Hibbert v Portage Licensing Trust and Sturm [2007] NZLLA 688 (31 July 2007)

Last Updated: 31 January 2010

Decision No.PH688-2007
-- PH689-2007
IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application pursuant to s.132 of the Act for cancellation of on-licence number 006/ON/232/2005 issued to PORTAGE LICENSING TRUST in respect of premises situated at Shops 2 and 3, Kelston Shopping Centre, 2-18 West Coast Road, Kelston, Waitakere City, known as “Korner Bar”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for cancellation of General Manager’s Certificate number GM 006/858/2006 issued to LEE BARRY STURM

BETWEEN VAUGHAN JOSEPH HIBBERT

(Police Officer of Waitakere City)

Applicant

AND PORTAGE LICENSING TRUST

First Respondent

AND LEE BARRY STURM

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Members: Ms J D Moorhead
Mr P M McHaffie

HEARING at AUCKLAND on 24 July 2007

APPEARANCES

Constable V J Hibbert – NZ Police - applicant
Mr C Baker – for first respondent
Mr L B Sturm – second respondent – in person
Mr J P Sheehan – Waitakere District Licensing Agency Inspector – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are two applications for the Authority’s consideration. The first is an application to cancel an on-licence issued to the Portage Licensing Trust (hereafter called the Trust) in respect of a tavern situated in the Kelston Shopping Centre in Kelston, Waitakere City, known as “The Korner Bar”. The on-licence was issued on 18 April 2001 and authorises trading from 9.00 am to 1.00 am the following day.

[2] The grounds for the application are that the licensed premises have been conducted in breach of ss.155(1) of the Act, and in breach of a condition of the licence. Section 155(1) of the Act creates an offence for a licensee or manager to sell or supply liquor, or allow any liquor to be sold or supplied to any person under the age of 18 years. The condition of the licence alleged to have been breached requires the licensee to ensure that the provisions of the Act relating to the sale and supply of liquor to prohibited persons are observed.

[3] The second application is for the cancellation of a General Manager’s Certificate issued to Lee Barry Sturm. The ground for this application is that the manager has failed to conduct the licensed premises in a proper manner. Mr Sturm was granted his certificate on 16 May 2006. At the hearing it was acknowledged that if enforcement orders were to be made then suspension would be more appropriate than cancellation.

[4] Both applications arise from the same set of facts. It is alleged that on Thursday 23 November 2006, a 17 year old male was able to purchase two RTDs known as ‘Smirnoff Black’ from a bar in the premises without being asked for identification. The sale was made by an employee of the Trust. Mr L B Sturm was in the premises as the duty manager at the time of the sale.

The Hearing

[5] Constable V J Hibbert is the Liquor Licensing Officer for the Waitakere City District. On Thursday 23 November 2006 he conducted a controlled purchase operation with the Waitakere District Licensing Agency Inspector, Mr J P Sheehan. The aim was to determine whether licensees and their staff were complying with the requirements of the Act. A total of 13 premises were visited and five sales were made.

[6] There were two volunteers used in the operation. The male named Stephen was born on 13 November 1989. He has just turned 17 at the time of the operation. The female volunteer named Sian was born on 8 August 1990 and was 16 years and three months at the time of the operation. They entered “The Korner Bar” at about 8.30pm and went up to the bar. The bar was not particularly busy. A female employee approached Stephen and he asked for two bottles of "Smirnoff Black". These were duly taken from a fridge and supplied to Stephen without any questions being asked as to the age of either volunteer. The two volunteers then took the bottles to a table and sent Constable Hibbert a text. It is unclear whether they had a sip of the contents.

[7] Constable Hibbert then entered the tavern and confirmed that the volunteers were in possession of the two recently purchased bottles. After they had identified the bar-person the volunteers were allowed to leave. The Constable then approached the bar-person. She acknowledged that she had served the couple but said they looked over 18. The Constable also spoke with Mr Sturm the duty manager who was present in the bar. We did not hear from the bar-person but our own observation of the two volunteers was sufficient to rule out any suggestion that the bar-person might have had reasonable grounds for believing that they were over the required age.

[8] At the time the sale was made, Mr Sturm was working in the gaming room refilling a hopper. He had no knowledge that the transaction was taking place and only saw the volunteers as they were departing. He confirmed that the episode had been a been a major learning curve for him, and spoke of the various changes that had been promoted by the Trust to ensure that the mistake was not repeated. These initiatives included the training of senior staff to service the gaming room thereby freeing up the duty manager to carry out the tasks for which he or she had been appointed.

[9] Mr Murray James Spearman gave evidence on behalf of the Trust. He is the Chief Executive of West Auckland Trust Services Limited which provides management services to both the Waitakere and Portage Licensing Trusts. He confirmed that the bar-person had been dismissed and that Mr Sturm had received a final written warning. He also spoke about the various improvements that had been made to the Trust’s systems following the incident. The details of most of these initiatives are set out in our decision in Vaughan Joseph Hibbert v Portage Licensing Trust and another LLA PH 677-678/2007.

[10] The Trust’s position was also set out in that decision. Mr Baker repeated his argument that the Trust maintained sound and conscientious systems designed to ensure compliance with the Act, and was therefore without fault. Alternatively it was contended that it was undesirable to make an order where proper standards had been put in place. As we indicated in that decision we had difficulty in accepting such a proposition. We felt the same way about this case. If the systems were that sound then the duty manager would have been in the bar area rather than the gaming room. We did not hear from the bar-person and therefore have no way of knowing how it was possible that she made the sale to two obviously young people without requesting identification.

[11] Mr Baker contended that any proof that the minors had been supplied with liquor was by description only. He submitted that the Trust had been deprived of the opportunity to have the contents of the bottles analysed, and argued that there was insufficient proof that the substance in the bottles was liquor as defined in the Act.

The Authority’s Decision and Reasons

[12] Normally speaking we would be considering imposing periods of suspension against the licensee and the manager in this case. After all, the grounds in respect of both applications have been established to our satisfaction. However, in our view, there was a flaw in the chain of proof. Under s.132 of the Act an applicant must satisfy us that one or more of the alleged grounds has been established. An offence such as selling to a minor has a number of elements all of which must be established. One of the elements of the offence is that the substance that is sold to a minor is liquor as defined in the Act. In this case, the bottles of "Smirnoff Black" were left in the bar. No samples were taken and nothing was presented at the hearing.

[13] Section 2 of the Act provides that:

Liquor means any fermented, distilled or spirituous liquor (including spirits, wine, ale, beer, port, honeymead, stout, cider, and sherry) that is found on analysis to contain 1.15 percent or more alcohol by volume.

[14] Section 179 of the Act provides:

In any proceedings for an offence against any of the provisions of this Act in relation to any spirits, wine, ale, beer, port, honeymead, stout, cider, sherry, or other fermented, distilled or spirituous liquor it shall not be necessary for the prosecution to prove that it contains 1.15% or more alcohol by volume unless at least 20 working days before the hearing the defendant puts the question in issue by written notice to that effect served on the prosecution.

[15] A hearing before us is not a proceedings for an offence, but the principle is clear. A defendant can apply to have the liquid tested. By implication this means that there is a substance available for such a test. In every case involving an off-licence the applicant presents the liquor by way of an exhibit. Normally it is accepted by the parties that the liquid in the container contained more than 1.15 percent alcohol by volume. In most cases the parties have the opportunity of being able to see the container and read the description of the contents. Common sense prevails.

[16] The Controlled Purchase Operation Guidelines prepared by ALAC in 2004 contain a number of references to the need to keep the alcohol as an exhibit. Although it is probable that most of the references are to an off-licence operation, there seems to be no reason why the same guidelines should not apply to an on-licence. On page 5 reference is made to the method employed in 2001 where volunteers were instructed to keep the alcohol together with the transaction receipt. At page 15 in the step by step guide, reference is made to the need to have self-sealing bags that are large enough for the evidence. In Appendix 3, the volunteer is told to take the alcohol with him or her when leaving the store. In Appendix 2 on page 31, the volunteer is to be advised of the following.

“Explain the importance of exhibits – alcohol, change and transaction receipts are all exhibits, therefore need to be secured and handled with care.”

[17] The question is, how can the applicant establish that the product purchased by the volunteer was liquor as defined in the Act, if there is no exhibit? It may be that in some cases there is sufficient supporting evidence from which only one inference can safely be drawn. Logic tells us that the two RTDs would have contained more than 1.15% alcohol by volume except that we do not know what was on the label, and there is no proof of the ingredients of the bottle. It seems to us that without the original bottle or a sample taken from it, the respondents are not only deprived of the right to have the ingredients tested, but the chain of proof has been broken.

[18] Because of the way that liquor is defined in the Act, the substance that is purchased, or a sample thereof, is nearly always tendered at the hearing. This is partly to satisfy the respondent from a practical and common sense point of view, that what was sold was indeed liquor, and partly to enable an analysis to be undertaken if a request of that nature is made. From a best practice point of view, we believe that in controlled purchase operation cases, it would create a potentially hazardous precedent to accept that a substance is liquor, absent the product that was purchased. We accept that in other cases not involving controlled purchase operations, production of the substance may not be possible. In summary, in this case, there was insufficient evidence to satisfy us on the probabilities that the bottles that were purchased, contained liquor as defined in the Act. For these reasons we decline to make any orders.

DATED at WELLINGTON this 31ST day of July 2007

Judge E W Unwin
Chairman

Korner Bar.doc