Grant and Long v Westpark Hospitality Limited and Harrison [2007] NZLLA 55 (8 February 2007)

Last Updated: 17 February 2010

Decision No. PH 55/2007 –
PH 56/2007

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 010/OFF/14/2004 issued to WESTPARK HOSPITALITY LIMITED in respect of premises situated at 3 George Street, Tuakau, known as “Tuakau Tavern”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for the suspension of General Manager’s Certificate number GM 010/29/2006 issued to WAYNE JOHN HARRISON

BETWEEN KIRI RAE GRANT
(Police Officer of Papakura)

AND TERENCE LONG

(Franklin District Licensing Agency Inspector)

Applicants

AND WESTPARK HOSPITALITY LIMITED

First Respondent

AND WAYNE JOHN HARRISON

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARING at PAPAKURA on 30 January 2007

APPEARANCES

Sergeant G J Campbell – NZ Police - applicant
Mr T Long – Franklin District Licensing Agency Inspector – applicant
Mr W J Harrison – representing first and second respondent

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] Mr Wayne John Harrison has been operating the “Tuakau Tavern” in Tuakau for the past four years. His company, Westpark Hospitality Limited, (hereafter called the company) holds the on and off-licences for the business. Mr Harrison and his wife Raewyn Glenys Harrison are the company’s directors and shareholders. Mr Harrison has held a General Manager’s Certificate since 21 July 2006. The business comprises a tavern with a separate but associated bottle-store. The off-licence for the bottle-store was issued on 23 December 2004. The licence also authorises sales over the bar for consumption off the premises. The hours of operation for the off-licence are from 9.00 am to 11.00 pm Monday to Sunday and 9.00 am to 10.00 pm on Sundays. The hours to sell over the bar are extended to coincide with the authorised trading hours for the on-licence. Up until August 2006 the business had an unblemished record.

[2] There are two enforcement applications for consideration. They were brought jointly by the Police and the District Licensing Agency Inspector. The applications relate to a controlled purchase operation carried out in a number of rural centres in the Franklin District on Saturday 26 August 2006. The operation was conducted by the Police in conjunction with the Franklin District Licensing Agency. A total of nine licensed premises were tested to see whether they would be prepared to sell liquor to a minor, without checking for identification. Three young volunteers were used and there were a total of 13 attempts made to purchase liquor.

[3] Of the nine premises that were visited, two sold liquor to a volunteer without either checking the volunteer’s age, or requesting the production of appropriate identification. The first respondent was one of the licensees to fail the test.

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

[5] We heard evidence from Constables W Dervan and K R Grant together with Mr T N Long and the volunteer. Their combined evidence showed that at about 6.30 pm on 26 August 2006 an underage volunteer named Calvin entered the bottle store known as “Tuakau Tavern”. Calvin was born on 10 December 1989 and was 16 years and 8 months at the time of the operation. He was able to purchase a four-bottle pack of Woodstock Bourbon and Cola without being asked for proof of his age. He was served by Mr Harrison who was acting as the duty manager of the bottle store.

[6] Mr T N Long is employed by the Franklin District Council as a Liquor Licensing Inspector. He has held this role for over 15 years. He was outside the tavern at the time of the incident. He noted that another vehicle entered the carpark just after Calvin had left the bottle store. The occupants of the vehicle then went into the liquor store. After they had left, Mr Long and Constable W Dervan entered the building and spoke with Mr Harrison. Mr Harrison confirmed that he was working on his own. He initially stated that he had asked for identification. When told that the volunteer had no identification on him Mr Harrison stated that he could not remember the transaction. Mr Long’s impression was that at the time he made the purchase, Calvin was the only other person in the store.

[7] Mr Harrison was subsequently spoken to on 12 September 2006. He was asked whether he had put in place any new or additional strategies to ensure that minors would not be served. He explained that he would not be working in the store in the future. He also expressed the opinion that the industry was over regulated and that compliance tests were unnecessary.

[8] Mr Harrison did not dispute the basic facts. He had been offered the opportunity to have both the licence and the certificate suspended for nominated periods but had declined to have the matters dealt with in this way. Mr Harrison gave the clear message that he thought that he and his company were being unreasonably treated. He argued that the premises had not failed in other similar operations and that he and his staff were committed to ensuring that minors were not served. He stated that he was not normally in charge of the bottle store but that his employee had been sick and he had taken over on short notice. He said he was about to close up when the sale was made and therefore paid less attention.

[9] Mr Harrison believed that his premises would not be a target for young people seeking liquor and that up until August there had been no problems with the running of the tavern. He thought that other premises should have been the subject of Police and Agency monitoring. In summary, he gave the strong impression that he was somewhat aggrieved and frustrated at having to appear before the Authority, as well as being annoyed at himself for making such an obvious and unnecessary error of judgement.

[10] It is therefore for his benefit, that we repeat what we have said previously about the legislative and social background leading up to the implementation of controlled purchase operations. It is our belief that these operations are a useful and effective way to secure managerial compliance with the Act. We continue to remain surprised that the message about the social harm, which results from unauthorised teenage access to liquor, has taken so long to get through.

The Legislative and Social Background to the Application

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

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

[13] On 7 May 2002, the Authority issued its decision in John Francis Armstrong and Anor v The Brougham Tavern Limited and others LLA PH 216 – 229/2002. This became known as the “Karara” decision. In that case, the Authority was confronted by seven applications for suspension following a controlled purchase operation. Three of the licensed premises were supermarkets. One was a convenience store. The other three premises were off-licences associated with a tavern similar to the present case. Six of the off-licences were suspended for five days. The seventh (which was a supermarket) was suspended for three days. All had exemplary records.

[14] The case was appealed to the High Court, which effectively stated that the Authority had exceeded its jurisdiction. Subsequently, the Court of Appeal restored the original orders. See Christchurch District Licensing Agency Inspector and another v Karara Holdings Limited and others NZAR [2003] 752. In that decision the Court of Appeal stated:

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

[15] There was a concern that the use of volunteers to purchase liquor could be seen as an offence against the Act. Consequently an amendment to the Act was passed in April 2004. This amendment established an exception to s.162(1) of the Act as follows:

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

[16] In summary, over the last seven years there have been a number of initiatives designed at bringing the issue to the attention of those who sell liquor to the public. Among the education methods employed by the enforcement agencies has been the controlled purchase operation. By using this method, the agencies have, for the first time, been able to check to see whether off-licences were playing their part in reducing liquor abuse. All licensees should be well aware of the concerns about under age access to liquor, and the impact of such access on the community, and the efforts being made to address the problem.

[17] Mr Harrison may ask what this has to do with his business. The answer is that this is a community concern that is directly related to the industry to which he belongs. As can be seen from the above summary, the controlled purchase operation has received legislative approval from Parliament, and judicial sanction from the Court of Appeal. As a consequence, Mr Harrison’s business has not been specifically targeted, but it has become swept up in the national education process.

[18] The reasons behind this controlled purchase operation were eloquently explained by the District Licensing Agency Inspector when he made these comments:

The Council has a responsibility to listen to, care for and act in the best interests of its ratepayers. Council receives many complaints from people in the community about young people who are perceived to be minors and who are consuming alcohol in public places. Callers to Council offices assume that these young people have purchased the alcohol themselves and are too young to be admitted to a bar. Sometimes our attention is directed to a particular outlet. Many people feel threatened by partly intoxicated young people misbehaving in public places.

Council spends more than $1 million each year repairing parks, reserves and community facilities after damage by vandals. Many of the people who generate this graffiti and destruction are fuelled by alcohol. Some of the people who engage in this sort of activity are minors. It is very clear that our community expects Council officers and the Police to do something about this problem. One response to this problem is to check that liquor outlets are not selling to minors.

Authority’s Decision and Reasons

[19] In this case it is clear that the ground for suspending the licence has been established. On 26 August last the premises known as the “Tuakau Tavern” were conducted in breach of s.155(1) of the Act. As the manager on duty, Mr Harrison failed to conduct the premises in a proper manner. As explained above, the purpose of enforcement actions is to help maintain the integrity and effectiveness of the licensing system. The issue for us is whether the imposition of a suspension order will help to do so.

[20] Deciding whether it is desirable to make a suspension order involves the exercise of a discretion. One of the ways in which our discretion is affected, is s.4(2) of the Act. This section requires us to exercise our jurisdiction, powers and discretions in the manner that is most likely to promote the object of the Act. That object is as follows:

The object of the Act is to establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse, so far as that can be achieved by legislative means.

[21] In The Mill Liquorsave Limited v Grant David Verner CIV-2003-485-874, Gendall J made a number of strong comments about enforcement processes under the Act. For Mr Harrison’s benefit we set these comments out below:

[23] I have no doubt at all that deterrence (i.e. to “discourage” others) from selling to minors, as well as special deterrence to the licensee before the Authority, is a relevant consideration and squarely within the objects of the Act. A reasonable system of control of the supply of liquor includes the need to be able to secure compliance with licence conditions and the law through the exercise of discretionary disciplinary powers specifically given to the Authority by Parliament. If it could not suspend a licence given to a corporate body where a “fault” or breach of the Act was that of a manager, its powers of control over licensed persons or bodies could be rendered nugatory or severely curtailed.

[28] In my view the phrase “licensing end” is no more than shorthand for “advancing the purposes of the legislation” which places liquor licensing and enforcement largely in the hand of the Liquor Licensing Authority. General deterrence of other licensees from breaches of the law, where there are general concerns of an increasing degree of access by underage persons to liquor often through direct purchases from licensees, is a factor or consideration which squarely falls within a legitimate licensing end or aim to be considered by the Authority when exercising its discretion to suspend a licence or not.

[22] In this case we believe that suspension orders are both desirable and appropriate. Factors which have influenced us are:

• [a] The obvious immaturity of the volunteer;
• [b] The type of product that was purchased;
• [c] The fact that the sale was made by the duty manager;
• [d] The fact that the duty manager was also the de-facto licensee;
• [e] Mr Harrison’s apparent lack of engagement with the reporting agencies;
• [f] Our belief that an order in this case will help to secure future management compliance by licensees, and this company and its staff in particular; and
• [g] Our belief that selling liquor to minors has the potential for serious liquor abuse.
  

[23] The remaining issue for our determination is the length of the suspensions. The Court of Appeal in the Karara Holdings Limited decision (supra) described the five-day period of suspension as a “moderate period” in paragraph [12], and “a short period” in paragraph [47]. In that case, there had been no warnings and the respondents had exemplary records. In that case we had imposed five-day suspension periods in respect of bottle stores associated with a tavern. We have been careful to distinguish between a business which is forced to close as a result of a suspension and one that can continue such as a supermarket or convenience store. A stand-alone bottle store which is the only source of income can expect a one day suspension on a first appearance before us. On the other hand the closure of a bottle store associated with a tavern does not prevent the on-licence from being operated.

[24] We received a number of submissions about the economic effect of a five-day closure of a bottle store attached to an on-licence. As a result we have reduced the recommended period of suspension to three days. However it is now standard practice to impose a period of suspension which will include the day on which the sale was made.

[25] Where the sale is made by the holder of a General Manager’s Certificate a period of at least one month’s suspension has become accepted as a reasonable response. This is because managers not only have the advantage of the training associated with the grant of a certificate but are fully aware of the need to set an example to members of staff. If they cannot carry out the basic requirements of seeking identification then how can they expect the checkout operators and other salespersons to administer the Act responsibly? In this case Mr Harrison had only held his certificate for a month when the sale was made.

[26] We are not unaware of the financial impact of a suspension. However we take the view that any financial loss associated with the suspension of a licence, should be measured against the social costs that society absorbs in respect of alcohol related harm experienced by young people. We also believe that recognition should be given to the seven premises who, when offered the same opportunity to sell to the minor, resisted the temptation to do so.

Orders

[27] For the reasons we have given we order that off-licence number 010/OFF/14/2004, issued to Westpark Hospitality Limited, is suspended for three days from 9.00 am on Saturday 17 March 2007 to 9.00 am on Tuesday 20 March 2007.

[28] General Manager’s Certificate number 010/29/2006, issued to Wayne John Harrison, is suspended for one month from Monday 19 March 2007.

DATED at WELLINGTON this 8th day of February 2007

Judge E W Unwin Ms P A Ballard
Chairman Member

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