Orangechapel Pty Ltd v Director of Liquor Licensing (Occupational and Business Regulation) [2010] VCAT 110

A restaurant licence (the licence) is granted in respect of premises at 2 Duke Street, Windsor, Victoria, as shown on the plan filed herein which is an amended plan endorsed by the City of Stonnington under Planning Permit No 218/08 on 15 December 2009. The licence authorises the licensee to supply liquor on the licensed premises for consumption on the licensed premises during the trading hours specified below.

The licensee shall not cause or permit undue detriment to the amenity of the area to arise out of or in connection with the use of the premises to which the licence relates during or immediately after the trading hours authorised under this licence. The licensee shall ensure that the level of noise emitted from the licensed premises shall not exceed the permissible noise levels for entertainment noise as specified in the State Environment Protection Policy (Control of Music Noise from Public Premises) No N-2.

The maximum number of patrons permitted to be on the premises at any given time shall not exceed 40.

Fridays and Saturdays between 11am and 1am the following morning

(a) The predominant activity carried out at all times on the licensed premises must be the preparation and serving of meals for consumption on the licensed premises; and

(b) Tables and chairs must be placed in position on the licensed premises so as to be available for at lest 75% of the patrons attending the premises at any one time; and

(c) The licensee must not permit -

• (i) the live performance of any musical works; or

• (ii) the playing of any recorded musical works;

on the premises at higher than background music level at any time outside ordinary trading hours.

(d) By 28 February 2010, the licensee shall submit to the Director of Liquor Licensing a Patron Management Plan for approval, which shall, in part, address the management of patrons' behaviour within the premises. Liquor shall not be supplied or consumed in the premises prior to the approval of the licensee's Patron Management Plan by the Director of Liquor Licensing. In the event that the respondent

• (i) has not rejected the management plan and suggested appropriate amendments by 14 March 2010 the plan shall be deemed to be accepted;

• (ii) the respondent shall approve or reject any subsequent amendments within 7 days of receipt. If there is no acceptance or rejection within that time the amendments shall be deemed to have been accepted.

(e) The consumption of liquor within the premises shall be limited to that which is supplied through waiter service only.

(f) The windows facing the lane on the west side of the subject premises shall be shut and remain shut after 9:00pm on each evening, until the close of trade.

Note: These written reasons consist of an edited transcription of reasons given orally at the conclusion of the hearing.

1. This is an application to review a decision of the respondent made 1 July 2009.
2. The respondent refused the applicant's application for a liquor licence for a restaurant known as Pandora's Box at No 2 Duke Street, Windsor (the premises). I understand, and I accept, that member P O'Leary gave a decision on 17 February 2009 permitting a restaurant to be conducted at the premises. The restaurant was to have no more than 40 patrons and 75% of those people would be seated in the restaurant.
3. The applicant has now applied for a liquor licence for the restaurant for 40 persons. The premises were described by Mr O'Leary in his decision in Orangechapel Pty Ltd v Stonnington City Council [2009] VCAT 259. At paragraphs 7 to 12 of that decision, Mr O'Leary described the area as follows :

The subject is located on the southern side of Duke Street about 80 metres east of Chapel Street in Windsor. Chapel Street is a busy activity area with the principal retailing, entertainment and commercial activities in a Principal Activity Centre which is identified as that part of Chapel Street and abutting areas to the north of High Street and the area to the south of High Street providing a Neighbourhood Activity focus with retailing, food and drink and entertainment facilities.

The subject restaurant is on the ground floor level of a two storey commercial premises. The premises abut a 3 metre wide bluestone laneway on its western boundary that is used for loading and unloading of goods associated with these premises and it also serves as pedestrian and vehicle access from the James Street car park to Duke Street. There is also a pedestrian link over the railway between the upper floor of the subject property and the rear of 118-120 Chapel Street.

I pause here to state that it is apparent that that link has now been shut.

The premises has its main pedestrian access to Duke Street and other access by a single door and roller door access to the laneway.

Land to the immediate rear comprise old garage structures apparently used for storage. A three storey commercial building is located to the east at No. 4-6 Duke Street. There is a town planning permit to convert the two upper levels of this building to residential apartments but it has not yet been enacted. To the east of the car of the storage area and to the south of No. 4-6 Duke Street is a three level apartment building at No.8 Lincoln Place. Apartments 1&2 are owned and occupied by Ms O'Connell and Mr Fahey and are the closest abutting dwellings to the site.

Again, I pause here to say that Ms O'Connell has given evidence before this Tribunal and suffice at this point to say that she is strongly opposed to this application.

The subject premises and all surrounding properties are located in a Business 1 zone or part Business1/Residential 1 and located within the Windsor Neighbourhood Activity Centre, with Chapel Street providing the principle focus for retailing, food and drink premises, including outdoor dining and drinking facilities. Many of the restaurant /food and drink premises operate to about 12.30 or 1.00 o'clock in the morning.

There are restaurants/food and drink premises that have access to rear laneway, including the laneway abutting the western boundary of the subject premises. There are rear doors and evidence of various mechanical ventilation devices serving these premises. Whilst most of Duke Street has an inner residential neighbourhood feel, the western end of it is clearly commercial in both built form and function.

1. I note that since member O'Leary gave this decision, there have been some further units in Lincoln Place and Chapel Street which are close to the subject premises. It is noted that while I did not visit the site for the purpose of this proceeding, I am familiar with the area and was shown a number of photographs. Member O'Leary's description of the site and surrounding area accords with my recollection.
2. The Liquor Control Reform Act 1998 (the Act) was amended last year and those amendments came into operation on 1 January 2010. While the application that was before me was made for an on-premises licence pursuant to s 9 of the Act, s 9A specifically relates to restaurant and café licences and both counsel and myself are in agreement that it is appropriate that if a licence be granted, it should be granted pursuant to s 9A. That section relevantly reads :

(1) A restaurant and cafe licence authorises the licensee -

(ii) at any other times determined by the Director and specified in the licence -

for consumption on the licensed premises where the predominant activity carried out at all times on the premises is the preparation and serving of meals to be consumed on the licensed premises; and

(b) to supply liquor on any other premises authorised by the Director and specified in the licence, during ordinary trading hours or at the times referred to in paragraph (a)(ii) or at any other times determined by the Director and specified in the licence, for consumption on those premises.

I pause here to state that the applicant applies for a restaurant licence pursuant to s9A of the Act that permits the service of liquor on its premises during the ordinary hours, ie up until 11:00pm except for Friday night where it asks to be able to serve liquor upto 1:00am on Saturday morning, and Saturday night where it asks to be able to serve liquor up until 1:00 am on Sunday morning.

1. Sub-section (3) of s 9A is also of importance. That sub-section states :

(3) A restaurant and cafe licence is subject to the following conditions -

(a) tables and chairs must be placed in position on the licensed premises so as to be available for at least 75% of the patrons attending the premises at any one time; and

on the premises at higher than background music level at any time outside ordinary trading hours.

1. Sub-section (5) defines "background music" in a similar way to what it has been defined by this Tribunal. It states :

background music level, in relation to premises, means a level that enables patrons to conduct a conversation at a distance of 600 millimetres without having to raise their voices to a substantial degree.

1. The Director has refused to issue a restaurant licence on the grounds that it will affect the amenity of the neighbourhood and also on the ground that the person in charge of the applicant manages two other premises in the area. Those two premises are one in Chapel Street and the other on the corner of Duke Street and Chapel Street. They are described as Nos 124 and 126 Chapel Street and they trade under the name of The Orange restaurant. There is a division between 124 and 126 Chapel Street but they are operated essentially as one premises. Mr Boyle, who manages those premises, has said that he attends those restaurants but they are managed from his office which is on the first floor of the premises that are sought to be licensed.
2. There has been an issue before me as to whether Mr Boyle would be able to conduct, in a proper way, not only the two premises in Chapel Street but the subject premises.
3. Mr Boyle has given evidence about this matter. He stated that he has been in the liquor industry in particular in relation to managing restaurants with liquor licences for approximately 12 years. In that time, he has never come under the notice of the law enforcement agency which inspects licensed premises, viz the particular branch of the police force, or the licensing authorities. Apparently, an audit was conducted of his premises recently and no irregularities were found. Also, there has been no suggestion that he has done anything wrong or illegal in managing the premises which he looks after. He stated that he is able to conduct all three premises and he is confident of that fact. He gives specific instruction to his staff how those premises should be managed and he would, if given a licence, give instructions as to how these premises would also be managed, ie Pandora's Box.
4. I was impressed with Mr Boyle's evidence. He gave me the impression that he was a businessman and he was familiar with his duties and responsibilities to the public and, in particular, those duties and responsibilities pursuant to the Act and any regulations that have been made thereunder. I have formed the view that Mr Boyle would in fact be capable of managing all three premises. If in fact he turns out to be incapable of managing all three premises (which I doubt), that is a matter that would surface very quickly and it is likely that law enforcement agencies would take action against him, particularly the relevant licensing inspector would be asking for an inquiry pursuant to s 90 of the Act. However, one hopes that would not be necessary as I have taken the view of Mr Boyle that I have stated.
5. I will now consider the question of amenity that is dealt with in s 44 of the Act. Relevantly, that reads as follows :

(2) The Director may refuse to grant an uncontested application on any of the following grounds -

(i) that the granting of the application would detract from or be detrimental to the amenity of the area in which the premises to which the application relates are situated;

(ii) that the granting of the application would be conducive to or encourage the misuse or abuse of alcohol

1. It should be noted that when considering the question of amenity, I have been told by Mr Scally, solicitor for the applicant, that the applicant does intend to run a restaurant at the premises regardless of the outcome of this proceeding. He has been given permission to run that restaurant by this Tribunal via Mr O'Leary's decision which I have already referred to. Thus, when considering the question of amenity, the question is not in this particular instance whether a restaurant on a particular site would affect the amenity of the neighbourhood. The question is whether licensing that restaurant would affect the amenity of the neighbourhood.
2. The first matter that I will consider is the question of noise.
3. This was considered by member O'Leary at paragraphs 42 to 44 and paragraphs 60 to 61 of his decision. Paragraphs 42 to 44 state :

In this case I doubt the kitchen and its exhaust would ordinarily operate after 10 or 11 pm if no liquor license existed. Similarly other measures suggested such as seals near the rear door and glazing are prudent suggestions and will assist in ensuring the premises meets the relevant SEPP.

It is acknowledged that the site does not have a frontage or proximity to Chapel Street to suggest that the hours of operation should be open ended. However, the premises are located within the business section of Duke Street and the level of activity and noise observed satisfies me that a licence can issue. Further, the hours of operation can extend to 1 am at least on Friday and Saturday evenings when the level of activity and noise in the neighbourhood is at a level that virtually masks the activity derived from this restaurant premises. The later hours on Friday and Saturday night seem consistent with Mr Dolly's noise readings and my general observations.

During the hearing Mr Scally conceded his client would accept 11 pm closure during the weekdays, not including Thursdays and Fridays. I consider there is insufficient evidence to conclude that amenity conditions, including ambient noise levels for Thursday warrant later closing time and therefore I will limit the later hours to Friday and Saturday nights only.

1. At paragraphs 60 to 61 member O'Leary dealt with the noise level as it concerned Ms O'Connell, to whom I have already referred. He there stated:

I consider that there is little likelihood of impact of noise or nuisance on Ms O'Connell and Mr Fahey's property from smokers from this small restaurant premises because that is to the rear (south east of the subject premises). Any amenity impact on Ms Hall's property should be considered in its Business 1 zoning and the fact that it has not been converted to residential yet.

I note that the footpath is relatively narrow and would tend to discourage if not prevent outdoor seating in this particular location and therefore smoking is more likely to be attributed from patrons of this relatively small premises. I may have taken a different view if the premises were much larger and was to be used as a bar or tavern. However the primary purpose of these premises is that of a restaurant with the intention of obtaining a meal

1. There were three witnesses called before me who gave oral evidence and whose statements were tendered.
2. The first witness was Dr Waters. Dr Waters lived in Duke Street some time ago but she moved out because of the noise. She was concerned because she had a young child who had difficulty sleeping.
3. Ms Hall, who also gave evidence before me, does not live in Duke Street. She owns premises opposite the premises that will become Pandora's Box. On the ground floor of that premises, her husband runs a martial arts school which operates until 9:00 pm. She conceded that that school makes a considerable amount of noise itself. Her intention is that she build a residence for herself and her family on top of the martial arts school. She has been granted a planning permit which I was told will expire in April 2010. So far she has not let the contract for the building and she does not appear to have taken any steps in having the building constructed. In fact, the construction of the building has not commenced. Apparently, there was some discussion to letting the contract for this building but those discussions fell through.
4. Mr Scally suggested that it is very unlikely given the circumstances which Ms Hall described that her premises would be commenced before the required time pursuant to the permit (April 2010) and therefore she would need to obtain an extension for that permit. In obtaining an extension to the permit, quite clearly the applicant's activities could be taken into account. However, in relation to what both Ms Hall and Dr Waters said, I find it difficult to understand why they are of the view that giving the subject premises a licence is likely to make very much difference, considering the premises may operate as a restaurant in any event.
5. As I have previously stated, the applicant is entitled to run a 40 person restaurant with 30 people seated. At the moment, there is nothing to stop him doing that and he intends to do so. It is difficult to envisage that because those 40 people may partake in some drinking activity while they are at the restaurant, the noise level would be increased. In fact it was suggested to me that people who drink are likely to make more noise. This may be so in a large hall where there are 100s or 1000s of people. But, in a small restaurant of this nature, in my view, it is very unlikely that those people would make any further noise. Thus, I do not consider that any noise emanating from Pandora's Box would further unduly affect the amenity of the neighbourhood.
6. I am told that there are windows in Pandora's Box that the owner intends to open on warm nights which face the lane. In my view, that could be a problem and increase the noise level to what it otherwise should have been. In order to alleviate this problem, I intend to make it a condition of the grant of the licence that those windows should not be opened after 9:00pm.
7. I have only mentioned Ms O'Connell in passing, because I have considered her evidence somewhat emotional, emotive and exaggerated. I gathered from Ms O'Connell that she is having considerable difficulty living in her premises at the moment. I accept that part of her evidence. I accept the part that she is also well motivated and that she is very sensitive to the situation. However, I have formed the view that Ms O'Connell was willing to say anything that she thought desirable that would suit her view. I refer to the fact that Ms O'Connell was complaining about matters of the delivery of goods such as milk and other products to the subject premises and that delivery was taking place outside the hours authorised by the council. I asked Ms O'Connell whether she thought that was likely to occur with the advent of liquor being delivered. She initially said "No, it would not" because liquor was too precious and it was likely to be stolen. When she was queried about that, she then stated that she thought liquor would be delivered at those hours and would create more noise. I thus concluded from that exchange that she was not always genuine when giving her evidence.
8. Mr Townsend, who appeared for the respondent, made a number of points in his submission. He stated that the residential amenity in the area has already been impaired by licensed venues. This, to some extent, is quite true. There are numerous licensed venues in Chapel Street. However, in my view, increasing those licensed venues by one in Duke Street would not detract from the neighbourhood or the amenity. It is said that there are no licensed premises in Duke Street and I think Mr Townsend said that there was only one other licensed premises in a substantially residential street in Windsor, and that was in McIlwrick Street, Windsor, and that those premises shut at 11:00pm each evening. However, I was told by Mr Scally that he has been instructed that it was never suggested by the applicant for the licence of the McIlwrick Street premises when it applied for a licence in respect of those premises that it wanted anything other than 11:00pm closing.
9. I also note what Ms Hall said that when you turn the corner from Chapel Street to Duke Street, there is quietness. This seems to be quite contrary to both the evidence of Ms O'Connell and the evidence of Dr Waters. Their evidence was to the fact that there was noise in the street at the moment and they would not want it getting any worse.
10. A number of other persons made statements who did not want this licence to issue. Those statements were tendered in evidence before me. These people did not attend for cross-examination. I allowed their statements to be tendered pursuant to s 98 of the Victorian Civil and Administrative Tribunal Act 1998 on the basis that the statements would be given appropriate weight. They indicated that there was a lot of noise around the premises, in particular a Ms Kontos who lives at No 11 Duke Street, suggested that there were instances of drunken behaviour, swearing, fighting, vandalism, public urination, vomiting, tooting of horns and abandonment of broken beer bottles on her fence and footpath.
11. Ms Kontos was not called to be cross-examined. No explanation was given in relation to her failure to attend. I do not know whether she was available or not and, indeed, Mr John Jacobs who referred to parking, nightclub noise and drunken behaviour was also not called and neither was Tammy Lidano called to give evidence. Given those facts, I have taken the view that those persons' oral evidence would not have helped the respondent, had they been called. In other words, in accordance with the principle of Jones v Dunkel (1959) 101 CLR 298 and O'Donnell v Reichard [1975] VicRp 89; [1975] VR 916, I formed the view those persons' evidence would not have assisted the respondent.
12. Mr Townsend addressed me in relation to the interface applying between the Business Zone of Duke Street and the Residential Zone. The area which is occupied by the subject premises is clearly close to the borders of those zones and, as such, I am obliged to take into account the fact the effect a licence may have on neighbouring premises which are residential. However, I also take into account the fact that when the neighbours purchased their property in the neighbouring zones, they would have been aware that the premises onto which Pandora's Box is to be built was a Business Zone. It was also clear that there are a number of restaurants in Chapel Street and to the keen observer, it would seem almost inevitable that the Chapel Street restaurants would spill over into the neighbouring streets which is what the applicant is doing in this particular instance. Thus, it becomes a balancing exercise.
13. It has been suggested to me as it was suggested to Mr O'Leary that because there is no smoking permitted inside the premises that a number of people would stand outside smoking. This would have a twofold undesirable effect. The first would create a smoke-filled atmosphere. While this may be so to some extent, it is unlikely that there would be large numbers of people standing outside because the restaurant is so relatively small and, in any event, it would not be far around the corner in Chapel Street where people would be smoking. The second matter that was put to me was that the footpath was very narrow and the smokers standing on the footpath from the restaurant would be blocking the footpath. In relation to that matter, I do not believe that would be a real problem. I think while the footpath is small, it is big enough for a few smokers and any pedestrians. There is also an annexe that leads into what will be Pandora's Box and the smokers could easily stand in that area and it would not affect the passers-by at all. Thus, I have come to the view that the people standing on the footpath may detract from the amenity of the area to a certain extent but it would be minimal.
14. It was also put initially that the layout of the premises could not maintain the condition of 75% of the patrons being seated at a table. On examining the plans, I concluded that was not correct. There are 13 tables in the restaurant showing seating for 2 on each table. However, there would be ample room at any of those tables for a further 1 or 2 more people. There are six seats at the bar. I do not count the bar seats as being part of the table but I think it would be quite easy to imagine that another four people, other than the 26 seats that were noted, would be able to sit at those tables. Of course, I would expect the applicant, pursuant to its obligations under the Act, to provide at least 30 seats for patrons who wish to be seated at the tables.
15. Mr Townsend submitted that the applicant intended to use the premises for a bar rather than a restaurant after 11:00pm on Friday and Saturday nights. This submission was based on a question which he asked Mr Boyle relating to the "Orange Instruction Manual of 2009". That manual was prepared by Mr Boyle for the purpose of his other two restaurants which I have mentioned. Mr Townsend asked Mr Boyle whether he intended to operate Pandora's Box restaurant in accordance with that instruction manual. Mr Boyle agreed he did. After asking no further questions on this point, in submissions Mr Townsend referred to that part of the manual which suggested that the kitchen would close at 11:00pm. When this submission was made to me, I pointed out to Mr Townsend that the submission was unfair because it had never been put to Mr Boyle whether specifically he intended Pandora's Box to serve meals up until closing time. As a result, Mr Boyle was recalled to give evidence. In that evidence, he stated quite categorically that he intended that meals would be served at Pandora's Box up until closing time which would include 1:00am on Saturday and Sunday mornings. I accept that evidence and, as a consequence, I find that the premises would not be used as a bar after 11:00pm or at all but will continue to be used as a restaurant in accordance with the conditions that would be put on the applicant's licence and s 9A of the Act.
16. There was some discussion before me as to whether this licence should cease at 11:00pm or 1:00am. I have to some extent dealt with this already. I have come to the conclusion that on the days requested, that is Friday night to Saturday morning and Saturday night to Sunday morning the premises should be allowed to remain open until 1:00am. I agree with what member O'Leary has had to say that there is more background noise on those nights and I refer to what I have already read of paragraphs 60 and 61 of his decision.
17. It is common practice that restaurants stay open in Melbourne until 12:30/1:00am particularly in vibrant areas and Chapel Street is certainly a vibrant area and is an activity zone. It is unclear whether the land in the Business Zone in Duke Street forms part of the activity zone of Chapel Street. However, it is clear that people would park their cars in Duke Street, the surrounding streets and the carpark in James Street when attending other restaurants in Chapel Street. Given that, it is difficult to see how people leaving at 1:00am or dining up until 1:00am at Pandora's Box would make the situation any worse. Therefore, in my view, it should be that this restaurant will be able to remain open and serve alcohol until 1:00am on Saturday and 1:00am on Sunday mornings.
18. I also note that the applicant has applied for his licence to include outside catering. The members who sat on the panel that was convened by the Director of Liquor Licensing found that the outside catering may affect the amenity of the neighbourhood. I do not hold such a view. There is a large kitchen in the premises already which prepares a considerable amount of meals for Nos 124 and 126 Chapel Street. It is quite permissible, whether I would give permission for outside catering or not, for that kitchen to provide meals for outside catering as long as it likes according to the conditions on the planning permit. The question is whether allowing the outside catering to cater also for liquor would detract from the amenity of the neighbourhood. In my view, it would not detract from the amenity of the neighbourhood because one would imagine that food would be loaded onto trucks the same as the liquor. This is not a situation where packaged liquor would be sold and delivered as in a supermarket. The catering would only be able to be done of course with the service of food and I do not take it that it is sought to be otherwise.
19. Given all these circumstances, I intend to grant the application and the conditions which I have been handed by Mr Townsend for the respondent, should apply. Those conditions are appropriate except that there should be a condition that the trading hours on Fridays and Saturdays be between 11:00am and 1:00am the following morning
20. There has also been a suggested condition about the first floor bridge but, as I understand it, that is already shut and it is not an issue any more.
21. Mr Scally spent some time addressing me about whether there should be waiter service in relation to alcohol at the premises and he said that that condition was not necessary. In my view, because this is a restaurant, waiter service is desirable. It is undesirable to have people standing up and walking to the bar. That can create a bar type atmosphere. I notice that there are 6 seats at the bar and they could probably be increased to 10. If someone was sitting in those seats, I would envisage that the term "waiter service" would be covered by asking the barman for the particular drink that person would want and the barman delivering the drink to him/her at the bar. That would be waiter service.
22. I pronounced my reasons orally on 29 January 2010. At the conclusion of those oral reasons, I was then requested to provide written reasons which required me to have my oral reasons transcribed. Next business day (1 February 2010) following the close of the hearing, there arrived by post an envelope containing a large amount of material submitted by Ms O'Connell, a witness in the proceeding, to whom I have already made reference above.
23. The covering letter appears to indicate the material contained in the envelope was assembled by her following the close of reasons. The envelope was marked "Strictly Private and Confidential". No leave was reserved to any party, much less a witness, to make submissions following the close of hearing. Consequently, I have ignored the material contained in the envelope. [Rumpf v Mornington Peninsula Shire Council Balmford J [2000] VSC 311; (2000) 2 VR 69 at [61]- [78]].