Lovatt v Nauhria [2008] NZLLA 472 (3 April 2008)

Last Updated: 5 July 2010

Decision No. PH 472/2008

IN THE MATTER of the Sale of Liquor Act 1989

AND

IN THE MATTER of an application pursuant to s.135 of the Act for suspension or cancellation of General Manager’s Certificate number GM/08/66/2003 issued to SANJEEV NAUHRIA

BETWEEN JOHN HENRY LOVATT

(Hastings District Licensing Agency Inspector)

Applicant

AND SANJEEV NAUHRIA

Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Mr P M McHaffie

HEARING at NAPIER on 19 March 2008

APPEARANCES

Mr J H Lovatt – Hastings District Licensing Agency Inspector – applicant
Mr D J Porteous – for respondent
Sergeant R M Gordon – NZ Police – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] This application relates to a General Manager’s Certificate held by Mr Sanjeev Nauhria. Mr Nauhria was first granted his certificate on 14 March 2003. Over the last five years he has used his certificate primarily to manage licensed premises in Auckland and Hawkes Bay. In March 2006, he was part of a consortium that established a stand-alone off-licence in the Flaxmere Shopping Centre. The business traded under the name of “Flaxmere Liquor”. Mr Nauhria was a director and shareholder of the company that held the licence, and was appointed as the manager of the business.

[2] During the time that Mr Nauhria was managing this business, two controlled purchase operations were conducted. No sales were made. In October 2007, the business was sold. Mr Nauhria transferred his shares to his two associates. He was then employed by the purchasing company to act as the manager of the new business, and assist with staff training. He was also involved in advising the new management team about a number of administrative and financial difficulties they had encountered. The new business traded under the name of “Krish Liquor”.

[3] On 21 November 2007, two youths under the age of 18 years were found to have purchased liquor from the off-licence on two separate occasions on the same day. On both occasions, Mr Nauhria was working as the duty manager. On both occasions, the sales were made by employees of the new company. On each occasion, Mr Nauhria was at the rear of the store away from the retail area and was unaware that the transactions had taken place.

[4] On 6 December 2007, when Mr Nauhria was acting as the duty manager of the new business, a controlled purchase operation was conducted by the District Licensing Agency in conjunction with the Police, and the Medical Officer of Health. A youth aged 17 was able to purchase liquor from the store. Mr Nauhria was not only the duty manager, but it was he who made the sale to the minor. Mr Nauhria was duly taken before the District Court where he received diversion.

[5] Mr John Henry Lovatt is a District Licensing Agency Inspector with the Hastings District Council. As a result of the activity described above, he filed an application with the Authority seeking the cancellation or suspension of Mr Nauhria’s General Manager’s Certificate. The grounds for the application were that Mr Nauhria had failed to conduct licensed premises in a proper manner. It was also alleged that his conduct had been such as to show that he was not a suitable person to hold the certificate. The particulars relied upon were as outlined above.

[6] Mr Nauhria was represented by Mr D J Porteous. He referred to Mr Nauhria’s excellent conduct prior to the incidents. He noted that there had been no prosecutions in respect of the two sales made on 21 November last. He argued against the imposition of a sanction on the basis that Mr Nauhria had learned a valuable lesson. He pointed out that Mr Nauhria relied on the certificate for his career and livelihood. He asked that this decision be issued as soon as possible.

The Hearing

[7] The evidence was that at about 8.00 pm on 21 November 2007, a Detective pulled into the car park of “Krish Liquor”. He noted two youths drinking liquor. One was aged 17 years and four months and the other was aged 16 years and seven months. They had liquor with them consisting of RTD cans. They confirmed that one of them had just purchased the items from “Krish Liquor”. A father of one of the boys later confirmed that the incident had happened while he was in the nearby supermarket.

[8] It was not immediately clear who had made the sale. Mr Nauhria was the nominated duty manager. He was in the shop but was not present when the sale was made. Mr Kashmir Singh was working there that night. It was his company that had taken over the business. He checked the security footage later that evening and subsequently rang the Police to advise that it was he who had made the sale. He duly appeared in the Hastings District Court where he was fined $1,000 with costs.

[9] One of the boys told the Police that earlier that day at about 4.00 pm, he had been able to purchase a four-pack of RTDs without being asked for identification. He nominated the person who had made the sale as Thivagaran Subramaniam an employee. Mr Subramaniam subsequently appeared in the Hastings District Court. He was granted diversion after writing an apology and making a charitable donation.

[10] Mr Nauhria had been acting as the duty manager that day. When he gave evidence, Mr Nauhria confirmed that he was at the rear of the shop when both sales were made. He said that he investigated the circumstances and found that one of the youths was the son of a regular customer and had often attended the premises with his father. He thought that the two staff members might have become confused.

[11] On 6 December 2007, a controlled purchase operation was jointly conducted in the Hastings/Flaxmere area. The volunteer was born on 19 November 1990, and had just turned 17 years of age. He visited five shops and was able to make a purchase on four occasions. He entered the premises known as “Krish Liquor” at about 7.40 pm. He selected a four pack of RTDs and took them to the counter. Mr Nauhria was the nominated duty manager as well as the salesperson. The sale was made without any request for identification or confirmation of age.

[12] When he was spoken to by the Police, Mr Nauhria initially advised that he had been shown identification. Later he said that he thought that the purchaser had a mature face like a 20 year-old. He could not explain why he had not asked for identification particularly as he was implementing a policy to check the identity of all persons appearing to be under the age of 25 years.

[13] When he gave evidence before us, Mr Nauhria suggested that the volunteer appeared to be significantly over the age of 17 years. On the other hand he accepted that he should have asked for identification. He explained that he was heavily involved in the administration and development of “Krish Liquor” although he has no financial involvement in the new company. He said his mind must have been elsewhere. He was subsequently charged with selling liquor to a minor and was granted diversion upon making a donation and writing a letter of apology.

[14] He said that he had received a clear warning and that the incident had had a considerable impact on the way he carried out his duties as well as staff training. He believed that the sale made on 6 December last represented isolated behaviour on his part, and said that he would not be making any other sales to a minor. He accepted that during his training and whenever he interacted with the Agency he had been reminded of his responsibilities not to sell liquor to minors.

The Authority’s Decision and Reasons

[15] In this case the grounds have been established to our satisfaction. Mr Nauhria acknowledged that while he was the duty manager two sales were made to minors. Furthermore, on a later date, Mr Nauhria was not only the duty manager but effected the sale to an underage volunteer. He failed to conduct the licensed premises in a proper manner. His general conduct has been shown to be such as to raise questions about his suitability to continue to hold the certificate.

[16] The issue in this case is whether it is desirable to make an enforcement order. We have no doubt that an order should be made. As has been stated in previous decisions, we have been conservative in imposing penalties or sanctions where sales have been made during a controlled purchase operation. This is partly because the sales are made in a contrived atmosphere and actual liquor abuse does not follow. This case is different in that two of the sales were detected because the youths were found in the car park with the liquor they had just purchased. It was then that they acknowledged to making an earlier purchase.

[17] Mr Nauhria did not seem to understand how important it was for him to be present at the point of sale and actively ‘manage’ the premises. On 1 April 2000, the law in respect of the management of licensed premises was altered by Parliament. Section 115(1) provided that:

At all times when liquor is being sold or supplied to the public on any licensed premises, a manager must be on duty and responsible for compliance with the Act and the conditions of the licence.

[18] On 1 April 2006, the section was again amended and strengthened. Section 115 now reads:

(1) At all times when liquor is being sold or supplied to the public on any licensed premises a manager must be on duty.

(2) A manager on duty in respect of licensed premises is responsible for-

• (a) The compliance with and enforcement of-
  
  • (i) The provisions of the Act; and
  • (ii) The conditions of the licence in force in respect of the premises; and
    

(b) The conduct of the premises with the aim of contributing to the reduction of liquor abuse.

[19] Both amendments were designed to encourage the drive to raise the standards of those charged with the responsibility of supplying liquor to the public. Parliament’s expectation is that the management of licensed premises will be conducted only by persons of integrity, who are committed to supervising the sale and supply of liquor in a responsible way.

[20] The latest amendment requires the holders of General Managers' Certificates not just to comply with the Act but enforce it as well. Duty managers are now responsible for the way the premises are operated, with the aim of reducing the potential for liquor abuse. Mr Nauhria needs to understand that it is not possible for him to ensure that the business complies with the Act if he is not present and supervising what is happening.

[21] The issue is about keeping standards high. If managers fail to manage and are then subjected to sanctions, there is a reasonable chance that the enforcement process will indirectly encourage the reduction of liquor abuse. Conversely, to take no action in such circumstances would send out the wrong message.

[22] Selling liquor to minors is one of the worst forms of encouragement of liquor abuse. Pursuant to s.4(2) of the Act, we are required 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.

[23] It is now eight 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. It is clear that Parliament took the view that the supply of liquor to minors was a very serious liquor abuse issue. 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).

[24] In this case, Mr Nauhria was duty manager on two occasions when sales were made by staff members to minors. In addition there was a third occasion when he was acting as the duty manager and sold liquor to a minor in a controlled purchase operation. 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. The buck literally stops with them.

[25] To add a further cliché, certificated managers are the front line in the campaign to reduce liquor abuse. If the holders of General Managers' 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.

[26] We believe that Mr Nauhria’s conduct calls for a severe response, although we agree with Mr Porteous, that to cancel the certificate would be an unreasonable result, particularly given Mr Nauhria’s subsequent co-operation with the agencies, and his prior good record. Accordingly, and for the reasons we have given, we order that General Manager’s Certificate number GM/08/66/2003, issued to Sanjeev Nauhria, be suspended for three months commencing Monday 21 April 2008.

DATED at WELLINGTON this 3RD day of April 2008

Judge E W Unwin
Chairman

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