Lopdell v Pink Cardie Co. Limited - Salvage [2000] NZLLA 1280 (30 November 2000)

Last Updated: 29 January 2012

Decision No. PH 1280 – 1281/2000

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application pursuant to
s.132 of the Act for cancellation of on-licence number 007/ON/62/98 issued to PINK CARDIE CO. LIMITED in respect of premises situated at Unit A, 118 Ocean View Road, Oneroa, Waiheke Island, Auckland City, known as “Salvage”

BETWEEN MICHAEL JOHN LOPDELL (Police Officer of Auckland)

Applicant

AND PINK CARDIE CO. LIMITED

Respondent

AND

IN THE MATTER of an application by PINK CARDIE CO. LIMITED pursuant to s.18 of the Act for renewal of an on-licence in respect of the same premises

AND

IN THE MATTER of an application by DEE PAEPAE ISAACS pursuant to s.123 of the Act for the renewal of a General Manager’s Certificate

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge J P Gatley
Members: Mr R J S Munro
Mr J W Thompson

RESUMED HEARING at AUCKLAND on 8 and 9 November 2000

APPEARANCES

Sergeant M J Lopdell – NZ Police – applicant for cancellation and in opposition to renewals
Mr W J Perring – Auckland District Licensing Agency Inspector – in support of

application for cancellation and in opposition to renewals
Mr G S Whittle – Auckland District Licensing Agency Inspector – to assist
Ms M McCullough for Auckland City Council
Mr D G Scott as agent of Pink Cardie Co. Limited and Mr D P Isaacs

DECISION

1. On 9, 10 and 11 February 2000 at Auckland we heard submissions and evidence in respect of the following three applications:-
   

1.1 By the Police pursuant to s.132 of the Act for cancellation of on-licence 007/ON/62/98 issued to Pink Cardie Co. Limited in respect of premises situated at Unit A, 118 Ocean View Road, Oneroa, Waiheke Island, Auckland City, known as Salvage.

1.2 By Pink Cardie Co. Limited pursuant to s.18 of the Act for renewal of the above on-licence.

1.3 An application by Dee Paepae Isaacs pursuant to s.123 for renewal of his General Manager’s Certificate.

2. Following the hearings in February last we issued an Interim Decision (No. PH 175-177/2000) dated 17 February 2000 which included at pages 3 and 4:-
   

“On completion of evidence ... it was suggested by the Authority that what promised to be an extended hearing of the three applications could be curtailed, ... if the following course of action was taken.

The Authority would make an order pursuant to subs.(7) of s.132 adjourning the Police application for cancellation pending the licensee obtaining an unqualified certificate from the Auckland City Council, in terms of s.9(1)(e) of the Act, certifying that the proposed use of the premises as a restaurant meets requirements of the Resource Management Act 1991 and of the Building Code.

On receipt of such a certificate, and surrender of on-licence 007/ON/62/98, the Authority would simultaneously issue a replacement on-licence authorising the sale and supply of liquor, for consumption on the premises, to any person who is present on the premises for the purpose of dining, with trading hours limited to Monday to Sunday 7.00 am to 12.00 midnight. As with any other new licence the new restaurant style licence would issue for a period of 12 months.

At the same time Mr D P Isaacs’ General Manager’s Certificate would be renewed for a period of 12 months.

After an adjournment to allow Mr Ireland to take instructions from Mr Burbury and Mr Isaacs the above proposal was accepted by Mr Ireland on behalf of the licensee and manager. The proposal was also accepted by Sergeant Lopdell for the Police and Mr Perring as Inspector subject to the following undertaking being given on behalf of the licensee:-

(1) That immediate steps would be taken by Mr Burbury to reflect a change in the manner of operation of the premises from a bar/brasserie to that of a true licensed restaurant.

(2) That the closing time of 12.00 midnight would be observed from 11 February 2000.

(3) That it was accepted that the closing time of 12.00 midnight would be authorised on the basis that it would give the licensee the flexibility to trade until 12.00 midnight on Friday and Saturday evenings, and some other days throughout the year, but the licensee would in fact often close considerably earlier than 12.00 midnight.

The Authority can only make an order pursuant to subs.(7) of s.132 of the Act on being satisfied that any of the grounds in subs.(3) of s.132 have been established and that it is desirable that an order be made under the section.

Evidence adduced at the hearing satisfied the Authority on the balance of probabilities that the licensed premises known as ‘Salvage’ have traded in breach of condition (b) of the licence in that liquor has been sold at ‘Salvage’ at times when the premises were not being operated as a restaurant.

A final decision on these matters will issue following receipt of:-

1. The section 9(1)(e) certificate referred to above.

2. Written confirmation on behalf of the licence of the undertakings enumerated (1) to (3) above.”

3. Following the February hearing Mr George Ireland, as solicitor for the licensee, advised our Secretary that the undertakings referred to at 2. above would not be provided pending a “second opinion” being obtained from Mr Andrew Green, a partner in Brookfields, Barristers and Solicitors, Auckland. By letter to our Secretary dated 18 May 2000 Mr Green confirmed the undertakings enumerated as (1), (2) and (3) on page 3 of our Interim Decision but, on the licensee’s behalf, declined to surrender the existing on-licence for Salvage pending the issue by the Authority of a replacement licence. In his letter Mr Green queried the consequences of an amendment to the wording of s.7 of the Act effective from 1 April 2000.
   
4. By a further letter to our Secretary dated 7 June 2000 Mr Green advised that if the Authority was minded to issue a replacement licence for Salvage including a condition pursuant to s.14(h) of the Act restricting the types of persons to whom liquor may be sold or supplied to persons present for the purpose of dining, the licensee “would not wish to surrender its existing licence and would prefer to have the s.132 application set down for a resumed hearing.”
   
5. Prior to the resumed hearing our Secretary was advised that Mr W S Meyer, the sole objector to renewal of the Salvage on-licence, had withdrawn his “opposition”. By letter dated 5 September 2000 Sergeant Lopdell advised our Secretary that withdrawal of the only objection to renewal did “not alter the Police stance.”
   
6. A notice then issued for the hearing of the three applications to be resumed on 8 and 9 November 2000.
   

Resumed Hearing on 8 and 9 November 2000

7. Mr D G Scott of Liquor Licensing Consultants Limited informed the Authority that he had been instructed at short notice to appear as agent of the licensee, as Mr Hamish Burbury, the sole director and shareholder in Pink Cardie Co. Limited, could no longer afford to be represented by his former counsel, Mr G Ireland or by Mr A Green.
   
8. A witness called by Mr Scott produced a new s.9(1)(e) certificate dated 7 March 2000, signed by Michelle Hewitt, “Senior Planner – Hauraki Gulf Islands” certifying that the use of “Salvage Café” as a restaurant is a “permitted use” and that “the proposed use of the premises meets the requirements of the Resource Management Act 1991.”
   
9. In the course of the hearing the Authority emphasised to the parties that the primary concern and focus of the Authority is control over the sale and supply of liquor with the aim of contributing to the reduction of liquor abuse; rather than revisiting all matters canvassed at the February hearing we wanted to hear evidence as to whether:-
   

9.1 There had been any incidents of sales to minors or intoxicated persons at Salvage between February and November 2000.

9.2 Mr Burbury had complied with the undertakings given on his behalf at the February hearing to operate Salvage as a restaurant – i.e. premises in which the sale of food, rather than the sale of liquor, was the predominant business.

Police Evidence

10. Two witnesses were called by Sergeant Lopdell to give evidence as to the manner in which Salvage has been operated since our Interim Decision issued.
    
11. Constable S J Salton, a Police constable stationed at the Liquor Licensing Unit, Auckland Central, gave evidence of an “off duty” visit to Salvage with a group of friends on Easter Sunday (23 April 2000) last when a jazz festival was taking place on Waiheke Island. Upon approaching the bar the group was told that they could only purchase alcohol after ordering a meal. The witness continued:-
    

“Upon ordering two plates of wedges and receiving a table disc, we were able to purchase four drinks.

While eating the wedges we requested more drinks from the waiter. He informed us that what we had purchased to dine on was insufficient. He would not supply us any more drinks unless we made a more substantial meal purchase.”

12. Constable Salton described a further visit to Salvage on Friday 28 July last when he was directed to make enquiries into the trading practices of Salvage and specifically, as to whether the premises were trading as a tavern rather than a restaurant. He entered the restaurant at approximately 6.55 pm with a friend. The witness said:-
    

“There were six patrons present. Three groups of two. All drinking and none dining. We both ordered a drink and then sat down at a table. I stayed in the restaurant for a period of approximately 2½ hrs, spending approximately $60.00 on alcohol.

During that time there were a total of 19 patrons including myself. Of those, only 10 had something to eat while drinking.

At no time during my period in the restaurant, were either my friend or I given a menu, or asked if we wanted something to eat.

We left Salvage at approximately 9.25 pm and went across the road to the restaurant Vino Vino. Upon entering the restaurant, we were greeted at the door by the waiter and asked if we had come for a meal.

After having a meal we left and went back across the road to Salvage. There appeared to be no patrons present.

We then went to another licensed premise.”

13. Karyn Mira Bush, a Licensing Inspector employed by Auckland City Council, gave evidence of being directed by her “team leader” to visit Salvage on Friday 13 October 2000 to determine how they were trading. Ms Bush was not appointed as an Inspector until 16 October last.
    
14. The witness told us of arriving at Salvage at around 5.50 pm with a friend. They counted 40-50 people seated and standing outside the restaurant with a further 40 seated and standing inside. There were children running around inside and outside. Ms Bush said the premises did not look like a restaurant to her when she entered; she had expected to be seated when she entered. A “happy hour” was operating enabling them to purchase a $21 bottle of wine for only $12.
    
15. Ms Bush and her friend were unable to obtain a dinner menu on request. The witness continued:-
    

“We seated ourselves on the outside area near the road side of the premises. As soon as we had found seats I went straight back to the bar and asked the same barman what hot food was available. I was hungry. I mentioned hot french fries and wedges. I was told that because they were so busy that even if they could take my order they would be unable to find me. He then directed me to the types of food they had in cabinets adjacent to the till. These were the clear faced cabinets you see in coffee bars and cafeterias.

There were approximately 10 pre-packed sandwiches, a plate of paninis, two types of bacon and egg slices, one filled roll and a small selection of sausage rolls and savouries. There was a small selection of sweets such as a slice of carrot cake and other biscuits. The cabinets were less than half full.

I left the bar and walked back to the table. I told my friend that there was no hot food. I was still astounded by this. We decided to order a panini as we were aware that this would have to be heated in the kitchen. That would let us know if anyone was working in the kitchen area. My friend ordered a panini at the bar. She paid and received a table number. About 5 minutes later she received her panini.

After we finished the wine one of our group went to the bar and purchased another bottle. She did not receive any glasses and no mention was made about having a meal. While she was at the bar, she saw someone come out of the kitchen with a bowl of french fries. She said that she wanted some of those as well. She paid for those and a bowl was delivered to the table relatively quickly. This was at 6.20 pm. We were aware that happy hour finished at 6.30 pm.

We remained on the premises until about 9.30 pm. We were the last people to leave. The owner, Hamish, was seated on the wall with a group of what appeared to be friends. He had been on the premises all night. He was pointed out to me by my friend, who lives on the island. The staff were cleaning up when we left. Hamish was still there with his friends.

...

I was on the premises from 5.50 pm to 9.30 pm. During that time I saw approximately ten plates of food over and above what my group had served on the premises. At its peak there were approximately 150 persons on the premises. These premises traded like a tavern. I had more problems trying to purchase hot food in these premises than I have had in any tavern in the City. I was persistent in trying to purchase food as I am one of those persons who need to have something to eat if I am having a drink.”

Licensee’s Evidence

16. Mr Hamish Burbury gave evidence as the effectual licensee (on lifting the corporate veil). He told us that he holds a General Manager’s Certificate. Following the hearing in February he was very conscious of the fact that Salvage had to trade as a restaurant. Turning away casual drinking trade had resulted in a dramatic decrease in profitability but he had done so in the knowledge that his company’s licence would otherwise be at risk.
    
17. Mr Burbury produced a number of menus demonstrating the variety of food available at Salvage at different times of the day. In relation to the visit of Constable Salton on 28 July last, Mr Burbury produced a statement of takings for the day showing revenue from the sale of food at 78% compared with alcohol 22%. It was Mr Burbury’s evidence that Constable Salton and his friend were the only two patrons who did not dine that evening.
    
18. In response to the evidence of Ms Bush, Mr Burbury pointed out that Friday 13 October was Halloween night; the witness produced a flyer that had been available on the ferries to Waiheke Island put out by a Julie Clark without Mr Burbury’s knowledge or input. The flyer included:-
    

“THE PROGRAMME

------- The Nightbirds Street Parade

5.30 pm Happy Hour at Salvage
6.30 pm Follow the Ak City Pipe Band up the main street to
7.15 pm a Wizard for Waiheke Contest
[Judges: Bruce Bisset and Ms Helen Aldridge]
and ANU GRACE with AURAL GRAVITY

onward

8.15 pm Catching the party bus to the
HEARTY ARTY PARTY at

ONETANGI BEACH HOTEL”

19. Mr Burbury described the period from 5.30 pm to around 7.15 pm that evening as “unorganised chaos”. He said that 150 people described by Ms Bush, were not so much in Salvage as in Pendragon Mall. Fifty were from the Auckland Youth Band. The flyer and an advertisement in “Gulf News” invited people to come to Salvage on Halloween Night; having stopped at Salvage before the parade people were reluctant to move on.
    
20. Mr Burbury produced weekly sales figures covering the period from Monday 24 April to Monday 16 October 2000 detailing percentages derived from the sale of liquor averaging between 10.9 and 21.24% of total sales. There were no weeks in which the sale of liquor was the predominant part of the business. The witness stressed that there had not been a single complaint from local Police regarding the operation of Salvage in the last nine months.
    
21. Numerous residents of Waiheke Island attended the hearing in support of Salvage as a licensed restaurant. Some who intended giving evidence had to leave the hearing before they were called. Letters of support were produced from patrons who had enjoyed celebrating Halloween at Salvage. They confirmed ordering drinks and food.
    
22. One of the witnesses in support of Salvage was Mr J M Davenport who had represented the Gulf Islands Ward on the Auckland City Council from 1995 to 1998. He said that if Salvage was to lose its liquor licence the effect on Waiheke Island would be severe. “The restaurant is part of the heart of the main tourist area of Waiheke Island, and is a daily focus of locals and visitors.” As a former “Licensing Commissioner” (with the Auckland District Licensing Agency) he had seen no evidence that Salvage was improperly run.
    

AUTHORITY’S CONCLUSION AND REASONS

23. We are satisfied on the evidence adduced at the hearing that since our Interim Decision of 17 February 2000 Mr Burbury has taken active steps to operate Salvage as a restaurant in accordance with the undertaking given on his behalf. There is no persuasive evidence before us that since Mr Burbury was given a clear warning that his operation of the premises was unsatisfactory, that the sale of liquor from Salvage has been the predominant business. We have the isolated evidence of Constable Salton of he and a friend being able to have a drink without dining on the evening of Friday 28 July last. Against that, on Easter Sunday being refused further drinks because of the limited quantity of food that they had purchased.
    
24. The evidence of Ms Bush of Salvage not operating in the manner of a true restaurant on the evening of 13 October last can be largely discounted by the fact that it was Halloween. We can accept that the operation of the restaurant on the evening of a street parade in Waiheke Island may well have been different from that of a normal evening’s trading. We accept Mr Burbury’s evidence that he was not involved in publicity arranged by Julie Clark to attract people to Salvage at the start of the parade, and that once there people were reluctant to move on.
    

Additional Matters Raised by the Applications

25. One of the grounds of the Police application for cancellation was that the licensed premises had been conducted in breach of s.151 of the Act in that liquor had been “kept for sale on unlicensed premises”. Evidence was given at the February hearing of liquor for Salvage having been stored at Units D and G at 118 Ocean View Road, Oneroa, Waiheke Island, and then transported from storage to the restaurant. Sergeant Lopdell suggested that the licensee should make application pursuant to Regulation 7 of the Sale of Liquor Regulations 1990 to include the storage area in the premises described in the Salvage on-licence as licensed premises.
    
26. Mr Ireland, as counsel for Pink Cardie Co. Limited at the February hearing, submitted that s.151 had not been breached. We agree. There must be many licensed premises who store liquor “off the premises” for reasons of security and periodically replenish stocks held on the licensed premises. The offence in s.151 is by a person who “not being the holder of a licence, sells or exposes or keeps for sale any liquor”.
    
27. Putting to one side the fact that Pink Cardie Co. Limited is a licensee there is no evidence before us that Mr Burbury has sold, or exposed liquor for sale, from Unit D or Unit G at 118 Ocean View Road, Oneroa. Accordingly we do not find the ground in the Police application of a breach of s.151 of the Act to have been established. Even if a breach of s.152 had been alleged – ie allowing unlicensed premises to be used for sale of liquor – there was still no evidence of

liquor being sold or exposed for sale on or from Units D and G of 118 Ocean View Road.

Remaining Grounds of the Police Application

28. Five of the remaining grounds of the Police application were established at the February hearing to our satisfaction relating to events prior to that hearing, being breaches of ss.165, 16006, 168 and 171 of the Act and breaches of conditions of the licence. However, after having regard to the manner in which the sale and supply of liquor has been conducted from Salvage since February, we are not persuaded that it is desirable that we should make any order pursuant to subsection (6) of s.132 of the Act in response to the Police application.
    
29. The final ground of the Police application, i.e. that the conduct of Pink Cardie Co. Limited, or in its alter ego Mr Burbury, has been such as to show that he is not a suitable person to hold a licence has not been established on the evidence adduced at both hearings.
    

Format of any Replacement Licence to Issue

30. In correspondence to our Secretary between the Interim Decision and the resumed hearing, and at the hearings, some of the parties raised the following matters:-
    

30.1 Whether any replacement licence to issue should include an authorisation clause following the wording of s.7 of the Act, as amended with effect from 1 April 2000.

30.2 Whether the licence should be worded so as to preclude Salvage operating as a tavern by –

30.2.1 Including a condition restricting trading hours to “such days and during such hours as the premises are being operated as a restaurant”, or by

30.2.2 The Authority relying on s.14(h) of the Act to include a condition on any new licence restricting “the persons or types of persons to whom liquor may be sold or supplied” to those on the premises for the purpose of dining.

31. If regard is had to the decision of Smellie J in Police v Peng [1992] NZAR 471 a question arises as to whether the Authority or an Agency can alter the authorisation clause, as distinct from the conditions, of a licence on renewal. In our view the decision in Peng can be distinguished on the facts before us in respect of Salvage in that since the licence was issued Parliament has passed amending legislation changing the wording of the authorisation clause of on-licences to:-
    

“7. ON-LICENCES--

An on-licence authorises the holder of the licence--

(a) To sell and supply liquor, to any person present on the premises or conveyance described in the licence, for consumption on the premises or conveyance; and

(b) To allow the consumption of liquor on the premises or conveyance described in the licence.”

32. Unopposed renewals are processed by District Licensing Agencies. We understand that on renewal of on-licences most, if not all, District Licensing Agencies are substituting the new wording in the authorisation clause of replacement on-licences issuing on renewal. Such action by Agencies would accord with the Authority’s approach to the change in wording of s.7 of the Act.
    
33. Where, as with Salvage, a s.9(1)(e) certificate only certifies use of on-licence premises as a restaurant as complying with the Resource Management Act 1991, our preference is for any restriction as to use on the face of the licence being by way of a restriction on trading hours, rather than on the type of person to whom liquor may be sold in terms of s.14(5)(h) of the Act. Such an approach accords with the Authority’s s.96 Statement to Agencies dated 24 October 2000.
    
34. In our view it would be unrealistic in the year 2000 to impose a condition on on-licence premises restricting the sale of liquor to diners only. As was mentioned by witnesses at the hearing, throughout New Zealand it is possible to walk into a licensed restaurant, consume liquor, then change one’s mind about dining and leave the premises. In addition, many licensed restaurants derive a proportion of their income from the sale of liquor to casual drinkers. To pretend otherwise is to turn a blind eye to reality. The more important point is that premises restricted by a s.9(1)(e) certificate to operating as a restaurant may not trade in such a way that the sale of liquor becomes the predominant part of the business.
    
35. If District Plans limit the manner in which premises the subject of an on-licence can operate then enforcement under the Resource Management Act 1991 of any such limitation is a matter for the Local Authority, subject always to the rider that restaurants trading as a tavern, contrary to licence conditions, can give rise to an issue as to suitability of the licensee to hold a licence. Such trading can also result in an application for renewal being opposed or in an application by an Inspector or the Police, pursuant to s.132 of the Act for suspension or cancellation of a licence.
    

Police Applicant and the Reporting Inspector

36. In our Interim Decision dated 17 February 2000 we commented at page 2 on the intense animosity between the objector, represented at the February hearing, and the licensee and staff of Salvage. Continuation of these proceedings have given rise to articles in the “Gulf News” that fall well short of “objective reporting”, complaints to the Police Complaints Authority regarding the activities of the Police, and complaints to Auckland City Council concerning the activities of Licensing Inspectors.
    
37. Having regard to that background the Authority wishes to place on record its view that actions carried out by Sergeant M J Lopdell on behalf of the Police, and by Mr W J Perring as the original reporting Inspector, have always been entirely proper and professional.
    

Cancellation of On-Licence

38. For reasons set out above, the application by the Police pursuant to s.132 of the Act for cancellation of on-licence Number 007/ON/62/98 issued to Pink Cardie Co. Limited is refused.
    

Renewal

39. We are satisfied as to the matters to which we must have regard as set out in s.22 of the Act. We renew on-licence 007/ON/62/98, on different terms and conditions, until 30 April 2002, that being three years from the first anniversary of the licence and authorise the issue of a replacement licence and a renewal certificate.
    

Renewal of a General Manager’s Certificate

40. Opposition to renewal of the General Manager’s Certificate issued to Dee Paepae Isaacs has been withdrawn. General Manager’s Certificate Number GM 3483/98 is renewed until 21 September 2002, that being three years from the first anniversary of the Certificate.
    

DATED at WELLINGTON this 30th day of November 2000

_____________________________

Judge J P Gatley

Chairman

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