Many of us enjoy the occasional tipple at our local bar, or in the comfort of our own homes. But what does the law have to say when a more adventurous party-goer decides she or he wants to experience all this....on a bus? In this FYI, we explore some key questions that have recently been answered in legal proceedings on liquor licensing for party buses - questions and answers that are particularly relevant to local authorities in their roles as district licensing agencies.

THE LAW

A few things that you should know in advance:

Party buses are buses that people can hire to drive them round for a day or night, often involving the drinking of alcohol and usually stopping at pubs along the way.

The Sale of Liquor Act 1989 (SOLA) requires anyone who wishes to sell liquor or have liquor consumed on his or her premises to obtain a licence from the District Licensing Agency, or DLA - which is the local territorial authority.

Appeals on the substance of DLA decisions are made to the Liquor Licensing Authority, or LLA.

Some background

Recent proceedings in the High Court and before the Liquor Licensing Authority have involved a group of party bus operators who applied for special licences for party tours in Christchurch.

In 2008, the view was formed that special licences should no longer be issued for the consumption of BYO alcohol on party buses. This caused the party bus operators to bring judicial review proceedings in the High Court and, following applications for licences to supply liquor on party buses, a number of operators appealed to the LLA. Although the saga has been of considerable complexity, the decisions of the High Court and LLA have provided some valuable clarity to the law.

The questions and the answers

The High Court Decision

The High Court ruled on a preliminary point of law: whether or not a special licence permitted a licensee to allow BYO alcohol on a bus, or whether an on licence was required for such consumption.

The Court, in its judgment, concluded that a special licence is not the appropriate licence to allow BYO liquor; this requires an on licence. The Court concluded that the focus of section 73 of the SOLA, which creates special licences, is the sale and supply of liquor. This could not be broadened to authorise the consumption of liquor that has not been sold or supplied.

Some of the party bus operators then applied to the DLA for special licences to sell and supply liquor. These licences were granted. But that was not the end of the matter. While the DLA had granted the licences, the applicants still appealed to the LLA against the conditions imposed by the DLA.

The LLA Decision

In the resultant appeal, the LLA ruled on two key questions. The first was whether a special licence can be granted to a party bus operator to cover the selling of alcohol on several kinds of unspecific bus trips over a future period.

The LLA held that the SOLA requires that for a special licence, an applicant must specifically identify an occasion, event or series of events and that unspecific events to take place sometime in the future cannot be the subject of a special licence.

In having regard to these particular details, the LLA held that the DLA must ensure the object of the Act (the reduction of liquor abuse) is achieved. Without specific information on the tours to be subject to the special licence, the DLA could not fulfil this duty. Interestingly, the DLA in the case sought to get around this issue by imposing a condition requiring the party bus operators to give notice before a tour commenced. The LLA held that the statutory requirement was, however, clear: the purpose of the Act must be able to be taken into account at the application stage, before the granting of the licence. Failure to do so cannot be cured through conditions.

It is an interesting question (but one that was not specifically ruled on) whether granting a licence for a party bus would ever meet the purpose of the SOLA. Given the LLA's comments that liquor reduction would not likely be achieved if each passenger received one drink every 20 minutes, a maximum of four drinks, and stopped at taverns on the way, it would appear a difficult hurdle for an operator to overcome. Those factors would seem to go to the very heart of many party bus operations.

The second question faced by the LLA was whether a DLA, when faced with an application for a licence, could state that an application for a different kind of licence would be more appropriate.

Again, the short answer provided by the LLA was no. If the DLA considers that an applicant has applied for the wrong kind of licence, it must still assess the application against the requirements of the licence that was applied for.

Implications for local authorities

We believe that DLAs should take the following principles out of the party bus litigations:

  • an on licence, not a special licence, is required for BYO liquor contexts;
  • there is a need to fully complete the application form, with specific information including an occasion, event or series of events;
  • a DLA should not comment on whether an application has been made for the correct form of licence, but rather assess it against the licence that has been applied for.