Dalziell-Kernohan v The Mill Liquorsave Limited [2007] NZLLA 35 (17 January 2007)

Last Updated: 17 February 2010

Decision No. PH 35/2007

IN THE MATTER of the Sale of Liquor Act 1989

IN THE MATTER of an application pursuant to s.132 of the Act for the suspension of off-licence number 015/OFF/13/04 issued to THE MILL LIQUORSAVE LIMITED in respect of premises situated on the corner of Mill Street and Willoughby Street, Hamilton, known as “The Mill Liquorsave”

BETWEEN JAMES ROBIN DALZIELL-KERNOHAN

(Police Officer of Hamilton)

Applicant

AND THE MILL LIQUORSAVE LIMITED
Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at HAMILTON on 14 December 2006

APPEARANCES

Senior Constable J R Dalziell-Kernohan – NZ Police - applicant
Mr C P Brosnahan – for respondent
Mr T P van der Heijden – Hamilton District Agency Licensing Inspector

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] On 12 November 2005 a Police volunteer visited the premises of “The Mill Liquorsave” on the corner of Mill Street and Willoughby Street in Hamilton. The volunteer was able to purchase a bottle of sparkling wine valued at $7.99. She was served by a 31 year-old shop assistant who asked her for identification. The volunteer produced her driver’s licence, the details of which were entered into the computer. The driver’s licence showed that the volunteer was born on 15 February 1989. In other words she was sixteen and a half years of age. However, the details which were entered into the computer showed a date of birth of 15 February 1987. The computer then calculated that the purchaser was over the age of 18, and the transaction was duly processed.

[2] The sale resulted in the Police issuing prosecutions against both the salesperson and the duty manager. The salesperson was convicted for selling liquor to a minor in the Hamilton District Court on 19 January 2006 and was fined $500 with costs $130. It was unclear whether she appeared at the Court to answer the charge. The duty manager was charged with allowing liquor to be sold to a minor. She received diversion which was completed in April 2006 when the charge was withdrawn.

[3] Once proceedings had been completed in the District Court, the Police then wrote to the company on 25 May 2006 indicating that the matter was going to be reported to the Authority. The letter offered to have the matter resolved by way of a voluntary suspension. Mr C P Brosnahan was instructed as counsel to act for the company. On 12 June 2006 he wrote to the Hamilton Police requesting disclosure under s.24 of the Official Information Act. Mr Brosnahan was initially advised that disclosure would not be made until an enforcement application had been lodged.

[4] An application for the suspension of the off-licence issued to The Mill Liquorsave Limited (hereafter called the company) was filed in July 2006. The application was based on the ground that the licensed premises had been conducted in breach of s.155(1) of the Act. This section creates an offence for any licensee or manager to sell or supply liquor or allow liquor to be sold or supplied on or from the licensed premises to any person who is under the age of 18. The Police also alleged that the premises had been conducted in breach of the condition of the licence which requires the licensee to ensure that the provisions of the Act relating to the sale and supply of liquor to prohibited persons are observed.

[5] There was a problem with disclosure. Initially the Police appear to have taken the view that as the application was not a prosecution, no disclosure would be made. It was not until 25 October 2006 that the company was given sufficient material to establish details of the transaction. The company was in some difficulty because it had written to the salesperson notifying her of a disciplinary meeting and inviting her to attend. She had failed to appear at the meeting and her employment had been subsequently terminated. Accordingly, the company was unable to establish exactly what had happened until such time as it received the requested information.

[6] The Police declined to produce a photograph of the volunteer but said that it could be viewed at the Police station in Hamilton. This was because a respondent in a previous case had placed copies of another volunteer’s photograph around the licensed premises. It seems to us that such a clear breach of privacy warranted a cautionary approach.

[7] Mr Brosnahan argued the case on the basis that the company had done all that could reasonably be expected of it. He submitted that its systems were designed to prevent sales being made to minors. He contended that in this case there had in all probability been a mistake made by the salesperson. It appeared that she had inadvertently entered 1987 rather than 1989. In such circumstances he argued that there was a complete absence of fault on the company’s part.

The Hearing

[8] Senior Constable J R Dalziell–Kernohan gave evidence that a Controlled Purchase Operation had been conducted in Hamilton on 11 and 12 November 2005. Of 22 premises which were visited over the two days, 12 premises had sold to the volunteer. He produced confirmation of the salesperson’s conviction and the diversion process offered to the duty manager. Sergeant D T McDonald produced a photograph of the volunteer. It was clear from the questioning that the volunteer had produced a copy of her driver’s licence and had received a receipt for the purchase. The respondent company (through its counsel), was keen to obtain a copy of this receipt, but it seems that it had been destroyed after the proceedings in the District Court.

[9] The applicant’s case lacked completeness in that we did not hear from the volunteer. The District Licensing Agency Inspector was able to recall speaking to the volunteer after the sale had been made. Her notes suggested that the proof of age details had not been keyed into the computer although the evidence showed otherwise.

[10] Mr B J Seddon is based in New Plymouth and is the company’s Human Resources Director responsible for the implementation of the training and monitoring of staff in the company’s 40 stores. He confirmed the company’s commitment to upholding the law particularly in relation to the potential sale of liquor to minors. He stated that over the years the company had developed a training and monitoring regime which is used to induct new employees. The employee is given a handbook and is then required to complete a comprehensive orientation work book with well over 50 questions to be answered and practical assignments to be completed. If applicants pass this exercise they are then placed under one-on-one supervision with the manager until the manager is satisfied that the employee fully understands the system.

[11] Mr Seddon gave evidence that at the commencement of each day before logging on, a message comes on the screen, advising of the offence of selling to minors and explaining the consequences. The message concludes:

I understand my responsibility under the Sale of Liquor Act to identify all persons under the age of 25 years old without exception for each transaction.

[12] The employee is required to endorse the message with “I agree” before he or she is able to operate the till. Each subsequent transaction produces an automatic prompt which reads “Age check required. Is the customer over 25?” The employee has to check yes or no. If the answer is no, then another prompt appears requiring the customer’s date of birth to be entered into the computer. The date of birth can only be taken from a New Zealand passport, or HANZ identification or driver’s licence. Mr Seddon confirmed that the computer then calculated whether the sale could proceed.

[13] Mr Seddon advised that once the company had received details of the sale it was able to identify the precise time of the sale and the product that had been sold. Mr Seddon was then able to access the receipt from the computer. This document was produced to us. It showed that a bottle of sparkling wine had been sold for $7.99. The document identifies the salesperson and the station. More importantly the document has these words and figures.

AGE CHECKED: (15/2/1987).

[14] We did not hear from the salesperson because she has now left the company’s employment. Nevertheless, it is clear that the computer, having read the age shown above, would have allowed the transaction to proceed. Mr Brosnahan argued that this document showed that the salesperson had either misread a ‘9’ for a ‘7’, or inadvertently typed in a ‘7’ instead of a ‘9’. Either way the exhibit shows conclusively that the salesperson conscientiously followed the procedures demanded by the company.

The Authority’s Decision and Reasons

[15] Mr Brosnahan asked for some guidance and/or directions on the issue of disclosure. This matter was discussed by the Authority in Trevor Vincent Walker v Kathryn Joan Furness and another LLA PH 147/99. In that case the Police had requested a ruling on the obligation on parties supporting or opposing an application coming before the Authority to respond to a request from another party for disclosure. The Authority’s conclusion was as follows:

“It follows from the Commissions of Inquiry Act and the procedure sections in the Sale of Liquor Act that the Authority’s proceedings may be inquisitorial to the extent that the Authority determines. It is the Authority which is in control of proceedings and it can regulate its proceedings as it thinks fit (s.107 Sale of Liquor Act) and require production of documents and these to be supplied to other parties (s.4C Commission of Inquiry Act), can admit evidence as it thinks fit (s.109 Sale of Liquor Act) and has power to summon witnesses (s.4D Commission of Inquiry Act). The District Courts Act and Rules are designed for traditional adversarial civil proceedings and in our view are not directly applicable in proceedings before us. Certainly the terminology of s.56A of the District Courts Act and R 321 is not appropriate for a liquor licensing application (use of “plaintiff, “defendant” etc)

As there is no statutory right to disclosure by the licensee at the instigation of the Police (“reciprocal disclosure”) it would appear to be necessary for the Police to make application to the Authority under s.4C(3) of the Commissions of Inquiry Act if they want to request information or particulars from the licensee. Although such applications can be made during the course of a public hearing, it would be preferable for such applications to be made through our Secretary prior to a hearing. The Authority would then determine whether to order production of documents to any party appearing before it.

Any reciprocal disclosure practice that the Police contend is normal procedure is simply a practice that has frequently been accepted by both parties to a matter before the Authority but such procedure is not enforceable as between the parties, unless the Authority has so ordered.”

[16] These comments are still pertinent nine years later. In summary, the Police are subject to the Official Information Act and any failure to respond can result in an application being made to the Ombudsman. In addition to the reference to s.4C of the Commissions of Inquiry Act 1908 it may be that s.110(2) of the Sale of Liquor Act, (which gives us power to order the production of documents), could be used if necessary. We believe that it is well accepted by enforcement authorities and agencies that requests for disclosure will be responded to positively.

[17] Mr Brosnahan was critical that the volunteer had been allowed to carry identification contrary to the Controlled Purchase Guidelines published in June 2004 by the Alcohol Advisory Council of New Zealand. However, the guidelines were never intended as a prescriptive blueprint, and it was expected that the recommendations would be adapted or amended to suit agencies’ and communities’ particular circumstances and requirements. On the other hand, this case may serve as a useful reminder that the more complicated the operation, the greater chance that there will be unforeseen consequences.

[18] In this case the production of the driver’s licence has produced a result quite out of keeping with the way liquor is sold by this company. We agree with counsel that the company has put into place systems which are designed to prevent the sale of liquor to minors. The prompting system in the computer is a daily reminder for all members of the staff. If members of staff follow the prompts then a sale to a minor will be an exceptional occurrence such as the one that happened on this occasion.

[19] It is true that members of staff have to make the discretionary call as to whether the purchaser looks under or over 25 years of age. However, in this case the salesperson made the correct call and asked for identification. We agree that there is no way that the company can monitor or manage an employee’s skill in typing certain numbers into a computer. In summary, the evidence has shown that this sale was an exceptional event which no amount of training or preparation can prevent. The company has shown that it was without fault.

[20] However, that is not the end of the matter. Section 132 of the Act requires a two step approach. First we must be satisfied that the grounds have been established. It has been established that on 12 November 2005 the premises were conducted in breach of s.155(2) of the Act. It could also be argued that the manager had allowed liquor to be sold to a minor. On the other hand, we do not accept that the Police have proved that the company failed to ensure that provisions of the Act about selling to minor had been observed. We think that the company did all it could to comply with that condition in its licence.

[21] If one of the grounds have been established to our satisfaction, the second step is to decide whether it is desirable to make an enforcement order. In this case in the light of the evidence given by the company, and our finding that there was an absence of fault, we believe that it would quite undesirable (if not unreasonable) to suspend the licence and we decline to do so. The application for suspension of the off-licence is accordingly refused.

DATED at WELLINGTON this 17th day of January 2007

Judge E W Unwin Ms P A Ballard
Chairman Member

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