Lopdell v Aussie Pub Company Limited and Peters [2003] NZLLA 194 (1 April 2003)

New Zealand Liquor Licensing Authority

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Lopdell v Aussie Pub Company Limited and Peters [2003] NZLLA 194 (1 April 2003)

Last Updated: 27 February 2010

Decision No. PH 194/2003 –
PH 195/2003

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 suspension of on-licence number 007/ON/128/2001 issued to AUSSIE PUB COMPANY LIMITED in respect of premises situated at Three Kings Plaza, 540 Mt Albert Road, Mt Albert, Auckland, known as "The Thirsty Whale"

AND

IN THE MATTER of an application pursuant to s.135 of the Act for suspension of General Manager's Certificate number GM 2882/97 issued to SEAN WARREN PETERS

BETWEEN MICHAEL JOHN LOPDELL

(Police Officer of Auckland)

Applicant

AND AUSSIE PUB COMPANY LIMITED

First Respondent

AND SEAN WARREN PETERS

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 21 November 2002

Final submissions received 28 February 2003

APPEARANCES

Senior Sergeant M J Lopdell – New Zealand Police – applicant
Mr A G Sherriff – for first and second respondents
Mr D W Sara – Auckland District Licensing Agency Inspector – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] Before the Authority are two applications. Both applications have been brought by the Police. The first application is made pursuant to s.132 of the Act, and is for the suspension of an on-licence in respect of the premises known as "The Thirsty Whale”.

[2] The second application is made pursuant to s.135 of the Act, and is for the suspension of a General Manager's Certificate issued to Sean Warren Peters.

[3] The grounds for the application to suspend the on-licence are:

(a) That the licence has been conducted in breach of ss.165 and 171 of the Act. (Unauthorised sale and supply, and allowing persons on unlicensed premises outside licensing hours)

(b) That the licence has been conducted in breach of the following condition of the licence:

(b) No liquor is to be sold or supplied on Good Friday, Easter Sunday, Christmas Day or before 1.00 pm on Anzac Day to any person other than persons who are present for the purpose of dining.

[4] The allegations in support of those grounds are the same in each case.

In short it is alleged that the company traded in the late afternoon of Easter Sunday 1 April 2002, contrary to the provisions of the Act and the licence.

[5] The ground for the application to suspend the General Manager’s Certificate issued to Sean Warren Peters is:

“That the manager has failed to conduct the licensed premises in a proper manner.”

[6] The allegation in support of the application for suspension of the manager’s certificate is the same as for the application in respect of the on-licence. In respect of Mr Peters, the argument is that he was the duty manager at the time the premises traded unlawfully.

The Allegations

[7] On Easter Sunday, 1 April 2002, two Police officers carried out licensing checks on various on and off-licensed premises in Auckland City. "The Thirsty Whale" was checked because of an advertisement in the New Zealand Herald indicating that a jazz band would be playing on that Easter Sunday afternoon. At the entry to the premises, there was a sign indicating that the premises had “an eat to drink policy”. The name of Sean Peters was displayed as the duty manager.

[8] According to the applications for suspension, the Police officers found on arrival, two patrons sitting in the dining area drinking coffee. There was no evidence of food or empty plates. A number of persons were in the bar. The majority of them were consuming liquor. There was a small area containing "pokie" machines. All the machines were being operated by patrons.

[9] The officers carried out observations over a two-hour period. A rugby league game was broadcast over a large television screen. Patrons were observed to arrive, have a drink, and leave. The majority of patrons were using the "pokie" machine area. Two couples were observed dining on the premises. The Police officers left without dining.

[10] It was alleged in the applications for suspension, that when spoken to, Mr S W Peters stated that whenever a patron came to the bar he or she was told they had to eat.

[11] The applications for suspension were filed with the Authority on 19 April 2002. They were set down for a public hearing on 21 November 2002. On 13 November 2002, Mr A G Sherriff, advised by facsimile that he had received instructions to act for the respondents. He indicated that he intended to rely on the authority of Panckhurst J in Karara Holdings Limited and Others v The District Licensing Agency Inspector and Others High Court, Christchurch (AP 14/02) 8 July 2002. He requested an adjournment for six months, or until such time as the Court of Appeal’s decision on the Karara case was known.

[12] He had earlier suggested to the Police, that the applications be dealt with by orders pursuant to ss.132 (7) and 135(7) of the Act. The Police had not accepted the offer. It will be observed that such orders can only be made if the grounds have been established to the satisfaction of the Authority.

[13] The Authority declined the application for adjournment "on the papers". It said that it would hear the evidence. It confirmed that it had dealt with a number of similar applications. It indicated that Mr Sherriff could make a further adjournment application at the hearing.

The Application for Dismissal, Stay, or Adjournment

[14] At the hearing, Mr Sherriff repeated his application, and added a further request that the proceedings be dismissed, or stayed, or struck out. We gave the Police the opportunity to reply to his detailed submissions. A response from Mr F Pilditch, counsel for the Police, was received in early February 2003. Mr Sherriff’s final submissions in reply were received on 28 February 2003. Having considered the submissions, our decision is as follows.

Authority’s Conclusion and Reasons

[15] The Karara decision has had an impact on the enforcement decisions of the Authority. However, because of conflicting High Court decisions we have continued to hear all the applications which have been scheduled. The suspension applications before us are the only exceptions to our current course of action. We accept that the issues raised by Panckhurst J, had not been specifically considered by other Judges in their previous judgments on various appeals against decisions of the Authority. Up until Karara it was generally accepted that the Authority had the right to determine enforcement applications, either with or without the issues being dealt with in the District Court. Examples of previous High Court thinking, are the decisions of Fisher J in Super Star Bar (NZ) Limited v Peter Alan Kaveney, HC 100/96 Auckland Registry, 17 December 1996, and Greig J in Christopher Michael James Goldsmith v The Liquor Licensing Authority, AP 234/92 Wellington Registry, 19 October 1993.

[16] The difficulty for the Authority is in the interpretation of the Karara decision. As will be seen, we have reached a quite different understanding of the implications of the decision than Mr Sherriff.

[17] Over the past twelve months, the Authority has dealt with 140 enforcement applications. The majority of the applications have been in respect of management certificates. Fifteen percent of the applications have resulted in cancellation of a licence or manager’s certificate. Fifty percent of the applications have resulted in a suspension order being made. In 35% of the cases, we have declined to make an order. A number of the applications have related to trading either after hours, or during the 3½ days prohibited by s.14(2) of the Act. Although they have been single events, the trading has been indiscriminate, and in some cases deliberate. Many of the incidents have involved a number of members of the public. In addition, there have been allegations concerning the supply of liquor to minors and intoxicated persons.

[18] The issue of Karara has been raised from time to time through the country. Although we have proceeded to hear the matters, we have been careful to consider the implications of any decision. In cases of intoxication and underage selling, we have generally dealt with more than one allegation. In a recent case of Geoffrey Alan McCrostie v M J and H R Roper, LLA PH 31/2003, we suspended an off-licence for four days for two separate incidents of selling to a minor. Karara was raised. In that case we said:

For our part, we would have thought that the sale and supply to minors was very much part of management responsibility. We accept that His Honour felt that while an order for suspension may be punitive and deterrent in nature, those ends were not the essential purpose for which the power was conferred. Since the judgment, (Karara) we have ... continued to take the view that applications for suspension are one of the ways in which the object of the Act can be achieved. It is our view that a reduction in liquor abuse cannot be achieved if the law relating to the sale of liquor to minors is ignored or treated with disrespect.

[19] There have been two appeals to the High Court in the last twelve months in respect of the Authority’s decisions on enforcement. One of them is Trevor Walker v Denis John Gear and Paul Richard Brydon LLA PH 607/2002–608/202. An on-licence was suspended for three days, and managers certificate was suspended for three weeks for a pattern of conduct involving minors on licensed premises. The holder of the on-licence, Mr Gear, appealed in order to await the decision of the Court of Appeal in Karara. His concern was having a suspension order against his name. However, in keeping with our assessment of his qualities as a licensee, he did not wish to be seen to be avoiding his responsibilities under the Act, and the premises were closed as required by the Authority.

[20] The second appeal was in Martin Ferguson v Nadia Mavana Pelenato LLA PH 522/2002. In that case, the on-licence was suspended for ten days for trading prior to 1.00 pm on Anzac Day. The respondent argued that because a free hangi had been brought to the bar, the patrons were present "for the purpose of dining". The appeal is still pending, but the issue is the meaning of the words "for the purpose of dining". In that case the respondent also closed her premises as required by the Authority.

[21] In summary therefore, we have taken the view that the Karara decision does not prevent us from considering enforcement applications in the absence of a conviction. Specific authority for that proposition can be found in the two High Court decisions of Superstar and Goldsmith referred to in paragraph [15] above. Pending the decision of the Court of Appeal, we have accepted that orders can only be made to meet genuine licensing concerns, or where the breach is serious. The problem has been in determining, what are "genuine licensing concerns", and what are "serious breaches"? The enforcement agencies not unnaturally argue for example, that a sale of liquor to a minor is serious. In such a situation, they believe that enforcement action is necessary to meet genuine licensing ends.

[22] We have not felt the same constraints with regard to the position of managers. See Doyle LLA PH 482/2002. Mr Pilditch is quite correct when he contends that the Karara decision has no bearing on applications under s.135 of the Act. In our view Panckhurst J confirmed the position when he stated at paragraph [54] of the decision:

"As I have already endeavoured to explain it is a power vested in the Authority to enable it to enforce the management responsibility which is in itself a key concept of the licensing regime."

[23] Mr Sherriff argued that the reasoning in the Karara decision would have been the same if s.135 of the Act had been argued in the High Court. He said that we could draw an inference that the lack of any appeal to the High Court was because the Authority had declined to suspend the manager’s certificates at the original hearing. In fact, two of the manager’s certificates were suspended for four weeks.

[24] We adopt with approval, the thoughtful synopsis of the Karara decision which was prepared by Mr F Pilditch. In paragraph 2.18 of his submissions, he reduced the judgment to the following propositions. We have made a minor amendment to proposition 3.

• Part IV of the Act is intended for situations where the Authority seeks to enforce the management responsibility aspect of the licensing regime;
  
• Orders under s.132 of the Act can be made by the Authority where the Authority considers the orders appropriate to secure a genuine licensing end;
  
• An order for suspension under Part VI of the Act may or may not be punitive and deterrent in nature [but] these ends are not the essential purpose for which the power is conferred;
  
• Immediate resort to s.132 of the Act may be appropriate following a single breach of the Act either in the absence of a prosecution or with a prosecution in tandem. Resort to s.132 of the Act in these circumstances may be appropriate where a breach is so serious or of such a nature that variation, suspension or cancellation of the "holder'’ licence is necessary.
  

[25] Applying those principles to the present case, it should be clear from other cases we have decided over the past twelve months, that we regard the three and a half sacroscant days as an important part of the licensing regime. Whether the prohibition is right or wrong is not a matter for us. It is the law. As the nation approaches Easter, there will be a number of licensed premises which will attempt to circumvent this aspect of the law. It is our view that if indiscriminate trading is allowed to take place against the wishes of Parliament, there is little point in having a licensing regime at all.

[26] In paragraph 23 of his submissions, Mr Sherriff argued that it was legally impermissible for the Police to seek to rely on grounds for alleging breach of the provisions of the Act where no charge had been laid under the Summary Proceedings Act, and no conviction has been secured. In other words he appeared to argue that in all cases, there must first be a conviction in the District Court. On that basis, he argued that licensees could initially avail themselves of the rights and protections of the New Zealand Bill of Rights Act, the criminal standard of proof, the protection against self incrimination, and the various safeguards which form part of the laws of evidence.

[27] In our view such an interpretation of Karara is drawing far too long a bow. It would be a quaint system indeed, if a licensee was required to go through all the checks and balances contained in our criminal law system, take part in an adversarial

contest, and receive a conviction, before he could take part in the more benign atmosphere of a hearing before the Authority, which pursuant to s.110 is deemed to be a Commission of Inquiry. Already the consequences of the Karara decision have been that people have received convictions, which under normal conditions would not have happened. We are not unaware of the pressures on the District Court, and the systemic delays which occur. If all licensees and managers were required to be convicted before facing the Authority’s sanctions, then enforcement of the Act and the licences, would in our opinion, virtually cease to exist.

[28] In the majority of cases, a licensee could not be prosecuted because of the provisions of s.181 of the Act. Mr Sherriff appears to argue that by taking action under s.132 of the Act, the licensee has been deprived of the protection of s.181 of the Act. This is a circular argument. If the application was directed at the licensee’s conduct, then we agree that he or she could have the benefit of the protection of s.181 of the Act, unless he or she was a party to the offence. However, most applications are directed at the manner in which the licensed premises have been conducted. There are many licensees who leave the running of the premises to the managers. Does that mean that no licensee can then be the subject of a s.132 application? If for example, a barman is prosecuted for selling to a minor, does that mean that the way is then clear for applications to proceed involving the manager and the licensee?

[29] Since Karara there have been no High Court rulings on the question of what happens after a case has been dealt with in the District Court. What happens if the case is dismissed following a defended hearing? According to Mr Sherriff, the Karara decision means that it would not be possible to bring enforcement proceedings before the Authority. Does that mean that the Authority can no longer consider suspension or variation? What happens if the "defendant" is discharged without conviction? Where does that leave the Police? What happens if the case is dismissed as an "abuse of process" because it has taken so long to be disposed of in the District Court? Does that mean that there can be no enforcement under the Sale of Liquor Act 1989? It will be noted that in the Goldsmith case (supra), His Honour was dealing with a case where the appellant had been acquitted in the District Court.

[30] In Superstar (supra), Fisher J distinguished the standard of proof in enforcement cases. He observed that there was nothing inconsistent with the dismissal of the charges in the prosecution context, and an adverse finding of fact in the licensing context. He opined that the hearing involved a much wider range of considerations not necessarily dependent on the particular prosecution allegations

[31] In summary therefore, we do not accept Mr Sherriff’s arguments or his interpretation of the Karara decision. However, he has made a number of other submissions, and in deference to him we feel obliged to answer them.

[32] In paragraph 7 of his submissions, Mr Sherriff referred to a comment by Panckhurst J at paragraph [55] of the Karara decision. His Honour referred to a decision of the Authority in Bremdon Holdings Limited LLA PH 347/2001, and suggested that the wrong procedure had been adopted. The case involved an off-licence sale of liquor on Good Friday in 2001. His Honour stated that a prosecution in the District Court was appropriate followed by a fine. Mr Sherriff argued that the Authority was bound by the High Court’s comments. With respect, the Bremdon decision was not the subject of any appeal. His Honour’s "obiter" comments could hardly be "constitutionally" binding as submitted by Mr Sherriff. At any event His Honour was not exactly referring to the opening of a bar on Anzac Day, contrary to the scheme of the Act.

[33] In paragraph 10 Mr Sherriff argued that to proceed prior to the Court of Appeal decision would be prejudicial to the licensee and the manager. He suggested that this would be an abuse of process. Why? Both the licensee and the manager have the right to attend the hearing, and be represented, and have the witnesses cross-examined. They also have a right of appeal. How can they be prejudiced? The only prejudice would be if it were later decided that such cases could never be heard by the Authority. Considering that the Karara decision did not say that in the first place, we do not accept such an argument. Mr Sherriff also referred to the New Zealand Bill of Rights Act and potential breaches of natural justice. Once again with respect, we adopt the arguments prepared by Mr Pilditch. No actual breaches have been identified. When or if they are, then no doubt they can be argued at the time.

[34] In paragraph 11 of his submissions, Mr Sherriff stated what he understood the Authority to have said during another case involving licensed premises in Auckland known as "Novotel". In that case a young pedestrian died in a motorway accident after drinking at a corporate function. We are unable to agree with Mr Sheriff’s understanding of the Authority’s position. It has always been the Authority’s intention to issue a decision in this case. It is regretted that a decision has not been issued before now. It is accepted that the delay has to some extent been affected by the forthcoming decision of the Court of Appeal, and other workload pressures. Nevertheless, the Authority intends to make a decision on the facts. In our opinion such a case is expressly permitted by the Karara decision where Panckhurst J stated at paragraph [60];

"There may well be cases where a breach is so serious or of such a nature that variation, suspension or cancellation of a holder’s licence is necessary, either absent a prosecution or with a prosecution in tandem."

[35] In paragraph 27 of his submissions, Mr Sherriff appeared to argue that the Police would not be able to use the presumptive provisions of ss.178 to 180 of the Act. As far as we are aware these provisions have not been relied upon in other enforcement applications.

[36] In paragraph 30 of his submissions, Mr Sherriff argued that the inclusion of s.132A in the Act, meant that a conviction under the Summary Proceeding Act must first be established, before the Police could bring the conviction to the attention of the Authority. He therefore suggested that the present applications were an abuse of process. The argument seems to ignore the fact that s.132A was brought into existence to ensure that in a limited number of cases, the Police were required to alert the Authority to certain convictions. The Authority was then required to consider whether to hold a hearing to cancel or suspend the licence. In other words to consider whether the Court sanctions were insufficient. How that process can be used to support the argument that an s.132 application cannot be brought in the absence of a conviction has eluded us. It may be of interest to note that there have been eleven such 132A notifications since the Amendment was passed, the last being received on 9 March 2001. One such notice has resulted in a public hearing.

[37] In paragraph 35 of his submissions, Mr Sherriff contends that the dismissal of the applications would be in keeping with s.4(2) of the Act which requires that we exercise our jurisdiction, powers, and discretions in a manner that is most likely to promote the object of the Act, being the reduction of liquor abuse. We believe that if we were to dismiss the applications, we would compromise the integrity of the Act. We regard any abuse of the prohibition against the sale of liquor by taverns and hotels on Good Friday, Easter Sunday, Christmas Day, or before 1.00 pm on Anzac Day, seriously. Over the past twelve months we have been required to deal with a number of instances where hotels and taverns have ignored the law. We do not know whether this happened with "The Thirsty Whale" on Easter Sunday, but we can see no good reason why we should not deal with the applications.

[38] The incident may well have been "isolated" as contended by Mr Sherriff, but there is nothing in s.132 of the Act, which could be construed so as to limit the number or types of alleged breaches of the Act, or the licence, which may be relied upon to trigger an enforcement application. There is no right for a respondent to determine the type of enforcement proceedings which may be brought. That is a matter for the enforcement agency.

[39] For the reasons we have tried to articulate, we intend to hear the applications. We will consider whether the grounds have been established to our satisfaction on the probabilities. If so, we will then decide whether it is desirable to make an order. In coming to the second decision, we will consider whether suspension is appropriate to secure genuine licensing ends. The applications for dismissal and adjournment are accordingly refused. The administration will be asked in accordance with s.132(4)(b) to fix the earliest practicable date for a public hearing. If required, we will consider the question of costs.

DATED at WELLINGTON this 1st day of April 2003

Judge E W Unwin Mr J C Crookston
Chairman Member

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