Sheehan and Thornley v Waitakere Licensing Trust and Hetaraka [2008] NZLLA 1501 (5 November 2008)

Last Updated: 10 February 2010

Decision No. PH 1501-1505/2008

IN THE MATTER of the Sale of Liquor Act 1989

IN THE MATTER of applications pursuant to s.132 of the Act for suspension of off-licence numbers 006/OFF/115/2007, 006/OFF/100/2006, 006/OFF/118/2007, and 006/OFF/128/2007 issued to WAITAKERE LICENSING TRUST in respect of premises situated respectively at: 4/288, Te Atatu Road, Te Atatu South, 3 Pringle Road, Te Atatu Peninsula, 1/709 Swanson Road, Swanson, and 3 Cellar Court, Massey, all in Waitakere City, and known respectively as: “Local Liquor All Seasons”, “Te Atatu Tavern Bottle Shop”, “Local Liquor Swanson”, and “King Dicks Westgate”

AND

IN THE MATTER of an application pursuant to s.135 of the Act for suspension of General Manager’s Certificate number GM/006/1015/2007 issued to ELIZABETH OLIVE TARI HETARAKA

BETWEEN JASON PAUL SHEEHAN

(Waitakere District Licensing Agency Inspector)

AND JOHN DAVID THORNLEY
(Police Officer of Henderson)
Joint Applicants

AND WAITAKERE LICENSING TRUST
First Respondent

AND ELIZABETH OLIVE TARI HETARAKA

Second Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Ms J D Moorhead


HEARING at AUCKLAND on 24 October 2008

APPEARANCES

Constable J D Thornley – NZ Police – joint applicant
Mr J P Sheehan – Waitakere District Licensing Agency Inspector – joint applicant
Mr C Baker and Miss R Harvey – for respondents

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] The Waitakere Licensing Trust (hereafter called the Trust) is a converted suburban trust whose business operations are managed by West Auckland Trust Services Limited. The Trust owns a large number of licensed premises in the Waitakere district, and four of its outlets are the subject of this decision. The off-licensed premises are as follows:

“Local Liquor All Seasons” situated at 4/288 Te Atatu Road, Te Atatu South

“Te Atatu Tavern Bottle Shop” situated at 3 Pringle Road, Te Atatu Peninsula

“Local Liquor Swanson” situated at 1/709 Swanson Road, Swanson

“King Dicks Westgate” situated at 3 Cellar Court, Massey

[2] The Trust enjoys a reputation for its overall professionalism together with an emphasis on training standards. For example the Trust was recently nominated for the HANZ annual Host Responsibility Award. Its nomination was endorsed by ‘Safe Waitakere’. ‘Safe Waitakere’ is responsible to the Waitakere City Council for all alcohol issues in Waitakere excluding licensing.

[3] There are five related applications before us. Four of the applications are for the suspension of four of the Trust’s off-licences listed above. The applications were brought by Mr J P Sheehan, a District Licensing Agency Inspector, as well as Constable J D Thornley of the Police. The applications relate to a controlled purchase operation carried out by the Police and the District Licensing Agency on Thursday 24 April 2008. A total of 18 licensed premises were visited, and 14 of these, were owned by the Trust. The volunteer was able to purchase liquor at four of those premises.

[4] The applications were virtually identical, and were based on two grounds. First, that the licensed premises were conducted in breach of s.155 of the Act. This section creates an offence for liquor to be sold or supplied to any person under the age of 18. Secondly it was alleged that the premises had been conducted in breach of the condition of the licence requiring the licensee to ensure that the provisions of the Act relating to the sale and supply of liquor to prohibited persons, were observed.

[5] The particulars in support of each application claimed that on 24 April 2008, a volunteer minor had been able to purchase a four pack of RTDs. On each occasion the volunteer had been asked for identification. The volunteer had produced his driver’s licence showing his date of birth as 3 October 1990. In other words he was about five months short of his 18th birthday. On each occasion, the salesperson had checked the licence, and then deliberately acted contrary to the Trust’s procedures and made the sale. The salesperson had been able to do so by overriding the requirement to insert the date of birth, and typing into the computer that the purchaser was over 25 years of age.

[6] The fifth application was for the suspension of a General Manager’s Certificate. The application was brought on the ground that the manager had failed to conduct the premises in a proper manner. It was alleged that she was the duty manager at “Local Liquor Swanson” when the sale was made.

[7] Mr C Baker appeared with Miss R Harvey for the Trust. He argued that the Trust maintained a computer till system with software that was superior to others at preventing potential sales to minors. He submitted that the systems and training in place were designed to ensure complete compliance with the Act. He contended that in each case the employee had deliberately overridden the system in breach of the Trust’s protocol and training.

[8] The Trust believed that it had done everything it possibly could to prevent sales to minors. What it could not do was prevent employees from being deceitful. Accordingly it was argued that the Trust was without fault. In addition Mr Baker contended that the duty manager had warned the salesperson to check the volunteer’s identification prior to the sale being made. Mr Baker submitted that taking into account the circumstances of the case, we should exercise our discretion in favour of the respondents and decline to impose sanctions.

The Applications

[9] As stated above, the controlled purchase operation took place on Thursday 24 April 2008. The object was to determine whether licensees and their staff were complying with the requirements of the Act. The volunteer was born on 3 October 1990. He was asked to take his driver’s licence with him. We feel bound to point out that using a driver’s licence in such circumstances can lead to difficulties. For example, a salesperson asking for identification, could be lulled into thinking why would the licence be produced, if it was not proof of a legitimate age? Furthermore, when a person is born in 1990, a salesman might look at the year of birth and assume that the person was 18 years of age. We note that in the ALAC guidelines, the use of a driver’s licence, is not a recommended practice. And see James Robin Dalziell-Kernohan v The Mill Liquorsave Limited LLA PH 35/2007.

[10] At each of the four premises the volunteer selected a four pack of ‘Woodstock Bourbon and Cola’. The only variation was that at “King Dicks Westgate”, he selected bottles rather than cans. On each occasion when he arrived at the counter he was asked for identification. He presented his driver’s licence as instructed.

[11] The volunteer gave evidence that on each occasion the salesperson appeared to read the licence before accepting the money and making the sale. The only variation was that when he was at “Local Liquor Swanson”, he selected his purchase and then he heard a person asking him if he had his identification with him and reminding the checkout operator, in a loud voice to check the identification. In all other respects the sales were identical.

The Trust’s Response

[12] Mr Murray James Spearman is the Chief Executive of West Auckland Trust Services Limited, which manages the business operations of the Trust. In that capacity it is his practice to appear at all public hearings before the Authority. On this occasion it was arranged that many senior staff attended the hearing to gain an insight into the potential consequences for the Trust if its systems are not followed.
[13] Mr Spearman advised that in May 2007 new software was installed in all of the Trust’s premises. This new software produces an icon when liquor is scanned. The icon cannot be by-passed. The icon is headed ‘Age Check’ and there are three boxes. These boxes read:

Looks Under 25
Looks Between 25 and 35
Looks Over 25.

[14] If the checkout operator selects the first box then the transaction cannot proceed unless an appropriate identification is presented, and the details entered into the computer. The system will then check the age and either allow or refuse the sale. If the person is too young the transaction is removed from the screen. If either of the other two boxes are selected the transaction will proceed. We received the benefit of a live demonstration.

[15] Mr Spearman contended that the reason that three groups or boxes were selected, was that it was considered that the operator would have to give greater attention to the process if confronted with three options. It was the Trust’s view that if an operator was asked a simple question such as “Does the person look over 25? Yes/No” then there was greater opportunity to make a mistake.

[16] Mr Spearman advised that as from 1 August 2007, the Trust funded training of all staff by First Contact Specialised Services Limited. He produced a copy of the training manual entitled ‘Conflict Management, Resolution and Enforcement Training.’ In addition an outside agency is contracted to operate ‘Liquor Identification Checks', and these take place in every store once a month. Appropriate follow ups are made in respect of every report. Mr Spearman produced a copy of an e-mail that had been sent to the managers of all outlets on 18 April last, (a week before the operation), to remind the managers to supervise all sales. This was part of the Trust’s constant contact with all outlets.

[17] Mr Spearman stated that the system in place ultimately relied upon the honesty of the server, and reasonable vigilance by the duty manager. He submitted that on each of the four occasions, each server had deliberately avoided the checks in place, and made a conscious effort to thwart the system. He considered that the Trust had been let down very badly by the deliberate actions of each operator.

[18] Ms Martha Helen Gibbons is the Human Resources Manager for West Auckland Trust Services Limited. She advised that all employment agreements include a provision that any breach of the Act as well as failure to check a customer who appears to be under 25, is serious misconduct and grounds for instant dismissal. In addition each staff member is required to sign and acknowledge their responsibility in relation to sales to minors.

[19] Ms Gibbons showed the CCTV recording of each of the four transactions. In each case the salesperson took the licence and examined it. Having read that the volunteer was born in 1990, he or she then elected to record a different age to avoid having to input the details. Ms Gibbons was of the view that each salesperson had deliberately and consciously over-ridden the software to record that the volunteer was over 25. She contended that they effectively “lied”, because from their own observations, they thought that the purchaser was under 25 years of age, otherwise they would not have asked for identification.

[20] Ms Gibbons also produced documentation to show how the system was working at each of the four outlets. In cases where the purchaser is shown as being under 25 years of age, details of the appropriate evidence of age document are listed. Ms Gibbons explained the disciplinary processes that were followed in respect of each store as follows:

“Local Liquor All Seasons”

[21] In this case the duty manager was also the server. She was asked to attend a disciplinary investigation meeting. The evidence was that having checked the volunteer’s driver’s licence she had recorded the volunteer was aged between 25 and 35. She advised that she was well aware of the consequences of selling to minors. She accepted that the Trust’s systems were clear. She said that having checked the identification, she had no reason not to input the information and no excuse for her failure, which she put down to laziness. Her appointment was terminated immediately, and accordingly there was no application to suspend her certificate.

“Te Atatu Tavern Bottle Shop”

[22] The duty manager in this store had resigned from the Trust’s employment before the controlled purchase operation. She left her employment on 30 April 2008, and therefore no disciplinary meeting took place, and there was no suspension application. The salesperson attended a disciplinary investigation meeting with a support person and two union delegates. He explained that he was well aware of the Trust’s systems and the consequences of breaching the employment agreement.

[23] The salesperson initially tried to cover up for his error. However, when shown the CCTV footage, he acknowledged that he had checked the volunteer’s driver’s licence, and then elected to record that the person was aged between 25 and 35, saving himself the trouble of putting the date of birth into the system. He had no excuse for his behaviour. His appointment was terminated that day.

“Local Liquor Swanson”

[24] The manager on duty was Elizabeth Olive Tari Heteraka. She had been employed by the Trust for 14 months. She gave evidence to say that she was in the store eating her lunch at the time of the purchase. She had a good view of the store and the counter. She saw the volunteer select a four-pack of RTDs. In a voice sufficiently loud to be heard by the salesperson, she asked the volunteer whether he had identification. He nodded. She reminded the volunteer to present his identification at the counter. The CCTV footage shows the volunteer stopping and acknowledging her.

[25] Ms Gibbons advised that the server was found to be under 18 himself. He had been employed as a fridge-filler but the store’s manager (not the duty manager), had allowed him to work on the till contrary to company policy. He was invited to attend a disciplinary investigation meeting. He said he was aware of the Trust’s systems and could give no reason why he had not followed them. He had ticked the box to show that the purchaser was between 25 and 35 years of age. He recalled hearing the duty manager call out to the purchaser to show his identification.

[26] Because of the server’s age and the fact that he had been allowed to work outside of his area of responsibility, he was given a final warning, and advised that he was not allowed to work on the till until he was 18 years of age. The Trust also accepted that having asked the purchaser to produce his identification, and alerted the server, Ms Heteraka was entitled to assume that the Trust’s systems would be followed and the details in the evidence of age document would be entered into the computer. She was also given a final warning.

“King Dick’s Westgate”

[27] The duty manager was not the person who made the sale. He was invited to attend a disciplinary investigation meeting. He did so with a support person. He acknowledged that he was reading a book at the time of the transaction, and not supervising. The CCTV coverage showed the duty manager assisting with bagging the RTDs while reading his book at the same time. The duty manager said he had no excuse because he had all the training necessary, and was well aware of the system. He said he would guarantee that it would not happen again. His appointment was terminated immediately. He has since filed a personal grievance claim which is, as yet, unresolved.

[28] The server was invited to attend a disciplinary investigation meeting. At the meeting he accepted that he was aware of the processes and the rules and the consequences of breaking them. He had no excuse for deliberately avoiding the system and selecting the wrong age band. He had in fact ticked the box to show that the purchaser was over 35 years of age. He attributed his actions to laziness. He had his employment terminated immediately.

The Authority’s Decision and Reasons

[29] In this case the evidence is clear that liquor was sold to a minor in breach of s.155 of the Act. The primary issue is whether it is desirable to order a sanction against the company and the manager. Whether a sanction should be imposed is a discretionary decision. In exercising our discretion we are required under s.4(2) of the Act, to do so in a manner that is most likely to promote the object of the Act. On the other hand the object of the Act is to establish a reasonable system of control over the sale and supply of liquor. In each case we have a duty to look at all the facts and then decide whether suspensions of the licences would be too heavy handed.

[30] That philosophy was confirmed in the Court of Appeal decision of Christchurch District Licensing Inspector and another v Karara Holdings Limited and others [2003] NZCA 96; [2003] NZAR 752 The Court commented on the scheme of the Act as follows:

“Section 4 expresses a philosophy concerning the social utility of controls over the sale and supply of liquor which reflects the underlying policy of the Act. Parliament has declared that the Act’s system of controls over the sale and supply of liquor should be administered so as to contribute to the reduction of liquor abuse in the community within the limits of their capacity to do so. 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 there were exceptional circumstances in this case. We believe that no amount of training or preparation would have been able to prevent what happened. In each case the server had correctly determined that the volunteer appeared to be under the age of 25 years. In each case the volunteer was correctly asked to provide identification. We are in no doubt that had identification been unavailable, the sales would not have proceeded.

[32] Why four premises should produce exactly the same result is difficult to fathom. We trust it had nothing to do with the use of the driver’s licence. In this case the point of sale systems are close to exemplary. In each case the employee has deliberately “duped” or “cheated” the system. In each case the server has obeyed Trust policy to check identification for any person appearing to be under 25, and then deliberately falsified the date entry. The Trust has not only imposed a virtually fail-safe system, but also provided for stern consequences in the event that its systems are not followed. In these cases it has invoked the consequences sending a very strong message to its employees and other licensees.

[33] In the case of the manager, she identified the risk and alerted the server. In our view she was entitled to expect that the employee would then follow the rules.

[34] At the hearing we made reference to a Blenheim decision in the name of Naera Evan Parata v Simon Warren Clifford Croft and others LLA PH 202-207/2005. However on reflection that case is not as relevant as the recent decision of Annette Elizabeth Davidson v The Mill Liquorsave Limited LLA PH 1461-1462/2008. In the decision we made these comments which seem to be right on point:

“On the other hand it is quite clear that the salesperson was not off on a frolic of her own. If that had happened, or if there had been a deliberate attempt to sabotage the company’s policies and systems, then clearly a suspension order might well be unreasonable and/or undesirable.”

[35] While selling liquor to minors is regarded as one of the more serious forms of encouragement of liquor abuse, the system of control must be administered in a reasonable way. Given all the above circumstances we do not accept that suspensions are desirable. For the reasons we have attempted to articulate, we decline to make orders.

DATED at WELLINGTON this 5th day of November 2008

Judge E W Unwin
Chairman

WaitakereLicensingTrust.doc