McIlraith v Le La Oso Limited [2002] NZLLA 713 (20 December 2002)

Last Updated: 31 December 2011

Decision No. PH 713/2002 –
PH 715/2002

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of two applications pursuant to s.132 of the Act for suspension of on-licence number 008/ON/8/2000 issued to LE LA OSO LIMITED in respect of premises situated at 128 Bairds Road, Otara, Manukau City, known as “Tradewinds Tavern”

AND

IN THE MATTER of two applications pursuant to s.135 of the Act for suspension of General Manager’s Certificate number GM 0025/2000 issued to TAUTAI HORST CARRUTHERS

AND

IN THE MATTER of an application pursuant to s.135 of the Act for suspension of General Manager’s Certificate number GM 1917/99 issued to JOSEPH PAULI

BETWEEN MICHAEL JOHN DARCY
McILRAITH
(Police Officer of Manukau)

Applicant

AND LE LA OSO LIMITED

First Respondent

AND TAUTAI HORST CARRUTHERS

Second Respondent

AND JOSEPH PAULI

Third Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at Auckland on 11 December 2002

APPEARANCES

Sergeant G J D McIlraith – New Zealand Police – applicant
Mr B D Ravelich – for the first and second respondents – in opposition
Mr A Wilkinson – Manukau District Licensing Agency Inspector – to assist
No appearance by or on behalf of the third respondent

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are five applications before the Authority for determination. All applications have been brought by Sergeant Michael John Darcy McIlraith. The first two applications are for the suspension of an on-licence, issued in respect of a tavern situated at 128 Bairds Road, Otara known as “Tradewinds Tavern”. The two applications cover different periods of time, and are based on different facts and allegations. The licence is held by Le La Oso Limited.

[2] The next two applications are for the suspension of the manager’s certificate issued to Tautai Horst Carruthers. Mr Carruthers was the duty manager in charge of "Tradewinds Tavern" when five intoxicated patrons were found on the premises. He was also the duty manager when unlawful sales were made to patrons. The two applications cover different periods of time, and are based on different facts and allegations.

[3] The fifth application is for the suspension of the manager’s certificate issued to Joseph Pauli. Mr Pauli was the duty manager in charge of "Tradewinds Tavern" when two intoxicated patrons were found on the premises.

[4] The two grounds for the first application to suspend the on-licence are:

"(a) That the licensed premises have been conducted in breach of s.168(1)(a) of the Act, (Allowing intoxicated person to be, or to remain, on licensed premises).

(b) That the licensed premises have been conducted in breach of a condition of the licence. The condition alleged to have been breached is “that the licensee must ensure that the provisions of the Act relating to the sale and supply to prohibited persons are observed.”

[5] There are two different grounds for the second application to suspend the on-licence. They are:

"(a) That the licensed premises have been conducted in breach of s.165(1) of the Act, (Unauthorised sale or supply).

(b) That the licensed premises have been conducted in breach of a condition of the licence. The condition alleged to have been breached is the sale of liquor for consumption on the premises."

[6] The ground for the two applications to suspend Mr Carruthers’ manager’s certificate is:

"That the manager has failed to conduct the licensed premises in a proper manner. In particular it is alleged that he allowed intoxicated persons to be or remain on licensed premises, and that he allowed the sale or supply of liquor to persons at times when the licensee was not authorised to sell or supply to those persons."

[7] The ground for the fifth application to suspend Mr Pauli’s manager’s certificate is:

"That the manager has failed to conduct the licensed premises in a proper manner. In particular it is alleged that he allowed intoxicated persons to be or remain on licensed premises."

[8] The respondents have virtually conceded the facts which gave rise to the suspension applications. They contend that there are some extenuating and mitigating circumstances. Mr B D Ravelich submitted that the first and second respondents has acted responsibly once the problems of intoxication had been brought to their attention. Mr Ravelich argued that the applications should be adjourned under ss.132(7) and 135(7) of the Act. Alternatively, any suspension orders should be brief.

The Factual Background

[9] Le La Oso Limited is a private company owned and operated by Mr Tau Tai Horst Carruthers and his wife Koreti Carruthers. Mr Carruthers came to New Zealand from Samoa in 1998. The company has held the licence of the "Tradewinds Tavern" for about three years. As he pointed out, he used to run a nightclub in Samoa where, the liquor licensing legislation and controls are relatively "free and easy".

[10] "Tradewinds Tavern" caters for the community in Otara. The premises are reasonably substantial and can accommodate up to approximately 300 patrons. Apart from the bar, there is a dance floor and stage, and a large seating or lounge area, with tables and chairs. There are also pool tables and "pokie" machines. The tavern has trading hours to 3.00 am.

[11] Sergeant M J D McIlraith was the officer-in-charge of the Manukau District Team Policing Unit from October 2001. When he took over the Unit, he established standard operating procedures for the Unit. Each of his eight constables on the Unit was given a geographical area of responsibility. It was the constable’s task to liase with all licensees, managers and staff in his or her area of responsibility. Any issues which arose from liquor licensing visits, would be brought to the duty manager’s attention.

[12] The Authority heard from five Police witnesses. All witnesses were experienced in assessing levels of intoxication. Each constable explained the signs of intoxication upon which the constable based his opinion of intoxication. Between 13 January 2002 and 27 July 2002, the Team Policing Unit located seven intoxicated persons inside the "Tradewinds Tavern".

[13] Details of the seven incidents were as follows:

(a) 13 January 2002. 1.57 am. Unit entered "Tradewinds Tavern". Constable B L Ostler located heavily intoxicated patron, who admitted to drinking beer in premises. The duty manager was Mr T H Carruthers who agreed to trespass the patron.

(b) 16 February 2002. 1.20am. Unit entered "Tradewinds Tavern". Constable M C Peebles located a patron falling asleep. He was unable to stand without swaying, his speech was slurred, and he had a strong smell of alcohol on his breath. The constable believed him to be heavily intoxicated. Mr Carruthers was on duty. He trespassed the patron.

(c) 6 April 2002. 2.05 am. Unit entered "Tradewinds Tavern". Constable S J Sherborne located intoxicated patron who was unsteady on his feet, whose eyes were glazed, and whose speech was slurred. The level of intoxication was confirmed by Acting Sergeant M Hassall, and the duty manager, Mr J Pauli. Mr Pauli stated that he was sorry that he had not seen him. Patron trespassed.

(d) 6 April 2002. 2.06 am. Unit entered "Tradewinds Tavern". Constable A W J Eltham located intoxicated patron. He was leaning against a pool table. He was unsteady on his feet, his eyes were bloodshot and his breath smelt strongly of alcohol. He was unable to concentrate when spoken to. Acting Sergeant Hassall confirmed the level of intoxication as did Mr Pauli, the duty manager. Mr Pauli apologised and trespassed the patron.

(e) 27 July 2002. 2.05 am. Unit entered "Tradewinds Tavern". Constable B L Ostler located a moderately intoxicated patron who was asleep. When he was woken, he was unsteady on his feet, his eyes were glazed and his speech was slurred. He said he had been on the premises for three or four hours drinking beer. Sergeant M J D McIlraith confirmed the level of intoxication as did the duty manager, Mr Carruthers. The patron was trespassed.

(f) 27 July 2002. 2.05 am. Unit entered "Tradewinds Tavern". Constable D Ealson located an extremely intoxicated patron who was falling asleep at a table and swayed when standing. He was unsteady on his feet, his breath smelt moderately of alcohol, and he slurred his speech. He admitted being on the premises for three or four hours. Sergeant McIlraith confirmed his level of intoxication, as did the duty manager, Mr Carruthers. He was duly trespassed.

(g) 27 July 2002. 2.20 am. Constable M C Peebles noticed a patron who was displaying signs of intoxication being refused entry. When he returned five minutes later, he found the patron inside the "Tradewinds Tavern". The patron was half asleep leaning against a pool table. He was unable to stand without swaying, his speech was slurred and nonsensical, and he had a moderate smell of alcohol on his breath. He was judged to be extremely intoxicated. The level of intoxication was confirmed by Sergeant McIlraith and the duty manager Mr Carruthers. The patron was trespassed.

[14] As a result of these seven incidents, the first applications for suspension of the on-licence, and the managers’ certificates were filed in August 2002.

[15] However, Constable Peebles subsequently carried out further observations of the tavern entranceway for about fifteen minutes at about 3.00 am on 25 August 2002. During that time he saw a large number of patrons leaving the premises with alcohol. None of the patrons appeared to be carrying sealed or closed bottles. In most cases the bottles were partially consumed. Several patrons were drinking from bottles as they left. The constable was able to make notes in his notebook about 34 persons who left the premises carrying alcohol.

[16] On 13 October 2002, Constable Peebles made a second observation of the entranceway between 2.51 am and 3.08 am. Once again he observed a total of 33 people carrying alcohol as they left the premises. There were others but he was unable to write down the details. None of the patrons appeared to be carrying sealed or closed bottles. In most cases the bottles were partially consumed. On several occasions, he saw patrons drinking from the bottles as they left the premises.

[17] It was as a consequence of these further observations that the additional two applications for suspension were filed against the licence holding company, and Mr Carruthers in November 2002.

[18] Mr T T H Carruthers was the only witness called on behalf of the first and second respondents. He said that the venture into the liquor industry had been a learning curve. He believed that Mr J Pauli had slackened off when he had decided to leave his employment at the tavern. On the other hand, the majority of the incidents happened when he was in charge. He accepted responsibility for the presence of intoxicated patrons. He said that since the incidents he had taken a more "hands on" involvement with the management of the premises.

[19] Mr Carruthers stated that patrons used to bring alcohol to the tavern after drinking in the car park. Management made them leave the bottles at the entrance way. He said that it was possible that they may have picked their bottles up again as they were leaving. It was no longer company policy to allow patrons to leave their own alcohol at the door.

[20] The company has an off-sales licence with trading hours to 3.00 am. It is not clear whether the liquor which was being taken outside had been purchased over the bar pursuant to the on-licence or the off-licence. It also needs to be recorded that there is no proof as to who the manager on duty was on the nights in question, although the suspension applications alleged that Mr Carruthers had been on duty on one of the occasions.

[21] Mr Carruthers confirmed that he had arranged a meeting with the Police and the District Licensing Agency. He had endeavoured to adopt all their recommendations. He said that signage had been improved, and he had joined HANZ. He gave evidence that the company had employed fresh security staff as he felt that the previous staff had not exercised enough control. He stated that since 27 July last, there had been no further incidents and he was confident that the problems had been addressed.

[22] Mr B D Ravelich referred the Authority to the High Court ruling in Karara Holdings Limited and others v The District Licensing Agency Inspector and another High Court, Christchurch (AP 14/02). 8 July 2002. The case is currently under appeal to the Court of Appeal. If he was suggesting that there should have firstly been prosecutions in the District Court, we point out that s.168(1) of the Act is not a qualifying offence under s.132A. Furthermore, there are no offences created for breaching conditions of the licence. Finally, we do not see these breaches as "one-off". As submitted by the Sergeant, a serious pattern of offending has emerged.

Decision

[23] In assessing the weight of the evidence, we are conscious that the allegations must be proved on the balance of probabilities. On the other hand, the evidence given by the Police witnesses was not challenged in any way. Quite clearly there were seven breaches of s.168(1)(a) of the Act. That section reads:

Every person commits an offence and is liable to a fine not exceeding $4,000 who, being the licensee or a manager of any licensed premises,-

(a) Allows any intoxicated person to be or to remain on the licensed premises ...

[24] On the other hand, the allegations that the licensed premises have been conducted in breach of condition (f) of the licence, relies on inferences being drawn. The condition in the licence reads:

The licensee shall ensure that the provisions of the Act relating to the sale and supply of liquor to prohibited persons are observed ... .

[25] In this case, there is no specific evidence of any sale or supply to intoxicated persons. Although some of the patrons made statements about being in the premises for up to four hours, there would need to be some stronger evidence presented, before we could draw the inference, that the seven persons in question had probably been served when the bar person or manager knew, or should have known, that each person was intoxicated.

[26] The issue becomes one of trying to establish the stage at which a patron clearly shows signs of intoxication. If he or she is served at that time, then the licence condition is breached. In these circumstances, we cannot be satisfied that the second ground of the first two applications, has been established.

[27] We also have difficulty with the later applications. These were filed as a consequence of the observations made of patrons leaving the premises with partially consumed bottles, drinking as they were leaving. We accept that the on-licence authorises the company to sell and supply liquor for consumption on the premises. However, such authorisation is not one of the conditions of the licence. Although it may seem illogical, allowing consumption off the premises is a breach of the licence, but it is not a breach of a condition of the licence. It could well be improper conduct by the licensee, but that is not relied upon by the Police in the applications.

[28] Furthermore, the Police have alleged a breach of s.165 of the Act. That section reads:

Every person commits an offence and is liable to the penalty set out in subsection (2) who, being the licensee or a manager of any licensed premises, sells or supplies liquor to any person at any time when the licensee is not authorised by the licence to sell to that person.

[29] The fact that patrons were seen leaving the premises after 3.00 am does not prove that they purchased the liquor after 3.00 am. Furthermore, nor does it prove whether the purchases were made under the on or off-licence. As mentioned above, there is no proof that Mr Carruthers was on duty on either of the nights.

[30] The duty manager’s responsibility is derived from s.115(1) of the Act. If there are breaches of the Act then it is the manager who carries the responsibility. In this case Mr Carruthers as a director of the licence owning company, was also acting as a licensee. Although Mr Pauli was less culpable than Mr Carruthers, we intend to treat them both in the same way. Mr Carruthers took the trouble to attend the hearing, to acknowledge his responsibility, and confirm that he had taken steps to improve his performance. Section 115(1) of the Act reads:

At all times when liquor is being sold or supplied to the public on any licensed premises a manager must be on duty and responsible for compliance with this Act and the conditions of the licence.

[31] In terms of ss.132(6) and 135(6) of the Act, we are satisfied that the licensed premises have been conducted in breach of s.168 of the Act. There were a total of seven breaches. We acknowledge that the company and Mr Carruthers have been subjected to a major learning curve. We were impressed with Mr Carruthers’ determination to ensure that similar incidents are not repeated.

[32] The question in this case is whether it is desirable that the licence and/or the certificates be suspended. We believe that a period of suspension is appropriate. We fully endorse Sergeant McIlraith’s submissions on this point. We are governed by s.4(2) of the Act. Our duty is to exercise our discretion in a manner that is most likely to promote the object of the Act. There can be few more graphic forms of liquor abuse, than intoxication.

[33] For the reasons given, we make the following orders:

(a) In respect of the application dated 9 August 2002 on-licence 008/ON/8/2000 issued to Le La Oso Limited is hereby suspended for 96 hours from 6.00 am on Wednesday 22 January 2003 to 6.00 am on Sunday 26 January 2003.

(b) In respect of the application dated 25 November 2002, the application is refused.

(c) In respect of the application to suspend the manager’s certificate dated 9 August 2002, General Manager’s Certificate GM 0025/2000 issued to Tautai Horst Carruthers is hereby suspended for two weeks from 6.00 am on Wednesday 22 January 2003.

(d) In respect of the application to suspend the manager’s certificate dated 25 November 2002, the application is refused.

(e) General Manager’s Certificate GM 1917/99 issued to Joseph Pauli is hereby suspended for two weeks from 6.00 am on Wednesday 22 January 2003.

DATED at WELLINGTON this 20th day of December 2002

Judge E W Unwin Mr J C Crookston
Chairman Member

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