Nelson v Enzo Entertainment Limited [2003] NZLLA 220 (4 April 2003)

New Zealand Liquor Licensing Authority

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Nelson v Enzo Entertainment Limited [2003] NZLLA 220 (4 April 2003)

Last Updated: 1 March 2010

Decision No. PH 220/2003

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/283/2000 issued to ENZO ENTERTAINMENT LIMITED in respect of premises situated at Level 2, Force Entertainment Centre, 291-297 Queen Street, Auckland, known as "Sputnik"

BETWEEN NIGEL STUART ROBERT NELSON

(Police Officer of Auckland)

Applicant

AND ENZO ENTERTAINMENT LIMITED

Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 4 March 2003

APPEARANCES

Senior Sergeant M J Lopdell – New Zealand Police – applicant
Mr J H Wiles – for respondent
Mr G S Whittle – Auckland District Licensing Agency Inspector – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] Before the Authority is an application brought by Constable N S R Nelson pursuant to s.132 of the Act, for suspension of an on-licence in respect of premises known as "Sputnik" situated at Level 2, Force Entertainment Centre, 291-297 Queen Street, Auckland. The licence is held by a private company, Enzo Entertainment Limited, owned by Mark Edward Francis. Mr Francis is the owner of another company which is the licensee of the “Gambio Bar” that is situated immediately opposite “Sputnik” in the same building. Both could be described as ‘casino bars’ but both are nevertheless, well appointed.

[2] The application specifies breaches of five provisions of the Act as grounds for suspension of the on-licence. They are ss.25 (display of licence), 115 (Manager to be on duty at all times), 130 (Notice of appointment of manager), 165 (Unauthorised sale or supply), 172A (licensee’s offences in respect of manager). The alleged particulars in support of those grounds disclose a breach of a sixth provision namely, s.175(5)(a) of the Act (fails to produce licence when required to do so).

[3] Senior Sergeant M J Lopdell in opening the case for the Police said that “the breaches [arose] through the failure of the licensee company to ensure properly appointed managers were on duty at all times the premises were open for the sale of liquor.”

Background

[4] Constable Nigel Stuart Robert Nelson is a member of the Liquor Licensing Section at Auckland Central Police Station. At about 11.30 pm on Friday 12 October 2001 he was on duty in plain clothes with Constable Scott Taylor. He said they had received reports of drunken behaviour at the premises known as “Sputnik”. They went there to check on the behaviour of the patrons.

[5] There was only one entrance to the bar. Despite a close examination of the entrance by Constable Nelson the on-licence was not displayed there or elsewhere on the premises. There were about 15 to 20 people in the bar. About half of them were consuming liquor. The Constables spent some time watching patrons purchasing drinks. They noted that the name of the duty manager was not displayed. The only staff member they saw was behind the bar. She was clearly not very experienced as she had little idea what a ‘light beer’ was. She was the only employee present over a period of half an hour.

[6] At about 10.00 pm on Thursday 24 January 2002 Constable Nelson and Mr G S Whittle, an Auckland District Licensing Agency Inspector, visited “Sputnik”. Constable Nelson was in full uniform. He noted that the on-licence for the premises was still not displayed at the entrance nor could he find it displayed anywhere inside the premises. A Notice of renewal of licence was displayed at the entrance.

[7] Constable Nelson spoke to Donna Williamson. She said that she was the duty manager for “Sputnik” as well as the licensed premises opposite, known as “Gambio”. Her name was not displayed as the duty manager. The two premises are about 10 metres apart, across a short walkway. Ms Williamson said that she had been called into work because the manager was sick. Constable Nelson said she seemed surprised when he told her that she could not be a duty manager for two separate premises at the same time. She did not know when she had been appointed manager of “Sputnik”.

[8] Constable Nelson required Ms Williamson to produce the licence. Ms Williamson was unable to find the liquor licence despite looking all around the premises. Constable Nelson told her that she needed to ensure that her name was displayed as the duty manager.

[9] Constable Nelson later discovered that only Martin Helleur and Agnes Tuapou had been appointed as managers to “Sputnik”. They were the only managers listed on the most recent application for renewal of the on-licence.

[10] On 4 February 2002 Constable Nelson received notification forms from Martin Helleur, purportedly under s.130 of the Act. To comply with that section the notification should have been made by a director of the licensee company. After Constable Nelson wrote to the company advising it of the anomaly, he received fresh notifications for managers Julie Marie Horne, Donna Marie Williamson and Lisa Danielle Arkell. These notifications had not been made within the two days after the appointment as required by s.130 of the Act. Two of the notifications had been signed by a director, but the third was unsigned.

[11] At 10.05 pm on Thursday 14 March 2002 Constable Nelson again visited “Sputnik” with Auckland District Licensing Agency Inspector, Mr G S Whittle. A Notice of renewal of licence was still displayed at the entrance and the on-licence was again absent. The duty manager’s name was not displayed at the bar. Two managers’ certificates for Lisa Arkell and Donna Williamson were hidden at the back of the bar behind glasses and other paraphernalia, and could not be read.

[12] Constable Nelson spoke to Robert Wildman. He claimed to be the “acting temporary manager” appointed by Martin Helleur to replace Lisa Arkell. Constable Nelson advised him there could be no such appointment under the Act. Martin Helleur, being a manager, could not appoint an acting or temporary manager. Furthermore, Ms Arkell had never been legally appointed as a manager.

[13] On 18 March 2002 Constable Nelson wrote to the director of Enzo Entertainment Limited advising him of the invalid appointment of Ms Arkell. To make it easier and less confusing for him in the future, he enclosed a set of notification forms for the appointment of three types of manager under the Act.

[14] Constable Nelson again visited the premises with Mr Whittle at about 11.55 pm on Wednesday 24 April 2002. He noted that the on-licence was not displayed anywhere, the duty manager’s name was not displayed, and the manager’s certificates for Lisa Arkell and Donna Williamson were in the same position as on his previous visit.

[15] Donna Williamson told Constable Nelson that she was the duty manager for the premises. When he asked her why her name was not displayed she said that it was, and she picked up it up from the floor, and fixed it onto a pillar with bluetack or a similar substance. When asked where the liquor licence for the premises was she just shrugged her shoulders.

[16] On 15 May 2002 the application for suspension was lodged with the Authority, and a copy was duly sent to the respondent.

[17] At 6.40 pm on 25 October 2002 Constable Nelson received a telephone call from Mr Greame Scott, liquor licensing consultant to the licensee of “Sputnik”. He advised that Martin Helleur had been the source of the problems, and he had been dismissed. He asked Constable Nelson if he would be willing to make a routine check to satisfy himself that the premises were operating properly, and if they were, would he withdraw the application under s.132 of the Act. Constable Nelson said that he would not withdraw the application, but if the premises were operating properly, he would agree to a short period of suspension or a warning.

[18] Constable Nelson visited the premises again at 8.55 pm on Thursday 31 October 2002 with Miss Karen Bush, an Auckland District Licensing Agency Inspector. The liquor licence was displayed at the principal entrance. There were a number of people drinking on the premises.

[19] Constable Nelson spoke to the barman and asked who the duty manager was. The barman pointed to one of three women sitting at the bar. The Constable spoke with the woman who had been identified. She said that her name was Julia Horne, and that she was not the duty manager. She said that the barman, Jamie Fuli-Roache, was the acting manager. Constable Nelson could not see Mr Fuli-Roache’s name anywhere and he asked where it was. Mr Fuli-Roache pointed to mini whiteboard at the back of the bar with illegible red writing on it. It was too small to see or to read. The red colour could not be discerned under the lights.

[20] Mr Fuli-Roache said that Julia Horne appointed him from time to time as acting manager. He said that he was replacing Tanya Snee. She worked the day shift, and he worked the evening shift. Tanya Snee had been properly appointed as a manager on 7 August 2002. When Constable Nelson told Mr Fuli-Roache that he could not replace a manager during a period that the manager would not normally be working, he then said that he was replacing Donna Williamson.

[21] Constable Nelson told Julia Horne that as the premises did not have a manager on duty each sale of liquor was unauthorised. He asked her if she was the manager. She said that she was actually the manager for “Gambio”. When Constable Nelson asked why she was not on the premises of “Gambio” she said that she did not need to be, and that her office was in the premises of “Sputnik”. While Constable Nelson was talking to Ms Horne, Mr Fuli-Roache left “Sputnik”.

[22] Constable Nelson, Miss Bush and Ms Horne went across the walkway to “Gambio”. Constable Nelson saw Mr Fuli-Roache walking away from “Gambio” and “Sputnik” and heading up a ramp further into the building.

[23] Constable Nelson later found that the barman’s name was displayed as the duty manager. He asked Ms Horne why her name was not shown. She said that it must have been changed while she was out of the premises. Constable Nelson concluded that the staff of both premises were lying to him, and that there was no manager on duty at either premises. This was the visit specially made because the Police had been advised that the premises were now operating properly.

[24] Mark Edward Francis is the sole shareholder and director of Enzo Entertainment Limited. He said that when he commenced the business three years ago he was new to the industry, and he was holding down a full-time job. He hired Mr Martin Helleur as a general manager to take care of all the day to day requirements of running the business. Mr Helleur had previously been a general manager of the Auckland Workingmen’s Club, and he had been highly recommended to Mr Francis.

[25] Mr Francis said that prior to the Police application on 12 October 2001, there had been no liquor licensing problems with the premises. He noted that the Police complaints were largely confined to February and March 2002. When he received the letter of 12 February 2002 from the Police, he advised Mr Helleur, and he left it to him to attend to the proper appointment and notification of the certificate holding managers. He said he accepted that responsibility for ensuring compliance was ultimately his. In hindsight he agreed that he had relied too heavily on Mr Helleur. He terminated Mr Helleur’s employment in August 2002 because of Mr Helleur’s unexplained absences from the premises when he left staff in charge who did not hold a General Manager’s Certificate.

[26] Mr Francis has now adopted a more ‘hands-on’ role, and he has appointed Julia Horne to the general manager’s position in place of Mr Helleur. He speaks to her daily, and he now has a better understanding of his obligations as an effective licensee.

[27] He regarded the breaches of the Act as technical rather than involving liquor abuse. He acknowledged some inadequacies in staff training and management incompetence. He noted the number of times that the liquor licence was not displayed, but he had been told repeatedly by Mr Helleur that it was only necessary to display the Notice of renewal. He now regretted accepting that advice. He was unaware that the notification of an appointment of a manager had to be signed by a director, and not a general manager.

[28] Mr Francis pointed out that when the licence was renewed in November 2000, and then varied in December 2002 from an entertainment style licence to a tavern style licence, there were no objections from the Police or the Auckland District Licensing Agency.

[29] Julia Horne was appointed as general manager for “Sputnik” and “Gambio” in or about September 2002. She has held a General Manager’s Certificate since 1998, and has been employed in the industry for about 10 years.

[30] She sought to correct some of Constable Nelson’s statements. She said that the mini white board was in fact a “manager on duty” sign, which has now been replaced by one that is easier to read. Ms Horne said that Mr Fuli-Roache meant to say that he followed Tania Snee’s shift, and had replaced Donna Williamson.
[31] Ms Horne said that she had gone to “Sputnik” to collect something from her office before returning to “Gambio”. She stopped to talk to two female staff members when Constable Nelson and Miss Bush arrived. She said that when Mr Fuli-Roache left the bar he had gone to “Planet Hollywood” upstairs to collect a meal for a patron. Ms Horne said that she was confident when she returned to “Gambio” with Constable Nelson and Miss Bush that they would see her name displayed as duty manager. However, when Constable Nelson arrived at “Sputnik” one of the staff had gone to “Gambio”, and had told the barman to put his name up as the duty manager. It was a misguided attempt to assist Ms Horne. Consequently, Constable Nelson had misconstrued the situation. She said that the staff member concerned is no longer employed at “Sputnik”.

[32] Mr Wiles submitted that the Authority’s decision in Scott Lyall Taylor v AAA New Zealand Limited LLA PH 1150/2000 had some relevance to the present case. In that case the licensee had failed to properly appoint a manager. Consequently, there had been unauthorised sales of liquor. Hence both cases were similar. Mr Wiles noted that at paragraph 28 of the AAA New Zealand Limited decision the Authority decided to adjourn the matter for six months under subs.(7) of s.135 of the Act instead of making an order under subs.(6). The purpose was to allow the respondent to demonstrate that the premises could be conducted in strict compliance with the requirements of the Act.

[33] Mr Wiles submitted that since Mr Helleur was dismissed, the premises have been in rectification mode for over six months. He suggested that the Authority might be justified in adjourning the matter with a warning that any further breaches could result in more serious action.

[34] Mr Whittle said that he had visited the premises two or three times and there was never a licence on display. He submitted that compliance has only come about since the application for suspension was filed on 15 May 2002. He said that when he visited other licensed premises he often finds that a duty manager is not on the premises. He submitted that the Authority needed to send a clear message that licensees must comply with the Act.

[35] Senior Sergeant Lopdell traversed the evidence, and the alleged breaches of ss.25, 115, 128, 129, 130, 165, and 172A of the Act. He submitted that for a period of ten months the licensee had not appointed any managers in accordance with Part VI of the Act. Consequently, every sale or supply of liquor over that period had been in breach of s.165 of the Act. He submitted that s.165 carried the largest penalty that a District Court could impose on a licensee. He referred to paragraph 27 of the AAA New Zealand Limited decision where in that case the application had been “brought by way of a ‘test case’ seeking clarification of recent changes in the legislation.”

[36] At paragraph 23 of his closing submissions Senior Sergeant Lopdell then made a most telling observation. He said:

“You have heard that after some months, without success, Constable Nelson lodged the application which is before you. It has been my experience, that on receipt of such an application, a licensee usually takes urgent steps to address the issues raised. That did not appear to be the case here. When the constable was invited to do a further inspection he found the management situation to be as bad, if not worse, than the previous visits. It is submitted that since lodging the application for renewal, this licensee has continued to breach the provisions of s. 130.” He then added: “At least for some months.”

Authority’s Conclusion and Reasons

[37] The attitude of Mr Francis toward the breaches of ss.25, 115, 128, 129, 130, 165, and 172A of the Act as being technical overlooks the important part those sections play in the enforcement of the Act, and in particular, ensuring that the object of the Act as expressed in s.4 is met.

[38] Sections 115, 128, 129, and 130 are aimed directly at ensuring the premises are managed properly. Following the recommendation of the Laking Report, the aim of subs.(2) of s.25 is to assist enforcement officers inspecting the premises. It notifies to the Police and the Inspector when they enter the premises the conditions of the licence, particularly as to where minors may lawfully be present. Section 165 inter alia penalises licensees who sell liquor when there is no properly appointed manager on duty on the premises. Section 172A is a new offence for licensees who fail to appoint managers, or who fail to ensure that managers comply with the law, or who fail to ensure that the names of the managers are displayed.

[39] Prior to the Sale of Liquor Amendment Act 1999 s.115(1) of the Act required either a licensee or manager to be on duty. That option was removed by the Amendment. The Robertson Committee in its Summary of Recommendations at page 63 of its report explained the reasons for the change.

“(e) That because of practical reasons, it is not possible for many licensees to be on duty at any time when liquor is sold or supplied on licensed premises, and even when an individual as a licensee is present, he or she may not be competent to enforce the provisions of the Act. Accordingly, we recommend:

(i) That ... a certificated manager be on duty at all times...

(ii) That s.115 of the Act also be amended to make provision for the licensee to be responsible for ensuring that control and expertise exists within the licensed premises to ensure compliance with, and enforcement of the requirements of the Act, especially its object and the conditions of the licence, and that there is a commitment to support the certificated manager in his or her role..” [emphasis added]

[40] In Police v Tillermans Restaurant Limited [2001] DCR 984, at 989, Judge Erber said:

“To my mind the requirement to be ‘on duty’ implies the physical presence of the temporary/acting/manager on the premises working in the capacity as manager while the premises are open for business.

However, the physical presence does not have to be continuous. Where a manager is absent for a brief period, but able to be communicated with during his/her absence, and where that absence is not for a purpose or in circumstances inconsistent with his/her ability to perform the obligations cast by s.115, then I think the manager is on duty.”

[41] It is our view that a manager who is managing two premises at the same time is acting inconsistently with the obligations cast by s.115 of the Act. The purpose is clearly set out in ss.(1) of s.115. It is to ensure that there is always someone on the premises responsible for compliance with the Act, particularly its object, and with the conditions of the licence. If a manager is dividing his or her time between two premises, control and expertise can hardly be said to be existing within the licensed premises to ensure that compliance.

[42] Section 165 of the Act provides:

165. Unauthorised sale or supply---(1) 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 or this Act to sell to that person.

[(2) The penalty is,—

(a) In the case of a licensee,—

(i) A fine not exceeding $20,000; or

(ii) The suspension of the licensee's licence for a period not exceeding 7 days; or

(iii) Both:

(b) In the case of a manager, a fine not exceeding $20,000.]

[43] In Police v Peng [1992] NZAR 471 Smellie J held that the words “any time” are not confined to sales of liquor outside the authorised trading hours. The respondent’s on-licence provides that:

“The authority (to sell and supply liquor on the premises) conferred by this licence shall be exercised by the licensee (if an individual) or through a manager or managers appointed by the licensee in accordance with Part VI of the Act.”

[44] Consequently, an offence is committed under s.165 of the Act by the licensee or manager, if liquor is sold outside the authorisation of the licence.

[45] We are satisfied that the Police have proven, on the balance of probabilities, that the licensee has failed to comply with the alleged breaches of ss.25, 115, 128, 129, 130, 165, and 172A of the Act.

[46] Although Mr Wiles submitted that the AAA New Zealand Limited decision has some relevance to the present case this time round the matter is no longer a ‘test case’. The principles have been well and truly set. Mr Whittle has advised us that when he visits other licensed premises he often finds, as he did in this case, that a duty manager is not on the premises. It is a plaint that we frequently hear. The industry needs to be aware that this is a situation that is not to be treated lightly. For some ten months the licensee had not properly appointed any managers.

[47] We accept that Mr Francis had hired a general manager to carry out the day to day requirements of the business, but that does not change his responsibilities as a licensee. In Hayford v Christchurch District Licensing Agency (H.C. Christchurch, AP201/92, 3 December 1993) Holland J said:

“A holder of a liquor licence under the Sale of Liquor Act is granted a privilege. It permits him to sell liquor when others are not permitted to do so.”

And in J M Clarke LLA 1169/99 the Authority said:

“A liquor licence is a privilege. It may colloquially be regarded as a ‘package deal’. Both the burdens and the benefits run with the licence. Mr Clark must either accept those burdens and control the sale and supply of liquor in a satisfactory manner, or he will not continue to enjoy the privilege.”

[48] We note that Constable Nelson gave Mr Francis advice and assistance that drew his attention to his responsibilities as a licensee. For whatever reason he did not accept that responsibility until the Police filed their application.

[49] It is acknowledged that every time the Police visited the premises, there was no evidence of intoxication or sales to minors.

[50] Up until now we have been inclined to issue warnings where there have been breaches of the Act, unaccompanied by incidents of potential liquor abuse. The warnings have not worked. The inadequate attention to the details of the Act appears to be widespread, particularly in Auckland. In this case, the premises were given the benefit of a special visit after the issue of proceedings. It failed the test. In our view, suspension is therefore desirable.

[51] When the application was filed it was in respect of the original licence, which bore the number 007/ON/283/2000. However, at the hearing Senior Sergeant Lopdell produced a replacement licence number 007/ON/553/2002. That licence was issued as a replacement for the original licence, and expires on 17 December 2003. The replacement licence includes a new Condition (c) that prohibits the sale of liquor on Good Friday, Easter Sunday, Christmas day, or before 1 pm on Anzac Day.

[52] Accordingly, and for the reasons stated we make the following order. The application to suspend on-licence number 007/ON/553/2002 issued to Enzo Entertainment Limited, is granted. The licence shall be suspended for three days from 7.00 am on Monday 21 April to 7.00 am on Thursday 24 April 2003.

DATED at WELLINGTON this 4th day of April 2003

Judge E W Unwin Mr J C Crookston
Chairman Member

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