Ferguson v Gourlay [2008] NZLLA 908 (4 July 2008)

Last Updated: 25 January 2012

Decision No. PH 908-909/2008

IN THE MATTER of the Sale of Liquor Act 1989

IN THE MATTER of an application pursuant to s.135 of the Act for cancellation of General Manager’s Certificate number GM/060/394/2005 issued to DONALD MORREL REHUA GOURLAY

BETWEEN MARTIN FERGUSON

(Christchurch District Licensing Agency Inspector)

Applicant

AND DONALD MORREL REHUA GOURLAY

Respondent

AND

IN THE MATTER of an application by DONALD MORREL REHUA GOURLAY pursuant to s.123 of the Act for renewal of a General Manager’s Certificate

BEFORE THE LIQUOR LICENSING AUTHORITY

Chairman: District Court Judge E W Unwin
Member: Dr J Horn

HEARING at CHRISTCHURCH on 23 June 2008

APPEARANCES

Mr M Ferguson – Christchurch District Licensing Agency Inspector – applicant and in opposition to renewal of General Manager’s Certificate
Mr D M R Gourlay – respondent and applicant for renewal of General Manager's Certificate

RESERVED DECISION OF THE AUTHORITY

Introduction

[1] Donald Morrel Rehua Gourlay was first granted a General Manager’s Certificate on 2 October 2002. The certificate was not renewed and accordingly lapsed. A further certificate was issued on 20 July 2005. This certificate fell due for renewal on 20 July 2006. When Mr Gourlay filed his renewal application he did not enclose a copy of the requisite Licence Controller Qualification. Accordingly, there was a considerable delay in progressing the matter.

[2] Mr Gourlay was written to about the qualification. He was advised that in the absence of the certificate, the application would have to be referred to the Authority for a public hearing. There was no response. However, just prior to the hearing, it was established that Mr Gourlay had attained the qualification in September 2006.

[3] Since late 2004, Mr Gourlay had been using his certificate at a suburban tavern known as “Hammersley’s”. He was a director and a minor shareholder of the licence owning company. Effectively he was the company’s alter ego and licensee. The on-licence authorised limited trading hours between 7.00 am and 11.00 pm. We gather that these hours were fixed as a result of a resource management process.

[4] During the latter part of 2007 both the Police and the District Licensing Agency Inspector had certain issues with the way the premises were being operated. On 6 May 2008 they filed a joint application for the suspension of the on-licence. At the same time, the District Licensing Agency Inspector filed an application for the cancellation of Mr Gourlay’s General Manager’s Certificate.

[5] Prior to the hearing, the business was sold. Consequently the application for the suspension of the on-licence was withdrawn. However, the Inspector elected to proceed with the application to cancel Mr Gourlay’s certificate. The ground for the application was that Mr Gourlay’s conduct had been such as to show that he was not a suitable person to hold the certificate.

[6] The particulars alleged that Mr Gourlay had allowed patrons to remain on the licensed premises when the premises were required to be closed. This was said to be in breach of s.171 of the Act. In addition it was alleged that he had allowed an intoxicated person to be or remain on licensed premises in breach of s.168 of the Act. It was also alleged that Mr Gourlay had failed to obtain the Licence Controller Qualification.

[7] During the hearing, Mr Gourlay presented his original Licence Controller Qualification together with five references as to his character and reputation. He disputed some of the evidence and presented his version of what had happened. He appeared to accept that there had been occasions when the business had traded after hours. Nevertheless, Mr Gourlay maintained that he was suitable to continue to be the holder of a General Manager’s Certificate.

The Hearing

[8] The first visit to “Hammersley’s” was reported to have taken place at 12.45 am on 18 October 2007. Six persons were found in the bar. On that occasion Mr Gourlay was not on duty. The duty manager explained that there had been staff drinks. However, not only were the staff members apparently present after the one hour period for employees under s.170(2)(e) of the Act, the three other people in the bar were regulars. When he gave evidence, Mr Gourlay explained that he had been away from the premises for a month working at another venue. He said that he had asked the staff to stay behind so that he could speak with them.

[9] Sergeant Gary Edward Manch is in charge of licensing for the Papanui area of Christchurch. He visited “Hammersley’s” later in the month and spoke with Mr Gourlay. He issued Mr Gourlay with a warning. He confirmed with Mr Gourlay that any breach of the licence conditions was regarded seriously. He told him that any further breach would result in an enforcement application being filed with the Authority. It is clear that Mr Gourlay was being spoken to in his capacity as a director and shareholder of the licence holding company.

[10] On 11 November 2007 at 12.50 am, there was a further visit. On that occasion 15 patrons were present in the bar. The bar appeared to be operating, as patrons were drinking. Mr Gourlay was spoken to. He was said to be the duty manager although there was no confirmation that his name was displayed. He did not question the evidence on this point. Mr Gourlay said that the patrons were waiting for taxis. When he gave evidence, he explained that it had been a very busy night in the city and the taxis had taken a long time to respond to the call out. However, the Sergeant, who was present at the premises, noted that no one was waiting outside the premises, and several of the patrons subsequently got into a private car.

[11] Mr Martin Ferguson is a District Licensing Agency Inspector employed by the Christchurch City Council. On 15 March 2008 he visited the premises at about midnight. He observed lights on in the premises although the main entrance was closed. He saw 12 patrons sitting in the outside garden bar. This area is part of the defined licensed premises. Mr Ferguson noted that the patrons had access to the inside of the premises via a side door. He saw two jugs containing beer, four stubbies, and glasses on a table.

[12] In response to a request for the duty manager, Mr Gourlay appeared. He said he was in the process of locking up. When he gave evidence Mr Gourlay said that he had his hand on the door and was about to close at the very time that Mr Ferguson arrived.

[13] Included in the group of patrons in the garden bar, Mr Ferguson observed an intoxicated male. This person’s speech was slurred and he was almost incomprehensible. He was not only argumentative and uncooperative but also had trouble standing.

[14] The final visit took place on 8 May 2008 at 11.45 pm. On this occasion, Mr Gourlay was not the duty manager. The business appeared to be operating and patrons were playing pool. Sergeant Manch observed 11 patrons present. He saw a full jug of beer along with three RTDs and four glasses of spirits in the bar area. Mr Gourlay was present. He argued that he was not doing anything wrong in that the tavern was hosting a pool competition. He said he had stopped selling liquor.

[15] When he gave evidence, Mr Gourlay referred to the intoxicated person who had been observed on the night of 15 March last. He said the person was a regular who had come into the bar where he had been refused service because of his intoxicated state. Mr Gourlay said that he took the person outside and sat him on a bridge situated outside the defined area of the licensed premises. There is reasonably easy access between this public area and the garden bar. Mr Gourlay’s intentions were to take the person home in due course. It is clear that the person then returned to the garden bar area where he was seen by Mr Ferguson.

[16] Mr Gourlay accepted that on the fourth occasion, the patrons should not have been on the premises even though they were playing in a pool competition. The evidence showed that Mr Gourlay’s primary vocation is that of a chef. The references he produced spoke glowingly of his competence and reputation in that capacity. He received a Rotary award as a head chef, and worked as a chef for the "Christchurch Club" for seven years from 1987 to 1994.

The Authority’s Decision and Reasons

[17] In this case, the Inspector has sought to rely on Mr Gourlay’s general conduct rather than any alleged failure to conduct the premises in a proper manner. In other words, the emphasis in this case relates more to Mr Gourlay’s conduct as the licensee. On the other hand, pursuant to s.135(6) of the Act, if we are satisfied that either of the grounds in subsection (3) is established, we may make an order provided such a course of action is considered to be desirable. Mr Gourlay’s conduct as a duty manager is also relevant to the renewal application as follows.

[18] In considering the renewal of the certificate we are required by s.126 of the Act to have regard to the following matters:

• (a) The character and reputation of the applicant:

(b) Any convictions recorded against the applicant since the certificate was issued or last renewed:
(c) The manner in which the manager has managed the sale and supply of liquor with the aim of contributing to the reduction of liquor abuse:
(d) Any matters dealt with in any report made under section 124 of this Act.

[19] Mr Gourlay carries the onus of showing that the way he has managed the sale and supply of liquor (with the aim of contributing to the reduction liquor abuse), warrants his continued status as a certificated manager. In respect of the enforcement application, the Inspector carries the onus of showing that Mr Gourlay’s general conduct was such as to show a lack of suitability to continue holding the certificate.

[20] It is clear that in late October 2007, Mr Gourlay (as the licensee) was formally warned about allowing the premises to stay open after 11.00 pm (or 11.30 pm given the 30 minute drink-up time). There were three subsequent occasions when the premises were found to be open. In our view of the evidence, the business was trading on each occasion. On two of those occasions Mr Gourlay was the duty manager. On the third occasion he was present. As the licensee on that occasion he had a duty under s.172A of the Act to ensure that the duty manager complied with the law. On the second occasion an intoxicated person was found on the premises. That person may well not have been served with liquor but he was in a position where he could have been offered a drink by another patron.

[21] 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.

[22] Mr Gourlay seemed not to be fully aware of the responsibilities that go with operating and managing licensed premises. To allow the premises to trade illegally on three occasions after receiving a formal warning has certainly placed his suitability in question. To allow an intoxicated patron to remain in an area within easy access to the premises showed a lack of judgement. Although these incidents occurred during Mr Gourlay’s ‘probationary’ year, he had previously held a certificate.

[23] Mr Ferguson argued strongly that Mr Gourlay should no longer be allowed the privilege of retaining a certificate. He suggested that there had been three strikes in terms of trading after the legal closing time. He argued that Mr Gourlay had lost the confidence of the Police and the Agency. He referred us to the decision in Horse and Trap Tavern Limited LLA PH 880-881/2005 in which these comments were made:

“We believe that raising the bar for the holders of General Manager’s Certificates, and keeping it at a certain height, has the potential to bring about a reduction in the abuse of liquor nation-wide. If certain otherwise meritorious applicants suffer in the process, that may not be too high a price to pay in order to achieve the long-term goal.”

[24] Mr Gourlay did not attempt to excuse his conduct. He was sufficiently contrite to indicate that he may well have learned from the experience. However, we are more than satisfied that in allowing the premises to remain open on three occasions following a warning, Mr Gourlay’s conduct was such as to show a lack of suitability to hold the certificate. We also find that he failed to conduct the licensed premises in a proper manner.

[25] The function of s.135 of the Act is to enforce sound management of licensed premises. Our duty is to secure managerial compliance where there has been a pattern of illegal trading as in this case. We accept that Mr Gourlay has had a distinguished career in the hospitality industry but we believe that it is desirable that his certificate be cancelled.

[26] In Noel Justin Allen LLA 1388/97, the principle that certificates would be easier to get and easier to lose was reaffirmed as follows:

“Following the introduction of a competitive regime on 1 April 1990 under the new Act, the Authority allowed a settling in period. In more recent years, we have endeavoured to gently raise the requisite standards both of licensees and the holders of Manager’s Certificates in order to improve both knowledge of the Sale of Liquor Act, and the conduct of licensed premises. As Dormer, Sherriff, and Crookston “Sale of Liquor” (Butterworths 1990) state in their text introduction at para 22 “Licences will be easier to get and easier to lose.” Provisions for Manager’s Certificates should, in our view, follow a similar pattern.”

[27] In the unreported decision of D T Hayford v Christchurch District Licensing Agency (High Court, Christchurch AP 210/92 3 December 1993) at page 10, Holland J made these comments:

“I said a few moments ago that a finding should not be infinite..... it may well be that he should be given another chance. That will be for the Tribunal having the authority of deciding whether or not a new licence is to be granted. I would not want it to be said that because this Court has said he is a person unsuitable to carry on a licence that that should be permanently be regarded as the situation.”

[28] On the basis of the above comments Mr Gourlay may wish to re-apply for his certificate in another 12 months time. It may be that a course of re-training will assist him in re-learning his responsibilities, and give the Inspector and the Police sufficient confidence not to oppose the application. For the reasons we have given, General Manager’s Certificate number GM/060/394/2005, issued to Donald Morrel Rehua Gourlay, is cancelled. It follows that the application for renewal has been rendered nugatory.

DATED at WELLINGTON this 4th day of July 2008

Judge E W Unwin
Chairman

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