Taite Tait & Associates Limited [2005] NZLLA 858 (5 December 2005)

Last Updated: 24 January 2012

Decision No. PH 858/2005

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by TAITE TAIT & ASSOCIATES LIMITED pursuant to s.18 of the Act for the renewal of an on-licence in respect of premises situated at 122 Dickens Street, Napier, known as “Fallen Angels”

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at HASTINGS on 23 November 2005

APPEARANCES

Mr V P Bowkett – on behalf of applicant
Miss M Naicker – Napier District Licensing Agency Inspector – to assist
Senior Sergeant A C Sloan – N Z Police – in opposition
Mrs B N Jansen – on behalf of Jancliffe Holdings Limited – in opposition

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] On 28 September 2004, Taite Tait & Associates Limited (hereafter called the company), was granted an on-licence by the Napier District Licensing Agency. There was no opposition to the application. The general nature of the business to be undertaken on the premises, was described by the Agency as a brothel. The on-licence enabled the company to sell and supply liquor to anyone present on the premises at any time on any day that the premises were being operated as a brothel.

[2] Mr Vaughan Peter Bowkett is the sole director and a shareholder of the company. He had been responsible for fitting out the new premises. He is also the owner/operator of licensed premises known as “Rack and Ruin” which was formerly known as “Odins” and which is operated as a tavern. He took over this business in May 2005.

[3] Currently, Napier has five licensed brothels which may also be described as massage parlours or commercial sex premises. All five businesses have 24 hour seven day licences other than premises known as “Club Fleurs”, which was granted trading hours of 6.00 pm to 6.00 am because of its proximity to residents, backpackers, a church, and a training institute. A similar business known as “Firecats” has a 24 hour licence, but the sale of liquor in its cabaret and strip club must cease at 3.00 am. At least three of the commercial sex premises, are based near each other in Dickens Street in the Napier CBD.

[4] After “Fallen Angels” had been trading for four months, the Police filed an application for the suspension, cancellation, or variation of the on-licence, as well as an application for the suspension, or cancellation of Mr Bowkett’s General Manager’s Certificate. According to the District Licensing Agency Inspector, the Police concerns were that the premises were being treated as a bar and not a brothel. The applications were withdrawn in April 2005, after an agreement was reached between the Napier Liquor Licensing Sergeant and Mr Bowkett. We were not advised of the details of such agreement, but we understand that Mr Bowkett agreed to make changes to address the Police concerns.

[5] On 28 September 2005, the company applied for the renewal of its on-licence following the “probationary” year. No change to the existing conditions of the licence was sought. Public notification attracted one letter of objection from the licensee of similarly licensed premises located on the opposite side of Dickens Street. The objector alleged that the company’s premises were attracting migrating drinkers after other licensed outlets closed at 3.00 am.

[6] The Police also reported that they had matters in opposition. They contended that the premises should be required to cease selling liquor at 3.00 am. Reference was made to the earlier concerns as expressed in the enforcement applications. The Police contended that since the agreement had been reached, the company had continued to allow the premises to be used by migrating drinkers after 3.00 am when other establishments had closed. Accordingly, the application was set down for a public hearing.

The Police Evidence

[7] As is often the case, we heard the opposition evidence first. This format was implemented to assist Mr Bowkett who seemed not well prepared for the hearing. Although he had received copies of the Police briefs, he had no written response. Senior Sergeant A C Sloan is the Liquor Licensing Officer for the Napier Police. In his opening remarks, he contended that the premises were being used as a bar for the general public. In particular, he argued that the premises were frequented after the other Napier taverns had closed.

[8] The Senior Sergeant submitted that the evidence would show that most of the drinkers found on the premises, were not present for any of the brothel or massage parlour activities. This was partly evidenced by the number of females who were also present. He argued that Mr Bowkett had been given ample opportunity to rectify the situation since it had been brought to his notice, and had been unwilling or unable to do so.

[9] On 18 December 2004, Sergeant Mark Nigel Moorhouse was the Sergeant in charge of the Team Policing Unit. Based on information received, he had formed the view that drinkers were leaving their taverns, but continued their drinking at “Fallen Angels”. This intelligence was based on observations as well as interviews. At about 5.00 am a visit was made to the premises. There were approximately 70 persons present and drinking. The ratio was about 60/40 men to women.

[10] Sergeant Moorhouse stated to the duty manager that most of the patrons were obviously present to drink, and not use the massage and other facilities on offer. He asked that the business modify its activities to an acceptable level, and return to the company’s core business. He spoke with Mr Bowkett the following day, and Mr Bowkett assured him that the situation would be changed and the numbers reduced. The situation improved but only for about two weeks.

[11] On 1 January 2005 at 4.50 am, a further visit was made to the premises. Constable R D Cotter spoke with Mr Bowkett who stated that there were 12 women working for him that night. The Constable considered that there were 50-60 people present, both male and female. They were drinking and socialising in a way that reminded the Constable of a typical bar scene. He noted a few female staff persons from other licensed premises. Some of them stated that they came to the premises after work to have a few drinks. There were a number of people who were hanging about outside the premises as well. Some of them were drinking.

[12] Constable Cotter spoke with Mr Bowkett. He said there were a number of people who had come from Maraenui and it was difficult to turn them away. He was referring to the people outside on the street.

[13] On 5 January 2005 at about 5.00 am, the Police were directed to an assault outside the City’s public library about 150-200 metres from “Fallen Angels”. They found a woman who was crying and upset, and who stated that she had been punched a number of times by her boyfriend. She was described as extremely intoxicated. The boyfriend was located about 15 minutes later. He was also very intoxicated. Both of them stated that they had been drinking at the “Onekawa Hotel” until about 1.00 am, and then they had gone to “Fallen Angels” where they had been drinking for most of the night. The boyfriend was arrested and charged. He stated that “Fallen Angels” was the best place to go to once the bars had closed.

[14] On 12 February 2005 at about 2.30 am, Constable Duane Grant was in Tennyson Street when he heard a female say to another female and two males that they should go to “Fallen Angels” for a drink. He visited the premises at 4.00 am and noticed that there was a doorman at the entrance. A cover charge was advertised at $5.00. There were about 30 patrons present consisting of 20 males and nine females. They were all drinking and some were playing pool. Mr Bowkett stated that he had 10 girls working that night. The Constable gave evidence that he could see three working girls in the bar. However, during the 15 to 20 minutes that he was present, he did not notice anyone approach them.

[15] On 22 October 2005 at 5.15 am, Sergeant M R Lochrie carried out a licensing check at “Fallen Angels”. He went up the stairs and pushed a button on the door to gain entry. He was eventually allowed entry to the main bar area where he counted 29 patrons of whom nine were female. He believed that two of the women were massage parlour workers. Mr Bowkett told him that he had eight employees working that night. It was the Sergeant’s opinion that the premises appeared to be a bar rather than a massage parlour. The Sergeant also stated that he walks to work at about 6.00 am, and often sees a number of cars and people outside the premises. He thought that some of them showed signs of intoxication.

The Evidence from the Objector

[16] Mrs B N Jansen spoke on behalf of Jancliffe Holdings Limited which trades as “Temptations Parlour & Bar”. Her company opposed the continuation of the 24/7 licence based on the number of people who arrived after 3.00 am when all the other licensed premises were closed. She believed that Mr Bowkett encouraged his own patrons from “Rack and Ruin” as well as others to migrate to “Fallen Angels”. She contended that it was common knowledge in Napier that one could go to “Fallen Angels” solely to drink. She stated that on numerous weekends at least 30 to 40 patrons entered “Fallen Angels”, many of whom were intoxicated and female. By contrast her business had catered for about a dozen women over eight years of trading as a massage parlour.

[17] Mrs Jansen also referred to her observations of people drinking in the street as well as in their cars. She said that she had called the Police because of incidents of fighting outside the premises. Mrs Jansen had no issue with the other commercial sex premises which held 24 hour licences but believed that such proprietors should respect and uphold the law, and ensure that their primary business was not compromised. She was concerned that once commercial sex premises had been legalised, they should not become a cover for 24-hour taverns. Mrs Jansen stated that she imposed a cover charge after 3.00 am as this tended to deter members of the public from attending the premises just to drink.

The Applicant’s Evidence

[18] Mr Bowkett confirmed that his premises were the first to be licensed following the passing of the Prostitution Law Reform Act in 2003. He argued that the bar was not his primary business, although he acknowledged that after 3.00 am it made a lot of money. He stressed that there had been no Police complaints about any disorder or intoxication either inside or outside his premises. He noted that the condition of his licence allowed the sale of liquor to anyone present on the premises, so long as the business was being operated as a brothel.

[19] Mr Bowkett denied that he was doing anything wrong. He seemed to place some of the blame on the former Senior Sergeant J H Lovatt who filed the original enforcement applications. Senior Sergeant Lovatt is now a District Licensing Agency Inspector. He has appeared before us often, and we have remarked about his fair minded, objective and helpful approach. The comments made by Mr Bowkett did little to enhance his own credibility. Mr Bowkett argued that since he had been made aware of the Police and other concerns, he had operated within the law. He said that the female patrons who were present often brought their male friends as potential customers, as well as acting as a sober driver. He denied that their presence was a problem, and did not appear to understand the significance of having women drinking casually at a brothel.

[20] Basically, Mr Bowkett denied any suggestion that he was running a bar, or that members of the public were visiting his premises just to drink. However, it was not easy to follow his line of argument particularly in the light of the evidence. During his time in the witness box, he had great difficulty in addressing the questions in an open and candid way. It seemed to us that Mr Bowkett had built up a successful business and was anxious to keep it. He did not appear to be interested in addressing the concerns which had been raised.

[21] The company is the only commercial sex premises in Napier which employs a doorman. Interestingly, the doorman is employed from 3.00 am to 6.30 am. Mr Bowkett argued that having a doorman downstairs meant that they could prevent undesirable persons from coming up the stairs and being refused entry there. He stated that at the top of the stairs, the customer is asked whether he or she wished to go through to the main bar or have privacy.

[22] In summary, we were less than impressed with Mr Bowkett’s evidence. He was not forthcoming about his business. For example, he did not seem to have any idea of how much liquor was sold after 3.00 am, or how much liquor was being purchased during any given period. He thought that liquor sales might account for 15% to 20% of his turnover. His attitude to the former Senior Sergeant (now Liquor Licensing Inspector) was a matter of concern. He did not seem to appreciate the nuances in the licensing system, and his distinct advantage in trading hours over taverns.

The Authority’s Decision and Reasons

[23] In any application for the renewal of a licence, the first point of reference must be the criteria to be taken into account. Pursuant to s. 22 of the Act we are required to have regard to the following matters when considering the application:

(a) The suitability of the licensee;
(b) The conditions attaching to the licence;

(c) The manner in which the licensee has conducted the sale and supply of liquor pursuant to the licence; and

(d) Any matters dealt with in any report made under s.20 of this Act. (This relates to reports from the Police, District Licensing Agency Inspector and the Medical Officer of Health).

[24] In this case, all the criteria are relevant. In considering an application for the renewal of an on-licence, we are also governed by s. 23 of the Act. That section reads:

(1) After considering an application for the renewal of an on-licence, the Licensing Authority shall –

(a) Renew the licence on the conditions presently attaching to it; or

(b) Renew the licence on such different conditions (relating to

any matters specified in section 14 (5) of this Act) as the Licensing Authority thinks fit; or

(c) Refuse to renew the licence.

(2) The Licensing Authority shall not exercise its powers under paragraph (b) or paragraph (c) of subsection (1) of this subsection except in response to –

(a) An objection duly made under section 19 of this Act; or
(b) A report duly submitted under section 20 of this Act; or
(c) A request by the applicant.

[25] It follows that on considering any renewal application, the Authority may in its discretion alter the trading hours in response to reports or objections. We are given the power to review the days on which, and the hours during which liquor may be sold. Decisions of the Auckland High Court in Sheepys Limited AP77-SW01 and Club Raro Limited AP86-SW01 both dated 10 December 2001, confirm the Authority’s discretion to cut back a licensee’s operating hours on a renewal. There are few fetters to the exercise of our discretion, although one of the most significant factors in this case is that we are dealing with a renewal application following the first “probationary” year of a new licence.

[26] In addition we are accountable to the provisions of s. 4 of the Act. These read:

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 as far as that can be achieved by legislative means.

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 the Act.

[27] In any renewal application the onus is on the applicant to show that it is suitable to continue to hold the licence. Furthermore, the applicant must show that the manner in which it has conducted the sale and supply of liquor pursuant to the licence has been satisfactory. In this case, the applicant company has clearly failed both tests. It is our view that there have been problems from the time that the premises opened for business. Although the evidence was general in nature, it was clear that a number of issues began to appear in the initial stages of the operation. We agree with the Police submission that the company was given an opportunity to put its house in order, but was unwilling or unable to do so.

[28] We were surprised that Mr Bowkett sought to justify the way he is running his business. Any licence is a privilege, and there is no guarantee that it will be continued indefinitely, or that the hours will remain the same, particularly if the privilege is ignored or abused. In our judgement, this is what happened. Mr Bowkett saw a market which he was happy to exploit at the risk of encouraging the potential abuse of liquor, and patron misbehaviour. In doing so he has (perhaps unwittingly) undermined the integrity of the commercial sex industry.

[29] The incident on 5 January 2005, illustrates what can happen in terms of liquor abuse when the terms and conditions of the licence are abused. We regard licensed commercial sex premises as discreet businesses which are professionally and quietly run. We do not expect there to be any congregation of people or disorder outside the premises. That is why we have allowed 24-hour licences for massage parlours in the past. Such a privilege is not granted to the holders of tavern style on-licences. Although technically there was no breach of the condition of the licence as set out in paragraph [1], it is obvious that this premises has become known as a place to get a drink, when legitimate licensed premises are required to close. In our opinion, Mr Bowkett has knowingly built up his business based on a false premise and an unrealistic expectation.

[30] In Buzz & Bear Ltd v Woodroffe [1996] NZAR 404, McGechan J said:

Times change. Communities and environments change. Social habits and levels of tolerance change. Obviously it would have been seen by the legislature to be wise to keep conditions imposed under review in light of potential social change. The licensee’s submissions would have licence conditions frozen in some time warp while the world marches on; not, even in the arcane world of liquor licensing, a likely legislative intention. Section 4 interpretation directives align with common sense to point towards allowing the Authority to engage in a wider perspective. It can keep its eye on wider trends and needs in a specialist area where it has unique, and uniquely current, expertise. Any licence takes a licence under risk that conditions may change, and a report may recommend adjustment. There is no asset protected for all time whatever may happen outside.”

[31] Limiting the hours of operation has become established as an important tool in addressing the growing social and economic cost of alcohol-related crime, disorder, and anti-social behaviour. Although it has been said that the issue is not so much about the hours of trading, as the way that the premises are managed, it is our experience, that the longer the hours, the greater the potential exists for liquor abuse, or breaches of the Act. In our view, the liberal hours that were granted to this applicant have not been respected. We have concerns about the suitability of the company, the conditions of the licence, and the manner in which the company has conducted the sale and supply of liquor pursuant to the licence.

[32] The evidence has demonstrated that the licensee has conducted the sale and supply of liquor in a manner which in our view has had a detrimental impact on the community, and will continue to do so if unchecked. We do not have confidence in the company’s suitability to operate the on-licence beyond the hour of 3.00 am. Fixing trading hours is a matter for the discretion of the Agency or the Authority. In this case, the Agency saw fit to grant a 24-hour licence. If on renewal there is evidence of liquor abuse or slack management, (particularly during the first “probationary” year), then we have a duty to respond.

[33] Accordingly, and for the reasons stated, the application for the renewal of the on-licence will be granted with the following trading hours:

Monday to Sunday 10.00 am to 3.00 am the following day

DATED at WELLINGTON this 5th day of December 2005

Judge E W Unwin Mr J C Crookston
Chairman Member

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