Wright v Taylor and Turner [2006] NZLLA 825 (4 October 2006)

Last Updated: 23 January 2012

Decision No. PH 825/2006 –
PH 827/2006

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 cancellation of on-licence number 01/ON/012/2005 issued to RUDY TAYLOR in respect of premises situated at 1191 State Highway 1, Okaihau, known as “Okaihau Hotel”

AND

IN THE MATTER of an application pursuant to s. 135 of the Act for cancellation of Club Manager’s Certificate number CM 126/2000 issued to MARY VICTORIA TURNER

BETWEEN GRAEME LESLIE WRIGHT

(Police Officer of Kerikeri)

Applicant

AND RUDY TAYLOR

First Respondent

AND MARY VICTORIA TURNER

Second Respondent

AND

IN THE MATTER of an application by RUDY
TAYLOR pursuant to s.18
of the Act for renewal of an on-
licence in respect of premises
situated at 1191 State Highway 1,

Okaihau, known as “Okaihau Hotel”

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at KAIKOHE on 25 September 2006

APPEARANCES

Senior Constable G Wright – NZ Police - applicant
Mr Rudy Taylor and Mrs Kaye Taylor – first respondent and applicant for renewal of on-licence
Mrs M V Turner – second respondent
Mr J A Thorne – Far North District Licensing Agency – in opposition to renewal of on-licence
Mr A Gounder – JR BDS Properties Limited - objector
Ms J Singh – JR BDS Properties Limited - objector

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are three applications for consideration by the Authority. The first application is brought by Mr Rudy Taylor and is for the renewal of his on-licence in respect of premises situated at Okaihau, north of Kaikohe. The premises trade under the name of “Okaihau Hotel”. The hours authorised for the sale of liquor are at any time on any day to lodgers and guests, and from 9.00 am to 12.00 midnight Monday to Sunday to any other person.

[2] The hotel has seven bedrooms available for the travelling public although two of these are currently used for employees. Mr Rudy Taylor was first granted an on-licence on 3 May 2005. At that time he was also granted an off-licence but he failed to renew it when it fell due for renewal. According to his wife, Mrs Kaye Taylor, there were insufficient funds available to do so. The application for renewal of the on-licence is the first since the application was granted. We regard the first renewal as significant. This is because the monitoring agencies and members of the public are given a first opportunity to comment on the way the premises have been operated over the previous 12 months. The terms of any renewal set the scene for the future.

[3] When the renewal application was filed in May 2006, the accompanying cheque for $776 was drawn on an account in the name of “Ngapuhi Sons”. This was a closed account and (not surprisingly), the cheque was dishonoured. By the time the status of the cheque was revealed, the on-licence had lapsed. The District Licensing Agency advised the applicant that he must cease trading. However, following representations to the Authority, the applicant was allowed to pay cash and the renewal application proceeded. Although Mrs Taylor said at the hearing that she had made a genuine mistake, we had serious reservations about her explanation.

[4] There was no initial opposition from the Police or the Medical Officer of Health. Public notification resulted in two objections being received by and on behalf of JR BDS Properties Limited (hereafter called the company). The company owns the hotel which in turn is leased to Mr Taylor. One of the directors of the company, Jaswinder K Singh, advised that Mr Taylor had borrowed $1552 to pay the fees for the on and off-licences when the original applications had been made in 2005. According to the objector the money was supposed to be repaid within two weeks but this had not happened.

[5] The second objection was from Jaspreet Singh who is also a director of the company. She alleged that Mr Taylor had only paid rent for the months of May and June 2005. She stated that attempts to remove the Taylors had been unsuccessful. She stated that her agent Mr A Gounder had closed the bar and the hotel in January 2006, but that Mr Taylor had broken in and reclaimed the premises. She stated that a Court action had been commenced in the Kaikohe District Court. Furthermore, she claimed that Mr Taylor had neglected to pay water bills and Council rates as well as insurance premiums. We note that trespass notices issued by Mr Taylor had been served on the objectors.

[6] As the objections were validly based on the suitability of the applicant the application was scheduled for a public hearing.

[7] In the interim period of time, the Police and Northland Health ran a Controlled Purchase Operation. An earlier operation in April 2006 had resulted in “Okaihau Hotel” making a sale of a dozen 330ml bottles of beer valued at $20 to an underage volunteer. A formal warning was sent to Mr Taylor on 12 April 2006. The letter recommended that he train his staff in the Act and encourage them to ask for identification.

[8] On 19 August 2006, a further Controlled Purchase Operation was conducted. Two under age volunteers were able to make separate purchases of unopened RTD’s. They were not asked for their age or for identification. Mr Taylor was spoken to and he advised that he was away at the time. He said he had appointed Mrs M V Turner as the duty manager. Subsequent enquiries revealed that Mrs M V Turner was the holder of a Club Manager’s Certificate. She was therefore unauthorised to manage the business on her own.

[9] Accordingly, the Police filed an application for the cancellation of the on-licence. They claimed that because the tops had been left on the RTD’s, the licensee was continuing to sell liquor for removal from the premises without the appropriate off-licence. Included in the application was a reference to the Police Alco Link data which disclosed that between September 2005 and July 2006, a total of eight patrons from the “Okaihau Hotel” had been found to be driving with excessive blood or breath alcohol content.

[10] The grounds for the application for cancellation of the on-licence are that the licensed premises have been conducted in breach of the following provisions of the Act:

• [a] Section 151 (Sales by unlicensed person) – The allegation is that the sales were off-licence sales
  

[b] Section 155 (Sale or supply of liquor to minors)

[c] Section 172A(a) (Failing to appoint manager in accordance with s.26)

[11] The Police also filed an application for the cancellation of the Club Manager’s Certificate issued to Mary Victoria Turner. Mrs Turner has held her Club Manager’s Certificate since 3 April 2000. The grounds for the application are that Mrs Turner has failed to conduct the premises in a proper manner. The allegations were that Mrs Turner had been the duty manager when the illegal sales were made to the two volunteers. When it was discovered that Mrs Turner was not the holder of a General Manager’s Certificate she is alleged to have stated that she could see nothing wrong with being a duty manager in such circumstances.

The Hearing

[12] The evidence showed that the two young volunteers had entered the premises together on Saturday 19 August 2006 at about 3.40 pm. One volunteer was aged 17 years and five months at the time. He was able to purchase two unopened RTD’s for $13.20. After walking out with the liquor, the second volunteer aged 15 years and 11 months returned and asked for two bottles of Jim Beam mix. He was supplied with two unopened bottles for $14. Neither of the young men was questioned about their age. It appears that neither asked for the bottles to take away with them.

[13] When he was spoken to after the incident Mr Taylor was adamant that the business was not selling liquor for consumption off the premises. He said that he knew that his off-licence had expired. He accepted that the old off-licence was still displayed. The evidence was that there was still a sign in the front entrance showing the bottle store opening hours. However, both Mr and Mrs Taylor stated that the sign had been used as a windbreak.

[14] The Alco Link data showed that eight persons had been apprehended between 1 July 2005 and 24 August 2006. All had nominated the “Okaihau Hotel” as the place where they had last consumed liquor. Three of the ‘patrons’ were said to be moderately intoxicated and three were said to be extremely intoxicated. Five people had been apprehended in 2006. The impact of such intelligence should not be underestimated. The strong inference is that the hotel’s management systems need to be reviewed and strengthened. Allowing patrons to leave the premises when they are intoxicated is in breach of the provisions of the Act as well as the hotel’s host responsibility policy.

[15] Mrs Kaye Taylor gave evidence on behalf of her husband, although he spoke as well. She questioned the status of the objectors. She argued that there was a genuine civil dispute about the amount of rent arrears. In support she presented two letters written by a solicitor, Ms Donna Hall, on their behalf. The last letter is dated 25 January 2006. In that letter Ms Hall provided some calculations. At that time, the landlord had claimed just under $20,000. Ms Hall stated that the sum of $10,444.57 would be paid to the landlord’s account on 27 January 2006. This amount included a refund of the sum of $1,552 referred to in paragraph [4] as well as $4,000 towards legal fees.

[16] The evidence is clear that the amount of $10,444.57 was paid into an account but not into an account owned by the landlord. The landlord has still not received the funds. Furthermore, the landlord has received no rental for the past eight months. According to our calculations this would amount to over $15,000. No landlord should have to put up with such failures to honour a contract. It is not as if the hotel is not making money. The figures produced show encouraging gross monthly revenue over the period 16 December 2005 to 14 January 2006.

[17] However, without any disclosure of figures, and with the uncompromising attitude displayed by the applicant, all the landlord can look forward to is frustration. The way that the applicant has ignored his commercial obligations and treated the landlord is in our view a prime example of unsuitability. We were unimpressed by the Taylors’ apparent unwillingness to accept responsibility for what has happened since they took over the premises. The fact that Mr Taylor was admitted to hospital on 1 May 2006 and discharged on 17 May 2006, may be a reason for some of the shortcomings but it is not an excuse.

[18] Mr Taylor accepted that sales had been illegally made to two volunteers. He said that he was in Auckland at the time. He had appointed Mrs M V Tuner as the duty manager. He noted that the sales had been made by a trainee bar-person. It appears that the hotel has yet to adopt a policy whereby any person appearing to be under the age of 25 years will be asked for identification.

[19] Mrs M V Turner explained the background to the sales made to the two volunteers. She said that she was having her tea break in the kitchen at the time that the sales were made. Mrs Turner said that she had worked at another tavern for three years using her Club Manager’s Certificate and honestly believed that she was qualified to operate a bar. Mrs Turner produced a number of references as to her work ethics and honesty.

The Authority’s Decision and Reasons

[20] There are three applications before the Authority. Although all three were heard together, they must be considered separately. In this decision we propose to deal with each application on an individual basis particularly because there are separate outcomes. Because of the issue about unpaid rental we have decided to deal with all three applications as promptly as possible.

The Application to Renew the On-Licence

[21] 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.

[22] In this case the issue is one of suitability. The onus is on the applicant to show that he is suitable to continue to hold the on-licence. As we have stated above, we regard any refusal to honour his obligations under the lease in this way as a sign of unsuitability. Making a living at the expense of a landlord has elements of fraud about it. When they spoke, neither the applicant nor his wife showed the slightest concern for the landlord’s plight. We found such attitude quite astonishing. It was almost as if Mr and Mrs Walker believed that they had a right to operate the premises without paying rent.

[23] We now put the applicant on notice that we will have no hesitation in cancelling the licence unless some action is taken. It is up to the applicant to show his suitability. Because of the urgency of this matter, we are adjourning the renewal application for a period of six weeks from the date of this decision. This will give the applicant the opportunity to ensure that the sum of $10,444.60 is paid into the correct account. That action should not be difficult. We would also expect the applicant to pay current rent from the end of January 2006. If this happens, then we would be prepared to renew the on-licence but for a truncated period. The parties can then resolve any other differences in the District Court.

[24] What we are looking for here are signs of goodwill from the applicant. He is the person who is in default. After six weeks we would like to hear from the parties by written submission. As stated above, if the rent for the last eight months is paid and if the sum of $10,444.60 is retrieved from the wrong account and paid into the landlord’s account, then we would be prepared to renew the licence on limited terms. If necessary we will reconvene a further public hearing but this course of action should not be necessary and we prefer to deal with the matter on the papers. In our view the actual detail of all disputed items should be resolved in the District Court. All we seek is for the applicant to show that he is suitable to continue to hold the on-licence.

The Application to Cancel the On-Licence

[25] In this case there is insufficient proof (allowing for a great deal of suspicion) that Mr Taylor was selling liquor for consumption off the premises. We have taken into account that no specific request was made by the volunteers when the liquor was purchased. We have noted that the bottles were purchased over the bar. In view of the fact that two bottles were purchased at a time and not a four or six pack, the general inference must be that they were for consumption on site. In that case it is possible that the inexperienced bar person may have neglected to unscrew the bottle tops. We are unable to be sure.

[26] On the other hand, there is clear evidence that two sales were made against a background of a previous warning for similar offending. The licensed premises were conducted in breach of s.155(1) of the Act. By employing the holder of a Club Manager’s Certificate the licensee has also breached s.172A of the Act. While he might say that he was unaware that Mrs Turner was not properly trained and qualified he had a duty to make sure. Such a breach results in liability for a maximum fine of $5,000.

[27] Furthermore, every sale made when a properly certificated manager was not present was unauthorised and illegal in terms of s.165 of the Act. The licensee could have faced penalties of up to $20,000. It is inevitable that there will be breaches of the Act as well as liquor abuse, if the premises are not managed by people who have the necessary experience, and have been properly trained. Some of the things that happened in the premises show precisely what can happen if the rules are ignored.

[28] In our view a period of suspension is highly desirable in this case. We have taken the view that it would be unreasonable to cancel the on-licence on the basis of the two sales as well as the appointment of a non-certificated manager. While we note the Alco Link data there is no claim that the premises have been conducted in an improper manner or that the licensee’s conduct has been such as to bring his suitability into question. Mr Taylor may consider himself fortunate in the way that the application was worded.

[29] A period of suspension will be in keeping with the comments of the Court of Appeal in Christchurch District Licensing Inspector and another v Karara Holdings Limited and others NZAR [2003] 752, in which it was 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”.

[30] For the reasons we have given we order that on-licence number 01/ON/012/2005 issued to Rudy Taylor, will be suspended for five days commencing at 9.00 am on Tuesday 31 October 2006 to 9.00 am on Sunday 5 November.

The Application to Cancel the Club Manager’s Certificate

[31] In this case it is clear that Mrs Turner failed to conduct the premises in a proper manner. However, at the time that the illegal sales were made, she was purporting to be the duty manager when in fact she had no legal authority to do so. In reality her conduct as the holder of a Club Manager’s Certificate has been such that she is no longer suitable. Ignorance of the law is not an excuse for its avoidance. It is incomprehensible that the holder of a Club Manager’s Certificate could believe that he or she is able to manage licensed premises in which members of the public may congregate.

[32] In our view, it is not good enough to attempt to place the blame on a former employer. While we accept the supporting references produced by Mrs Turner, the fact of the matter is that she has not worked as a club manager for some time. She has no current prospects to do so. The Club Manager’s Certificate has been rendered nugatory. Given Mrs Turner’s beliefs, it would be a risk to allow the certificate to continue in circulation as she might be tempted to use it again in an unauthorised way.

[33] We see no reason why she should not re-apply for a General Manager’s Certificate in the usual way, particularly if she has Mr Taylor’s support. By the time the application is dealt with it may be that sufficient time will have passed for the monitoring agencies to be satisfied that the lessons from this experience have been absorbed.

[34] For the reasons given, Club Manager’s Certificate number CM 126/2000, issued to Mary Victoria Turner, is cancelled.

DATED at WELLINGTON this 4th day of October 2006

Judge E W Unwin Ms P A Ballard
Chairman Member

Okaihau Hotel.doc