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Parata v Croft and others [2005] NZLLA 202 (20 April 2005)

Last Updated: 28 February 2010

Decision No. PH 202-207/2005

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of six applications pursuant to s.132 of the Act for suspension of off-licences issued to SIMON WARREN CLIFFORD CROFT: W & J DILLON LIMITED: REDWOOD DEVELOPMENTS LIMITED: BLENHEIM FOODSTORE LIMITED: THE PARTNERSHIP OF LESLIE JOHN HOPE and MAURICE JOHN MCQUILLAN: and BUILDERS ARMS (2004) LIMITED

BETWEEN NAERA EVAN PARATA

(Police Officer of Blenheim)

Applicant

AND SIMON WARREN CLIFFORD CROFT: W & J DILLON LIMITED: REDWOOD DEVELOPMENTS LIMITED: BLENHEIM FOODSTORE LIMITED: THE PARTNERSHIP OF LESLIE JOHN HOPE and MAURICE JOHN MCQUILLAN: and BUILDERS ARMS (2004) LIMITED

Respondents

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at BLENHEIM on 25 January 2005

APPEARANCES

Sergeant N E Parata - NZ Police - applicant
Mr S W C Croft - respondent
Mr W S Dillon – on behalf of W & J Dillon Limited - respondent

Ms B A Senior - for Redwood Developments Limited and Blenheim Food Store Limited - respondents

Mr P J Radich - for partnership of Leslie John Hope and Morris John McQuillan - respondent
Mr A J Nolan - on behalf of Builders Arms (2004) Limited - respondent


RESERVED DECISION OF THE AUTHORITY

Introduction


[1] Before the Authority are six applications by the Police for suspension of the off-licences of three taverns with bottle stores, two stand-alone liquor stores, and one convenience store.

[2] The ground for each of the applications was that the licensed premises had been conducted in breach of s. 155 of the Act. That section prohibits the sale or supply of liquor to minors.

[3] All six applications arose from the same set of facts. On Thursday 12 August 2004, the Police conducted a controlled purchase operation in Blenheim. The operation involved two volunteers Ryan and Mark aged 16 years, entering off-licensed premises and attempting to purchase alcohol. Ryan was born on 3 August 1988 and Mark was born on 20 November 1987. They were instructed to answer any questions regarding their age honestly, and they were to state that they did not have any identification if asked.

[4] Ryan and Mark were not required to appear at the hearing as all licensees accepted their evidence. Photographs were taken before the operation showing how they were dressed, and were produced in evidence.

[5] Of the 15 off-licensed premises that were visited during the evening the volunteers were asked for identification or their age at nine of those premises. In each case a sale was refused.

[6] Sergeant Parata said that this was the third controlled purchase operation that had been run in Blenheim, and all three had received publicity in the local news media.

[7] Sergeant Parata said that after a couple of meetings between the Police and the licensees all applications for suspension of the General Manager’s Certificate were withdrawn at the direction of the District Commander of the Blenheim Police. This was a show of goodwill toward the licensees in the Blenheim area for their improved performance. Each of the people who made the sale, except one, had been charged in the District Court, and were later dealt with by way of Police diversion. One sales person had not been charged because he was seriously ill.

[8] At the end of each hearing we advised the respondent that we would wait until we had heard all six applications before issuing a decision that reflected the circumstances at each of the premises.

Simon Warren Clifford Croft Application


[9] Ryan entered the “Springlands Tavern” bottle store at about 5.30 pm. He obtained a six pack of Lion Red cans, and went to the counter where he was served. He was not asked for identification nor was he questioned about his age.

Blenheim Foodstore Limited Application


[10] At about 6.00pm Mark entered the “Blenheim Night & Day Foodstore” and purchased a six pack of Speights stubbies. The shop assistant asked him for identification, and when he told her did not have any she continued to serve him and completed the sale.

W & J Dillon Application


[11] At about 4.45 pm Mark entered the “Blenheim Liquorland” store and purchased a six pack of Export Gold stubbies. The shop assistant did not ask him for identification or question him about his age.

Builders Arms (2004) Limited Application


[12] Ryan entered the “Builders Arms Tavern” bottle store at 6.40 pm. An employee served him, and he purchased a “Pub Pet” of Icebreaker. Ryan was not asked for identification nor was he questioned about his age.

Redwood Developments Limited Application


[13] At about 5.14 pm Mark entered the “Redwood Tavern Liquor Vault” where he obtained a six pack of Export Gold stubbies. An employee served him. He only asked Mark if he wanted a bag for his purchase. The employee did not ask Mark for identification or question him about his age.

Partnership of Leslie John Hope and Maurice John McQuillan Application


[14] At about 5.40 pm Mark entered “Grove Road Superliquor” store. He was going to the beer fridge area when he saw a teacher from his school in that part of the shop. Mark grabbed a bottle of wine, and took it to the counter. In his brief of evidence he said that he stood behind an older gentleman who was being served by a female employee. He was then called over to another counter where a man served him. He was not asked for identification nor was he questioned about his age.

Response from Mr S W C Croft


[15] Simon Warren Clifford Croft is the licensee and hands-on operator of the “Springlands Tavern”. He is also the President of the Marlborough Hospitality Association of New Zealand. He has owned the “Springlands Tavern” for 14 years, and has been in the industry for 15 years. It was the first time he had had to appear before the Authority. He did not dispute the evidence. He has six other establishments, one of which is the “Builder’s Arms”. He employs over 100 staff. He works 100 hours per week. He said he cannot be everywhere and he has to rely heavily on his staff and managers.

[16] Mr Croft submitted that the tavern is a well-run business that has not previously caused the Police any concern. It is a busy local tavern where at times up to 300 patrons can be on the premises. It has a sports and lounge bar, restaurant, and bottle store. It was in the bottle store that the breach occurred

[17] Mr Croft said that the server, Trevor Lammas, was new to the tavern, and did not hold a General Manager’s Certificate. He had been reprimanded for the sale. As part of the Police diversion he had to put an advertisement in the newspaper saying that he would not be serving underage people. He also had to make a donation to a charity. The duty manager was serving in the bar at the time.

[18] Mr Croft said that staff training is an important part of the business. Regular seminars are carried out on the premises. Host responsibility procedures included the underage policy and the checking of identification. Identification procedures at the tills had also been highlighted. He said that with the help of HANZ, steps had been taken to ensure that the incident would not be repeated. HANZ had supplied policy and procedure manuals, and signage.

[19] Mr Croft considered that the prosecution of the staff had been a sufficient penalty. With his help, the Police had received co-operation from the licensees, and a two-way relationship with the Police had been established.

Response from Blenheim Foodstore Limited


[20] Paula Anne Cochrane and her husband own and operate the “Blenheim Night & Day Foodstore”. Mrs Cochrane holds a General Manager’s Certificate. She was on duty when the sale to the volunteer was made, but was removing rubbish at the time. She said that the employee who had made the sale was under video surveillance because she was suspected of theft. She was later caught in the act of stealing. She admitted previous thefts, and is no longer employed at the store.

[21] Just prior to the sale to Ryan, Mrs Cochrane had intervened in a transaction because she was concerned that the employee was selling cigarettes to a person under the legal age. After the customer left, Mrs Cochrane went through the procedures for selling cigarettes and alcohol with the employee and reminded her about asking for identification. She instructed the employee to call her if cigarettes or alcohol were to be purchased.

[22] Mrs Cochrane said that the company had had a liquor licence for 12 months. The server had been in their employment for approximately seven months. There are five staff who hold a manager’s certificate, and one of them is always on duty. Prior to the incident, staff were allowed to sell alcohol. However, since the incident a new policy has been instituted whereby only senior staff members are permitted to sell alcohol. Posters on the wall of the shop now advise customers of that policy. There is also a note on the till reminding staff to ask for identification.

Response from W & J Dillon Limited


[23] Warren Stewart Dillon said that the company had been formed 10 years ago to buy a “Liquorland” franchise, now known as “Blenheim Liquorland”. He is a hands-on operator and conducts the business with a minimum of staff. He was aware that a controlled purchase operation was being conducted, and that there had been others.

[24] Mr Dillon said that “Liquorland” runs its own controlled purchase operations through the Market Pulse Company. That company sends psuedo patrons who dress down to give the impression that they are under the age of 18 years. Mr Dillon’s company is also involved in the programme whereby patrons appearing to be under the age of 25 years are asked for identification. Until this incident Mr Dillon’s company had had an almost 100% success rate. On one occasion he had accepted the wrong type of identification, but he had known the customer’s family.

[25] The staff member who had made the sale to the volunteer was from overseas. Mr Dillon did not put her through a training course when he employed her because he did not know how long she was going to stay in Blenheim.

[26] Mr Dillon said that a screen on the tills reminded staff to ask for identification from people aged less than 25 years. He said that the staff member had freely admitted not asking for identification. The company no longer employs her. She had been employed at the store for seven months. Mr Dillon did not discourage her when she said she was leaving.

[27] Through the Police Diversion scheme the staf member paid $150 to a charity and was required to put an advertisement in the newspaper stating that she would not serve underage people. Mr Dillon said that he had been present on two previous occasions when she had asked both people for identification.

Response from Builders Arms (2004) Limited


[28] Mr Anthony John Nolan is one of the directors of the company, and the holder of a General Manager’s Certificate. The company had purchased the business on 19 July 2004. It was operating under a temporary authority at the time the sale was made to the volunteer. Mr Nolan had not had any previous experience as a licensee although DB Breweries Limited had employed him for 11 years.

[29] He said the “Builders Arms” was a small multi-faceted tavern with a bottle store, kitchen, gaming facilities, and a bar. At the time of the sale to the volunteer he was dealing with a gaming machine matter in another part of the premises. When these situations occur he has to rely heavily on his staff. He said that gaming machines require a lot of staff time, and he has several staff members undergoing training to manage them. The staff member who served the volunteer was employed part-time. She had previous experience, and has since left to go to full time employment.

[30] Directly after the sale to the volunteer Mr Nolan held a compulsory staff meeting where the incident was discussed and the staff agreed to an action plan. That action plan involved increasing the level of staff training, purchasing and distributing copies of the Act and Managers’ Guides to all staff, providing more notices and signs at the point of sale for both staff and customers, adopting the under 25 years policy, and meeting with Marlborough Security to secure consistent and reliable staff.

[31] Mr Nolan said that all of those matters had been actioned. In addition there had been meetings with the Police District Commander and the Liquor Licensing Sergeant resulting in an increased level of co-operation with the Blenheim Police. As a consequence of all those matters they have tried to eliminate the risk of failure. He was now getting comments from customers that the bar and bottle store is regarded as the hardest in the town to get into. Mr Nolan said he did not want to appear before the Authority again.

Response from Redwood Developments Limited


[32] Joseph Gilbert Flood is the employee who served the volunteer. He has been in the industry for 29 years. He said that he failed to ask the volunteer for identification because while he was carrying out the transaction he was watching another customer whom he believed was trying to steal some liquor, and who had been involved in shoplifting in the past.

[33] John Arthur Davis was the manager on duty at the time of the incident. He has been a manager of the “Redwood Tavern” for 27 and a half years. He was told by the Police officer afterwards that in three similar operations previously the volunteer had been turned away. Since the incident on 12 August 2004 he had interviewed every staff member who sells liquor, and had stressed the importance of complying with the Act and the company policy at all times.

[34] Robert Paul Ham is a shareholder and director of the company. He said that Mr Flood had been employed by the company for nine years and was a conscientious employee who normally errs on the side of caution. He contended that Mr Flood had annoyed regular customers by repeatedly asking them for identification.

[35] Mr Ham said the company has been operating the tavern since 1972, and it has never been prosecuted under the Sale of Liquor Act. The company is acutely aware of the necessity to frequently remind staff of their legal obligations as well as the ongoing need for training all staff members. He asked that the Authority take into account the company’s past exemplary record and accordingly, that any suspension period be kept to a minimum. He stressed that the incident was unlikely to happen again.

Response of the Partnership of Leslie John Hope and Maurice John McQuillan


[36] Mr M J McQuillan is in partnership with Mr L J Hope. He said that the partnership had been operating “Grove Road Super Liquor” for 13 years. During that time they have never been convicted under the Sale of Liquor Act. They have a policy not to serve minors, which is strictly enforced. All the staff know the policy, and that they are not in the business of catering to the needs of minors. The business has one of the largest wholesale liquor turnover in Marlborough.

[37] Mr McQuillan’s son, Drew, who is aged 25 years, was the manager on duty. He was working with Shirley, a mature, long standing employee of more than 10 years experience. According to her, there were two other people in the shop before the volunteer, Mark, entered the premises. One was a middle-aged man who was being served by Shirley, and the other was a school teacher who was at the beer fridge. She understood that Mark saw the teacher and went to another section of the shop to avoid him. The teacher made his purchase and left the shop. Mark then stood beside the middle-aged man and some conversation took place between them. Shirley took the wine off Mark, assuming that they were father and son. She added it to the middle-aged man’s account. She was then made aware of the mistake, and sent Mark to another counter to be served by Drew. At that point, Drew assumed that Shirley had made the identification check, and completed the transaction. Mr McQuillan emphasised that it was a simple mistake brought about by misunderstandings arising from the circumstances.

[38] Following the hearing, Mr Radich wrote to the Authority on 26 January 2005. He said:

“After the hearing this morning Sergeant Parata reminded me that the Police were willing in the circumstances to support an outcome whereby the application would be adjourned for 12 months on the basis that if during that period of time there were no other issues, the Police would seek leave to withdraw the application at the end of that period.

I omitted to mention that to the Authority as a possible means of dealing with the matter and am now with the consent and support of the Sergeant putting this memorandum before you.”


[39] In light of the unusual circumstances we consider that would be an appropriate outcome.

Authority’s Conclusion and Reasons


[40] We are satisfied that in respect of each application there was a breach of s. 155 of the Act. Although the evidence also amounted to a breach of s. 165 of the Act, (sale or supply of liquor to any person when not authorised by the licence or the Act), that breach was not alleged in the applications. The next issue is whether it is desirable that suspension orders should be made. That issue must reflect the seriousness of supplying liquor to minors. We have made the following comments before, but we consider they are worth repeating. The issue of imposing a sentence has to be viewed against a background of two factors.

(a) The potential increase of liquor abuse. Although there was no abuse reported in this case, some minors who have purchased liquor unlawfully, have ended up in a hospital, or have become involved in offending.

(b) The 1999 reduction of the legal drinking age from 20 to 18.


[41] This major change of policy was accompanied by a number of other statutory measures. These measures were designed to bolster the detection and enforcement of breaches of the new law. Parliament clearly took the view that the supply of liquor to minors was a very serious liquor abuse issue. It gave the Act the necessary teeth in an attempt to actively discourage those who might be tempted to supply liquor to persons under age. 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.

(c) 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.


[42] Our views about the impact of these provisions were first expressed in Onehunga Wines & Spirits Co. Limited LLA PH 311-312/2001. As was said in that case:

“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.”


[43] Then on 7 May 2002, came the well-known Karara decision LLA PH 216 – 229/2002. In that case, the Authority was confronted by seven applications for suspension following a controlled purchase operation. Three of the licensed premises were supermarkets. One was a convenience store. The other three premises were off-licences associated with taverns. Six of the off-licences were suspended for five days. The seventh was suspended for three days. All had exemplary records. No specific warnings had been given.

[44] The case was followed by an appeal to the High Court, which effectively stated that the Authority had exceeded its jurisdiction. Subsequently, the Court of Appeal restored the original orders. See Christchurch District Licensing Agency Inspector and another v Karara Holdings Limited and others [2003] NZCA 96; [2003] NZAR 752. The resultant publicity was significant, and most off-licensed premises felt the impact.

[45] On 17 December 2002, the Minister of Justice and the Associate Minister of Health announced that “The Government is very concerned about the widespread negative impacts of alcohol and illicit drugs on the health and social wellbeing of individuals, families and communities. Of special concern is the impact on our young people.” They announced the establishment of a Ministerial Action Group on Alcohol and Drugs. Part of the Action Plan was aimed at examining what further steps needed to be taken to prevent the sale of liquor to underage drinkers. The plan stated that ALAC and the Police would identify “best practice” operations in enforcing controls of the purchase and consumption of alcohol by those under age, with a view to developing and implementing more effective practices. The Minister of Justice subsequently spoke with industry leaders about the seriousness of the problem.

[46] A special report compiled by ALAC in 2003 showed that up to 87% of young people aged between 14 and 18 defined themselves as current alcohol drinkers.

[47] Over the last four years, District Licensing Agencies, the Police, and officers from Regional Public Health have taken a number of initiatives designed at bringing the issue to the attention of those who sell liquor to the public. Among the education methods employed by the agencies has been the controlled purchase operation. By using this method, the agencies have for the first time, been able to check to see whether off-licences were playing their part in reducing liquor abuse. As a consequence of such operations, the number of enforcement applications brought before the Authority has increased significantly.

[48] Notwithstanding the evidence and submissions from each of the respondents our responsibility is encapsulated in s.4(2) of the Act which provides that we are required to exercise our jurisdiction, powers, and discretions under the Act in a manner that is most likely to promote the object of the Act. The object is:

4. Object of Act---(1) The object of this Act is 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, so far as that can be achieved by legislative means.


[49] In Christchurch District Licensing Agency Inspector v Karara Holdings Limited (supra) the Court of Appeal said:

Section 4 expresses a philosophy concerning the social utility of controls over the sale and supply of liquor which reflects the underlying policy of the Act. Parliament has declared that the Act’s system of controls over the sale and supply of liquor should be administered so as to contribute to the reduction of liquor abuse in the community within the limits of their capacity to do so. The stipulation that the object of the Act is to establish a reasonable system of control reflects that legislative perception. It also implicitly recognises that if the administration of the Act’s licensing system becomes too heavy-handed, so that it unreasonably inconveniences those wishing to purchase and consume liquor in a manner not giving rise to abuse, that result would be inconsistent with the statutory object. The licensing bodies which administer the licensing system, and the Courts on appeal, are required by s 4(2) of the Act to exercise their respective functions in a manner that is most likely to promote this underlying statutory policy and object.”


[50] In exercising our discretion under s.132(6) of the Act, we believe that it is desirable to make orders. We regret having taken some time to resolve the difficult question of the length of the suspension periods.

[51] In John Francis Armstrong v Karara Holdings Limited LLA PH 800-801/2003 the Authority discussed its philosophy in assessing a period of suspension which is both reasonable and reflective of the misconduct. In that case the respondent had been caught in a second controlled purchase operation. We said:

“[21] ....The point needs to be made that there are about 7000 off-licences currently in existence in this country. The vast majority seem to be able to cope with the requirements of the Act. As was stated by Gendall J in The Mill Liquorsave Limited (supra), recognition of those who comply with the law can encourage adherence to the law. It is of more than passing interest that the companies which either did not do well in the first controlled purchase operation, or about whom there have been complaints, did not do well on the second controlled purchase operation either. .

[22] The Court of Appeal in Christchurch District Licensing Agency Inspector and another v Karara Holdings Limited and others (CA 178/02, 13 June 2003) has reminded us that in exercising our discretion we must avoid being heavy handed. We accept such a duty, and we have been careful to distinguish between those licensed premises which sell liquor only, and those (such as supermarkets and restaurants) where the sale of liquor is not the primary business being conducted. We assume that where the core business of any company is not the sale of liquor, the company will have weighed up the advantages and disadvantages of maintaining an off-licence. Having made that decision, the company must then accept the obligations which go with the licence. The company may gain a privilege, but in doing so, it will assume a relatively straightforward responsibility, coupled with a potential liability, if it takes that responsibility too lightly.”

[23] In the above decision, the Court of Appeal described the period of suspension for five days as “a moderate period” in paragraph [12], and “a short period” in paragraph [47]. We believe that any period of suspension should reflect the activity which led to the suspension. A controlled purchase operation by its nature will not lead to liquor abuse. All it does is point to such a possibility. We take the view that all suspensions which follow such operations, should be moderate. We have said before that we regard sales to minors in an on-licence situation as potentially more destructive. If there is actual liquor abuse then the sanction will be greater. If there is clear managerial irresponsibility, that will be reflected in the period of suspension. Credit will always be given where it has been established that efforts have been made to ensure that there will be no repetition of the conduct leading to the suspension. We have always tried to distinguish between premises where the core business is the sale of liquor, and premises where the sale of liquor is an ancillary service. In the latter case, any suspension will not mean that the business has to close.

[24]... As was stated in Sarah Jane Reynolds v Mikano Limited and another LLA PH 738-739/2003 a reasonable discount should be given to reflect a co-operative if not remorseful attitude. In that case and in others, we have taken the view that 30% of the sanction is fair.”


[52] This was the third controlled purchase operation conducted in Blenheim. There had been extensive media publicity covering the previous operations. Consequently, all licensees were aware of the possibility of another controlled purchase operation. There had also been extensive coverage in the general media regarding selling liquor to minors. In other words no-one in the industry would be unaware of the issue.

[53] In the present cases all the licensees were well aware of their responsibilities, and had immediately co-operated with the Police avoiding the need for the volunteers to give evidence. More importantly, four of the six licensees had exemplary records in the industry, from 32 years in the case of Redwood Developments Limited, 14 years in respect of Mr S W C Croft, 13 years in respect of the partnership of L J Hope and M J McQuillan, and 10 years in the case of W & J Dillon Limited. The other two were relative newcomers to the industry. Blenheim Foodstore Limited was affected by an untrustworthy employee who was under surveillance for stealing from her employer. It was apparent that Mrs Cochrane was doing her best with a difficult employee. However, we noted that this employee was the only one that asked for identification, but then made a sale anyway. Builders Arms (2004) Limited has made such significant improvements to its operation that apparently, it is now regarded as the premises that is the most difficult for a young person to gain entry. The withdrawal by the Police of the applications for suspension of the managers’ certificates reflected the efforts that the licensees had made to improve their respective operations.

[54] Acknowledgement must be given to the efforts all the licensees have made to minimise the future risk of minors attempting to purchase liquor from their premises. That has to be balanced against the attendant publicity that surrounded a third controlled purchase operation in Blenheim. We were particularly impressed with the way that the licensees faced up to their responsibilities, and formed a close liaison with the Police to try and ensure a reduction in liquor abuse in the future. The periods of suspension are intended to be in keeping with those matters as well as reflecting the direction in s.4(2) of the Act to establish a reasonable system of control. We have also taken into account that the managers’ certificates were not subject to applications for suspension. In other words, the licensees will not be inconvenienced by managers on suspension.

[55] For the reasons we have given the applications for suspension of the following off-licences are granted and we make the following orders:

[56] The application for suspension of off-licence number 052/OFF/27/2002 issued to the partnership of Leslie John Hope and Maurice John McQuillan is adjourned for 12 months. This period of time will give the licensee the opportunity to remedy the issues of minors being allowed to enter or remain on the premises or purchase any liquor. If at the end of that time there have been no further incidents or adverse reports from the Police or the District Licensing Agency Inspector, the application will be dismissed. If there are further incidents a further public hearing will be held.

DATED at WELLINGTON this 20th day of April 2005

Judge E W Unwin Mr J C Crookston
Chairman Member

Blenheim CPOs.doc(aw)


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