All alcohol off-licences for supermarkets and grocery stores require a condition which confines the display and promotion of alcohol to a defined area or areas within the premises known as a single alcohol area condition. This article looks to the difficulties in defining such an area after the recent decision in Christchurch Medical Officer of Health v J & G Vaudrey  NZHC 2749.
The Sale and Supply of Alcohol Act 2012 (“the Act”) requires all alcohol off-licences for supermarkets and grocery stores to have a condition which confines the display and promotion of alcohol to a defined area or areas within the premises (“single alcohol area condition”). This is designed to avoid display of alcohol products at the supermarket’s entrance or at checkouts where there is particular visibility and thus vulnerability for the supermarket’s patrons.
The High Court has recently considered the validity of a single alcohol area condition in relation to supermarkets in the decision in Christchurch Medical Officer of Health v J & G Vaudrey  NZHC 2749.
The decision involved renewal applications for off-licences at South City New World and Bishopdale New World in Christchurch. For South City New World (“SCNW”), the District Licensing Committee (“DLC”), excluded from the licensed area a wine display cabinet at one end of the wine display shelves. For Bishopdale New World (“BNW”), the DLC set out a single-area condition described as a compromise between all parties.
SCNW and BNW appealed to the Alcohol Regulatory and Licensing Authority (“ARLA”) which upheld the appeals. It was held that it would have done so due to natural justice alone because the DLC made a decision which was not founded on evidence because in coming up with its own proposal, the DLC necessarily departed from all submitted proposals. ARLA stated that it could not impose conditions which would make the application an altogether different application.
The Christchurch Medical Officer of Health appealed to the High Court. In his decision, Justice Gendall held that the role of a DLC or ARLA was evaluative. In relation to single area conditions, this role is to describe an area which it considers best accords with the purpose and object of the Act, the purpose of the single area conditions and the requirements in relation to pedestrian routes. The DLC or ARLA was not limited to accepting or rejecting the plan put forward by the applicant. Rather the DLC or ARLA must on its own describe an area which it considers is compliant after hearing evidence and submissions from all relevant parties.
General Distributors Limited was concerned that such a conclusion would be contrary to requirements under the Resource Management Act 1991 and the Building Act 2004 which require detailed plans before an application for an off-licence for the sale and supply of alcohol under the Act is made. Thus an applicant could face making significant and expensive structural changes to the building if the DLC directed a different single alcohol area.
However, Gendall J was unconvinced with these difficulties. In his view, practical issues would ultimately bear on the issue of reasonableness of conditions and of the relevant body altering the proposed layout. In his Honour’s view, it would be sensible for an applicant to informally liaise with the reporting agencies and perhaps also staff of the relevant DLC before completing building proposals and formally making an application.
Under s 113(1) of the Act, the DLC or ARLA concerned “must have regard to” s 112(1) of the Act which states that the purpose of a single area condition is to “limit (so far as is reasonably practicable) the exposure of shoppers in supermarkets… to displays and promotions of alcohol, and advertisements for alcohol”.
Justice Gendall, therefore, defined a series of critical phrases and words. He found:
- “have regard to” is an evaluative exercise requiring assessment which in the context of a single area condition showed that evaluation was not a black and white matter;
- “limit” means to circumscribe, to restrict or to reduce so that some residual content may remain and therefore it did not in these circumstances mandate prohibition;
- “so far as reasonably practicable” imports proportionality. This involves a weighing exercise engaging various issues including expenditure, time involved, difficulty and inconvenience as balanced against the desired objective.
Justice Gendall further held that whether a condition is reasonable will depend on an objective assessment of whether there is a rational and proportionate connection between the identified risk or benefit when weighed against all relevant considerations in light of the purpose and object of the Act. It should also be noted that if there is no objection to an application, the DLC or ARLA must still consider the application in a merits based consideration having regard to all relevant matters.
ARLA decided that the DLC breached the requirements of natural justice by making a decision which was not founded in evidence because in coming up with its own proposal, the DLC necessarily departed from all submitted proposals. However, in the High Court Justice Gendall found that while there are undoubtedly situations where advance notice of an adverse finding will be required, this will be exceptional. What is required is that the decision is made only in reliance on material put before the relevant body. To have regard to any further evidence would require the DLC or ARLA to afford the parties an opportunity to engage with, and comment on, that material. Dissatisfaction with an outcome is then best addressed through appeal. In this situation, Justice Gendall was not convinced there was any transgression of the principles of natural justice before the DLC as the DLC had, in Justice Gendall’s view, merely engaged in a synthesis or compromise of the proposals.
Accordingly, the High Court allowed the appeal and found that the DLC is able to agree to a proposal that is a synthesis or compromise of the proposals put forward by the applicant and / or submitters. ARLA’s decision was quashed and the matter was referred back to ALRA for reconsideration in light of the judgment as well as the purpose and object of the Act.
Within the context of the single alcohol areas in supermarkets and grocery stores, the decision adheres to the purpose of the statutory provisions in giving the DLC a discretion to limit the display and promotion of alcohol. However, the decision will have a wider impact. It entrenches the evaluative nature of bodies making decisions under the Act. It adds another layer of complexity to the intersection between environmental planning and alcohol licensing. No doubt, the framework for determining a reasonable condition will become a mainstay of analysis.
However, the decision is under appeal. The Court of Appeal will be forced to grapple with the fact that a single alcohol area in supermarket or grocery store is difficult to change once a supermarket or grocery store is built which is what the High Court has decided. While it may be sensible for an applicant to informally liaise with relevant parties before completing building proposals and formally making an application for an off-licence, in practice, the fact remains that it is no small order, once built, for a supermarket or grocery store to change its layout.
Published: 20 January 2020