WOOLIES LIQUOR STORES v SEAFORD RISE TAVERN & ORS No. SCGRG-99-1178 [2000] SASC 116

DOYLE CJ: The Licensing Court heard concurrently two applications for a retail liquor merchant's licence. This category of licence is provided for by s 37 of the Liquor Licensing Act 1997 ("the Act"). One application was made by Woolies Liquor Stores Pty Ltd ("Woolies"). The other application was made by two companies jointly. I will refer to those two companies as "Saturno". Both premises in respect of which a licence was sought are in the suburb of Hackham, a southern suburb of Adelaide.

Each application was objected to by a number of licence holders from the nearby suburbs.

At the end of the day the only live issue was whether either applicant had met the requirements of s 58(2) of the Act. Section 58(2) provides:-

"An applicant for a retail liquor merchant's licence must satisfy the licensing authority that the licensed premises already existing in the locality in which the premises or proposed premises to which the application relates are, or are proposed to be, situated, do not adequately cater for the public demand for liquor for consumption off licensed premises and the licence is necessary to satisfy that demand."

If the court was satisfied that either applicant had discharged the requirements of this provision, then it was necessary for the court to decide which application should be granted. I say this because, as the Acting Judge commented, it would not have been appropriate to grant two licences for premises as close to each other as these premises were.

The Acting Judge decided that neither applicant had discharged the requirements of s 58(2). He said that if he was wrong in that, he would have granted the application by Woolies, in preference to the application by Saturno.

Woolies has appealed. Saturno has not appealed. On appeal the sole issue is whether the Licensing Court erred in deciding that Woolies had not discharged the requirements of s 58(2).

Hackham is some distance south of Adelaide. The Main South Road, a busy highway, passes through Hackham in a north-south direction. To the north of Hackham, and also traversed by the Main South Road, is the suburb of Morphett Vale. There is a substantial shopping centre in Morphett Vale, with shops either side of the Main South Road. On the western side of the Main South Road is Hackham West, and a little further west the suburb of Noarlunga Downs. The Noarlunga Centre is located in Noarlunga Downs. It is a very large shopping centre.

The premises in respect of which Woolies sought a licence are in a shopping centre fronting on to the eastern side of Main South Road, and at the southern end of Hackham. They are in a shopping centre known as Hackham Plaza. The main premises in Hackham Plaza are a large Woolworths supermarket. In addition, there will be about eleven specialty shops, once all of them are occupied.

The Saturno application is in respect of premises in a shopping centre, also in Hackham, although sometimes these premises were referred to as being in Hackham East. In this centre there is a large Bi-Lo Supermarket, and about eight speciality shops. The distance between Hackham Plaza and the shopping centre at Collins Parade is about 1.3 kms by the shortest convenient route. Collins Parade Shopping Centre is to the north and slightly to the east of Hackham Plaza. It also is on the eastern side of Main South Road, but not fronting that road.

The Acting Judge viewed a number of licensed premises in the general locality and heard evidence from a substantial number of witnesses. As I understand the submissions, no criticism was made on either side of the findings of fact made by the Acting Judge. Criticisms made by Mr Walsh QC, counsel for Woolies, relate to the use made by the Acting Judge of his findings of fact, and to the manner in which he reasoned to his conclusion.

The Acting Judge found that the relevant locality was an area that is, roughly described, a square. I make that qualification because the southern and eastern boundary was identified by reference to the boundary of the Hills Face Zone. The northern boundary was identified as being the alignment of Wheatsheaf Road and Flaxmill Road. These roads run in an east-west direction, and are either side of the Main South Road. The Morphett Vale Shopping Centre is immediately north of the point where they meet Main South Road. The western boundary was identified by reference to the site of the proposed extension to the Southern Expressway. The Noarlunga Centre is just west of that Expressway. My estimate is that the locality as identified by the Acting Judge is about three kilometres wide from east to west, and from north to south. The Main South Road almost bisects the locality, although as it begins to leave the locality at its southern end the Main South Road curves to the west.

The population of the locality is about 14,000 people.

There are two hotels which are either just inside the locality at its southern extremity or just outside the locality. They are the Aussie Inn and Mick O'Shea's Irish Pub. They can be put to one side, because the Acting Judge found that their facilities were such that they were of no real relevance to the case, meaning that their facilities could not adequately cater for the public demand in the locality for liquor for consumption off licensed premises.

Just north of the northern boundary of the locality, and on the eastern side of the Main South Road, is the Emu Hotel. It is 2.6 kms north of Hackham Plaza and 2.4 kms northwest of the Collins Parade site. The hotel has a drive-in bottle department and a small associated browsing area. The licensed premises have been redefined to include a separate liquor store adjoining a Woolworths supermarket in the shopping centre just to the north of the hotel, known as the Village Shopping Centre. This liquor store is known as Village Cellars. The Acting Judge found that Village Cellars was a substantial outlet with a good range of liquor. Shoppers using the Woolworths supermarket have direct access to this bottle shop and can use their supermarket shopping trolleys in the bottle shop.

I have already referred to the Noarlunga Centre which is just to the west of the western boundary of the locality. This is a large shopping centre, with substantial parking facilities. Located within it is a retail liquor merchants licence known as Super Cellars. These premises are 3.6 kms west of Hackham Plaza and 4 kms west of the Collins Parade site. The Acting Judge found that this was a large store with a good range of beer and wine. This shopping centre is readily accessible by road, as one would expect of such a large shopping centre.

Unsurprisingly, the Acting Judge proceeded on the basis that the residents of the locality had a demand for liquor for consumption off licensed premises. These days, evidence would not be necessary to establish that. He also found that a significant proportion of the population would like to be able to purchase liquor when they were making their weekly purchases of food. Once again, evidence is hardly necessary to establish that these days. This portion of the local population would obviously include people shopping at the Woolworths supermarket at Hackham Plaza and at the Bi-Lo supermarket at Collins Parade. The Acting Judge also found, as one would expect, that the ability to combine food and liquor shopping was available "relatively nearby" at Morphett Vale Village Centre and "to a lesser extent at the Noarlunga Centre". I take this qualification to refer to the fact that the Super Cellars are not immediately adjacent to a supermarket.

As to the people of the locality, the Acting Judge made the following finding based on the witnesses before him. He said:-

"They satisfy me that the public at large in this region is relatively mobile with access to a motor vehicle and accustomed to driving significant distances for the purposes of shopping and or employment."

"None of the consumer witnesses lived at a greater distance than 3 kilometres from the Emu Hotel. Those living west of Main South Road were within 3 kilometres of the Super Cellars Liquor Store."

"None of the customer witnesses called by either applicant experiences great difficulty in having their demand for liquor met within the region."

The Acting Judge summarised the issue before him as follows:-

"The thrust of the cases of both applicants was that applying contemporary standards the inconvenience created by the need to travel up to 3 kilometres for adequate bottle shop facilities together with the inconvenience caused by [not] being able to acquire liquor whilst doing food shopping (in the case of Woolies at the Hackham Plaza shopping centre and in the case of Saturno's at the Bi-lo supermarket at Collins Parade) resulted in the demands of such people for liquor being not adequately catered for."

That seems to me to be a fair summary of the case as presented to the Acting Judge.

In brief, there was a public demand in the locality for liquor for consumption off licensed premises. There were no premises in the locality that could adequately cater for that demand. The real issue was whether Super Cellars at Noarlunga Centre and Village Cellars at Morphett Vale Village provided facilities that were sufficiently accessible to the public in the locality to lead to the conclusion that the grant of a licence was not necessary to satisfy the demand in the locality, even though there were no premises in the locality capable of meeting that demand.

I should add that although I have referred only to Super Cellars and Village Cellars, the reasons of the Acting Judge and the evidence before him contained references to other licensed premises that were of some relevance to the case. I have not referred to these other premises only because, for the purposes of the appeal, they are of much less significance. However, it is important to bear in mind that they played some part in the Acting Judge's conclusions.

The case before the Licensing Court was therefore one in which the outcome turned upon the significance to be attributed to the facilities available at licensed premises just outside the area identified by the Acting Judge as the relevant locality.

In relation to distances that had to be travelled, and the time involved, the Acting Judge made the following finding:-

"... I am unable to say that the distance to be travelled by residents of the locality in order to satisfy their demands for liquor is so great as to amount to any more than mere inconvenience. The inconvenience is neither so great nor so unreasonable as to result in a finding that the existing facilities do not adequately cater for the public demand."

He found that the parking facilities at Noarlunga Shopping Centre and at Morphett Vale Village were adequate, although he noted that at the latter Centre they were "less than ideal". He accepted that traffic conditions were such that driving into and out of Morphett Vale Village Shopping Centre "creates some inconvenience", but he said that this was "no greater than that which confronts the average motorist many times each week". I take him to mean that the inconvenience was the sort of inconvenience that all of us put up with when driving to various premises in the course of our daily lives. The Acting Judge noted the wish of witnesses to purchase liquor when doing their weekly food shopping. He observed, correctly, that of itself this was of limited significance because to grant a licence on that basis would, as I observed in Woolies Liquor Stores v South Eastern Hotel & Ors [1999] SASC 289 "result in a licence at each well patronised shopping centre". He noted also that the ability to combine food and liquor shopping was available at Morphett Vale Village Centre and at Noarlunga Shopping Centre.

After referring to these and other relevant matters, the Acting Judge concluded that he was not satisfied:-

"... that the existing licensed facilities in particular the Morphett Vale Village Cellars and to a lesser extent Super Cellars at Noarlunga Centre do not adequately cater for public demand."

I begin by making the point, often made before, that this Court does not lightly depart from conclusions reached by a specialist Court like the Licensing Court, particularly when those conclusions rest substantially on findings of fact made by the Court. This is particularly true of findings that draw on the judge's observations of the area and of traffic conditions within it, and upon the impression made by witnesses who are giving evidence about relatively subjective matters like their wishes and the inconveniences that they encounter in obtaining liquor supplies.

The outcome of the case turns upon the application of s 58(2). This provision has a long history in this State. It is unnecessary to go through that history yet again. I refer to, without repeating, what I said on the topic in Woolies Liquor Stores Pty Ltd v Carleton Investments Pty Ltd (1998) 73 SASR 6 at 10-12. The approach that I outlined there appears to be the approach taken by the Acting Judge in the present case, although I mention that the particular issue of importance in this case, next to be identified by me, did not arise there.

Mr Walsh QC, counsel for Woolies, submits that the Acting Judge erred in principle in treating Super Cellars and Village Cellars, premises outside the locality, as relevant to the satisfaction of the public demand for liquor in the locality. Alternatively, he submits that the Acting Judge erred in treating the ability of the public in the locality to satisfy their demand for liquor at these premises as relevant as long as the public could do so with no more than "mere inconvenience". The effect of his submission was that licensed premises outside the locality were to be put wholly to one side, unless the public who satisfied their demand for liquor at those premises did so by choice or without any discontent. In other words, licensed premises outside the locality were only relevant to the extent that their presence lead the court to conclude that there was no public demand in the locality or a lesser public demand than would otherwise exist. Mr Walsh QC submits that the facilities available at premises outside the locality are not to be weighed in the balance in the same manner as are the facilities available at premises within the locality.

To consider that submission it is necessary to take a step back. The focus of s 58(2) is upon the demand for liquor expressed by persons (usually residents) in a locality, and upon the ability of the premises in the locality to cater adequately for that public demand.

A finding, as was implicit in the Acting Judge's reasons, that there is a public demand in the locality, and that existing licensed premises in the locality do not adequately cater for that demand, is a significant step along the way to the grant of an application. That much must be conceded in favour of Mr Walsh's submission.

But the cases on the earlier legislation have treated licensed premises outside the locality as relevant in considering whether a new licence should be granted.

Under the Licensing Act 1967 an applicant for a retail storekeeper's licence (the equivalent of the licence in question here) had to meet a double test. First, the applicant had to prove that the grant of the licence was required for the needs of the public having regard to the licensed premises existing in the locality. That was a test that applied to the grant of most licences. Then the applicant had to meet a more stringent test set by the then s 22(2) which required the applicant to satisfy the court that "the public demand for liquor cannot be met by other existing facilities for the supply of liquor in the locality". A lot of learning was devoted to the meaning of this provision. But even in relation to this provision, which seemed to focus exclusively on existing facilities in the locality, the court accepted that licensed premises outside the locality might be relevant. As Hogarth ACJ said in Lincoln Bottle Shop v Hamden Hotel (1978) 19 SASR 326 at 330:-

"... But it is not to the point that an existing demand within the locality could be met, even without discontent, by existing facilities which exist outside the locality. If members of the public who are within the locality, whether permanently or temporarily, choose to satisfy their requirements for liquor from facilities outside the locality, and do so without discontent (perhaps because they prefer to do it in that way), then their requirements have been met and cease to be a demand for relevant purposes so far as s 22(2) is concerned. ... "

In the same case Jacobs J expressed similar views at 341-342. So it can be seen that even under this provision, the weighing of the public demand had to take into account the fact, if it were the fact, that the use made of licensed premises outside the locality might be such that one would conclude that at least, as to some part of the public, there was no relevant demand in the relevant locality.

More relevant is the approach taken in relation to the then s 47(a) to which I earlier referred. In Hoban's Glynde Pty Ltd v Firle Hotel Pty Ltd (1973) 4 SASR 503 at 512 Bray CJ said:-

"... It cannot be right to define a locality so as to exclude licensed premises capable of serving it and then say that, as those licensed premises are not in the locality, no regard need be had to them. Even if certain licensed premises are not in the locality defined by the Court, their ability to satisfy the needs of that portion of the public which it is claimed need the proposed licence, or part of it, must be relevant to the questions raised by s 47(a). Indeed it may be that the word 'locality' should be treated in a much looser and more cavalier fashion without necessarily requiring the definition of a precise area, but I do not pursue the question."

That passage has been referred to with approval on a number of occasions, see for example Nepeor v Liquor Licensing Commission (1987) 46 SASR 205 at 215 von Doussa J. In my view it continues to be relevant in the application of s 58(2) of the Act, notwithstanding changes in terminology.

Premises outside an identified locality remain relevant to the question that arises under s 58(2). First of all, applying reasoning of the type used in Lincoln Bottle Shop, a demand met outside the locality without any discontent at all, or at least by choice, would not be a relevant demand. Second, for reasons identified by Bray CJ and von Doussa J, the process of identifying a locality cannot be allowed to dictate an artificial approach to deciding whether a grant of a licence is necessary to satisfy the relevant public demand. The identification of a locality is usually a necessarily imprecise process. A particular boundary must be identified in most cases, but the identification of that boundary does no more than identify in a general way the locality from which the relevant public demand arises: Nepeor at 216 von Doussa J. The effect of s 58(2), as with earlier provisions, is to focus attention upon a locality in which a demand is expressed and upon the facilities available at premises in that locality, but not to do so in an artificial sense, but rather by way of directing primary consideration to these matters. It should not be overlooked that s 58(2), after the reference to whether existing facilities adequately cater for public demand, goes on to provide that the licence will not be granted unless the court also concludes that "the licence is necessary to satisfy that demand". Consideration of the ability of the facilities in the locality to cater for the demand in the locality is not the end of the matter. The grant of the licence must be necessary to satisfy the demand. Section 58(2) is not concerned solely with the ability of premises in a locality to meet the public demand in that locality. It requires a wider consideration of the means by which that demand is or can be satisfied. It is also relevant to bear in mind that in most cases, although not all cases, however the locality is identified there will be shopping facilities and licensed premises not far from the extremities of the locality which will in fact be playing a part in meeting the demands of people within the locality. It will also often be the case that, however the locality is identified, for a fair number of people in the locality, shopping facilities and licensed premises not far outside the locality will actually be closer and more convenient than the applicant's premises. When an application is made for a licence, the focus is naturally upon the applicant's proposed premises. There is a natural tendency to draw the locality around and by reference to those premises. This should not lead the court to ignore the relevance of shopping facilities and licensed premises outside the locality. As King CJ said in Nepeor at 206-207, with reference to a similar provision in the Licensing Act 1967, and its use of "locality":-

"... Its purpose is simply to focus attention upon the local, as distinct from purely general, character of the public demand with which the section is concerned. It is unnecessary, and indeed futile, to attempt to delineate by boundaries the area within which the relevant public demand is to be looked for. The concept is simply that of demand which might be expected to be met at least in part by the proposed licensed premises. ... "

My view is that all of these matters must be taken into account in the application of s 58(2). And, as I have already said, the concluding words of that provision seem to require this of the court.

Mr Walsh QC correctly submits the premises outside the identified locality are likely to be of less significance than premises within the identified locality, because the emphasis (although not exclusively so) of s 58(2) is on demand in a locality, and satisfaction of that demand within the locality. I accept that. But for the reasons that I have indicated, licensed premises outside the locality cannot be put to one side, nor are they relevant only in the limited way in which they were considered to be relevant in cases like Lincoln Bottle Shop in the application of the former s 22(2). In my view the correct approach for a provision like s 58(2) is that indicated by Bray CJ in Hoban's Glynde Pty Ltd v Firle Hotel Pty Ltd.

The Acting Judge of the Licensing Court did not allude to this distinction in the present case, but it does not follow that his conclusion was wrong.

A significant feature of the locality identified by the Acting Judge is the presence of Super Cellars and Village Cellars just outside the boundary of the locality. For a good many people in the relevant locality, these premises are quite close at hand, and indeed more conveniently accessible than Hackham Plaza. In saying that I have not overlooked the impact of Main South Road. But, as my description of the locality indicates, a good half of the locality is to the west of Main South Road, and to the extent that using or crossing Main South Road is seen as a disadvantage, for people in the western half of the locality Super Cellars will be more accessible than Hackham Plaza.

There was a strong case for including Super Cellars and Village Cellars in the locality, having regard to their location. But their exclusion from the locality could not, of itself, lessen the significance of the use being made of them by the public in the locality. That had to be considered.

The Acting Judge also found that the population in the locality was fairly mobile, and regularly drove to a range of shopping centres in and outside the locality. I agree with the submission by Mr Costello for the respondents that when one looks at the evidence of witnesses, one can see why the Acting Judge was not satisfied that they were indicating any significant difficulty in satisfying their demand for liquor as things stand at present, or expressing any real discontent with the existing situation. This is obviously something which would have affected the Acting Judge's approach to the case.

It is true that with the establishment of the Woolworths supermarket at Hackham Plaza, a fair number of people who previously shopped elsewhere would begin to shop there. No doubt many of them would like to purchase their liquor at Hackham Plaza at the same time. That is a factor not to be disregarded. If liquor is conveniently purchased outside a locality only because residents find, for other reasons, the need to go outside the locality, the removal of the need to go outside the locality for other reasons may mean that there is now a need for licensed premises in the locality. But the establishment of new shopping facilities in the locality, and a choice made to patronise those facilities rather than facilities further afield, does not inevitably lead to the conclusion that the grant of a licence is necessary to satisfy the demand for liquor which may now arise at the newly established premises. It remains necessary to consider the reasonableness of that demand by contemporary standards, taking account of all local circumstances. I get the firm impression from the Acting Judge's reasons that he was satisfied that weighing up existing shopping patterns, distances, travelling times, parking facilities and other relevant matters, the evidence amounted to no more than evidence of a natural wish on the part of those who would use Hackham Plaza to obtain liquor closer at hand than before, but that for such people obtaining their liquor requirements at Super Cellars or Village Cellars, or some of the other premises referred to, did not involve anything more than the sort of mere inconvenience that is a part of daily life for people in the locality. I also get the firm impression that the Acting Judge was satisfied that in the locality that he had identified the fact that Super Cellars and Village Cellars would be closer or more convenient for many people than an outlet at Hackham Plaza was a significant consideration. The Acting Judge's conclusions are to be understood in light of the significance of the presence of these premises just outside the locality.

A particular submission advanced by Mr Walsh QC was based upon the fact that in Nepeor this Court apparently regarded it as unreasonable by contemporary standards to expect the public in the relevant locality to make a round trip by motor vehicle of the order of 6 kms or more to purchase liquor. He made the point that the effect of the decision in the present case was to impose such a requirement. First of all, as a matter of fact that submission is not correct. It would apply to some people in the locality, but for the reasons indicated by me for many people in the locality the distance to Super Cellars or Village Cellars would either be less than the distance to Hackham Plaza, or certainly no more. But quite apart from that, the factual conclusion reached in one case cannot be transposed in the manner suggested by Mr Walsh QC to another case. That is not to say that the decision in Nepeor cannot be taken as indicating an approach to or giving content to the contemporary standards to be applied under s 58(2). But it is taking that process too far to argue that Nepeor establishes a travelling distance which sets a limit to what can be expected in suburban areas generally by reference to contemporary standards.

It is fair to say that I regard the case as borderline. The Acting Judge's finding that there were no premises in the locality capable of meeting the public demand was a significant step in favour of the grant of a licence. But when one considers the Acting Judge's reasons as whole, the evidence before him, and then looks at the map of the locality, the pattern of the roadways, the location of Super Cellars and Village Cellars, one can see how the Acting Judge was led to the conclusion that licensed premises outside the locality meant that the grant of the licence was not necessary to satisfy the demand in the locality. Even if the Acting Judge did not attend adequately to the significance of the absence of facilities in the locality, my view is that his findings of fact still lead to the conclusion that he reached that the case for the applicant had not been made out.

For those reasons, in my opinion the appeal should be dismissed.

DEBELLE J: The issue in this appeal was quite straightforward. The Acting Judge of the Licensing Court had determined that there was a public demand for liquor for consumption off licensed premises and that the two hotels in the locality (the only relevant licensed premises in the locality) did not adequately cater for that demand. The appellant, therefore, contended that effect should be given to the clear words of s 58(2) of the Liquor Licensing Act 1997and a retail liquor merchant's licence should be granted to it.

On its face, the appellant's argument appears to be attractive. However, it is flawed in two respects. First, it seeks to read s 58(2) too literally. Secondly, it seeks to attribute to the delineation of the locality an effect which is not intended by the Liquor Licensing Act.

It is implicit in s 58(2) that an applicant for a retail liquor merchant's licence must prove two things, the demand for the licence in the locality and that that demand is not being adequately catered for by existing licensed premises. Although there is no provision in the Act similar to s 47(a) of the Licensing Act 1967, it is nevertheless necessary to prove public demand for liquor for consumption off the premises. Logically, if there is no demand, it is not necessary to proceed further to determine whether the existing premises adequately cater for that demand. When determining whether a demand exists, and the nature of that demand, regard will be had to licensed premises within the locality and those outside the boundaries of the locality which serve the demand in the locality. In the usual case, those premises will be close or relatively close to the boundaries of the locality. Regard will be had to them because they may well serve the public in that locality: cf. Bray CJ in Hoban's Glynde Pty Ltd v Firle Hotel Pty Ltd (1973) 4 SASR 503 at 512 and Nepeor v Liquor Licensing Commissioner (1987) 46 SASR 205 per King CJ at 206. A simple example illustrates the proposition. It may be possible to define a locality in which no licensed premises are to be found but there may be excellent hotels and bottle shops close to each boundary of the locality which adequately caters for the demand in that locality. It is true, as Mr Walsh contends, that premises outside the identified locality may be less significant than premises within the locality. However, for the reasons expressed, it does not follow that regard should not be had to those premises. The extent to which premises outside the locality may be relevant will depend on a number of factors including their proximity and convenience to the public whose demand has been expressed and the quality of the services provided. Both issues are relevant when assessing the demand and determining whether it is being catered for by existing premises.

Although the task of defining a boundary is frequently undertaken in applications for retail liquor merchant's licences, the limitations inherent in a defined locality must be recognised. First, it is a somewhat artificial concept since there are obvious difficulties in defining the locality with precision. The locality in which the demand exists is not capable of precise delineation. Secondly, the purpose of defining the locality is not to fix lines on a map but rather to focus attention upon the local, as distinct from the purely general, character of the public demand with which s 58(2) is concerned: per King CJ in Nepeor v Liquor Licensing Commissioner at 206. This necessarily imprecise process is no more than a means to the end of identifying the relevant public demand and the relevant licensed premises.

Although not expressly stated, the tenor of the reasons of the Acting Judge is that there are two outlets in particular which adequately cater for the needs of the public in the identified locality. The reasons for that are set out in the judgment of the Chief Justice and need not be repeated. Nothing has been demonstrated which should cause this court to interfere with that finding of fact.

For these reasons, I would dismiss the appeal.

NYLAND J: I agree that the appeal should be dismissed for the reasons expressed by the learned Chief Justice.