Ferguson v Pelenato [2007] NZLLA 1252 (5 December 2007)

Last Updated: 29 January 2012

Decision No. PH 1252-1259/2007

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application pursuant to 132 of the Act for cancellation of on-licence number 060/ON/46/2003 and off-licence number 060/OFF/24/2003 issued to NADIA MAVAVA PELENATO in respect of premises situated at 133 Gloucester Street, Christchurch, known as “Harrys on Gloucester”

AND

IN THE MATTER of an application pursuant to s.132 of the Act for the cancellation of on-licence number 060/ON/117/2000 and off-licence number 060/OFF/69/2000 issued to NADIA MAVAVA PELENATO in respect of premises situated at 35 Hampshire Street, Christchurch, known as “Aranui Café & Bar”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for cancellation of General Manager’s Certificate number GM 3699/97 issued to NADIA MAVAVA PELENATO

BETWEEN MARTIN FERGUSON

(Christchurch District Licensing Agency Inspector)

Applicant

AND NADIA MAVAVA PELENATO

Respondent

AND

IN THE MATTER of applications by NADIA MAVAVA PELENATO pursuant to ss. 18 and 41 of the Act for renewal of on and off-licences in respect of premises situated at 133 Gloucester Street, Christchurch, known as “Harry’s on Gloucester”, and on and off-licences in respect of premises situated at 35 Hampshire Street, Christchurch, known as “Aranui Café & Bar”

AND

IN THE MATTER of an application by NADIA MAVAVA PELENATO pursuant to s.123 of the Act for renewal of a General Manager’s Certificate

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin

Member: Dr J Horn

HEARING at CHRISTCHURCH on 20 November 2007
Final date for receiving respondent’s affidavit/declaration - 5 December 2007

APPEARANCES

Mr M Ferguson – Christchurch District Licensing Agency Inspector – applicant and in opposition to applications for renewal of on and off-licences and manager's certificate
Miss N M Pelenato – respondent and applicant for renewal of on and off-licences and manager's certificate
Sergeant A J Lawn – NZ Police – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] We have for consideration 8 discrete licensing applications. All applications relate to Miss Nadia Mavava Pelenato, and her suitability to be the licensee of two licensed premises in Christchurch, as well as her suitability to continue to hold a General Manager’s Certificate.

[2] The first application is for the cancellation of the on and off-licences issued to Miss Pelenato in respect of the licensed premises known as “Harrys on Gloucester”. The application was filed with the Authority on 14 June 2007, and a copy was sent to Miss Pelenato the following day. The application alleges that the conduct of the licensee has been such as to show that she is not a suitable person to hold the licences. Furthermore it is alleged that the licensed premises were being used in a disorderly manner so as to be obnoxious to neighbouring residents or to the public.

[3] The particulars in support of the application allege that Miss Pelenato obtained the licences on behalf of Mr Peter Machirus. It was also alleged that she had continually lied to the Police and the District Licensing Agency Inspector in regard to her involvement in the operation, and that she was acting as a front for Mr Machirus. It was stated that the information had been given by Miss Pelenato under oath on 31 May 2007, when she had faced charges of obtaining the benefit fraudulently.

[4] In respect of the second ground for cancellation, the particulars allege that the operators of “Coachman Backpackers” (premises across the road), had received complaints from their guests regarding drunken noisy behaviour from patrons both inside “Harrys on Gloucester” and outside, yelling and screaming to the point where guests have been unable to sleep, foul language, fighting, urinating, public abuse and intimidation of members of the public.

[5] The second application is for the cancellation of the on and off-licences issued to Miss Pelenato in respect of the “Aranui Café & Bar” situated in Hampshire Street, Christchurch. This application was filed with the Authority on 14 June 2007 and a copy was sent to Miss Pelenato the following day.

[6] The ground for the application is that the licensee’s conduct had been such as to show that Miss Pelenato was unsuitable to hold the licences. It was alleged that she had obtained the licences on behalf of Mr Peter Machirus, and that she had continually lied to the Police and the District Licensing Agency Inspector in regard to her involvement in the operation of the premises, and that she was acting as a front for a third party. The application alleged that this information had come from evidence given by Miss Pelenato under oath in the District Court on 31 May 2007, when she was facing charges of obtaining the benefit fraudulently.

[7] The third application is for the cancellation of the General Manager’s Certificate issued to Miss Pelenato. The application was filed with the Authority on 25 June 2007 and a copy was sent to Miss Pelenato the following day. The applicant in respect of all three applications is Martin Ferguson, a District Licensing Agency Inspector in Christchurch. The grounds for the application are that Miss Pelenato’s conduct has been such as to show a lack of suitability to hold the certificate. Miss Pelenato has held her General Manager's Certificate since 17 November 1997. We note that at that time, the Authority expressed some concerns about her suitability. See LLA 2104-2106/97.

[8] The particulars in support of the application allege that Miss Pelenato obtained licences on behalf of Mr Peter Machirus and that she had continually lied to the Police and the District Licensing Agency Inspector with regard to her involvement with the “Aranui Café & Bar”, and that she was acting as a front for a third party. It was alleged that the information was provided by Miss Pelenato in the District Court on 31 May 2007 when she was giving evidence under oath when facing charges of obtaining the benefit fraudulently.

[9] The fourth and fifth applications are brought by Miss Pelenato and are for the renewal of the on and off-licences in respect of “Harrys on Gloucester”. Both licences were granted on 9 April 2003, and fell due for renewal on 1 August 2005. The on-licence permits sales of liquor at any time on any day. The off-licence permits sales between 7.00 am and 11.00 pm seven days a week from any bottle store, and at any time on any day across the bar.

[10] The Inspector’s report dated 28 June 2007 covers both licences, and reflects his ongoing concerns about the operation of the two businesses. Reference was made to the allegation that Miss Pelenato had obtained the licences on behalf of Mr Peter Machirus. There was an unspecified claim of complaints about the operation of the business. The report states that no reports had been obtained, and no public notification had been carried out because the Agency had been advised that the business was changing hands. In addition the Inspector became aware that Miss Pelenato was facing criminal charges. It was considered prudent to hold the applications pending resolution of the charges although the Inspector was unaware that the disposal of the charges would take quite so long.

[11] The Inspector noted that Miss Pelenato had been convicted of benefit fraud in June 2007 and sentenced to 12 months imprisonment. Pursuant to s.20(5) of the Act copies of all reports received by the Agency must be sent to the applicant. We have no doubt that this happened on this occasion.

[12] The sixth and seventh applications are brought by Miss Pelenato and are for the renewal of the on and off-licences in respect of the “Aranui Café & Bar”. Both licences were granted on 4 October 2000, and fell due for renewal on 4 October 2004. Both licences permit sales between 7.00 am and 11.00 pm seven days a week.

[13] The Inspector’s report dated 28 June 2007 covers both licences, and reflects his ongoing concerns about the operation of the two businesses. Reference was made to outstanding building consent issues as well as the presence of intoxicated persons. The reports contained the allegation that Miss Pelenato had obtained the licences on behalf of Mr Peter Machirus, and had lied about her involvement. There was an unspecified claim of complaints about the operation of the business. The report confirms that the applications were publicly notified. The Inspector stated that he became aware that Miss Pelenato was facing criminal charges. It was considered prudent to hold the applications pending resolution of the charges although the Inspector was unaware that the disposal of the charges would take quite so long.

[14] The Inspector noted that Miss Pelenato had been convicted of benefit fraud in June 2007, and sentenced to 12 months imprisonment. Pursuant to s.20(5) of the Act copies of all reports received by the Agency must be sent to the applicant, and we are in no doubt that this happened.

[15] The eighth and final application is brought by Miss Pelenato and is for the renewal of her General Manager’s Certificate. The certificate fell due for renewal on 17 November 2005. The application was opposed by the Police and District Licensing Agency Inspector based on criminal charges laid against Miss Pelenato, and her admission that she had had obtained licences on behalf of Mr Machirus. It is noted that the certificate had been renewed for one year only in 1999 because of allegations of intoxicated patrons. Reference was made in the reports to Miss Pelenato’s conviction and prison sentence for benefit fraud.

[16] Pursuant to s.124(5) of the Act, copies of all reports received by the Agency must be sent to the applicant. We have no doubt that all the reports were sent to Miss Pelenato. In addition, the Authority wrote to Miss Pelenato on 4 July 2007, confirming that her application had been opposed by the Police and Inspector, and that the matter would be heard at a public hearing likely to take place in September 2007.

[17] As it happens all eight applications were scheduled for a public hearing on 20 November 2007. Notices of the time and place of hearing were sent out to Miss Pelenato on 19 October 2007.

[18] On or about 23 October 2007, the Authority received a letter from Miss Pelenato written from the Christchurch Women’s Prison. The letter was addressed to the Christchurch District Licensing Agency and was as follows:

“Dear Mr Ferguson or Mr Spang,

To let you know that I received a call from the Authority in Wellington that I have to appear in Court on the 20th November 2007 regarding my licensees. I’m asking you Sir on my behalf to defer this hearing until early next year. The reason why is because my family is most important to me than my Bars at the moment. First of all, and the most important thing in my life are my two young kids. I lost my kids to the C.Y.F. because of all the problems I’ve been through last four months. I’m going to Court on 19th November for my kids. I have one whole month to attend all the courses that C.Y.F. wants me to do before they will return my kids to me. When I get out of jail on Home Detention 6 courses to attend in whole November, December and January 2008, regarding my 2 young kids. Dear Mr Ferguson hopefully you will understand loosing my kids is the most hurtful experience any mother can deal with.

Yours sincerely
Nadia Pelenato”

[19] Miss Pelenato was written to on 24 October 2007 by the Authority’s Deputy Secretary as follows:

“Your recent letter to Mr Ferguson at the Christchurch District Licensing Agency requesting that your hearing before the Liquor Licensing Authority be deferred until early next year has been considered by the Chairman of the Authority. The Chairman has declined your request at this time and the hearings will proceed as scheduled at 9.30 am on Tuesday 20 November 2007.

Under the Sale of Liquor Act 1989 enforcement applications must be allocated a fixture as soon as practicable. This is because of the urgency that is required when the suitability of licensees is raised.

It is accepted that you are understandably more concerned about your children than your licensed premises. On the other hand it is important to see whether the grounds of the applications have been established and, if so, what actions are necessary. While it is appreciated that you will have family courses to attend, a few hours on one day to inquire into the licences should not unduly interfere with that process.

You are welcome to explain your personal position at the time of the hearing before any decision is made. However, from the Authority’s perspective the most important issue at this time is the integrity of the licensing system.”

[20] There is a distinct connection between the matters currently before the Authority and a cancellation application heard by the Authority on 3 September last involving licensed premises known as “Christinas”. The Authority heard similar evidence about the involvement of Mr Machirus and others in the business. We determined that Mr McCullough was acting as a front for others who because of their criminality would not be granted a licence. In the decision of Martin Ferguson v Corey Adam McCullough LLA PH 915/2007, the on-licence was cancelled.

The Hearing

[21] When the hearing commenced, Miss Pelenato was asked whether she was ready to proceed and she confirmed that she was. However, after the first witness, Mr M Ferguson, had given his evidence, Miss Pelenato complained that she had not received a copy of the brief beforehand, and had had no opportunity to research the allegations and respond appropriately. She said that this was a breach of s.132 of the Act, as well as a breach of s.27 of the New Zealand Bill of Rights Act 1990. She did not ask for an adjournment at that time but did so later.

[22] Section 27 of the New Zealand Bill of Rights Act reads:

Every person has the right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person’s right, obligations, or interests protected or recognised by law.

[23] Mr Ferguson confirmed that the Agency adopts the standard policy of responding to any requests for disclosure. In the absence of any such request, no disclosure is made. This is on the basis that the particulars are disclosed in the enforcement applications, and other relevant information is contained in the reports received by the Agency and referred to the respondent. He noted that there is no requirement under the Act that the Agency’s evidence must be disclosed prior to the hearing. The issue will be considered later in this decision.

[24] Mr Martin Ferguson is a Liquor Licensing Inspector for the Christchurch District Licensing Agency. His evidence was that Miss Pelenato is the de facto partner of Peter Machirus. Mr Machirus is currently serving a term of three and a half years imprisonment for 20 charges of receiving, alleged to have occurred between 2000 and 2004. He was found guilty by a jury and sentenced on 21 September 2007. Mr Machirus has previous convictions going back over 40 years. Excluding the current offending, about 18 of the convictions are for dishonesty, and about 30 convictions relate to his bookmaking activities.

[25] Sergeant Alastair John Lawn is in charge of the Christchurch Liquor Licensing Section. He said that the Police had long held the view that Miss Pelenato was acting as a front for others when she acquired and operated the two licensed premises but they had never been able to prove it. He stated that she was currently under investigation for perjury. He confirmed that the Police had mounted a covert operation known as Operation Rhino aimed at exposing organised crime. One of the targets was Peter Machirus who was arrested and subsequently tried.

[26] Mr Machirus was before the High Court on 26 March 2007 when he brought an appeal against a decision of the Taxation Review Authority, in respect of tax assessments for the years 1991 to 1995. One of his arguments was that his rights under s.27 of the New Zealand Bill of Rights Act 1990 had been breached. See Peter Lloyd Machirus v Commissioner of Inland Revenue CIV 2003 409 2350.

[27] In his reserved decision, Justice Ronald Young said at paragraph [6]:

“Mr Machirus is, on his own admission a criminal, whose case at least in part before the Taxation Review Authority was that the proceeds of his criminal activities were not liable to either income tax or GST.”

[28] Later, at paragraph [8], he made these comments:

“However, as the Authority observed the Commissioner now understood the bulk of the illegally produced income by Mr Machirus was from bookmaking rather than theft, burglary, or fraud.”

[29] The evidence was that on 19 June 2007, Miss Pelenato was convicted in respect of four charges of fraud (s.229A(B) of the Crimes Act), and one charge of misleading a Social Welfare Officer. These charges did not arise out of Operation Rhino. She was acquitted of her involvement with that offending. The benefit fraud offending was said to have occurred between 2002 and 2004. Miss Pelenato was sentenced to concurrent terms of imprisonment for 12 months on each charge and was given leave to apply for Home Detention.

[30] Mr Ferguson produced a copy of the transcript of the hearing on 31 May 2007 when Miss Pelenato gave evidence on oath. This document was also produced in the hearing in respect of “Christinas”. In her evidence, Miss Pelenato explained how she used to clean the premises known as the “Aranui Café & Bar” two days a week. This was to help support herself and her three children. Her employer asked her to carry out more responsible work behind the bar, and eventually she obtained a General Manager’s Certificate. When her employer died, Mr Machirus (whom she did not know then), asked her to apply for the licence. She said:

“But I do apply for the licence and I did get it. So then I was only doing a favour for a person but I didn’t even know I was breaking the law and everything was in my name.” Page. 36. Line. 29.

[31] Miss Pelenato explained that over two seasons, she had picked asparagus as a seasonal job. She said:

“If you were the owner of a bar, two bars, you don’t go and pick asparagus, you get that much money you don’t go and pick asparagus.” Page. 38. Line. 7.

[32] Miss Pelenato explained her defence to the benefit fraud charges in this way:

“All I’m saying is they not my bars, I was used to get the licence, they not my money. I have no right to take anything, all I got the right to do is go and see the police, go and see the liquor licensing if there’s any trouble in the pubs but that’s why I got the benefit to support my family. They not my money and I argue to get money and I give and tell him, this is my licence and I deserve to have something.” Page. 38. Line. 34.

[33] Later Miss Pelenato made a number of statements in which she accepted that Mr Machirus gave her money when she asked him. Included in her statement were these samples:

“What I meant by that is getting my licence to run a bar for someone that can’t get a licence. But my benefit was um the main thing that I didn’t sorry for that because my benefit is the only income like I go to the Social Welfare and renew my benefit.” Page. 39 Line. 9.

“Like I said, it’s not my money, it’s not my money, I have no right to touch it. Even though my name is on the bank account, I go to the bank, draw money out and go straight to the hand of the person that owns the money as I tried to explain.” Page. 42. Line. 12.

“Most of the time I don’t work. Like I said people work at the bar is choose by Peter Machirus, I only work when someone is sick or have problems with the family.” Page.43. Line. 1.

[34] Miss Pelenato was asked whether she had purchased “Harrys on Gloucester” from Linda Westbury. Her reply was:

“That’s what’s on the evidence, but I didn’t purchase any money or buy any pub, all I do is apply for the licence.” Page. 49. Line. 27.

[35] She was asked whether she had covered up to Mr Ferguson who had made it clear that he did not want Mr Machirus involved in the business. Her reply was:

“I remember saying that to him. That was a lie, I lied to him. I did lie to him, I did, I did lie to him.” Page. 50. Line. 12.

[36] And finally, Miss Pelenato was asked whether, when the liquor licence was at stake, she would go along and say whatever was necessary to protect either Peter Machirus and lie as to his involvement. Her reply was:

“I agree, I agree I was lying for him for not telling him the truth for my licence. I was lying for that.” Page.52. Line.7.

[37] In summary, Mr Ferguson submitted that Miss Pelenato had admitted that she was not the owner of the business, and thereby did not hire staff or receive the profits. He argued that from the evidence given in the District Court it was clear that both premises were being operated by a person who was clearly unsuitable to hold a liquor licence. By conniving in such subterfuge, Miss Pelenato had shown that she was unsuitable to be a licensee or the holder of a manager’s certificate.

[38] He stated that when he spoke with Miss Pelenato on 14 June 2007, she told him that she intended to surrender the two licences. She wrote to the Authority to that effect that day. However only copies of the licences were enclosed and the Act does not allow licences to be surrendered in this way. Miss Pelenato was advised that the originals had to be forwarded. However by 18 June 2007, Mr Machirus advised Mr Ferguson that Miss Pelenato would not be surrendering her licences as this was a matter for the courts to decide. Miss Pelenato then wrote a letter reflecting what Mr Machirus had said.

[39] Mr Ferguson noted that both premises had since lost their ability to provide gaming machines. In respect of “Harrys on Gloucester”, the venue operator had surrendered the licence because of late bankings and other compliance issues. In the case of the “Aranui Café & Bar”, the licence was surrendered because Miss Pelenato was considered to be unsuitable.

[40] Sergeant Lawn stated that “Harrys on Gloucester” ranked at number two in New Zealand on the Alco-Link national report, and the highest in Canterbury. However, no dates or records were produced and the evidence has been treated as background material only. He also gave evidence of reports being received of three incidents where minors had been found in the bar, although no subsequent action had been taken.

[41] Mr Ferguson called Wendy Broekmeyer as a witness in relation to the claim that the premises had been operated in a disorderly manner so as to be obnoxious to neighbouring residents or to the public. Ms Broekmeyer operates a backpackers business opposite “Harrys on Gloucester” with her husband. Her evidence was very convincing and very troubling. She spoke about disorderly behaviour of patrons in the street. The behaviour included urinating, defaecating, vomiting, screaming, arguing, obscene language, drinking outside, blatant drug dealing, and fighting. She also complained about the high level of noise from music, singing, and shouting.

[42] Ms Broekmeyer also referred to many incidents of intimidation from patrons in respect of the backpacking guests as well as themselves. She found it very stressful operating the backpacking business, and having to deal with the day to day comments and complaints of the guests. She said that the worst time of the day was around 6.00 am or 7.00 am. Although the evidence was non-specific in terms of dates and times, it was nevertheless a litany of serious problems with the running of the premises as confirmed by the Authority’s own limited observations.

[43] We heard from Doctor Stephanie Kelly a Community Researcher. In 2001 she had carried out a Needs Analysis as part of the precursor to a Housing Renewal Project for the suburb of Aranui. The project had been initiated by the Christchurch City Council, as well as the community, and Housing New Zealand. At that time she noted a strong feeling in the community that the “Aranui Café & Bar” was the cause of many of the community’s problems. She was currently conducting a second Needs Analysis and had conducted a number of interviews. She said that the changes had been significant in terms of increased pride and more positive attitudes. However she identified the “Aranui Bar & Café” as the one thing that still stands out in the community that detracts from all the efforts that have been made.

[44] When invited to cross-examine the witness, Miss Pelenato expressed surprise at all the papers she had received (referring to the briefs of evidence and the exhibits). She said that she needed time to read them and obtain legal advice. She referred again to s.27 of the NZ Bill of Rights Act, and said she did not want the hearing to continue. We took this as a further request for an adjournment and considered the matter. For the reasons set out in this decision, the application was declined and the hearing proceeded.

[45] Dr Kelly’s evidence was supported by Constable Andrew Millar who has been the Aranui Community Constable for the past four years. His community base, which is next door to the “Aranui Café & Bar”, is used three afternoons a week. He had received a number of reports that the premises are being used for illegal activities as well as the selling of cannabis, but there was no proof of such activity. He had a number of concerns about the business. He said that many residents had concerns about the premises but were afraid to complain. Nevertheless, he had received complaints from members of the public about harassment from patrons standing outside the premises and drinking and smoking. Some of the patrons were said to be gang members. He said it was common knowledge that Mr Machirus ran the bar and he had seen him there often, restocking the bar and maintaining the facility. He stated that the owner of the property had told him that it was being rented to Mr Machirus.

[46] On 27 July 2007,Constable Millar had found the premises closed at 1.00 pm. He asked about this later, and was told by the manager on duty that Mr Machirus had the key to the front door but had left it at a local agency without telling anyone. On two occasions he had seen Mr Machirus deliver kegs of beer to the premises. On 18 September 2007, following a newspaper report of Mr Machirus’ High Court appearance on the appeal over his tax, the Constable visited the bar. The duty manager expressed concerns that Mr Machirus would be unable to pay their wages. The employee went so far as to give the keys to the Constable because he said that members of staff did not want any involvement with criminal activities. The keys were handed to Mr Machirus’ daughter.

[47] Constable Millar gave evidence of five incidents in 2007 of intoxicated patrons being found in the bar. On seven occasions in July and August 2007, he found the premises operating with non-certificated managers on duty. He opined that the “Aranui Bar & Café” was used by very few members of the community for social drinking, as it had become the local for persons associated with gangs and/or criminal activity.

[48] Mr Peter O’Reilly is employed as a Senior Gambling Inspector with the Gambling Compliance Group for the Department of Internal Affairs. He said that he had carried out a number of audits and investigations into the company that held the gambling licence for “Christinas”. He noted that the licence holder had advised the department of 10 occasions between April 2006 and January 2007 when the funds from the machines had been banked late. An analysis of the records showed that “Christinas” had deposited funds to the gambling account of “Harrys on Gloucester” on 17 occasions. The total was $43,850. There was also one deposit of $1500 to the gambling account of the “Aranui Café & Bar”.

[49] Mr O’Reilly confirmed that the machines at both premises had been disabled and the licence surrendered by the Trust that owned the machines. In the case of “Harrys on Gloucester”, the reasons were the late bankings, and other compliance issues such as cancelled credit record keeping and disputed jackpots. In the case of the “Aranui Café & Bar”, the reasons was Miss Pelenato’s unsuitability to conduct the business, she having acknowledged on oath that she was not the legal owner of the premises. Mr O’Reilly also referred to major discrepancies in the way the machines had been operated at “Harrys on Gloucester”. The normal profit from a machine is $1,000 a week. Accordingly, weekly bankings would be $18,000 for 18 machines. Some venues may reach as high as $30,000 to $40,000 a week. However, in the case of “Harrys on Gloucester” the weekly bankings have varied between an average of $13,000 to over $50,000. The takings were even up to $68,000 a week. Such excessive bankings indicate other activities with the machines.

[50] When invited to give evidence, Miss Pelenato referred to a submission she had prepared with the help of her friend who was supposed to be present but had not appeared. She spoke about her intention to defend the allegations because she believed that she was a suitable person to hold the licences and her certificate. She accepted that there had been a previous incident of trading on Anzac Day. And she accepted that she had been convicted of benefit fraud and was on Home Detention. However, she said that she had been acquitted of the other matters arising out of Operation Rhino. She believed that she had been a good licensee but was being unfairly blamed because of Mr Machirus’ involvement.

[51] Miss Pelenato said that she had been placed at a disadvantage because in her view she was entitled to copies of all the briefs of evidence and supporting documents at least 10 days before the hearing. She referred to s.27 of the New Zealand Bill of Rights Act and stated that she did not agree to the applications proceeding. She sought to portray herself as an unrepresented and unprepared litigant who was being treated unfairly. When cross-examination began, it quickly became apparent that Miss Pelenato was in danger of incriminating herself, particularly as she was under investigation for perjury. Accordingly, she was allowed to leave the witness box. Because of the matters raised by her, and because she now had copies of all the evidence, she was given 10 working days in which to seek legal advice, and provide us with an affidavit of her response to the various allegations.

The Authority’s Decision and Reasons

[52] We first deal with Miss Pelenato’s complaint that she has been treated unfairly, and that she has been denied her right under s.27 of the New Zealand Bill of Rights Act. We confirm there is no automatic right to a copy of an applicant’s briefs of evidence prior to a hearing. Requests have to be made and declined, before there can be any suggestion of unfairness. The issue was discussed in James Robin Dalziell-Kernohan v The Mill Liquorsave Limited LLA PH 35/2007.

[53] Nor do we believe that Miss Pelenato would have been unaware of what she was facing. All the enforcement applications specified the particulars of what was alleged. Miss Pelenato has been aware of these allegations since mid June. She was alerted to the claim that “Harrys on Gloucester” was alleged to have been trading in a disorderly manner that was obnoxious to the neighbours. She had received copies of all reports on the renewals and had also been aware since late June of the concerns of the Inspector. In particular she would have been aware of his belief that she was holding the licences for a third party, that she had disclosed her deceit before a jury, and that she had convictions leading to a prison sentence. In our view there are sufficient checks and balances in the Act to ensure that licensees and managers are well aware of any problems they may face on renewal.

[54] As we said when rejecting the application for an adjournment, we had lost faith in Miss Pelenato's credibility. We believed that she had been coached to react to the evidence in this way in order either to delay the possibility of an adverse decision, or alternatively to provide a platform for an appeal. It seemed to us that Miss Pelenato's conduct at the hearing was aimed at keeping the licences alive for as long as possible.

[55] On the other hand there was some evidence that may well have taken her by surprise. We refer in particular to the evidence of Dr Kelly, Constable Millar and Mr Peter O'Reilly. There was other evidence of intoxication on both premises, the presence of minors, and the Alco-Link records. Because the licences were at risk as well as her certificate, we gave Miss Pelenato 10 working days to seek legal advice and produce an affidavit of her response to the various allegations. A letter confirming this process was sent to her at her Home Detention address. On reflection, we believe that we were being over cautious as all this material was unnecessary for any finding of unsuitability.

[56] On 3 December last the following facsimile was received at the Authority’s secretariat;

“Dear Sir,

I received your letter of 21 November only on 1 December, although the mail has been cleared on 28 November.

I am on Home Detention and cannot leave the house to see a person such as a lawyer. All I can say is the first hearing was a wrong use of the Law by the prosecution. Not one shred of evidence was given to me before the hearing, putting me in an impossible position to obtain witnesses for myself and to cross-examine hostile witnesses.

I cannot prepare an affidavit as I already had been denied my rights to a fair hearing. Press statements made by the Prosecution before a determination was also a breach of fairness.

I ask the matter be dismissed and a rehearing ordered. If not, I will obtain advice on an Appeal.

Yours truly

Nadia Pelenato”

[57] We believe that the situation with regard to both premises is so serious that an immediate response is now called for. One of the issues that has arisen in this case is the inability to act quickly when there are serious problems with the running of licensed premises. For a number of reasons these matters have been allowed to linger for too long. It is timely for the Authority to respond decisively.

[58] In this case it is necessary to deal only with the five renewal applications. There are certain criteria set out in the Act to which we are required to have regard when considering these applications. The criteria for an on-licence are found in s.22 of the Act as follows:

(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.

[59] The criteria for an off-licence are similar. They may be found in s.45 of the Act. Instead of ‘supply’ in (c), the issue is ‘delivery’.

[60] In the case of a renewal of a General Manager’s Certificate, the criteria may be found in s.126 of the Act as follows:

(a) The character and reputation of the applicant:

(b) Any convictions recorded against the applicant since the certificate was issued or last renewed:
(c) The manner in which the manager has managed the sale and supply of liquor pursuant to the licence with the aim of contributing to the reduction of liquor abuse:
(d) Any matters dealt with in any report made under section 124 of this Act.

[61] Thus it can be seen that the essential issues in all cases are Miss Pelenato’s suitability to be the holder of a licence. In the case of the General Manager’s Certificate the issues relate to Miss Pelenato’s character and reputation as well as the convictions incurred by her. In all renewal applications the onus is on the applicant to establish that he or she is suitable to continue to hold the licence as well as the certificate.

[62] In our view the evidence of Miss Pelenato’s unsuitability is overwhelming. Miss Pelenato has been unable to satisfy us that she should continue to be a licensee or hold a General Manager’s Certificate. We believe that the statements made by her under oath before the jury were the truth. Not only did her comments have the ring of truth about them, but they confirmed all the previous suspicions held by the monitoring agencies. Put simply, Miss Pelenato conspired to deceive the agencies that she was entitled to be the licensee of “Harry on Gloucester” and the “Aranui Café & Bar”, when that was not the case. She has effectively been living a lie for some years.

[63] In this process, Miss Pelenato allowed a clearly unsuitable person to operate two licensed premises. In that capacity he was able to continue with other illegal activities. The consequences of the deception have not only undermined the integrity of the licensing system, but also significantly reduced the effectiveness of the Act in the eyes of the public. Without becoming too editorial, the results could be described as a licensing nightmare.

[64] As was said in Martin Ferguson v Corey Adam McCullough LLA PH 915/2007:

The suitability of a licensee is fundamental to the licensing system. To act as a front for others, (because they would be unable to obtain a licence), undermines the integrity of the Act. We are satisfied that the original application for a licence was a deliberate attempt to circumvent the system. Once the licence was granted, all parties (including Mr McCullough), continued to act in this dishonest way in order to keep the business going. They abused the privilege of a licence. They brought the system into disrespect. No licence could be allowed to continue in such circumstances.

[65] Miss Pelenato has been sentenced to 12 months imprisonment for benefit fraud. The sentence reveals how serious the offending has been. Charges of this nature would normally prevent a person from obtaining a General Manager’s Certificate until the offender had seen out a conviction free period of 5 years. (See Graham Leslie Osborne LLA 2388/95).

[66] Miss Pelenato strikes us as a naïve person who by her relationship with Mr Machirus, has become surrounded by people with criminal tendencies. Such people have no interest in upholding the law. They see breaking the law as a challenge if not a right. We do not think that Miss Pelenato originally belonged in that loop but she has become enveloped in it. Until such time as she can show non-association with such people she will always be tainted.

[67] In this decision we propose to deal only with the renewal applications. This means that the three enforcement application will be rendered nugatory, although for the record, we would have had no hesitation in ordering cancellation. In particular, we would have made a finding that “Harrys on Gloucester” was being used in a disorderly manner with obnoxious consequences. For the reasons given above, the five applications for the renewal of the on and off-licences issued to Nadia Mavava Pelenato, in respect of ”Harrys on Gloucester”, and the “Aranui Café & Bar”, as well as the General Manager’s Certificate issued to Nadia Mavava Pelenato, are refused.

DATED at WELLINGTON this 5th day of December 2007

Judge E W Unwin
Chairman

Pelenato.doc