Sara v Paradise Bar & Restaurant Limited and Hu [2003] NZLLA 786 (22 October 2003)

Last Updated: 23 January 2012

Decision No. PH 786/2003 –
PH 787/2003

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/99/2003 issued to PARADISE BAR & RESTAURANT LIMITED in respect of premises situated at Shops 10–12, 13 and 39 on the Mezzanine Floor, 183 Karangahape Road, Auckland, known as “Paradise Bar & Restaurant”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for suspension of General Manager's Certificate GM/007/1207/02 issued to YUE JIAO HU

BETWEEN DONALD WILLIAM SARA
(Auckland City District Licensing Agency Inspector)

Applicant

AND PARADISE BAR & RESTAURANT LIMITED

First Respondent

AND YUE JIAO HU

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 23 September 2003

APPEARANCES

Mr D W Sara – Auckland District Licensing Agency Inspector – applicant
Mr P D Swain – agent for first and second respondents

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are two matters for determination before the Authority. The first is an application to suspend the on-licence issued to Paradise Bar and Restaurant Limited for the premises known as “Paradise Bar and Restaurant”. The second application is for the suspension of a General Manager's Certificate issued to Yue Jiao Hu.
[2] The grounds for the application for suspension of the on-licence are that the licensed premises have been conducted:

• [a] In breach of the following provisions of the Sale of Liquor Act 1989 – s.165 (unauthorised sale of liquor), s.130 (fails to give notice of appointment of manager Yue Jiao Hu), s.172A(c) (fails to comply with s.130).

[b] In an improper manner.
[3] The ground for the suspension of the General Manager's Certificate issued to Yue Jiao Hu is that the manager has failed to conduct the licensed premises in a proper manner. The same facts that were relied upon in the application for the suspension of the on-licence, were relied upon in the suspension of General Manager's Certificate.
[4] On 26 April 2003 at about 11.30 pm, two Fire Safety Officers and a Building Inspector visited the licensed premises known as “Paradise Bar and Restaurant” on the Mezzanine Floor, of St Kevin’s Arcade at 183 Karangahape Road, Auckland. Twenty-eight people were standing around the balcony on the mezzanine floor outside the licensed premises. Many of the people had glasses of liquor in their hands and some had bottles of beer.
[5] The balcony area is a common area and is not part of the licensed premises. The District Licensing Agency Inspector had noted in his report on the application for the on-licence that:

“The premises will operate as a tavern with two detached karaoke rooms on the second floor. ... The applicant proposes to have staff at the top of the stairs to prevent patrons leaving with liquor from the two karaoke rooms. Liquor will only be taken in the karaoke rooms by bar staff. No patrons will be allowed to walk around the balcony that overlooks St Kevin’s Arcade with liquor.”

[6] On entering the premises the Fire Safety Officers estimated that about 150 people were inside dancing and drinking. A condition under the Building Act placed a limit on the number of people on the premises to 50. This was because there was only one means of ingress and egress.
[7] The duty manager was Yue Jiao Hu who holds a General Manager's Certificate. She is the wife of Jong Duan, the sole director of Paradise Bar and Restaurant Limited. Neither the Auckland District Licensing Agency nor the Police had received notice of Mrs Hu’s appointment as a manager.
[8] The premises were overcrowded creating a risk to public safety because there was only one means of escape. The Building Inspector called the Police who evicted the patrons from the premises on the grounds of public safety.

Factual Background

[9] Frederick Leonard Oates is a Fire Safety Officer with the New Zealand Fire Service in Auckland. He said that for some time the Fire Service have had concerns about licensed premises being overcrowded, and there have been a number of nightclub disasters overseas. The Fire Service believed that the same thing could happen in this country. He produced a pamphlet produced by the Fire Service entitled “Dying for a Good Night Out” as an exhibit. Inside that pamphlet was a list of fires in overseas nightclubs where loss of life had resulted. Late last year following discussions with the Auckland City Council a programme to monitor overcrowding in city nightclubs and bars was set in place.
[10] Prior to the end of 2002, Mr Oates had inspected three licensed premises. One of them was the first respondent’s premises in St Kevin’s Arcade. Mr Oates was present when a Building Inspector told Mr Duan that the maximum occupancy number for his premises was 50 people.
[11] Mr Oates said that at about 11.30 pm on Friday 26 April 2003 he and the Building Inspector, Jason Wang, and another Fire Safety Officer visited the premises in St Kevin’s Arcade, Karangahape Road. They noticed people drinking on the upstairs balcony. Mr Wang spoke to a man at the door of the premise, and Mr Oates heard the man tell Mr Wang that he was a security officer. The “security officer” was drinking liquor at the time. He told Mr Wang that the premises were full, and no more people were allowed entry. They left the premises and returned about 20 minutes later. Mr Oates counted 28 people standing around the balcony. He produced a series of photographs that he had taken showing the people outside the premises on the balcony. Many of them were holding glasses or had bottles of beer in their hands.
[12] Mr Oates said that when he and his colleague and Mr Wang entered the nightclub they estimated about 150 people were inside the premises. They left the premises believing that the number inside the premises had to be reduced to 50 people for safety reasons. In Karangahape Road they spoke to a Police Sergeant about their concerns. The Police called for assistance and all the patrons were removed from the premises.
[13] After the patrons had been removed, Mr Oates made an inspection of the premises. He noted that a stage had been set up opposite what was normally the main entrance to the premises and a curtain had been draped over the double doors that could have been used as an exit in an emergency. The doors opened inwards. He said that in the event of fire if people did not panic inside the premises it was feasible that they could have jumped out of the windows on the Karangahape Road side of the building. However, it was his opinion that if there had been a fire, people would have been crushed trying to get through the narrow and only exitway to the balcony area.
[14] Mr Oates acknowledged that there were two or three people living on or nearby the premises on the first floor. He had no record showing that Mr Duan had been advised in writing of the maximum loading. He said a fire evacuation scheme filed by the previous owner, had yet to be approved by the Fire Service.
[15] Jason Ning Wang is the managing director of Qualmark Homes in East Tamaki. In April 2003 he was the Team Co-Ordinator - Building for Auckland City Council. He said that in December 2002 following discussions with the Fire Service, a programme to monitor overcrowding in city nightclubs and bars was set in place. One of the first premises to be inspected was the “Paradise Bar and Restaurant” in St Kevin’s Arcade. Mr Wang went there with Fire Safety Officers and spoke to Mr Duan. During the conversation Mr Wang told Mr Duan that a maximum occupancy number for the premises was 50 people. Mr Duan told him that the owner had said that he could have hundreds of people on the premises.
[16] Mr Wang said that he was familiar with the history of the premises. It was built in 1923 as a shopping arcade or mall, containing up to 30 small shops. “Paradise Bar and Restaurant” is on the mezzanine floor. It has only a single unprotected means of escape which discharges within the ground floor area of St Kevin’s Arcade rather than going directly to the street or an open space. He said that in 2000 he was the processing officer when the consent was given for a café/bar fit out on the present site. Because there was only a single means of escape a condition was imposed on the consent that read: “The occupant load (whole mezzanine) floor must not exceed 50 persons.” This was based upon the Building Code requirements. He produced a copy of the document showing that condition. The condition was put on the consent after a letter had been received from the building owner dated 4 December 2000. He produced a copy of that letter which said that:

“As the landlord of St Kevin’s Arcade, 179-183 Karangahape Road, Auckland, we wish to advise that the maximum occupancy permitted on the mezzanine floor of St Kevin’s Arcade shall not exceed fifty (50) persons until further compliance with Fire Safety regulations.”

[17] Mr Wang said that when he looked through the file for the premises, at the Council, he noticed there were two undated Fire Safety reports that referred to premises known as “Nsomnia” which was the previous name for the premises. Although undated they had been received by the Council in 2000. He noted that under the heading of “Fire Safety Precautions” one report spoke of an occupancy load of up to 100, and the other, an occupancy load of up to 50 for the premises. The person who wrote the two reports is not regarded by the Council as a recognised Fire Engineer. In October 2002 Mr Duan lodged an application for a building consent to create karaoke rooms inside the premises. The undated report that mentioned the occupancy load of up to 50 was attached to the building consent. Because there was only a single means of escape from the premises, Mr Duan was written a letter by the Council, asking him how he intended to comply with the provisions of the building code. Although no response was received from Mr Duan, a consent was issued to him on 24 October 2002. The Council placed no condition on the building consent that limited the number of occupants to 50.
[18] Mr Wang said he went to the premises at 11.30 pm on 26 April 2003 with the two Fire Safety Officers. He said that to get to the premises they had to walk through a steel security grill at the bottom of the stairs that led to the balcony. As they approached the steel grille a man who claimed to be a security officer, closed the grille and would not let them up the stairs. He had a bottle of beer in his hand and appeared to be intoxicated. They were told the premises were full and no more people were being allowed entry. Mr Wang and the Fire Safety Officers decided to visit another premises in the arcade, and return later to see what was happening at the first respondent’s premises.
[19] When they returned twenty minutes later, the security guard again closed the grille and would not let them enter. Mr Wang produced his Building Inspector’s warrant, and demanded entry to the premises. The security guard called for the manager. Eventually, Mr Duan came down the stairs, and allowed them to enter the premises. It was Mr Wang’s estimate that there were about 200 people inside the premises. A Fire Safety Officer spoke to Mr Duan and the duty manager, Mrs Hu, about the lack of an early fire warning system. Mr Wang reminded Mr Duan of their previous conversation concerning the maximum number allowed in the bar being 50. Mr Wang said that there was nothing that they could do to reduce the numbers, as there was only three of them. The premises appeared to be out of control. He believed Mr Duan was just as concerned as they were about the situation. Mr Wang had also noticed that there appeared to be people living in at least one of the other rooms on the mezzanine floor. He was concerned that a number of lives could be lost if there was a fire.
[20] After discussing the situation with the Fire Service officers, Mr Wang decided that they needed to reduce the occupancy of the premises. He telephoned the Police and told them that he believed it was an unsafe building, and overcrowded. With such a large number of patrons who were drinking he was concerned about the floor loading on the building, and that Mr Duan may have had difficulty communicating with the patrons if there had been a fire on the premises. After he had discussed the situation with the Police, the Police removed the patrons from the premises. The owner of the building was issued a Dangerous Building Notice pursuant to s.65 of the Building Act 1991 on 26 May 2003. Mr Wang acknowledged that Mr Duan had never been written to personally advising him of the maximum number of people allowed on the premises.
[21] Donald William Sara is a liquor licensing inspector with the Auckland District Licensing Agency. He was very clear that he had discussed the corridor at length with Mr Duan, when the application was made. He reiterated that the corridor could not be part of the licensed premises. On 29 April 2003 he became aware of a visit by a Building Inspector and Fire Safety Officers to St Kevin’s Arcade in Karangahape Road on 26 April 2003. He arranged to meet Mr Duan at the premises at midday on 30 April 2003. Mr Duan told Mr Sara that his wife was the duty manager that night, and had been serving behind the bar. He said he thought that there were about 60-80 people inside the premises, although most of the time he was outside at the top of the stairs. He did not think there were any people drinking on the balcony. He said that he spent most of his time outside the door of his premises. Mr Duan said that when the Police arrived at the premises they stood by the bar and watched people dancing for about five minutes, then they told the patrons that the premises did not have a licence, and they removed the patrons from the premises. After the premises were closed Mr Dwan rang his consultant about his licence. He was advised that the licence had been sent to the consultant, but he had not forwarded it to Mr Duan. Mr Duan told Mr Sara that he remembered being told by the Building Inspector and the Fire Safety Officers that he had to limit the number of people on the premises to 50.
[22] Mr Jong Duan is a sole director of the licensee company. He holds a General Manager's Certificate.
[23] In 2002 when Mr Duan was buying the business he spoke to the owner of the building, Mr Kirkpatrick. Mr Kirkpatrick told him that he could have “hundreds of people” on the premises, and at no time did Mr Kirkpatrick tell him that there was any limitation on the number of people he could have there. In the light of the letter written by Mr Kirkpatrick on 4 December 2000, we find such evidence to be very suspect.
[24] When Mr Duan took over the business on 1 October 2002 he employed a consultancy firm to obtain a liquor licence for his company. He said that when he employed the consultancy company he assumed that they would do everything for him, including notifying the manager’s appointment.
[25] In October 2002 he employed an architect to draw the plans for the premises, and apply for a building consent for the two karaoke rooms. He said the architect looked after all those matters. At no time did he see any papers that indicated that there was a limit on the number of persons who could be in the bar. In December last year he spoke to Mr Wang who told him that he thought the maximum number was 50. Mr Duan told Mr Wang that he must be joking. Because of what the owner had told him Mr Dwan had agreed to pay $65,000 per annum for the rental, plus GS, rates, and all the outgoings, in connection with the business.
[26] As a result of that conversation Mr Duan made further enquiries. At the Council he found a copy of an undated report on the Council’s file which said that up to 100 people could be on the premises.
[27] On the night of 26 April 2003 Mr Duan said he was on the door of his premises when he was called to see the Building Inspector downstairs. He went down and saw Mr Wang and two other men. He took them upstairs. He said the person who claimed to be a security guard on the bottom door was not employed by him, but lived in a shop opposite the front door of Mr Duan’s premises.
[28] Mr Duan said that he had a discussion again with the Building Inspector and the Fire Safety Officers about numbers. He told them that he had sold 160 entry tickets that night at $5.00 per head although people come and go during the night. Mr Duan thought that when Mr Wang arrived there would have been about 100 people on the premises. He denied allowing any people out onto the balcony to drink, and said that if anyone has to go out there to go to the toilet, he does not let them take their drinks there. He said that there were people living on the same floor as his premises, who regularly have parties. During the time that he was on the door he saw people coming from the party out on to the balcony, and come to listen to the music at his premises. He said that no-one had ever written to him or told him officially how many people he could have on the premises.
[29] Yue Jiao Hu is the wife of Jong Duan. She holds a current General Manager's Certificate. She was the duty manager on the night of 26 April 2003. Mrs Hu said that during the night she was working inside the bar while her husband was on the door checking people in and out of the premises. The normal security person was resting because he had a headache. She said that no-one had ever told her how many people were allowed in the bar at any one time, and she asked if she was not told these things how was she supposed to know them. She did not count how many people were in the bar, but there was a record of 160 people having entered during the night. She said that did not mean they were all present all of time.

Respondent’s Submissions

[30] Mr Swain submitted that the application for suspension pursuant to s.132 was in two parts. The first was alleged breaches of s.130 of the Act, not notifying the appointment of a manager, and that a failure to make such an appointment amounted to an unauthorised sale in terms of s.165 of the Act.
[31] Mr Swain submitted that Mr Duan had asked a firm of licensing consultants to attend to all matters related to his liquor licence, and those matters included notification in terms of s.130 of the Act. Mr Swain submitted that Mr Duan was entitled to rely on the professionalism and expertise of his consultants. Any failure on their part should not reflect on Mr Duan. He said that Mr Duan had acted properly throughout, and it would be harsh to impose a penalty under such circumstances, especially as there had been no allegations of minors on the premises or liquor abuse.
[32] Mr Swain submitted that the second part of the application alleged that the premises had been operated in an improper manner in that there was an excess number of persons in the premises on 26 April 2003. Mr Swain submitted that there was a real dispute between Mr Duan and the Auckland City Council regarding the numbers on the premises. He referred to the two undated documents produced in evidence, showing the limitation on the numbers permitted in the premises. He said that the same person wrote both reports. Mr Swain submitted that the matters referred to by Mr Wang concerning the matters that occurred in 2000, were almost three years before Mr Duan took over the premises, and therefore had no application to Mr Duan. In addition he noted that the building certificate issued pursuant to s.9(1)(e) of the Act, contained no reference to the numbers of people permitted on the premises. He submitted that on the basis of the evidence, no-one could say with any degree of certainty what were the maximum numbers permitted on the premises.
[33] Mr Swain submitted that even though Mr Wang said he attached a document to the building consent, Mr Duan says he left all such matters to the architect to attend to, and apart from a verbal comment made by Mr Wang in 2002, that is all the notification that he has ever received concerning numbers on the premises. Mr Swain also submitted that the application under s.132 of the Act was flawed. If a prosecution could not be maintained against the owner of the building under the Building Act, that suggests a prosecution could not be supported because there was no valid calculation as to the maximum number of persons permitted to be present on the premises. He submitted that if it was difficult to prosecute a building owner under the Building Act, it was a misuse of the Sale of Liquor Act to try to use the same provisions of the Building Act for an application under s.132 of the Sale of Liquor Act.
[34] Mr Swain noted that neither Mr Wang nor Mr Oates had the power under the Building Act to close down premises, nor did the Police have the power to close licensed premises other than under s.174 of the Act. He said that s.174 only applies where there is fighting or serious disorder on licensed premises.
[35] Mr Swain submitted that there was no evidence that the people drinking on the balconies had been inside Mr Duan’s bar that evening, and an inference should not be drawn on mere suspicion.
[36] In respect of the application under s.135 of the Act, Mr Swain submitted that Mrs Hu did not know of any limitation on numbers on the premises and she had left the control of the door to her husband. He said that to succeed in his applications, Mr Sara must prove that there had been some clear, cogent, and direct communication in writing from Auckland City Council to Mr Duan’s company, setting out the permitted numbers on the premises. Two reports on a Council file that contained two different numbers and a verbal communication were insufficient. Therefore, the allegations in respect of those matters must fail.
[37] Mr Swain submitted that there could be no improper use of licensed premises if both the licensee and the duty manager have no specific knowledge of any peculiarities affecting their licensed premises.
[38] Mr Swain sought costs on behalf of his clients because the Police, at the behest of Messrs Oates and Wang, had illegally closed the premises. The company had suffered financial loss through that illegal act, and to impose any further suspension of trading would compound that problem further, particularly as there was no evidence of either sales to minors or liquor abuse on the premises. We decline the application because we believe that in the circumstances, the Police were more than justified in taking the action that they did.

Applicant’s Submissions

[39] Mr Sara noted that the two karaoke rooms that were accessed from the balcony were part of the licensed premises. However, the balcony area outside the premises was not licensed, and the company was aware that no patrons were allowed to consume liquor in that area. The respondent had assured him that liquor would only be taken to the karaoke rooms by bar staff, and patrons would not be allowed to walk around the balcony with liquor.
[40] Mr Sara submitted that because the respondent was controlling entry to the balcony area, and because people who appeared to be drinking liquor were near the doorway of the premises, it was likely, on the balance of probabilities, that the people had been sold liquor inside the premises. He said if the Authority found that that was the case, then any liquor sold for consumption in and around the balcony area was deemed to be an unauthorised sale, and it was on that basis that the ground pursuant to s.165 of the Act could be established.
[41] Mr Sara submitted that in respect of s.130 of the Act it was clear that Mrs Hu was the duty manager on the night of 26 April 2003, and there was no evidence that the company had given notice of her appointment. Accordingly, there was sufficient evidence to establish that the ground under s.172A(c) had been established, in that the licensee had failed to comply with s.130 of the Act. Mr Sara submitted that a brief period of suspension was warranted in respect of those breaches.
[42] Mr Sara submitted that the premises had been conducted in an improper manner based upon the evidence of the Fire Safety Officer and the Building Inspector. They had told Mr Duan in December 2002 that the maximum occupancy of the premises was fifty people. When they returned on the 26 April 2003 they estimated the number of patrons to be 150 and 200 respectively while the receipts for the night apparently showed that 160 people had paid to enter the premises. He said that the Fire Service concerns about some city nightclubs being dangerously overcrowded was exemplified in the respondent’s premises when the Fire Safety Officer found a set of double doors that opened inward had been locked and covered with a curtain.
[43] He said a copy of a Fire Safety report referring to the occupancy limit of 50 persons was attached to the building consent for the site issued by the Council in 2000. That condition had been imposed on the site because the premises had only a single means of escape to St Kevin’s Arcade from the mezzanine floor. Mr Sara submitted that it was significant that the same Fire Safety report was later attached to the application for a building consent that the respondent lodged in October 2002, to create the two karaoke rooms. In response, Mr Swain submitted that the architect engaged by the respondent had lodged the application for the building consent, and therefore that information may not have been within the knowledge of Mr Duan. However, we note that Mr Duan said that he remembered being told about the limit of 50 persons although the Council had never formally advised him. It was Mr Sara’s submission that Mr Duan chose to disregard what he had been told.
[44] In respect of the application under s.135 of the Act, Mr Sara said if the Authority found that the people standing around the balcony were in fact patrons, and were drinking liquor, then any liquor sold for consumption in and around that area is deemed to be an unauthorised sale.
[45] He further submitted that the premises were being conducted in an improper manner because, on the evidence of the Fire Safety officers and the Building Inspector, the premises were dangerously overcrowded, and as Mrs Hu, was the duty manager, she was responsible for the conduct of the licensed premises.

Authority’s Conclusion and Reasons

[46] This is an unusual application in that the predominant concern is the physical safety of patrons rather than the issue of liquor abuse. However, the allegations regarding the breach of s.165 of the Act, go to the heart of the terms of the licence as well as to the object of the Act, whereby a reasonable system of control over the sale of liquor is required.
[47] The issue in this case is whether, pursuant to s.132(6) and s.135(6) of the Act the grounds have been established, and if so, whether it is desirable to make an order for suspension.
[48] The major issue is the overcrowding of the premises. On the evidence of two witnesses it was estimated that there were between 150 and 200 people on the premises respectively, and the evidence from the respondent was that they had sold 160 tickets that night, although with people coming and going it does not mean that there were 160 on the premises constantly. Mr Duan says that he was never told officially as to how many people may be on the premises. He was only told verbally by Mr Wang. Mr Duan said that he was not aware officially of what number of persons were allowed on the premises because he had employed a consultant in respect of the sale of liquor matters, and an architect for the building consent application. Mr Swain suggested that the mistakes of the professionals could not be visited upon Mr Duan. The architect was not called to give evidence, and we find it very surprising that the architect would not have discussed such an important issue with Mr Duan.
[49] Mr Duan alleged that the landlord told him that he could have “hundreds on the premises”. However, that allegation did not gel with the landlord’s letter to the DLA regarding 50 people being allowed on the premises. We find it highly unlikely that the landlord would have made such a statement given the landlord’s potential exposure to prosecution if that number was exceeded. Mr Duan said that he made his own enquiries, and found there were two documents on the Council’s file that provided for 100 and 50 people respectively being permitted on the premises. However, an examination of those documents showed that the later one of the two established that only 50 were permitted on the premises at any one time. Mr Duan’s explanation and his evidence generally does not accord with reality. In any event, both those numbers were significantly exceeded on the estimations of the two witnesses, and on the number of tickets that were sold on the night, even accepting that the patrons may not have all been there at the same time. We are therefore inclined to agree with Mr Sara’s submission that Mr Duan deliberately turned a “blind eye” to the advice that he received from the Building Inspector. On that basis we are satisfied that the ground in respect of the premises being conducted in an improper manner has been established. There is no independent evidence of the number of tickets sold, and quite frankly we were left in considerable doubt that the figures of 160 was accurate.

Section 165

[50] Section 165 of the Act states:

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.

[51] In Police v Peng [1992] NZAR 471 Smellie J held that the section “punishes such sales to persons where such sales are not authorised either by the licence itself or the provisions of the Act.”
[52] The evidence from the Building Inspector and the Fire Safety Officers was that people were drinking on the balcony outside the premises. Yet the Building Inspector and the Fire Safety Officers were unable to gain access to the mezzanine floor because of a “security guard” that was stationed at the gate at the bottom of the stairs. That was the only means of access to the premises. It was not until Mr Wang produced his Inspector’s Warrant that the “security guard” called Mr Duan down the stairs, and he permitted the Building Inspector and the Fire Safety Officers to have access to the premises. Mr Duan now claims that the person who was acting as a security guard was not employed by him, but he neither said or did anything at the time the Fire Safety Officers and the Building Inspector were attempting to gain entry to the premises to dispel that notion. In other words, the “security guard” appeared to be acting with the tacit approval of Mr Duan.
[53] It was noteworthy that the people who were drinking on the balcony were all in the vicinity of the door to the respondent’s premises, and neither the Building Inspector nor the Fire Safety Officers indicated that there was a party going on in the vicinity of those premises. We would have expected them to make some comment about that situation especially when they expressed concern about the people living in the other rooms on the mezzanine floor. Another factor was that the karaoke rooms gave immediate access to the balcony area from the premises, and there was no apparent element of control over patrons entering or leaving the premises via the karaoke rooms.
[54] There was no evidence of sales being made in the unlicensed area. However, for the reasons expressed above we draw the inevitable conclusion that the patrons were allowed to leave the premises with liquor. That situation amounted to a breach of s.7 (a) of the Act “To sell or supply liquor to any person present on the premises for ... for consumption on the premises ... .” Accordingly, pursuant to Police v Peng (supra) we find that the ground under to s.165 of the Act has been established.

Section 172A(c) – Fails to Comply with s.130

[55] It is clear from the evidence that the District Licensing Agency did not receive a notice of appointment. Whether or not the applicant’s attention was drawn to the need to appoint a manager by way of a letter from the Agency is irrelevant. The requirements to appoint a manager and to provide the appropriate notice are clearly set out in the Act. There is no requirement under the Act for the Agency to remind a licensee of its responsibilities. Mr Duan as the holder of a General Manager's Certificate, should have been well aware of that requirement. For the reasons expressed above Mr Duan has to accept the mistakes of the consultant as his own. Accordingly, we find that ground of the application has been established.

Section 135 Application

[56] We have found, pursuant to the application under s.132 of the Act that while s.165 has not been breached, there has been a breach of the licence in that people were permitted to leave with liquor from the licensed premises and drink it on the balcony outside. We have also found that the dangerous overcrowding of the premises amounted to the premises being conducted in an improper manner. In that respect we accept that Mrs Hu may not have been aware of the overloading restrictions on the premises.
[57] However, pursuant to s.115(1) of the Act, a manager must be on duty and responsible for compliance with this Act, and the terms and conditions of the licence. It therefore follows that Mrs Hu was in breach of her responsibilities under the Act when the patrons took their liquor off the premises and consumed it in an unlicensed area.
[58] The overcrowding of the premises, the locking and covering of the double doors that were a potential escape route created an extremely dangerous situation. The situation was so serious that if an emergency had occurred there was the possibility that the licensee could be faced with a charge of manslaughter.
[59] We also did not believe Mr Duan’s evidence that people on the balcony were from somewhere else other than the “Paradise Bar”, particularly as access to the common area in front of the premises was controlled, at least by his tacit approval. It was also Mr Oates’ impression when he walked around the balcony, and took photographs of the people standing outside the door of the premises that they were patrons. There was no reference to any other people on the balcony. In fact when he was cross-examined by Mr Swain, Mr Oates said that he was aware that two or three people lived in other rooms off the balcony. When Mr Wang was cross-examined he told Mr Swain that what caused him to say people were living in the rooms off the balcony was that the door was open and he caught sight of a bed. In those exchanges there was no reference to any party being in progress.
[60] Therefore, we are satisfied pursuant to s.132(6) and s.135(6) that the grounds specified in the application have been established. We consider it highly desirable to make orders under this section, although we accept that Mrs Hu is less culpable than her husband.
[61] At the end of the hearing Mr Duan appeared to take the view that it was necessary to have more than 50 people present to enable him to make enough money to pay the rent. He seemed to have little understanding of his obligations. Quite clearly he must provide other forms of egress for his patrons to ensure their safety.
[62] In fixing the period of suspension, we recognise that the impact of a suspension is much greater on the first respondent whose principal business is the sale of liquor, than for other licensed premises such as a restaurant, or a supermarket, or even a tavern with an off-licence.
[63] The on-licence number 007/ON/99/2003 issued to Paradise Bar & Restaurant Limited will be suspended for ten days from 8.00 am on Monday 10 November 2003 to 8.00 am on Thursday 20 November 2003.
[64] The General Manager’s Certificate number GM/007/1207/02 issued to Yue Jiao Hu will also be suspended for ten days from 8.00 am on Monday 10 November 2003 to 8.00 am on Thursday 20 November 2003.

DATED at WELLINGTON this 22nd day of October 2003

Judge E W Unwin Mr J C Crookston
Chairman Member

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