Taylor v Vandna Enterprises Limited and Patel and Patel [2002] NZLLA 660 (26 November 2002)

Last Updated: 31 January 2012

Decision No. PH 660/2002 –
PH 662/2002

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 the suspension of off-licence number 007/OFF/46/98 issued to VANDNA ENTERPRISES LIMITED in respect of premises situated at 170–172 Kepa Road, Orakei, Auckland known as “Orakei Price Cutter”

AND

IN THE MATTER of applications pursuant to s.135 of the Act for the suspension of General Manager’s Certificates numbers GM 4666/98 and GM 4668/98 issued to HANSA PATEL and DINESH PATEL

BETWEEN SCOTT LYALL TAYLOR
(Police Officer of Auckland)

Applicant

AND VANDNA ENTERPRISES LIMITED

First Respondent

AND HANSA PATEL

Second Respondent

AND DINESH PATEL

Third Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Mr J C Crookston

HEARING at AUCKLAND on 22 November 2002

APPEARANCES

Sergeant M J Lopdell – NZ Police – for applicant
Mr J H Wiles – for the first, second and third respondents – in opposition
Ms K M Bush – Auckland District Licensing Agency Inspector – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] On 20 February 2002, we issued a reserved decision LLA PH 61–63/2002 involving the above parties. In the decision, we refused three applications brought by the Police for the suspension of an off-licence issued to Vandna Enterprises Limited, and two manager's certificates issued to Hansa Patel and Dinesh Patel.

[2] The main reason for the refusal of the applications, was our rejection of the evidence of one of the Police witnesses. He was a fifteen-year old youth who had agreed to assist the Police by attempting to purchase liquor from the premises. If he was asked his age, he had been instructed to say that he was eighteen. It was this deceit which led to the Authority’s decision to reject the evidence.

[3] The Police lodged an appeal against the decision. In a judgment dated 25 July 2002 being AP22-PL02, O’Regan J ruled that the evidence was admissible. The case was remitted back to the Authority so that it could reconsider the applications on the basis of all the evidence. The High Court also indicated that the Authority could take what action it considered best in the light of the decision Karara Holdings Limited & Ors v District Licensing Inspector & Ors (High Court Christchurch AP14/02). That decision is to be determined by the Court of Appeal in due course.

The Factual Background

[4] The facts are no longer in dispute. At about 6.50 pm on Friday 28 September 2001, "Thomas" entered the Orakei Price Cutter. He took a bottle of white wine from a shelf. Behind the counter was Hansa Patel. Her husband Dinesh was close by. "Thomas" placed the bottle of wine on the counter and handed over his Eftpos card to Mrs Patel. Mr Patel immediately asked "Thomas" how old he was. "Thomas" replied that he was 18. The evidence is that Mr Patel is normally the person in the shop who checks the identification of persons who may be under age.

[5] As the exchange was happening, Mrs Patel removed the price tag from the bottle. She then swiped the Eftpos card. It was submitted that this was an automatic reaction by her. "Thomas’" Eftpos card was programmed in such a way that it would be declined. Accordingly, no actual sale could take place. "Thomas" then entered his pin number. The transaction was declined by the machine. When Mrs Patel announced what had happened, Mr Patel came from behind the counter and stood by "Thomas". He asked "Thomas" if he had any identification. "Thomas" said he did not. He was then handed back his card and he left the shop.

[6] When the Constable returned to the shop the Patels stated that the person they had spoken to was 18, but stated that they had not served him. They said they had never sold any wine. They added that they had asked for ID but "Thomas" did not have any.

Submissions from the Police and Counsel

[7] In his submissions following the High Court appeal, Sergeant M J Lopdell advised the Authority that the Police were no longer seeking any orders. He acknowledged that the appeal process would have put the respondents to considerable cost which in itself was a form of sanction. He said that the Police now accepted that an attempted breach of the Act, was insufficient to ground an application under s.132(3)(a) of the Act. He indicated that future controlled purchase operations would result in a sale and not an attempted sale being made. He asked the Authority to make a ruling as to whether the evidence in this case could have resulted in suspension orders. It was his view that Mr and Mrs Patel each appeared to be on duty, and therefore, equally culpable.

[8] Mr J H Wiles submitted that the activity complained of, was ‘de minimus’. He emphasises the lack of any sale. In the light of the legal process which had taken place, he submitted that a sufficient penalty had been suffered by his clients, assuming that one was warranted at all.

Further Decision of the Authority

[9] The application to suspend the licence was based on the following grounds:

(a) The licensed premises had been conducted in breach of the provisions of the Act being ‘s. 155 - Sale or supply to minors.’

(b) The licensed premises had been conducted in breach of the conditions of the licence being failure to ensure that the sale and supply of liquor to prohibited persons was observed.

(c) The conduct of the licensee was such as to show that he (or she) was not a suitable person to hold the licence.

[10] As we explained in our earlier decision, because no sale actually took place, the Police were unable to rely on the grounds specified in (a) and (b) above. This view has been accepted by the Police. Essentially therefore, we are required to look at the conduct of the licensee to see whether such conduct was sufficiently serious or irresponsible, to warrant a description or classification of unsuitability.

[11] The two applications to suspend the manager’s certificate were based on the ground contained in s.135 of the Act:

The manager had failed to conduct the licensed premises in a proper manner.

[12] The issue is whether the conduct of the managers (who were, after all, the "alter ego" of the company), had been shown to be improper?

[13] Does the removal of a price tag and the swiping of an Eftpos card in these circumstances amount to misconduct on the part of the licensee or the managers?

[14] We repeat that there is no statutory requirement placed on a licensee or manager to ask for identification. If an age document has been sighted, then the licensee or the manager will have a defence to the charge. It is a defensive mechanism which licensees are encouraged to use. Licensees and salespersons who do not make the effort to ask for proof of age, place the licence and the manager’s certificates at risk, if a sale then eventuates to an underage purchaser.

[15] The first communication between the manager (Mr Dinesh Patel) and the under-age purchaser ("Thomas") was to ask him his age. He did this as "Thomas" was placing the bottle of wine on the counter, and handing over his card. While "Thomas" was telling Mr Patel that he was eighteen, Mrs Patel was going through the motions of effecting the sale. We did not hear from Mrs Patel, and we understood that her grasp of English was even less adequate than her husband.

[16] In our view there were too many unanswered questions for us to be satisfied about Mrs Patel’s state of mind as she was preparing to make a sale. We do not know whether she heard or understood the conversation between "Thomas" and her husband. In this case if anyone was at fault, it was Mrs Patel. She processed the card leading to a sale. The fact that "Thomas" was asked to enter his PIN number into the machine prior to being asked for any identification showed a lack of judgement. Nevertheless, it was Mr Patel who ultimately made the decision whether or not to allow a sale. He had little time in which to refuse the sale prior to the card being swiped.

[17] We stated in our original decision, "Thomas’" youthful looks should have registered with the managers sufficiently, for them to make an enquiry before allowing the sale to proceed further. In this case the Patels allowed a further step to proceed in the selling process.

[18] We therefore take the view that the actions of the managers were such that they marginally failed to conduct the premises in a proper manner. Accordingly, it could be said that the conduct was such that the licensee could marginally be said to be an unsuitable entity to hold a licence.

[19] However, in enforcement proceedings under the Act there are two tests which the applicant must overcome before an order can be made.

[20] Sections 132(6) and 135(6) read:

If the Licensing Authority is satisfied that any of the grounds specified in subsection (3) of this section is established and that it is desirable to make an order under this section, it may, by order,........

[21] The applicant in this case failed to satisfy us that it was desirable to make an order for suspension. The lack of unequivocal proof that the Patels were about to make an illegal sale, and the lack of any proved breach of the law or the licence, would in our view make any suspension unreasonable. The object of the Act refers to a "reasonable" system of control over the sale of liquor. It is our view that any suspension of a licence or a manager’s certificate in these circumstances would be counter-productive to the establishment and maintenance of such a system.

[22] This view has also been reflected in the approach now adopted by the Police. Accordingly, the applications are again refused.

DATED at WELLINGTON this 26th day of November 2002

Judge E W Unwin Mr J C Crookston
Chairman Member

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