Masters v Homestead Restaurants and Bars Limited [2006] NZLLA 310 (5 May 2006)

Last Updated: 14 March 2010

Decision No. PH 310/2006

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 DLA/01/ON/032/2000 issued to HOMESTEAD RESTAURANTS AND BARS LIMITED in respect of premises situated at Homestead Road, Kerikeri known as "Homestead Restaurants and Bars”

BETWEEN PETER GEORGE MASTERS

(Police Officer of Kerikeri)

Applicant

AND HOMESTEAD RESTAURANTS AND BARS LIMITED

Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at KERIKERI on 27 April 2006

APPEARANCES

Senior Constable G L Wright – NZ Police – applicant
Mr C M White – for respondent
Mr J A Thorne – Far North District Licensing Agency Inspector – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] Before the Authority is an application brought by the Police pursuant to s.132 of the Act. It is for the suspension of an on-licence issued in respect of premises situated in Kerikeri, and known as "Homestead Restaurants and Bars”. The licence is held by Homestead Restaurants and Bars Limited (the company). Mr Ross Lynch is a director of the company.

[2] The application is based on the ground that the licensed premises have been conducted in breach of ss.165 and 171 of the Act.

[3] Section 165 of the Act creates an offence if the licensee or 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 the Act to sell to that person. Section 171 of the Act creates an offence if the licensee or manager of any licensed premises allows any person to be on the licensed premises outside the authorised licensing hours.

[4] The allegations in support of the application, are that the company’s on-licence prevents the sale or supply of liquor on Good Friday, Easter Sunday, Christmas Day, and before 1.00 pm on Anzac Day. It is alleged that at 1.25 am on the morning of 25 December 2005, the Police found a group of five or six persons standing or sitting at a bar leaner with what appeared to be fresh alcoholic drinks. The Police contend that the patrons were socialising after the premises should have been closed.

[5] The allegations contained in the application also referred to three other background matters. There is a reference to two “minor issues” which had occurred at the premises in 2005. In addition, it is submitted that the company features adversely in Police Last Drink Surveys, and the recently introduced Alco Link reports. However, as will be explained later, the application was based only on the breaches of the Act referred to above.

[6] In the course of the hearing, the company acknowledged a breach of s.165 of the Act. Mr C M White was acting as counsel. On the company’s behalf, he submitted that there had been no breach of s.171 of the Act, and further, that it was undesirable in the circumstances for there to be any suspension of the licence. He also expressed concerns about the relevancy of the evidence of what had happened in 2005, and questioned the probative value and relevancy, of the data produced by the Last Drink Surveys, and the Alco Link reports.

[7] The on-licence for the premises in Homestead Road, Kerikeri was first issued on 2 July 1996. The licence allows for trading on Mondays to Saturdays between 8.00 am and 2.00 am the following day, in the “Chats Bar”, and from 8.00 am and 3.00 am the following day, in the “Lounge Bar”. Sunday trading is from 8.00 am to 12.00 midnight. Because the premises trades as a tavern, it is subject to the condition contained in s.14(2) of the Act, restricting the sale or supply of liquor on the three and a half sacrosanct days referred to above.

The Incident on which the Application is Based

[8] Sergeant P G Masters is the officer in charge of the Kerikeri policing area. On 24 December last, he was working a shift from 5.00 pm on 24 December 2005, to 3.00 am on Christmas Day. Visits were made to a number of licensed premises in the area. The first visit to “Homestead Restaurants and Bars” was made at 9.30 pm on 24 December 2005. At that time the Sergeant spoke with the duty manager Mr Matt Jay. He reminded him that it was Christmas Eve, and that he needed to stop serving at midnight, and then close the business down, after allowing for the 30 minutes ‘drink up’ time.

[9] Later on, at about 1.25 am, he was driving through the central business district when he noticed a crowd outside “Homestead Restaurants and Bars”. Some were on the footpath, and some had moved into the tavern’s car park. He stopped and realised that there were still people inside the tavern. He went inside and noted that Mr Ross Lynch appeared to be entertaining a group of four people at a table in the bar area to the right of the main bar. He noted half-full handles of beer, and a woman drinking from an RTD. He recognised one of the patrons as Megan Parris. There were other persons standing around in the same part of the bar area.

[10] Although Mr Lynch tried to speak with him, the Sergeant concentrated on speaking with Mr Matt Jay who was the duty manager, and therefore solely responsible for the operation of the licence. He told Mr Jay that as the manager he needed to have all persons removed. Shortly thereafter, Mr Lynch and the others left the premises, and departed the area in a courtesy van. Mr Jay had only held a General Manager’s Certificate for a month or two, and he was the first to acknowledge that he had been placed in an awkward position, having to eject a person who was actually the licensee.

[11] Some five days later, Mr Lynch came and spoke with the Sergeant and made a written statement. In that statement, he confirmed that they had been very busy on the Christmas Eve, and that he had spent the night working as a bar person. He said that the duty manager had closed the bar at midnight, and stopped serving. He said that the people who were in the bar at 1.25 am were waiting for rides home, and had helped to clean up the bar. He acknowledged that he had supplied them with a drink as a mark of his gratitude to the people who had helped clean up the bar.

[12] Mr Lynch was able to persuade Sergeant Masters to view the video tape of the incident. Sergeant Masters confirmed that he had viewed the tape and that it showed that there were people who were in fact cleaning the bar right up until shortly before his arrival. On the other hand, he also noted that people seemed to be able to come and go quite freely, and the some alcohol was being supplied from the bar.

[13] Ms M Parris appeared on summons. She is a friend of Mr Lynch. She confirmed that she was present at the premises that night and like others, she was waiting to catch the courtesy bus. She had offered to help clean up the bar because there was such a mess. She said that she had only just got a drink from Mr Lynch when the Police walked in. She acknowledged that the bar had been closed at midnight, and that most of the large crowd had been dispersed within half an hour. She had been waiting for the bus outside, but had been persuaded to come inside because it was safer.

[14] Mr R Lynch gave evidence that all the people present in the bar had been cleaning up until minutes before the Police arrived. He named the people who were present. He confirmed that when the cleaning up was finished, he had supplied those present with a drink which was being consumed when the Police arrived. He recognised that he should not have allowed this to happen and apologised for his failure to apply the law correctly. He accepted that in retrospect, it would have been wiser to have removed all the patrons and have them wait outside. He confirmed that there was only the one courtesy van in operation that night, and because they had been so busy, it was unable to cope.

[15] Mr Lynch also accepted that while watching the video tape, he had noticed one of his daughters come into the premises, and help herself to liquor which she took away with her. He accepted that the front door must have been unlocked to allow this to happen. He disputed the assertion that he had placed the duty manager in an awkward position, because he was doing everything he could to assist him with such a busy night.

[16] Normally speaking, when hearing evidence of this nature, one could be forgiven for having a somewhat sceptical view of what had happened. At first glance there appeared to be a reasonably blatant breach of the Act. However, we also heard from Mrs Kylie Harper who was present on the premises that Christmas Eve. Mrs Harper was a very confident and natural witness. She did not hesitate when answering questions. We believed that she was telling the truth.

[17] Mrs Harper recalled celebrating the arrival of Christmas Day (at midnight), and the bar then being closed. She gave a good description of waiting for the courtesy bus and trying to get home. She was persuaded to come inside by her husband and voluntarily helped to clean up the bars – something she has not done before. She went outside to have a cigarette. She talked with Mr Lynch’s daughter and allowed her inside the bar for personal reasons. This may have accounted for the fact that the door became unlocked. She was then offered an RTD, and had had two sips when the Police arrived.

[18] As Mr White submitted, there was little dispute about the facts. The main issue was the interpretation of those facts. After hearing all the evidence, we were satisfied that the bar was closed at midnight as required by the Act. There were about 80 people present and although many walked home or obtained a lift, a number of patrons had to wait until the one courtesy van returned to take another load. While that was happening, a small group of friends assisted Mr Lynch to clean up the bar so that everyone could go home and enjoy their Christmas Day. This was a major task. There was no deliberate attempt to allow patrons in to purchase liquor. There was no evidence of any sale.

The Two Background Matters

[19] The applicant sought to introduce other material aimed at showing that there were Police concerns about the way the business was being managed, and that the licensee had been warned about such concerns. Mr White objected to this material because it did not relate to the application referred to above. We agree with him that the evidence could not be used to support a finding that the allegations had been substantiated. The only possible relevance of such information, could be if there was a claim made that the premises were problem premises, or whether the exercise of our discretion might be affected by the material.

[20] The first matter related to two incidents in January 2005 and June 2005. On both occasions, the premises were visited by Constable V C Lee. On the first occasion, she wrote a letter to the District Licensing Agency about what she had observed. That was the end of the matter. On the second occasion, the Constable observed an intoxicated female patron. It appeared to her that Mr Lynch had not taken the matter seriously. She reported the incident to Sergeant Masters, and in September 2005, she attended a meeting. Mr Lynch and the Sergeant were also present. She explained her concerns to Mr Lynch and he apologised. The duty manager at the time was subsequently prosecuted, but no other action was taken.

[21] If we were dealing with a renewal application, or if the s.132 application referred to issues such as the suitability of the licensee, then the two incidents may well have had greater relevance. However, it was the after hours trading on Christmas day, which sparked the enforcement application, and the two breaches of the Act were the only allegations made. Furthermore, both the incidents referred to above, were dealt with and disposed of, in one form or another. Accordingly, we do not think that the two incidents can play any significant part in our deliberations.

The Last Drink Surveys and Alco Link Reports

[22] At the hearing we received data from Last Drink Surveys between November 2002 and November 2004. In addition we received the Alco Link data between 1 July 2005 and 18 April 2006. No attempt had been made to analyse the data. Sergeant Masters gave evidence that “Homestead Restaurants and Bars” is recognised by the Northland Police District as being one of the top 10 problem premises as regards persons who have been found to be intoxicated, and who have stated that they had their last drink at the premises. The figures and details had been referred to Mr Lynch at the meeting in September.

[23] This material had only been supplied to the respondent a few days before the hearing. Because it introduced allegations which had not been included in the application, (but mentioned peripherally), Mr White claimed that the respondent was unable and unprepared to answer or explain the information. For our part we had difficulty in reconciling the wealth of material available to us, with the enforcement application based on trading after hours.

[24] Although Sergeant Masters accepted that the information contained in the reports was based on the word of an apparently intoxicated person, nevertheless, he submitted that in his experience such people were invariably truthful when answering the question as to when and where they had last consumed liquor.

[25] For our part, we are more than satisfied that the material provided by the Alco Link project gives excellent intelligence, and if there a large number of entries then that alone is a good early warning that the premises in question are lacking in managerial skills. For any licensed premises to be consistently at the top end of the list, is a fair indication that licensee and managerial attention is needed. The warning signs are there. Mr Lynch stated that he was disturbed to hear that he was in the top 10 premises, and so he should be. It is not good enough to complain about the difficulty in subjectively assessing intoxication. Mr Lynch should know that it is possible to bring an application for the suspension of the licence based solely on such results.

[26] However, as stated above, the applicant did not rely on the results as a ground to suspend the licence. In the case of Martin Claud Hepburn v Clary 2002 Limited LLA PH 825/2004, we dealt with an application to vary an on-licence which was based almost exclusively on Last Drink Survey results. In that case we stated:

“The data from Last Drink Surveys is a very useful tool in determining suitability, but is an insufficient evidential base on which to establish breaches of the Act.”

On the other hand, in another decision, Howard Philip Clement v Nga Taonga Ao Aotearoa Limited LLA PH 163-164/2003 we suspended an on-licence based on Last Drink Survey results, which we found had reflected on the suitability of the licensee to continue to hold the licence.

Authority’s Conclusion and Reasons

[27] In an application brought under s.132 of the Act, the Police carry the onus of proving the allegations. In assessing the weight of the evidence, the allegations must be proved on the balance of probabilities. As we set out in paragraph [18] above, we are more than satisfied that there was no deliberate attempt to allow patrons in to purchase liquor. The duty manager was warned earlier about closing the premises, and he heeded the warning. He was unable to prevent his employer from allowing a few friends to remain and help clean up. Matters were not helped by the absence of any form of taxi service.

[28] There is no question that on the Christmas morning, the premises were trading illegally, and Mr Lynch accepted that this was the case. By supplying liquor to a few friends as a thank you for helping to clean up the bar, he broke the law. Allowing for the 30-minute drink up time (enshrined in s.170 (1) (a) of the Act), Mr Lynch and the duty manager had a duty to have all patrons off the premises by 12.30 am.

[29] The need to have the premises cleared does not apply to Mr Lynch or his wife, or a manager or the manager’s spouse, or any member of their respective families. Nor does it apply to a person who is lodging on the premises, or a bona fide guest of that lodger. There are also exemptions for employees who reside on the premises, or who are actually working at the time, or who ceased work one hour previously.

[30] Although Mr White tried to advance the argument that the period of time could well extend to allow a reasonable period of recuperation after cleaning up, or while waiting for transport, the law does not permit such flexibility. There have been others who out of the concern for their patrons’ well-being, have allowed them to wait inside the premises, but that is a breach of the law. If a licensee was particularly concerned about patron safety, he or she could set aside an area which was not licensed. In summary, the grounds specified in the applications have been satisfied. On 25 December 2005, the premises were conducted in breach of ss.165(1) and 171 of the Act.

[31] The issue for us is whether a suspension is desirable. After hearing the evidence we have decided that a suspension in these circumstances would be counter productive to the enforcement of sound management of licensed premises. We have given Mr Lynch the benefit of the doubt. It seems to us that the breach of the licensing standards was not a major matter. No liquor was sold. There was a genuine reason for the presence of the few people on the premises. The bar had been closed at midnight.

[32] We have declined to supplement the finding of the breaches of the Act, with the other background matters and the Alco Link information. We feel that to do so would be unfair on the respondent who up until recently, was acting on the assumption that it only faced the one allegation of two breaches of the Act.

[33] Nevertheless, we believe that we should make use of the provision in s.132(7) of the Act. We propose to adjourn the application for nine months. It will be noted that the period of adjournment will take in next Christmas Day. The period of adjournment is to allow the company the opportunity to remedy its systems in relation to its trading hours to ensure that there are no further breaches of this kind. If after nine months, no further breaches under ss.171 or 165 have been recorded then the application will be deemed to have lapsed. On the other hand if there is any repetition of such conduct, then a further public hearing will be scheduled.

DATED at WELLINGTON this 5th day of May 2006

Judge E W Unwin Mr J C Crookston
Chairman Member

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