Reynolds v Occidental Tavern Limited [2005] NZLLA 462 (27 June 2005)

Last Updated: 24 April 2010

Decision No. 462-463/2005

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 the suspension of on-licence number 007/ON/383/2004 issued to OCCIDENTAL TAVERN LIMITED in respect of premises situated at 6-8 Vulcan Lane, Auckland known as “Occidental Belgian Beer Café”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for suspension of General Manager’s Certificate Number GM/007/1175/04 issued to STEFAN LANGE

BETWEEN SARAH JANE REYNOLDS
(Police Officer of Auckland)

Applicant

AND OCCIDENTAL TAVERN

LIMITED

First Respondent

AND STEFAN LANGE

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at AUCKLAND on 9 June 2005

APPEARANCES

Constable S J Reynolds – NZ Police – applicant
Mr A Dormer - for first respondent
Mr S L Lange – second respondent
Mr G S Whittle – Auckland District Licensing Agency Inspector – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are two enforcement applications for consideration. Both applications are brought by the Police. The first is for the suspension of an on-licence issued to Occidental Tavern Limited (the company). The on-licence was issued in 2000, for premises in Vulcan Lane in Auckland City, known as the “Occidental Belgian Beer Café”. The second application is for the suspension of the General Manager’s Certificate held by Mr Stefan Lange. Mr Lange was the duty manager of the premises at the time of the incident which led to the filing of the applications. He has held his General Manager’s Certificate since 8 November 2004.

[2] The grounds of the application in respect of the on-licence are that the premises have been conducted in breach of the following provisions of the Act:

Section 115 (Licensee or manager to be on duty at all times)

Section 165 (Unauthorised sale or supply)

Section 172A (b) and (c) – (Licensee’s offences in respect of manager)

[3] The ground of the application for the suspension of the General Manager’s Certificate is that the manager has failed to conduct the licensed premises in a proper manner.

[4] Both applications arose from two incidents in March and April 2005. An inspection of the premises on the evening of St Patrick’s Day, 17 March 2005, revealed that a number of patrons were consuming liquor in Vulcan Lane beyond the boundaries of the outdoor seating licence, as well as outside the defined licensed premises. It was discovered that the person whose name was shown as duty manager was not present. It became apparent that Mr Lange was on duty and that he had neglected to display his name on the notice board. A subsequent visit on 14 April 2005, revealed a similar situation, with patrons drinking beyond the limits of the defined area of the licensed premises. As a consequence, the Police lodged the enforcement applications on 2 May 2005.

[5] The application pursuant to s.132 of the Act was opposed on the grounds that the premises were non-problem premises, and that there had been no liquor abuse issues. Mr Dormer contended that the incidents were therefore technical in nature. He submitted that any suspension would not be in keeping with the reasonable system of control promoted by the Act, and out of kilter with other Authority decisions. In effect, the Authority was asked to exercise its residual discretion not to suspend the licence.

[6] Mr Stefan Lange spoke eloquently about the personal consequences which had flowed from the two incidents. He took issue with the allegations that his patrons had been consuming liquor in non-licensed areas, or that he had not been co-operative. He believed that he had acted professionally and done the best that he could in the circumstances.

The Factual Background

[7] Mr Trevor Allen Ready has had 30 years experience in the hospitality industry. He has owned and operated a number of licensed premises over that period of time. Currently, his family company has the responsibility of four licensed premises in Auckland, all with the “Belgian Beer Café” theme. The company employs over 150 people. The company took over the premises now known as the “Occidental Belgian Beer Café” in 1999. At that time the premises had not been trading for two years.

[8] The “Occidental Belgian Beer Café” has a tavern style licence although 40% of the turnover relates to the sale of food. It also has an outdoor seating licence granted under the Auckland City Bylaw known as “Trading in Streets and Public Places”. This seating licence allows for five tables and 16 chairs that can be placed on the footpath directly outside the premises. The conditions of the outdoor seating licence require that the footpath area set aside for the tables and chairs, must not exceed 1.8 metres out from the premises, and there must be a clear two metre free passageway for pedestrian access. The outdoor seating area is included in the definition of licensed premises, so the consumption of liquor in this outdoor area is permitted.

[9] The evidence was that the next door tavern known as “O’Carrolls”, had applied for a special licence to sell liquor from a small marquee on part of Vulcan Lane to celebrate St Patrick’s day on 17 March 2005. The application has not been granted because it had not been received by the Auckland District Licensing Agency in sufficient time to be processed. The Police and District Licensing Agency Inspector had decided to visit the premises in Vulcan Lane to ensure that trading was not taking place.

[10] The visit was undertaken by Constable Sarah Jane Reynolds a Police Constable with the Strategic Liquor Licensing Section, and Gary Selwyn Whittle, a Liquor Licensing Inspector with the Auckland District Licensing Agency. They started observing the “Occidental Belgian Beer Café” at about 8.10 pm. Over a period of about five minutes, they noted several patrons walk out of the premises and into Vulcan Lane with their drinks. Some patrons sat down at the tables while others stood around in groups consuming their beer and wine. In doing so, they were outside the 1.8 metre zone specified in the outdoor seating licence, and beyond the defined licensed premises. Mr Whittle and Constable Reynolds estimated that some of the patrons were as far as 10 metres from the entrance to the premises. There was no sign of any staff member monitoring the scene, or checking that the patrons were keeping to the allocated area. In summary, the premises appeared to be trading illegally.

[11] Mr Whittle and the Constable entered the premises at about 8.15 pm, and noted that the name of ‘Andree Anderson’ was the nominated duty manager. Constable Reynolds asked to speak with Ms Anderson but was immediately told that the duty manager was actually Mr Stefan Lange. Mr Lange was very busy behind the bar, and was said to be initially extremely uncooperative. It was some minutes before he agreed to speak with the enforcement officers. He had been employed at the premises for about six months, and had undertaken duty manager responsibilities since being granted a General Manager’s Certificate in November 2004.

[12] Mr Lange refused to acknowledge that his patrons were drinking in a non-licensed area, and then said it was impossible to prevent patrons from leaving the premises with their drinks as they were so busy. He was told that he had to comply, and accordingly, a staff member was placed on the door to prevent other patrons from consuming liquor beyond the seating area.

[13] On 14 April 2004 at about 8.15 pm the Constable and the Inspector returned to the premises in Vulcan Lane. They again noticed that patrons were drinking outside the area defined as licensed premises. They observed one of the patrons going inside the premises and returning with full glasses of beer for his friends. They also noted Mr Lange come out of the premises and walk among the patrons who were standing in the Lane. Mr Lange was on duty that evening. He denied that there was a problem. He placed some of the blame on the staffing levels and fluctuating number of patrons. He repeated that he could not prevent patrons from going outside and beyond the 1.8 metre area. He said that one of the problems was that the Council would not permit the licensee to put up a rope barrier to identify the street trading area. Constable Reynolds was cross-examined about her ability to identify patrons from the “Occidental Belgian Beer Café”. She said that she had no doubt about her observations, and she certainly came across as a very thoughtful, professional and objective witness.

[14] Constable Reynolds gave evidence that on 11 May 2004 a facsimile was received advising that Mr Lange’s employment as manager had been terminated. She spoke with Mr Ready the next day. He told the Constable that Mr Lange had had a problem coping under stress when the business was busy. A few weeks previously, he had resigned over an unrelated matter but had agreed to stay on. When the suspension applications were filed, Mr Ready felt that he had no option but to accept the earlier resignation and relieve Mr Lange of his employment. Mr Ready stated that he hated seeing anyone lose their jobs, but the manager’s conduct had placed his business under threat.

[15] Constable Reynolds interviewed Mr Lange a few days later. He acknowledged that he had forgotten to replace the name of the previous duty manager with his own. He said that he was not intentionally uncooperative, but wanted to finish off what he was doing before speaking with the enforcement officers. He also acknowledged that he had not been aware that patrons were consuming liquor outside the defined premises, and that they should have had a doorman on duty. He said that he was not intentionally trying to break the law.

[16] Mr Ready was firmly of the view that the St Patrick’s day celebrations in “O’Carrolls” next door had impacted on the way his premises had been managed. He confirmed that all duty managers were aware that the licence did not permit drinking in Vulcan Lane. He said that Mr Lange had told him that two of the employees had not arrived for their shift, and that this had put added pressure on him. Mr Ready understood that it was not possible to rope off the area defined by the outdoor seating licence because the Auckland City Council took the view that to do so, would indicate that this part of the footpath was no longer a public thoroughfare. On the other hand, Vulcan Lane is a pedestrian way only. Mr Ready advised that since the incidents, he had arranged for a rope barrier to be erected because he felt he had no alternative.

[17] Mr Lange confirmed that the loss of employment had already impacted on his personal life although he was currently working back in the industry. He denied that he was serving customers when first spoken to. He apologised if he was uncooperative, but said that this was not his intention. He acknowledged that he had received clear instructions not to allow consumption of liquor off the premises. He said that it was still a source of irritation that patrons had been identified as having come from his premises, because he did not see how that was possible.

[18] Mr Dormer referred us to the decisions of Kauri Consulting Ltd [1996] NZAR 461 in which the Authority had stated:

“We comment that having regard to the object of the Sale of Liquor Act at s.4, paraphrased as contributing to the reduction of liquor abuse, in our view it would be preferable for the Police and agency inspectors to concentrate on taking enforcement proceedings under the Sale of Liquor Act to counter the sale of liquor to intoxicated persons and to minors, rather than addressing the issue of whether non-problem premises are selling liquor to patrons who are or are not present on the premises for the purpose of dining.”

[19] He also referred us to Geoffrey Donald Logan v Tiffanys Cabaret Limited and another LLA 2546-2547/98 in which the Authority declined to make enforcement orders in respect of premises where two teenagers had been employed as strippers. There was an argument as to whether the young women had given incorrect ages. The Authority was of the opinion that the key factor in favour of the respondents was that there was nothing in the Police evidence to suggest that the operation of the premises gave rise to problems associated with liquor abuse.

[20] Finally, Mr Dormer referred us to Michael John Lopdell v Audiophile Bar & Café Company Limited LLA PH 235/2001 and the subsequent appeal to the High Court. In that case the premises had been operated for a short time without a certificated manager being present. Furthermore, the licensee had neglected to notify managerial appointments for nearly two years, and had allowed consumption of liquor on the footpath without the requisite footpath permit. The evidence was that the licensee had since rectified all matters. It had obtained a footpath permit, and made the necessary appointments and notifications. We noted that these were non-problem premises and deemed it desirable not to make a suspension order.

[21] The Police appealed this aspect of the decision on the basis that the offending was serious, and that the discretion had therefore been exercised on a wrong principle. In the decision of Michael John Lopdell v Audiophile Bar and Café Company Limited Auckland High Court AP81/01, Paterson J held that the failure to impose any penalty did not amount to an application of the wrong principle. He took the view that the decision did not set a precedent which effectively condoned non-compliance with the Act.

[22] In summary, Mr Dormer stressed that in the absence of liquor abuse issues, any suspension of the licence for the way the premises had been conducted, could be counter productive to the Act’s objective of establishing a reasonable system of control over the sale and supply of liquor to the public with the aim of reducing liquor abuse. Mr Dormer submitted that the education of licensee was preferable, in cases where the degree of culpability was minor, as in this case.

The Authority’s Decision and Reasons

[23] We deal firstly with the application for the suspension of the on-licence. There are three alleged breaches of the Act which give rise to this application. In her final submissions, Constable Reynolds abandoned any claim that s. 172A(c) of the Act had been breached.

(i) Section 115(2) states: “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 shall be deemed for the purpose of the Act to be the manager at that time.”

(ii) Section 165 (1) states: “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”.

(iii) Section 172(A) (b) states: “Every person commits an offence and is liable to a fine not exceeding $5,000 who, being a licensee, fails, without a reasonable excuse, to (b) Ensure that section 115 is complied with”:

[24] It is clear that there was a breach of s.115(2) of the Act. Mr Lange made a mistake. When he reported for work at about 3.30 pm, he forgot to put his name on the duty manager notification board as he had been instructed. It is a mechanical task which no doubt becomes second nature to all duty managers. He has apologised for his oversight. Nevertheless, he was present on the premises, and accordingly there was little chance of any liquor abuse issues arising. The breach was technical and unintentional and in our view would not call for a suspension, particularly of the on-licence.

[25] In terms of s.172(A)(b) of the Act, we are not satisfied that the licensee failed without reasonable excuse to ensure that the correct name was put up on the board. Having heard from Mr Ready, we are more than satisfied that he had put sufficient systems in place to ensure compliance with s.115 of the Act. The fact that one of his managers let his guard down and forgot to carry out such a function, does not in our view, establish a licensee failure. Accordingly, we do not accept that this ground has been established.

[26] So far as s.165 of the Act is concerned, the legal position is not uncomplicated. Pursuant to s.7 of the Act, the on-licence authorises the holder of the licence to sell liquor to any one present on the premises for consumption on the premises. The section also authorises the holder of the licence to allow the consumption of liquor on the premises. Clearly these provisions were breached, but such breaches were not alleged in the application. It could also be argued that the licensed premises were conducted in an improper manner as provided for in s.132(3)(a) of the Act.

[27] The Police case is that any sale which is made for consumption off the premises, will not be an authorised sale in terms of s.165 of the Act. It was submitted that in cases where the manager or the licensee condones or allows consumption off the premises, then the Act has been breached. In this case, the unauthorised sales were more the result of negligence or inattention on the part of the manager and staff.

[28] As far as Mr Lange is concerned we are more than satisfied that on two occasions he failed to conduct the licensed premises in a proper manner. The evidence showed that he was so busy that he became unaware of what was happening. Although Mr Dormer submitted that there was no liquor abuse, the fact remains that the licensed premises were conducted in a way which was quite contrary to the terms of the licence, and the provisions of the Act. We accept that compliance may be difficult but there is a significant difference between an isolated patron who takes a drink away from the licensed premises, and the sort of wholesale consumption which was taking place on the two nights in question. Although Mr Dormer was critical of the motivation behind the filing of the applications, the Police were effectively confronted by an unauthorised street party, which on the face of it, was being promoted by the next door premises, despite a refusal to grant a special licence.

[29] Sections 132 and 135 of the Act require a two step approach. First, the evidence must be examined to see whether we are satisfied that the allegations have been established. If that is the case, we must then decide whether it is desirable than an enforcement order is made. So far as the licensee is concerned, we do not intend to make any order. We believe that the licensee did all that was required of it. As Mr Ready stated in his interview, it is not possible to be on the premises 24 hours a day. He has to trust his managers to run his business in his absence. The fact that Mr Lange was subsequently dismissed from his employment sends a much more powerful message to the industry than any policy statement from us.

[30] Although Constable Reynolds submitted that a reasonable length of suspension was warranted, we do not believe that this would assist in securing compliance with licence conditions and the law. In our view, the company has taken further steps to avoid the same thing happening again although it may yet have to deal with the Council on this issue. After hearing from Mr Ready we came to the conclusion that the message had got home. The retention of Mr Dormer as counsel, showed how seriously he took the matter. In this case, we believe that any suspension of the licence would be heavy-handed and unreasonable.

[31] In the case of Mr Lange, we note that he has suffered also. He has born the brunt of the two incidents, and it was clear that he is missing his former employment. On the other hand the breaches happened on his watch, and within a short period of his receiving his General Manager’s Certificate. The fact that the conduct was repeated has aggravated the situation. We have fixed a period of suspension which we trust will act as a reminder to him of the need to be vigilant, without being seen as a severe penalty.

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

(a) The application for the suspension of the on-licence issued to Occidental Tavern Limited is refused.

(b) General Manager’s Certificate number GM/007/1175/04 issued to Stefan Lange is suspended for three weeks from Monday 18 July 2005.

DATED at WELLINGTON this 27th day of June 2005

Judge E W Unwin Mr J C Crookston
Chairman Member

Occidental Belgian Beer Café.doc(nl)