Rouge Bar & Eatery Limited, re [2006] NZLLA 34 (30 January 2006)

Last Updated: 17 February 2010

Decision No. PH 34/2006

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application by ROUGE BAR & EATERY LIMITED pursuant to s.18 of the Act for renewal of an on-licence in respect of premises situated at 141-143 Cuba Street, Wellington, known as “Rouge”

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at WELLINGTON on 26 January 2006

APPEARANCES
Mr D A Richards – agent for applicant
Mr M J Kemp – Wellington District Licensing Agency Inspector – to assist
Senior Sergeant G D Verner – NZ Police - in opposition

RESERVED DECISION OF THE AUTHORITY

The Application

[1] This is an opposed application for the renewal of an on-licence in respect of premises known as “Rouge” situated at 141-143 Cuba Street, Wellington. The licence is held by Rouge Bar & Eatery Limited (hereafter called ‘the company’), and fell due for renewal on 27 July 2005. No changes are sought to the conditions of the licence.

[2] The business trades with a tavern style licence and was described by the company’s licensing consultant as an upmarket bar and restaurant. The trading hours are:

Monday to Sunday 7.00 am to 3.00 am the following days

[3] There were no health or building compliance issues, and there were no public objections. The renewal application attracted an adverse report from the Police. They expressed concern that in the last three years, one of the two shareholders, (Ms Vim Rao), had incurred four convictions, including two for driving with excess blood alcohol. In addition it was alleged that she was currently before the District Court in respect of a further charge of refusing an officer’s request for a blood sample.

[4] Finally, the report stated that the company had been trading without a certificated manager being present. This apparent breach of s.115 of the Act, was confirmed by the Inspector’s report. The Police accordingly submitted that the offences committed by a shareholder with 50% of the company shares, combined with the absence of a certificated manager, brought in to question the suitability of the company.

The Hearing

[5] Mr D A Richards is a licensing consultant trading as D A Richards & Associates in Porirua. He stated that “Rouge” was one of three licensed premises which had been operated by Ms Rao. He confirmed that in November 2003, Ms Rao had been removed as a director of all three companies following Police concerns as to her suitability. Two years later, in order for her to sign cheques and assist with management of the businesses, Ms Rao took steps to enable her to be reinstated as a director. However, the company neglected to advise the Authority of this change, and consequently, the Police were not consulted either.

[6] Accordingly, although the Police believed that Ms Rao was not involved with the three businesses, it is clear that by November 2005, she had taken an active role in

their management. She signed the application for the renewal of the licence.

[7] Ms Rao gave evidence at the hearing. She accepted that her suitability to be a shareholder and/or director of a licence holding company had been compromised by the convictions incurred over the past three years. She did not seek to contest a finding of unsuitability. She had filed an application for a General Manager’s Certificate on 5 May 2005, but this had been subsequently withdrawn. Her goal was to withdraw from any involvement with the operation of the licence.

[8] Ms Rao stated that since the last conviction involving liquor abuse, she had again withdrawn as a director of the licence holding companies. One of the businesses has been sold. Furthermore, Ms Rao advised that she has now severed all responsibilities with the day to day operation of “Rouge”. She contended that her only contact with “Rouge” would be, as Chef Consultant to the corporate group in order to discuss food matters, menu planning, costing, and interviewing chefs. She stated that the management of the licensed operation was now in the hands of her husband, Mr Gnanaprasham Kunda, and that he was the sole shareholder and director of the company.

[9] This evidence was confirmed and corroborated by Mr Kunda who produced a copy of a letter he had written to all staff at “Rouge” confirming that he was now the sole director of the company, and was responsible for all licensing matters.

The Police Opposition

[10] Sergeant A P Kowalczyk gave evidence that he conducted a licensing inspection of the premises known as “Rouge” on 15 July 2005. He noted that the nominated duty manager was a Mr Paul Save. He spoke with Mr Save who said that he was an acting manager, and that he had partially completed a course of training.

[11] The Sergeant then spoke with Ms Rao and asked her whether she was the holder of a General Manager’s Certificate. Ms Rao stated that she was, although she did not have the certificate with her. The Sergeant subsequently confirmed that this was not the case. Mr Rao advised the Sergeant that she had appointed Mr Save as an acting manager, although for a period in excess of 48 hours. She seemed to believe that a notice of the appointment had been sent in accordance with s.130 of the Act.

[12] Senior Sergeant G D Verner is the officer in charge of liquor licensing in Wellington. He produced a copy of Ms Rao’s convictions. This showed that she had the following list of recent convictions:

Date of Offence Charge Penalty

24.9.2002 Driving with Fined and disqualified

excess blood

154/100

24.9.2002 Refusing to Convicted discharged

accompany

2.10.2003 Drives contrary Fined and disqualified

to limited licence

2.10.2003 Driving with Fined and disqualified
excess blood
169/100

28.5.2003 Refusing officers Supervision
request for blood
sample

[13] The Senior Sergeant stated that he had discussed his concerns with Mr Richards, and although he was advised that action was being taken, Ms Rao’s position as a director and shareholder of “Rouge” did not change according to the Companies Office records. These records were finally updated in early 2006. Accordingly, Senior Sergeant Verner took the view that Ms Rao would continue to run the company, and as she was living with the sole director and shareholder, she would be seen by staff and others as continuing to be in charge.

The Authority’s Decision and Reasons

[14] The criteria that we must consider are contained in s.22 of the Act. These criteria are:

(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.

[15] The only issue in this case is the suitability of the licensee. The onus is on the company to show that it is suitable to continue holding the licence. In our view, Ms Rao has responded appropriately to the claim that she is unsuitable to be the holder of a licence. It seems to us that she has done all she can to show that she is no longer involved in the management of the business. The Senior Sergeant may have some doubts about the letter to the staff and the evidence from Mr Kunda, but there is no other evidence that the actions taken are a sham. We accept that there was a delay in formalising the new arrangements, but we have no reason to doubt Ms Rao’s word.

[16] There may have been an occasion when the premises were being operated without a certificated manager being present. It may be that Mr Save was properly appointed under ss.128 or 129 of the Act, although such appointment was not notified. This is a serious matter and could lead to the suspension of a licence. Every sale made when a certificated manager is not present, is unauthorised and illegal in terms of s.165 of the Act. Both the manager and the licensee can face penalties of up to $20,000. It is inevitable that there will be breaches of the Act and the licence as well as liquor abuse, if the premises are not managed by people who have the necessary experience, and have been properly trained.

[17] In summary, we are satisfied that without Ms Rao as a shareholder or director, the company is a suitable entity to continue to hold the on-licence. We accept Ms Rao’s word that she will no longer be involved in the management of the business. We do not consider that the absence of a properly certificated and notified manager on the one occasion was sufficiently serious to warrant a refusal to renew the on-licence. Mr Richards’ involvement gives us confidence that the future appointment of managers and their notification will be conducted in accordance with the Act.

[18] For the reasons given, the on-licence issued to Rouge Bar & Eatery Limited is renewed for three years.

DATED at WELLINGTON this 30th day of January 2006

____________________
B M Holmes
Deputy Secretary

Rouge.doc