises within the same locality."

It is unnecessary for me to express a view as to whether Woolies Liquor Stores v Port Pirie Licensed Victuallers Association was correctly decided, and whether the omission of the word "other" from s 67 of the 1985 Act warranted the distinction drawn by Matheson J between that case and Pandelis.

In this case, counsel for the objectors drew attention to the fact that the expression "other existing facilities", which was regarded as significant in Pandelis, more particularly the use of the word "other", does not appear in s 61 of the 1997 Act. Furthermore, subsection (2) of the 1997 Act, it was suggested, was in terms which should be construed in the same way as s 67 of the 1985 Act was construed in Woolies Liquor Stores v Port Pirie Licensed Victuallers Association.

I would not be prepared to approach the construction of s 61 in that way.

In the first place, s 61(2) is drafted in rather different terms from any of its predecessors. I would not be prepared to approach the construction of it by making such a nice comparison between the language which appears in s 61 and that which was used in its predecessors. To do so would be to overlook the eminently sensible and practical considerations which led the court in Pandelis to read down the application of s 38 of the 1967 Act in its application to removals within the same locality.

For reasons similar to those expressed by Jacobs J in Pandelis, it would be a strange and anomalous result if s 61(2) was to oblige an applicant for removal of a retail liquor merchant's licence to have to face all over again the very onerous test of need which would be applicable if the applicant was to apply for a new licence in the same locality.

Ipso facto, an applicant for removal of a retail liquor merchant's licence, in order to have obtained the licence in the first place, would necessarily have satisfied the onus of proving that the licensed premises "already existing in the locality" did not "adequately cater for the public demand for liquor for consumption off licensed premises". It would make no sense to oblige the applicant for subsequent removal to satisfy the same onus when the effect of the removal would be simply to maintain (or perhaps improve) whatever contribution the applicant was making towards the satisfaction of the public demand for liquor in the locality.

As Jacobs J observed in Pandelis, if such an approach was to be adopted, "... the existing licence can continue to operate and meet the public demand in its present situation in the locality, but [must be regarded as] ... not necessary to meet the demand in the locality as a whole if moved to a different part of the same locality".

If that view was to prevail, the heavy onus applicable to the grant of a new licence in the locality would have to be satisfied, by an applicant who simply wished to move one door away from premises which, through no fault of the licensee, might have ceased to be available to him or her. Such a view ignores the fact that the obvious legislative intent behind the replication of the text for a new licence in the provision dealing with removal, is to address the situation where the removal is to a new locality, and if permitted, would be equivalent to the grant of a new licence in that locality.

In my view, the only real question which arises is whether or not, in order to avoid the absurd results which would otherwise ensue, the language of s 61(2) can properly be construed so that its application is limited to a situation in which the removal is from one locality to another.

In my opinion, the section ought properly to be construed in that way. It seems to me that the words "... the licensed premises already existing in the locality to which the licence is to be removed ..." are apt to identify a situation in which there is a removal to another locality. The words do not, in my view, have a sensible application where the removal is within the same locality.

This does not mean, as was suggested during argument, that there is "no test applicable to a removal of either an hotel licence or a retail liquor merchant's licence if the removal is not from outside the locality".[11] An applicant for removal would still have to satisfy the licensing authority that the proposed premises to which removal was sought were suitable to be licensed, and did not unduly interfere with the amenity of the residents in the vicinity of the new premises.

Specific provisions as to matters of that kind, and other matters which an applicant for removal must prove to the satisfaction of the licensing authority, are set out in s 60 of the Act:

"(1) An applicant for the removal of a licence to premises or proposed premises must satisfy the licensing authority-

(a) that the premises to which removal of the licence is sought are, or, in the case of premises not yet constructed, will be, of an appropriate standard for carrying on business under the licence; and

(b) that the removal of the licence would be unlikely-

(i) to result in undue offence, annoyance, disturbance or inconvenience to people who reside, work or worship in the vicinity of the premises; or

(ii) to prejudice the safety or welfare of children attending kindergarten, primary school or secondary school in the vicinity of the premises.

(2) An application for the removal of a licence to premises or proposed premises cannot be granted unless the licensing authority is satisfied-

(a) that any approvals, consents or exemptions that are required under the law relating to planning to permit the use of the premises or proposed premises for the sale of liquor have been obtained; and

(b) that any approvals, consents or exemptions that are required by law for carrying out of building work before the removal of the licence takes effect have been obtained; and

(c) that any other relevant approvals, consents and exemptions required for carrying on the proposed business from the premises have been obtained.

Apart from the matters referred to in that section of the Act, if the removal was to premises from which the service capable of being offered to satisfy the public demand for liquor in the locality would be impaired rather than maintained or enhanced, no doubt that is a matter which would go towards the exercise of the discretion.

During the course of argument, reference was made to s 77 of the Act, which creates a general right of objection to any application. Specifically, as to applications for removal of a retail liquor merchant's licence, the following sub-section is relevant:

"77(5) An objection may be made on one or more of the following grounds:

(c) in the case of an application for the grant or removal of a retail liquor merchant's licence - that the grant of the application is not necessary in order to provide for the public demand for liquor for consumption off licensed premises in the area in which the premises or proposed premises to which the application relates are situated; ..."

Some of the objectors to the application in question raised that ground.

I think it is unfortunate that this ground of objection is cast in such different terms from s 61. That it does so may be explained by reference to the fact that the wording of the sub-section appears to have been directly transposed from the corresponding section in the 1985 Act, namely, s 85(4)(b) of that Act, apparently without regard to the differences in context in the 1997 Act.

Be that as it may, I would not construe s 77(5)(c) as providing a ground of objection which would negate the construction which, in my view, is the proper interpretation to be placed on s 61(2).

It remains to deal with the question of the exercise of the discretion under the 1997 Act. Under the 1997 Act, the licensing authority is given a wide discretion to grant or refuse an application, as was the case in the earlier Acts.

"(1) Subject to this Act, the licensing authority has an unqualified discretion to grant or refuse an application under this Act on any ground, or for any reason, the licensing authority considers sufficient (but is not to take into account an economic effect on other licensees in the locality affected by the application).

(2) A licensing authority should not grant an application as a matter of course without proper inquiry into its merits (whether or not there are objections to the application).

(3) A licensing authority may, on such conditions (if any) as it thinks fit, vary or waive compliance with formal requirements relating to an application."

Authorities which emphasise the breadth of the discretion exercisable by the Licensing Court in the context of the precursors to s 53 of the present Act are of equal application. The discretion is "the widest of possible discretions",[12] although it is doubtful that it might properly be used to enable a grant to be made if specific criteria for such a grant, to be found elsewhere in the Act, are not met.[13] That is not the case here.

It should be noted that a most important change appears in s 53, in comparison with its predecessors. Section 53(1) provides that the licensing authority "... is not to take into account an economic effect on other licensees in the locality affected by the application". That provision should be read together with s 3(e), which enumerates as one of the objects of the 1997 Act "to encourage a competitive market for the supply of liquor".

In the result, it was incumbent upon the court to approach the matter with a view to encouraging competition, and furthermore, to ignore the economic impact of the removal upon the trading operation of the other licensees in the locality.

In his reasons for decision, the learned Licensing Court judge, after referring to Pandelis and Woolies Liquor Stores v Port Pirie Licensed Victuallers Association, expressed the view that:

"... the applicant in this case is required to 'overcome' the provisions of s 61(2)."

He then proceeded to define the locality. After referring to various features of the evidence, he concluded:

"I do not accept that the already existing licensed premises in the locality are somehow inadequate in catering for the liquor demand. Nor do I accept that the removal is necessary to satisfy that demand."

For the reasons which I have given, in adopting that approach, the learned Licensing Court judge applied the wrong test. It follows that the conclusion which he reached cannot be sustained. His order dismissing the application for removal should be quashed.

This leaves the question as to how this Court should dispose of the appeal.

It would be open for this Court to remit the matter for re-hearing before another judge.

But the case as presented in the Licensing Court was lengthy. A large number of witnesses was called and there was an exhaustive examination of the demographics of the locality and other relevant considerations. It would be unfortunate if the applicant was obliged to start afresh and present its case again in the Licensing Court.

Clearly, the requirements of s 60 of the Act were met.

For the reasons which I have given, the only real issue in the case is whether or not, in the exercise of the discretion pursuant to s 53 of the 1997 Act, the application should be refused. It seems to me that this Court is in as good a position as was the learned Licensing Court judge to address that question.

It was suggested by counsel for the objectors that in fact the decision of the learned Licensing Court judge was one which he reached in the exercise of the discretion. I do not think that to have been the case, having regard to the conclusion expressed at the foot of his reasons in the passage which I have quoted above.

However, he did make a number of observations, some of which might be thought to be pertinent to the exercise of the discretion. Under the heading "The Proposal Generally" he said.

"I have no quarrel with the concept at all. It is a very sensible commercial decision which will enhance business and profits substantially. But I must look at a wider field. Public interest and the provisions of the Liquor Licensing Act are this Court's domain. The proposal does not fit kindly within that domain.

The public, as represented by the witnesses called by the objectors (I note not one from the applicant) do not want it. Indeed I am not surprised that the applicant called no such evidence. I would think and infer that there would be very few indeed who would favour a shift of their preferred bottleshop from the area of their preferred major shopping centre which would require a special trip with attendant traffic difficulties. Whilst I generally accept Mr Young's views I do have my concerns (and I think the public would too) that driving away from the new premises and getting onto the very busy Unley Road would be an undesirable and sometimes awkward task. But that apart I detect a groundswell of public opinion against this proposition notwithstanding the greater size and greater range of the proposal. Going back to parking too, I think the parking area at the shopping centre to be far more 'customer friendly' than at the proposal. Mr Siow made criticisms of the latter and some of them had validity though not so compelling as to refuse the application on those grounds. Entry and exit onto Unley Road is also a much easier task than at the proposal.

I have gone on long enough. I hope I have dealt with all major issues."

In the first paragraph of that passage, the learned Licensing Court judge refers to commercial considerations, public interest and the provisions of the Liquor licensing Act. In making those observations, he failed to refer to the need "to encourage a competitive market for the supply of liquor" which, as I pointed out, is one of the express objects of the 1997 Act,[14] and which is a consideration peculiar to that Act as compared with its predecessors.

Given the particular circumstances of the application with which he was dealing, this was an important consideration. It does not seem to me to be a matter to which, with respect to him, the learned Licensing Court judge has accorded sufficient weight.

The learned Licensing Court judge goes on to refer to the evidence given by the witnesses called by the objectors, and the fact that he detected "quite a groundswell of public opinion against" the application.

I do not consider that the evidence tendered in the case justified that conclusion.

Several residents were called who were regular shoppers at the Unley Shopping Centre and frequented the Vintage Cellars store at the Centre. They spoke of the convenience of being able to attend to most of their weekly shopping needs at the Centre, including the purchase of liquor, expressed satisfaction with the range of liquor available at the appellant's present store, and expressed some concerns at the implications with respect to traffic and parking if it was to be removed to the proposed site.

It is not in the least surprising that some shoppers who find it convenient to frequent the Unley Shopping Centre and who live nearby might prefer to see the status quo preserved.

Although it is perfectly proper for the Licensing Court to take into account voiced demand or preferences by local residents, too much can be made of evidence of that kind. I repeat observations which I made in Sailmaster Tavern and Ors v Nemo Nominees Pty Ltd:[15]

"... the finding of a relevant need .... does not necessarily turn upon the cogency of a voiced demand. On the contrary, there are many other factors to be taken into account, some of which stem from the objective geographic and demographic features of the relevant locality, the knowledge of the licensing authority, which may be presumed without the need for evidence being called, of the nature and scope of the trading operations of the other licensed premises in the locality, the general understanding of the licensing authority as to public preferences, tastes and needs, and its understanding of the general nature of the particular needs of sections of the community such as tourists. The fact that it has become customary in the Licensing Court, at least in contested applications, to call a number of lay witnesses to give evidence of voiced demand or of particular unmet 'needs', should not obscure the fact that in dealing with all applications the licensing authority is entitled to bring to bear its experience and understanding of the matters to which I have referred, ..."

In dealing with this particular application, even without the evidence called to that end, the Court could safely assume that there would be a number of local residents who shopped regularly at the Unley Shopping Centre and who might find it convenient to continue to purchase their liquor requirements at the existing liquor store.

The anticipated patronage at the proposed premises may be inferred from Mr Francis' evidence of the anticipated turnover, which evidence was not placed under serious challenge. That evidence leads me to conclude that the premises to which removal is sought, and the style of the trading which Liquorland proposes to conduct at the premises, could fairly be assumed to meet the convenience of as large, or even larger proportion of the population within the locality than is presently the case with the existing store.

The learned Licensing Court judge refers to the question of parking and ingress and egress for vehicles travelling on Unley Road, but it seems to me that the considerations to which he had regard in that respect were not such as might properly lead to the exercise of the discretion against the grant. Parking and traffic considerations had separately been addressed and resolved in Liquorland's favour by the Environment Resources and Development Court. Although, as the learned Licensing Court judge indicated, he did not regard himself as bound by the decision of that court, it seems to me that the circumstances would be rare indeed it which it would be proper for the Licensing Court to revisit planning considerations associated with an application and determine them inconsistently with a view expressed by the Environment Resources and Development Court.

In all the circumstances, it seems to me that there are no considerations which should lead to the exercise of the discretion against permitting the proposed removal. The removal is over a comparatively short distance, and Liquorland's ability to service the local demand for off-premises sale of packaged liquor would, if anything, be substantially enhanced if the application was to be granted.

I would allow the appeal and quash the order of the learned Licensing Court judge dismissing the application for removal.

I would refer the matter back to the Licensing Court to issue a certificate of approval pursuant to s 62 of the Act, which will provide an opportunity for that court to address any practical considerations which might have a bearing upon the alteration and equipping of the proposed premises to fit them for their intended use. The Licensing Court must, in conformity with these reasons, effectively grant the application for removal, and any conditions to be imposed under s 62 of the Act must be confined to the making ready of the proposed premises.

If it does not think it necessary to issue a certificate of approval under that section, it should simply make an order granting the application.

GRAY J. I agree that the appeal should be allowed for the reasons published by Perry J.

[1] See, for example, Buttery v Muirhead and Ors [1970] SASR 334 per Zelling J at 352, Hoban's Glynde Pty Ltd and Ors v Firle Hotel Pty Ltd and Ors (1973) 4 SASR 503 and Nepeor Pty Ltd v Liquor Licensing Commission and Ors (1987) 46 SASR 205 per von Doussa J at 214 et seq.

[2] In appropriate cases, regard may be had to the extent to which licensed premises outside the relevant locality are capable of servicing part of the demand within it: see Woolies Liquor Stores Pty Ltd v Seaford Rise Towers and Ors [2000] SASC 116; (2000) 76 SASR 290.

[3] (1998) 73 SASR 6.

[5] Lincoln Bottle Shop Pty Ltd v Hamden Hotel Pty Ltd and Ors (No 2) (1981) 28 SASR 458 per King CJ at 461.

[6] Woolies Liquor Stores Pty Ltd v Carelton Investments Pty Ltd and Ors (supra) per Doyle CJ at 9.

[7] Full Court, Jacobs, Cox and Matheson JJ, Judgment No 2586, 10 July 1990 (unreported).

[9] Judgment No S3956.1, 17 June 1993, Matheson, Legoe and Duggan JJ (unreported).

[11] Written outline of argument of the hotel objectors and the AHA, para 2.8.

[12] Dalgety Wine Estates Pty Ltd v Rizzon [1979] HCA 41; (1979) 141 CLR 552 per Stephen J at 566 and per Mason J at 572. And see Lincoln Bottle Shop Pty Ltd v Hamden Hotel and Ors (No 2) (1981) 28 SASR 458 per King CJ at 463 and Buttery v Muirhead and Ors [1970] SASR 334 per Zelling J at 350.

[13] Milne v Pope and Belair Cellars Pty Ltd (1972) 4 SASR 45 per Bray CJ at 48.

[15] Full Court (Perry, Cox and Lander JJ), 20 October 1995, Judgment No S5266, at 7-8.