Pabst v General Distributors Limited and Grant [2007] NZLLA 239 (15 March 2007)

Last Updated: 4 March 2010

Decision No. PH 239/2007 –
PH 240/2007

IN THE MATTER of the Sale of Liquor Act 1989

IN THE MATTER of an application pursuant to s.132 of the Act for suspension of off-licence number 058/OFF/28/2000 issued to GENERAL DISTRIBUTORS LIMITED in respect of premises situated at 87-97 Hilton Street, Kaiapoi, known as “Countdown”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for suspension of General Manager’s Certificate number 058/GM/15/2006 issued to CAROLYN DAWN GRANT

BETWEEN RENE ANTHONY PABST

(Police Officer of Rangiora)

Applicant

AND GENERAL DISTRIBUTORS LIMITED

First Respondent

AND CAROLYN DAWN GRANT

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at CHRISTCHURCH on 26 February 2007

APPEARANCES

Sergeant R A Pabst – NZ Police - applicant
Mr D S McGill – for first and second respondent
Mr C J Bryant – Waimakariri District Licensing Agency – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are two matters before the Authority for determination. They relate to a controlled purchase operation conducted on Friday 30 June 2006 in the Waimakariri District north of Christchurch. Two young volunteers were used to test licensees’ willingness to sell to minors without requesting identification. A total of 18 licensed premises were visited. Four of those premises made sales to the female volunteer named Sarah. No sales were made to the second volunteer. One of those premises that failed the test was a supermarket owned and operated by General Distributors Limited, (hereafter called the company), and trading as “Countdown”. The company holds an off-licence which allows trading from 7.00 am to 12.00 midnight seven days a week.

[2] The ground for the application to suspend the off-licence was that the licensed premises had been conducted in breach of s.155(1) of the Act. Section 155(1) prohibits the licensee or manager from selling or supplying (or allowing the sale or supply) of liquor to persons under the age of 18 years.

[3] The ground for the application to suspend the General Manager’s Certificate was that the manager’s conduct was such as to show that she was not suitable to hold the certificate. It was alleged that she was on duty when the sale was made.

[4] Mr D S McGill appeared for both respondents. On behalf of his client he accepted that the sale had taken place but denied any responsibility for the offending. He based his arguments on three alternative lines of defence. First, he relied on s.155(4) of the Act. This section provides:

It is a defence to a charge under subsection (1) or subsection (2) of this section if the defendant proves that the person who sold or supplied the liquor believed on reasonable grounds that the person to whom it was sold or supplied had attained the age of 18 years.

[5] The first respondent assumed the onus of establishing on the balance of probabilities that the person who made the sale believed that the volunteer had attained the age of 18, and that he or she had reasonable grounds for such a belief. The basis of that belief centres on the actions of the accompanying undercover Police officer who was required to observe what happened as well as ensure the safety of the volunteer.

[6] Mr McGill set out to show that the undercover Police officer had not only followed the volunteer into the premises, but had spoken with her as she was selecting a bottle of wine, and stood by her as she was making the purchase. During the transaction it was alleged that the accompanying officer had not made a purchase himself, and had moved to the other side of the volunteer when the transaction was completed. He then led the volunteer away from the check out counter. Fortunately the first respondent was able to secure the security video showing the two people making the purchase. This was a great assistance in establishing the close proximity between the Constable to the volunteer.

[7] Mr McGill contended in the alternative that the actions of the officer amounted to entrapment in that the presence of the accompanying officer helped to persuade the salesperson that the volunteer had attained the age of 18. Mr McGill argued that the actions of the officer actively encouraged the salesperson to make the sale without asking for any identification.

[8] In the event that these two arguments were unsuccessful, Mr McGill submitted that a suspension of the off-licence would be an unreasonable, unfair and undesirable response to the factual situation.

The Hearing

[9] The volunteer’s name was Sarah. She was born on 1 October 1988 and was 17 years and 9 months at the time of the operation. She looked and dressed her age. She entered the premises known as “Countdown” in Kaiapoi at about 9.45 pm on the night of Friday 30 June 2006. She said that she and her accompanying officer entered the premises together. The officer’s name was Jason McGirr. He was born on 3 July 1983 and was about to turn 23 the following week. He also looked his age. Sarah acknowledged that when she selected the wine, the Constable was standing beside her and they may have exchanged a few words at that time. She chose a bottle of sparkling wine valued at $8.95.

[10] Sarah stated that as they approached the express checkout the Constable was a pace behind her. A young male aged about 16 opened the counter for her and made the sale. No relevant conversation took place. As the transaction was completed the Constable moved from her right side to her left side, and then led her away from the counter. He did not make any purchase. She acknowledged that any person observing the two of them would reasonably assume that they were together.

[11] Constable McGirr gave evidence that his duties were to observe the sale as well as look out for the volunteer’s safety. He denied that he and Sarah were acting in any manner to suggest that they were a couple. However, after observing he video, he was prepared to accept that anyone following them would reasonably be able to infer that they were together. He refuted the suggestion that there was no need for his presence to ensure the volunteer’s safety although he based his opinion on an incident that had occurred to another volunteer in on-licensed premises.
[12] A Police Constable went back into the premises a few minutes after the sale had been made and identified the salesperson. He was advised that he would be spoken to later. The salesperson was Nicholas. He was a schoolboy aged 16 years and 7 months. He had been working at the supermarket for nine weeks. He only worked as a checkout operator on a Friday. The remainder of his time was either spent on cleaning or helping others. He had received some basic training, and had been shown what to do by another check out operator.

[13] On 7 July 2006, he was duly cautioned and made a statement. He declined to speak with a lawyer. He said that he had been mopping the floors and had seen a young girl and a man approaching the express lane so decided to open his till to assist them. He said that he thought that the male was the person responsible for the liquor, although he acknowledged that the girl was not only holding the bottle, but had paid for it as well. Nicholas stated that he thought that the girl looked to be at least 19 years of age. He acknowledged that it was company policy that anyone looking under 25 was to be checked for identification.

[14] Ms C D Grant obtained her General Manager’s Certificate on 17 March 2006. She was interviewed a few days after the sale was made. She acknowledged that she was duty manager at the store that evening, but said that she was not aware of the sale to the minor until she was starting to close the store at about 10.15 pm that night.

[15] The only witness called by the respondents was Mr G M Swan who has been the Regional Loss Prevention Manager with Progressive Enterprises Limited for the past four and a half years. Progressive Enterprises Limited is the parent company of the first respondent. Mr Swan oversees compliance with the Sale of Liquor Act and the Smoke-Free Environments Act on a national basis. He confirmed that Nicholas had lost his part time employment as a result of the sale being made and had not been asked to appear as a courtesy to him. He emphasised that the company had zero tolerance to breaches of the Act.

[16] Mr Swan provided us with a summary of the company’s approach to staff training and compliance procedures. We accept that the company has a number of procedures in place designed to prevent breaches of the Act. Mr Swan stated that checkout operators are carefully selected although we question the age at which Nicholas had been employed bearing in mind that he was entitled to sell liquor. The company adopts a procedure whereby supervisors are employed to keep an eye on the checkout operators and can be called upon to assist. Mr Swan said that supervisors watch the checkout operators “like hawks” although there was no evidence where Nicholas’s supervisor was. In addition the company has sign in forms to be signed by the checkout operators and a seven-year buffer policy in that any person under 25 must be asked for identification. There are prompts on all tills although the operator can manually override these.

The Respective Submissions

[17] Mr McGill accepted that Nicholas had made a sale of liquor to a minor although he noted that no conviction had been entered against the salesperson. He relied on Nicholas’ statement to the Police to support his contention that at the time of the sale Nicholas believed that Sarah had obtained the age of 18 and that he had reasonable grounds for such belief. He stressed that Nicholas had stated that he thought the man was the one responsible for the alcohol, and that he thought that Sarah was at least 19.

[18] Mr McGill argued that such belief was formed on the basis of:

• Sarah’s appearance;

• The appearance of the accompanying Police officer;

• The close proximity of the accompanying Police officer to the volunteer; and
  
• The action of the accompanying Police officer in following Sarah to the checkout counter, standing beside her during the sale, and then leading her away from the counter.
  

[19] Alternatively, Mr McGill argued that the actions of the accompanying officer had incited Nicholas to make the sale, and that if the officer had been further away no sale would have been made. He submitted that the actions of the officer amounted to active encouragement resulting in the Act being breached that would otherwise not have happened. Mr McGill based his arguments on the cases of Scott Lyall Taylor v Vadna Enterprises Limited and another Auckland High Court AP22-PLO2 25 July 2002 and Jiaqing Dong v Police Palmerston North High Court CRI-2004-454-27.

[20] In conclusion he contended that to suspend the off-licence or the General Manager’s certificate in the circumstances of this case would be wholly counterproductive to the intended purpose of the Act and would not be in the interests of justice.

[21] The Police argued that there was no intention by the accompanying officer to pose as a couple, and that at any event both parties were clearly under the age of 25. He noted that the salesperson had described the volunteer as young. Accordingly he submitted that this was a fair test which the respondents had failed. The Sergeant was critical of the amount of training given to the young salesperson.

The Authority’s Decision and Reasons

[22] We do not accept that the salesperson’s statement to the Police made a week after the incident was sufficiently strong, and objectively persuasive, to reach the probative threshold necessary to show that the law had not been breached. Dealing with the four points made by Mr McGill in paragraph [18] above, there was no comment about Sarah’s appearance except that Nicholas thought she was at least 19. On the other hand we thought she looked her age. There was no comment in the statement about the appearance of the accompanying officer. He looked under 25. On appearances alone there should have been a request for identification. But there was no discussion between the salesperson and the volunteer.

[23] We agree that the closeness of the couple gave the appearance that they were together. We assume that the association between a young girl and an older man may have led the salesperson to believe that the young girl was therefore of the same age. But he never said so in his statement. All he said was that he thought the man was responsible for the liquor. In this case Sarah was buying the liquor and it was her age which was at issue. There was no conversation between the two. The type of liquor being purchased should have sent out warning signals. We agree that the presence of a couple may have caused some confusion, but in this case, Nicholas (and by implication the first respondent) has the onus of proving that he believed that Sarah was over 18, and that he had reasonable grounds for so doing.

[24] Which leads to the final point. While we respect the company’s reasons for not calling the salesperson, all we have been left with is an exculpatory statement quite untested by cross-examination. If one is carrying the onus of proving something, it is unlikely that one can reach such a threshold without actually being in a witness box. The same thing happened in J Dong v Police (supra). In that case, the appellant was convicted of selling liquor to a minor. There had been no interaction between the bar-person and the volunteer. However, the volunteer had been accompanied by two other persons who were both in their twenties. The theory was that the volunteer would have looked part of the group and of an age with the others. But the appellant had not appeared at the hearing to explain why he believed that the person was 18 years of age. The Judge on appeal stated:

“I must approach the matter on the basis that, as the Judge said, the defendant elected to give or call evidence. This makes reliance upon the statutory defence impossible.”

[25] The salesperson’s statement does not in our view, amount to proof that Nicholas believed that that the volunteer was over the age of 18, and certainly does not show that reasonable grounds existed for drawing that conclusion. It may show some confusion on the young man’s part as to his legal responsibility when selling liquor.

[26] The second issue is whether the presence of the accompanying officer and his conduct in being so close to the volunteer amounted to entrapment. Did such conduct merely provide the opportunity for the offending to take place (in which case the conduct is permissible) or did it constitute active encouragement resulting in a crime being committed that would otherwise not have been committed (in which case the conduct is impermissible)?

[27] To a large extent that issue was answered by McKenzie J in J Dong v Police (supra). Counsel in that case argued that the presence of two older men turned the controlled purchase operation into entrapment. We do not know how close they were to the volunteer or whether there was any interaction between the three people. The Judge noted that the sale had been made without enquiry as to the volunteer’s age. He said he was satisfied that the conduct was permissible. He said:

“The proposition that selecting a volunteer who may appear to be over the age of 18, and having that volunteer associate with persons who are in fact over that age, (our emphasis), can amount to entrapment involves a consideration of the defence under s.155(4) of the Sale of Liquor Act 1989 ... If a volunteer is selected who may appear to be over the age of 18 years, that may make it somewhat easier for a defendant to make out that defence than if a person of obviously younger age was selected. But that fact tends to demonstrate that the selection of such a volunteer cannot in itself amount to entrapment. That is to say the selection of a person who is apparently over age, and the presentation of that person in circumstances which might tend to confirm that appearance, (our emphasis), does not in my view constitute entrapment. It is, in those circumstances, a matter for the defendant to seek to establish the s.155(4) defence.”

[28] In summary therefore, the presence of an older person accompanying the volunteer does not incite or actively encourage the salesperson to make the sale. That is on the basis that the accompanying person is present and not actively involved. However, the presence of such a person may well give the salesperson reasonable grounds for believing that the volunteer was older. In this particular case we have already ruled that the company cannot rely solely on the salesperson’s statement as a defence.

[29] It follows therefore that the company is unable to rely on either defence. The ground for the applications has been established in each case. The issue is whether it is desirable to make suspension orders. In the case of the first respondent we agree with Mr McGill that making a suspension order would be an unreasonable exercise of our discretion.

[30] The Court of Appeal in the decision of Christchurch District Licensing Agency Inspector and another v Karara Holdings Limited and others [2003] NZCA 96; [2003] NZAR 752:

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

[31] In our view this controlled purchase operation suffered from unintended unfairness. We cannot see any reason for the accompanying officer to watch for the volunteer's safety in a supermarket. Certainly there was no need to be so close. The video evidence shows that the officer was with the volunteer at the point of sale. If he was not making a purchase then an objective observer might well ask what he was doing. In our view the officer’s actions in unintentionally associating himself with the volunteer were inappropriate, and should not happen when a controlled purchase operation is being conducted.

[32] Once the link has been made between the volunteer and the accompanying person, once they are seen to be a couple, then there are not only grounds for a s.155(4) defence, but there is also the possibility of false assumptions being made. The impact on the young checkout operator in this case was to create confusion although any reasonably intelligent person would have concentrated on the volunteer purchaser. All controlled purchase operations should be fairly conducted. It is the duty of the enforcement agencies to provide the opportunity to see if a breach is committed. We draw the line when the volunteer becomes obviously associated with an older person. Our clear view is that in this case, and for these reasons, it would be undesirable to make a suspension order against the company.

[33] However, no such leniency can be extended to the duty manager. We did not hear from her and we do not know where she was when the sale was made. We do not expect a duty manager to trust supervisors to carry out their role. A certificated manager has the advantage of training. He or she carries the responsibility under s.115 of the Act of complying with the Act, and the conditions of the licence. They are the front line in the campaign to reduce liquor abuse. If the holders of General Manager’s Certificates cannot live up to the standards expected of them, then it would be almost impossible to expect bar persons, checkout operators, and other salespersons to be vigilant. As we said in the original decision of John Francis Armstrong and anor v The Brougham Tavern Limited and others LLA PH 216 – 229/2002 at paragraph [83]:

“In busy supermarkets a duty manager should not be in an office. Nor should she/he have other duties associated with non-licensed activity. If the duty manager cannot oversee the sale of liquor, then he/she is going to be unable to ensure compliance. If the duty manager were required to shoulder more responsibility, then we would expect the licensee to be more vigilant. If the checkout operator is the weakest link, then he or she should not be discouraged from requesting identification by being penalised on the issue of productivity.”

Orders

[34] For the reasons we have given we make the following orders.

• [a] The application to suspend the off-licence issued to General Distributors Limited is refused.
  
• [b] General Manager’s Certificate 058/GM/15/2006 issued to Carolyn Dawn Grant is suspended for 14 days from Monday 2 April 2007.
  

DATED at WELLINGTON this 15th day of March 2007

Judge E W Unwin Ms P A Ballard
Chairman Member

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