A recent decision of the High Court has clarified the extent to which causation of alcohol-related harm must be established in the context of granting/renewing an alcohol licence. Although requiring a positive correlation, the Court relaxed the previously accepted standard requiring a causal nexus, holding that a positive correlation does not require proof that an applicant’s premises is at the centre of the harm.
Any person wishing to sell or supply alcohol is required to apply for an alcohol licence. The Sale and Supply of Alcohol Act 2012 (the “Act”) sets out several criteria to be considered by a District Licensing Committee (“DLC”) in determining an application to issue or renew an alcohol licence.
The first consideration, in the case of both issue and renewal applications, is the object of the Act. The object is stated in section 4 as being that:
- the sale, supply, and consumption of alcohol should be undertaken safely and responsibly; and
- the harm caused by the excessive or inappropriate consumption of alcohol should be minimised.
Alcohol-related harm is defined in very broad terms in section 4(2) and includes any crime, damage, death, disease, disorderly behaviour, illness, or injury caused directly or indirectly by the excessive or inappropriate consumption of alcohol and any associated harm to society or the community.
The Current Case
The Lion Liquor case involved an application by Liquor King for a renewal of its off licence for premises located on Kent Terrace at the edge of the Courtney Place entertainment precinct in Wellington. There are a large number of licenced premises within a 500m radius of the Liquor King, including 13 other off licenced premises. The police and the Medical Officer of Health (the “Reporting Agencies”) opposed the application and gave evidence at the DLC hearing of alcohol-related harm in the locality of the Liquor King. The DLC granted the renewal of the licence and imposed a condition reducing the previous operating hours, a condition which it considered achieved the purpose of the Act.
The DLC decision was appealed to the Alcohol Regulatory and Licensing Authority (the “Authority”) who reinstated the original trading hours on the basis that a causal nexus between the alcohol-related harm in the area and the operation of Liquor King’s licence was not established. Although the Authority accepted that the evidence undoubtedly showed excessive or inappropriate consumption of alcohol in the locality of the Liquor King, it considered that this did not constitute evidence that excessive or inappropriate consumption of alcohol and increased alcohol-related harm would result from the renewal of the licence. This decision was subsequently appealed to the High Court.
The Court held that the evidence showed “that there can be no realistic doubt the premises contributes to some of the alcohol-related harm in the locality”. The Reporting Agencies did not contend that the Liquor King was the sole originator of the alcohol-related harm in the locality, nor did the Court require a causal link of this standard to be shown. The Court accepted that a licensee may be a model operator, nevertheless if its products are consumed after sale in a harmful way the operator may bear the consequences by way of restrictions on the licence.
The Court emphasised that the Act seeks to minimise alcohol-related harm. Where there is an evidential foundation linking a real risk of alcohol-related harm to the grant of a renewal licence, the harm must be minimised. It is not necessary to establish that the operation of the licence would be likely to lead to alcohol-related harm and to require such a link to be demonstrated would be unrealistic and contrary to the legal position. Nor is a DLC required to be satisfied that the imposition of a condition would, in fact, minimise alcohol-related harm.
The Court acknowledged that there was compelling evidence of alcohol-related harm in the locality on Friday and Saturday nights. Based on the location of the premises, the evidence that the area suffers alcohol-related harm, and that fact that the Liquor King supplies products clearly associated with alcohol-related harm, the Court considered that the trading hours condition imposed by the DLC was principled. The DLC did not have to be sure that the condition would minimise alcohol related harm in the locality, but it was entitled to test the possibility.
This decision means that it will not be necessary to show a direct causal link between alcohol-related harm and a premises seeking an alcohol licence. There will be circumstances in which alcohol related-harm is so prevalent in a locality, that merely being an operator in the business of the sale and supply of products associated with alcohol-related harm may be enough to establish the necessary link between alcohol-related harm and the operation of a licence, even in cases where the licensee is a model operator. In order to achieve the object of the Act, if such a link is found, the DLC is entitled to either decline to grant/renew a licence or impose conditions on a licence which it considers support the object of the Act and reduce alcohol related harm.
The decision therefore has potentially wide-reaching implications for those selling and supplying alcohol.
Feel free to contact ChanceryGreen if you would like to discuss this case, including how it may affect you or your business.
 Medical Officer of Health (Wellington Region) v Lion Liquor Retail Ltd  NZHC 1123.
 Section 105 sets out the requirements for the issue of a licence and section 131 sets out the requirements for the renewal of a licence.
 The licence had previously allowed Liquor King to operate from 8.00am to 11.00pm Monday to Friday. The DLC’s amendment reduced the trading hours on Friday and Saturday nights to 9.00pm.
 At para 
 At para