Clement v Nolas Wines And Spirits Limited and Tierney [2006] NZLLA 816 (2 October 2006)

Last Updated: 23 January 2012

Decision No. PH 816/2006 –
PH 817/2006

IN THE MATTER of the Sale of Liquor Act 1989

IN THE MATTER of an application pursuant to s.132 of the Act for the cancellation or suspension of off-licence number 003/OFF/5/2004 issued to NOLAS WINES AND SPIRITS LIMITED in respect of premises situated at 126-130 Victoria Street, Dargaville, known as “Nola’s Wines and Spirits”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for the cancellation or suspension of General Manager’s Certificate number GM 003/55/2002 issued to MICHAEL JOHN TIERNEY

BETWEEN HOWARD PHILIP CLEMENT

(Police Officer of Whangarei)

Applicant

AND NOLAS WINES AND SPIRITS LIMITED

First Respondent

AND MICHAEL JOHN TIERNEY

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Ms P A Ballard

HEARING at WHANGAREI on 26 September 2006

APPEARANCES

Sergeant H P Clement – NZ Police - applicant
Mr D G Scott –agent for respondents
Mr R Ramsaroop – Kaipara District Licensing Agency Inspector – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] “Nola’s Wines and Spirits” has been operating in Dargaville as a stand-alone off-licence for many years. The authorised hours of operation are from 8.00 am to 10.00 pm on Monday to Saturday, and from 9.00 am to 10.00 pm on Sundays. The business had an unblemished record. The licence is held by Nolas Wines and Spirits Limited (hereafter called the company). Mr F D Nola is a director and shareholder of the company. He takes great pride in the company’s record of service, and the high standards that have been achieved.

[2] Before the Authority are two enforcement applications brought by Sergeant H P Clement in respect of the off-licence. Sergeant Clement is responsible for liquor licensing matters in the Whangarei area. The applications relate to a controlled purchase operation carried out in Dargaville on Friday 10 March 2006. The operation was conducted by the Police in conjunction with Northland Health. A number of licensed premises were tested to see whether they would be prepared to sell liquor to a minor, without checking for identification. The respondent was one of the premises alleged to have failed the test.

[3] At about 5.35 pm on Friday 10 March 2006 an underage volunteer entered the premises. He was accompanied by a Health worker who was present to protect his safety. The volunteer was aged 17 years and 10 days at the time. He was able to purchase six cans of “Woodstock” bourbon and coke for $15 without being asked for proof of his age. He was served by Mr M J Tierney who was the duty manager at the time. Mr Tierney had been working at the premises for 17 and a half years and was well regarded by his employer company.

[4] The application in respect of the off-licence is based on the ground that the licensed premises had been conducted in breach of s.155(1) of the Act. Section 155(1) creates an offence for any licensee or manager to sell or supply liquor to any person under the age of 18. The application in respect of the General Manager’s Certificate is based on the ground that the manager failed to conduct the premises in a proper manner.

[5] Mr D G Scott appeared as agent for the company and for Mr Tierney. Because there had been a delay in notifying the company of the result of the controlled purchase operation, neither the duty manager nor the company had any knowledge that there had been an illegal sale. Mr Scott therefore put the Police to proof on the issue of whether a sale had taken place. He argued that if it was proved that an illegal sale had been made, then it would be undesirable to suspend the off-licence or the General Manager’s Certificate because to do so would be unfair and unreasonable, given the delay and the lack of information provided to the company. Mr Scott relied on the comments made by the Court of Appeal in Christchurch District Licensing Agency Inspector and another v Karara Holdings Limited and others NZAR [2003] 752:

“The stipulation that the object of the Act is to establish a reasonable system of control reflects that perception. It also implicitly recognises that if the administration of the Acts licensing system becomes too heavy handed, so that it unreasonably inconveniences those who wishing to purchase and consume liquor in a manner not giving rise to abuse, that result would be inconsistent with the statutory object.”

[6] Because it appeared that the company and its directors felt a sense of injustice about the issue, we propose to set out a brief background leading up to the implementation of this particular controlled purchase operation. It is our belief that such operations are a useful and effective way to secure managerial compliance with the Act. As is shown below, the controlled purchase operation has received legislative approval from Parliament, and judicial sanction from the Court of Appeal. We continue to remain surprised that the message about the social harm, which results from unauthorised teenage access to liquor, has taken so long to get through.

The Background to the Applications

[7] It is now coming up to seven years since the drinking age was lowered from 20 to 18. This was a major social change in the country. The amendment to the Act was accompanied by a number of measures that were designed to bolster the detection and enforcement of breaches of the new law. It is clear that Parliament took the view that the supply of liquor to minors was a very serious liquor abuse issue, and it gave the Act the necessary teeth to actively discourage those who might be tempted to supply liquor to persons under age. Penalties were doubled for all offences, and the penalty for supplying liquor to minors was increased to a maximum of $10,000 (for managers and licensees).

[8] After a settling in period, public concerns about teenage access to liquor became quite widespread. Instances of drunken behaviour by intoxicated minors were reported. Initially, the main source of the supply of liquor was said to be in the homes. Evidence of an increasing trend for young people to access liquor from licensed premises was provided by a survey commissioned by the Centre for Social and Health Outcomes Research and Evaluation (SHORE), and Te Ropu Whariki of Massey University.

[9] In Onehunga Wines & Spirits Co Limited LLA PH 311 – 312/2001 we said:

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.

[10] In John Francis Armstrong and anor v The Brougham Tavern Limited and others LLA PH 216 – 229/2002 we said:

Attaining the objective of the Act can be compared with a three-legged stool. The three legs are training, experience and enforcement. All three are necessary to keep the stool standing.

[11] In Christchurch District Licensing Agency Inspector and another v Karara Holdings Limited and others, supra, the Court of Appeal stated:

“This indicates that the function of s.132 is to enable the Licensing Authority to enforce sound management of licensed premises. Its particular role is to enable the Licensing Authority to secure management compliance by licensees, through enforcement steps, in those cases brought before it by the Police or District Licensing Agencies where it appears there have been breaches in licensing standards which are reflected in the grounds for applying for and making orders under s.132”.

[12] 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.

[13] The plan stated that ALAC and the Police would identify ‘best practice’ procedures 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. 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.

[14] In summary, over the last six years, Parliament, the hospitality industry, 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. All licensees should be well aware of the concerns about under age access to liquor, and the impact of such access on the community, and the efforts being made to address the problem.

[15] There was a concern that the use of volunteers to purchase liquor could be seen as an offence against s.162(1) of the Act which reads:

Every person commits an offence and is liable to a fine not exceeding $2,000 who, being under the age of 18 years, purchases any liquor on or from licensed premises.

[16] Consequently, an amendment to the Act was passed in April 2004. This amendment established an exception to the above offence as follows:

Subsection (1) does not apply to a person who purchases liquor on or from licensed premises at the request of a member of the police acting in the course of his or her duties.

The Hearing

[17] The volunteer’s name was Jason. He was born overseas on 28 February 1989. Although Mr Scott was critical of the information which was produced, we were more than satisfied that the documents traced Jason’s history from the time he was born in 1989, to the time his birth was registered in New Zealand in 1991.

[18] Jason, his mother and the Health worker who accompanied him during the operation, attended a briefing in which the certain rules were explained as to how he was to go about attempting to purchase alcohol. In particular Jason was asked not to say too much, and not to try and persuade the salesperson into making a sale. He gave evidence that at 5.35 pm he entered the premises known as “Nola’s Wine and Spirits”. He had not been into the premises before. He went to take a 12 pack of “Woodstock” bourbon and cola cans but these cost more than the $20 he had been given.

[19] It seems that Mr M J Tierney was the only employee present. Mr Tierney suggested to Jason that six cans would cost $15. Jason had to wait in a queue behind three people and when his turn arrived, Mr Tierney said “Here you go mate”. The transaction was completed without any further conversation about Jason’s age or identification. No receipt was given.

[20] The transaction and the conversation were witnessed by the Health worker. Both witnesses gave an accurate description of Mr Tierney. There was supplementary evidence given by the Health worker about two earlier ‘pseudo’ sales having been made by a young ‘of age’ volunteer without any request for identification. We have discounted such evidence as there was no other proof of the two sales, and no proof that the company had been written to about them.

[21] When Sergeant H P Clement took over the file, he noted that there had been no follow up from the Police in Dargaville. It was not until 9 June 2006 that he was able to interview Mr Tierney. Mr Tierney could not remember the transaction. Not unnaturally, he and his employers were concerned about the veracity of the allegations and indicated that they would need to see the volunteer in person.

[22] When he gave evidence, Mr Tierney said he had no recollection of the sale but acknowledged that the volunteer looked his age. He said that he would not normally have made a sale to Jason without requesting identification. Mr F D Nola expressed concern that there was no receipt for the transaction. He said he was still concerned as to whether the allegations were true.

[23] Mr Scott emphasised the delay in confronting the company and submitted that the directors had been taken by surprise. He submitted that it was not possible to expect the parties to remember back that far. He noted that the premises would have been busy at 5.30 pm on a Friday. In all the circumstances he argued that it would be unreasonable to impose any sanction. He referred to the company’s exemplary record.

The Authority’s Decision and Reasons

[24] Notwithstanding the concerns expressed by Mr Scott we are satisfied that a sale to a minor did take place. There was a considerable amount of direct evidence on this point. The absence of a receipt is not a fatal flaw in the chain of proof. The standard of proof in an inquiry of this nature is based on the probabilities. It is clear to us that with the number of patrons in the store and the time of the day, the duty manager made an error of judgement.

[25] It follows, that in our view, the licensed premises were conducted in breach of s.155(1) of the Act. Furthermore, we are satisfied that Mr M J Tierney as the duty manager failed to conduct the licensed premises in a proper manner. Not only did he fail in his responsibility to ensure that the premises complied with the Act, he was the person who neglected to request identification before making the sale. It follows that the issue in this case is whether it is desirable that enforcement orders are made.

[26] The issue of delay came before us in James McGrogan and another v Ashtree Holdings Limited LLA PH 238-239/2005. In that case the volunteer was described as a tall Fijian female who was reasonably large with mature features and a youthful face. There was some conversation between her and the salesperson about the weather. The salesperson was the proprietor of the business. He did not receive notification about the illegal sale until a few days afterwards. He argued that because of the delay in notification, and because the issue of the volunteer’s age was not clear-cut, he had been deprived of the opportunity of arguing that he believed on reasonable grounds that the volunteer was 18 years of age. He was forced to look at the video of the event and reconstruct his thinking.

[27] In that case, we accepted that the delay was prejudicial to the respondent as it deprived him of the opportunity to take advantage of the defence under s.155(4) of the Act. We noted that the ALAC guidelines on controlled purchase operations do not recommend that the seller be confronted soon after the event although it was our view that such a course is desirable.

[28] In our view, that case can be distinguished from the current set of facts. In this case there is no real contest about the age and maturity of the volunteer. Mr Tierney acknowledged that after seeing the volunteer six months after the event, he would not normally have made a sale without requesting identification. While we accept that the respondents have the right to feel aggrieved that it took so long to advise them of the illegal transaction, we do not accept there has been any prejudice such as to prevent suspensions from being imposed.

[29] As was stated by the Court of Appeal in the Karara decision (supra), the purpose of s.132 of the Act is to help maintain the integrity and effectiveness of the licensing system. The issue for us is whether the imposition of a suspension order will help to do so. This is very much a discretionary matter. One of the ways in which our discretion may be affected, is s.4(2) of the Act which requires us to exercise our jurisdiction, powers and discretions in a manner that is most likely to promote the object of the Act. That object is as follows:

The object of the 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.

[30] In terms of s.4(2) of the Act we believe that suspension orders are desirable and appropriate. It is accepted that selling liquor to minors has the potential for serious liquor abuse. We believe that orders in this case will help to secure future management compliance by licensees, and this company and Mr Tierney in particular. We have previously expressed the belief that any financial loss associated with the suspension of a licence or a General Manager’s Certificate should be measured against the social costs that society absorbs in respect of alcohol related harm experienced by our young people. We also take the view that recognition should be given to the other premises who, when offered the same opportunity to sell to the minor, resisted the temptation to do so.

[31] On the other hand the company has an excellent record. Both proprietors took the matter seriously enough to appear at the hearing. In view of the delay they were entitled to have the evidence tested. Because of the delay between the transaction and notification we believe that it is appropriate to depart from our normal policy to impose the suspension on the day that the transaction took place.

Orders

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

• [a] Off-licence number 003/OFF/5/2004, issued to Nolas Wines and Spirits Limited is suspended for 24 hours from 8.00 am on Monday 30 October 2006.
  
• [b] General Manager’s Certificate number GM 003/55/2002 issued to Michael John Tierney, is suspended for one month from Monday 30 October 2006.
  

DATED at WELLINGTON this 2nd day of October 2006

Judge E W Unwin Ms P A Ballard
Chairman Member

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