Donaldson and Norris v Red Fox Tavern (2006) Limited and Te Kauwhata Foodmarket Limited and Te Kauwhata Licensing Trust and Felton and Patel [2008] NZLLA 793 (13 June 2008)

Last Updated: 23 January 2012

Decision No. PH 793-797/2008

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 number 014/OFF/02/2007 issued to RED FOX TAVERN (2006) LIMITED in respect of premises situated at Monument Road, Maramarua, known as “Red Fox Tavern”; and off-licence number 014/OFF/5/2000 issued to TE KAUWHATA FOODMARKET LIMITED in respect of premises situated at 6 Main Road, Te Kauwhata, known as Te Kauwhata Foodmarket; and off-licence number 014/OFF/07/2007 issued to TE KAUWHATA LICENSING TRUST in respect of premises situated at 20 Main Road, Te Kauwhata, known as “Te Kauwhata Trust Tavern”
AND

IN THE MATTER of applications pursuant to s.135 of the Act for suspension of General Manager’s Certificate number GM 010/35/2007 issued to BARRY RATCLIFFE FELTON and General Manager’s Certificate number GM 2232/96 issued to JESAL GHELA PATEL

BETWEEN BLAIR JOHN DONALDSON

(Police Officer of Huntly)

AND CINDY NORRIS
(Waikato District Licensing Agency Inspector)

Joint Applicants

AND RED FOX TAVERN (2006) LIMITED

First Respondent

TE KAUWHATA FOODMARKET LIMITED

Second Respondent

TE KAUWHATA LICENSING TRUST

Third Respondent

BARRY RATCLIFFE FELTON

Fourth Respondent

JESAL GHELA PATEL

Fifth Respondent

BEFORE THE LIQUOR LICENSING AUTHORITY

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

HEARINGS at HAMILTON on 5 and 6 May 2008

APPEARANCES

Sergeant B J Donaldson – NZ Police – applicant
Mrs C Norris – Waikato District Licensing Agency Inspector – applicant
Mr R Bryant – agent for first respondent
Mr B R Felton – fourth respondent
Mr R W Murphy – agent for second and fifth respondents
Mr J Richardson – on behalf of third respondent
Mr R G Henderson – representing Medical Officer of Health – to assist

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] There are effectively five matters before the Authority for determination involving three off-licensed premises. They relate to a controlled purchase operation conducted in the North Waikato area on 4 October 2007 by the Police, the Waikato District Licensing Agency, and Waikato Health.

[2] Prior to the operation being carried out, the Waikato District Council had sent out a letter on 12 September 2007 to all licensees confirming that a controlled purchase operation would be carried out before the end of the year.

[3] During the operation, known as “Operation Guinness” 25 licensed premises were visited and 10 made sales to the minors.

[4] The same female volunteer aged 17 years was able to purchase liquor from the "Red Fox Tavern", "Te Kauwhata Foodmarket" and "Te Kauwhata Trust Tavern" without being asked for identification or challenged as to her age. Two of the three premises had previously failed a controlled purchase operation and had been the subjects of suspension orders.

[5] The grounds for the applications to suspend the off-licences were that the licensed premises had been conducted in breach of s.155(1) of the Act. Section 155(1) creates an offence for a licensee or manager to sell or supply liquor, or allow liquor to be sold or supplied, to a person under the age of 18 years.

[6] In addition it was alleged that the premises had been conducted in breach of the condition of the licences requiring the licensee to ensure that the provisions of the Act relating to the sale and supply of liquor to minors, were observed.

[7] The ground for the applications to suspend the General Managers’ Certificates was that the managers had failed to conduct the licensed premises in a proper manner.

The Hearing

[8] Mr A Parkes is the Environmental Health Manager for the Waikato District Council. He sent the 12 September 2007 letter to all liquor outlets in the area reminding them of their responsibilities under the Act, and confirming that a controlled purchase operation would take place before the end of the year. He said that giving a warning in this way was considered to be fair to all licensees.

[9] Sergeant B J Donaldson is a Police officer based in Huntly. He holds the Liquor Licensing portfolio for the Waikato area that includes Raglan, Ngaruawahia, Huntly and Te Kauwhata. He conducted the briefing of the volunteers on the day of the operation. The volunteers were told that they were not to dress up or wear make up that would make them appear older than their age.

[10] Constable R Bacon is the Youth Aid Police officer stationed in Huntly. He was responsible for two volunteers who visited the "Red Fox Tavern", "Te Kauwhata Foodmarket" and "Te Kauwhata Trust Tavern". The volunteers, a male and a female, both entered the premises, but on each of these three occasions it was the 17 year old female who was able to make the purchases.

[11] The volunteer was born on 29 October 1989. At the time of the operation she was a few weeks short of her 18th birthday. She is approximately 183 cm tall and of Maori and Samoan descent. We had the advantage of observing the volunteer at the hearing and she appeared to us to look much older than her age. In fact the volunteer herself acknowledged that she looked considerably older than her age.

[12] The volunteer was able to purchase a six pack of 330 ml bottles of Woodstock Bourbon from the bottle store at the "Red Fox Tavern". At the "Te Kauwhata Foodmarket" she purchased four bottles of Bellini strawberry sparkling wine and at the "Te Kauwhata Tavern", four bottles of lime Vodka Cruisers. It was accepted by all the respondents that the sales were made, and that the items were liquor in terms of the Act. At none of the premises was the volunteer asked her age or to provide identification. However, at the "Te Kauwhata Foodmarket" a conversation did take place regarding her age between the seller and his mother.

[13] The volunteer was able to purchase liquor at most, if not all, of the premises she visited. (There was some confusion as to which volunteer had been the attempted purchaser at other premises where no sale was made).

"The Red Fox Tavern"

[14] Mr B R Felton is employed at the "Red Fox Tavern" in Maramarua as a barman and duty manager. It was he who served the volunteer on 4 October 2007 at about 4.20 pm. He admitted making the sale to the volunteer but said that he had assessed her age as being in her early twenties.

[15] Mr Felton said that about five minutes after he had served the volunteer it occurred to him that she might possibly be buying the bottles of Woodstock Bourbon for a youth that he had refused service to a few minutes earlier. On this previous occasion Mr Felton had asked for identification and refused service when none was provided. He said he went searching for them but there was no sign of them in the car park.

[16] Mr Felton mentioned the two incidents to Mrs Joy Ross shortly afterwards. Mrs Ross is the sole director of Red Fox Tavern 2006 Limited and gave evidence confirming this.

[17] Mr Felton said that when he was spoken to the next day by Mr Parkes and Mrs Norris from the Waikato District Council he told them that he could have been the duty manager at the relevant time but was unsure at what stage he had put his name up on the duty manager board in the sports bar. He had been due to start work at 4.00 pm but had arrived late at approximately 4.10 pm and had not done so immediately. He said that his name had never been on the duty manager’s board located directly beside the door to the bottle store.

[18] Mr Felton represented himself and submitted that the application for suspension of his General Manager's Certificate should be refused for several reasons including: the manner in which the operation was carried out with two volunteers; the lack of evidence that he was the named duty manager; and the failure of the Inspector to produce a warrant of authority the following day.

[19] Mr R Bryant is a licensing consultant. He submitted on behalf of the licensee that the test was not a fair and reasonable one. He referred to the fact that the volunteer was 17 years 11 months and five days old at the time of the operation. He also referred to the fact that the volunteer was described by Mr Felton as being a “woman” whereas the first volunteer who was refused service was described as a youth. He pointed out that Mr Felton had previously been a Sergeant in the New Zealand Police and had experience dealing with the public and in particular youth when it comes to making age assessments.

[20] Mr Bryant submitted that the licensee had not breached condition (d) of its licence which requires the licensee, rather than the manager, to ensure that the provisions of the Act relating to the sale and supply of liquor to minors were observed. We agree that the applicants have not been able to establish the second ground of the application.

[21] Mr Bryant also made submissions regarding the inadmissibility of any evidence obtained from the Inspector’s visit the day after the operation because of a failure to comply with s.131 of the Act. In particular he referred to a failure to produce a warrant of authority as alleged by both Mr Felton and Mrs Ross. He submitted that this was sufficient grounds to refuse the application. Section 131 of the Act reads:

(1) Any inspector may at any reasonable time enter on and inspect any

licensed premises, or any part of any licensed premises, to ascertain whether the licensee or any manager is complying with the conditions of the licence.

(2) Any inspector who exercises the power conferred by subsection (1) shall
carry a warrant of authority and evidence of identity, and shall produce those
documents---

(a) on first entering the licensed premises to the person appearing to
be in charge of the premises; and

(b) whenever subsequently required to do so on the licensed premises by

any other person appearing to be in charge of the premises or any part of them.

[22] With respect Mr Bryant has misread the section. The purpose of the visit was not to make an inspection to ascertain whether the licensee or manager was complying with the conditions of the licence (as provided in the section), rather the purpose of the visit was to inform of the failed result in the controlled purchase operation.

[23] Mr R Henderson appeared for the Medical Officer of Health in an assisting capacity. He made a challenging submission in which he warned of the risks in allowing appearance derived from ethnicity to become an effective defence for selling minors alcohol. He noted that young persons of Maori or Pacific Island ethnicity may tend to look older than other persons of the same age from other ethnicities. He argued that if this is the case, then unless there is enforcement of this nature, this group is more likely to obtain access to liquor than others who are of the same age but of a different ethnicity.

"Te Kauwhata Foodmarket"

[24] The "Te Kauwhata Foodmarket" is a family enterprise owned and operated by husband and wife since 1995. Mr Jesal Patel and Mrs Ramila Patel are the directors of Te Kauwhata Foodmarket Limited. The premises are a Four Square franchise aligned to Foodstuffs.

[25] The licence was previously suspended for five days as the result of an agreed settlement following a controlled purchase operation in July 2006. Mrs R Patel was the seller on that occasion. Mr G Patel had been the duty manager on that occasion and his General Manager's Certificate was suspended for an agreed period of two weeks. (LLA decision 770-789/2006)

[26] Mr Trushar Patel is the son of the directors and has been employed full time in the Four Square for eight years. He is 28 years of age. He has held a General Manager’s Certificate for six months. It was he who made the sale of four bottles of Bellini sparkling wine to the volunteer. He had thought that she looked over 25 years of age but did ask his mother for a second opinion. She told him to make sure he checked identification. As he was sure she looked over 25 he made the sale anyway. He described her as a very large tall Maori girl. In hindsight he accepted that he should have done what his mother said.

[27] Mr Jesal Patel was in the shop when the sale but was involved with another customer. He was the duty manager at the time. Mr J Patel gave evidence of the camera and scanning systems within the shop and the regular checks conducted by Foodstuffs.

[28] Mr R W Murphy is a licensing consultant. He stated that he had requested disclosure from the Police in March 2008, but apparently through miscommunication this had not been received. He had instructions not to request an adjournment, as it was not denied that the sale had taken place.

[29] Mr Murphy referred to the decision in Andrew Charles Sloan and Audrey Merle Carr v Harrison Sales Limited and another LLA PH 70-71/2008 in which the Authority had stated that it is a step forward for any licensee to take professional advice from a consultant.

[30] Mr Murphy also suggested that the statutory defence in s.155(4) of the Act might apply

"Te Kauwhata Trust Tavern"

[31] The Te Kauwhata Licensing Trust had previously failed a controlled purchase operation in July 2006. An agreed suspension of three days was confirmed by the Authority in decision number LLA 770-789/2006.

[32] Ms Karen MacCulloch was the both the seller and the duty manager at the "Te Kauwhata Trust Tavern" on 4 October 2007. She sold four bottles of lime Vodka Cruisers to the volunteer. An agreed suspension of her General Manager’s Certificate had already been negotiated and she did not appear at the hearing. The manager of the tavern, Ms Janelle Barakat, gave evidence that Ms MacCulloch had told her she had honestly thought the volunteer was 25 years of age.

[33] Mr Parkes confirmed in his evidence that when he spoke to Ms MacCulloch the following day she was distraught that she had made a sale to a 17 year old as she had considered the person to be aged 25.

The Authority’s Decision and Reasons

[34] In all three of these cases there was clearly a breach of s.155(1) of the Act. None of the respondents disputed the evidence that a person under the age of 18 years had been sold liquor.

[35] There was however no evidence that the licensees had failed to ensure that the provisions of the Act relating to the sale and supply of liquor to minors were being observed. It could not be said that any of the premises were conducted in breach of that particular condition of the licence.

[36] The Authority has taken the view when determining enforcement applications, that respondents should be given a similar opportunity as a defendant in the District Court, to prove that they were misled into making the sale. This is sometimes referred to as a “safe harbour” defence.

[37] Section 155(4) of the Act is as follows:

It is a defence to a charge under subsection (1) or subsection (2) of this section if the defendant proves that the person who sold or supplied the liquor believed on reasonable grounds that the person to whom it was sold or supplied had attained the age of 18 years.

[38] That defence was open to the respondents in this case. The common belief of the persons who sold the liquor was that the volunteer was aged about 25. The onus is on the respondents to establish the defence. In the case of the "Te Kauwhata Trust Tavern" however this would be difficult, as the seller herself did not give evidence.

[39] At any event it is our firm view that all respondents failed to satisfy us that they had reasonable grounds for believing that the volunteer had attained the age of 18 years. In each case there was no conversation or discussion with the volunteer. The type of product being purchased should have alerted the sales people to the potential risk. It is not enough in marginal cases to rely solely on looks and size.

[40] Mr Murphy referred to the recent decision of Jas & Jas Holding Ltd LLA PH 889/2007. In that case, and in N K Ahir LLA PH 1113-1115/2006 the Authority declined to make suspension orders where the same volunteer, a 17 year old European male, was thought to be quite mature looking. We noted in the Jas & Jas decision that the ALAC controlled purchase guidelines, produced in June 2004, refer at page 11 to “the volunteer’s look” and says that “volunteers should represent their age group-that is look and act their age” and that they should avoid looking older than they are. There is a further note about “old-looking volunteers” and cases that have been compromised because of this.

[41] The issue is whether it is desirable to make enforcement orders given the circumstances. On the one hand we have s.4(2) of the Act requiring 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.

[42] On the other hand is the question whether the controlled purchase operation conducted with this volunteer was a fair and reasonable test. We do not believe that it was. We believe that when conducting a controlled purchase operation, all agencies must be careful to avoid any suggestion of entrapment. Although Mr Henderson made a strong argument, it is our view that it is more important to maintain the integrity of a ‘reasonable’ system of control.

[43] It is fair to say that we were disconcerted when the volunteer appeared to give evidence. In our view it was quite easy to see why all of the respondents had thought that the volunteer was over the age of 18 years. Mr Parkes was quite candid in his response when questioned and said that he personally had not been comfortable with this particular volunteer being used.

[44] Enforcement applications under both ss.132 and 135 of the Act require a two step approach. First we must be satisfied that the allegations have been established. If that is the case, we must then consider whether it is desirable that an enforcement order is made.

[45] In the case of Mr Felton there is a question as to whether it has been established that he was the manager on duty at the time. In all likelihood we believe that he was, but even if this was the case, we believe that it is undesirable to make a suspension order.

[46] In these particular circumstances we do not believe that it is desirable to make suspension orders in regard to the off licences held by the three licensees Red Fox Tavern (2006) Limited, Te Kauwhata Foodmarket Limited and Te Kauwhata Licensing Trust or of Mr Jesal Patel’s General Managers Certificate.

[47] Accordingly, and for the reasons we have given, all of the applications are declined.

DATED at WELLINGTON this 13th day of June 2008

Judge E W Unwin
Chairman

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