Publicly Speaking

01 Mar 2010

Liquor Licensing for Party Buses: Reporting on the Oddballs and Marshall cases

The High Court has recently ruled that a district licensing agency (DLA) may not issue special licences to operators of charter bus operations in Christchurch, involving consumption of bring-your-own liquor (BYO)[1]. In 2008 the Liquor Licensing Authority (LLA) declined an on-licence application for a BYO party bus operation in Upper Hutt. These decisions may have implications for processing and determination of any liquor licence in situations where BYO may occur, particularly on board conveyances.

Oddballs background - the need for BYO party buses to hold liquor licences

There is a substantial "party bus" or "tavern trek" industry in Christchurch. BYO consumption by patrons occurs on board the buses as they travel between licensed venues.

Except in a few situations, no liquor licence under the Sale of Liquor Act 1989 (SOLA) is required for members of the public to consume BYO. One exception as that, under section 38 of the Summary Offences Act 1981, any passengers supplying or consuming (or possessing for consumption) BYO on an unlicensed "vehicle carrying passengers for reward" commit an offence.

In order to licence these operations, the Christchurch DLA issued the "party bus" operators with special licences for each bus, in relation to all of the events that would occur within a particular month.

The problem identified with the use of special licences for BYO operations

In 2008 the DLA received legal advice concerning its ability of issuing special licences in relation to these BYO "party bus" operations. The advice centred on a difference between sections 7 and 73 of the Sale of Liquor Act 1989:

• Section 7 deals with on-licences. It makes specific reference to the licence authorising both the sale and supply of liquor (under section 7(a)) and the consumption of liquor (under section 7(b)).
• Section 73 deals with special licences. It only authorises sale and supply.

The DLA accordingly changed its process and advised the operators that special licences could no longer be obtained for their operations. The operators brought judicial review proceedings in the High Court.

The Oddballs High Court decision

In November 2009, Chisholm J in the High Court heard two preliminary questions of law:

1. Can a special licence be applied for and/or granted under Part4 of the SOLA for an event or events on a conveyance carrying passengers for reward in circumstances where

(a) there is no intention on the part of the licensee to sell or supply liquor on board the conveyance during the event or events, and

(b) the licensee intends to allow the consumption of BYO liquor (being liquor that has not been sold or supplied by the licensee) during the event or events?

2. If the answer to (1) is yes, then in relation to any application for a special licence for an event or events on a conveyance made under Part 4 of SOLA, can an inspector filing a report under section 78 of SOLA identify the prospective consumption of BYO liquor during any such event as a relevant factor for the DLA to consider in granting or refusing the application?

Chisholm J determined that the answer to the first question was "no". The DLA has no authority to issue special licences for BYO-type operations on board conveyances. On that basis, he was not obliged to answer the second question (although he indicated that he would have answered it "yes", had it been required).

In answering the first question, Chisholm J considered the statutory history of the Sale of Liquor legislation. He decided that he was not able to look past the clear difference between the statutory provisions for on-licences and special licences.  He noted that section 28 provides for BYO restaurants, under which operators are granted an on-licence (under section 7(b)) to authorise consumption of liquor alone, without receiving authorisation to sell and supply liquor (under section 7(a)). He considered that implying into section 73 a similar power to grant special licences to authorise consumption would cross the boundary between interpreting the law and legislating.

Chisholm J drew support from the fact that on-licences would be available to the operators, and that there was no hiatus in the SOLA to be rectified. He was not persuaded that his conclusion, and the additional hurdles involved in obtaining an on-licence, would lead to a licensing system involving excessive or oppressive controls.

There is an interesting additional aspect to the decision. Drawing on earlier case authority relating to BYO restaurants, Chisholm J concluded that the scope of the SOLA enables it to deal with aspects of liquor control that are not directly related to the sale and supply of liquor. No doubt, this conclusion influenced his indication that he would have answered "yes" to the second question, if required. This indication may be relevant to future processing of any applications involving the prospect of BYO consumption.

The LLA's earlier approach in Marshall

In its 2008 decision of Alan Marshall (LLA decision 1801/2008), the LLA declined an application for an on-licence for a party bus in Upper Hutt, due (in part) to its concerns over BYO consumption on the vehicle. Patrons in that case would have been allowed to bring a limited number of drinks on board for consumption during the trip.

In the Marshall case, the LLA was forced to deal with the issue of BYO consumption in a indirect way. It considered the prospect of BYO consumption against two of its statutory considerations:

Section 13(1)(d) directs consideration of the steps proposed by the applicant to prevent sale of liquor to prohibited (intoxicated) persons. The decision to allow BYO was relevant to the likelihood that patrons to whom liquor may be sold would be intoxicated before and during the event:

Section 13(1)(f) directs consideration of the "other services" to be supplied as part of the operation. The LLA categorised the fact that the operator was allowing passengers to consume their own liquor on board as a "service", and considered the implications of BYO on the overall operation under this provision.

Some implications of the two decisions

The Court's central finding in Oddballs, that special licences cannot be granted to authorise BYO-type operations on board chartered conveyances,  now applies generally to DLAs throughout New Zealand.

DLAs should no longer grant special licences to operators of BYO events on board chartered conveyances, if this has been their practice. On-licences should instead be obtained by the operator, or a special licence should be obtained by the person making the sale and supply (which could be the operator or the patron).

The Oddballs decision also indicates that the LLA or a DLA is able to confront evidence about BYO in a direct manner. The Inspector (and perhaps the Police, and the Medical Officer of Health in the case of on-licences) may validly raise concerns about BYO consumption in their statutory reports, to promote SOLA's broad section 4 object of establishing a "reasonable system of control over the sale and supply of liquor with the aim of contributing to the reduction of liquor abuse, so far as that can be achieved by legislative means". Under sections 13(1)(g) and 79(1)(g), matters validly raised in those reports are relevant matters for consideration by the DLA and LLA in considering on-licence or special licence applications.

[1] Simpson Grierson acted for the respondents, the Christchurch City Council and its inspector, in this matter.

Authors

Robert Gapes

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Duncan Laing

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Vivienne Wilson

Senior Associate - Public Sector

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