Loye v Kelly [2004] NZLLA 655 (16 September 2004)

Last Updated: 31 January 2012

Decision No. PH 655/2004 –
PH 658/2004

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 006/ON/100/2002 issued to TRADING SYSTEM DESIGN LIMITED in respect of premises situated at 16 Captain Scott Road, Glen Eden, Waitakere City known as “813 Café”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for the suspension of General Manager’s Certificate number GM006/317/2002 issued to PETER WILSON KELLY

BETWEEN JASON PETER LOYE
(Police Officer of Waitakere City)

Applicant

AND PETER WILSON KELLY

Respondent

AND

IN THE MATTER of an application by TRADING SYSTEM DESIGN LIMITED pursuant to s.18 of the Act for renewal of an on-licence in respect of premises situated at 16 Captain Scott Road, Glen Eden, Waitakere City known as “813 Café”

AND

IN THE MATTER of an application by PETER WILSON KELLY pursuant to s.123 of the Act for renewal of a General Manager’s Certificate

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 13 August 2004

APPEARANCES

Constable P J Loye - NZ Police - applicant and in opposition to the applications for renewal

Mr P D Swain - for respondents and applicants for renewal of on-licence and General Manager’s Certificate
Mrs J W Edwards - Waitakere District Licensing Agency Inspector - to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] Before the Authority are four applications for determination. The first two applications are made pursuant to ss.132 and 135 of the Act. The Police seek suspension of the on-licence issued to Trading System Design Limited for premises known as “813 Café”, and the General Manager’s Certificate issued to Peter Wilson Kelly. The Police also oppose the applications for renewal of the on-licence issued to Trading System Design Limited, and the renewal of the General Manager’s Certificate issued to Peter Wilson Kelly.

[2] The grounds for the application pursuant to s.132 of the Act are:-

• [a] That the licensed premises have been conducted in breach of the following provisions of the Act: s.155(1) (permits sale of liquor to a minor) and s.165 of the Act (unauthorised sale or supply of liquor).
  
• [b] That the licensed premises have been conducted in breach of the following conditions of the licence:
  

“(b) That liquor may be sold only on the following days and during the following hours:
On such days and during such hours as the premises are being operated as a restaurant/café but not other than on the following days and hours:
(d) The licensee shall ensure that the provisions of the Act relating to the sale and supply of liquor to prohibited persons are observed and shall display appropriate signs adjacent to every point of sale detailing the statutory restrictions on the supply of liquor to minors and the complete prohibition on sales to intoxicated persons.”

The second condition was incorrectly recorded in the application as (d) instead of (g).

[3] The grounds upon which the application pursuant to s.135 of the Act are based are that:

[a] That the manager has operated the premises in breach of the following provisions of the Sale of Liquor Act 1989: s.155(1) (permits sale of liquor to a minor) and s.165 of the Act (unauthorised sale or supply of liquor).

[b] That the conduct of the manager is such as to show that he is not a suitable person to hold the certificate.

The particulars relied upon in support of both applications for suspension are based upon two incidents on 18 July 2003 and 8 April 2004. On 18 July 2003, the Police and the Inspector visited the premises together. It was alleged that Mr Peter Wilson Kelly whose name was displayed as the duty manager, was mildly intoxicated. It was also alleged that the premises, which is licensed as a restaurant/café was trading as a tavern in a trust area contrary to s.216 of the Sale of Liquor Act 1989. On 8 April 2004, the Police conducted a controlled purchase operation using a male volunteer who was sold a bottle of beer. Mr Kelly was the duty manager at the time.

[4] The third and fourth applications for renewal of the on-licence by Trading System Design Limited and the General Manager’s Certificate held by Mr Kelly were opposed by the Police because of the respective applications for suspension. The licence fell due for renewal on 22 October 2002, and Mr Kelly’s certificate fell due for renewal on 8 May 2003.

[5] All four matters were set down for a public hearing on 13 August 2004.

The First Incident on which the Applications for Suspension are Based

[6] On Friday 18 July 2003, Senior Constable Jason Peter Loye visited the premises of “813 Café” with a former Waitakere District Licensing Agency Inspector, Mr Collett Taylor. Mr Peter Kelly’s name was displayed on a board behind the bar as being the duty manager. Senior Constable Loye assessed Mr Kelly as being mildly intoxicated. Mr Kelly was in possession of half a glass of wine from which he continued to drink throughout the time that the Constable and Mr Taylor were on the premises. Senior Constable Loye observed that Mr Kelly had glazed eyes, unsteady body movement, and slurred speech. Mr Kelly acknowledged that he had “had a few” that night. Clearly such conduct as a duty manager would raise the issue of suitability. During the conversation, Mr Kelly at no time denied he was the duty manager. However, the Senior Constable acknowledged that he had assumed that Mr Kelly was on duty because his name was displayed. Because there was a live band playing, most of the patrons were dancing and singing, and there were signs advertising karaoke evenings displayed throughout the premises, Senior Constable Loye advised Mr Kelly that the premises were operating as a tavern in breach of the on-licence conditions. He came to that conclusion from the absence of restaurant meals. There was a commercial kitchen on the premises, which was open but not operating. The Senior Constable acknowledged that the clientele who frequented the premises was older rather than younger. He also accepted that the premises were not regarded as problem premises.

[7] On 21 August 2003, Senior Constable Loye sent a letter to the licensee outlining his concerns regarding his visit on 18 July 2003. He did not receive a response to his letter.

[8] On 23 September 2003, Senior Constable Loye received an application for renewal of the on-licence issued to Trading System Design Limited. He noted that the application sought no changes to the conditions of the licence. On 14 October 2003, he reported to the Waitakere District Licensing Agency that the premises were operating as a tavern contrary to its licensed conditions. On 6 April 2004, Senior Constable Loye wrote to the licensee seeking financial account details of the premises for the year 2002 to 2003 to determine if it was operating as a tavern. On 12 August 2004, he received figures, which showed the total value of purchases for the business for the year ended 31 March 2003 was $48,626.00. Of that total, $38,414.50 was spent on food and $10,211.50 was spent on liquor. Food therefore represented 78.9 per cent of the total value of purchases. These figures were supplemented when the company produced its annual report and statement of accounts for the year ended 31 March 2003 at the hearing.

[9] Catherine Mary Graham Grant has been employed as a technical officer by the Auckland Regional Public Health Service since July 2003. Between 8.30 pm and 9.15 pm on Friday 25 June 2004 she and a colleague, Tracey Menger, visited “813 Café” to assess whether the premises was operating as a restaurant. When they drove past the premises just before 8.30 pm the café appeared to be closed. No people were eating there, although there were some people in a kitchen behind the café. On entering the premises Ms Grant noted there was a bar in the café, and the café had the atmosphere of a pub rather than a restaurant. Ten patrons were sitting at the bar drinking beer and smoking. From the remains of food on the bar counter it was apparent that some people had eaten a pizza. A chalkboard advertised live music on Friday nights “until late”, which Ms Menger was advised meant midnight. On Wednesdays she understood that the music went from 7.00 pm until 9.30 pm or 10.00 pm.

[10] During the 30 minutes Ms Grant and Ms Menger were on the premises, two people ate a pizza while drinking at the bar. At 9.00 pm three other people entered the premises and ordered a dessert in the café part of the premises. Ms Grant considered that the premises was a pub serving snacks and desserts. It did not appear to be operating as a “full serving restaurant”. We note that Ms Grant’s Night Visit Inspection form simply asked the question: “If Restaurant Licence : Trading as a restaurant?” which may have coloured her view, particularly as her stated purpose was simply to assess whether the premises was operating as a restaurant. However, Her notes in response to the question referred to the premises as a café. Under Condition (b) of the licence, liquor may only be sold when the premises are being operated as a restaurant/café.

[11] Eileen Sinclair is the sole director and shareholder of the applicant company. She holds a current General Manager’s Certificate. Mr Kelly is her partner. Ms Sinclair said she had failed to “put her name up” as the duty manager after Mr Kelly had left the premises to meet some friends. She said that she had a conversation with him and that she agreed to run the premises in his absence. She said that she was normally in the kitchen attending to meals ordered by customers. Mr Kelly later returned to the restaurant with his friends, and they had a meal and some wine. Ms Sinclair said she considered that it was Mr Kelly’s night off, and for practical purposes she was the duty manager. She said he usually acted as the duty manager. She accepted that anyone who entered the premises would assume that Mr Kelly was the duty manager.

[12] Ms Sinclair denied that the restaurant was being run as a tavern. The premises is a restaurant with a full commercial kitchen. She referred to the normal menu, which was supplemented by weekly specials on a blackboard. She said there was one large table for twelve people and eight smaller tables. There was a waiting service, and tables were laid as meals were served. Live sedate music that was not suitable for young people was usually provided by two to three musicians. It was ideal for dancing, and was popular with the patrons. The restaurant catered for older patrons who wish to have a drink, a meal, and to dance. This happened about twice a week.

[13] Ms Sinclair said the cash register recorded purchase totals only and not individual items. To establish a list of liquor and non-liquor items that was sold and their values, she had to trace the records of purchases from the suppliers. She had not supplied the GST returns requested by Senior Constable Loye because they were not helpful. They simply showed totals of income and expenditure.

[14] Mr Kelly denied that the business was operating as a tavern, or receiving a letter from Senior Constable Loye requesting detailed trading figures for the business, although he had had discussions with Mr Swain on a number of occasions about the accounting procedures for the business. He produced a copy of the standard daily menu to support his contention that the business operated as a restaurant/cafe. He said no cover charge was made for the entertainment. On the other hand, the hours of operation of the premises seemed to open at 4.00 pm on most days, and such hours are very much in line with the trading hours of a tavern.

[15] Mr Kelly said that as far as he was concerned Ms Sinclair was the duty manager on 18 July 2004. Although Senior Constable Loye told Mr Kelly that his name was shown as the duty manager, the Constable did not ask him if he was in fact the duty manager. He denied being intoxicated.

[16] Mr Swain submitted that the failure by Ms Sinclair to change the name of the duty manager from Mr Kelly to herself was simply human error. Mr Kelly was present as a patron and not as a duty manager. In that respect we note that Section 115(1) and (2) is absolutely clear:

115. Licensee or manager to be on duty at all times---(1) 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.

(2) At all times while any manager is on duty in respect of any licensed premises, the name of the manager shall be prominently displayed inside the premises so as to be easily read by persons using the premises; and the person so named at any time shall be deemed for the purposes of this Act to be the manager at that time. (emphasis added)

[17] At the relevant time Mr Kelly’s name was displayed. He is to be regarded as the manager. If managers treat the requirement to display their names casually or with disdain then the requirement becomes meaningless.

[18] Mr Swain submitted that the allegation that Mr Kelly was mildly intoxicated was “a red herring”, because Senior Constable Loye had not taken any action in accordance with ss.166, 167 or 168 of the Act. In light of the present applications that action was not necessary. If Mr Kelly was on duty that night, then his decision to consume liquor to a state of mild intoxication must reflect adversely on the manager and the licensee.

[19] Mr Swain argued that the allegation that the premises were trading more akin to a tavern than a restaurant was based on Senior Constable Loye’s evidence of one visit lasting about 45 minutes, as well as the one visit by a technical officer from Auckland Regional Public Health. He noted that the licence permitted liquor sales whilst the premises was being operated as a restaurant. In other words, it was not necessary for casual drinkers to have a meal.

[20] Mr Swain submitted that Ms Sinclair’s failure to supply an accurate breakdown of sales of liquor and non-liquor items was a common feature of many small businesses because sales are not recorded by commodity. All she could do was to obtain figures from the purchases.

[21] Mr Swain submitted that those figures countered the Police allegations because they showed that the emphasis of the business was on food rather than liquor, and neither the Act nor the licence prohibited live entertainment for patrons in a restaurant. The Police evidence therefore had not established that the premises were operating outside the conditions of the licence. We agree. In addition, Ms Grant’s evidence that she saw the remains of a pizza on the bar, two other people eating a pizza, and three other people order a dessert while seated in the café part of the premises, would seem to indicate that the premises was operating as a café.

[22] Senior Constable Loye referred to s.216(a) of the Act which provides that an on-licence shall not be granted in respect of any hotel or tavern in the trust district. He also noted the definition of “tavern” under s.2 of the Act that:-

“Tavern means any premises used or intended to be used in the course of business, principally for the provision to the public of liquor and other refreshments;...”

[23] Senior Constable Loye submitted that despite the amendment to s.7 of the Act in 1999, (allowing restaurants to serve liquor to casual drinkers) the predominant purpose of a restaurant/cafe licence was dining. Therefore, patrons should be dining from a menu that was the same as, or similar to, that supplied with the application for liquor licence. In that respect we note that condition (b) of the licence states:

“Liquor may be sold only on the following days and during the following hours:

On such days and during such hours as the premises are being operated as a restaurant/café but not other than on the following days and hours:
Monday to Sunday 0700 to 1.00am the following day” [emphasis added]

Quite clearly, if the premises were not “being operated” (those words being in the present tense) as a restaurant/café, the sale of liquor cannot take place in any circumstance on the premises. “Operate” in the Collins Concise Dictionary is defined inter alia as:

“1. to function or cause to function. 2. to control the functioning of. 3.to manage, direct, run, or pursue (a business system etc.)”

[24] Senior Constable Loye referred to the Authority’s view of the meaning of a café in its decision in Doner Kebab Café Limited LLA PH 328/2002:

“[52] By contrast, a café means in our view, any premises used principally for the provision of food and non alcoholic drinks. If a licence is granted then the provision of liquor will be complementary and secondary to the main purpose. In a café the range of food may extend from cooked and continental breakfasts, to snack meals, to light lunches, to afternoon teas, to pre-theatre bites and suppers. There might well be a strong emphasis on croissants, open sandwiches, paninis, muffins, and the like. Clearly there will be a good selection of coffees, standard and exotic teas, and juices. People will be attracted to the premises for the atmosphere, and the selections of food and non alcoholic drinks. A book entitled “Wellington’s Café Culture” produced by William Watson gives the individual profile and philosophy of 52 cafes.”

[25] Constable Loye and Ms Grant both acknowledged the existence of menus that included items listed above, and that the premises had a commercial kitchen, which Constable Loye said, was open but he did not see it operating. The apparent lack of food, more people drinking than eating, the presence of a live band, people singing and dancing, and advertisements for karaoke did not help to dispel Constable Loye’s view that the premises was being operated principally for the sale of liquor. He considered that premises were not being used “principally for the provision of food and non alcoholic drinks” that is, as a restaurant or café,

[26] On the other hand, Ms Sinclair produced figures that almost 80% of purchases were for food. Her evidence regarding the menus, the existence of a waiting service, the fact that the kitchen was open, and the separate dining area together with Ms Grant’s evidence that at least five people were supplied with either pizza or dessert helped to contradict the allegation that the premises were being operated as a tavern.

The Second Incident on which the Applications for Suspension are Based

[27] The Centre for Social and Health Outcomes Research and Evaluation (SHORE), conducted a project known as Auckland Pseudo Patrons Project over three successive weekends in 2002 and again in 2003. That project showed that identification was not requested at off-licensed premises in Waitakere in 40% of visits in 2002, and 36% of visits in 2003. In the 2004 project, identification was not requested in 39% of visits to such premises on the North Shore.

[28] Because there had been problems with intoxicated youths, and a suggestion that they were purchasing liquor from licensed premises, Senior Constable Loye decided to conduct a controlled purchase operation. The operation involved the use of two volunteers, a female aged 17 years and a male aged 16 years. The volunteers visited a total of 15 premises twice over a two-day period when three sales were made to the minors. Most of the premises were visited once by each minor.

[29] On Thursday 8 April 2004 at 9.00 pm, Senior Constable Loye and a volunteer named Timothy visited “813 Café”. Timothy was born in October 1987, and he was aged 16 years and 6 months. Timothy entered the bar via the principal entrance with Senior Constable Loye entering shortly afterwards. The Senior Constable waited near the door to observe the actions of the bar staff. Mr Kelly’s name was displayed as the duty manager. The barman served Timothy with a bottle of Corona beer with a slice of lemon in the neck of the bottle, and gave him $14-00 change from a $20 note. The barman did not ask Timothy for his age or ask him for any identification. Timothy left the bar with the bottle in full view in his hand, passing Constable Loye as he did so. No person made any attempt to chase after him, or stop him from leaving the premises.

[30] After obtaining a written statement from Timothy, Senior Constable Loye returned to the premises, and spoke to Mr Kelly and the barman, Michael Alan Procter. Mr Procter said that he did not ask Timothy for his age because he was in a rush and Timothy “looked of age”. Mr Procter has since been summoned to appear in the District Court in relation to the sale.

[31] Mr Kelly told Senior Constable Loye, that when he opened the door for Timothy he looked a minimum of 20 years of age. He commented that they did not get many young ones on the premises, and we were surprised to hear that he asked Senior Constable Loye whether they had a right to check Timothy’s identification. When Mr Kelly was asked if he had anything else to say he said, “not really”.

[32] Timothy visited twelve premises that evening and was able to purchase alcohol from two of them. He was refused service at the other premises because he was unable to produce any identification.

[33] Ms Sinclair accepted that Mr Kelly and Mr Procter had made an assumption regarding Timothy’s age.

[34] Mr Kelly said it was his policy that if a person looked under 20 years of age, he immediately asked that person for identification. His immediate reaction when he saw Timothy was that he looked to be aged in his early 20’s whom he compared with Ms Sinclair’s son who is aged 18 years, but looks younger than Timothy.

[35] Mr Kelly then took no further interest in Timothy, and he carried on serving or talking to other patrons in the premises. However, he said he noticed Timothy leave the bar area carrying his beer. Mr Kelly was about to go and see him to tell him he could not leave the premises with the beer when he saw Timothy pause on the deck as if he was looking for someone. Mr Kelly thought that Timothy was going to drink his beer so he did not pursue the matter any further.

[36] This explanation was unconvincing on three counts. First, when Mr Kelly was spoken to by Senior Constable Loye about 15 minutes or so later, and he was asked if he had anything else to say, he did not mention it. Secondly, Senior Constable Loye observed that no-one made any attempt to follow Timothy, or to stop him even though he was carrying the beer openly in his hand. Thirdly, Mr Kelly said that he had watched Timothy walk out the bar door onto the deck outside the premises, which is part of the licensed premises. Mr Kelly said he was about to go out and tell Timothy that he could not leave the premises. That explanation did not ring true as Timothy was still on licensed premises at that stage, and Senior Constable Loye said neither Mr Kelly, Mr Procter, nor Ms Sinclair were in sight as Timothy left the premises.

[37] Michael Alan Procter alternates between serving behind the bar and serving liquor to diners in the restaurant area. On the night of 8 April 2004, he had been busy “but not too busy to make a judgement call on the age of people who came to the bar to purchase liquor.” He said he was well aware of his legal responsibilities even though he does not hold a General Manager’s Certificate, and he usually asks for identification from patrons who appear to be under 18 years.

[38] When Timothy approached the bar, and ordered a bottle of Corona beer, Mr Procter looked hard at him. He formed the view that because of his size, appearance and manner, Timothy was in his early 20s. After serving Timothy he turned away, and he did not see where Timothy went. He said on occasions he had relied upon a patron named Mark Todd to call his attention to possible minors in the bar. On this occasion, although Mr Todd was sitting near the door, and would have seen Timothy enter, he made no comment. Mr Procter therefore considered that he was safe to serve Timothy. However, when questioned about that matter he declined to give an explanation other than that he was in a rush. After seeing Timothy giving his evidence, Mr Procter acknowledged that in hindsight he would have asked for identification.

[39] Shane Terry Owen Maxwell was a patron in “813 Café” on the evening of Thursday 8 April 2004. His initial impression based on Timothy’s body size, looks and appearance was that Timothy was in his early 20s. He was convinced that Timothy was well over 18 years because he had some hair growth on his face. Timothy confirmed that he had started shaving.

[40] Mr Swain referred to s.155(4) of the Act which provides:

“It is a defence to a charge under subsection(1) or subsection (2) of this section if the defendant proves that the persons who sold or supplied the liquor believed on reasonable grounds that the person to whom it was sold or supplied had attained the age of 18 years of age.”

[41] Mr Swain submitted that although that defence was not as strong as the defence in subs.(4A) of s.155 of the Act of sighting an evidence of age document it was still a defence. Mr Swain said four different people had come to the subjective view that, based on his appearance, Timothy was over 18 years of age. He cited Ovens v Laneyie (1987) 11 NSWLR 207 which held that appearance alone may afford reasonable grounds for belief that, a person to whom liquor is sold or supplied, was at least 18 years old.

[42] Mr Swain said although it may have been prudent for staff to request some evidence of age, the fact that Timothy had been refused service on other occasions that night was not direct evidence that he looked under 18. Those other premises may have had different security measures in place.

[43] Mr Swain submitted that the defence in subs.(4) of s.155 of the Act was a subjective test that must be proved by the respondents on the balance of probabilities. The respondents’ evidence was corroborated by the witness, Maxwell. The final onus was on the Police to prove the allegations, and they had not done so.

[44] Senior Constable Loye observed that the respondent’s premises was one of the few who had served Timothy liquor, and did not ask for identification.

[45] When Timothy gave evidence it was immediately apparent to us from his style of dress (that he had also worn during the operation) and his face that he was a young teenager even though a photograph made him look more mature. The large amount of hair that he had at the time of the incident had been trimmed, but the other aspects of his appearance reinforced the impression that he was a young teenager. It should be noted that we saw him four months after he was seen by Messrs Kelly, Maxwell, and Procter

[46] We reject any suggestion that he could be mistaken for a person aged 18 years. Having seen Timothy in the witness box it was apparent to us that any reasonable bar person or manager should at the very least have made an inquiry as to his age. The fact that he was refused service at most of the outlets he visited reinforced that view.

[47] We do not accept the evidence from Ms Sinclair, and Messrs Kelly, Procter, and Maxwell that there were reasonable grounds for a belief that Timothy had attained the age of 18 years. We thought the evidence was contrived. Ms Sinclair and Mr Kelly suggested that Ms Sinclair’s son, who was aged 18 years, and whom they said looked younger than Timothy, should be a basis upon which we could conclude there was a reasonable ground for a belief that Timothy was aged over 18 years. We reject that suggestion. There are bound to be many people younger than Ms Sinclair’s son that look older than him. That is not a reasonable ground upon which to form a belief that Timothy was over the age of 18 years. Mr Procter admitted at the hearing that in hindsight he should have asked Timothy for identification. Having seen Timothy, albeit four months after the event, Mr Maxwell’s suggestion that Timothy’s size and appearance combined with the fact that Timothy had some hair growth on his face was equally unconvincing.

Authority’s Conclusion and Reasons

[48] In applications brought under ss.132 and 135, the onus of proving the allegations lies with the Police. In a decision of the High Court in Waitakere Licensing Trust v 3MI Choices Limited AP 109-PL01, His Honour Justice Fisher discussed s.132 of the Act. In paragraph [49] of his judgment. He said:

"Here is a classic situation in which the legal burden lies on the Police or Inspector, not on the licensee."

In assessing the weight of the evidence, we are conscious that the allegations must be proved on the balance of probabilities although the onus is reversed in respect of the sale of liquor to Timothy.

[49] We are satisfied for the reasons we have expressed that the grounds in the applications pursuant to s.132 and s.135 of the Act have been made out in respect of the sale of liquor to Timothy. The licensee and manager failed to ensure that the provisions of s.155 were observed. We have concluded, with some disquiet, that the evidence that the premises were operating as a tavern fell short of that required. Therefore, that ground of the applications for suspension must fail. We find that Mr Kelly was mildly intoxicated while he was the duty manager on 18 July 2003 for the following reasons. First, his name was displayed as the duty manager pursuant to s.115 of the Act. Secondly, when Senior Constable Loye had a discussion with Mr Kelly about his state of intoxication, and the Constable’s concerns that the premises may have been operating as a tavern, Mr Kelly never denied that he was the duty manager. Thirdly, Senior Constable Loye never received a response to his letter of 21 August 2003 to the licensee. In that letter he referred specifically to Mr Kelly’s name being displayed as the duty manager, that Mr Kelly was mildly intoxicated, that he continued to consume wine while he was being spoken to, and that Mr Kelly said he “had had a few” that night.

[50] Having made those findings, we are required to determine whether it is desirable that suspension orders should be made. That question should reflect the seriousness of supplying liquor to minors, and the potential for liquor abuse.

[51] In Onehunga Wines & Spirits Co Limited LLA PH 311-312/2001 we said:

"Since the age limit was reduced to eighteen, there have been regular concerns expressed throughout the country about the ability of young people to obtain alcohol ... When Parliament reduced the age limit to eighteen it doubled the penalties. It was sending a message to the public that people who breached this aspect of the law must expect rigorous enforcement and severe consequences."

[52] The Authority has consistently sent out clear signals that in the area of sales to minors, there will be cancellations and suspensions. The principle that "a licence will be easy to get and easy to lose" was first coined by the authors of "Sale of Liquor", and subsequently quoted by the Authority as far back as 1990 in Douglas-Oliver Corp Ltd [1990] NZAR 411. It has been cited in a number cases since. Selling liquor to minors is a form of liquor abuse. The seriousness of doing so was clearly indicated when Parliament made a number of changes to the Sale of Liquor Act in 1999 designed to bolster the detection and enforcement of breaches of the new law. Amongst those changes was a significant increase in all penalties that was tempered by the defence of sighting an evidence of age document. The amendments to the Act were designed to actively discourage those who might be tempted to supply liquor to persons under age. Those changes have now been in force since 1 December 1999.

[53] The measures which were enacted included:

(a) Section 2A. The provision of “evidence of age documents”.

(b) Section 132A. The mandatory reporting of certain proven offences (including sales to minors) to the Authority, and a requirement for the Authority to consider whether a public hearing to suspend or cancel the licence is appropriate.

(d) Section 155(2A). Not only were all penalties doubled for all offences, the penalty for supplying liquor to minors was increased to a maximum of $10,000 (for managers and licensees), and the District Court was given the power to suspend a licence for up to 7 days.

[54] Although not established as a ground for suspension operating a restaurant/café as a tavern is a form of liquor abuse as well as a breach of the conditions of the licence. The conditions of a licence contribute to the scheme of the Act in terms of s.4 to "establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse". They are not there to be followed at the whim of a licensee or manager.

[55] In our view it is desirable to make orders. It is our view that if no sanction was imposed, we would not be encouraging those businesses which declined sales to the young volunteer, or who comply with the Act and the conditions of their licences. We would also not be fulfilling our function as set out in s.4(2) of the Act:

The Licensing Authority, every District Licensing Agency, and any Court hearing any appeal against any decision of the Licensing Authority, shall exercise its jurisdiction, powers, and discretions under this Act in the manner that is most likely to promote the object of this Act.

[56] At issue then is the length of any suspension. There have been a number of relevant enforcement actions involving sales made on on-licensed premises. In James Leslie Sole v Zeebos Limited and another LLA PH 348 - 349/2003, the on-licence was suspended for 24 hours for the sale of a bottle of “Vodka Cruiser” to a seventeen year old minor. The suspension took place on a Friday being the day of the sale.

[57] In James Leslie Sole v Ashburton Licensing Trust and others LLA PH 399 - 402/2003, the on-licence was suspended for 24 hours for two sales which were made to the same volunteer in different bars on the premises on the same night. The suspension was made on a Friday which was the same night that the sales were made.

[58] In Jason Peter Loye v Supreme Enterprises Limited LLA PH 492/2003, the on-licence was suspended for 48 hours for two sales to two 16-year old minors. On both occasions the minors were able to purchase an RTD.

[59] In Jason Peter Loye v Brent Warrick Gore and Neville Paul Pearce LLA PH 710-712/2003, the on-licence was suspended for 48 hours for two sales of RTDs made to two minors in a controlled purchase operation. The duty manager who had made both sales and been fined $350 in the District Court had his General Manager’s Certificate suspended for three weeks.

[60] We consider that any suspension period imposed for the incident of liquor abuse in this case should not be less than 24 hours for the sale of liquor to a minor.

[61] On 8 April 2004 Mr Kelly was the duty manager, and thereby vicariously liable for the sale by Mr Procter to Timothy. He was also the person who opened the door and admitted Timothy to the premises. For the reasons we have stated he was also the duty manager on 18 July 2003.

[62] The criteria to be considered by the Authority on the renewal of the licence and the manager’s certificate are contained in ss.22 and 126 of the Act. We accept that it was appropriate to oppose the applications for renewal because of the applications for suspension. However, apart from the incident which on 8 April 2004, there have been no other incidents affecting the on-licence since it was issued on 22 October 2002.

[63] The renewal of Mr Kelly’s General Manager’s Certificate is affected by his intoxication while on duty on 18 July 2003 and the sale of liquor to Timothy on 8 April 2004.

[64] Public notification of the application for renewal of the on-licence attracted an anonymous objection. As that objection could not be tested it could not be considered. The applicant is entitled to bring its otherwise good record into account.

[65] In the light of the action we propose to take in respect of the applications for suspension, the on-licence and General Manager’s Certificate will be renewed for three years.

[66] Senior Constable Loye asked that the Authority impose an order similar to the one given in 3MI Choices Limited LLA PH 421/2003 where we were not satisfied that the premises was not operating as a tavern or in accordance with the conditions of its licence. We considered that a refusal to renew the on-licence was warranted. However, the application was adjourned for six weeks from the date of the decision to enable the applicant to cease all disco and dancing activities. The Inspector was asked to monitor the situation and report to the Authority. We were prepared to grant a renewal of the licence for the three-year period if the unauthorised activity ceased. We expected the company to give an undertaking not to conduct disco and dancing activity unless specifically authorised. In the absence of such an undertaking, or if any similar activity was recommenced, we expected an application for cancellation of the licence to be made.

[67] In the present case we are not satisfied that the threshold for such action has yet been reached. However, we expect the reporting agencies to continue to monitor the premises, and we warn the respondents that if the premises are not being conducted in accordance with the conditions of the licence we expect an application for cancellation of the licence to be made.

[68] Quite clearly the licensee will have to consider its options in light of our comments and the provisions of s.216(a) of the Act. Karaoke nights are not normally associated with the running of a restaurant/café. We expect the licensee to change its systems to enable accurate records to be taken of the amount of liquor and food consumed on the premises.

[69] For the reasons we have given we make the following orders:

• (a) On-licence 006/ON/100/2002 issued to Trading System Design Limited is suspended for 24 hours from 7.00am on 30 September 2004.

(b) General Manager’s Certificate number GM006/317/2002 issued to Peter Wilson Kelly is suspended for six weeks from 30 September 2004.
(c) On licence 006/ON/100/2002 issued to Trading System Design Limited is renewed for three years.
(d) General Manager’s Certificate GM006/317/2002 issued to Peter Wilson Kelly is renewed for three years.

DATED at WELLINGTON this 16th day of September 2004

Judge E W Unwin Mr J C Crookston
Chairman Member

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